Maritime Case

Maritime cases can be tried in federal courts or state courts. When a claim falls within the admiralty jurisdiction, then case can be brought in federal court under the court’s original and exclusive admiralty jurisdiction. Federal admiralty jurisdiction is an independent source of federal court jurisdiction. Even a minor collision between two small boats can be tried as a federal maritime case. Saving to Suitors Clause means that if maritime case is one that could have been tried under the traditional common law, that case can be tried in state court. Traditional common law cases are tort cases and contract cases. Furthermore, maritime negligence cases brought by crew members against ship owners or operators can be tried in state court. Jones Ac expressly grants right to crew members to sue ship owners or operators for negligence.

Saving to Suitors Clause only grants state court trial for maritime cases that are also common law cases. Admiralty cases that do not have common law counterpart can only be tried in federal court.

Following maritime actions are trialed in Federal Courts:

  1. maritime actions in rem to arrest a ship for a maritime lien
  2. maritime actions against a defendant seeking pre-judgment maritime attachment or garnishment against the defendant’s property
  3. maritime actions to determine possession of the whole or part of a vessel
  4. shipowner actions for exoneration or limitation of liability
  5. maritime actions against the United States arising under the Suits in Admiralty Act or the Public Ship Act
  6. actions to foreclose preferred ship mortgages under the Ship Mortgage Act
  7. cases to adjudicate maritime prize cases
  8. cases to adjudicate in rein claims of maritime salvage

Policy reason behind the Saving to Suitors Clause was to recognize that while maritime and admiralty matters are matters of national interest appropriate for resolution in the federal courts, United States Constitution was not intended to take away the traditional jurisdiction of state courts over torts and contract disputes that occur within their jurisdiction.

Saving to Suitors Clause has been a good safety valve on maritime jurisdiction. Saving to Suitors Clause gives parties a limited right to choose the forum in which they try their maritime cases. Here below are not subject to state court jurisdiction:

  • Pure maritime matters that arise under maritime statutes like ship mortgage litigation or limitation of liability cases
  • Traditional maritime cases with no analogue in the common law like in rem salvage cases

These are not subject to state court jurisdiction for a number of policy reasons:

  • congressional determinations that the matters are not appropriate for decision in various state courts
  • need to establish and maintain a uniform federal maritime law
  • presumption that federal maritime judges are more suitable to the determination of maritime matters
  • determination that certain maritime cases are best served by the application of the unique federal maritime procedures.

Generally, maritime cases brought in federal court are subject to the same Federal Rules of Civil Procedure as other federal cases. It means that, maritime cases brought in federal court have the benefit of the federal rules governing discovery, trial procedures, and post-trial relief.

In United States, while maritime cases tried to state court may be subject to general maritime law, they are still subject to the state court’s rules of procedure. Some state rules might be very similar to the federal rules or may be more flexible. Some state rules might be more cumbersome. Main differences between Federal and State Courts:

  • Cases under federal maritime jurisdiction are tried to judge alone. But, cases in state court may be tried to a jury
  • only federal court can grant unique maritime remedies like judicial sale of an arrested ship or maritime attachment
  • only federal court can grant exoneration or limitation of ship owner’s liability
  • federal court maritime cases have potential right to interlocutory appeal. Parties may not have to try damages portion of the case until the liability portion has been decided on appeal
  • the rules for joining parties to the case are more flexible for maritime cases in federal court than in most state courts
  • rules for determining which court has venue to try the case are different for federal maritime trials
  • the way that the court determines if a case has been brought in time, or is too stale, may be different in the federal court than in the state court
  • successful case brought in federal court may be more likely to get interest on the claim running from the date of the injury until the day of judgment
  • federal rules governing summary judgment may be more flexible than some state court counterpart. While the forums may have different rules, goal of all courts is to provide a fair trial and a just result.

Compelling case should come to the same result whether in federal court or state court. Depending on the nature of the case and particular state forum, choice of forum may be a simple matter of preference and convenience. When we leave procedural issues aside, a state court which is very close to the plaintiff’s home county. State court has a local jury and a local judge who may be a locally elected official. State court could be daunting to an out-of-state or even just non-local defendant. On the other hand, state court judge and jury may have far less familiarity with maritime laws, rules, and customs, than a federal judge. Federal judge is appointed for life and specialization may regularly include maritime matters.

