What is the “saving to suitors” clause?
Article III, Section 2 of the U.S. Constitution “vests federal courts with jurisdiction over all cases of admiralty and maritime jurisdiction.” Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 443, 121 S. Ct. 993, 998 (2001).
The jurisdictional statute elaborates that “[t]he district courts shall have original jurisdiction, exclusive of the courts of the States, of … [a]ny civil case of admiralty or maritime jurisdiction,” but from this grant of exclusive jurisdiction it “sav[es] to suitors in all cases all other remedies to which they are otherwise entitled.” 28 U.S.C. § 1333(1) (emphasis added).
The highlighted provision is commonly referred to as the “saving to suitors” clause. It gives plaintiffs the option to refrain from designating their claims as admiralty claims and sue at law, i.e., bring their claims in state court or in federal court when there exists some independent basis for federal jurisdiction, such as diversity of citizenship.
This rule, however, does not apply to any and all maritime claims. For example, in rem claims, which are claims against a vessel or maritime property itself, are subject to exclusive admiralty jurisdiction.
Is there a conflict between the grant of “exclusive” jurisdiction to federal courts and the saving to suitors clause’s preservation of the concurrent jurisdiction of state and federal courts?
Let us reiterate the relevant provision of the jurisdictional statute:
The district courts shall have original jurisdiction, exclusive of the courts of the States, of … [a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.
28 U.S.C. § 1333(1).
At first glance, the substance of the saving to suitors clause, when read in conjunction with the grant of “exclusive” jurisdiction to federal courts, might seem contradictory. The Supreme Court has provided clarity on this apparent conflict. The Court explained that “[a]dmiralty’s jurisdiction is ‘exclusive’ only as to those maritime causes of action begun and carried on as proceedings in rem, that is, where a vessel or thing is itself treated as the offender and made the defendant by name or description in order to enforce a lien.” Madruga v. Superior Ct. of State of Cal. in & for San Diego Cnty., 346 U.S. 556, 560, 74 S. Ct. 298, 300–01 (1954).
“[P]roceedings in rem were deemed outside the scope of the [saving to suitors] clause because an in rem action was not a common law remedy, but instead a proceeding under civil law.” Lewis, 531 U.S. at 444, 121 S. Ct. 999. The Judiciary Act of 1789 historically “vest[ed] in the District Courts of the United States exclusive cognizance of civil causes of admiralty and maritime jurisdiction.” The Moses Taylor, 71 U.S. 411, 414, 18 L. Ed. 397 (1866). Accordingly, state courts cannot exercise jurisdiction over in rem maritime claims.
“But the jurisdictional act does leave state courts ‘competent’ to adjudicate maritime causes of action in proceedings ‘in personam,’ that is, where the defendant is a person, not a ship or some other instrument of navigation.” Madruga, 346 U.S. at 560–61, 74 S. Ct. 301.
Unless the applicable statute provides otherwise, plaintiffs with in personam maritime claims have three alternatives: (1) to proceed in federal court sitting in admiralty; (2) to proceed in federal court at law, assuming an alternative basis for federal jurisdiction; or (3) to proceed in state court. See Ghotra by Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054 (9th Cir. 1997) (“[A] plaintiff with in personam maritime claims has three choices: He may file suit in federal court under the federal court’s admiralty jurisdiction, in federal court under diversity jurisdiction if the parties are diverse and the amount in controversy is satisfied, or in state court.”); see also In re Lion Air Flight JT 610 Crash, 110 F.4th 1007, 1014 (7th Cir. 2024) (“For a long time, maritime plaintiffs generally have been able to choose the forum in which they bring in personam claims. Such plaintiffs generally could sue in federal admiralty courts, in state court, or if diversity existed, in the federal circuit courts (1789–1911), on the “law side” of the federal district courts (1911–1966), or by refraining from designating their claims as admiralty claims under Rule 9(h) (since 1966).”).
It is important to note that while in personam maritime claims are generally within the concurrent jurisdiction of state and federal courts, Congress has established exclusive admiralty jurisdiction for some of these claims through statutory provisions. For example, under the Limitation of Liability Act, the owner of a vessel “may bring a civil action in a district court of the United States for limitation of liability.” 46 U.S.C. § 30529(a) (emphasis added).
