This is a legal update from the bridge of Fulweiler llc.
Lots of marine businesses include language in their maritime contracts stating "the general maritime law of the United States" applies to any disputes. A recent decision from the 5th Circuit Court of Appeals held that in a particular dispute such language included not only judicially made law (the maritime "common law"), but also the Federal Maritime Lien Act. Among other things, the Appellate Court explained:
In addition to using the tools of contract interpretation, the district court relied on another district court decision, World Fuel Servs. Trading, 12 F. Supp. 3d at 792, that interpreted an identical U.S. choice-of-law provision. Tracing the history of American maritime lien law in detail, the World Fuel Servs. Trading court concluded that the “General Maritime Law of the United States” necessarily included the FMLA because “the 1971 deletion of the duty-of-inquiry ‘statutory text' from the Federal Maritime Lien Act clearly evidences Congress's intent to ‘speak directly to [the] question,' of whether a supplier of necessaries has a duty to inquire as to the presence and terms of a charter party.” Id. at 807 (citations omitted). Consequently, “because ‘the general maritime law must comply with [Congress's] resolution' of this ‘particular issue,'” the World Fuel Servs. Trading court held that “‘the General Maritime Law of the United States,' includes the Federal Maritime Case: 15-30239 Document: 00513449225 Page: 15 Date Filed: 04/01/2016 No. 15-30239 16 Lien Act.”4 Id. (citations omitted). The Fourth Circuit affirmed the district court on the more limited basis that Florida law, alternatively applicable to this contract under the General Terms, must apply federal statutes pursuant to the Constitution's Supremacy Clause. Either way, our decision is consistent with the result in the Fourth Circuit's case.
You can read a copy of the decision by clicking HERE.
This is a narrow legal issue and it may or may not apply to your particular circumstance. Always check with your maritime lawyer before relying on anything you read on this website. We hope, however, to provide you with the tools to spot an issue should it arise.
Underway and making way.
By: John K. Fulweiler, Esq.