admiralty law outline

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Admiralty I. Admiralty Jurisdiction 1. In rem- enforce a lien by suing the property itself, the vessel. Can only be brought in FEDERAL court in admiralty. Can only collect the value of the ship at sale. 2. Quasi-in rem- attach the property to get to the object of the suit 3. In personam- get jurisdiction over the person. Can collect the whole amount 1. Service on the individual person. 2. Service on agent if registered with the secretary of state. b. Federal courts are courts of limited jurisdiction c. Consequences of jurisdiction- a reverse ERIE rule, there IS federal common law in admiralty d. The Constitution of the United States and its resulting enabling statutory grant of admiralty jurisdiction to federal courts: 28 U.S.C. §1333 e. Navigable waterways of the United States 1. Genesee Chief- ebb and flow of tides 2. NOW- public navigable waters on which COMMERCE is carried between different states and nations 1. Presently or presently CAPABLE or being used for interstate trade- Daniel Ball 2. Natural and artificial obstructions can eliminate navigability 3. Seasonal flow does not impact status f. Admiralty Extension Act- 1. Extends maritime jurisdiction to all cases of damage or injury caused by vessel on navigable water, notwithstanding such damage or injury be done or consumed on land. g. Tort Jurisdiction- locality and the rise of the nexus to traditional maritime activity requirement- Executive Jet h. Contract Jurisdiction- the SUBJECT MATTER of the contract controls

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Page 1: Admiralty Law Outline

Admiralty

I. Admiralty Jurisdiction1. In rem- enforce a lien by suing the property itself, the vessel. Can only be

brought in FEDERAL court in admiralty. Can only collect the value of the ship at sale.

2. Quasi-in rem- attach the property to get to the object of the suit3. In personam- get jurisdiction over the person. Can collect the whole

amount1. Service on the individual person. 2. Service on agent if registered with the secretary of state.

b. Federal courts are courts of limited jurisdictionc. Consequences of jurisdiction- a reverse ERIE rule, there IS federal common law

in admiralty d. The Constitution of the United States and its resulting enabling statutory grant of

admiralty jurisdiction to federal courts: 28 U.S.C. §1333e. Navigable waterways of the United States

1. Genesee Chief- ebb and flow of tides2. NOW- public navigable waters on which COMMERCE is carried between

different states and nations1. Presently or presently CAPABLE or being used for interstate

trade- Daniel Ball 2. Natural and artificial obstructions can eliminate navigability3. Seasonal flow does not impact status

f. Admiralty Extension Act- 1. Extends maritime jurisdiction to all cases of damage or injury caused by

vessel on navigable water, notwithstanding such damage or injury be done or consumed on land.

g. Tort Jurisdiction- locality and the rise of the nexus to traditional maritime activity requirement- Executive Jet

h. Contract Jurisdiction- the SUBJECT MATTER of the contract controls1. Nature and Subject of contract control

1. Service/supply of vessel2. Charter parties3. Wharfage agreements4. Vessel storage Ks5. Carriage of goods by sea6. Stevedoring 7. Passanger transport8. Marine employment9. Piloting10. Salvage11. Towage12. Ship mortgages

a. NOT CONSTRUCTION2. ORAL K’s are enforceable under maritime law- Kossik

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3. Mixed K’s- maritime §s will be governed by maritime law 1. If non-maritime portion is INCIDENTAL, admiralty controls2. If non-maritime elements are inseparable, admiralty loses

II. Procedure, Saving to Suitors, Parties, and Choice of Lawa. Subject matter jurisdiction over the claim

1. Admiralty- 13332. Diversity3. SMJ- Federal Question

b. The Savings to Suitors Clause1. Concurrent jurisdiction between state and federal courts. One cannot bring

an in rem action or a limitation action in STATE court. Apply FEDERAL SUBSTANTIVE LAW and STATE PROCEDURAL LAW in state court.

c. Removal of maritime claims from state to federal court1. BAD IDEA- won’t work!

1. Deprives P of his right under Savings to Suitors Claused. Third Party Practice- rule 14-c and the joinder of partiese. 9h

1. In personam options for P1. Fed ct- admiralty juris2. Fed Ct- diversity3. State court

2. Make claim in alternative to preserve federal juris. 1. SEE RULES BELOW

f. Jury trials in admiralty- they do not exist g. Choice of law

1. Jensen Test: Applicability of State Law in Admiralty1. If it contravenes the essential purpose of Congressional act2. Works material prejudice 3. Interferes with proper harmony and uniformity of law that impact

interstate/international relations h. LAURITZEN-RHODITIS- 8 Factors

1. Factors that determine substantive law1. Place of accident2. Place of contract3. Law of flag4. Law of forum5. Inaccessibility of foreign forum6. Domicile of plaintiff7. Domicile of defendant8. Base of operation

i. Belgenland- 1. 2 vessels, open water, different flags collide- law of forum applies2. 2 vessels- same flag- law of registry applies3. 2 vessels- territorial waters- law of territory applies

j. The role of state law1. Case must be in personam (still concurrent with Fed juris), not in rem

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k. Venue1. In personam- where D is served with summons/notice2. In rem- where D’s property is or could be attached3. Must be some connection to the venue, not just forum shopping

l. Forum Non Conveniens – dismissal – CANADA MALTING- inconvenient to parties, witnesses to try case in certain area

1. Conditional dismissal- court dismisses, subject to certain conditions to be fulfilled by D- (waiver of some rights, etc, to ensure a fair trial)

2. Accident occurring in U.S. waters is not sufficient for juris. 3. Uniform application is required for harmony of decisions.4. Procedural, not substantive in state courts!

III. Arrest and Attachment- ADD RULESa. Arrest- Rules C & E

1. C- Vessel must be within court’s jurisdiction now or at time of trialb. Attachment- Rules B & E

1. Unrelated property can be usedc. Attachment- based on PERSONAL liability of the owner- cannot be used if owner

or agent is within jurisdiction of vessel/claim1. Petitioner must show reasonable efforts to find owner or agent, and cannot

find either in order to attach2. Provisional relief3. Marshal takes custody of vessel for the court, secures the property pending

the final determination of the court 4. Electronic fund transfers are subject to attachment!5. Direct relationship to the claim is not needed- quasi in rem!

d. Arrest- IN REM1. Must be granted by a judge or clerk of court

1. Hearing can be skipped in response to exigent circumstances2. Hearing can happen soon thereafter- arrestor must show cause3. Serious penalties for false arrest!

2. Must related directly to the claim itself3. Lien required

1. Liens- “Last In Time, First In Line!”a. Custodia Legis- marshal’s expensesb. Wages c. SALVAGE

i. If more than one salvor, latest is honored firstd. Tortse. Necessaries (bunkers, provisions, equipment)f. Mortgages (only NON-SECRET lien)

4. Letter of credit can release ship back into commerce5. Sale of property eliminates all liens on property6. Mechanics of Admiralty Arrest

1. Marshal takes control of the property2. Can be released if bond is given (usually a letter of credit from the

insurance co.)

