Category: Admiralty


Thoughts on the Gulf Spill

In anticipation of the President’s speech tonight, I thought I’d make some observations about the situation in the Gulf.

1.  When I taught Admiralty last semester, I pointed out to my students that many of the statutes in this area are obsolete.  But, I quickly added, Congress won’t do anything about this until there’s a crisis.  Now we see a slew of proposals to amend the Jones Act, amend the Death on the High Seas Act, amend the Limitation of Liability Act, and overturn the Court’s decision on punitive damages in the Exxon Valdez case.  Maritime law is hot!  Of course, whether this sort of knee-jerk response leads to thoughtful changes is another matter, but overall it’s probably better that these neglected topics just get attention.

2.  The discussion about setting up a 9/11 style Fund (paid for by BP) to address claims arising from the disaster is intriguing.  It seems to me, though, that some new statute will required to make this work.  In particular, I’m not clear on how such a fund would interact with bankruptcy law.  Suppose BP puts $10 billion in escrow for the fund.  Then later they have to file for Chapter 11.  I don’t think that the fund would be immune from other creditors or that litigants would have priority over them (admittedly, though, some of my co-bloggers know far more about this than I do).

3.  A far less important point.  This crisis shows why the AALS Annual Meeting should not require such an early date for setting up panels.  Obviously, I’d like to do this year’s Admiralty Section panel on the spill.  But now I can’t — the deadline for setting up the panel was two months ago.  Granted, AALS can organize a separate one on the issue, but their rigidity with respect to the sections is rather irritating.


Punitive Damages in Maritime Law

As the Gulf disaster continues, it is worth thinking about about the potential liability of BP and other parties.  Following the Exxon Valdez disaster, the Supreme Court held, acting in its capacity as a common-law court, that punitive damages in admiralty could not exceed the compensatory damage award.  Justice Breyer dissented from this part of the opinion, explaining that “this was no mine-run case of reckless behavior. The jury could reasonably have believed that Exxon knowingly allowed a relapsed alcoholic repeatedly to pilot a vessel filled with millions of gallons of oil through waters that provided the livelihood for the many plaintiffs in this case. Given that conduct, it was only a matter of time before a crash and spill like this occurred.”

Perhaps some future court will distinguish Exxon from a suit against BP, but the opinion is awfully clear that a 1:1 rule is the law.  Congress, though, is free to change this, since Exxon is not part of the Court’s due process jurisprudence on punitive damages (which treats anything above 10:1 as suspect). Just as Congress may amend the Limitation of Liability Act in response to this crisis, they should also look at the punitive damage question.


Limitation of Liability and the Gulf Oil Spill

Transocean (RIG), which owns the platform that exploded in the Gulf and caused the massive ongoing oil spill, is seeking to invoke the Limitation of Liability Act of 1851. This law, which has never been amended with respect to property or environmental damage claims, provides that a carrier cannot be held liable for anything more than the value of the vessel and its contents if the ship is involved in an accident that causes those sorts of harms.  It probably goes without saying that the value of the oil platform (more specifically, what’s left of it) is way less than RIG’s probable share of the cleanup costs.

I am very skeptical that the statute applies to an offshore oil platform, in part because that is not navigable and does not involve “traditional maritime activity.”  More broadly, though, this might be the right time to abolish this doctrine entirely.  Maritime scholars (me included) have long held that in a modern world of insurance and corporate organization, the limitation of liability is obsolete.  The problem is that Congress hasn’t had any reason to repeal the 1851 Act — it’s a pretty obscure area of law.  A high-profile incident like the Gulf spill, though, might change that, especially if a court somewhere accepts RIG’s defense.


General Average and Takings

One of the maritime doctrines that I enjoy teaching is the general average.  This principle applies when cargo is voluntarily sacrificed by the crew in a successful effort to save a ship in distress (or when a ship makes a similar sacrifice to save the cargo).  Let’s say the master decides that he needs to throw cargo overboard to lighten the vessel and prevent it from sinking.  If this works, then the cargo owner who suffers a loss must be compensated by the vessel and the other cargo owners.  The compensation is calculated on a proportional basis depending on the respective values of the cargo and the vessel, with each party paying something and with the cargo owner who was affected also paying a share.  (In other words, the party who suffers a loss is not fully compensated.)

There is a fruitful analogy here to takings law.  The general average, like a taking, involves payment when property is used for the common good.  (Of course, the general average involves private owners rather than an acquisition by the state.)  There is an interesting paper that could be written comparing how these sea and land doctrines are applied.  Here’s an example.  In cases where property is taken in an emergency and successfully halts the danger, the property owner typically gets zero.  Why?  Because the thought is that the property would have been destroyed anyway (say by a giant fire or a disease).  In the maritime context, we say that the property owner who sacrificed should just not be compensated fully, but should get something.


