Court Opinion

ID: 6330310
Source: CourtListenerOpinion
Date Created: 2022-04-13 00:00:24.486612+00
Date Added: 2024-06-11T09:22:53.274628
License: Public Domain

Case: 21-60501         Document: 00516277666            Page: 1   Date Filed: 04/12/2022

             United States Court of Appeals
                  for the Fifth Circuit                             United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                       April 12, 2022
                                         No. 21-60501                 Lyle W. Cayce
                                                                           Clerk

   Central Boat Rentals, Incorporated; Global Towing
   Service, L.L.C.; Offshore Towing, Incorporated;
   McAllister Towing of New York, L.L.C.; Curtin
   Maritime Corporation,

                                                             Intervenors—Appellants,

                                            versus

   M/V Nor Goliath, in rem; Goliath Offshore Holdings,
   Private Limited, in personam,

                                                              Defendants—Appellees.

                      Appeal from the United States District Court
                        for the Southern District of Mississippi
                        USDC Nos. 1:19-CV-391, 1:19-CV-935

   Before Owen, Chief Judge, and Higginbotham and Elrod, Circuit
   Judges.
   Patrick E. Higginbotham, Circuit Judge:
         Again, the familiar question of whether provisions were a “necessary”
   under the Commercial Instruments and Maritime Liens Act (“CIMLA”). 1

         1
             46 U.S.C. § 31301 et seq.
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                                            No. 21-60501

   To its answer, able counsel bring creative arguments urging that we expand
   CIMLA’s reach. We decline the invitation and affirm the judgment of the
   district court.2
                                                  I.
            This dispute arose from the bankruptcy of Epic Companies, L.L.C.3
   Epic was a general contractor that decommissioned oil platforms in the Gulf
   of Mexico, subcontracting with owners of various vessels to complete
   decommissioning projects, including heavy lift vessels, material barges, and
   tugboats. The M/V Nor Goliath was a heavy lift vessel hired by Epic to lift
   oil platform components out of the water and place them onto barges.
   Tugboats then towed the loaded barges from the Nor Goliath’s location in
   the Gulf to an inland scrapyard for further dismantling, returning to the Nor
   Goliath with empty barges. These tugboats were owned by various towing
   companies.4
            Upon Epic’s bankruptcy, the suppliers looked elsewhere to recoup
   their costs. The Towing Companies joined a suit filed in the United States
   District Court for the Southern District of Mississippi, seeking to assert and
   enforce maritime liens under CIMLA against the Nor Goliath, maintaining
   that the tugboats provided it necessary services by towing the barges. The
   Nor Goliath and the Towing Companies each filed motions for summary

            2
                We have jurisdiction to review this interlocutory appeal under 28 U.S.C.
   § 1292(a)(3) as the district court’s grant of summary judgment determined the rights and
   liabilities of parties in an admiralty case.
            3
                See In re Epic Companies, LLC, No. 19-34752 (Bankr. S. D. Tex., filed August 26,
   2019).
            4
             The Towing Companies are the named Intervenors-Appellants: Central Boat
   Rentals, Inc.; Global Towing Service, L.L.C.; Offshore Towing Inc.; McAllister Towing of
   New York, L.L.C.; and Curtin Maritime Corp.

                                                  2
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                                             No. 21-60501

   judgment. The district court granted summary judgment to the Nor Goliath,
   holding that the services rendered by the tugboats did not create a lien on the
   Nor Goliath.5 The Towing Companies timely appealed.
                                                  II.
           We review de novo a district court’s grant of summary judgment.6 We
   affirm a summary judgment ruling “when the nonmoving party fails to meet
   its burden to come forward with facts and law demonstrating a basis for
   recovery that would support a jury verdict.”7 “Whether a maritime lien
   exists is a question of law, reviewed de novo.”8
                                                  III.
           Under CIMLA,
           a person providing necessaries to a vessel on the order of the
           owner or a person authorized by the owner (1) has a maritime
           lien on the vessel; (2) may bring a civil action in rem to enforce
           the lien; and (3) is not required to allege or prove in the action
           that credit was given to the vessel.9
   “‘[N]ecessaries’ includes repairs, supplies, towage, and the use of a dry dock
   or marine railway.”10

           5
             See Arc Controls, Inc. v. M/V Nor Goliath, No. 1:19CV391-LG-RPM, 2021 WL
   1971485, (S.D. Miss. May 17, 2021).
           6
            World Fuel Servs. Singapore Pte, Ltd. v. Bulk Juliana M/V, 822 F.3d 766, 770 (5th
   Cir. 2016).
           7
               Little v. Liquid Air Corp., 37 F.3d 1069, 1071 (5th Cir. 1994).
           8
             Comar Marine, Corp. v. Raider Marine Logistics, LLC, 792 F.3d 564, 575 (5th Cir.
   2015) (italicization added).
           9
               46 U.S.C. § 31342(a).
           10
                46 U.S.C. § 31301(4).

