Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603 (1991)

Exxon Corporation v. Central Gulf Lines, Inc.

No. 90-34

Argued April 15, 1991
Decided June 3, 1991
500 U.S. 603

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Petitioner Exxon Corporation and Waterman Steamship Corporation negotiated a marine fuel requirements contract, in which Exxon agreed to supply Waterman’s vessels with fuel when the vessels called at ports where Exxon could supply fuel directly and, when the vessels were in ports where Exxon had to rely on local suppliers, to arrange for, and pay, those suppliers to deliver the fuel and then invoice Waterman. In the transaction at issue, Exxon acted as Waterman’s agent, procuring fuel from a local supplier in Jeddah, Saudi Arabia, for a ship owned by respondent Central Gulf Lines, Inc., but chartered by Waterman. Exxon paid for the fuel and invoiced Waterman, but Waterman filed for bankruptcy and never paid the bill’s full amount. When Central Gulf agreed to assume personal liability for the bill if a court were to hold the ship liable in rem, Exxon commenced litigation in the District Court against Central Gulf in personam and the ship in rem, claiming to have a maritime lien on the ship under the Federal Maritime Lien Act. The court concluded that it did not have admiralty jurisdiction. Noting that a prerequisite to the existence of a maritime lien based on a breach of contract is that the contract’s subject matter must fall within the admiralty jurisdiction, it followed Second Circuit precedent, which holds that Minturn v. Maynard, 17 How. 477 -- in which an agent who had advanced funds for repairs and supplies necessary for a vessel was barred from bringing a claim in admiralty against the vessel’s owners -- established a per se rule excluding agency contracts from admiralty. However, the court ruled in Exxon’s favor on a separate unpaid bill for fuel that Exxon supplied directly to the ship in New York. The Court of Appeals affirmed.

Held:

1. Because there is no per se exception of agency contracts from admiralty jurisdiction, Minturn is overruled. Minturn is incompatible with current principles of admiralty jurisdiction over contracts. The rationales on which it apparently rested -- that an action cognizable as assumpsit was excluded from admiralty, and that a claimant had to have some form of a lien interest in a vessel to sue in admiralty on a contract -- have been discredited, and are no longer the law of this Court. See Archawski v. Hanioti, 350 U.S. 532, 536; see also, e.g., North PacificS.S. Co. v. Hall Bros. Marine Railway & Shipbuilding Co., 249 U.S. 119, 126. Minturn’s approach is also inconsistent with the principle that the "nature and subject matter" of the contract at issue should be the crucial consideration in assessing admiralty jurisdiction. Insurance Co. v. Dunham, 11 Wall. 1, 26. And a per se bar of agency contracts from admiralty ill serves the purpose of the grant of admiralty jurisdiction, which is the protection of maritime commerce, Foremost Ins. Co. v. Richardson, 457 U.S. 668, 674. There is nothing in the agency relationship that necessarily excludes such relationships from the realm of maritime commerce, and rubrics such as "general agent" reveal nothing about whether the services actually performed are maritime in nature. Pp. 608-612.

2. Admiralty jurisdiction extends to Exxon’s claim regarding the delivery of fuel in Jeddah. The lower court correctly held that the New York transaction is maritime in nature. Since the subject matter of both claims -- the value of the fuel received by the ship -- is the same as it relates to maritime commerce, admiralty jurisdiction must extend to one if it extends to the other. P. 612-613.

3. This Court expresses no view on whether Exxon is entitled to a maritime lien under the Federal Maritime Lien Act, and leaves that issue to be decided on remand. P. 613.

904 F.2d 33 (CA 2 1990), reversed and remanded.

MARSHALL, J., delivered the opinion for a unanimous Court.