Within the United States court system it is not always clear which court holds jurisdiction to hear certain cases. When a plaintiff files a lawsuit, the defendant often will claim that the court where the complaint was filed lacks jurisdiction – be it personal or subject matter jurisdiction – to preside over the case. In fact, parties will spend several thousands and sometimes millions of dollars litigating where the case should be heard, even before a court hears substantive arguments on the subject.
The same is applicable for maritime jurisdiction. While the Federal Courts have jurisdiction over maritime cases, it is not always blatantly clear that a case falls under Federal Maritime jurisdiction.
Fixing a Yacht
Mark owns a yacht. He uses it often and the yacht is showing signs of wear and tear. He realizes that it needs new flooring and calls XYZ company, which specializes in yacht repair and renovation, to discuss repair. After an inspection, XYZ quotes a price and Mark and XYZ agree to a contract.
After a protracted timeframe in which XYZ performed significant work but both parties to the contract were not satisfied, Mark brings suit in Texas state court against XYZ company for negligence and breach of contract. XYZ files a motion to remove the case to a Federal Court in Texas, citing maritime jurisdiction. Mark opposes the removal of the case from state court.
The Eleventh Circuit Court of Appeals stated, in the 1990 case of Nehring v. Steamship M/V Point Vail, that “[n]ot every contract that somehow relates to a ship or its business is considered maritime.” Instead, the Eleventh Circuit stated that an action only falls under admiralty law if it pertains directly and is necessary for commerce or for navigation on waters deemed navigable.
Using this test, courts apply whether Federal Admiralty jurisdiction is proper. True, repairing the flooring of a yacht is for the ultimate purpose of admiralty and there is significant case law stating that admiralty jurisdiction need not occur on the high seas; it is sufficient to have a nexus with the high seas but the actual case and controversy could stem from something that happened entirely upon dry land.
The Flooring of a Yacht
Based on an analysis of the Nehring case, XYZ would have difficulty stating that this case should be in Federal Court. New flooring on a yacht is not relevant to navigating water on the high seas. A yacht can easily sail safely on ocean waters with older flooring. If XYZ was repairing a defective hull or reworking a turbine, then it would have more of a compelling case for Federal Maritime jurisdiction. Under the facts of the above example, the Texas state courts, not the Federal Courts, would have sole jurisdiction with respect to the claims in this case.
Are you litigating a case that has maritime or admiralty implication? You need a lawyer that is both an advocate for your business and understands the maritime business. Contact the Kolodny law firm, a maritime law firm.