Martin Energy Servs., L. L.C. v. M

• Decision Date: 17 June 2020
• Docket Number: No. 19-30612,19-30612
• Citation: 962 F.3d 827
• Parties: MARTIN ENERGY SERVICES, L.L.C., Plaintiff - Cross-Claimant - Appellee v. BOURBON PETREL M/V, etc., et al, Defendant CGG Services US, Incorporated, Intervenor Defendant - Cross-Defendant - Appellant SNC Bourbon CE Patel; CGG Services, S.A.; Movants - Appellants Martin Energy Services, L.L.C., Plaintiff - Appellee v. Miss Lilly M/V, etc., Defendant Sea Support Ventures, L.L.C., in Personam, Defendant - Appellant CGG Services, S.A.; CGG Services US, Incorporated, Appellants Martin Energy Services, L.L.C., Plaintiff - Appellee v. OMS Resolution M/V, etc., Defendant v. Rederij Groen BV, in Personam, Defendant - Appellant CGG Services, S.A.; CGG Services US, Incorporated, Appellants
• Court: U.S. Court of Appeals — Fifth Circuit

962 F.3d 827

MARTIN ENERGY SERVICES, L.L.C., Plaintiff - Cross-Claimant - Appellee

v.BOURBON PETREL M/V, etc., et al, Defendant

CGG Services US, Incorporated, Intervenor Defendant - Cross-Defendant - Appellant

SNC Bourbon CE Patel; CGG Services, S.A.; Movants - Appellants

Martin Energy Services, L.L.C., Plaintiff - Appellee

v.Miss Lilly M/V, etc., Defendant

Sea Support Ventures, L.L.C., in Personam, Defendant - Appellant

CGG Services, S.A.; CGG Services US, Incorporated, Appellants

Martin Energy Services, L.L.C., Plaintiff - Appellee

v.OMS Resolution M/V, etc., Defendant

v.Rederij Groen BV, in Personam, Defendant - Appellant

CGG Services, S.A.; CGG Services US, Incorporated, Appellants

No. 19-30612

United States Court of Appeals, Fifth Circuit.

FILED June 17, 2020

Peter Michael Jung, Clark Hill Strasburger, Dallas, TX, Walter Patrick Maestri, Deutsch Kerrigan, L.L.P., New Orleans, LA, for Plaintiff-Appellee.

Thomas Pollard Diaz, Brett Daniel Wise, Liskow & Lewis, P.L.C., New Orleans, LA, for Movant-Appellant, Defendants-Appellants, Appellants.

Bruce G. Paulsen, Esq., Brian Paul Maloney, Esq., Laura Elizabeth Miller, Seward & Kissell, L.L.P., New York, NY, David Boies Sharpe, Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, New Orleans, LA, for Amicus Curiae ING Bank N.V.

Before BARKSDALE, HIGGINSON, and DUNCAN, Circuit Judges.

STUART KYLE DUNCAN, Circuit Judge:

Under the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. §§ 31301 – 31343, a person may obtain a maritime lien against a vessel by providing it with "necessaries." Here, plaintiff Martin Energy Services ("Martin") delivered fuel to three support vessels owned by C.G.G. Services, U.S., Inc. ("CGG"). The support vessels carried the fuel in their cargo tanks to refuel three other vessels performing seismic surveys off Louisiana's coast. When CGG failed to pay for the fuel, Martin sued, and the district court concluded Martin had a maritime lien on the support vessels. That result unduly expands our maritime lien precedents. Fuel may be "necessary" to a vessel if it fuels the vessel. But the fuel transported by the support vessels was for refueling other vessels. That fuel was not "necessary" to the support vessels. We therefore reverse and render judgment for CGG.

I.

In 2014, CGG was conducting seismic surveying operations off the coast of Louisiana with three vessels, the Geo Celtic , Oceanic Sirius , and Oceanic Vega (the "Seismic Vessels"). CGG was responsible for ensuring the Seismic Vessels were supplied with fuel, supplies, and equipment. To do so, CGG used three other vessels, the Bourbon Petrel , OMS Resolution , and Miss Lilly (the "Support Vessels"), which made deliveries to the Seismic Vessels from Port Fourchon, Louisiana. At first, CGG purchased fuel directly from Martin, but credit problems eventually led it to buy through a trader, O.W. Bunker USA, Inc. ("O.W. Bunker"). For the purchases at issue in this case, O.W. Bunker arranged for fuel deliveries through Martin.

Those fuel deliveries occurred in October and November 2014. Pursuant to purchase orders from O.W. Bunker, Martin delivered fuel to each of the three Support Vessels. Each vessel had a cargo tank for carrying fuel to the Seismic Vessels, as distinct from a "day tank" holding fuel for the Support Vessels themselves. On three separate occasions during this time, the Support Vessels transported thousands of gallons of fuel in their cargo tanks to refuel the Seismic Vessels.

Shortly after, O.W. Bunker filed for bankruptcy.¹ CGG had not yet paid O.W. Bunker's invoices for the Martin fuel. CGG eventually settled with O.W. Bunker, but O.W. Bunker never forwarded payment to Martin. Martin then sued CGG in federal district court, asserting in rem claims against the Support Vessels and in personam claims against the vessels’ owners. The in personam claims were disposed of on summary judgment, and the in rem claims were tried to the court.

The district court ruled for Martin. The court concluded that Martin's delivery of fuel gave rise to a maritime lien against the Support Vessels. It reasoned that the Martin fuel qualified as "necessaries" to those vessels under CIMLA. See 46 U.S.C. § 31342(a). The court also concluded the fuel was provided "on the order" of CGG or its authorized agent, as CIMLA requires. See id. Finally, the court awarded Martin pre-judgment interest dating from each fuel purchase. CGG timely appealed.