What is the difference between proceeding in admiralty and at law?
“The difference between [proceeding in admiralty and at law in state or federal court] is mostly procedural.” Ghotra, 113 F.3d at 1054. Federal and state courts have their own procedural rules.
As to federal courts, they historically maintained separate procedural rules for cases under admiralty and law jurisdiction. In re Lion Air Flight JT 610 Crash, 110 F.4th at 1014. By 1966, a unification process in federal district court practice was complete, and since then the Federal Rules of Civil Procedure have governed all civil actions, including admiralty actions. Id. However, some procedural differences continue to exist. See, e.g., Fed.R.Civ.P. 38(e) (no right to a jury trial in admiralty or maritime claims). Accordingly, if a claim falls within the admiralty or maritime jurisdiction and also within the court’s subject matter jurisdiction on some other ground, such as diversity of citizenship, a party must designate the claim as an admiralty claim in order for the different procedural rules to apply. Fed.R.Civ.P. 9(h).
The most significant difference between maritime claims brought in admiralty and at law is the right to a jury trial.
The Seventh Amendment does not extend to cases falling within the admiralty jurisdiction. See Waring v. Clarke, 46 U.S. 441, 460 (1847) (“[T]here is no provision, as the constitution originally was, from which it can be inferred that civil causes in admiralty were to be tried by a jury, contrary to what the framers of the constitution knew was the mode of trial of issues of fact in the admiralty. We confess, then, we cannot see how they are to be embraced in the seventh amendment of the constitution, providing that in suits at common law the trial by jury should be preserved.”).
Therefore, in the absence of a statute providing otherwise, the district court which subject matter jurisdiction is based solely on admiralty decides the case without a jury. See Fed.R.Civ.P. 38(e); see also Ghotra, 113 F.3d at 1054 (“[T]here is no right to jury trial if general admiralty jurisdiction is invoked, while it is preserved for claims based in diversity or brought in state court.”); In re Lion Air Flight JT 610 Crash, 2024 WL 3665332, at *5 (“[U]nless a statute provided otherwise, if the plaintiff sued at law, either party could demand a jury trial, but if they sued in admiralty, the case would be tried by the court.”).
Would state and federal courts apply different substantive law in maritime cases?
No. The same substantive maritime law applies regardless of whether a maritime cause of action is brought in admiralty or at law. See Carlisle Packing Co. v. Sandanger, 259 U.S. 255, 259, 42 S. Ct. 475, 477 (1922) (“The general rules of the maritime law apply whether the proceeding be instituted in an admiralty or common-law court.”); see also Mink v. Genmar Indus., Inc., 29 F.3d 1543, 1548 (11th Cir. 1994) (“Indeed, the federal interest in uniformity is such that the courts have developed a reverse-Erie doctrine, by virtue of which the same federal maritime law applies in maritime cases, whether the case is brought in state court or in federal court based on diversity of jurisdiction.”).
The sources of substantive maritime law include:
• Federal statutes;
• Judge-made substantive maritime law, which was referred to as the “general maritime law” in Pac. Co. v. Jensen, 244 U.S. 205, 37 S. Ct. 524 (1917), and Chelentis v. Luckenbach S.S. Co., 247 U.S. 372, 38 S. Ct. 501 (1918); and
• State law.
The interaction between these sources, however, is complex.
Imagine a scenario where federal maritime law and state law offer different solutions to the same issue. For example, in Chelentis, the Supreme Court found that the “well-recognized maritime rule” allowed an injured seaman to recover only wages to the end of the voyage and the expenses for maintenance and cure for a reasonable time thereafter, whereas state law provided for full indemnity. 247 U.S. at 379, 38 S. Ct. 502.
Which law should prevail?
Emphasizing the importance of protecting the uniformity of federal maritime law, the Supreme Court explained that “[i]t certainly could not have been the intention to place the rules and limits of maritime law under the disposal and regulation of the several States, as that would have defeated the uniformity and consistency at which the Constitution aimed on all subjects of a commercial character affecting the intercourse of the States with each other or with foreign states.” The Lottawanna, 88 U.S. 558, 575, 22 L. Ed. 654 (1874).
