Quasi-Contract Claim is Maritime Case

Deborah Elkins//July 5, 2012

Quasi-Contract Claim is Maritime Case

Deborah Elkins//July 5, 2012

A Lynchburg U.S. District Court declines to dismiss a South African freight-forwarding company’s suit against defendant, a Lynchburg company that imports and sells linens, for failure to pay for an international shipment of hotel bed linens; the dispute falls within the court’s quasi-contract admiralty jurisdiction.

For a district court to have proper subject matter jurisdiction over a contractual dispute under 28 U.S.C. § 1333(1), the contract at issue must be a “maritime” one. Maritime jurisdiction when founded upon contract depends upon the nature and subject matter of the contract. While no clear line has been drawn between maritime and non-maritime contracts, at bottom, the true criterion is whether the contract has reference to maritime service or maritime transactions.

Here, several different contracts came into being during the course of the linens shipment in 2009. The first contract, an agreement of sale, is not a maritime contract; it merely represents an agreement between a buyer and a seller, and it involves no specifically maritime aspects. The third contract, an agency agreement, is also not a maritime contract. But because its primary objective is to accomplish the transportation of goods by sea from Shanghai to Los Angeles, the second contract, a bill of lading, is a maritime contract. The other bills of lading are also maritime contracts, and plaintiff claims to be a party to at least one such contract. It is true that none of the bills of lading represent a contract between this Plaintiff and this Defendant, so I thus cannot find that any of the bills of lading, standing alone, gives rise to this court’s admiratlty jurisdiction. Unlike most cases in which courts discuss the propriety of exercising admiralty jurisdiction over a contract dispute under § 1331(1), plaintiff and defendant here are not the two parties to the contract at issue.

I do accept, however, plaintiff’s argument that an alternative basis for the court’s subject matter jurisdiction exists under the law of quasi-contract, as it applies to admiralty. Even if plaintiff and defendant are not both parties to one of the earlier bills of lading, as I have assumed, plaintiff’s complaint still may be brought before this court under a quasi-contract theory, since the alleged damages quite clearly arose as a result of the breach of at least one of these maritime contracts.

Santova Logistics Ltd. v. Castello 1935 Inc. (Moon) No. 6:12cv00007, June 19, 2012; USDC at Lynchburg, Va. VLW 012-3-268, 7 pp.

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