United States District Court, S.D. New York
OPINION AND ORDER
G. SCHOFIELD, DISTRICT JUDGE:
Starr Indemnity & Liability Company (“SILC”)
brings this suit pursuant to Title 28 U.S.C. § 1333
against Defendant Marine Environmental Remediation Group
(“MER”) seeking a determination of no coverage
under a pollution liability insurance policy for losses
caused by LONE STAR, a MER ship. MER moves to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack
of subject matter jurisdiction. The motion is denied.
following alleged facts are drawn from allegations in the
Complaint and documents attached to or integral to the
Complaint. Goel v. Bunge, Ltd., 820 F.3d 554, 559
(2d Cir. 2016). The facts are construed in the light most
favorable to Plaintiff as the non-moving party. Raymond
Loubier Irrevocable Tr. v. Loubier, 858 F.3d 719, 725
(2d Cir. 2017).
SILC sold a policy of pollution liability insurance (the
“Policy”) for three vessels, including LONE STAR,
to Defendant MER. During the policy period, MER began
dismantling LONE STAR. This process stopped in November 2016.
Around April 30, 2017, LONE STAR sank and discharged
approximately 1, 800 gallons of waste oil. MER notified SILC
of the incident.
Motion to Dismiss for Lack of Subject Matter
order to survive a motion to dismiss under Rule 12(b)(1),
“the plaintiff has the burden of proving by a
preponderance of the evidence that subject matter
jurisdiction exists.” Katz v. Donna Karan Co.,
872 F.3d 114, 120 (2d Cir. 2017). All material allegations in
the Complaint are accepted as true, however,
“argumentative inferences favorable to the party
asserting jurisdiction should not be drawn.” Atl
Mut. Ins., v. Balfour Maclaine Int'l Ltd, 968 F.2d
196, 198 (2d Cir. 1992); accord Lucas v. Fed. Bureau of
Prisons, No. 17 Civ. 1184, 2018 WL 3038496, at *2
(S.D.N.Y. June 19, 2018). In considering 12(b)(1) motions, a
court may rely on evidence outside the pleadings. See
Cortlandt St. Recovery Corp. v. Hellas Telecomm.'s,
S.a.r.l, 790 F.3d 411, 417 (2d Cir. 2015).
U.S. Constitution extends the federal judicial power to
‘all Cases of admiralty and maritime
jurisdiction.'” d'Amico Dry Ltd. v. Primera
Mar. (Hellas) Ltd., 886 F.3d 216, 223 (2d Cir. 2018)
(quoting U.S. Const. Art. III, § 2, cl. 1).
“Congress has empowered federal district courts to hear
‘[a]ny civil case of admiralty or maritime
jurisdiction.' This grant provides for jurisdiction over
claims arising from maritime contracts.” Id.
(quoting 28 U.S.C. § 1333(1)). The question of whether a
contract is a maritime contract can be “deceptively
simple” -- “[t]he question is clear, but the law
is murky.” Id. When determining whether an
agreement is a maritime contract:
[Ultimately the answer depends upon the nature and character
of the contract, and the true criterion is whether it has
reference to maritime service or maritime transactions. In
other words, we ask whether the principal objective of the
agreement is maritime commerce. The Supreme Court has
cautioned that this inquiry is conceptual and not constrained
by the location of contract performance or a vessel's
involvement in the dispute. Our beacon is the purpose of the
jurisdictional grant-to protect maritime commerce.
Id. (quoting Norfolk S. Ry. Co. v. Kirby,
543 U.S. 14, 24-25 (2004); Folksamerica Reinsurance Co.
v. Clean Water of New York, Inc., 413 F.3d 307, 311 (2d
Cir. 2005)) (internal citations and quotation marks omitted).
Second Circuit has “routinely conclude[d] that
insurance policies covering marine risks fall within our
maritime jurisdiction.” Id. at 225. For
example, insurance “for pollution coverage for a
[floating dry-dock, a] structure used in vessel repair and
maintenance . . . directly implicate[d] the business of
maritime commerce.” Fireman's Fund Ins. Co. v.
Great American Ins. Co. of New York, 822 F.3d 620, 634
(2d Cir. 2016). Similarly, an insurance policy covering a
ship tank cleaning company is a maritime contract.
Folksamerica, 413 F.3d at 323.
Policy covers maritime risks that give rise to maritime