Thursday, October 19, 2006

First Circuit Discusses Admiralty Jurisdiction and Doctrine of Laches

Per Puerto Rico Ports Authority v. Umpierre-Solares, 456 F.3d 220 (1st Cir. July 27, 2006):

We must decide whether the district court had admiralty jurisdiction over this matter and, if so, whether the district court correctly ruled that the relief sought by the Puerto Rico Ports Authority ("PRPA") was barred by the doctrine of laches. The PRPA argues that the district court lacked admiralty jurisdiction over the removed action because La Isla Nena was a "dead ship." Under the dead ship doctrine, a ship loses its status as a vessel subject to admiralty jurisdiction "when its function is so changed that it has no further navigation function." Mullane v. Chambers, 333 F.3d 322, 328 (1st Cir.2003). We agree with Defendants that the Contract was maritime in nature and, therefore, within the admiralty jurisdiction of the district court.

Section 1333(1) of Title 28 U.S.C. provides that federal district courts shall have jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction." . . . "[T]he fundamental interest giving rise to maritime jurisdiction is the protection of maritime commerce." Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 608, (1991). [W]e focus our inquiry on "whether the nature of the transaction was maritime," id. at 611, that is, whether the contract "relate[s] to the navigation, business or commerce of the sea." Cunningham v. Director, Office of Workers' Compensation Programs, 377 F.3d 98, 109 n. 11 (1st Cir.2004) [citations omitted]. Whether La Isla Nena was "live" or "dead" when it was lying at the bottom of San Juan Harbor, obstructing navigation, is of no consequence to our jurisdictional inquiry. What matters is that La Isla Nena was lying at the bottom of San Juan Harbor, obstructing navigation, and that the Contract related to the removal of this obstruction.

Having concluded that the district court had admiralty jurisdiction over this action, we now turn to whether the district court erred in holding that the PRPA's breach-of-contract action was barred by laches. The district court so held because the PRPA waited more than eleven years to file its claim. "In an admiralty case, maritime law and the equitable doctrine of laches"--not federal or state statutes of limitations--"govern the time to sue." TAG/ICIB Servs., Inc. v. Pan American Grain Co., Inc., 215 F.3d 172, 175 (1st Cir.2000). [T]he focus of our inquiry is "whether the plaintiff's delay in bringing suit was unreasonable and whether defendant was prejudiced by the delay." TAG/ICIB Servs., Inc., 215 F.3d at 175.

. . . [A]s noted by the district court, "the record is devoid of any evidence to show plaintiffs made any extra-judicial or judicial effort during the eleven (11) year-period to request from defendants the specific performance of the contract." In light of this undisputed evidence of inaction on the part of the PRPA, and the absence of any reasonable explanation for such inaction, we agree with the district court that the PRPA's eleven-year delay in bringing this action was unreasonable.


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