By Lafcadio Darling

A few recent federal maritime decisions have shed further light on the boundaries of admiralty jurisdiction:

In Vasquez v. GMD Shipyard Corp., No. 08-4566 (2nd Cir., September 15, 2009), the Second Circuit Court of Appeals confirmed that a claim arising out of an injury in an empty dry dock was properly subject to admiralty jurisdiction. The case arose from the accidental death of a shipyard worker, who fell while in a "graving dock" in the Brooklyn Navy Yard that had no water in it. In addition to ruling on the substance of the case, the court affirmed that admiralty jurisdiction over tort claims is determined by using a two party test: (1) the alleged tort must have occurred on or over the navigable waters of the United States, and (2) the activity giving rise to the incident must have had a substantial relationship to traditional maritime activity, such that the incident had a potentially disruptive influence on maritime commerce. The Vasquez reviewed prior precedent and confirmed that (1) a graving dock, even if empty, is considered part of the "navigable waters" for jurisdiction purposes and (2) work in a shipyard clearly has a substantial relationship to traditional maritime activity and commerce.

In In re Complaint of Mission Bay Jet Sports, LLC, No. 08-56142 (9th Cir. June 24, 2009), a federal trial court found no admiralty jurisdiction for tort claims brought by two women who were seriously injured when, as passengers, they were thrown off a Sea-Doo personal watercraft that being operated in an area of San Diego's Mission Bay designated for such craft. The plaintiffs were injured by the Sea-Doo's propulsion jet when they were thrown off because of the alleged negligence of the operator. The Ninth Circuit reversed the trial court's ruling on jurisdiction, using the same two-part test used in Vasquez. While finding that the tort clearly occurred on U.S. navigable waters, the court acknowledged that the question of whether there was a connection with traditional maritime activity and commerce was more difficult. Nonetheless, the court recognized that courts have declined to restrict admiralty jurisdiction to only those actually engaged in commercial activity, and have also taken an "inclusive view" of the types of activities that are covered under this test. Thus the court found that admiralty jurisdiction was proper.

In New Hampshire Ins. Co. v. Home Sav. and Loan Co. of Youngstown, Ohio, No. 08-3902 (6th Cir. September 24, 2009), the Sixth Circuit Court of Appeals rejected the argument by an insurer that its policy, styled a "marine insurance policy," was sufficient to implicate federal admiralty jurisdiction in a declaratory judgment action. The court held a Yacht Dealer/Marina Operator's general liability insurance policy was not a "maritime contract" and thus insufficient to invoke admiralty jurisdiction. The court noted that the correct approach is to look at the contract "as a whole" and determine whether the contract's "primary objective" has an "essentially maritime nature" and relates to "maritime commerce." The court then catalogued the non-maritime coverages within the policy and concluded:

Simply because a contract involves a marina does not mean it necessarily is a maritime contract. We must look at the nature of the contract and, in the case of an insurance policy, consider the specific interests insured. Applying that distinction in this case, we conclude that this insurance policy covering a yacht dealership and a marina falls outside the scope of our maritime jurisdiction, despite the fact that some of the services provided by the marina may relate incidentally to or facilitate maritime commerce.

The Sixth Circuit also observed that, "[l]ike other courts that have addressed similar issues, we also are reluctant to open the courthouse doors to a surge of litigation concerning transactions that may only tangentially involve a maritime business or a ship owner merely because one is a party in the dispute."

Lafcadio Darling specializes in commercial and maritime litigation, representing a wide variety of large and small business and individual clients. In addition to being licensed in Washington and California, Lafcadio also holds an LL.M. from University College London and is a licensed solicitor in England & Wales.