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Smart Summary

Factual and Procedural Background

MLC Fishing, Inc. ("MLC"), owner of the fishing vessel "Capt. Mike," initiated a limitation of liability proceeding following an accident involving Julio Angel Velez, who slipped and fell on a ramp connecting a marina to a floating dock while attempting to board the vessel as a passenger. The vessel was docked at Capt. Mike's Marina in Howard Beach, Queens. MLC sought exoneration from or limitation of liability under the Exoneration and Limitation of Liability Act. The United States District Court for the Eastern District of New York dismissed the complaint for lack of subject matter jurisdiction, and MLC appealed.

Legal Issues Presented

  1. Whether the accident involving Velez occurred on or over navigable waters, thereby satisfying the locality requirement for federal admiralty jurisdiction.
  2. Whether the Exoneration and Limitation of Liability Act independently provides a basis for federal admiralty jurisdiction over incidents not occurring on or over navigable waters.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Delgado v. Quarantillo, 643 F.3d 52 (2d Cir. 2011) Standard of de novo review for dismissal for lack of subject matter jurisdiction. Cited to affirm the standard of review applied to the district court’s dismissal.
Mathirampuzha v. Potter, 548 F.3d 70 (2d Cir. 2008) Burden of proof lies with party asserting subject matter jurisdiction. Applied to emphasize MLC’s burden to demonstrate federal jurisdiction.
U.S. Const. art. III, § 2 Constitutional grant of judicial power to cases of admiralty and maritime jurisdiction. Foundation for federal admiralty jurisdiction.
28 U.S.C. § 1333(1) Federal district courts’ original jurisdiction over admiralty and maritime cases. Statutory basis for federal admiralty jurisdiction invoked by MLC.
Vasquez v. GMD Shipyard Corp., 582 F.3d 293 (2d Cir. 2009) Purpose of federal admiralty jurisdiction to protect commercial shipping with uniform rules. Contextualized the scope and purpose of admiralty jurisdiction.
Jerome B. Grubart, Inc. v. Great Lakes Dredge Dock Co., 513 U.S. 527 (1995) Two-part test for admiralty tort jurisdiction: locality and substantial relationship to maritime activity. Applied to determine that the accident did not occur on navigable waters and was not substantially related to maritime activity.
46 U.S.C. § 30101(a) (Admiralty Extension Act) Extension of federal admiralty jurisdiction to injuries caused by a vessel on navigable waters, even if consummated on land. Used to clarify limits of admiralty jurisdiction and reject extension to the ramp incident.
Victory Carriers, Inc. v. Law, 404 U.S. 202 (1971) Piers and docks are extensions of land and injuries thereon are not compensable under maritime law. Supported classification of the ramp and floating dock as land extensions, excluding admiralty jurisdiction.
S. Port Marine, LLC v. Gulf Oil Ltd. P'ship, 234 F.3d 58 (1st Cir. 2000) Floating docks do not possess maritime characteristics for admiralty jurisdiction. Reinforced the conclusion that the floating dock and ramp are land extensions.
Cope v. Vallette Dry-Dock Co., 119 U.S. 625 (1887) Incidents on floating dry-docks lacking navigation characteristics fall outside admiralty jurisdiction. Analogous authority supporting the non-maritime nature of the dock and ramp.
46 U.S.C. § 30505(a) & (b) (Limitation Act) Limits vessel owner’s liability to the value of the vessel and pending freight for certain claims. Statutory provision under which MLC sought limitation of liability.
Sisson v. Ruby, 497 U.S. 358 (1990) Indicated unresolved question whether Limitation Act provides independent jurisdictional basis. Noted Supreme Court’s declination to decide the jurisdictional scope of the Limitation Act.
Seven Resorts, Inc. v. Cantlen, 57 F.3d 771 (9th Cir. 1995) Limitation Act does not independently confer admiralty jurisdiction. Adopted by the court to hold Limitation Act does not provide independent jurisdiction here.
Guillory v. Outboard Motor Corp., 956 F.2d 114 (5th Cir. 1992) Same as above. Same as above.
David Wright Charter Serv. of N.C., Inc. v. Wright, 925 F.2d 783 (4th Cir. 1991) Same as above. Same as above.
Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 921 F.2d 775 (8th Cir. 1990) Same as above. Same as above.
Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046 (11th Cir. 1989) Same as above. Same as above.
Complaint of Sisson, 867 F.2d 341 (7th Cir. 1989) Same as above. Same as above.
Henderson ex rel. Henderson v. Shinseki, 131 S.Ct. 1197 (2011) Federal courts have an independent obligation to raise and decide jurisdictional questions. Justified the court’s independent review of jurisdiction despite parties’ positions.
Hertz Corp. v. Friend, 130 S.Ct. 1181 (2010) Same as above. Same as above.
In re Carter, 743 F. Supp. 2d 103 (D. Conn. 2010) Interpretation that Limitation Act does not constitute a jurisdictional grant. Used as persuasive authority to support holding that Limitation Act does not confer independent jurisdiction.
Skilling v. United States, 130 S.Ct. 2896 (2010) Federal courts should adopt limiting interpretations to avoid constitutional difficulties. Supported limiting construction of the Limitation Act to avoid exceeding constitutional admiralty jurisdiction.