Generally, a case that is brought in federal court under the court’s maritime jurisdiction is tried to a judge alone. This rule is subject to some exceptions:

  • Statutory, in a case involving claims relating to contracts or torts involving a ship engaged in coastwise trade on the Great Lakes, either party can demand trial by jury
  • The other exception is jurisdiction-based. Saving to Suitors Clause gives parties with a common law claim the right to bring the case in a common law court (state court)
  • United States Judiciary Act also gives the federal courts jurisdiction over cases between citizens of different states or between citizens of a state and foreign citizens, when the amount in dispute is more than $75,000, under the court’s diversity jurisdiction. If a maritime case also satisfies the test for diversity jurisdiction, then the plaintiff can choose whether to proceed as a maritime case or as a diversity case, by making an election permitted under Rule 9(h) of the Federal Rules of Civil Procedure. Although the substantive law, maritime law, will stay the same, a Rule 9(h) election will determine whether the case will follow the maritime rules. If the plaintiff chooses not to follow the maritime rules, then the case will proceed just like any other diversity case, with a jury, if a jury is requested by a party.
  • If a maritime case arises under the Constitution or laws or treaties of the United States, then a plaintiff could bring the case under the federal court’s federal question Depending upon the statute involved, that jurisdiction may also permit a trial by jury.
  • If primary lawsuit is under the federal court’s diversity or federal question jurisdiction, but the plaintiff also has a maritime claim against the defendant, court may allow the maritime claim to be heard along with the other claims, under the court’s pendant jurisdiction

Plaintiff who actually files the complaint in a case gets the first, and usually the deciding, say in where the case will be tried. Nevertheless, a defendant has a few ways to influence the choice of forum.

Defendant from a maritime accident can pick the forum. In maritime case in which a ship owner will be the defendant, ship owner may win the race to the courthouse by filing an action under Shipowner’s Limitation of Liability Act. Although the procedure may seem counter-intuitive, by filing an affirmative complaint to be exonerated from any claims, or to have liability limited under the Act, the ship owner can choose a specific federal court, and force all would-be plaintiffs to bring their claims to that court. Because a limitation case is a unique maritime case, the matter will be tried without a jury, unless the claiming parties can find a way to take the case out of the federal court.

Shipowner’s Limitation of Liability Act, the limitation procedure set out in the Supplemental Admiralty Rule F is intended as a way to implement the rights of a shipowner under the Shipowner’s Limitation of Liability Act. Those rights include the right to bring all claims together into a single forum concursus and to limit the ship owner’s liability to value of the ship, subject to meeting certain conditions. If those rights, which are obtained through a limitation action under Rule F, conflict with the claimants’ rights to trial by jury under the Seventh Amendment to the Constitution, then courts have developed a process to allow claimants in certain cases to bring their claims in state courts or federal courts under diversity jurisdiction. If the rights of the ship owner can be protected by other means, like cases involving only one claimant or where the claims do not exceed the value of the ship, a limitation proceeding is not necessary, because the ship owner will not need to use the concursus process to bring all claims to a single forum and will not need the limitation action because the ship owner is not exposed to claims beyond the value of the ship. In other cases, the claimants may submit a stipulation that can achieve the same effect, by joining together all potential claimants, and by their agreeing to permit the federal maritime court to adjudicate all limitation issues, while permitting the state or diversity court jury to find the facts and determine liability.

If the plaintiff chooses state court, defendant may remove it to federal court. Currently, maritime case can be removed from state court only if case is subject to federal jurisdiction independent of the admiralty jurisdiction. Recent amendments made to the federal removal statute have raised questions about the ongoing validity of that rule. Federal removal statute permits defendants in state court actions to remove case brought in a state court to a federal court, if the federal district court would have original jurisdiction. If the case could have been brought in federal court in the first place. If a case satisfies the test for federal diversity jurisdiction or if the case arises under a federal. Then defendants may file Notice of Removal with federal district court. Case will proceed in that forum, unless the plaintiff can show that the case is not subject to removal, either due to a lack of federal jurisdiction, or if removal is otherwise prohibited. In a 1959 case, United States Supreme Court decided that maritime cases, other than diversity or federal question cases, are not federal question cases subject to removal to federal court.

United States Supreme Court concluded that admiralty and maritime law is based on sources different than laws of the United States, which are passed by Congress and signed into law by the President. Among other factors considered by the Court was the pragmatic recognition that allowing removal of maritime cases would nullify the Saving to Suitors clause. In 1959 case, federal removal statute stated that only cases founded on a claim or right under the Constitution, treaties, or laws of the United States would be removable without regard to the citizenship of the parties. United States Supreme Court had also held that maritime law was not founded on laws of the United States, statute meant that maritime cases would not be removable unless the federal court would have diversity jurisdiction. On the other hand, removal statute was amended by United States Congress in December 2011.