By reason of this principle, the Supreme Court applied “the well-recognized maritime rule concerning measure of recovery” in Chelentis and disallowed the application of “the full indemnity rule of the common law.” 247 U.S. at 382, 38 S. Ct. 503 (“[N]o state has power to abolish the well-recognized maritime rule concerning measure of recovery and substitute therefor the full indemnity rule of the common law. Such a substitution would distinctly and definitely change or add to the settled maritime law; and it would be destructive of the ‘uniformity and consistency at which the Constitution aimed on all subjects of a commercial character affecting the intercourse of the states with each other or with foreign states.’”).
The requirement of uniformity, however, is not absolute.
Federal maritime law “may be changed, modified, or affected by state legislation … to some extent.” Jensen, 244 U.S. at 216, 37 S. Ct. 529.
But to what extent?
There is no simple answer to this question.
In various factual scenarios, courts have applied different analytical frameworks:
• “[T]he general maritime law may be changed, modified, or affected by state legislation” unless such legislation (1) “contravenes the essential purpose expressed by an act of Congress,” or (2) “works material prejudice to the characteristic features of the general maritime law,” or (3) “interferes with the proper harmony and uniformity of that law in its international and interstate relations.” Jensen, 244 U.S. at 216, 37 S. Ct. 529. Jensen’s preemption analysis has not been applied consistently by the courts.
• “Even though Congress has acted in the admiralty area, state regulation is permissible, absent a clear conflict with the federal law.” Askew v. Am. Waterways Operators, Inc., 411 U.S. 325, 341, 93 S. Ct. 1590, 1600 (1973).
• “[T]he general rule on preemption in admiralty is that states may supplement federal admiralty law as applied to matters of local concern, so long as state law does not actually conflict with federal law or interfere with the uniform working of the maritime legal system. The questions, then, are (1) whether applying California’s overtime provisions to maritime employees on the high seas contravenes an act of Congress, and (2) whether applying the provisions would unduly disrupt uniformity in maritime law.” Merch. Shipping Ass’n v. Aubry, 918 F.2d 1409, 1422 (9th Cir. 1990).
• “[W]e should not lightly conclude that the federal law of the sea pre-empts a duly enacted state statute. Instead, we should focus on whether the state provision in question conflicts with some particular substantive rule of federal statutory or common law, or, perhaps, whether federal maritime rules, while not directly inconsistent, so pervade the subject as to preclude application of state law. We should jettison Jensen’s special maritime pre-emption doctrine and its abstract standards of ‘proper harmony’ and ‘characteristic features.’” Dredging Co. v. Miller, 510 U.S. 443, 461, 114 S. Ct. 981, 992 (1994) (Stevens, J., concurring).
• “[G]eneral maritime law applies in maritime contract disputes unless they ‘so implicate local interests as to beckon interpretation by state law.’” Great Lakes Ins. SE v. Raiders Retreat Realty Co., LLC, 601 U.S. 65, 86, 144 S. Ct. 637, 651 (2024) (Thomas, J., concurring).
The Supreme Court has yet to reconcile the existing discrepancies in these analyses.
The saving to suitors clause allows claimants to pursue most of their in personam maritime claims in a forum of their choice (i.e., in state court or in federal court). At the same time, the Limitation of Liability Act of 1851 gives the owner of a vessel the right to seek limitation of their liability exclusively in federal court. How to reconcile this conflict?
Under the Limitation of Liability Act, the owner of a vessel “may bring a civil action in a district court of the United States for limitation of liability.” 46 U.S.C. § 30529(a) (emphasis added). The Limitation of Liability Act allows the owner of a vessel to limit their liability for an array of “claims, debts, and liabilities” that might arise from the activities of their vessel to “the value of the vessel and pending freight,” as long as the incident giving rise to liability occurred “without the privity or knowledge of the owner.” 46 U.S.C. § 30523(a)-(b).
