Admiralty - Robert S. Glenn, Jr., Colin A. Mcrae, and Jessica L. Mcclellan

• Publication year: 2007

Admiraltyby Robert S. Glenn, Jr.^* Colin A. McRae^** and Jessica L. McClellan^***

I. Introduction

The United States Court of Appeals for the Eleventh Circuit's admiralty docket was not particularly active this year, perhaps reflecting the state of the maritime practice. Interestingly, it was a good year for district court judges in the circuit, as the Eleventh Circuit affirmed nearly all of the lower courts' maritime decisions in the context of sovereign immunity, maritime statutes of limitation, jurisdiction, international carrier bonds, limitation of liability, allision, maritime liens, choice of law, and pollution.

II. Sovereign Immunity

The Eleventh Circuit saw one of its admiralty opinions reviewed by the United States Supreme Court. In Northern Insurance Co. of New York v. Chatham County, Georgia,¹ the Supreme Court addressed the assertion of sovereign immunity by Chatham County, Georgia (the "County"), the owner of a drawbridge that malfunctioned and damaged a boat insured by the petitioner.² The County contended that it was immune from suit because it was an arm of the State of Georgia and therefore was protected from suit under the Eleventh Amendment.³

The United States District Court for the Southern District of Georgia held that sovereign immunity did indeed extend to counties and municipalities when acting under a power delegated to them by the state. The Eleventh Circuit affirmed this holding and concluded that the common law had created a "residual immunity" that protected subdivisions of the state like the County in this case.⁴

The United States Supreme Court granted certiorari and reversed.⁵ The Court, citing Alden v. Maine,⁶ held that only states and "arm[s] of the state" possess Eleventh Amendment immunity from suits under federal law.⁷ The Court determined that the County in Northern Insurance was not an arm of the state and rejected the lower courts' conclusions that the County fell under a broader "residual immunity" from suit.⁸

The Supreme Court also rejected the County's alternative argument that the Court should recognize "a distinct sovereign immunity against in personam admiralty suits arising from a county's exercise of core state functions with regard to navigable waters."⁹ The Court cited Workman v. New York City¹⁰ in rejecting the County's argument, holding that there is a general precedent that sovereign immunity does not protect a city from an admiralty suit.¹¹ In Workman the Court concluded that admiralty courts have jurisdiction over municipal corporations.¹² The County, however, argued that Ex Parte New York¹³ was controlling.¹⁴ In Ex Parte New York, the Court held that no redress could be granted because the Court did not have jurisdiction over the municipality.¹⁵ In Northern Insurance, the Supreme Court distinguished Ex Parte New York on the ground that there was no jurisdiction over the person or property in that case, whereas in Northern Insurance, there was no question that the defendant was an entity within the jurisdiction of the district court.¹⁶

Cranford v. United States¹⁷ is another decision in 2006 involving sovereign immunity. In Cranford the plaintiffs filed complaints against the United States for personal injuries and death suffered in an allision of a pleasure boat and a submerged wreck. The complaints alleged negligence by the government in marking the wreck and in refusing to remove the wreck. The plaintiffs maintained that the district court had jurisdiction over their claims under the Federal Tort Claims Act,¹⁸ the Suits in Admiralty Act,¹⁹ the Public Vessels Act,²⁰ and the Wreck Act.²¹

The United States District Court for the Southern District of Alabama dismissed the complaints for lack of subject matter jurisdiction on the ground that the United States had not waived its sovereign immuni-ty.²² The district court relied on United States v. Gaubert²³ to conclude that "the marking of the . . . [w]reck and refusal to remove it fell within the 'discretionary function exception' of the Federal Tort Claims Act . . . and that the waivers of sovereign immunity in the Suits in Admiralty Act and the Public Vessels Act did not apply."²⁴

The issue on appeal was whether the discretionary function exception to the waivers of sovereign immunity in the Suits in Admiralty Act and the Public Vessels Act applied to decisions of federal officials in marking and choosing not to remove a submerged wreck.²⁵ To resolve this issue, the court addressed three matters: (1) the legal standard for the discretionary function exception; (2) whether the marking of the wreck fell within the exception; and (3) whether the refusal to remove the wreck fell within the exception.²⁶