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3.IV. Cargo

a. Majors players and terms1. Shipper- owner of goods sending them somewhere2. Carrier- owner of vessel

1. Common- heavily regulated, big companies2. Private- no regulation, can make any K it likes

3. Freight- payment for carriage- usually prepaid 4. Vessel is the bailee of the bailment cargo

b. The Bill of Lading1. Formal receipt2. K for service3. Document of title

a. Negotiable- Carrier on hook for misdelieveryb. Non-negotiable- only named party can take delivery – BoL

must say “Non-Neg” or straight2. Construed AGAINST the draftsman3. Custom terms will apply over generic terms of BoL4. For common carriers, may NOT K out of responsibility

c. Pre-Statutory Law- U.S. courts would not let carriers K out of responsibilities d. COGSA and Harter Act (Do not apply to PRIVATE carriage)

1. Harter1. Inland US-US ports under a BoL, NOT foreign-US travel2. Applies OUTSIDE of tackle-to-tackle period

a. From receipt of goods until proper deliveryi. Proper delivery

1. Discharge on a fit wharf 2. Segregates cargo per BoL3. Makes accessible to consignee4. Consignee has reasonable opportunity to

take possession 3. EXCULPATION

a. §1- carrier CANNOT exculpate himself in a clause of the BoL relating to loading, stowage, custody, care or delivery of the cargo.

b. §2-carrier CANNOT protect against not using DUE DILIGENCE in properly equipping and providing a SEAWORTHY vessel

c. §3-IF carrier shows due diligence and properly manned/equipped the vessel, he is exonerated for:

i. faults or errors in navigationii. errors in management of the vessel

iii. losses arising from:1. perils of the sea2. acts of God3. acts of public enemies

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4. inherent defect, quality, or vices of the goods

5. insufficiency of packaging6. seizure under the legal process7. any act or omission of the shipper or owner8. saving or attempting to save goods at sea

2. COGSA- 46 U.S.C. § 1300 – applies over multi-modal transport (vessel to RR, etc. until final delivery)

1. Pro-Carrier statutea. Carrier- vessel, owner, or charterb. K of Carriage- applies only to particular shipment under

BoLc. Good- anything other than live animals

2. Applicationa. All K’s of carriage to or from U.S. ports in foreign tradeb. Tackle-toTackle- received by carrier until ultimate delivery

i. When the goods hit the end of the vessel’s chuteii. Liquids- when pipes connect with phalange

iii. On gangplank, when over the hull c. BoL must exist AS A K!d. If BoL is just a receipt, COGSA does not applye. US to US is HARTER jurisf. COGSA can be K’d into by both parties, will trump any

BoL clauses3. § 1303- Responsibilities/Liabilities of Carrier/Ship

a. DUE DILIGENCE at INCEPTION of voyage to:i. Make vessel SEAWORTHY- applies at

inception/sailing, not absolutelyii. Properly MAN/Equip vessel

iii. Make vessel fit for receipt, carriage and preservation of goods

b. Cargo- CONTINUOUS DUTY to properly load, handle, keep, carry, care, and discharge the goods.

c. BoL- issued by carrier upon shipper’s request showing:i. Leading marks needed for ID of goods

ii. Number/quantity/or weight of packages/goodsiii. APPARENT order and condition of goods; carrier

cannot be compelled to do this if he has reasonable suspicion of inaccuracy of data or has no reasonable means of checking

d. BoL- prima facie evidence of receipt of goods by carriere. BoL- ONE YEAR statute of limitations f. BoL- ANY clauses exonerating the carrier from negligence,

fault, or duties shall be VOID 4. §1304- Rights and Immunities of Carrier/Ship

a. § 1- Unseaworthiness

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i. not liable for losses arising from unseaworthiness unless brought about by lack of due diligence

1. burden of carrier to prove!ii. Latent defects- carrier could not have

detected/remediediii. Transitory seaworthiness- after ship leaves port

b. § 2- Uncontrollable Seas- not liable for:i. acts of negligence in the nav/mgt of vessel

ii. FIRE, unless caused by actual fault or privity of carrier

iii. Perils of the SEAiv. Acts of Godv. Acts of war

vi. Acts of public enemiesvii. Arrests, restraint of princes, legal seizure,

quarantineviii. Act or omission by shipper

ix. Inherent defect or vice of the goodsx. Latent defects not discoverable by due diligence

xi. Any other causes without privity of carrier- burden on carrier to prove

c. § 3- Liability (§ 1305)i. $500 per package or non-package customary freight

unitii. UNLESS the value could have been declared by the

shipper (and thus a higher $hipping rate)iii. May K to increase liability, not to decrease…may

charge more for increased liability5. Rights and Liabilities under other provisions

a. COGSA shall not effect the Fire Statute6. HARTER v. COGSA

a. Differences:i. Harter- no statute of limitations

ii. Harter- no limitation of liabilityiii. Harter- no exoneration for errors in nav/mgt

b. Harter- BoL’s for US-US voyagesc. COGSA- does not apply to goods stored on deck or live

animals

e. The Shipper’s Prima Facie Case1. P does not need to show fault/negligence to explain how cargo was

damaged2. P must show goods were damaged while in carrier’s custody3. Burden of Proof is met:

1. Good Order- Bad Order- good cargo at start, bad when delivereda. Or

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2. How/when damaged- can show evidence, such as seawater damage 4. Clean/Claused BoL

1. Clean- carrier acknowledges condition at receipt timea. N/A when carrier has no way to inspect cargo!

2. Claused- states goods are already damage- RARE5. Even if damage is not detectable by carrier at receipt, P can show damage

could ONLY have been caused while under care of carrier 6. Misdelivery- carrier is on the hook if cargo given to wrong person

f. Responsibilities of the Carrier- see COGSA1. Cannot be contracted out for a COMMON carrier2. Private carrier can set any terms both parties will agree to

2. Due diligence to make ship seaworthy- fit for the nature of the voyage!1. Factors- voyage, cargo, stowage2. Duties at inception and beginning of voyage:

a. Fault in construction of vesselb. error by master c. improper loading/stowaged. conditions making storm damage likely (hatch covers

loose)e. faulty maps/charts or other navig. aids f. improper cleaning of tanks/input lines

3. Actsa. COGSA- causal connection between fault and damage

needed. Lack of due diligence must be proven.b. Harter- any breach of duty imputes liability; due diligence

must be established by the carrier before other defenses. 3. Due Diligence in handling of cargo

1. Continuing duty of carrier and its agents2. Defense- latent defect

g. Immunities of the Carrier- see COGSA above1. Loss from Unseaworthiness despite Due Diligence

1. No liability if due diligence exercised a. Due diligenceb. After voyage commencedc. Latent conditions

2. Errors in Navigation1. Unseaworthy v. Error in Mgt

a. Unseaworthy- i. detectable at time of voyage

ii. owner did not diligently provide a competent crewb. Error

i. Ship made wrong turn, collides- no liability for owner

2. Proper care of cargo v. error in nav.

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a. Knott approach- was the risk primarily to the cargo? Was the act a threat to the cargo or to the vessel? Was the vessel seaworthy. Improper stowage is not an error in nav.

b. COGSA Multimodal- applies if K’d for!c. If threat to vessel, protected; threat to cargo- not protected

3. Perils of the Sea1. Must be unique to the sea2. Extraordinary3. Not foreseeable4. Due diligence must be exercised5. Carrier must establish peril of sea…if 50/50, carrier loses

4. Inherent Vice1. Shipper, not carrier, should be aware of internal characteristics or

goods and should be responsible for thema. Insect eggsb. Tendency of metal or rustc. Tendency of fishmeal to create heat

2. Burden of Proofa. 2nd Circ- carrier needs to show internal vice and burden

then shifts back to carrierb. 5th Circ- Carrier must show vice was inherent.

Susceptibility is not sufficient- actual cause must be shown to shift burden back to shipper.

