Note by Christopher A. Hebert
When U.S. bankruptcy law converges with federal admiralty law, complex jurisdictional conflicts and constitutional issues arise. This Article explores the history of how courts have treated the intersection of these two complex bodies of federal law, with a particular focus on Article III of the United States Constitution in the wake of the United States Supreme Court’s decision Stern v. Marshall. Because this fundamental issue regarding the power of bankruptcy courts to adjudicate admiralty matters may have a significant practical effect on maritime creditors, it is important that maritime practitioners be cognizant of the principles of bankruptcy jurisdiction. The Article further discusses certain aspects of complex commercial bankruptcy that are relevant to maritime practitioners, providing explanation of the impact of various bankruptcy issues in the maritime context.
Maritime accidents have a long history of creating environmental and personal property damages, as well as human casualties. Though these accidents have historically been subject only to civil liability, over time incidents like oil spills and passenger-boat casualties have gained more media attention and public outcry, resulting in more frequent criminal prosecutions. Beginning in the mid-1990s, the face of maritime law began to change. Ship officers and crews, as well as shipowners and even multinational corporations, have been increasingly penalized under criminal statutes. Now wrongdoers may find themselves subject to prosecution for manslaughter as well as criminal violations under environmental statutes. The United States Department of Justice has taken an active approach to prosecuting maritime wrongdoers under a myriad of federal environmental statutes, including the Clean Water Act, the Act To Prevent Pollution From Ships, and the Refuse Act. This Article presents a discussion of the criminalization of maritime casualties generally, as well as the increase in prosecutions of individuals and companies for maritime environmental crimes.
More and more, shippers of freight are engaging third-party logistics providers to arrange the movement of cargo instead of speaking with the motor carriers directly. In cases of lost cargo, the claimant must determine among the carriers, brokers, and third-party logistics providers—some of whom may be unknown to the shipper—which party carries the liability. The Carmack Amendment to the Interstate Commerce Commission Termination Act establishes a national application of strict liability to motor carriers and preempts all state law relating to carrier liability. The Carmack Amendment unquestionably applies to motor carriers, thus limiting their liability, but while the Amendment does not apply as to brokers and logistics providers, whether these entities qualify as carriers, despite never having physical control of the cargo, is unclear. This Article first analyzes whether claims about third-party logistics providers are preempted by the Carmack Amendment, then continues to determine what liabilities apply and what remedies are available and whether the Carmack Amendment should apply.
Warranties in marine insurance policies can take varying forms, from a common survey warranty to a unique provision inserted at the whim of a particular underwriter. Depending on the type of provision and the law applicable to the interpretation of the clause, the breach of a warranty may void or suspend a policy altogether. Alternatively, in certain jurisdictions or in certain cases, the breach may void the policy only if the breach is causally related to the loss or the breach increases the risk. In other situations, the provision may be unenforceable under state statute or under state law rules of contractual interpretation. This Article provides an overview of the treatment of a breach of warranty by various courts, beginning with an overview of various courts’ treatment of particular clauses and concluding with a discussion of a recent case example regarding a breach of an express seaworthiness warranty in a protection and indemnity policy.
This Article examines the English and Scottish Law Commissions’ ongoing review of insurance contract law and the demand for its reform. The difference between insurance law in England and the United States is important in order to understand the possible recommendations for reform. The Article summarizes the reforms made to date to consumer insurance law and the recommendations likely to be made regarding disclosures, warranties, and consequential damages for business insurance. The Article concludes that the reforms made to consumer insurance law are not appropriate for business insurance, that the case for reform is not made, and that such reform could likely be harmful.
Marine practitioners must be aware of the issues that may arise when dealing with potential claims in the marine insurance context. In some jurisdictions, both in the United States and abroad, plaintiffs may join the insurer in the lawsuit and seek recovery directly, rather than only through the insured. In most jurisdictions, the plaintiff will likely prefer to have the case heard in state court, but the defendant will seek to have it in federal court. To do this, the defendant may seek to remove the case once it is filed or to seek a declaratory action before the claim is made. Additionally, when dealing with multiple potential claimants, the insurer may wish to file and interpleader and deposit the funds with the court. This Article discusses these practical issues, and others, that may arise in a marine insurance claim.
When a ship proceeds to sea, it is beset by danger on all sides. The scope of risks involved is just as vast as the ocean. They range from the most minor to the catastrophic. The focus of this Article is protection and indemnity (P&I) insurance, a form of coverage under which shipowners and charterers are protected against the risk of liability to third parties and which plays a central role in maritime law. This Article considers the extent to which courts in the United States enforce and give effect to P&I insurance, especially in situations where the shipowner is unable to meet its financial obligations or has gone into bankruptcy.
The legal fallout from major offshore events such as the DEEPWATER HORIZON spill, PIPER ALPHA, and the grounding of the EXXON VALDEZ has resulted in extreme stress testing of liabilities allocation in upstream oil and gas project contracts. The risks inherent in the offshore oil and gas industry are very large. This Article examines how liability is shared during offshore construction projects, the standard insurance policy that is commonly used in respect of such risks, and a number of topical issues that parties engaged in such activity might bear in mind when they are negotiating contracts and insurance arrangements to protect their position.
The Fifth Circuit held that the district court did not have admiralty jurisdiction over this action, because Gulf Coast lacked a legal claim to title or possession of the dredge, and its contract and tort claims did not constitute maritime claims, which would have afforded a basis for admiralty jurisdiction. Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 237, 2011 AMC 421, 422 (5th Cir. 2010).