*

Judge Kravitch was in regular active service when this

matter was originally submitted but has taken senior status

effective January 1, 1997. 

United States Court of Appeals,

Eleventh Circuit.

No. 95-9425.

AMBASSADOR FACTORS, Plaintiff-Appellant,

v.

RHEIN-, MAAS-, UND SEE- SCHIFFAHRTSKONTOR GMBH (VORMALS SANARA

REEDEREIKONTOR GmBH), Defendant-Appellee.

Feb. 20, 1997.

Appeal from the United States District Court for the Southern

District of Georgia. (No. CV494-319), B. Avant Edenfield, Chief

Judge.

Before ANDERSON, Circuit Judge, and KRAVITCH*

 and HENDERSON, Senior

Circuit Judges.

KRAVITCH, Senior Circuit Judge:

Appellant Ambassador Factors Corporation ("Ambassador")

brought the instant suit in the Southern District of Georgia,

invoking that court's admiralty jurisdiction pursuant to 28

U.S.C.A. § 1333(1) (1993). On Defendant-Appellee Rhein-, Mass-,

und See- Schiffahrtskontor's ("RMS") motion, the district court

held that it lacked jurisdiction over the case. Undertaking a de

novo review of the district court's dismissal for lack of subject

matter jurisdiction, Hall v. U.S. Dept. Veteran's Affairs, 85 F.3d

532, 533 (11th Cir.1996), we reverse.

I. FACTS

Pursuant to bills of lading designating the district court as

the forum for resolving contract disputes, RMS's predecessor in

interest, Sanara Reedereikontor ("Sanara"), hired Topgallant Lines,
Inc. ("Topgallant") to ship certain cargo from Europe to the United

States. Topgallant borrowed money from Ambassador, and, as part of

the loan agreement, assigned its contract rights and accounts

receivable under the RMS contract to Ambassador. Topgallant

subsequently entered bankruptcy. The bankruptcy court ruled that

Topgallant had abandoned its accounts receivable to Ambassador and

that Ambassador had acquired a perfected security interest in

Topgallant's freights under the contract. In re Topgallant Lines,

Inc., 138 B.R. 314 (Bankr.S.D.Ga.1992), aff'd in pertinent part,

154 B.R. 368 (S.D.Ga.1993), aff'd, 20 F.3d 1175 (11th Cir.1994).

In effect, the court held that the Topgallant-to-Ambassador

assignment was valid.

According to the complaint in the instant proceeding,

approximately $31,000 in unpaid freights is due under the contract.

Ambassador therefore sued RMS, alleging breach of the original

Sanara-Topgallant contract. RMS moved to dismiss the suit,

claiming that the fact that Ambassador is the assignee of the right

to collect on a shipping contract—rather than an original party to

the contract—deprived the district court of admiralty jurisdiction.

The court agreed and dismissed.

II. DISCUSSION

 The Supreme Court and this court have held that the nature of

the disputed contract, not the status or alignment of parties, is

the crucial inquiry in determining whether a contract is in

admiralty. In Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S.

603, 611-12, 111 S.Ct. 2071, 2076, 114 L.Ed.2d 649 (1991), the

Court noted that "admiralty jurisdiction is designed to protect
 1

See also Ingersoll Milling Mach. Co. v. M/V Bodena, 829

F.2d 293, 302 (2d Cir.1987) ("It is the character of the work to

be performed under the contract that is determinative of whether

the contract was maritime."), cert. denied, 484 U.S. 1042, 108

S.Ct. 774, 98 L.Ed.2d 860 (1988); Proleride Transp. Sys., Inc.

v. Union Carbide Corp., 498 F.Supp. 680, 682 (D.Mass.1980) (a

contract, to be in admiralty, must be "wholly maritime"; it is

"wholly maritime" if the "primary tenor" of the contract is

maritime). 

maritime commerce." A court must consider "whether the services

actually performed pursuant to a contract are maritime in nature.

It is inappropriate, therefore, to focus on the status of a

claimant to determine whether admiralty jurisdiction exists." Id.

We have stated similarly:

To come within the federal court's admiralty and maritime

jurisdiction, "such contracts must pertain directly to and be

necessary for commerce or navigation upon navigable waters.'

