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.
Navigating the Rogue Waters of Inland Marine Transportation and the Impact of the Use of Third-Party Logistics Providers on Recovery for Cargo Loss and Damage
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.
Breach of Warranty and Misrepresentation—USA
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.
Direct Actions, Declaratory Actions, Abstention, Interpleaders, and Other Practical Considerations
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.
The Central Role of P&I Insurance in Maritime Law
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.
Offshore Energy Construction Insurance: Allocation of Risk Issues
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.
Marine Casualty Investigations
This Article will focus primarily on the government entities (e.g., Coast Guard and NTSB) responsible for conducting marine casualty investigations. These formal investigations allow evidence to be gathered and preserved in a more orderly manner than can be done during, or even immediately after, a serious collision, fire, oil discharge, sinking, or other casualty, when response is the primary goal and the “Incident Command Center,” whether run solely by the Coast Guard or in conjunction with other federal and state agencies, is still in full swing.
Maritime Catastrophe Response — Civil and Criminal Counsel Investigation; Illustrative Recent Collision and Platform Case Law; Criminalization of Marine Negligence
To most people, nothing is more fascinating and newsworthy than a maritime disaster. A burning factory in Kentucky or a pipeline oil spill in Utah does not generate the same sense of drama and excitement as an equivalent amount of spilled oil from a burning ship or oil platform in Louisiana, Texas, or anywhere else. This Article partners a panel presentation at the 2011 Tulane Admiralty Law Institute. In this presentation, for illustrative purposes, the authors played back a United States Coast Guard Vessel Traffic Service (VTS) Automatic Identification System (AIS) Electronic Chart Display (ECDIS) for the M/T BOW FORTUNE--M/T STOLT ZULU collision at 81 Mile Point on the Mississippi River above New Orleans at about 0440 hours on May 19, 2006.
The Role of the P&I Clubs in Marine Pollution Incidents
The fire and explosion on the mobile offshore drilling unit Deepwater Horizon and the subsequent release of nearly five million barrels of crude oil into the Gulf of Mexico has been characterized as “the worst environmental disaster America has ever faced.” Although the oil spill occurred while the rig was operating as an offshore facility, among the many issues arising from the disaster is the adequacy of the current limits of liability applicable both to vessels and offshore oil exploration and production facilities under the U.S. Oil Pollution Act of 1990 (OPA 90), and the role of the marine insurance industry in meeting the costs of response and damages caused by such catastrophes. Pollution risks are borne primarily by the owner of the ship or facility concerned, who will normally insure against them, along with other marine liability risks, by separate liability cover. In the case of vessels, this is arranged most commonly by entering the vessel in one of the shipowners' mutual insurance associations, which specialize in providing cover of this kind, and which are more commonly known as Protection and Indemnity Associations, or P&I Clubs. This Article will discuss the law and practice of P&I insurance with particular emphasis on the liabilities arising from major marine pollution incidents.
Hijacked: The Unlikely Interface Between Somali Piracy and the U.S. Regulatory Regime
As of March 4, 2011, 33 vessels and 711 crew members were being held hostage by pirates. The international community has engaged in various efforts to address the continuing problem of pirate hijackings with seemingly little success. The United States has also taken its own swipe at piracy through Executive Order 13,536, entitled “Blocking Property of Certain Persons Contributing to the Conflict in Somalia” (Order), that was issued by President Barack Obama on April 12, 2010. Upon its issuance, the Order created a great deal of confusion and consternation with respect to whether it prohibited the payment of ransom to pirates. The answer as it emerged has proved to be “yes,” “no,” and “maybe” and has resulted in a process whereby applications for guidance with respect to the payment of certain ransoms (and related insurance payments) are made to the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC). The authors of this Article have both been actively involved in the development of the application process and have represented numerous clients seeking guidance with respect to ransom-related payments. This Article explains the Order and its import for piracy situations, and details the authors' experience with both the OFAC guidance process and related procedural and substantive issues that have arisen.