Pirates and Terrorists

Officials in Washington are still struggling with how to deal with the alleged terrorists detained in Guantanamo.  One day the issue is whether some of them should be tried in a civilian court and, if so, where?  Another day the question is whether, and how, they should be tried by military commissions.  And then there is the thought that some of the detainees should just be held indefinitely without trial.

The most fruitful analogy for thinking about this problem comes from piracy.  (Eugene Kontorovich has an excellent paper on the modern aspects of this comparison coming out in California Law Review.)  Pirates and terrorists are both irregular enemies (or unlawful combatants) whose actions are clearly condemned by international law.  So I thought I would talk about the British experience with suppressing piracy to see what we might learn about dealing with alleged terrorists.

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Arrr . . . matey!

120px-Sperm_whale1bYesterday I became the Chair of the AALS Section on Admiralty and Maritime Law.  It was a bitter, hard-fought campaign in which I was the only volunteer.  So my main task is to put together a panel for the 2011 AALS Conference in San Francisco.

My idea for a panel builds on a post that I did wrote way back in April, which talked about what scholars in other fields can learn from Admiralty.  What I would like to do is get a contracts person, a torts person, and a corporate law person to talk about the relevant distinctions between maritime law and land-based doctrine.  I think that could be a fun discussion for lots of folks.  Please email me if you’re interested in participating.


Fun Cases You’ve Never Heard of — Part II

120px-Jolly-RogerUnited States v. Palmer, 16 U.S. (3 Wheat.) 610 (1818) is almost certainly the best case on statutory interpretation that you can use in the classroom.  If you’ve never heard of it, that’s because it is a maritime case about pirates.

Three Americans were convicted of piracy on the high seas.  A federal law provided for capital punishment where someone on the high seas committed “murder or robbery, or any other offense, which, if committed within the body of the country, would, by the laws of the United States, be punishable with death.”  The defendants argued that their crime was a robbery (no murder was involved) and that robbery was not a capital crime on land.  Thus, they could not be sentenced to death.

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Fun Cases That You Don’t Know

Since it’s that time of year (by which I mean exam time), I thought I’d write a recurring series of posts on neat cases that I use in my courses but are relatively unknown.  These will mostly be Admiralty cases, as I doubt that there are any “fun” constitutional or IP decisions that are hidden in plain sight.

Let’s start with Koistinen v. American Export Lines, 83 N.Y.S.2d 297 (1948).  Plaintiff was a seaman who was on shore leave in Yugoslavia.  At a bar, he “met a woman whose blandishments, prevailing over his better sense, lured him to her room for purposes not entirely platonic; while there ‘consideration like an angel came and whipped the offending Adam out of him’; the woman scorned was unappeased by his contrition and vociferously remonstrated unless her unregarded charms were requited by an accretion of ‘dinner,’ . . . the court erroneously interpreted the word as showing that the woman had a carnivorous frenzy which could only be soothed by the succulent sirloin provided at the plaintiff’s expense; but it was explained to denote a pecuniary not a gastronomic dun”

I could go on quoting this opinion all day, but to move things along the seaman (having changed his mind about going through with this assignation) was locked in the room by the woman and confronted by her pimp.  The sailor leapt out the window to escape, fell about eight feet, and broke his leg.  The issue was whether the ship was required to pay maintenance and cure (medical expenses and lost wages) related to his injuries.   The Court said yes, on the grounds that shore-leave injuries (with one or two exceptions) are considered work-related in maritime law.  After all, stranding a sailor in a foreign port with no medical care would be contrary to the remedial goals of maintenance and cure.


Pirate Democracy

I just finished a fun book that I want to recommend. It’s “The Invisible Hook: The Hidden Economics of Pirates” by Peter T. Leeson. The author explores the Golden Age of Piracy (circa 1720) and shows how pirates overcame collective action problems. While there are many parts that are of interest to lawyers (for example, the pirate use of trademarks — the Jolly Roger — and crude advertising to enhance their brand of terror and encourage capitulation), the issue that I want to focus on is pirate governance.

Leeson points out that pirates needed to create a legitimate authority amongst themselves because the cost of having unhappy crew members was high. Even one disgruntled pirate could desert and expose the ship to the authorities. (And the penalty for piracy was death). So how did pirate gangs handle this?

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Parrots and the Jolly Roger

Piracy is back in the news, and it’s not the intellectual kind. This is great for admiralty professors, and so I thought I’d take advantage of this brief moment in the sun to talk about some general legal issues involving pirates before discussing the ones operating off of Somalia.

Since ancient times, pirates have been considered public enemies under customary international law. This meant that ships were free to use force on the high seas to repel or capture pirates. Indeed, the phrase “public enemies” is still used in maritime contracts as a justification for non-performance in the event of a pirate attack. National governments sometimes authorized privateers to attack enemy merchant ships with letters of marque (the Constitution empowers Congress to issue these in Article One, Section Eight) but these immunity grants from domestic piracy prosecution have not been issued for decades.

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