Congress passed the Limitation of Liability Act in 1851 “to encourage ship-building and to induce capitalists to invest money in this branch of industry.” Norwich & N.Y. Transp. Co. v. Wright, 80 U.S. 104, 121, 20 L. Ed. 585 (1871). In the modern era, however, the value of the limitation of liability is questionable, as the companies leverage the Limitation of Liability Act to avoid paying compensation. For example, after the Titanic sank in 1912, killing approximately 1,500 passengers and crew, her owner invoked the Limitation of Liability Act, arguing that their liability should be capped at $91,805.54—the value of the 14 recovered lifeboats and pending freight. The Titanic, 209 F. 501, 502 (S.D.N.Y. 1913). The District Court for the Southern District of New York dismissed the owner’s petition to obtain a limitation of their liability. Id. The owner of the Titanic appealed this decree, and the U.S. Supreme Court ruled that the Limitation of Liability Act should apply. Oceanic Steam Nav. Co. v. Mellor, 233 U.S. 718, 34 S. Ct. 754 (1914).
The Titanic case, which originally involved $16 million in consolidated claims, was finally settled for only $664,000. See Matthew E. Zekala, Liability and Salvage: Titanic Jurisprudence in United States Federal Court, 16 Lewis & Clark L. Rev. 1075, 1085 (2012).
Similarly, the Limitation of Liability Act was invoked by the Singapore-based owner and manager of the M/V Dali, the ship that collided with the Francis Scott Key Bridge in Baltimore. On April 1, 2024, they filed a petition with the U.S. District Court for the District of Maryland, seeking exoneration from or limitation of liability to approximately $43.7 million. This amount represents the sound value of the vessel plus pending freight, less repair costs and salvage costs. According to the Maryland Transportation Authority, the Key Bridge rebuild would cost between $1.7 billion and $1.9 billion.
Due to the significant disparity between the damages and the potential liability of the Singapore-based owner and manager of the M/V Dali, U.S. Representatives John Garamendi and Hank Johnson introduced the Justice for Victims of Foreign Vessel Accidents Act. This Act seeks to amend the Limitation of Liability Act to retroactively increase the limit of liability for foreign-flagged vessels up to 10 times the dollar value of the vessel and its cargo, minus expenses. Whether this Act will become law is an open question.
Although the Limitation of Liability Act was “badly drafted even by the standards of the time,” Lewis, 531 U.S. at 447, 121 S. Ct. 1000 (citation omitted), the courts must “apply the law as it exists, no matter how poorly it may have aged.” Skanska USA Civ. Se. Inc. v. Bagelheads, Inc., 75 F.4th 1290, 1303 (11th Cir. 2023).
The existing law establishes the following procedure for a limitation action:
• The owner of a vessel may bring a limitation action in a district court of the United States within six months after a claimant gives the owner written notice of a claim. 46 U.S.C. § 30529(a); R. Civ. Supp. R. F(1).
• The owner must deposit with the district court an amount equal to the value of the owner’s interest in the vessel and pending freight, or approved security. 46 U.S.C. § 30529(b); R. Civ. Supp. R. F(1).
• When the complaint and the deposit are submitted, “all claims and proceedings against the owner related to the matter in question shall cease.” 46 U.S.C. § 30529(c); R. Civ. Supp. R. F(3).
• The district court then is directed to issue notice to all persons asserting claims against the vessel arising from the incident. Fed.R.Civ.P. Supp. R. F(4).
• Injured parties must file their claims against the owner in the federal limitation proceeding.
• After the claims are filed, the district court, sitting without a jury, decides whether the owner is liable and, if so, whether the owner can limit their liability. Lewis, 531 U.S. at 448, 121 S. Ct. 1001.
• If liability is limited and the limitation amount is insufficient to cover all claims, the district court distributes the limitation amount to the valid claimants in proportion to their losses. 46 U.S.C. § 30525; Fed. R. Civ. Supp. R. F(8).
This procedure, sometimes referred to as a “concursus,” “provides for all claims against an owner to be aggregated and decided at one time under a single set of substantive and procedural rules, thereby avoiding inconsistent results and repetitive litigation.” In re Paradise Holdings, Inc., 795 F.2d 756, 761 (9th Cir. 1986).
