Removal of Maritime Claims: Is There Still a Conflict?

Noe S. Hamra

In the United States, state and federal courts operate on a dual track, with the difference that state courts are courts of “general jurisdiction” (i.e., hearing all cases not specifically reserved to federal courts), while federal courts are courts of “limited jurisdiction” (i.e., hearing cases involving “diversity of citizenship” or raising a “federal question”). In some cases, however, a defendant found in state court can transfer the case to federal court (also known as “removal”).

Until recently, it was well established that general maritime claims could not be removed from state court based solely on the federal court’s admiralty jurisdiction under 28 U.S.C. § 1333. Section 1333(1), also known as the saving-to-suitors clause, provides “[t]he district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled….”

“As a practical matter, the saving-to-suitors clause most commonly means that maritime plaintiffs may bring their actions (1) in a state court that, under its own jurisdictional rules, is competent to hear the case, or (2) in a federal court on the ‘law side’ (i.e., a federal court not sitting in admiralty) if there is some basis for federal jurisdiction other than 28 U.S.C. § 1333. The principal non-admiralty bases for federal jurisdiction are ‘federal question’ (sometimes known as ‘arising under’) jurisdiction and ‘diversity’ jurisdiction.”[1] Therefore, if a plaintiff elected to bring general maritime claims in state court, the claims were not removable in the absence of diversity of citizenship (under 28 U.S.C. § 1332) unless there was another basis for jurisdiction besides admiralty.

“Although Congress has long ‘saved to suitors’ their right to bring maritime cases in state courts, Congress has also long-empowered defendants in certain circumstances to ‘remove’ a case filed in state court so that it can instead be resolved in federal court.”[2] Pre-amended 28 U.S.C. § 1441 stated in its relevant part:

a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending….

b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

In 1959, the Supreme Court in Romero v. Int’l Terminal Operating Co., 358 U.S. 354 (1959) was confronted with the question of whether general maritime law claims properly fell within the district court’s federal question jurisdiction. The court held that while federal courts have original jurisdiction over maritime and admiralty claims, such claims do not present a federal question because they do not “arise under” the Constitution or laws of the United States.

In 2011, Congress amended § 1441 in the Federal Courts Jurisdiction and Venue Clarification Act. In reorganizing the statute, Congress retained the reference in § 1441(a) regarding the removability of cases in which courts have “original” jurisdiction unless the removability was prohibited by an act of Congress. However, Congress deleted the first full sentence of the old § 1441(b), and the new version solely refers to cases that are removable on the basis of diversity jurisdiction. This change created a split among trial courts as to whether this amendment rendered admiralty and maritime claims removable in the absence of an independent basis for jurisdiction.

Split within District Courts

Several district courts within the Fifth Circuit interpreted Congress’ amendments as allowing previously nonremovable claims to be removed solely based on the federal court’s original jurisdiction over admiralty claims (i.e., § 1333). These courts found that because § 1441(b) is now only concerned with diversity cases, it is no longer an “Act of Congress,” as stated in § 1441(a) that prohibits removal in maritime cases. In other words, after the amendment to the removal statute, these courts found that admiralty claims are removable, even in the absence of diversity of citizenship or some other federal question, because Congress had removed the § 1441(b) language that stated that an independent basis for federal question jurisdiction must exist when diversity is absent. District court cases expressing this view were prominent in 2013 and 2014 and, although these cases represented the minority view, they caused a stir within the legal community.

It is noteworthy, however, that since 2015 it appears that only one court in the Southern District of Texas, Exxon Mobil Corp. v. Starr Indem. & Liab. Ins. Co., 181 F. Supp. 3d 347, 357 (S.D. Tex. 2015), has held that “general maritime claims are [now] removable under the plain language of § 1441[].” This is in contrast with the large number of courts, including district courts within the Southern District of Texas, that have reached the opposite view.

Courts within the majority view have found that Congress intended to clarify § 1441, not amend it. These courts have concluded that removal of maritime cases continues to be permissible as long as there is an independent basis for federal jurisdiction (e.g., diversity of citizenship, federal question jurisdiction, or some other federal statute such as the Outer Continental Shelf Lands Act). In reaching this conclusion, several courts have argued that the saving-to-suitors clause operates independently of the removal statute to exclude from original federal jurisdiction general maritime claims brought by plaintiffs in state court. Other courts argued that because the saving clause cases filed in state court are necessarily brought at law, not in admiralty, and § 1333 alone does not grant district courts subject-matter jurisdiction over maritime claims brought on the “law side” of the court, it follows that absent diversity or a federal question, such claims do not fall within the court’s original jurisdiction as required for removal under § 1441. Either way, the majority of courts agree that it is “the statutory grant of admiralty jurisdiction, 28 U.S.C. § 1333, and more than 200 years of precedent interpreting this grant” that determine the removability of plaintiffs’ claims, and not the removal statute itself.

On February 5, 2018, the Fifth Circuit Court of Appeals recognized the difficulty and uncertainty surrounding this issue in Sangha v. Navig8 ShipManagement Private Ltd., 882 F.3d 96, 100 (5th Cir. 2018). In reviewing whether the district court abused its discretion in addressing issues of personal jurisdiction and forum non conveniens before first addressing the question of subject-matter jurisdiction, the court stated that the question of “whether the saving-to-suitors clause of the federal maritime statute prohibits removal of general maritime claims absent an independent basis for federal jurisdiction in light of Congress’s December 2011 amendment to the federal removal statute—is not clear.” The court acknowledged that it has not yet spoken directly on this issue and this has created a split among district courts.

Unfortunately, the court passed on the opportunity to settle this issue once and for all.

Conclusion

The remarkably low number of decisions supporting the conclusion that general maritime claims are now removable under the plain language of § 1441 places into question whether the minority view can survive the overwhelming number of decisions supporting the opposite conclusion. Parties within the Fifth Circuit should be aware, however, that the last word on this issue rests with the Fifth Circuit Court of Appeals, and until such time as the court speaks, it is possible that the minority view might continue to crop up in decisions.

[1] Michael F. Sturley, Removal into Admiralty: The Removal of State-Court Maritime Cases to Federal Court, 46 J. MAR. L. & COM. 105, 107 (2015)

[2] Id. at 108.