United States District Court, Southern District of New York
February 28, 1990
GUMERSINDO PADRO, PLAINTIFF,
VESSEL CHARTERS, INC., DEFENDANT.
The opinion of the court was delivered by: Leisure, District Judge:
ORDER & OPINION
Defendant Vessel Charters, Inc. ("VCI"), owner of the SS
SANTA ADELA, claims that it is not a proper party to this
lawsuit brought by its employee, seaman Gumersindo Padro. VCI
supports its claim by citing the Suits in Admiralty Act ("SIAA"
or the "Act")*fn1 which, under certain circumstances, holds
the United States exclusively liable for admiralty claims
arising under the SIAA. 46 U.S.C.App. § 745. VCI time-chartered
the vessel SS SANTA ADELA to the United States, through the
Military Sealift Command, an agency of the Department of the
Navy. Because VCI believes the SIAA applies here, it seeks
dismissal of the lawsuit for lack of subject matter
jurisdiction. Alternatively, VCI requests that summary judgment
be granted. After careful review of the SIAA and case law
interpreting it, the Court denies VCI's motion for dismissal
for lack of subject matter jurisdiction. As a number of factual
issues remain to be resolved, VCI's motion for summary judgment
is also denied.
The facts not in dispute will be briefly summarized. In 1984,
VCI entered into a time-charter agreement with the Department
of the Navy. Pursuant to the agreement, VCI was to provide the
vessel SS SANTA ADELA for the Navy's use, with VCI retaining
responsibility for manning the ship with officers and crew, as
well as navigation, care and custody of the ship. See
Defendant's Exhibit 1, Article 22(a) (the "time-charter
agreement"). The resulting relationship provided that the Navy
designate the cargo to be carried and the ports to be visited,
while VCI had day-today operational control of the SS SANTA
On April 3, 1988, with the time-charter agreement operative,
plaintiff sustained a severely broken left leg while assisting
at docking the ship in Yakohoma, Japan. His injury allegedly
resulted when one of the mooring lines snapped and wrapped
around his leg. As a result of the injury, plaintiff has been
unable to return to work as a merchant seaman.
On March 17, 1989, plaintiff brought this lawsuit alleging
that his injury was caused by VCI's negligence in maintaining
its mooring lines, or, alternatively, by the unseaworthiness of
the SS SANTA ADELA. In its answer, VCI alleged, as its first
affirmative defense, that plaintiff's exclusive remedy lies
against the United States pursuant to the SIAA. This motion is
grounded on that defense and requests that VCI be dismissed as
defendant because the Court lacks jurisdiction over it.
The Court will first consider the SIAA and case law
interpreting it before discussing its application here.
A. Suits In Admiralty Act
VCI claims that the United States is the exclusive defendant
in this lawsuit, pursuant to the SIAA. Sections 741 through 745
of the Act provide the statutory frame for VCI's claim, and the
sections must be read together to understand their use.
Section 741 provides in relevant part:
No Vessel owned by the United States . . . or in
the possession of the United States . . . or
operated by or for the United States . . . shall
hereafter, in view of the provision herein made
for a libel in personam [Section 742], be subject
to arrest or seizure by judicial process in the
United States or its possessions. . . .
The important passage for this lawsuit is "Vessel[s] . . .
operated by or for the United States," which the Court finds
includes a vessel such as the SS SANTA ADELA. A reasonable
interpretation of the plain language of the statute requires
its application to a privately owned ship operated for the
benefit of the United States. See J. W. Petersen Coal & Oil Co.
v. United States, 323 F. Supp. 1198
, 1205-06 (N.D.Ill. 1970)
(articulates the meaning of "operated by or for the United
States," and concludes that a time-charter is encompassed by
the "operated for" language); see also A.H. Bull S.S. Co. v.
United States, 105 F. Supp. 474, 479 (S.D.N.Y. 1952), aff'd,
208 F.2d 888
(2d Cir. 1953).
The Court must also consider section 742 to determine whether
the SS SANTA ADELA is within the jurisdiction of the SIAA.
Section 742 provides that, "[i]n cases where . . . if a private
person or property were involved, a proceeding in admiralty
could be maintained, any appropriate nonjury proceeding in
personam may be brought against the United States." Certainly,
absent the time-charter agreement, plaintiff could have
maintained an admiralty proceeding against VCI, as the owner of
the SS SANTA ADELA, to recover damages for his injury. See
Cosmopolitan Shipping Co. v. McAllister, 337 U.S. 783, 791, 69
S.Ct. 1317, 1321-22, 93 L.Ed. 1692 (1949). Thus, at this stage
of the analysis, plaintiff's claim appears to be within the
jurisdiction of the SIAA because the SS SANTA ADELA was being
operated for the United States and plaintiff's claim is one to
be heard in an admiralty proceeding.
Finally, section 745, providing the remaining element in the
SIAA framework, states that, "where a remedy is provided by
this Act, it shall hereafter be exclusive of any other action
by reason of the same subject matter against the agent or
employee of the United States . . . whose acts or omission gave
rise to the claim." VCI claims that this exclusivity provision
precludes plaintiff from maintaining this action against it, as
the United States is the proper, and exclusive, party to the
action. Plaintiff argues, on the other hand, that exclusivity
only attaches when the remedy sought is provided by the SIAA,
but not when the United States is merely a time-charterer
without operational control of the vessel.