Tension exists between the saving to suitors clause and the Limitation of Liability Act because the former allows claimants to pursue their in personam maritime claims in a forum of their choice (i.e., in state court or in federal court), while the latter gives the owner of a vessel the right to seek limitation of their liability exclusively in federal court. See Lewis, 531 U.S. at 448, 121 S. Ct. 1001. This tension escalates to the degree that the district court shall, upon the vessel owner’s request, “enjoin the further prosecution of any action or proceeding against the [vessel owner] or the [vessel owner’s] property with respect to any claim subject to limitation in the action.” Fed. R. Civ. Supp. R. F(3).
“In resolving this tension, the ‘primary concern is to protect the shipowner’s absolute right to claim the Act’s liability cap, and to reserve the adjudication of that right in the federal forum.’” Beiswenger Enterprises Corp. v. Carletta, 86 F.3d 1032, 1037 (11th Cir. 1996) (quoting Magnolia Marine Transp. Co. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992)). The shipowner’s right to limit liability, however, is “not so boundless.” Lake Tankers Corp. v. Henn, 354 U.S. 147, 152, 77 S. Ct. 1269, 1272 (1957). Courts may not “transform the Act from a protective instrument to an offensive weapon by which the shipowner could deprive suitors of their common-law rights.” Id.
The Supreme Court has recognized two exceptions to vessel owners’ right to consolidate claims in a limitation action in federal court. The Court permitted claimants to proceed with their claims outside a limitation action (i.e., in state court or in federal court at law) where (1) there is only a single claimant (the “single claimant exception”), or (2) the total value of the claims does not exceed the value of limitation fund (the “adequate fund exception”). Lewis, 531 U.S. at 451, 121 S. Ct. 1002.
In order to invoke the single claimant exception, a single claimant must make three stipulations: (1) concede that the value of the fund is the value of the vessel and its freight; (2) waive any right to a claim of res judicata based on another court’s judgment; and (3) concede the district court’s exclusive jurisdiction to rule on all questions pertaining to limitation of liability. Jefferson Barracks Marine Serv., Inc. v. Casey, 763 F.2d 1007, 1010 (8th Cir. 1985); Valley Line Co. v. Ryan, 771 F.2d 366, 373 (8th Cir. 1985).
This list, however, is not universal. “[I]n multiple-claimant cases, admiralty courts still should allow state court claims to proceed under proper stipulations.” Magnolia Marine Transp. Co. v. Laplace Towing Corp., 964 F.2d 1571, 1576 (5th Cir. 1992) (citation omitted). For example, “[m]ultiple claimants may reduce their claims to the equivalent of a single claim by agreeing and stipulating as to the priority in which the claimants will receive satisfaction against the shipowner from the limited fund.” Id. (citation omitted). See also Odeco Oil & Gas Co., Drilling Div. v. Bonnette, 74 F.3d 671, 674 (5th Cir. 1996) (“In mediating between the right of shipowners to limit their liability in federal court and the rights of claimants to sue in the forum of their choice, federal courts have developed two instances in which a district court must allow a state court action to proceed: (1) when the total amount of the claims does not exceed the shipowner’s declared value of the vessel and its freight, and (2) when all claimants stipulate that the federal court has exclusive jurisdiction over the limitation proceeding, and that the claimants will not seek to enforce a damage award greater than the value of the ship and its freight until the shipowner’s right to limitation has been determined by the federal court.”); Texaco, Inc. v. Williams, 47 F.3d 765, 768 (5th Cir. 1995) (“The case law is clear that if all claimants stipulate that the federal court has exclusive jurisdiction over limitation issues and the claimants will not seek to enforce a greater damage award than the limitation fund, the claimants may proceed outside of the limitation action.”). These stipulations are necessary to “protect the shipowner’s right to have the admiralty court ultimately adjudicate its claim to limited liability.” Beiswenger, 86 F.3d at 1037.
If either the single claimant exception or the adequate fund exception applies and a claimant or claimants make the requisite stipulations, it is an abuse of discretion for the district court to fail to dissolve the injunction against other legal proceedings and thus deprive a claimant or claimants of their choice of forum. Langnes v. Green, 282 U.S. 531, 51 S. Ct. 243 (1931).