5. Restraint of Princes1. Legitimate government interferes with vessel, carrier is off the

hook. 6. Q-Clause

1. OMNIBUS clausea. “any other causes arising without the fault of the carrier or

his agents”2. Carrier must show no privity of self or agents to shift burden to

shipper3. Carrier:

a. Proof of Due Diligenceb. Proof that damage was caused by something other than

carrier’s negligence (must sometimes prove actual cause, or lose)

7. FIRE!1. Unless caused by actual fault or privity of carrier is except, since it

is inescapable and remedial action is very limited.2. Carrier usually wins fire cases.3. Better all around if carrier can prove DD.

h. Damages and Limitation of Liability1. Non-Containerized Cargo

1. Fully enclosed goodsa. Generally deemed to be packages

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b. Look to BoL for package numbersc. Look at general physical nature of the itemd. Containers are generally not packages unless indicated as

such by the BoLe. IF NOT A PACKAGE, THE LOOK TO CUSTOMARY

FREIGHT UNIT2. Partially enclosed

a. Generally defined in BoLi. Ex- pallets

3. $500 limitation a. per-package unless value is declared on BoLb. Shipper must have opportunity to declare a higher value

i. If shipper opts not to, in order to pay less freight, he assumes the risk of only getting $500 back

i. COGSA Carriers- 1. Generally:

1. Shipowner issuing a BoL2. Charter3. 3-Party situation

2. Ask- who is captain going to K with? 3. Himalaya Clause

1. Non-carrier agent seeks protections under BoL2. Read strictly against party seeking protection3. Must clearly and expressly extend protection4. Say whom is to be protected, not a blanket immunity clause

j. Deviation1. An intentional departure by the vessel from the geographical route specific

in the contract of carriage2. Application

1. Quasi-deviation- fundamental breaches of K of C that are not geographic. Includes conduct exposing cargo to risk- carrying on deck, delay, etc.

a. Non-Delivery- b. On-Deck carriage- quasi-deviation occurs when carrier

disregards terms of K and fails to store goods below deck, despite provision calling for such

2. Policy- Deviations put cargo at risk beyond terms of K of carriage3. COGSA Deviation

1. Reasonable/excusable- when done for a reasonable purpose or in attempt to save life or property at sea

2. Unreasonable/inexcusable- deviation for purpose of unloading cargo or passengers, or in pursuit of inexpensive bunkers

3. Reasonableness Test: does deviation expose cargo to danger that is foreseeable and avoidable???

a. Excused: deviation to alternate port due to strike, quarantine, risk to cargo

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b. Unexcused: deviation to load/unload cargo or passengers, remedy a pre-existing unseaworthy condition, to purchase inexpensive bunkers, on-deck storage in violation of KoC

4. Causal connection between loss and deviation needed to eliminate COGSA and BoL protections of carrier!

k. Exoneration Clauses- unenforceable under COGSA BoLs l. Choice of Forum and Law

1. Usually on the back side of the bill of lading2. Generally enforceable

V. Charter Partiesa. Charter Party- a maritime contract for the lease of a vessel or a portion thereof

1. Governed by freedom of K. 1. Private K2. Parties can allocate risks as they please

2. Strictly construed AGAINST the drafter3. Nearly universal arbitration clauses to decrease litigation

b. 3 Major Types:1. Time Charter- charter selects destinations/schedule, pays for fuels, owner

covers the rest 1. K for use of vessel for period of time2. Charterer bears expenses of each voyage, pays hire to the carrier

for the time used3. Owner- retains management and control

a. Terms of vessel’s useb. Feec. Condition of vessel for insurance appraisald. Duratione. Expenses of running vessel

2. Voyage Charter- charterer is buying space on the vessel, owner pays for crew/supplies

1. Taxi ride- K of carriage2. Carrier- agrees to transport cargo in return for freight (inclusive

fee)3. Charterer- provide cargo and pay freight4. Owner- provide vessel, master, and crew at disposal of charterer5. May lease entire vessel or just space aboard the vessel

3. Demise/Bareboat Charter- charterer pays for everything, terms usually in years, charterer is owner pro-hoc-vice

1. Charterer provides everything- crew, master, provisions, etc.a. Pays charter hire

2. Charterer is liable for damages and lossesa. Anything that is not normal wear and tearb. Indemnifies owner against damages from charterer’s

negligence or fault 3. Owner need only provide a seaworthy vessel as per charter party at

INCEPTION of charter

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4. TEST: is owner giving service of vessel, or possession (not title)a. Possession = demise/bareboat charter

c. Charter Party Fixtures- the formation of the K1. Usually made through brokers

1. Main agreement2. Details

2. England- no K until details are settled3. U.S.- k exists when main agreement to charter is reached…details, even

big ones, can come later – the Junior Kd. Late Delivery- charterer is free to cancel (as per cancellation clause) if vessel is

not ready on due datee. Failure of Vessel to comply with Charter Party:

1. Promises from Owner1. Fuel and oil2. Diesel oil3. Speed/consumption4. Carrying capacity

a. Volume- cc grain capacityb. Deadweight- “about” amount of cargo able to carry

2. Consequences of Breach1. Repudiation if breach of promise substantially impacts the

commercial purpose of the Charter party 3. Speed/Fuel Consumption

1. Owner’s promise = guarantee= warrantee, even if word is not useda. Breach allows for repudiation and damages if promise was

made to induce chartering of vessel 4. Warranty of Seaworthiness

1. Unless EXPLICITLY and conspicuously agreed (by waiver) otherwise, owner has duty to furnish a seaworthy vessel- doing so implies a warranty

2. Not due diligence, warranty of fitness3. If breached, charterer not liable for damage to vessel 4. Charterer’s knowledge of unseaworthiness does not deny him the

right to rely on the owner’s warranty5. C does not have to accept unseaworthy vessel from O, C can

repudiate charter party 6. Not a continuing duty of O, unless agreed to in CP7. Once accepted, only a substantial infringement upon the

commercial purpose will warrant repudiationf. OFF-HIRE

1. Generally- no-fault period; charter does not have to pay, owner not liable for loss of use

2. Typical instances:1. Drydocking 2. Deficiency of crew or stores3. Mechanical breakdown

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4. Damage to hull, other accident3. Only payment of hire is suspended, if charterer is not at fault for off-hire

event4. Off-hire time – net overall time lost to charterer

1. If time lost is to fix a defect of the vessel, it is on owner’s time and not off-hire

5. Preventing the working of the vessel- Knutsford case6. Any loss of time- Woods Hole

1. Charter party controls terms of when vessel is off-hire due to non-fault

g. Remedies: Damage/Withdrawal 1. Owner’s remedies:

1. Withdrawal- will only happen when market rate is greater than K rate

a. Must happen at END of voyage, mid-voyage notice is not effective

2. Sport of the shipping market- owners have been known to withdraw HOURS after a missed payment, forcing a rechartering at a higher market rate

3. LUCKENBACH- if owner takes actions inconsistent with withdrawal, CP is presumed to continue/renewed

h. Safe Port, Safe Berth 1. Owner will only allow charterer to select “safe” ports

1. Time and Voyage charters require “safely lie, safely afloat”2. Unless otherwise K’d for, charterer warrants that a particular port

is safe3. Poor weather does not mean unsafe

2. Uses of Safe Port Doctrine1. Owner may sue for damages if port proves dangerous2. Master may refuse to enter a port he feels is unsafe- no breach

3. Reasonable care must be used- “safe” refers to state of port at time of selection, regardless of later developments

i. Redelivery1. Wear and tare

1. Charterer is responsible for damages beyond the normal wearing down of the vessel

2. Presumption of charterer negligence if owner can show:a. Good drop-offb. Damaged on return

3. Owner is entitled to charter hire until vessel is returned in good condition

4. Charterer is liable to owner for lost time due to necessary repairs from charterer’s fault

j. DEMURRAGE1. Charter Party Laytime

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1. Laytime- period of time allowed for loading and unloading. After laytime has expired, demurrage rate is paid for overtime/dealy

2. Customary Despatch- charterer must load/unload as quickly as reasonably possibly (charterer gets $ if he finishes early, usually half of demurrage rate)

3. Reversible- an option given to the charterer to add together the time allowed for loading and discharging

4. Demurrage- liquidated damages- increased rate of hire to compensate for delay caused by charterer

5. “On Demurrage”- laytime has expired6. Distinguish with “Detention”- penalty imposed on a charterer for a

wrongful or unnecessary delay; usually post-demurrage period when vessel is STILL late

7. Weather Delays- will stop laytime clock and extend it8. Notice of Readiness- notice that vessel has arrived and is ready to

load/unload 2. Once notice of readiness is given, the clock starts ticking!3. Port Congestion

