Stevens Technical Services, Inc. v. U.S.

• Decision Date: 10 October 1990
• Docket Number: No. 87-3359,87-3359
• Citation: 913 F.2d 1521
• Parties: STEVENS TECHNICAL SERVICES, INC. Plaintiff-Appellant, v. UNITED STATES of America, as Owner of the U.S.N.S. SEALIFT ANTARCTIC, its engines, etc., in rem, and Atlantic Sandblasting & Coatings, Inc., in personam, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1521

913 F.2d 1521

1991 A.M.C. 2497

STEVENS TECHNICAL SERVICES, INC. Plaintiff-Appellant, v. UNITED STATES of America, as Owner of the U.S.N.S. SEALIFT ANTARCTIC, its engines, etc., in rem, and Atlantic Sandblasting & Coatings, Inc., in personam, Defendants-Appellees.

No. 87-3359.

United States Court of Appeals Eleventh Circuit.

Oct. 10, 1990.

David F. Pope, Macfarlane, Ferguson, Allison & Kelly, Tampa, Fla., for plaintiff-appellant.

Gary J. Takacs, Asst. U.S. Atty., Tampa, Fla., Stephanie J. Grogan, Admirality Section, Torts Brach/Civil Div., U.S. Dept. of Justice, Washington, D.C., for U.S Edward F. Gerace, Tampa, Fla., for Atlantic.

Appeal from the United States District Court for the Middle District of Florida.

Before ANDERSON, Circuit Judge, and BROWN ^*, Senior Circuit Judge. ^**

JOHN R. BROWN, Senior Circuit Judge:

The Prelude

In a nutshell, the government's theme can be simply capsulated: A maritime lien claim for repairs to a vessel requires seizure and arrest of the vessel to effectuate it. Since governmentally owned and operated vessels ¹ and public ² vessels cannot be seized or arrested the lien cannot be enforced, hence, no governmental liability. Finally, a libel in persoman on principles of in rem libel authorized by both SIA and PVA is not permitted. Consequently, the District Court--disregarding that SIA--PVA which permits a libel (complaint) in personam on principles of in rem --was right in dismissing the libel (complaint).

The Past is Indeed Prologue

The government's position, successfully maintained below, and reasserted here, flatly ignores principles established 45 years ago.

In Canadian Aviator, Ltd. v. United States, ³ Justice Reed dealing with PVA pinpointed the critical issue the answers to which also solve the instant case:

The dismissal by the lower court of petitioner's libel raises three questions for consideration by this Court:

Does the Public Vessels Act, 1925, [PVA] authorize suit against the United States where the public vessel is not the physical cause, the "physical instrument" by which the damage is done; that is, is the Act confined to cases involving the collision situation?

If not, does the Act, which authorizes the filing of a libel in personam against the United States, authorize recovery in such suit on admiralty principles of in rem as well as in personam liability?

Finally, if the Act authorizes recovery on admiralty principles in rem and in personam does petitioner's libel state cause of action under those principles of admiralty law?

Id. 324 U.S. at 218, 65 S.Ct. at 641, 89 L.Ed. at 905.

Later, the Court, pointing out that the petitioner was evidently relying on Sec. 2 of the Act to state in its libel the election to have the action proceed on principles of in rem as well as in personam liability specifically referred to the Court of Appeals holding "that the Act does not authorize recovery on principles of in rem liability because of the statutory denial [Sec. 788] of a maritime lien ..."--the very contention now made 45 years later by the government. The Court then answering the first of its decisive questions phrased it this way:

Does the [PVA] which authorizes filing of a "libel in personam" authorize the courts to apply principles of in rem as well as in personam liability in admiralty?

Id. at 226, 65 S.Ct. at 645, 89 L.Ed. at 909. The answer, the Court reasoned, brought into play Secs. 2 ⁴ and 3 ⁵ of the Suits in Admiralty Act (SIA).

Although PVA does not have a specific provision similar to SIA Sec. 743, PVA has Sec. 782 ⁶ which expressly provides that PVA "suits shall be subject to and proceed in accordance with the provisions" of the SIA, "insofar as the same are not inconsistent" with the provisions of PVA.

The Court then concludes with this sweeping declaration:

Since there is nothing in the [PVA] that is inconsistent with this provision of the [SIA], we hold that the incorporation clause applies.

324 U.S. at 227, 65 S.Ct. at 645, 89 L.Ed. at 910. This means that for nearly half a century the PVA authorized a libel (complaint) in personam against the government to be determined on principles of both in personam and in rem liability under the maritime law.

Both PVA and SIA have substantially the same provisions forbidding seizure or arrests of a ship involving either a pre-1960 "merchant vessel" ⁷ or a public vessel. ⁸ Canadian Aviator concludes with emphasis, "we hold that the [PVA] was intended to impose on the United States the same liability (apart from seizure or arrest under a libel in rem ) as is imposed by the admiralty law on the private shipowner...." 324 U.S. at 228, 65 S.Ct. at 646, 89 L.Ed. at 910 (emphasis added).

