Opinion ID: 2609810
Heading Depth: 1
Heading Rank: 9

Heading: Substantive Admiralty Law Preempts Application of a State Law Remedy

Text: Applying interest analysis, the Court of Appeals concluded that Washington's definition of economic loss should apply. Stanton v. Bayliner Marine Corp., 68 Wn. App. 125, 132, 844 P.2d 1019 (1992) (citing Kossick v. United Fruit Co., 365 U.S. 731, 738-42, 6 L.Ed.2d 56, 81 S. Ct. 886 (1961)). Citing East River S.S. Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 864, 90 L.Ed.2d 865, 106 S.Ct. 2295 (1986), Bayliner argues that [w]ith admiralty jurisdiction comes the application of substantive admiralty law. Bayliner contends that the application of substantive admiralty law in this case means that no products liability claim lies in admiralty when the only injury claimed is economic loss. Stanton, on the other hand, argues that state law is not preempted if it does not interfere with the uniform system of federal maritime law. Stanton claims that Washington law supplements the remedies available in admiralty. Article 3, section 2 of the United States Constitution provides in part that the judicial power of the United States shall extend to all cases of admiralty and maritime jurisdiction. This provision, by implication, grants Congress the power to revise and supplement the maritime law, and grants federal courts power to develop the general maritime law. Pacific Merchant Shipping Ass'n v. Aubry, 918 F.2d 1409, 1421 (9th Cir.1990) (citing Romero v. International Terminal Operating Co., 358 U.S. 354, 360-61, 3 L.Ed.2d 368, 79 S.Ct. 468 (1959)), cert. denied, 119 L.Ed.2d 578 (1992). State courts, however, have concurrent jurisdiction over maritime claims. Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 222, 91 L.Ed.2d 174, 106 S.Ct. 2485 (1986). The process of determining the applicability of state law in cases within the admiralty jurisdiction has been described as one of accommodation, entirely familiar in many areas of overlapping state and federal concern, or a process somewhat analogous to the normal conflict of laws situation where two sovereignties assert divergent interests in a transaction as to which both have some concern. Kossick, 365 U.S. at 739 (citing with approval the application of state wrongful death statutes, The Tungus v. Skovgaard, 358 U.S. 588, 3 L.Ed.2d 524, 79 S.Ct. 503 (1959); The Hamilton, 207 U.S. 398, 52 L.Ed. 264, 28 S.Ct. 133 (1907); and state survival of actions statutes, Just v. Chambers, 312 U.S. 383, 85 L.Ed. 903, 61 S.Ct. 687 (1941)). [4] Relying on Kossick, the Court of Appeals stated that even though a cause of action arises under admiralty jurisdiction, state law may displace federal law when a matter of local concern is at stake and the application of state law would not disturb the uniformity of maritime law. Bayliner, 68 Wn. App. at 131-32. Although Kossick endorsed the notion of balancing local concerns against federal interests in some circumstances, it does not stand for the proposition that state law may displace conflicting federal law. See Kossick, 365 U.S. at 742. The federal statute conferring admiralty jurisdiction on federal district courts sav[es] to suitors in all cases all other remedies to which they are otherwise entitled. 28 U.S.C. § 1333(1). The Supreme Court has said that this statute leaves state courts competent to adjudicate maritime causes of action in proceedings in personam and means that a state, `having concurrent jurisdiction, is free to adopt such remedies, and to attach to them such incidents, as it sees fit,' so long as it does not attempt to [give in rem remedies or] make changes in the `substantive maritime law.' Stated another way, the saving to suitors clause allows state courts to entertain in personam maritime causes of action, but in such cases the extent to which state law may be used to remedy maritime injuries is constrained by a so-called reverse-Erie doctrine which requires that the substantive remedies afforded by the States conform to governing federal maritime standards. (Citation omitted. Some italics ours.) Offshore Logistics, Inc. v. Tallentire, 477 U.S. at 222-23 (quoting Madruga v. Superior Court, 346 U.S. 556, 560-61, 98 L.Ed. 290, 74 S.Ct. 298 (1954)). In Bohemia, Inc. v. Home Ins. Co., 725 F.2d 506, 510 (9th Cir.1984), the court, interpreting both Kossick v. United Fruit Co., supra , and Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 99 L.Ed. 337, 75 S.Ct. 368 (1955), stated that state law will control in the absence of a federal statute, a judicially fashioned admiralty rule, or a need for uniformity in admiralty practice. Accord, Port Lynch, Inc. v. New England Int'l Assurety of Am., Inc., 754 F. Supp. 816, 820 (W.D. Wash. 1991); Pacific Merchant Shipping Ass'n v. Aubry, 918 F.2d 1409 (9th Cir.1990). The Aubry court similarly concluded that the 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. Aubry, 918 F.2d at 1422. Applying this standard, we next determine whether application of the rule on economic loss in Washington Water Power Co. v. Graybar Elec. Co., 112 Wn.2d 847, 774 P.2d 1199, 779 P.2d 697 (1989) conflicts with federal law, or whether it would disrupt the uniform application of maritime law.