1. If event is beyond control of the charterer, demurrage does not kick in

4. Vessel Arrival1. Starts clock on laytime2. Depending upon charter party terms, can mean arrival at: port,

dock, berth 3. Vessel must be clean and ready to load4. Notice must be given to charterer5. Laytime ceases if delay occurs through fault of owner or agent6. Charterer liable for dead weight- less cargo loaded than K’d for7. Port arrival- waiting is done on charterer’s time, even if there is no

berth open8. Berth arrival- on owner’s time until in berth9. WIBON- whether in berth or not-

a. Turns a berth CP into a port CP- may give notice WIBON…shifts risk of waiting time from owner to charterer

10. Vessel has arrived at port when it is as close as it can safely get 11. Periods of Voyage:

a. Loading voyage- Owner timeb. Loading- Charterer timec. Carrying voyage- Od. Discharge- C

5. Vis Majeur- major acts/events beyond control of charterer stop laytime clock, hence no demurrage

6. Cessar Clause – if charterer pays part of freight in advance, owner can look to lien on cargo and consignee for balance of freight- K’d for by C for reduced freight rate

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k. Frustration- when commercial purpose of the charter party becomes impossible1. Cancels CP and releases both parties from obligations

l. Mutual Exceptionsm. Other damages issuesn. Charter-related Liens

1. Charterer’s Lien on Vessel1. Rainbow Line v. Tequila- the C has a lien on the vessel based on a

breach by O2. Owner’s Lien on subfreights

1. Finora v. Amitie Shipping- O has a lien on the cargo and subfreights based on a breach by the C

3. Outsider’s Liens1. Gulf Oil Trading v. Caribe Mar

a. Suppliers of necessities have a lien against a vessel UNLESS they have knowledge of a “prohibition of lien” clause in the charter party. Knowledge defeats the claim.

o. Charter Parties and Bills of Lading1. Charter covers owner/charterer relations2. BoL covers cargo- when held by charterer, serve as a receipt only

VI. Maritime Casualitesa. Liability

1. Inevitable accident1. Not preventable by exercise of due care, causation, and nautical

skill2. Inscrutable fault- neither vessel can be shown to be at fault- no

negligence can be imputed to either vessel, accident is deemed inevitable- The Jumna

a. Rarely foundi. Easy to establish fault

ii. Impugn fault3. Presumption of fault of moving party- The Louisiana Rule-

a. When a moving vessel strikes a stationary one, moving vessel is presumptively at fault unless

i. Accident inevitable orii. Vis major

2. Error in Extremis1. Where one ship has, by wrong maneuvering, placed another ship in

a position of extreme danger, the other ship will not be held to blame if she has done something wrong and not maneuvered with perfect skill and presence of mind

2. Vessel claiming EiE must show it did not cause peril b. Fault- Modern Rule

1. Proportional Fault- RELIABLE TRANSFER-1. Each party is liable only for damages caused by their portion of

negligence

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2. OLD RULE- divided damages- each party paid equal share, regardless of actual fault- very unfair, especially after Pennsylvania rule

c. Statutory Faultd. Causation in law- superseding and sole proximate cause

1. Proportional fault does not mean causal questions are immaterial2. Nothing in RELIABLE says one party cannot be 100% liable

e. Superseding causes- bar recovery1. A single, superseding cause can wipe out other proximate causes and

make on party 100% liablef. Pennsylvania Rule: if a vessel is guilt of a statutory violation, the defaulting

vessel must show “not merely that her fault was not a cause of the accident, but that it could not have been a cause of the accident.”

1. Applies to ALL tort cases 2. Once P shows violation of statute, violator must show fault was and could

not have been the causeg. Compensable harms and damage amounts

1. Vessels1. Generally:

a. Total Loss-i. Markert value of the vessel at the time of the loss

PLUS pending freightii. Pollution cleanup, salvage wreck removal, and other

incidental costs proximate to the casualtyiii. Loss of earnings and detention are NOT

RECOVERABLE1. Too speculative!

b. Non Total Lossi. Cost of repairs or diminution of value

ii. Detention (lost earnings…calculable)iii. Other incidentals- piloting, salvage costs

2. Lost Timea. Frequently litigatedb. D argues that proper measure is post-collision valuec. 3-VOYAGE-RULE- average the daily earnings of the

vessel’s previous three voyages to measure detention rates 3. Owner’s Time

a. If vessel must be laid up for repair, owner can conduct other, non-related repairs

b. Owner gets windfall!4. No double recovery- either O or C can recover to loss of use…

governed by charter party5. ROBBINS DRY-DOCK- you can only recover if you have suffered

actual, physical damage. P must have a proprietary interest in the property damaged.

6. M/V TESTBANK- Wisdom’s Particular Damage Approach:

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a. How fare the chain of damages will reachi. Negligence

ii. Foreseeabilityiii. Proximate cause ANDiv. If community damage leaves private citizen without

remedy 2. Cargo

1. Both to Blame Collision- cargo can sue non-carrier, who can then sue carrier for his share of the loss

2. Both to Blame Clauses- void!h. Jurisdiction and Practice

1. Jurisdictional Issues2. Choice of Law issues

i. International Waters: COLREGS- Rules of the Road- VIOLATION TRIGGERS PENNSYLVANIA RULE

1. Lights and shapes1. Port- red2. Starboard- green3. Stern- white4. Every 50m of length- one white light on masthead

a. Masthead lights used to denote operation of vessel2. Sound signals

1. Bells and whistles- to be used in fog or when stationary in poor visibility

3. Steering Rules- Rules of the Road1. Usually turn to PORT to fully avoid other vessel w/o crossing

paths4. Look-out and Radar- have them!5. Good Seamanship and special circumstances

j. Inland Waters and Rules1. Sound and light signals2. Steering and sailing rules

1. Privileged Vessel- right of way- OBLIGATED to maintain course and speed

2. Burdened vessel- give way, required to maneuver to avoid collision

3. Situations:1. Meeting- converging, bow to bow

a. Both vessels turn starboard- “port to port passage”2. ***Crossing

a. Vessels crossing coursesi. Vessel with other vessel on its port side is

privileged (can see green running light on other vessel)

ii. Vice versa 3. Overtaking

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a. Stern to bowi. Ship which is being overtaken must remain constant

ii. Other ship is the “give way” ship 4. Rivers:

1. Keep as far starboard as possible within the shipping lane of a narrow channel

2. Down-bound vessel has right of way3. Up-down vessel must hold as needed to permit safe passage

VII. Limitations of Liabilitya. The Limitation of Shipowner’s Liability Act, 46 U.S.C. § 30501, et seq., and

Federal Rules of Civil Procedure Rule F1. Terminology

b. The Limitation of Shipowner’s Liability Act1. Applies to both in rem and in personam liabilities of the owner2. Tortfeasor is the “limitation plaintiff”3. Victim is the “claimant” 4. Available to foreign owners in U.S. courts5. ONLY available in admiralty6. Value of Vessel is determined at the CONCLUSION OF THE VOYAGE

and ANY PENDING FREIGHT- limitation fund7. In multiple owner situations, uninvolved owners are not liable, liable

owners are limited to their share of ownership and share of voyage8. Wage disputes are not subject to limitation9. If limitation fund is insufficient, up to $420 per ton is to be ordered by

court10. Any knowledge of master at inception of voyage is imputed to the owner

in cases of personal injury or death11. Must be filed within six months of written notice of claim12. Must be filed by an owner13. Establishes a SINGLE FORUM for liability of owner/vessel, owner’s

limitation entitlement, amount of just claims, division of limitation funs among claimants

c. Benefits of Limitation1. BENEFITS when not used a defense:

1. ALL CLAIMS MAY BE COMBINED INTO SINGLE FORUM2. LIMITATION OF LIABILITY

d. Parties entitled to limitationi. Pending Freight- fees, charges for carrying cargo OR value of contract for

a service vessel (non cargo, like a drilling ship)1. PERSONAL INJURY EXCEPTION FOR LIMITATION FUND-

value for fund is value AT TIME OF INJURY, NOT END OF VOYAGE, regardless of total loss of vessel (MORO CASTLE AMENDMENT)

e. Privity or Knowledge1. Only when owner lacks privity and knowledge can he claim a limitation2. Burdens of Proof- CLAIMANT must prove OWNER was at fault