Court's Reasoning and Analysis

The court applied the Supreme Court’s two-part test from Jerome B. Grubart, Inc. v. Great Lakes Dredge Dock Co. to determine admiralty jurisdiction over tort claims. First, the locality test requires that the tort occur on or over navigable waters. The court found that the ramp where Velez slipped was an extension of land, as piers, docks, and floating docks are traditionally considered land for admiralty jurisdiction purposes. Since the accident did not occur on navigable waters or the vessel itself, the locality prong was not satisfied.

Second, the court considered whether the Limitation Act independently confers federal admiralty jurisdiction. The court noted that the Supreme Court has not definitively resolved this question but observed that every Court of Appeals to consider the issue has held that the Limitation Act does not provide an independent jurisdictional basis. The court endorsed the reasoning from the District of Connecticut’s decision in In re Carter, which concluded that the Limitation Act grants a private right of action but does not constitute an explicit jurisdictional grant. The court also emphasized constitutional limitations on admiralty jurisdiction and the need to avoid overly broad interpretations.

Accordingly, the court held that the Limitation Act does not extend federal admiralty jurisdiction beyond incidents occurring on or over navigable waters as defined by the Admiralty Extension Act.

Holding and Implications

The court’s final decision is AFFIRMED.

This holding means that the district court correctly dismissed MLC’s complaint for lack of subject matter jurisdiction because Velez’s accident did not occur on or over navigable waters, and the Limitation Act does not independently confer jurisdiction in such circumstances. The decision directly affects the parties by upholding the dismissal and does not establish new precedent expanding federal admiralty jurisdiction.

MLC FISHING, INC., as owner of the v. ssel "Capt Mike," the Plaintiff for Exoneration from or Limitation of Liability, Plaintiff-Appellant,

PER CURIAM:

Plaintiff-Appellant MLC Fishing, Inc. ("MLC") appeals from the district court's judgment dismissing for want of subject matter jurisdiction MLC's complaint seeking exoneration from or limitation of liability pursuant to the Exoneration and Limitation of Liability Act (the "Limitation Act"), 46 U.S.C. § 30501 et seq. MLC owns the fishing vessel "Capt. Mike," which at all relevant times was docked at Capt. Mike's Marina in Howard Beach, Queens. MLC initiated this limitation proceeding following an accident that took place when Defendant-Appellee Julio Angel Velez, intending to go fishing as a passenger aboard the Capt. Mike, slipped and fell on a ramp leading from the marina to a floating dock that passengers were required to traverse in order to access the vessel.

