New admiralty case from the Fourth Circuit Court of Appeals. It is unpublished, but it does have a basic primier on maritime contracts, admiralty jurisdiction and collateral estoppel. The case is Barna Conshipping, S.L. v. 2,000 Metric Tons, 2011 U.S. App. LEXIS 2751 and it can be found here.
Facts: the parties contracted to ship steel from Spain to three U.S. ports and one Mexican port. The steel was apparently damaged upon shipment. A dispute arose about the bills of lading and the damage after the cargo reached the U.S. The charter party, who was incurring $15,000 per day detention charges, brought suit in Norfolk, Virginia. It asserted in rem claims as well as maritime quasi-contract claims. The ship was allowed to sail and new lawsuits followed the vessel into the Gulf of Mexico. The case reaching the Fourth Circuit was the Norfolk case, but apparently the Mobile and Houston cases had adverse findings for the charter party.
Issues: 1) should the appeal be dismissed on collateral estoppel grounds based on the adverse findings in Mobile/Houston?; 2) does an admiralty court have jurisdiction over quasi-contract claims in the absence of admiralty jurisdiction over the non-admiralty claims?
Analysis: the Fourth Circuit reviewed each claims pending in the various courts and found the overlapping claims, which were the subject of adverse rulings, were indeed preclusive under the doctrine of collateral estoppel.
As to admiralty jurisdiction over quasi-contractual claims, the Fourth Circuit said:
Admiralty jurisdiction exists over contract disputes if the contract at issue is a maritime contract; whether a contract qualifies as a maritime contract “depends upon the nature and character of the contract, and the true criterion is whether it has reference to maritime service or maritime transactions.” Norfolk S. Ry. v. Kirby, 543 U.S. 14, 24 (2004) (internal quotation marks and alteration omitted). If the “principal objective of a contract is maritime commerce,” id.
Quasi-contract claims, of course, are generally made by parties who, for various reasons, could not prevail on a contract claim. at 25, the contract is a maritime contract and admiralty jurisdiction exists over claims involving that contract. In this case, jurisdiction was lacking not because there were no maritime contracts involved in the transaction, but because Barna was not a party to and thus not entitled to make a claim under the maritime contracts upon which Barna was basing its claims. See Matarese v. Moore-McCormack Lines, 158 F.2d 631, 634 (2d Cir. 1946) (“The doctrine of unjust enrichment or recovery in quasi-contract . . . applies to situations where as a matter of fact there is no legal contract, but where the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain, but should deliver to another.”); see also Gulf Oil Trading Co. v. Creole Supply, 596 F.2d 515, 520 (2d Cir. 1979) (noting availability of quasi-contract remedies under maritime law even though express contract alleged by plaintiff “had [not] come into being”). Barna’s inability to assert a contract claim thus does not automatically foreclose its quasi-contract claims.
Admiralty courts have jurisdiction over quasi-contractual claims that “arise out of maritime contracts or other inherently maritime transactions.” Peninsular & Oriental Steam Navigation Co. v. Overseas Oil Carriers, Inc., 553 F.2d 830, 835 (2d Cir. 1977) (citation omitted); see Archawski v. Hanioti, 350 U.S. 532, 536 (1956) (“Rights which admiralty recognizes as serving the ends of justice are often indistinguishable from ordinary quasi-contractual rights created to prevent unjust enrichment. How far the concept of quasi-contracts may be applied in admiralty it is unnecessary to decide. It is sufficient this day to hold that admiralty has jurisdiction . . . provided that the unjust enrichment arose as a result of the breach of a maritime contract.”). There certainly are maritime contracts involved in this transaction – the bills of lading and the Barna-Oldendorff charter party, at the very least. Moreover, the quasi-contract claims that Barna asserts appear to arise from those contracts or more generally from the inherently maritime transaction at the heart of this case – the transoceanic transport of cargo by vessel. Barna’s quasi-contract claims did not receive much attention from the parties or the district court below, and the precise nature and contours of the claims are not entirely clear from the record. Nonetheless, given the information now before us, Barna’s quasi-contract claims would seem to be cognizable in admiralty.
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