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1. If fault is proven, OWNER must prove he did not know or have privity (50% + 1)

3. LINSEED KING- manager of factory acted as owner’s agent, allowed vessel to sail in ice- limitation denied as a result- manager knew, ergo, owners should have known

4. INVOKING LIMITATION OPENS UP IN REM AND IN PERSONAM JURIS. COURT HAS DISCRETION TO FASHION A JUST REMEDY.

f. The Limitation Fund1. Place v. Norwich

1. Insurance proceeds are NOT part of the limitation fund 2. The Flotilla Rule- only the active vessel and agent are included in the

limitation fund, UNLESS it is a contract action g. Limitation as an Answer- filing of limitation action acts as an answer to the claim

against the owner h. Limitation of Liability versus Savings to Suitors

1. Newton v. Shipman-1. Exceptions to federal limitations (court MUST allow state actions)

a. Limitation fund exceeds value of all claimsb. There is only a single claimant IF:

i. District court can adjudicate owner’s limitation action regardless of P’s other award

i. Availability of U.S. limitation action in federal courts to foreign plaintiffs in limitation and the applicability of foreign law to those actions

VIII. Marine Insurance- usually “brokered” by a third party who puts client in contact with insurera. Inherently a maritime K, hence admiralty jurisdictionb. Basic Terms and Concepts

1. Insurance = K between Insurer and insured2. Insurer agrees to INDEMNIFY the insured3. “All Risk” policies- covers any damage to property, whatever the cause, as

long as it is not an excluded cause. 1. NEITHER P/I NOR HULL ARE “ALL RISK”

4. “Named Perils” Policies- only covers damage from enumerated causes 5. Insurer issues the policy- P/I club or underwriter6. Insured/Assured receives the policy 7. Premium- price that the insured pays to the insurer to supply policy8. Insurable Interest- some legal or equitable relationship to the voyage for

the insured property – no exhaustive definition1. ABSOLUTE PREREQUISITE FOR A POLICY

a. Without one, the policy is just a wager and VOID2. Provisions usually show the insurable interest of the policy holder

a. Usually to show interest is routine, in case the interest is not obvious

9. Broker- identifies needs, puts insurer and assured in contact10. Underwriter- just an insurer, sometimes insures a % of the risk

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11. SUBROGATION- once an insurer pays out on a policy, he can stand in place of the assured in a court action

1. WAIVER OF SUBROGATION- insurer agrees to not subrogate claim…usually in instances of parent/subsidiary companies

12. Reserves- an insurer will set a reserve when presented with a claim…the insurer will decide how much it will pay for the particular claim. Insurers must maintain assets commensurate with policy risks.

13. P&I Clubs- mutual clubs of insurers1. Usually comprised of owners2. Formed to cover ¼ of liability not covered under a basic hull

policy14. Lloyd’s of London- unincorporated syndicates of insurers-

a. ***UNLIMITED LIABILITY*** 2. Corporations3. Private individuals

15. Crown-Zellerbach- insurance payments in P&I cannot exceed what shipowner’s duty to pay

c. The duty of Utmost Good Faith- Uberrimae Fidei1. insured MUST disclosed EVERY material circumstance to the insurer

when deciding whether to accept the risk and when setting the premium for the risk. Materiality is an objective, reasonable person standard. GOVERNED BY STATE LAW.

1. Cusanoa. Material nondisclosure WILL void a policy

d. Warranties and Compliance- should generally be applied, but as per state law1. Pacific Fisheries- insured agrees to operate vessel within a certain

geographic area1. Operating outside of the pre-determined area will result in

forfeiture of policy 2. Applies CALIFORNIA insurance law

2. Wilburn Boat v. Fireman’s Fund1. Owners transferred the ownership of the vessel AFTER insuring

the vessel, without the knowledge/permission of the insurer 2. Marine insurance is governed by STATE

LAW/REGULATION3. Albany Insurance v. Anh Thi Kieu

1. Anti-Technicality provision of Texas insurance law- if an insured’s breach of warranty is immaterial to the cause for the claim, the breach is not a defense to justify rejection of the claim

e. The Hull Policy1. Property, not owner’s liability insurance, with one major

exception- also covers COLLISIONS2. Covers damage to the insured vessel (originally covered ¾ of the

value)a. NOT CARGO

3. Insured had to have an insurable interest in the vessel

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2. The Named Assured3. Waiver of subrogation4. Loss Payee5. Covered Perils

1. The Perilsa. Must be OF the sea not just ON the seab. An EXCLUDED cause cannot trigger an included cause

and trigger coverage2. The Additional Perils- Inchmaree Clause- damage caused by crew

negligence3. The Deliberate Damage- Pollution Hazard Clause

6. Collision Liability7. Sue and Labor8. War Strikes and related EXCLUSIONS9. Warranty of Seaworthiness

10. General Average and Salvage1. General average- all beneficiaries of master’s choice to jettison

cargo will bear the cargo owner’s loss. a. Common peril or imminent dangerb. Voluntary sacrifice for the common benefitc. Successful avoidance of danger

11. Watchman12. Payment on Claims13. Termination

f. Protection and Indemnity Policy1. The Assured in the P&I Policy2. Indemnity vice liability3. Coverage Provided by the P&I Policy

1. Personal Injury and Deatha. Jones Actb. Maintenance and Curec. Passenger Claims

2. Collisions, Allisions, and Other Liabilities to Vessels and Structures

3. Wreck Removal4. Cargo Damage5. Fines and Penalties6. Mutiny or Misconduct7. Plague, contagious diseases, and quarantine 8. Cargo’s General Average9. Repatriation and Putting-In expenses10. Defense costs11. ONLY COVERS PAID COSTS

4. Exclusions1. War risks2. Contractual Liability

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3. Towage4. Miscellaneous exclusions

5. Claim and Policy Limits1. Policy Limits2. Claims

6. Terms and Terminationg. Insurance Policies and Limitation Actions- insurance proceeds are NOT part of

the limitation fund!IX. Salvage

a. Pure Salvage1. Three elements of Salvage:

1. MARINE PERIL2. VOLUNTARY SERVICE, not previously required by duty/K3. SUCCESS in whole or in part, or contributing to a success

2. Eligible salvors- pretty much anyone that does not have a duty to salvage (Coast Guard cannot, it is part of their job)

3. The Salvage award1. Compensation to those whose voluntary service have saved vessel

or cargo- REWARD, inducement to help 2. Salvors have a lien on the vessel3. Salvors may proceed in rem against the res

a. Blackwell Factorsi. Labor expended by salvers

ii. Promptitude, skill, and energy displayediii. Value of salved property, danger to which it was

exposediv. Risk incurred by salversv. MARKET Value of the property saved

vi. Degree of danger from which it was rescued 4. International Conventions5. Lloyd’s Standard Form of Salvage Agreement- LOF6. Salvage that mitigates the threat of environmental damage- award can be

made if vessel is not saved, but environmental hazards are mitigated or avoided

7. Negligence by the salvor1. If just negligence, then no problem2. If GROSS negligence, then salvor incurs liability

b. Contract Salvage1. Preexisting duty- no pure salvage

1. K’s- PRESUMPTIVELY VALID unless fraud in inception or not equitable to enforce

c. Life Salvage1. Mariners are required by law to rescue people2. BUT if a vessel rescues people and another vessel salves the foundering

vessel, the vessel that saves the people is entitled to a share of the salvage award

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d. Salvage versus Find 1. Henner v. United States

1. Salvage favored over findsa. Owner remains owner if not abandonedb. Salvage encourages rewards and discourages

competitiveness and secrecy, assumes c. Law of finds is less encouraging of compensation

Big Cases to Know:1. Pennsylvania Rule- If your vessel violated a rule in a collision, you

must prove that your violation DID NOT AND COULD NOT have caused the casualty.