"We review de novo the district court's dismissal for lack of subject matter jurisdiction." Delgado v. Quarantillo, 643 F.3d 52, 54 (2d Cir. 2011) (per curiam). "The burden of demonstrating subject-matter jurisdiction lies with the party asserting it. . . ." Mathirampuzha v. Potter, 548 F.3d 70, 85 (2d Cir. 2008).

The Constitution provides that "[t]he judicial Power shall extend . . . to all Cases of admiralty and maritime Jurisdiction." U.S. Const. art. III, § 2. Congress has granted federal district courts original jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction." 28 U.S.C. § 1333(1). "The primary purpose of federal admiralty jurisdiction is to protect commercial shipping with uniform rules of conduct." Vasquez v. GMD Shipyard Corp., 582 F.3d 293, 298 (2d Cir. 2009) (internal citation, quotation marks, and alteration omitted). To determine whether a tort action lies within the federal courts' admiralty jurisdiction, we apply the two-part test set forth by the Supreme Court in Jerome B. Grubart, Inc. v. Great Lakes Dredge Dock Co., 513 U.S. 527 (1995):

First, the alleged tort must have occurred on or over "navigable waters." Second, the activity giving rise to the incident must have had a substantial relationship to traditional maritime activity, such that the incident had a potentially disruptive influence on maritime commerce.
Vasquez, 582 F.3d at 298 (citing Grubart, 513 U.S. at 534); see also Admiralty Extension Act of 1948, 46 U.S.C. § 30101(a) ("Extension Act") (federal admiralty jurisdiction "extends to and includes cases of injury or damage, to person or property, caused by a vessel on navigable waters, even though the injury or damage is done or consummated on land").

Applying this standard, we conclude that the ramp on which Velez slipped and fell is properly considered an extension of the land, and that this accident was not "caused by" the vessel or its appurtenances. As an initial matter, it is well established that "[p]iers and docks [are] . . . deemed extensions of land" for purposes of determining admiralty jurisdiction, and so "injuries inflicted to or on them [are] . . . not compensable under the maritime law." Victory Carriers, Inc. v. Law, 404 U.S. 202, 206-07 (1971) (footnotes omitted). Similarly, "courts specifically examining the nature of floating docks . . . [which] rise and fall with the tides . . . have consistently held that they do not possess the characteristics associated with maritime objects." S. Port Marine, LLC v. Gulf Oil Ltd. P'ship, 234 F.3d 58, 60, 63 (1st Cir. 2000) (citing cases); see also Cope v. Vallette Dry-Dock Co., 119 U.S. 625, 627 (1887) (claims arising from incident occurring on floating dry-dock did not fall within federal admiralty jurisdiction because the floating dock "had no means of propulsion . . . [and] was not designed for navigation"). Given that floating docks are considered extensions of land for purposes of determining whether an incident occurred on or over navigable waters, it stands to reason that a ramp leading from the land to a floating dock should likewise be so considered. Accordingly, because Velez's alleged accident occurred on such a ramp, the district court was correct in ruling that MLC cannot satisfy the locality prong of the two-part test for invoking federal admiralty tort jurisdiction.

Separately, MLC suggested below that the Limitation Act provides an independent basis for federal jurisdiction over this action. The Limitation Act provides that "the liability of the owner of a vessel for any claim, debt, or liability . . . shall not exceed the value of the vessel and pending freight," 46 U.S.C. § 30505(a). The "claims, debts, and liabilities" subject to this limitation of liability "are those arising from any embezzlement, loss, or destruction of any property, goods, or merchandise shipped or put on board the vessel, any loss, damage, or injury by collision, or any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of the owner." Id. § 30505(b).