No Lien Clauses Are SIA-PVA Centered

Here again what happened--not 45 years ago, but over 70--determines that the no-lien clause of SIA and PVA are directly related to and draw their meaning and limitation from inclusion in these Acts. They are in no sense a prohibition on the creation or existence of a maritime lien. They each assure that there can be no arrest or seizure of a government vessel.

We go back to The Lake Monroe. ⁹ Congress, seeking a way to avoid the numerous applications for private bills for shipping claims, provided in the Shipping Act of 1916 ¹⁰ that such vessels "... while employed solely as merchant vessels, shall be subject to all laws, regulations, and liabilities governing merchant vessels." The Court in Lake Monroe held that this statutory waiver of sovereign immunity subjected these government vessels to the usual proceedings in rem in admiralty. The Supreme Court denied a writ of prohibition against the seizure of a government vessel under the 1916 Act. Thus the SIA was born. Canadian Aviator, supra, explained it, "[s]ince the arrest and seizure of a vessel incident to an admiralty proceeding in rem proved embarrassing, Congress in 1920 adopted the Suits in Admiralty Act." 324 U.S. at 219, 65 S.Ct. at 642, 89 L.Ed. 906.

Referring to Lake Monroe and Eastern Transportation Co. v. United States, ¹¹ Canadian Aviator held:

Although Sec. 2 [Sec. 742] of [SIA] limited suit to the filing of a 'libel in personam' this Court interpreted the provisions of Sec. 3 [Sec. 743], of the Act to authorize recovery in such suit on admiralty principles of in rem as well as in personam liability.

324 U.S. at 220, 65 S.Ct. at 642, 89 L.Ed. at 906.

So as we raise the curtain to unfold the facts on which to apply the decisive principles, the law concerning public vessels under PVA is now, and has been for nearly half a century:

PVA automatically incorporates the procedure of Secs. 2 and 3 [Secs. 742 and 743] of SIA.

A libel (complaint) in personam with in rem election may invoke principles of a libel in rem.

The no lien clause of PVA, Sec. 788, and the no seizure clause of SIA, Sec. 741, relate to a SIA-PVA proceeding against the government.

A PVA libel (complaint) in personam with in rem election can effectually enforce a maritime lien.

I. The Litigation

The District Court entered judgment against the ship repairer ¹² [Stevens] on its libel (complaint) in personam with an election to proceed on principles of in rem for repairs to a public vessel, U.S.S. SEALIFT ANTARCTIC. The trial court held that under PVA an in personam suit with in rem election could not lie against the United States to recover on a maritime lien for repairs to a public vessel since effectuation of lien would require arrest and seizure of the vessel prohibited by Sec. 788.

In the Beginning

The SEALIFT ANTARCTIC is a public vessel of the United States. ¹³ It is demise chartered to the United States through the Military Sealift Command (MSC), a subdivision of the United States Navy, and operated by Marine Transport Lines, Inc. (MTL).

In 1984, the SEALIFT ANTARCTIC was scheduled for a major overhaul, including tank cleaning, repainting and coatings and major engine and machinery work. On January 14, 1985, in response to a solicitation for repair work bids issued by MTL, Atlantic submitted a bid to carry out and complete the specified repairs for an agreed price. The bid submitted by Atlantic, as required by the bid solicitation, identified Stevens as a subcontractor performing more than 15 percent by dollar value of the specified repair work.

On January 16, 1985, Stevens and Atlantic entered into a memorandum agreement which, among other things, provided for division of the repair items between Atlantic and Stevens, with the Atlantic items totaling approximately $578,000, and the Stevens items totaling approximately $580,000. The Atlantic contract was accepted and approved by government agencies, and on February 15, 1985, MTL awarded the job to Atlantic for the work to be done by Atlantic and Stevens.

The repairs were performed at Atlantic's repair facility in Tampa, Florida. During the course of the repair work on the SEALIFT ANTARCTIC the government was represented by employees of MTL and MSC who inspected, tested and approved the work performed by both Atlantic and Stevens. Following completion of the repairs, the SEALIFT ANTARCTIC departed from the Port of Tampa and proceeded to Mobile, Alabama, where, at the request of representatives of the vessel, Stevens adjusted and corrected certain deficiencies in the repair work Stevens had performed. MTL paid the full contract price to Atlantic and was reimbursed for this full amount by the MSC. Atlantic failed to pay Stevens the balance owed on Stevens' contract. In July 1985, Stevens filed this action against Atlantic, in personam, and the United States, as owner of SEALIFT ANTARCTIC, in rem, ¹⁴ to recover the balance due.

After a bench trial, the District Judge, Anthony Alaimo entered judgment against Atlantic for the amount due, but ordered that Stevens take nothing in its quasi in rem action against the United States. The District Court concluded that Stevens was not entitled to recover against the SEALIFT ANTARCTIC in rem and, therefore, dismissed the claim...