The UCC and The
Restatements in American
Maritime Law: Some Lessons
for Europe
Jonathan Gutoff
Roger Williams University School
of Law
jgutoff@rwu.edu
What Possible Lessons From
the US
• Mostly Common
Law Tradition
• A single federal
maritime law
• The US Supreme
Court the Last Word
on US Maritime Law
For Europe
• Mostly Civil Law
Tradition
• Multiple Sovereigns
Control Admiralty
Law
• ECJ Does Not Rule
on Issues of Private
Maritime Law
Similarities and Lessons
• US maritime law is multivariate within a
complex federal system
– 50 States along with territories and DC.
– 12 geographically based, independent federal
Courts of Appeals
– Infrequency of US Supreme Court Review
• “From U.S. history, continentals could draw quite
valuable lessons about the complex alchemy of a
legal system producing model laws and
restatements along with binding state and federal
law.”
– Mauro Bussani, A Streetcar Named Desire: The
European Civil Code in the Global Legal Order, 83
Tul. L. Rev. 1083, 1095 (2009)
US “Alchemy” is Not Real
Chemistry
• No philosopher’s stone
or quintessence of
federalism.
• After over 200 years US
is still seeking to
rationalize the law of
federal-State relations.
• The observations and
experience of US
practice may lead to a
more rational practice in
Europe.
Plan
• Introduction to the Uniform Law Commission,
the American Law Institute, the Uniform
Commercial Code and the Restatements.
• Overview of Admiralty Jurisdiction in the
United States
• Examples of the UCC and the Restatements
in US Maritime Law
• Conclusion
The ULC
• Founded in 1892
• Purpose to Bring Predictability to State
Law While Maintaining the Autonomy of
States
• Members Appointed by States
• Produces Uniform Acts and Model Acts
• Most Successful the UCC (with the ALI)
The ALI
• Founded 1923
• 3000 elected members
• Approximately 1200 life members and
members ex officio.
• Best known product is the Restatements of
the Law.
The UCC
• Issued in 1952
• Various Updates, 2003 update to Article
2, Sales, not adopted and withdrawn
• Adopted by all States and territories
save Louisiana which has not adopted
Article 2.
UCC Articles
•
•
•
•
•
•
•
•
1.
2.
2A.
3.
4.
4A.
5.
7.
• 8.
• 9
General Provisions
Sales
Leases
Negotiable Instruments
Bank Deposits
Fund Transfers
Letters of Credit
Warehouse Receipts and Bills
of Lading
Investment Securities
Secured Transactions
Restatements
• First Issued 1923-42 on 17 topics
• Second (with commentary and
illustrations) 1952 onward.
• Third 1987 onward.
• Restatement (Second) Torts 402A is
basis for modern US products liability
law.
• Varying levels of acceptance. The US
Virgin Islands has legislatively adopted
the Resettlements. 1 V.I.C. § 4.
Admiralty Jurisdiction In US -The Basic Statute
• 28 U.S.C. 1333(1) gives to federal
district courts exclusive jurisdiction over
“[a]ny civil case of admiralty and
maritime jurisdiction saving to suitors in
all cases all other remedies to which
they are otherwise entitled.”
Extent of The Admiralty
Jurisdiction
• At the margins “a mess.”
– E.g. David W. Robertson & Michael F. Sturley,
Recent Developments in Admiralty and Maritime
Law at the National Level and in the Fifth and
Eleventh Circuits, 16 U.S.F. Mar. L.J. 147, 201
(2004)
• Torts: Incidents on or caused by vessels on
navigable waters or high seas.
– See Jerome B. Grubart, Inc. v. Great Lakes
Dredge & Dock Co., 513 U.S. 527 (1995).
• Contracts: Contracts of a “maritime nature”
but not construction or sale of vessels.
– See East River S.S. Co. v. Transamerica Delaval,
Inc. 476 U.S. 858, 872 n.7 (1986).
What is Saved To Suitors
• Right to Bring and in personam action in
State Court.
• Right to rely on state attachment
procedures.
• Long-time understanding is that
maritime actions are not removable.
Maritime Actions in Federal
Court
• May be brought in
one of 94 District
Courts.
• Appeals of Right to
one of 12
geographically
based courts of
appeal
• Discretionary
Review by US
Supreme Court
Maritime Actions In State
Court
• In trial courts of 50
states and territories
and District of
Columbia.
