Opinion
Civil Action No. 04-0357 (RMU), Document Nos. 12, 14.
October 8, 2004
MEMORANDUM ORDER
The court held a post-arrest hearing on October 14, 2004, in the above-captioned matter pursuant to Rule E(4)(f) of the Supplemental Federal Rules of Civil Procedure for Admiralty and Maritime Claims. SUPP. R. ADM. E(4)(f) (stating that "[w]henever property is arrested or attached, any person claiming an interest in it shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated"). At the hearing, the court denied the defendants' motion to vacate the arrest. For the reasons that follow, the court now also denies the defendants' motion to dismiss for lack of subject-matter jurisdiction.
The plaintiff, Capital Yacht Club ("CYC"), filed its complaint on March 5, 2004, seeking immediate foreclosure of its lien on the vessel Aviva. On March 8, 2004, the court issued an order for arrest of the vessel, and the United States Marshal executed the warrant shortly thereafter. The dispute stems from the defendants' alleged failure to pay dockage fees at CYC. The plaintiff maintains that, because the defendants left their vessel at CYC after CYC properly terminated the defendants' membership, CYC bylaws required the defendants to pay CYC the higher, non-member/transient rate for continued dockage of their vessel. E.g., Pl.'s Opp'n at 3-4. The defendants respond that the termination was invalid because CYC did not comply with its bylaws and that the defendants therefore only needed to pay CYC its member rates. E.g., Defs.' Reply at 2-3. The defendants further argue that if a transient rate does apply, the plaintiff charged an unreasonable transient rate. Id. at 3.
The Federal Maritime Lien Act ("FMLA"), 46 U.S.C. § 31342, grants a maritime lien to any "person providing necessaries to a vessel" and provides a cause of action to enforce that lien. Id. § 31342 (a)(1)-(2); see also Marina Management Services, Inc. v. Vessel My Girls, 202 F.3d 315 (D.C. Cir. 2000) (addressing a suit brought by Marina for money due for lease of a boat slip and transient rate charges). The holder of a valid maritime lien has
a sufficient interest in the vessel to detain it for security and ultimately to subject it to condemnation and sale for satisfaction of the lien. The arrest of the vessel in the proceeding in rem is to accomplish this end. The lien and the proceeding in rem are, therefore, correlative-where one exists, the other can be taken, and not otherwise.Amstar Corp. v. S/S Alexandros T., 664 F.2d 904, 912 (4th Cir. 1981) (internal citations omitted).
At the post-arrest hearing, the plaintiff had the burden of demonstrating that the arrest should not be vacated. Amstar, 664 F.2d at 912; Salazar v. Atlantic Sun, 881 F.2d 73, 79 (3d Cir. 1989); Newport News Shipbuilding and Dry Dock Company v. S.S. Independence, 872 F. Supp. 262, 265 (E.D. Va. 1994). To satisfy this burden, the plaintiff had to show by a preponderance of the evidence that it is entitled to maritime lien under the FMLA. Amstar Corp., 664 F.2d at 912. Based on the testimony presented and the arguments of counsel, the court found at the post-arrest hearing that the plaintiff established by a preponderance of the evidence that the plaintiff (1) provided necessaries; (2) to a vessel; (3) by the order of the owner or a person authorized by the owner. 46 U.S.C. § 31342; Ventura Packers, Inc. v. Jeanie Kathleen, 305 F.3d 913, 919 (9th Cir. 2002).
The FMLA defines "necessaries" to include repairs, supplies, towage, and use of a dry dock or marine railway. 46 U.S.C. § 31301(4). Courts have expanded on the meaning of necessaries to include "most goods or services that are useful to the vessel, keep her out of danger, and enable her to perform her particular function[.]" Foss Launch Tug Co. v. Char Ching Shipping U.S.A., Ltd., 808 F.2d 697, 699 (9th Cir. 1987) (quoting Equilease Corp. v. M/V SAMPSON, 793 F.2d 598, 603 (5th Cir. 1986)).
Certain persons are presumed to have authority to procure necessaries, including the owner, master, person entrusted with the management of the vessel at the port of supply, or an officer or agent appointed by the owner, a charterer, an owner pro hac vice, or an agreed buyer in possession of the vessel. 46 U.S.C. § 31341.
