Articles Posted in Admiralty & Maritime Law

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The Herrs bought property on Crooked Lake in the Upper Peninsula of Michigan, hoping to use the lake for recreational boating and fishing. Most of Crooked Lake lies in the federally-owned Sylvania Wilderness but some remains under private ownership. Congress gave the Forest Service authority to regulate any use of Crooked Lake and nearby lakes “subject to valid existing rights.” The Forest Service promulgated regulations, prohibiting gas-powered motorboats and limiting electrically powered motorboats to no-wake speeds throughout the wilderness area. After noting “nearly a quarter century of litigation over the recreational uses of Crooked Lake,” the Sixth Circuit concluded that both regulations exceed the Forest Service’s power as applied to private property owners on the lake. Under Michigan law, lakeside property owners may use all of a lake, making the Herrs’ right to use all of the lake in reasonable ways the kind of “valid existing rights” that the Forest Service has no warrant to override. Michigan law permits motorboat use outside the Sylvania Wilderness. The Forest Service long allowed motorboat use on all of the lake after it obtained this regulatory authority and it still does with respect to one property owner. View "Herr v. United States Forest Service" on Justia Law

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In 2006, the district court adopted a consent order to resolve Dispatch's suit for an accounting of the gold from the S.S. Central America shipwreck. The order required defendants to produce financial documents regarding the period starting January 1, 2000. The court later issued a contempt order, citing defendants’ failure to produce an inventory of the gold recovered and sold. Defendants then produce an inventory of gold that they sold to California Gold Group from February 15 to September 1, 2000. They did not produce any prior inventories, which would have provided a complete accounting of treasure recovered from the ship. At a 2007 contempt hearing, the parties argued about whether the defendants possessed any earlier inventories. The court issued another contempt order in 2009. Defendants continued to assert that they had no such inventories. In 2013, Dispatch obtained the appointment of a receiver that it had first sought in 2008 to take control of and wind down the defendants. The receiver recovered found numerous inventories created before the California Gold sale, in a duplex owned by defendants' attorney and leased to defendants. The court concluded that defendants’ attorney engaged in bad-faith conduct, rejected Dispatch’s request for $1,717,388 (its total litigation expenses) and limited sanctions to the cost of pursuing the motion for sanctions, plus the expenses to uncover the fraud and locate the inventories. Dispatch submitted bills for $249,359.85. The Sixth Circuit affirmed a reduced award of $224,580. View "Williamson v. Recovery Ltd. P'ship" on Justia Law

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Bulgarelli’s 36-foot boat ran aground on Lake St. Clair. Bulgarelli contacted a tow service, which dispatched a salvage vessel commanded by Captain Leslie. Leslie claims that he quoted the price of $250 per foot of length. Bulgarelli insists that the quoted price was $1,000–$1,200, and that Leslie assured him that insurance would pay. Bulgarelli signed the contract, which did not include a printed price, but has “$250.00 FT” scrawled in its bottom margin. Bulgarelli claims that handwriting was not present when he signed the paper and Leslie had exclusive possession of the sole copy of the contract. Calling this a “hard” grounding in high winds and very rough waters, Leslie claimed that the work took 29 minutes. Bulgarelli and a corroborating witness stated that the wind and water were calm, and that Leslie pulled the vessel free in less than 10 minutes. The tow company sought enforcement of a maritime lien. Bulgarelli counterclaimed for fraud, innocent misrepresentation, and reformation. Finding Bulgarelli and his corroborating witness credible, while finding Leslie not credible, the court made a finding that Leslie had quoted the price of $1,000–$1,200, intending to bill Bulgarelli’s insurance company for $9,000, and added the handwritten margin note after Bulgarelli signed the contract. The Sixth Circuit affirmed. View "St. Clair Marine Salvage, Inc. v. Bulgarelli" on Justia Law

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Kumar was 19 years old and in his first year in the Aviation Technology Program at Bowling Green State University when he was assigned to fly alone from Wood County Airport near Bowling Green to Burke Lakefront Airport in Cleveland, and back, after 10:00 p.m. The flight plan required him to fly over part of Lake Erie. On the return trip, Kumar observed what he believed to be a flare rising from a boat. He reported this sighting to Cleveland Hopkins International Airport and was instructed to fly lower for a closer look. Kumar could not then see a boat. Fearful of hurting his chances of one day becoming a Coast Guard pilot, he reported that he saw additional flares and described a 25-foot fishing vessel with four people aboard wearing life jackets with strobe lights activated. Kumar’s report prompted a massive search and rescue mission by the U.S. Coast Guard, and the Canadian Armed Forces. A month later, Kumar admitted that his report had been false. He pleaded guilty to making a false distress call, a class D felony per 14 U.S.C. 88(c)(1), which imposes liability for all costs the Coast Guard incurs. He was sentenced to a prison term of three months and ordered to pay restitution of $277,257.70 to the Coast Guard, and $211,750.00 to the Canadian Armed Forces. The Sixth Circuit affirmed. View "United States v. Kumar" on Justia Law

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The 19th-century steamship S.S. Central America, the “Ship of Gold,” sank in the Atlantic Ocean in 1857, taking many tons of gold with her. The wreckage was discovered more than 130 years later by explorers led by Thompson, in one of the most significant finds in maritime history. Thompson is a fugitive from the law. Those who assisted Thompson in locating the wreckage signed non-disclosure agreements in exchange for a percentage of the net recovery, but none have received payment. In their suit, Thompson’s business entities asserted a two-year statute of limitations for actions in salvage and three counterclaims. The district court rejected the time-bar argument and granted summary judgment against all counterclaims. While an interlocutory appeal was pending, the district court granted prejudgment attachment and an injunction against one of the entities and Thompson, forbidding them from divesting certain assets. The Sixth Circuit agreed that the time bar does not apply, affirmed summary judgment against the counterclaims for failure to raise an issue of fact material to the disposition of the case, and upheld the injunction. View "Williamson v. Recovery Ltd. P'ship" on Justia Law