• Appellate review
varies by State and
territory.
• Discretionary
Review by Supreme
Court
Courts in Different Circuits Not
Bound By Each Other -- “Splits”
• Deviation in COGSA. Compare, e.g., Sedco
Inc. v. S.S. Strathewe 800 F.2d. 27 (2d Cir.
1986) with All Mut. Ins. Co. v. Poseidon
Schiffart, 313 F.2d 872 (7th Cir. 1963)
• Punitive Damages. Compare, In re P&E Boat
Rentals Inc. 872 F.3d 642 (5th Cir. 1989) with
CEH Inc. v. F/V Seafarer, 70 F.3d 694 (1995)
with Protectus Alpha Navig. Co. v. N. Pac.
Grain Growers, Inc. 767 F.2d. 1379 (9th Cir
1985); See In re Deepwater Horizon, MDL
2079, Mem. Op. ¶¶ 567-571 (E.D. La. Sept 4,
2014).
State Courts Not Bound By
Inferior Federal Courts
“But we are not a
higher court than the
Supreme Court of
California or the
California Court of
Appeal, or for that
matter, California
traffic courts. We are
in a different judicial
hierarchy.”
Kleinfeld, J (CTA9)
Use : Not Change Fill Interstices.
• Article 2A of the UCC not an important part of
charter party litigation.
• Article 1 has been used to decide whether a
purported lease was a charter party or a
security interest. Interpool Ltd. v. Char Yigh
Marine, SA, 890 F.2d 1453 (9th Cir. 1989)
• The BP Court used the Restatement of Torts
to find meaning for “recklessness” under the
CWA and OPA.
• The BP Court looked to established law from
Courts of Appeals to determine whether BP
would be liable for punitive damages in
private law actions.
An Example of the
Applicability of the UCC
• “The UCC is considered a source of
federal maritime law.” Southworth
Machinery Co. v. F/V Corey Pride, 994
F.2d 37 (1st Cir. 1993). (applying UCC
Article 2 to a contract to sell and intall
an engine).
To apply U.C.C. principles to a maritime contract for services would hinder admiralty law's goals of uniformity
An Example of the
Inapplicability of the UCC
.
• “To apply U.C.C. principles to a maritime
contract for services would hinder admiralty
law's goals of uniformity and predictability.”
Princes Cruises v. Gen. Elec. Co., 143 F.3d
828 (4th Cir. 1998) (holding Article 2 did not
apply to a contract to repair and supply parts to
a vessel)
Problem With Restatements
Not Always Consistent
• Problem of Classification Society
Liability Possibility of Different
Standards from Different Provisions of
the Restatement.
Bases for Liability
Section 552
• Restatement (Second) § 552 limits liability
for false information
(a) by the person or one of a limited group of
persons for whose benefit and guidance he
intends to supply the information or knows
that the recipient intends to supply it; and
(b) through reliance upon it in a transaction that
he intends the information to influence or
knows that the recipient so intends or in a
substantially similar transaction.
Bases for Liability
Section 311
• (1) One who negligently gives false
information to another is subject to liability for
physical harm caused by action taken by the
other in reasonable reliance upon such
information, where such harm results
...
(b) to such third persons as the actor
should expect to be put in peril by the action
taken.
Classification Society Cases
• Otto Candies LLC v. Nippon Kaiji Kyokai
Corp., 346 F.3d 530 (5th Cir. 2003) (affirming
liability under Restatement (Second) of Torts,
§ 552)
• Isham v. Padi Worldwide Co., 208 WL
877126 (D. Hawai’i 2008) (finding possibility
of liability under Restatement (finding
possibility of liability under Restatement
(Second) of Torts § 331).
Classification Societies Cases
• Reino de España v. American Beaurau of
Shipping, 729 F.Supp. 635 (S.D.N.Y.
2010) (rejecting liability based on section
reckless conduct), aff’d on other grounds
691 F.3d 461 (2d Cir. 2012) (concluding
that even if there was a sufficient
relationship to impose liability for
recklessness Spain had not proven
recklessness)
Conclusion
• Non-binding codes and rules of principles
may be useful in filling gaps.
• They may even be a building block for more
uniformity where if courts fill the gaps in the
same way.
• Without some instrument requiring the
application of particular principles or statutory
provisions, do not expect any uniform
changes.