In addressing the legal standard for the discretionary function exception, the court in Cranford discussed the test outlined by the United States Supreme Court in Gaubert. The test involves a two-step inquiry: (1) "whether the conduct involves 'an element of judgment or choice'" and (2) "whether the judgment or choice is grounded in considerations of public policy, because the 'purpose of the [discretionary function] exception is to "prevent judicial second-guessing of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort."'"²⁷ The Eleventh Circuit held that the marking of the wreck and the refusal to remove it were "discretionary decisions grounded in social, political, and economic policy," and thus, the court affirmed the district court.²⁸

III. Statute of Limitations

Jane Doe (A.H.) v. Carnival Corp.²⁹ involved a suit against a cruise line by a passenger. The passenger claimed that she was sexually assaulted by a ship employee while aboard the ship when she was seventeen years old. The only issue on appeal was whether the plaintiff was barred from suit by the statute of limitations.³⁰

Although the statute of limitations for maritime personal injuries is three years, the defendant cruise line was permitted to contract for a shorter limitations period.³¹ Carnival sent each passenger a contract whereby the passenger agreed to a one-year limitations period for the filing of any personal injury suits for injuries sustained while aboard the ship. The plaintiff in Jane Doe did not dispute the fact that she signed this contract upon purchase of her cruise ticket. However, she claimed that the contract she signed establishing a one-year limitations period was not valid because she signed it as a minor, and therefore, the maritime three-year statutory limitations period trumped the contractually shortened one.³²

The United States District Court for the Southern District of Florida entered summary judgment for the shipowner on the ground that the plaintiff was time-barred from bringing suit, and the court of appeals affirmed.³³ The Eleventh Circuit concluded that 46 U.S.C. app. Sec. 183b(a)³⁴ contained a restriction that permitted the cruise line to contract for a shorter statute of limitations, provided such period was not less than one year.³⁵ Furthermore, the court rejected the plaintiff's assertion that because she was a minor at the time of execution, the contract in which she agreed to a one-year limitations period was unenforceable.³⁶ The court cited 46 U.S.C. app. Sec. 183b(c)³⁷ in concluding that the contract was indeed enforceable and that the one-year period began to run when a guardian was appointed or the minor reached the age of majority.³⁸ Therefore, 46 U.S.C. app. Sec. 183b(c) did not render void the contractually shortened limitations period; it merely tolled its operation.³⁹ The plaintiff in Jane Doe filed suit more than one year after her eighteenth birthday and thus exceeded the one-year period allotted by the contract; this period began to run from the date the plaintiff reached the age of majority and not from the date of the injury.⁴⁰ Therefore, the plaintiff's personal injury claim against the defendant was barred by the statute of limitations.⁴¹

IV. INTERNATIONAL CARRIER BOND

United States v. Kafleur⁴² involved another cocaine smuggling vessel. The defendants were Washington International Insurance Co. ("WIIC") and an entity known as Riverside Shipping ("Riverside"), which acted as an agent for vessel owners or charterers. Riverside filed a customs form for one of its vessels, the M/V GREAT NORTHEASTERN EXPRESS ("EXPRESS"). The EXPRESS did not arrive at its expected destination and was towed by the U.S. Coast Guard to Miami Beach. It was there that the Coast Guard discovered a steel box containing 89.9 pounds of cocaine. The Coast Guard then instructed the EXPRESS to continue to its final destination for formal entry, where upon docking, the crew fled before an investigation could be conducted or a manifest could be retrieved.⁴³ United States Customs then issued a notice of statutory penalty to Riverside under 19 U.S.C. Sec. 1584⁴⁴ for $1000 per ounce of cocaine found aboard and $100,000 for the full amount of the surety bond. The government agreed to mitigate the penalty from $1,438,400 to $143,840, but the defendants still refused to pay the penalty or the surety bond amount. The government then initiated suit to compel payment of these fines from an international carrier bond.⁴⁵

The United States District Court for the Southern District of Florida dismissed the motions of the principal and surety for summary judgment and granted summary judgment to the government. The district court found that the defendants were liable under Sec. 1584 for the full amount of the $100,000 bond.⁴⁶ The principal and surety appealed, and the Eleventh Circuit affirmed, holding that (1) the principal and bond were not outside the scope of enforcement provisions of the Tariff Act;⁴⁷ (2) the government's demand for a manifest was not a prerequisite to the imposition of penalties under the Tariff Act; (3) the principal was not entitled to an evidentiary hearing to ascertain whether the captain of the vessel had knowledge that the...