Ocean Barge Transp. Co. v. Hess Oil Virgin Islands Corp.

• Decision Date: 08 August 1984
• Docket Number: Civil No. 80-18
• Citation: 21 V.I. 87
• Parties: OCEAN BARGE TRANSPORT CO., Plaintiff v. HESS OIL VIRGIN ISLANDS CORP., Defendant/Third-Party Plaintiff v. MINTEC/INTERNATIONAL, a division of Barber-Greene Company, Third-Party Defendant
• Court: U.S. District Court — Virgin Islands

21 V.I. 87

OCEAN BARGE TRANSPORT CO., Plaintiff v. HESS OIL VIRGIN ISLANDS CORP., Defendant/Third-Party Plaintiff v. MINTEC/INTERNATIONAL,a division of Barber-Greene Company, Third-Party Defendant

Civil No. 80-18

District Court of the Virgin Islands Div. of St. Croix

August 8, 1984

Application for attorney's fees award by prevailing parties, plaintiff and defendant/third-party plaintiff, in an admiralty action. The District Court, Christian, Chief Judge, held that the issue was governed by the federal law of admiralty; since none of the plaintiff's claims fell within any exceptions to the general admiralty rule, plaintiff's application was denied; defendant/third-party plaintiff was entitled to attorney's fees on the basis of the "indemnification exception" to the general rule in admiralty cases, to the extent of the cost of attorney fees for defending that portion of the action for which the third-party defendant was contractually obligated to indemnify the defendant/third-party plaintiff.

[COPYRIGHT MATERIAL OMITTED]

ROBERT H. RUSKIN, ESQ., Christiansted, St. Croix, V.I., for plaintiff

JOHN E. LENAHAN, ESQ. (BRYANT, LENAHAN & ELTMAN), Christiansted, St. Croix, V.I., for defendant/third-party plaintiff

JAMES E. HYMES, ESQ., St. Thomas, V.I., for third-party defendant

CHRISTIAN, Chief Judge

MEMORANDUM

The question here presented is whether this Court may make an award of attorney's fees to the prevailing party in this admiralty action pursuant to the provisions of Title 5 V.I.C. § 541(6).

Under the provisions of the section of the Virgin Islands Code referred to above costs which may be allowed in a civil action include attorney's fees. Plaintiff Ocean Barge Transport Co. prevailed against defendant Mintec/International. Also prevailing in the law suit was Hess Oil Virgin Islands Corp. (hereinafter Hess) as Third-Party Plaintiff against Third-Party Defendant Mintec/International (hereinafter Mintec).

Mintec contends that the court lacks authority to award attorney's fees in an admiralty action. The prevailing parties on the other hand, relying on the peculiar status of the District Court of the Virgin Islands, argue that this Court may refer to the laws of the Virgin Islands when defining costs, albeit the action before the Court is a purely federal matter. The complicating factor in addressing the instant issue stems from the fact that the District Court of the Virgin Islands is not an Article III District Court of the United States but rather a creation of the Congress of the United States pursuant to its Article IV powers. Carty v. Beech Aircraft Corp., 679 F.2d 1051, 1057 (3d Cir. 1982). And, as ordained by the Congress this Court has not only jurisdiction in admiralty and in all causes arising under the Constitution and laws of the United States, but it is also the court of general original jurisdiction of the Territory of the Virgin Islands. Revised Organic Act, 48 U.S.C. § 1612 (1984 Supp.).

Rule 54(d) of the Federal Rules of Civil Procedure, made applicable to our Court by the Revised Organic Act, 48 U.S.C. § 1615 (1984 Supp.), empowers this Court to award costs to a prevailing party.However, costs as generally allowed under Rule 54(d) do not include attorney's fees. It would appear therefore, that whether we may rely on 5 V.I.C. § 541 in defining costs must depend on the nature of the case before the Court.

[1-3] Under what is commonly referred to as the "American Rule," district courts of the United States, when the basis of their jurisdiction is other than diversity of citizenship, may not normally grant attorney's fees absent a statute or an enforceable contract providing therefor.¹ Alyeska Pipe Line Service Co. v. Wilderness Society, 421 U.S. 240 (1975). When federal courts sit in diversity cases, they should look to the law of the state in which they sit for guidance regarding attorney's fee awards, providing that the state law does not run counter to a federal statute or rule of court. Id. 421 U.S. at 259 n. 31, quoting 6 J. Moore, Federal Practice 54.77[2], pp. 1712-1713 (2d ed. 1974); see Cohen v. Beneficial Loan Corp., 337 U.S. 541, 555-557 (1949). By the same token,

a federal territorial court should similarly apply territorial law [in a non-federal case]. However, where the plaintiff has based his action on federal law he may not invoke a state or territorial law to obtain attorney's fees.

Id. at pp. 1713-1714 (1983-84 Supp.). For the foregoing proposition, Moore cites Sanabria v. International Longshoremen's Ass'n Local 1575, 597 F.2d 312 (1st Cir. 1979), in which the Court, in considering the applicability of Puerto Rico's attorney's fees statute to a federal question case, while agreeing that the statute was applicable in a diversity case, went on to say, "[b]ut we have never extended the allowance of such costs arising under federal law." 597 F.2d at 313-314. See also Gradmann & Holler GMBH v. Continental Lines, 679 F.2d 272 (1st Cir. 1982) (local statute on attorney's fees not applicable in admiralty action), and cases cited therein.

[4] While this Court, because it is a court of general original jurisdiction, has no diversity jurisdiction, we believe the principles discussed above apply with equal force here. Henceforth, therefore, we will apply 5 V.I.C. § 541 to cases which arise under the Court's general original jurisdiction only, and not in matters grounded in federal law.

Admiralty is a body of law which is peculiarly federal in nature. Gilmore and Black, The Law of Admiralty, § 1-9 (2d ed. 1975); U.S.Const. Art. III, § 2; 28 U.S.C. § 1333. Consequently, in considering the pending requests for attorney's fees in this case, we must look to the federal law of admiralty to determine if fees may be awarded.

[5-7] With respect to the matter of award of attorney's fees in admiralty cases, the so called "American Rule" referred to above generally prevails. Noritake v. M/V Hellenic Champion, 627 F.2d 724, 730 (5th Cir. 1980); Sandoval v. Mitsui Sempakv K. K. Tokyo, 460 F.2d 1163, 1171 (5th Cir. 1972); American Union Transport Co. v. Aguardilla Terminal, Inc., 302 F.2d 394, 396 (1st Cir. 1962). See also Walker v. The Tug Diane, 9 V.I. 285, 350 F.Supp. 1338 (D.V.I. 1972). There are, however, well established exceptions to the general rule above stated. Under one...