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New Admiralty Case From First Circuit - Fairest-Knight v. Marine World Distributors, Inc

New admiralty case from the First Circuit Court of Appeals. Issues are breach of implied warranty in the admiralty context.  The case is Fairest-Knight v. Marine World Distributors, Inc., 2011 U.S. App. LEXIS 14531 and can be found here.

Ah, the joys of owning a boat.  Circuit Judge Rorruella agrees, beginning this opinion:

This case, involving the saga of an extremely frustrated boat owner, provides further support for the occasionally expressed view that the two happiest days of a boat owner's life are the day he buys his boat and the day he sells it. Appellees will have to remain satisfied with this allotment of joy, as we now reverse the district court and hold that there was insufficient proof of causation to support finding the appellant liable.

This is a case arising from Puerto Rico where a recreational boat dealer sold a pleasure craft to a first-time boat owner.  Apparently, there were some mechanical problems with the engine requiring repeated visits back to the dealer for repairs.  After the last mechanical problem, the boat was returned to the boat dealer (where the dealer began repairing it) and the owner filed suit.  After the owner won at trial on claims of breach of implied warranty, the dealer appealed.

On appeal, the issue was could the dealer be liable for the ship repair. 

The First Circuit has acknowledged three potential sources of liability under federal maritime law for a ship repairer's infelicitous work.  [Author note:  I had to look it up too].  These are liability via expressly assumed contractual obligations, the maritime tort of negligence, and the "implied warranty of workmanlike performance that attaches to admiralty contracts under the rule of Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124 (1956).  

The purchase contract provided that the sale of the boat was "as is" AND the owner was provided documentation that the engine was not inspected.  Indeed, the boat owner conceded that he had no evidence of any sub-standard work by the dealer/repairer.  The Court could not find sufficient proof of causation and held that the trial court erred in finding the dealer/repairer liable.  In short, the boat owner could not point to the "undeniably frustrating" mechanical problems with his boat and infer a breach of the implied warranty of good workmanship.

Hawaii State Bar Assn Dinner

A Judge, a Bar President and a bunch of attorney hula dancers

Hawaii State Bar Assn Dinner - Honolulu Convention Center

New Admiralty Case from Fifth Circuit - QT Trading, L.P. v. M/V Saga Morus, et al

New admiralty case from the Fifth Circuit Court of Appeals. The issues are bailments and COGSA. The case is QT Trading, L.P. v. M/V Saga Morus, et al, 2011 U.S. App. LEXIS 9619 and can be found here.

Facts: QT purchased steel pipes from a company in China. That company chartered a ship for the transport of the pipes from China to the U.S. The vessel was owned by a third party who had chartered the ship to a fourth party. The pipes were delivered in rusty condition and QT brought suit against the vessel, in rem, the steel pipe vendor, the third party vessel owner, the fourth party vessel charter, and the operator of the vessel. NOTE: Gotta love these admiralty cases and their complicated defendant line-up!

Issues: Were any of the defendants "carriers" for COGSA liability? If not, were any of the defendants liable under a bailment theory?

Analysis: The complicating factor in this case was that the company who sold the pipes and who arranged the cargo to be shipped to the U.S. went bankrupt. The trial court granted summary judgment against QT for its claims against all the other parties, including the in rem claim against the vessel. The Fifth Circuit affirmed the summary judgment because none of the other parties were "carriers" under COGSA (the bankrupt defendant certainly was one). Additionally, QT's bailment theory failed because in order to recover under a bailment theory, a property owner's goods must have been in the exclusive possession of a bailee. In this case, the bills of lading acknowledged that the goods were not in the exclusive possession of any party.

Pacific Ocean Environmental Issues in the News - Rare Earth and Plastics

Lots of ocean environmental issues in the news today. 

The Star Advertiser reports that Japanese researchers discovered rare earth minerals in the Pacific Ocean, apparently beyond the U.S. Exclusive Economic Zone.  Several interviewed, including my former colleague Robert Harris, have expressed some concerns about the environmental impacts of such action.  This is an interesting discovery - stay tuned for my thoughts on the legal issues, like Law of the Sea, Global Commons, and the Precautionary Principle.

Separately, the Christian Science Monitor reports on the impact of the plastic-laden garbage patch in the North Pacific. To date, news reports are focused on the impact of the garbage patch on seabirds, as bird carcasses full of plastic are regularly found on the Northwestern Hawaiian Islands.  This was an interesting report on the impact of the plastics on the fish which are more commonly part of the food chain that can impact humans.  The Scripps release is here.

Ninth Circuit Decision on Intervention in Groundfishery Rulemaking Litigation

The Ninth Circuit just released its decision in a lawsuit regarding groundfish regulations on the West Coast.  The case is West Coast Seafood Processors Association ("Association") v. Natural Resources Defense Council, Inc. and the decision can be downloaded here.

The Natural Resources Defense Council filed a lawsuit against the National Marine Fisheries Service challenging aspects of the Pacific Coast Groundfish Fishery Management Plan.  At first, the Association participated as an amicus party.  NMFS published various amendments to the Plan year after year and NRDC amended its complaint to challenge the new plans.  The Association sought to intervene at several points after amendment of NRDC's complaint.  The trial court denied intervention, noting the age of the litigation (eight years), discounting the time from the intervention motion from the filing of the amended complaint (two days).  The Association appealed to the Ninth Circuit Court of Appeals.  Pending the appeal, the trial court partially ruled for NRDC and partially for NMFS and the parties apparently settled the dispute thereafter.

The issue for the appeals court is whether the Association's appeal was mooted by the underlying settlement.  The Ninth Circuit held that it was.  Under federal law, a case is not moot if the controversy is capable of repetition yet evade judicial review.  The majority opinion found that it was not capable of repetition because NMFS fisheries regulations are only good for two years, ergo a challenge to those regulations was not capable of repetition.

Judge Bea dissented (in an opinion that was double the length of the majority).  Judge Bea found the case entirely likely to repeat yet evade judicial review, noting that the action challenged by NRDC was too short in duration to be fully litigated on appeal.

Intervention can be a potent device to shape litigation, particularly in environmental litigation.  There are procedural hurdles, as this opinion demonstrated, but the only true way to have a seat at the table is to intervene.

July 4th Parade Kailua

July 4th Parade Kailua