The defendants argued at the hearing and in their submissions to the court that this case is not centrally about a maritime lien but instead involves a dispute over "a non-maritime membership agreement." E.g., Defs.' Mot. to Vacate Arrest Warrant at 8. However, federal courts often sort out preliminary disputes to determine whether they have subject-matter jurisdiction. And the dispute here over the membership agreement does not appear so qualitatively different to this court than the more customary subject-matter jurisdiction disputes that this court faces so as to divest the court of jurisdiction. C.f., Shulman v. Voyou, LLC, 305 F. Supp. 2d 36, 39-41 (D.D.C. 2004) (determining the residences of the parties for diversity purposes); Macharia v. United States, 238 F. Supp. 2d 13, 19-21 (D.D.C. 2002) ("examining facts related to where the alleged negligent actions took place, at home or abroad, and whether [the d]efendant's actions were in fact discretionary in nature"). Nor, for that matter, does the dispute over the membership agreement appear qualitatively different than the analysis courts must often engage in to determine whether a contract is maritime in nature. See, e.g., Ingersoll Mill. Mach. Co. v. M/V Bodena, 829 F.2d 293, 302 (2d Cir. 1987) (examining the services to be performed under a contract — such as "preparation and processing of export declarations, delivery orders, dock receipts, bills of lading, and advance notification of shipment" — to determine whether or not they were preliminary services incidentally related to a maritime contract).
Thus, the court does not dispute that the terms of the "non-maritime membership agreement" between the parties play an important role in this case. But these terms are important as a threshold for determining whether a lien exists, and on this very issue — on the question of whether the plaintiff followed the terms of the membership agreement in terminating the defendants and charged reasonable transient fees — the court weighed evidence, heard conflicting testimony, and considered counsels' arguments. Based on all that information, the court made a factual finding that the plaintiff demonstrated by a preponderance of the evidence that its interpretation of the bylaws (and, coextensively, its application of a transient rate) should prevail and that a lien therefore exists.
The court notes that it is well aware that (a) matters do not invoke the court's admiralty jurisdiction just because they eventually involve a boat, see, e.g., Chase Manhattan Financial Services, Inc. v. McMillian, 896 F.2d 452 (10th Cir. 1990); E.S. Binnings, Inc. v. M/V Saudi Riyadh, 815 F.2d 660 (11th Cir. 1987), overruled on other grounds by Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603 (1991), and (b) maritime liens must be construed stricti juris, e.g., Logistics Management, Inc. v. One (1) Pyramid Tent Arena, 86 F.3d 908, 913 (9th Cir. 1996). Neither of these propositions counsels in favor of viewing this case as outside the court's admiralty jurisdiction, however.
Furthermore, as indicated above, to invoke admiralty jurisdiction under the FMLA, the plaintiff must demonstrate that it (1) provided necessaries; (2) to a vessel; (3) by the order of the owner or a person authorized by the owner. 46 U.S.C. § 31342; Ventura Packers, 305 F.3d at 919. Thus, establishing the above three elements also establishes the court's subject-matter jurisdiction. Ventura Packers, 305 F.3d at 919 (holding that, if the defendant "demonstrates these elements, it may invoke the admiralty jurisdiction of the federal courts to enforce a necessaries lien in rem"). Because the court found that the plaintiff met its burden for establishing a maritime lien, and because this burden is equivalent to the showing that the plaintiff would have to make on a factual attack to subject-matter jurisdiction, American Farm Bureau v. EPA, 121 F. Supp. 2d 84, 90 (D.D.C. 2000), the court therefore determines that it has subject-matter jurisdiction. Ventura Packers, 305 F.3d at 919. Accordingly, the court denies the defendants' motion to dismiss for lack of subject-matter jurisdiction.
Of course, the court is free — and, indeed, duty-bound — to insure its subject-matter jurisdiction throughout the case. See, e.g., Macharia, 238 F. Supp. 2d at 19-20. The court therefore may reassess its jurisdiction after the parties have submitted more evidence.
For all these reasons, and the reasons the court articulated in the post-arrest hearing, it is this 18th day of October, 2004,
ORDERED that the defendants' motion to vacate arrest is DENIED; and it is
FURTHER ORDERED that the defendants' motion to dismiss for lack of subject-matter jurisdiction is DENIED; and it is
FURTHER ORDERED that the parties shall jointly submit a schedule for discovery by no later than 5pm on October 20, 2004.
SO ORDERED.