Amendments were intended to clarify the scope of removal for diversity cases. Amendments appeared to undercut the basis for the traditional limitations on removal on the basis of admiralty jurisdiction. Amended removal statute states that except as otherwise expressly provided by Act of Congress, any civil action of which a district court has original jurisdiction may be removed. This would include most maritime cases except Jones Act cases brought by crew members against ship owners.

Maritime cases can now be removed to federal court while other courts questioned whether United States Congress actually intended to allow maritime cases to be removed.

In April 2015, majority of courts that have looked at the issue have granted remand to send the cases back to state court. Common reasoning has been that while the federal district courts have original jurisdiction over claims brought under their maritime jurisdiction, they do not have original jurisdiction over claims brought at law in state court under Savings to Suitors Clause. Some courts have also noted that removal to federal court under maritime jurisdiction would deprive plaintiff of the right to a jury trial which is otherwise allowed under the Savings to Suitors clause. On the other hand, majority of those cases have involved crew member’s claims brought under the Jones Act which expressly allows cases to be brought in state court forums. What this means for parties to a maritime case brought in state court is that a defendant might be able to avoid facing a local judge and jury and instead force the case into a federal court to be tried by judge alone, under the court’s maritime jurisdiction. Until a Court of Appeals rules on the issue, it will remain so maritime plaintiffs and defendants should not assume that a maritime case brought in state court is safe from removal.

Federal court hearing an admiralty case have the jurisdiction to hear related state law claims. If state law claim arises from a common body of operative facts with the federal maritime claim, the federal court could hear the claim under its pendant jurisdiction.

Most federal cases are subject to the laws on venue which serve to allocate cases among federal courts with jurisdiction over a case. Under those general rules, diversity cases must be brought

  • where the defendant resides
  • where most of the events giving rise to the claim occurred
  • where the affected property is

Maritime cases are expressly exempted from those statutes. United States Supreme Court explained that exemption is based on the traditional underpinnings of maritime and admiralty jurisdiction. United States Supreme Court noted that admiralty courts were established for the purpose of resolving disputes between persons engaged in commerce and navigation, with property in remote locations, involving ships that may be absent for long periods of time. United States Supreme Court concluded that forcing plaintiffs in maritime cases to have to hunt down a maritime defendant when the plaintiff could otherwise establish jurisdiction over the defendant in some more convenient location, would be unjust. On the other hand, general rule of unlimited venue in maritime cases is subject to an exception. Just like other federal cases, maritime cases are subject to the doctrine of forum non conveniens. That well -established doctrine allows a federal district court that has jurisdiction to dismiss an action on the ground that some other forum is more appropriate and convenient for the trial of the case. Courts generally respect the choice of court made by the plaintiff and a defendant that asks to have a case dismissed on forum non-agreed grounds has a heavy burden, but if the chosen forum is not the home forum of the plaintiff then the court can assess the public and private conveniences overall, and decide whether some other court would be a better forum. Forum non-agreed situations typically come up in cases between foreign entities, involving foreign disputes, that only coincidentally may come within United States maritime jurisdiction, so a decision to dismiss a case for forum non-agreed rarely disadvantages United States person from bringing maritime case in United States court.

Generally, foreign courts are courts of general jurisdiction. Foreign courts are like state courts. Foreign courts hear cases involving property damage, personal injury, tort cases and contract disputes. On the other hand, not all courts are authorized to grant maritime remedies. When court orders the sale of a ship to enforce a judgment or claim. In that case, whether court is an admiralty court or civil court can be of crucial importance. General maritime law recognizes the sale of a ship by admiralty court as terminating all prior maritime liens and claims against the ship. Admiralty court sale allow new purchaser of ship to start fresh with clear title. On the other hand, if the ship is sold by civil court, then ship remains burdened with the pre-existing maritime liens and claims. If party is causing sale of a ship through foreign court, such as when foreclosing on a preferred ship mortgage or enforcing a maritime lien, party would be wise to confirm that the court has maritime jurisdiction over ships, in rem jurisdiction and should seek to have the court expressly state that it has admiralty jurisdiction and is selling the ship free and clear of all pre-existing liens. When a shipowner or investor want to buy a ship from foreign judicial sale, shipowner or investor should insist on obtaining a notarized confirmation of the court’s admiralty jurisdiction, to confirm that ship has been sold free and clear of all maritime liens.