2. Executive Jet3. JEROME B. GRUBART, INC. V. GREAT LAKES DREDGE

AND DOCK CO. a. In a case with multiple tortfeasors, if one of the principle

tortfeasors was engaged in a traditional maritime activity, maritime juris applies.

4. Torrey Canyona. Wreck of oil tanker led to international cooperation in

setting up funding and responses to major oil spills and tanker casualties

5. Robins Dry Dock – to get damages, you must show actual physical damage, not just economic impact

6. Testbank

Still to complete: practice and CP’s

Rule B. In Personam Actions: Attachment and Garnishment

(1) When Available; Complaint, Affidavit, Judicial Authorization, and Process.

In an in personam action:

(a) If a defendant is not found within the district, when a verified complaint praying for attachment and the affidavit required by Rule B(1)(b) are filed, a verified complaint may contain a prayer for process to attach the defendant's tangible or intangible personal property - up to the amount sued for - in the hands of garnishees named in the process.

(b) The plaintiff or the plaintiff's attorney must sign and file with the complaint an affidavit stating that, to the affiant's knowledge, or on information and belief, the defendant cannot be found within the district. The court must review the complaint and affidavit and, if the conditions of this Rule B appear to exist,

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enter an order so stating and authorizing process of attachment and garnishment. The clerk may issue supplemental process enforcing the court's order upon application without further court order.

(c) If the plaintiff or the plaintiff's attorney certifies that exigent circumstances make court review impracticable, the clerk must issue the summons and process of attachment and garnishment. The plaintiff has the burden in any post-attachment under Rule E(4)(f) to show that exigent circumstances existed.

(d)

(i) If the property is a vessel or tangible property on board a vessel, the summons, process, and any supplemental process must be delivered to the marshal for service.

(ii) If the property is other tangible or intangible property, the summons, process, and any supplemental process must be delivered to a person or organization authorized to serve it, who may be (A) a marshal; (B) someone under contract with the United States; (C) someone specially appointed by the court for that purpose; or, (D) in an action brought by the United States, any officer or employee of the United States.

(e) The plaintiff may invoke state-law remedies under Rule 64 for seizure of person or property for the purpose of securing satisfaction of the judgment.

(2) Notice to Defendant.

No default judgment may be entered except upon proof - which may be by affidavit - that:

(a) the complaint, summons, and process of attachment or garnishment have been served on the defendant in a manner authorized by Rule 4;

(b) the plaintiff or the garnishee has mailed to the defendant the complaint, summons, and process of attachment or garnishment, using any form of mail requiring a return receipt; or

(c) the plaintiff or the garnishee has tried diligently to give notice of the action to the defendant but could not do so.

(3) Answer.

(a) By Garnishee.

The garnishee shall serve an answer, together with answers to any interrogatories served with the complaint, within 20 days after service of process

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upon the garnishee. Interrogatories to the garnishee may be served with the complaint without leave of court. If the garnishee refuses or neglects to answer on oath as to the debts, credits, or effects of the defendant in the garnishee's hands, or any interrogatories concerning such debts, credits, and effects that may be propounded by the plaintiff, the court may award compulsory process against the garnishee. If the garnishee admits any debts, credits, or effects, they shall be held in the garnishee's hands or paid into the registry of the court, and shall be held in either case subject to the further order of the court. (b) By Defendant. The defendant shall serve an answer within 30 days after process has been executed, whether by attachment of property or service on the garnishee.

(b) By Defendant.

The defendant shall serve an answer within 30 days after process has been executed, whether by attachment of property or service on the garnishee.

Rule C. - Actions in Rem:  Special Provisions

(1) When Available.

An action in rem may be brought:

(a) To enforce any maritime lien;

(b) Whenever a statute of the United States provides for a maritime action in rem or a proceeding analogous thereto.

Except as otherwise provided by law a party who may proceed in rem may also, or in the alternative, proceed in personam against any person who may be liable.

Statutory provisions exempting vessels or other property owned or possessed by or operated by or for the United States from arrest or seizure are not affected by this rule. When a statute so provides, an action against the United States or an instrumentality thereof may proceed on in rem principles.

(2) Complaint.

In an action in rem the complaint must:

(a) be verified;

(b) describe with reasonable particularity the property that is the subject of the action; and

(c) state that the property is within the district or will be within the district while the action is pending.

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(3) Judicial Authorization and Process.

(a) Arrest Warrant.

(i) The court must review the complaint and any supporting papers. If the conditions for an in rem action appear to exist, the court must issue an order directing the clerk to issue a warrant for the arrest of the vessel or other property that is the subject of the action.

(ii) If the plaintiff or the plaintiff’s attorney certifies that exigent circumstances make court review impracticable, the clerk must promptly issue a summons and a warrant for the arrest of the vessel or other property that is the subject of the action. The plaintiff has the burden in any post-arrest hearing under Rule E(4)(f) to show that exigent circumstances existed.

(b) Service.

(i) If the property that is the subject of the action is a vessel or tangible property on board a vessel, the warrant and any supplemental process must be delivered to the marshal for service.

(ii) If the property that is the subject of the action is other property, tangible or intangible, the warrant and any supplemental process must be delivered to a person or organization authorized to enforce it, who may be: (A) a marshal; (B) someone under contract with the United States; (C) someone specially appointed by the court for that purpose; or, (D) in an action brought by the United States, any officer or employee of the United States.

(c) Deposit in Court.

If the property that is the subject of the action consists in whole or in part of freight, the proceeds of property sold, or other intangible property, the clerk must issue - in addition to the warrant - a summons directing any person controlling the property to show cause why it should not be deposited in court to abide the judgment.

(d) Supplemental Process.

The clerk may upon application issue supplemental process to enforce the court's order without further court order.

(4) Notice.

No notice other than execution of process is required when the property that is the subject of the action has been released under Rule E(5). If the property is not released within 10 days after execution, the plaintiff must promptly - or within

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the time that the court allows - give public notice of the action and arrest in a newspaper designated by court order and having general circulation in the district, but publication may be terminated if the property is released before publication is completed. The notice must specify the time under Rule C(6) to file a statement of interest in or right against the seized property and to answer. This rule does not affect the notice requirements in an action to foreclose a preferred ship mortgage under 46 U.S.C. 31301 et seq., as amended.

(5) Ancillary Process.

In any action in rem in which process has been served as provided by this rule, if any part of the property that is the subject of the action has not been brought within the control of the court because it has been removed or sold, or because it is intangible property in the hands of a person who has not been served with process, the court may, on motion, order any person having possession or control of such property or its proceeds to show cause why it should not be delivered into the custody of the marshal or other person or organization having a warrant for the arrest of the property, or paid into court to abide the judgment; and, after hearing, the court may enter such judgment as law and justice may require.

(6) Responsive Pleading; Interrogatories.

(a) Maritime Arrests and Other Proceedings.

(i) a person who asserts a right of possession or any ownership interest in the property that is the subject of the action must file a verified statement of right or interest:

(A) within 10 days after the execution of process, or

(B) within the time that the court allows;

(ii) the statement of right or interest must describe the interest in the property that supports the person's demand for its restitution or right to defend the action;

(iii) an agent, bailee, or attorney must state the authority to file a statement of right or interest on behalf of another; and

(iv) a person who asserts a right of possession or any ownership interest must serve an answer within 20 days after filing the statement of interest or right.

(b) Interrogatories.

Interrogatories may be served with the complaint in an in rem action without leave of court. Answers to the interrogatories must be served with the answer to the complaint.

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Rule E. - Actions in Rem and Quasi in Rem:  General Provisions

(1) Applicability.

Except as otherwise provided, this rule applies to actions in personam with process of maritime attachment and garnishment, actions in rem, and petitory, possessory, and partition actions, supplementing Rules B, C, and D.

(2) Complaint; Security.

(a) Complaint.

In actions to which this rule is applicable the complaint shall state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.