The Supreme Court has indicated that whether the Limitation Act provides an independent basis for federal subject matter jurisdiction is an open question, but has declined the resolve the issue. See Sisson v. Ruby, 497 U.S. 358, 359 n. 1 (1990) ("[w]e need not decide" the issue because " § 1333(1) is sufficient to confer jurisdiction"). Every Court of Appeals to reach the question, however, has concluded that the Limitation Act does not provide an independent foundation for federal admiralty jurisdiction. See Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 773 (9th Cir. 1995); Guillory v. Outboard Motor Corp., 956 F.2d 114, 115 (5th Cir. 1992) (per curiam); David Wright Charter Serv. of N.C., Inc. v. Wright, 925 F.2d 783, 785 (4th Cir. 1991) (per curium); Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 921 F.2d 775, 779-80 (8th Cir. 1990); Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046, 1053-54 (11th Cir. 1989); Complaint of Sisson, 867 F.2d 341, 349-50 (7th Cir. 1989), rev'd on other grounds sub nom. Sisson, 497 U.S. at 358. While the district court did not address the issue in its opinion dismissing the case, and MLC has not renewed its argument that the Limitation Act broadens federal admiralty jurisdiction on appeal, "federal courts have an independent obligation to . . . raise and decide jurisdictional questions that the parties either overlook or elect not to press." Henderson ex rel. Henderson v. Shinseki, 131 S.Ct. 1197, 1202 (2011); see also Hertz Corp. v. Friend, 130 S.Ct. 1181, 1193 (2010) ("Courts have an independent obligation to determine whether subject-matter jurisdiction exists. . . ."). Having carefully considered the question, we take this occasion to join our sister Circuits in holding that the Limitation Act does not confer admiralty jurisdiction over petitions that arise from incidents that, like the one here, did not occur on or over navigable waters.

In reaching this conclusion, we are aided considerably by the District Court of Connecticut's cogent and well-reasoned recent opinion in In re Carter, 743 F. Supp. 2d 103 (D. Conn. 2010) (Kravitz, J.). As the court observed in Carter, the relevant statutory language — "[t]he owner of a vessel may bring a civil action in a district court of the United States for limitation of liability under this chapter," 46 U.S.C. § 30511(a) — gives no indication that Congress intended the Limitation Act to constitute a jurisdictional grant. See id. at 112 ("When Congress grants subject-matter jurisdiction to federal district courts, it ordinarily does so explicitly by using the word `jurisdiction.'") (emphasis in original). Instead, on its face, § 30511(a) appears to be intended as granting vessel owners a private right of action to enforce their rights under the Limitation Act in a federal court, assuming that the court otherwise has subject-matter jurisdiction over the controversy. Moreover, as noted by the Carter court, there does not appear to be anything in the Limitation Act's legislative history to indicate that Congress intended § 30511(a) as a jurisdictional grant. See id. With respect to "the Act's purpose of making United States shipping more competitive world-wide through the limitation of shipping liability," Seven Resorts, 57 F.3d at 773, we agree with our sister Circuits that this purpose would not be advanced by construing the Limitation Act as conferring federal jurisdiction beyond the limits set forth in the subsequently-enacted Extension Act, which extended federal admiralty jurisdiction to any incident "caused by a vessel on navigable waters," 46 U.S.C. § 30101(a). Finally, we share the Carter court's concern that reading the Limitation Act to confer federal jurisdiction over controversies that do not occur on or over navigable waters "might well exceed the scope of the constitutional grant of admiralty jurisdiction." Carter, 743 F. Supp. 2d at 113; see Skilling v. United States, 130 S.Ct. 2896, 2929-30 (2010) ("We have . . . instructed the federal courts . . . to avoid constitutional difficulties by adopting a limiting interpretation [of a statute] if such a construction is fairly possible.") (internal quotation marks and editing omitted). For these reasons, we hold that the Limitation Act does not confer federal admiralty jurisdiction over any action not already encompassed within the Extension Act's jurisdictional grant.

Accordingly, the judgment of the district court is AFFIRMED.

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Comments

MLC FISHING, INC. v. VELEZ, 10-903-cv (2nd Cir. 12-15-2011)
(Dec 15, 2011)