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New Admiralty Case - Stays of Tort Cases Pending Limitation Action

Ah, the Limitation Act, 46 U.S.C. s 30501.  Roughly digested, it provides a cap or limit on the damages a tortfeasor faces for maritime wrongs.  The limit is set, by statute, as the value of the vessel plus freight.  The typical tort scenario is:  maritime injury occurs, victim files suit in state court asserting negligence, the vessel owner files a suit in federal court which is essentially a valuation trial as to the value of the vessel.  The statute says that during the pendency of the federal limitation action, the state court proceeding "shall cease."  46 U.S.C. s. 30511(c).

So, what happens to the state court suit?  Is it just stayed pending limitation action, or does cease require the suit to be dismissed?  And, if it is dismissed is the state law statute of limitation tolled while the limitation action is litigated?

The Court of Appeal for the Seventh Circuit resolved these questions today.  In American River Transportation Company v. Ryan, the Seventh Circuit ruled that "cease" really means "stayed."  Opinion can be downloaded here.  In American River, the federal district court was entertaining a limitation action while a state court negligence suit was stayed.  The party seeking limitation sought to have the district court require the dismissal of the state court suit, citing the "cease" language of the Limitation Act.  The court initially just stayed the action, but then reversed itself and sanctioned the state court plaintiff for not dismissing the state court suit.

The Seventh Circuit reversed.  It held that "cease" in the Limitation Act was satisfied by a "stay" of the state court proceeding.  It found compelling the fact that if the state court suit was dismissed, it would be time barred by the applicable statute of limitation.  It found that result to be illogical.  Thus, it interpreted "cease" to require a stay or cessation of the state court proceedings pending resolution of the Limitation action.

Coast Guard Publishes Draft Ballast Water Regulations

The U.S. Coast Guard is about to publish proposed regulations pertaining to ballast water handling in U.S. waters.  The official publication happens tomorrow, but the rule can be downloaded here (it is 180 pages, so be warned before printing).  This action is entitled a Notice of Proposed Rule Making or NPRM.

Highlights:

This NPRM would require that all vessels that operate in U.S. waters, are bound for ports or places in the U.S.,and are equipped with ballast tanks, install and operate a Coast Guard approved ballast water management system (BWMS) before discharging ballast water into U.S. waters. This would include vessels bound for offshore ports or places.

During the phase-in period for the phase-one standard, ballast water exchange (BWE) would remain as a ballast water management (BWM) option for vessels not yet required to meet the BWDS. At the end of the phase-one phase-in schedule, the option of using BWE would be eliminated. From that date forward, all vessels would be required to manage their ballast water through a Coast Guard approved BWMS and meet either the proposed phase-one or phase-two discharge standard, as applicable, or retain their ballast water onboard.

The Coast Guard acknowledges that testing is not yet technologically feasible and that Phase II is 1000 times more stringent than Phase I.  Hence, it is temporally phasing the implementation to allow for testing to become more technologically practical.

There has been much criticism over the Coast Guard's handling of its authority to deal with invasive species in ballast waters, particularly in the Great Lakes.  See my posts here, here, here.

Comments:

To submit your comment online, go to http://www.regulations.gov and click on the "submit a comment" box, which will then become highlighted in blue. Insert “USCG-2001-10486” in the Keyword box, click"Search", and then click on the balloon shape in the Actions column.

Matson - Horizon Shipping Antitrust Lawsuit Dismissed

A federal court in Seattle has dismissed an antitrust lawsuit brought against Matson Navigation Company and Horizon Lines, LLC. 

I have obtained the decision which can be downloaded here.  The case is In Re Hawaiian & Guamanian Cabotage Antitrust Litigation, No. 08-md-1972 TSZ.

This case is interesting on several fronts.  First, this court dismissed the complaint on its face ruling that the allegations were not sufficient to survive a motion to dismiss the complaint.  Under the federal rules of civil procedure, traditionally, all that a complaint had to allege was a short and plain statement of the claim showing that the plaintiff is entitled to relief.  The Supreme Court changed that requirement for antitrust plaintiffs in its decision in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).  Post-Twombly plaintiffs must allege, with specificity, facts that state a "plausible" round for relief.  In this case, allegations of common membership in trade associations, attendance at the same meetings, all constituted "parallel activity" but not a concrete allegation of illegal agreement. As such, it was dismissed without prejudice with leave to amend the complaint within 30 days.

Second, the court found the Filed Rate Doctrine applicable.  This doctrine, stemming from the Supreme Court decision in Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156 (1922), barred antitrust plaintiffs from rebates when prices are disclosed to a government regulatory authority.  In this case, the rates were filed with the Surface Transportation Board.  This court found that the Board could enforce anti-competitive violations.

Side note:  Twombly is not without controversy.  Last year, the Supreme Court expanded its reach beyond antitrust but other areas of civil litigation.  See Ashcroft v. Iqbal, 556 U.S. ___ (2009).  Legislation is being considered to overturn the Twombly/Iqbal standard.

Maui County Voter Case - SCT Argument Recording Available

My thumbs are still sore from the live tweet of the Maui voting case heard last week by the Hawaii Supreme Court.  Follow the above link to www.inversecondemnation.com to see pleadings and other materials.

The official recording is available on the Hawaii Supreme Court's website here. 

HAWSCT Argument: Live Tweet and Disclosure

The Hawaii Supreme Court will be hearing oral arguments this morning in the case of Dupree v. Hiraga.  Briefs and other materials over at www.inversecondemnation.com, post here.

I'll be live-tweeting the argument, albeit on my iPhone (excuse the typos).  Follow me at twitter.com/hawaiioceanlaw.

FULL DISCLOSURE:  My firm represents one of the litigants and my partner Ken Kupchak will be arguing. 