(b) Security for Costs.

Subject to the provisions of Rule 54(d) and of relevant statutes, the court may, on the filing of the complaint or on the appearance of any defendant, claimant, or any other party, or at any later time, require the plaintiff, defendant, claimant, or other party to give security, or additional security, in such sum as the court shall direct to pay all costs and expenses that shall be awarded against the party by any interlocutory order or by the final judgment, or on appeal by any appellate court.

(3) Process.

(a) In admiralty and maritime proceedings process in rem or of maritime attachment and garnishment may be served only within the district.

(b) Issuance and Delivery.

Issuance and delivery of process in rem, or of maritime attachment and garnishment, shall be held in abeyance if the plaintiff so requests.

(4) Execution of Process; Marshal's Return; Custody of Property; Procedures for Release.

(a) In General.

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Upon issuance and delivery of the process, or, in the case of summons with process of attachment and garnishment, when it appears that the defendant cannot be found within the district, the marshal or other person or organization having a warrant shall forthwith execute the process in accordance with this subdivision (4), making due and prompt return.

(b) Tangible Property.

If tangible property is to be attached or arrested, the marshal or other person or organization having the warrant shall take it into the marshal's possession for safe custody. If the character or situation of the property is such that the taking of actual possession is impracticable, the marshal or other person executing the process shall affix a copy thereof to the property in a conspicuous place and leave a copy of the complaint and process with the person having possession or the person's agent. In furtherance of the marshal's custody of any vessel the marshal is authorized to make a written request to the collector of customs not to grant clearance to such vessel until notified by the marshal or deputy marshal or by the clerk that the vessel has been released in accordance with these rules.

(c) Intangible Property.

If intangible property is to be attached or arrested the marshal or other person or organization having the warrant shall execute the process by leaving with the garnishee or other obligor a copy of the complaint and process requiring the garnishee or other obligor to answer as provided in Rules B(3)(a) and C(6); or the marshal may accept for payment into the registry of the court the amount owed to the extent of the amount claimed by the plaintiff with interest and costs, in which event the garnishee or other obligor shall not be required to answer unless alias process shall be served.

(d) Directions With Respect to Property in Custody.

The marshal or other person or organization having the warrant may at any time apply to the court for directions with respect to property that has been attached or arrested, and shall give notice of such application to any or all of the parties as the court may direct.

(e) Expenses of Seizing and Keeping Property; Deposit.

These rules do not alter the provisions of Title 28, U.S.C., § 1921, as amended, relative to the expenses of seizing and keeping property attached or arrested and to the requirement of deposits to cover such expenses.

(f) Procedure for Release From Arrest or Attachment.

Whenever property is arrested or attached, any person claiming an interest in it shall be entitled to a prompt hearing at which the plaintiff shall be required to

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show why the arrest or attachment should not be vacated or other relief granted consistent with these rules. This subdivision shall have no application to suits for seamen's wages when process is issued upon a certification of sufficient cause filed pursuant to Title 46, U.S.C. §§ 603 and 604 or to actions by the United States for forfeitures for violation of any statute of the United States.

(5) Release of Property.

(a) Special Bond.

Whenever process of maritime attachment and garnishment or process in rem is issued the execution of such process shall be stayed, or the property released, on the giving of security, to be approved by the court or clerk, or by stipulation of the parties, conditioned to answer the judgment of the court or of any appellate court. The parties may stipulate the amount and nature of such security. In the event of the inability or refusal of the parties so to stipulate the court shall fix the principal sum of the bond or stipulation at an amount sufficient to cover the amount of the plaintiff’s claim fairly stated with accrued interest and costs; but the principal sum shall in no event exceed (i) twice the amount of the plaintiff’s claim or (ii) the value of the property on due appraisement, whichever is smaller. The bond or stipulation shall be conditioned for the payment of the principal sum and interest thereon at 6 per cent per annum.

(b) General Bond.

The owner of any vessel may file a general bond or stipulation, with sufficient surety, to be approved by the court, conditioned to answer the judgment of such court in all or any actions that may be brought thereafter in such court in which the vessel is attached or arrested. Thereupon the execution of all such process against such vessel shall be stayed so long as the amount secured by such bond or stipulation is at least double the aggregate amount claimed by plaintiffs in all actions begun and pending in which such vessel has been attached or arrested. Judgments and remedies may be had on such bond or stipulation as if a special bond or stipulation had been filed in each of such actions. The district court may make necessary orders to carry this rule into effect, particularly as to the giving of proper notice of any action against or attachment of a vessel for which a general bond has been filed. Such bond or stipulation shall be indorsed by the clerk with a minute of the actions wherein process is so stayed. Further security may be required by the court at any time.

If a special bond or stipulation is given in a particular case, the liability on the general bond or stipulation shall cease as to that case.

(c) Release by Consent or Stipulation; Order of Court or Clerk; Costs.

Any vessel, cargo, or other property in the custody of the marshal or other

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person or organization having the warrant may be released forthwith upon the marshal's acceptance and approval of a stipulation, bond, or other security, signed by the party on whose behalf the property is detained or the party's attorney and expressly authorizing such release, if all costs and charges of the court and its officers shall have first been paid. Otherwise no property in the custody of the marshal, other person or organization having the warrant, or other officer of the court shall be released without an order of the court; but such order may be entered as of course by the clerk, upon the giving of approved security as provided by law and these rules, or upon the dismissal or discontinuance of the action; but the marshal or other person or organization having the warrant shall not deliver any property so released until the costs and charges of the officers of the court shall first have been paid.

(d) Possessory, Petitory, and Partition Actions.

The foregoing provisions of this subdivision (5) do not apply to petitory, possessory, and partition actions. In such cases the property arrested shall be released only by order of the court, on such terms and conditions and on the giving of such security as the court may require.

(6) Reduction or Impairment of Security.

Whenever security is taken the court may, on motion and hearing, for good cause shown, reduce the amount of security given; and if the surety shall be or become insufficient, new or additional sureties may be required on motion and hearing.

(7) Security on Counterclaim.

(a) When a person who has given security for damages in the original action asserts a counterclaim that arises from the transaction or occurrence that is the subject of the original action, a plaintiff for whose benefit the security has been given must give security for damages demanded in the counterclaim unless the court, for cause shown, directs otherwise. Proceedings on the original claim must be stayed until this security is given, unless the court directs otherwise.

(b) The plaintiff is required to give security under Rule E(7)(a) when the United States or its corporate instrumentality counterclaims and would have been required to give security to respond in damages if a private party but is relieved by law from giving security.

(8) Restricted Appearance.

An appearance to defend against an admiralty and maritime claim with respect to which there has issued process in rem, or process of attachment and

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garnishment, may be expressly restricted to the defense of such claim, and in that event is not an appearance for the purposes of any other claim with respect to which such process is not available or has not been served.

(9) Disposition of Property; Sales.

(a) Interlocutory Sales; Delivery.

(i) On application of a party, the marshal, or other person having custody of the property, the court may order all or part of the property sold - with the sales proceeds, or as much of them as will satisfy the judgment, paid into court to await further orders of the court - if:

(A) the attached or arrested property is perishable, or liable to deterioration, decay, or injury by being detained in custody pending the action;

(B) the expense of keeping the property is excessive or disproportionate; or

(C) there is an unreasonable delay in securing release of the property.

(ii) In the circumstances described in Rule E(9)(a)(i), the court, on motion by a defendant or a person filing a statement of interest or right under Rule C(6), may order that the property, rather than being sold, be delivered to the movant upon giving security under these rules.

(c) Sales, Proceeds.

All sales of property shall be made by the marshal or a deputy marshal, or by other person or organization having the warrant, or by any other person assigned by the court where the marshal or other person or organization having the warrant is a party in interest; and the proceeds of sale shall be forthwith paid into the registry of the court to be disposed of according to law.

(10) Preservation of Property.