* * * The test we apply in deciding whether the subject matter

of a contract is necessary to the operation, navigation, or

management of a ship is a test of reasonableness, not of

absolute necessity.

Nehring v. Steamship M/V Point Vail, 901 F.2d 1044, 1048 (11th

Cir.1990) (quoting 7A MOORE'S FEDERAL PRACTICE ¶ .230[2], at 2761-62

(1988)). In sum, we look to whether the substance of the contract

at issue in the dispute—without regard to the identity of the

parties—is reasonably necessary to the conduct of maritime

commerce.1

 Applying this standard, we conclude that the district court

erred in holding that it lacked jurisdiction. The contract at

issue is the Sanara-Topgallant shipping contract, despite RMS's

claims to the contrary. Ambassador seeks collection of freights

owed to Topgallant for having shipped goods to the United States.

The assignment of the contract to Ambassador is not at issue;

indeed, it has been held valid by the bankruptcy court, whose
 2

RMS concedes that if Topgallant had not assigned its rights

and had brought the instant collection action, admiralty

jurisdiction would be proper. In light of the Supreme Court's

admonition that it is "inappropriate ... to focus on the status

of the claimant," Exxon, 500 U.S. at 612, 111 S.Ct. at 2076, we

find this concession significant, as it recognizes the maritime

nature of the contract itself. 

decision was affirmed by the district court and this court. Thus,

jurisdiction exists over this action if the shipping contract is

reasonably necessary to maritime commerce. Because courts

uniformly have agreed that "[s]uits brought against a cargo owner

by a carrier to recover freight due under the terms of an ocean

bill of lading ... are clearly within the admiralty jurisdiction of

the federal court," see 1 STEVEN F. FRIEDELL, BENEDICT ON ADMIRALTY §

190[a], at 12-50 (1996) (collecting cases), we hold that the

district court had jurisdiction to hear Ambassador's suit to

enforce the shipping contract.2

This result is consistent with the case law, although sparse,

addressing the assignment of maritime contracts. RMS urges us to

follow Kreatsoulas v. Freights of the Levant Pride & the Levant

Fortune, 838 F.Supp. 147 (S.D.N.Y.1993). That case, however, is

not contrary to our holding here. In Kreatsoulas, the plaintiff

loaned a shipping company money to finance a shipping venture and

the company secured the loan by assigning to the plaintiff an

interest in the freights. When the shipping company went bankrupt,

the plaintiff sued the freights in rem, seeking enforcement of the

assignment contract. The court held that it lacked jurisdiction

over the assignment, because its purpose was merely to provide

collateral for a loan. Nothing about the assignment, it ruled, was

maritime in nature. Id. at 152. Unlike the instant case,
 3

We need not, and expressly do not, decide whether or not

the assignment contract is within the federal admiralty

jurisdiction, or under what circumstances it might be. 

Similarly, we need not decide whether or not Kreatsoulas was

decided correctly. 

Kreatsoulas did not involve a suit to enforce the underlying

shipping contract; rather, it was a suit to enforce the assignment

contract. That distinction is of central importance here because

Ambassador's suit is to enforce the Sanara-Topgallant shipping

contract, which is self-evidently maritime in nature.

In a more similar case, Continental Ill. Nat'l Bank & Trust

Co. of Chicago v. Alltransport, Inc., 1979 A.M.C. 669

(N.D.Ill.1978), the court reached the same result we do today. In

that case, a shipping company assigned freights due under a

shipping contract to a bank as collateral for a loan. In holding

that it had jurisdiction, the court ruled that the assignee could

sue those parties who owed the shipper under the shipping contract

because the contract at issue in the suit—the shipping contract—was

maritime in nature and "because the underlying maritime action

gives [the assignee] standing to bring its claim in admiralty."

Id. at 671. Likewise, the underlying maritime action here (the

Sanara-Topgallant contract) sustains jurisdiction over claims by an

assignee (Ambassador).

 Accordingly, we hold that where a contract is indisputably

maritime in nature, such as the shipping contract at issue in this

case, and a party to the contract assigns its rights to a third

party, the third party may sue in admiralty to enforce the original

contract, even though the assignment contract itself might not be

within the federal courts' admiralty jurisdiction.3
III. CONCLUSION

The order of the district court is REVERSED and the case is

REMANDED for proceedings consistent with this opinion.