Conversely, “[i]f the district court concludes that the vessel owner’s right to limitation will not be adequately protected—where for example a group of claimants cannot agree on appropriate stipulations or there is uncertainty concerning the adequacy of the fund or the number of claims—the court may proceed to adjudicate the merits, deciding the issues of liability and limitation.” Lewis, 531 U.S. at 454, 121 S. Ct. 1004.
In Lewis, for example, the seaman sued the vessel owner in state court for personal injuries suffered aboard the vessel. 531 U.S. at 440, 121 S. Ct. 996. In anticipation of his suit, the vessel owner filed a complaint for exoneration from, or limitation of, liability in the U.S. District Court for the Eastern District of Missouri pursuant to the Limitation of Liability Act. The District Court followed the procedure for a limitation action. Specifically, the District Court approved a surety bond of $450,000, representing the vessel owner’s interest in the vessel, ordered that any claim related to the incident be filed with the court within a specified period, and enjoined any further proceedings in state court.
The employee filed an answer to the vessel owner’s complaint, a claim for damages for injury, and a motion to dissolve the restraining order. The employee averred that he was the only claimant. He also waived any res judicata claim concerning limited liability from a state court judgment. Additionally, he stipulated that the vessel owner could relitigate issues related to the limitation of liability in the District Court and that the value of his claim was less than the value of the limitation fund.
The District Court recognized that federal courts have exclusive jurisdiction to determine whether the vessel owner if entitled to limitation of liability. The District Court also noted that the statute that confers exclusive jurisdiction over admiralty or maritime claims to federal courts contains a clause that saves to suitors “in all cases all other remedies to which they are otherwise entitled.” 28 U.S.C. § 1333(1). “Thus, a tension exists between the exclusive jurisdiction vested in the admiralty courts to determine a vessel owner’s right to limited liability and the savings to suitors clause.” In re Lewis & Clark Marine, Inc., 31 F. Supp. 2d 1164, 1168 (E.D. Mo. 1998) (citations omitted).
The District Court found two exceptions to exclusive federal jurisdiction under which a claimant is allowed to litigate his claim in state court: (1) if the value of the limitation fund (value of the vessel plus freight) exceeds the total value of all claims asserted against the vessel owner, and (2) if a single claimant brings an action against the shipowner.
The District Court dissolved the injunction and permitted the employee to pursue his claim is state court. This was because the employee met the adequate fund exception and because he made the necessary stipulations. In re Lewis & Clark Marine, Inc., 31 F. Supp. 2d at 1169–70 (“Certain stipulations are required of a claimant before a court can dissolve a restraining order, although the stipulations appear to be required only in the single claimant case. Nonetheless, assuming they apply to the adequate fund exception as well, the Court finds that Claimant has made the necessary stipulations to protect any rights [the vessel owner] may have to a limitation proceeding in this Court.”).
The Supreme Court agreed with this reasoning and concluded that “the District Court properly exercised its discretion in dissolving the injunction that prevented petitioner from pursuing his claims in state court”:
The District Court, guided by our prior cases, attempted to reconcile [the employee’s] right to his remedy under the saving to suitors clause with [the vessel owner’s] right to seek limited liability under the Limitation Act. The court dissolved the injunction against the state court proceedings after it concluded that [the vessel owner’s] right to seek limitation of liability would be adequately protected. [The vessel owner’s] rights were protected by [the employee’s] stipulation that his claim did not exceed the limitation fund, [the employee’s] waiver of any defense of res judicata with respect to limitation of liability, and the District Court’s decision to stay the Limitation Act proceedings pending state court proceedings. … [N]othing more was required to protect [the vessel owner’s] right to seek a limitation of liability.
Lewis, 531 U.S. at 451–52, 454, 121 S. Ct. 1002–04.
To sum up, the Supreme Court’s case law makes it clear that state courts, with all of their remedies, may adjudicate claims like the seaman’s claim against the vessel owner in Lewis so long as the vessel owner’s right to seek limitation of liability is protected.
The information provided in this article is intended for informational purposes only and does not constitute legal advice. It should not be relied upon or applied without consulting an attorney to address your specific circumstances. Please note that this article was published on the date indicated and may not reflect subsequent changes in the law.