When the owner or another person remains in possession of property attached or arrested under the provisions of Rule E(4)(b) that permit execution of process without taking actual possession, the court, on a party's motion or on its own, may enter any order necessary to preserve the property and to prevent its removal.

Rule F. - Limitation of Liability

(1) Time for Filing Complaint; Security.

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Not later than six months after receipt of a claim in writing, any vessel owner may file a complaint in the appropriate district court, as provided in subdivision (9) of this rule, for limitation of liability pursuant to statute. The owner (a) shall deposit with the court, for the benefit of claimants, a sum equal to the amount or value of the owner's interest in the vessel and pending freight, or approved security therefor, and in addition such sums, or approved security therefor, as the court may from time to time fix as necessary to carry out the provisions of the statutes as amended; or (b) at the owner's option shall transfer to a trustee to be appointed by the court, for the benefit of claimants, the owner's interest in the vessel and pending freight, together with such sums, or approved security therefor, as the court may from time to time fix as necessary to carry out the provisions of the statutes as amended. The plaintiff shall also give security for costs and, if the plaintiff elects to give security, for interest at the rate of 6 percent per annum from the date of the security.

(2) Complaint.

The complaint shall set forth the facts on the basis of which the right to limit liability is asserted and all facts necessary to enable the court to determine the amount to which the owner's liability shall be limited. The complaint may demand exoneration from as well as limitation of liability. It shall state the voyage if any, on which the demands sought to be limited arose, with the date and place of its termination; the amount of all demands including all unsatisfied liens or claims of lien, in contract or in tort or otherwise, arising on that voyage, so far as known to the plaintiff, and what actions and proceedings, if any, are pending thereon; whether the vessel was damaged, lost, or abandoned, and, if so, when and where; the value of the vessel at the close of the voyage or, in case of wreck, the value of her wreckage, strippings, or proceeds, if any, and where and in whose possession they are; and the amount of any pending freight recovered or recoverable. If the plaintiff elects to transfer the plaintiff's interest in the vessel to a trustee, the complaint must further show any prior paramount liens thereon, and what voyages or trips, if any, she has made since the voyage or trip on which the claims sought to be limited arose, and any existing liens arising upon any such subsequent voyage or trip, with the amounts and causes thereof, and the names and addresses of the lienors, so far as known; and whether the vessel sustained any injury upon or by reason of such subsequent voyage or trip.

(3) Claims Against Owner; Injunction.

Upon compliance by the owner with the requirements of subdivision (1) of this rule all claims and proceedings against the owner or the owner's property with respect to the matter in question shall cease. On application of the plaintiff the court shall enjoin the further prosecution of any action or proceeding against the plaintiff or the plaintiff's property with respect to any claim subject to limitation in the action.

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(4) Notice to Claimants.

Upon the owner's compliance with subdivision (1) of this rule the court shall issue a notice to all persons asserting claims with respect to which the complaint seeks limitation, admonishing them to file their respective claims with the clerk of the court and to serve on the attorneys for the plaintiff a copy thereof on or before a date to be named in the notice. The date so fixed shall not be less than 30 days after issuance of the notice. For cause shown, the court may enlarge the time within which claims may be filed. The notice shall be published in such newspaper or newspapers as the court may direct once a week for four successive weeks prior to the date fixed for the filing of claims. The plaintiff not later than the day of second publication shall also mail a copy of the notice to every person known to have made any claim against the vessel or the plaintiff arising out of the voyage or trip on which the claims sought to be limited arose. In cases involving death a copy of such notice shall be mailed to the decedent at the decedent's last known address, and also to any person who shall be known to have made any claim on account of such death.

(5) Claims and Answer.

Claims shall be filed and served on or before the date specified in the notice provided for in subdivision (4) of this rule. Each claim shall specify the facts upon which the claimant relies in support of the claim, the items thereof, and the dates on which the same accrued. If a claimant desires to contest either the right to exoneration from or the right to limitation of liability the claimant shall file and serve an answer to the complaint unless the claim has included an answer.

(6) Information To Be Given Claimants.

Within 30 days after the date specified in the notice for filing claims, or within such time as the court thereafter may allow, the plaintiff shall mail to the attorney for each claimant (or if the claimant has no attorney to the claimant) a list setting forth (a) the name of each claimant, (b) the name and address of the claimant's attorney (if the claimant is known to have one), (c) the nature of the claim, i.e., whether property loss, property damage, death, personal injury etc., and (d) the amount thereof.

(7) Insufficiency of Fund or Security.

Any claimant may by motion demand that the funds deposited in court or the security given by the plaintiff be increased on the ground that they are less than the value of the plaintiff's interest in the vessel and pending freight. Thereupon the court shall cause due appraisement to be made of the value of the plaintiff's interest in the vessel and pending freight; and if the court finds that the deposit or security is either insufficient or excessive it shall order its increase or

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reduction. In like manner any claimant may demand that the deposit or security be increased on the ground that it is insufficient to carry out the provisions of the statutes relating to claims in respect of loss of life or bodily injury; and, after notice and hearing, the court may similarly order that the deposit or security be increased or reduced.

(8) Objections to Claims: Distribution of Fund.

Any interested party may question or controvert any claim without filing an objection thereto. Upon determination of liability the fund deposited or secured, or the proceeds of the vessel and pending freight, shall be divided pro rata, subject to all relevant provisions of law, among the several claimants in proportion to the amounts of their respective claims, duly proved, saving, however, to all parties any priority to which they may be legally entitled.

(9) Venue; Transfer.

The complaint shall be filed in any district in which the vessel has been attached or arrested to answer for any claim with respect to which the plaintiff seeks to limit liability; or, if the vessel has not been attached or arrested, then in any district in which the owner has been sued with respect to any such claim. When the vessel has not been attached or arrested to answer the matters aforesaid, and suit has not been commenced against the owner, the proceedings may be had in the district in which the vessel may be, but if the vessel is not within any district and no suit has been commenced in any district, then the complaint may be filed in any district. For the convenience of parties and witnesses, in the interest of justice, the court may transfer the action to any district; if venue is wrongly laid the court shall dismiss or, if it be in the interest of justice, transfer the action to any district in which it could have been brought. If the vessel shall have been sold, the proceeds shall represent the vessel for the purposes of these rules.

Trial is to the court unless any party demands trial by jury under Rule 38.(e) Admiralty and Maritime Claims.

These rules do not create a right to a jury trial on issues in a claim that is an admiralty or maritime claim under Rule 9(h).

(h) Admiralty or Maritime Claim.

(1) How Designated.

If a claim for relief is within the admiralty or maritime jurisdiction and also within the court's subject-matter jurisdiction on some other ground, the pleading may designate the claim as an admiralty or maritime claim for purposes of Rules 14(c), 38(e), and 82 and the Supplemental Rules for Admiralty or Maritime

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Claims and Asset Forfeiture Actions. A claim cognizable only in the admiralty or maritime jurisdiction is an admiralty or maritime claim for those purposes, whether or not so designated.

(2) Designation for Appeal.

A case that includes an admiralty or maritime claim within this subdivision (h) is an admiralty case within 28 U.S.C. § 1292(a)(3).

FRCP 14

(c) Admiralty or Maritime Claim.

(1) Scope of Impleader.

If a plaintiff asserts an admiralty or maritime claim under Rule 9(h), the defendant or a person who asserts a right under Supplemental Rule C(6)(a)(i) may, as a thirdparty plaintiff, bring in a third-party defendant who may be wholly or partly liable — either to the plaintiff or to the third-party plaintiff — for remedy over, contribution, or otherwise on account of the same transaction, occurrence, or series of transactions or occurrences.

(2) Defending Against a Demand for Judgment for the Plaintiff.

The third-party plaintiff may demand judgment in the plaintiff's favor against the third-party defendant. In that event, the third-party defendant must defend under Rule 12 against the plaintiff's claim as well as the third-party plaintiff's claim; and the action proceeds as if the plaintiff had sued both the third-party defendant and the third-party plaintiff.