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           “We apply the provisions of CIMLA stricti juris to ensure that
   maritime liens are not lightly extended by construction, analogy, or
   inference.”11 Necessaries “includes most goods or services that are useful to
   the vessel, keep her out of danger, and enable her to perform her particular
   function. These are items useful to vessel operations and necessary to keep
   the ship going.”12 “Necessaries are the things that a prudent owner would
   provide to enable a ship to perform well the functions for which she has been
   engaged.”13 We look to the “particular function” and requirements of a ship
   to determine what is a necessary for that ship.14
                                                IV.
           First, the Towing Companies argue that the Nor Goliath’s particular
   function was the entirety of the decommissioning process, therefore every
   good or service used to decommission an oil platform was a necessary to the
   Nor Goliath. We disagree. The decommissioning project was Epic’s goal as
   the general contractor. Indeed, Epic hired a fleet of vessels for the project. As
   the Nor Goliath’s role was to lift platform components and place them on the
   barges,15 its necessaries are goods or services it used for this particular
   function.

           11
              Valero Mktg. & Supply Co. v. M/V Almi Sun, IMO No. 9579535, 893 F.3d 290, 292
   (5th Cir. 2018) (internal quotations omitted).
           12
             Martin Energy Servs., L.L.C. v. Bourbon Petrel M/V, 962 F.3d 827, 831 (5th Cir.
   2020) (internal quotations omitted).
           13
                Equilease Corp. v. M/V Sampson, 793 F.2d 598, 603 (5th Cir. 1986) (en banc).
           14
             Martin, 962 F.3d at 832–33. See also Equilease, 793 F.2d at 603 (“What is a
   ‘necessary’ is to be determined relative to the requirements of the ship.”).
           15
           See Arc Controls, Inc. v. M/V NOR GOLIATH, No. 1:19CV391-LG-RPM, 2021
   WL 2931426, at *2 (S.D. Miss. July 12, 2021).

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          Second, the Towing Companies argue their towing services provided
   the barges to the Nor Goliath, and the barges are equipment necessary for the
   Nor Goliath’s particular function. Not so. In Trico Marine Operators, Inc. v.
   Falcon Drilling Co., we held that drilling equipment was a necessary for an
   offshore drilling vessel, for the equipment was necessary for the vessel’s
   particular function—drilling.16 Then, in Martin Energy Servs., L.L.C. v.
   Bourbon Petrel M/V, we held that gasoline is not a necessary to a vessel tasked
   with carrying the gasoline as cargo to another vessel for its consumption, only
   the consuming vessel received a necessary.17 This is because liens arise when
   “the good or service was provided for use by the vessel itself.” 18
          It is plain that the barges were not equipment for the Nor Goliath, did
   not help the Nor Goliath’s crane raise and lower the platform components,
   and so the Nor Goliath did not “use” the barges. It follows that the Towing
   Companies did not provide a service necessary to the Nor Goliath’s
   particular function.
          Third, the Towing Companies alternatively contend that they
   provided a necessary as the decommissioning project would have ground to
   a halt without the tugboats moving the barges; thus the Nor Goliath indirectly
   benefitted from the towing of the barges. The argument that maritime liens
   arise from indirect benefit misapprehends the concept of liens for
   necessaries. Mutually beneficial conduct is expected when each vessel was
   hired by the same general contractor. Indeed, every ship in Epic’s fleet
   indirectly benefitted from the barges being towed just as every ship indirectly
   benefitted from the Nor Goliath’s lifting and loading. But mutually beneficial

          16
               116 F.3d 159, 162 (5th Cir. 1997).
          17
               Martin, 962 F.3d at 832–33.
          18
               Id. at 833.

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   conduct alone cannot give rise to a maritime lien under CIMLA, otherwise
   multi-ship operations would give rise to an untenable situation where all the
   ships in a fleet would have liens on the other. In short, maritime liens for
   necessaries run against the vessel that received the necessary and no
   further.19
                                              V.
          Note that the Towing Companies also claim that they are entitled to
   maritime liens as they protected the Nor Goliath from the hazards of the sea,
   alleging that the Nor Goliath would be in danger if it was forced to hold an oil
   platform component suspended by its crane in choppy waters. Whatever its
   merits, the Towing Companies did not present any evidence of the danger
   these conditions posed to the Nor Goliath, which previously suspended and
   transported large loads without the aid of barges. As the nonmovants at the
   summary judgment stage, the Towing Companies did not meet their burden
   to demonstrate that the Nor Goliath was in danger beyond their conclusory
   allegations and unsubstantiated assertions.20
                                              VI.
          Ultimately these arguments for extending the protection of liens for
   necessaries provided by CIMLA fail to accept that the primacy of the lien is
   essential to its role of securing necessaries for vessels. They require the
   suppliers of necessaries, as we have defined them, to share pro rata with other
   creditors, a loss of primacy diluting the incentive to suppliers to the
   detriment of CIMLA’s core mission. These economic realities were not lost
   on Congress as evidenced by its singular treatment of maritime liens,

          19
               Id.
          20
               Little, 37 F.3d at 1075.

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                                          No. 21-60501

   providing a separate statutory pathway for enforcement within CIMLA.21
   Attentive to the economic realities to which CIMLA’s plain language
   responds, we apply its language stricti juris.22
          The Towing Companies fail to demonstrate a legal basis for their
   claimed maritime liens against the Nor Goliath. The district court’s grant of
   summary judgment is AFFIRMED.

          21
               46 U.S.C. § 31342.
          22
               Valero, 893 F.3d at 292.

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