II.

On appeal from a bench trial, we review fact findings for clear error and legal conclusions de novo . Maritrend, Inc. v. Serac & Co. (Shipping) Ltd. , 348 F.3d 469, 470 (5th Cir. 2003) (citation omitted). "Whether a maritime lien exists is a question of law, reviewed de novo ." Comar Marine, Corp. v. Raider Marine Logistics, LLC , 792 F.3d 564, 575 (5th Cir. 2015).

III.

CIMLA² governs entitlement to maritime liens. ING Bank N.V. v. Bomin Bunker Oil Corp. , 953 F.3d 390, 393 (5th Cir. 2020) (quoting Valero Mktg. & Supply Co. v. M/V Almi Sun, IMO No. 9579535 , 893 F.3d 290, 292 (5th Cir. 2018) ). It states, in relevant part, that "a person providing necessaries to a vessel on the order of the owner or a person authorized by the owner ... has a maritime lien on the vessel [and] may bring a civil action in rem to enforce the lien." 46 U.S.C. § 31342(a)(1), (2) (emphasis added). The lien "is a special property right in the vessel," which "grants the creditor the right to appropriate the vessel, have it sold, and be repaid the debt from the proceeds." Equilease Corp. v. M/V Sampson , 793 F.2d 598, 602 (5th Cir. 1986) (en banc) (citation omitted).³ "We apply the provisions of CIMLA stricti juris to ensure that maritime liens are not ‘lightly extended by construction, analogy, or inference.’ " Valero , 893 F.3d at 292 (quoting Atl. & Gulf Stevedores, Inc. v. M.V. Grand Loyalty , 608 F.2d 197, 200–01 (5th Cir. 1979) ).

While not defining "necessaries," CIMLA furnishes an illustrative list: "repairs, supplies, towage, and the use of a dry dock or marine railway." 46 U.S.C. § 31301(4). In that regard, "[n]ecessaries are the things that a prudent owner would provide to enable a ship to perform well the functions for which she has been engaged." Equilease , 793 F.2d at 603 (citing 2 Benedict on Admiralty § 34 (7th ed. 1984)). The term, which has a "broad meaning,"⁴ includes "most goods or services that are useful to the vessel, keep her out of danger, and enable her to perform her particular function." Id . These are items useful "to vessel operations"⁵ and "necessary to keep the ship going."⁶

A.

It is undisputed that the Martin fuel was put into the cargo tanks of the Support Vessels, each of which transported it to refuel the Seismic Vessels. The issue is whether, as the district court concluded, that fuel constituted "necessaries" to the Support Vessels, giving rise to a maritime lien under CIMLA. The court reasoned that two of the Support Vessels, the Bourbon Petrel and the OMS Resolution , served as "floating gas stations" for the Seismic Vessels and that the fuel was "necessary" for the Support Vessels to perform this function. Similarly, the court reasoned the fuel was "necessary" for the third Support Vessel, the Miss Lilly , to function as an "offshore supply vessel," transporting fuel, equipment, and personnel to the Seismic Vessels. On appeal, CGG argues this was error. It contends the Martin fuel supported operation of the Seismic Vessels, not the Support Vessels. The fuel was merely cargo carried by the Support Vessels, and no authority supports deeming cargo "necessaries" for purposes of a maritime lien. We agree.

Fuel may qualify as a "necessary" to a vessel under CIMLA when it is supplied to refuel that vessel. See , e.g. , Valero , 893 F.3d at 291, 294 (there was "no dispute that [fuel] bunkers qualify as necessaries ... to the Vessel" when plaintiff supplied fuel to a vessel that "needed refueling"). In such a case, fuel could be akin to "repairs, supplies, [or] towage," 46 U.S.C. § 31301(4) : like those things, the fuel would be "necessary to keep the ship going." Silver Star Enterprises, Inc. v. Saramacca M/V , 82 F.3d 666, 668 (5th Cir. 1996) (quoting Dampskibsselskabet Dannebrog v. Signal Oil & Gas Co. , 310 U.S. 268, 280, 60 S.Ct. 937, 84 L.Ed. 1197 (1940) ). Therefore, the Martin fuel may have qualified as a "necessary" vis-à-vis the Seismic Vessels.⁷ We need not decide that question, however, because the Seismic Vessels are not parties here.

The Support Vessels present a different scenario. As the district court found, CGG utilized the Support Vessels "for ensuring that the Seismic Vessels were supplied with fuel and water." To that end, the fuel deliveries at issue "were put in the cargo tanks of the [Support Vessels]," and the entire amount was transported to the Seismic Vessels for their refueling. The district court did not find that any part of the Martin fuel was used to fuel the Support Vessels.⁸

Given those undisputed facts, there is no basis for concluding that the Martin fuel was a "necessary" as to the Support Vessels. To do so would, as CGG persuasively argues, "represent an unprecedented expansion of the CIMLA" by extending the concept of "necessaries" to cargo transported by a vessel. The parties cite no precedent—nor can we find any—supporting that expansion.⁹ Based on that absence alone, we would reject the proposition. "The absence of precedent signifies the weakness of [Martin's] position, since admiralty enjoys an unusually rich legal tradition and, more than nearly any other contemporary area of federal law, relies on venerable precedents where they exist." Gulf Marine & Indus. Supplies, Inc. v. Golden Prince M/V , 230 F.3d 178, 180 (5th Cir. 2000).

B.

We are unpersuaded by the district court's reasoning and by Martin's arguments on appeal. The court reasoned the Martin fuel was necessary for the Support Vessels to perform their "particular function"—that is, as "floating gas stations" (the Bourbon Petrel and OMS Resolution ), or an ...