Hawaii Turns 50 - Statehood and the Law

The State of Hawaii turns 50 this week.  Owing to looming budget shortfalls in the State's budget, celebrations seem scarce around town.  This fact is not lost on the Editors of the New York Times who published an editorial today discussing the relative lack of celebration planned for this anniversary.

On that note, it seemed relevant to consider some differences between states and territories (I use that term generically to capture commonwealths, possessions and other land areas affiliated with the United States).

Statehood matters.  Some differences are highlighted below:

Individual rights: Around 1900, the U.S. Supreme Court heard a series of cases involving the newly acquired lands of Puerto Rico, Philippines, Hawaii and Alaska.  The cases, dubbed the Insular Cases, grappled with the notion that being a state was different than any other status.  As recently as 1990, the U.S. Supreme Court has said that the full panoply of constitutional rights are not automatic in non-states.  In United States v. Verdugo-Urquidez, the Supreme Court stated:

The global view taken by the Court of Appeals of the application of the Constitution is also contrary to this Court's decisions in the Insular Cases, which held that not every constitutional provision applies to governmental activity even where the United States has sovereign power. See, e. g., Balzac v. Porto Rico, 258 U.S. 298 (1922) (Sixth Amendment right to jury trial inapplicable in Puerto Rico); Ocampo v. United States, 234 U.S. 91 (1914) (Fifth Amendment grand jury provision inapplicable in Philippines); Dorr v. United States, 195 U.S. 138 (1904) (jury trial provision inapplicable in Philippines); Hawaii v. Mankichi, 190 U.S. 197 (1903) (provisions on indictment by grand jury and jury trial inapplicable in Hawaii); Downes v. Bidwell, 182 U.S. 244 (1901) (Revenue Clauses of Constitution inapplicable to Puerto Rico). In Dorr, we declared the general rule that in an unincorporated territory - one not clearly destined for statehood - Congress was not required to adopt "a system of laws which shall include the right of trial by jury, and that the Constitution does not, without legislation and of its own force, carry such right to territory so situated." 195 U.S., at 149 (emphasis added). Only "fundamental" constitutional rights are guaranteed to inhabitants of those territories. Id., at 148; Balzac, supra, at 312-313; see Examining Board of Engineers, Architects and Surveyors v. Flores de Otero, 426 U.S. 572, 599 , n. 30 (1976). If that is true with respect to territories ultimately governed by Congress, respondent's claim that the protections of the Fourth Amendment extend to aliens in foreign nations is even weaker. And certainly, it is not open to us in light of the Insular Cases to endorse the [494 U.S. 259, 269]   view that every constitutional provision applies wherever the United States Government exercises its power.

Plainly, the Supreme Court considers territories to being either on the path to statehood or the path to independence.  Citizens of states have more rights than citizens of non-states.

Elections:  Per Art. II, Section 1 of the U.S. Constitution, states, and not citizens, elect the President. "Each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress: but no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector."

Representation in Congress:  Per Art. I, Section 2 of the U.S. Constitution, only states can be represented in the U.S. Congress.  "The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature."  Art. I, Section 3 has a parallel provision for the U.S. Senate.  Non-states may have Delegates who lack voting power.

This is not a law review article on what laws apply to what territories.  Each federal law could have its own definition of "state" which could include non-states.  The Submerged Lands Act defines states as "states of the union" and it provides them title to the submerged lands adjacent to their territorial landmass.  See 43 U.S.C. s. 2301. 

Happy 50th Hawaii.

SCOTUS Beach Renourishment Case Update: Merits Brief Filed

The Petitioner has filed merits brief in the Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009).  The U.S. Supreme Court agreed to hear the appeal from the Florida Supreme Court regarding the uncompensated taking of beach lands. 

My partner, and fellow blogger, Robert Thomas, has created a resource page for this case.  My prior post here.

New Case - 9th Circuit FOIA Case Relating to Puget Sound Naval Munitions Site

Today, the Ninth Circuit affirmed a Washington federal court's summary judgment in favor of the Navy in a Freedom of Information Act case.

The Plaintiff submitted a FOIA request for government records relating to the Naval Magazine at Indian Island in Puget Sound.  The Navy disclosed about 1000 pages of records but did not release 81 documents, citing to two exemptions of the Freedom of Information Act.

Plaintiff brought suit and the Navy obtained summary judgment from the trial court.  The Ninth Circuit affirmed the decision finding that the the records were exempt under the FOIA's Exemption 2 (exempting from disclosure matters that are “related solely to the internal personnel rules and practices of an agency.”)

This exemption protects records which could be used to circumvent government regulations or those sensitive records designed for the agency's own internal use (assuming that they are particularly sensitive).

The Navy refused to turn over maps which denoted the blast radius around the Island based on the various types of munitions stored there.  The Court found that to disclose the records posed a risk that the records would be used to circumvent the law.  Therefore, the records were not required to be disclosed under FOIA.

Decision can be downloaded here. 

Maui Shark Tour Ban - County Council Cmte Approves

From the Maui News:  Wow -that was fast, the County Council Economic Development, Agriculture and Recreation Committee approved the proposed ban on shark tours (really a ban on land based activities related to shark tours. 

We'll see what the full Council and Mayor have to say about the proposed Ordinance.  My earlier post, with the bill available for download is here.

Congress Mulls Grants for Waterfront "Brownfields"

A bill has been introduced to amend CERCLA to provide grants for the revitalization of waterfront brownfields areas.  Hat tip to Captain Bryant for his post.

Bill can be downloaded here.

The bill authorizes grants for redevelopment of brownfields areas in the waterfront area.  The program will be spearheaded by the Environmental Protection agency.  Grants would be available up to $500,000.