In sum, VCI argues that it was operating the SS SANTA ADELA
for the United States pursuant to the time-charter within the
purview of section 741. Further, the United States was amenable
to an admiralty claim by section 742. Finally, VCI is absolved
of direct liability by the exclusivity provision of section
745. Although VCI's position may be supported by a plain
reading of the SIAA, the case law interpreting the SIAA
prevents the Court from adopting VCI's interpretation of the
statute.*fn2 Further, the Court believes such a restrictive
reading of the SIAA is inappropriate under these circumstances.
B. Case Law Applying the SIAA
In Williams v. Central Gulf Lines, 874 F.2d 1058 (5th Cir.
1989), cert. denied, ___ U.S. ___, 110 S.Ct. 843, 107 L.Ed.2d
837 (1990), the Fifth Circuit, interpreting the SIAA on facts
similar to those here, ruled that the Act itself provides no
actual remedy against the United States, but only serves to
waive sovereign immunity for the United States in admiralty
actions. Id. at 1059 (citing Trautman v. Buck Steber, Inc.,
693 F.2d 440, 444 (5th Cir. 1982)). The court proposed a two-part
test which must be met to absolve a private ship owner,
time-chartering its ship to the United States, from maritime
liability because of the SIAA's exclusivity provision. First,
the United States must have consented to the lawsuit, providing
a "jurisdictional hook"
to include the United States as a defendant. Second, the
defendant asserting the exclusivity defense must show that the
United States is susceptible to a "traditional admiralty claim"
under the particular circumstances present in the case.
Williams, supra, 874 F.2d at 1061. Unless both parts of the
test are satisfied, the private ship owner may not use the
SIAA's exclusivity provision to avoid being a party to the
lawsuit. Id. The Court will adopt the analysis of the Fifth
Circuit in Williams.
Sections 741 and 742 of the SIAA establish the first part of
the test — the United States's consent to the lawsuit under
the present facts. Williams, supra, 874 F.2d at 1062. The
legislative intent of the SIAA discloses Congress's desire to
free United States merchant vessels from the possibility of
arrest or seizure. To do this, Congress waived sovereign
immunity for admiralty claims arising from the operation of
such vessels. Schnell v. United States, 166 F.2d 479, 481 (2d
Cir.), cert. denied, 334 U.S. 833, 68 S.Ct. 1346, 92 L.Ed. 1760
(1948). VCI satisfies this prong of the test by showing that
the United States consented to the present lawsuit by
time-chartering the SS SANTA ADELA for operation as a United
States merchant vessel.
However, the second part of the test, whether a traditional
admiralty claim may be asserted against the United States, is
not as readily satisfied. The Second Circuit's general rule on
a time-charterer's liability, clearly in accord with the Fifth
Circuit's rule, is that, "'[a] time charterer assumes no
liability flowing from the unseaworthiness of the vessel or the
negligence of the crew unless it is shown that the parties to
the charter intended otherwise.'" Atlantic Richfield Co. v.
Interstate Oil Transport Co., 784 F.2d 106, 113-114 (2d Cir.),
cert. denied, 479 U.S. 817, 107 S.Ct. 75, 93 L.Ed.2d 31 (1986)
(quoting Klishewich v. Mediterranean Agencies, Inc.,
302 F. Supp. 712, 713 (E.D. N.Y. 1969)); see P & E Boat Rentals,
Inc. v. Ennia General Ins. Co., 872 F.2d 642, 647 (5th Cir.
1989). Therefore, to succeed, VCI must show that the intent of
its time-charter agreement with the United States was that the
United States would be liable for injuries such as the one
incurred by seaman Padro here.*fn3
C. The Time-Charter Agreement
The time-charter agreement between VCI and the United States
contains two provisions deemed dispositive by the
Williams court in finding jurisdiction over the private ship
owner for the seaman's injuries. The persuasive provisions,
articles numbered 22(a) and 31, are numbered identically to the
time-charter agreement involved here. The articles indicate to
the Court that VCI retained liability for the negligence of its
crew and the unseaworthiness of the SS SANTA ADELA, and thus
cannot avail itself of the exclusivity provision in the SIAA.
Article 31, titled "CHARTER NOT A DEMISE," leaves no doubt
that a time-charter, as opposed to a demise or a bare-boat
charter, is intended. Article 22(a), titled "THE MASTERS,
OFFICERS AND CREW," sets forth the parties' responsibilities
for the seamen aboard the SS SANTA ADELA. It states in relevant
The Master, Officers and crew of this Vessel shall
be appointed or hired by the Owner and shall be
deemed to be the servants and agents of the Owner
at all times except as otherwise specified in this
Charter. The Master of the Vessel shall be under
the direction of the Charterer as regards the
employment of the
Vessel, but shall not be under Charterer's orders
as regards navigation, care and custody of the
Vessel and care of the cargo.
Additionally, article 21(a), in its last sentence, states that,
"[t]he Owner shall pay for all expenses incurred in the
navigation and management of the Vessel, except as otherwise
specifically provided herein."
Reading these articles together, the intent of the
time-charter agreement leaves VCI with responsibility for the
crew of the SS SANTA ADELA, and, presumably, for any personal
injuries sustained by the crew while carrying out its duties.
None of the articles of the time-charter agreement
unambiguously articulate an intent to pass liability for a
seaman's personal injury to the United States.*fn4 Thus, VCI
is required to defend against plaintiff's admiralty claim,
which alleges his personal injury while a crewmember aboard the
SS SANTA ADELA. Indeed, it would be anomalous to allow VCI, as
a private ship owner and private employer, to relieve itself of
any obligations to its crew by entering into a contract with a
third-party, albeit the United States.
Defendant's motion to dismiss the action under the Suits in
Admiralty Act, or, in the alternative, for summary judgment is