Umpqua Marine Ways, Inc. v. U.S.

• Decision Date: 12 February 1991
• Docket Number: No. 90-1011,90-1011
• Citation: 925 F.2d 409
• Parties: 36 Cont.Cas.Fed. (CCH) 76,019 UMPQUA MARINE WAYS, INC., Appellant, v. The UNITED STATES, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 409

925 F.2d 409

36 Cont.Cas.Fed. (CCH) 76,019

UMPQUA MARINE WAYS, INC., Appellant, v. The UNITED STATES, Appellee.

No. 90-1011.

United States Court of Appeals Federal Circuit.

Feb. 12, 1991.

Joseph A. Yazbeck, Jr., Allen, Kilmer, Schrader, Yazbeck & Chenoweth, Portland, Or., argued for appellant. With him on the brief was Gina Anne Johnnie.

Allen D. Bruns, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for appellee. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Thomas W. Petersen, Asst. Director.

ON MOTION TO TRANSFER

Before RICH, NEWMAN, and CLEVENGER, Circuit Judges.

CLEVENGER, Circuit Judge.

ORDER

Umpqua Marine Ways, Inc. ("Umpqua"), appeals the decision of the Armed Services Board of Contract Appeals sustaining a termination of Umpqua's contract with the Government for default and denying its total cost claim on the terminated contract. Umpqua Marine Ways, Inc., 89-3 BCA (CCH) p 22,099, 1989 WL 82110 (A.S.B.C.A.1989) ("Umpqua"). The Government's motion to transfer for lack of jurisdiction was deferred for consideration by the merits panel. Umpqua Marine Ways, Inc. v. United States, No. 90-1011, Order (Fed.Cir. May 24, 1990). Pursuant to 28 U.S.C. Sec. 1631 (1988), we transfer the case to the United States District Court for the District of Oregon because the contract sounds in admiralty.

I

In 1981, the Naval Defense Surface Weapons Center ("Navy") issued an Invitation for Bids ("IFB") for the conversion of a 1977 fifty-foot Landing Craft-Mechanized Workboat into a Standard Navy Diving Boat and for the fabrication of a Diving System Module that could be loaded on and operated from the converted boat. The IFB described the projects as separate contracts. After submitting bids on both, Umpqua was awarded a single contract for the projects. The diving module portion of the contract was significantly more complicated and extensive (and correspondingly more expensive) than the specifications relating to the conversion of the workboat. The contract described the diving module as "an independent self sustained unit. It will be used for diving operations from a pier or any floating platform of adequate size, without the use of the altered 50' LCM workboat if need be." Appellee Motion App. at 21.

The diving module is a large aluminum box that consists of a diver control station and a compressed air system with tanks, pipes and valves. The module is designed to provide support for underwater divers working on the bottoms of adjacent Navy ships. To that end, air tanks on the

module were to be used to service a diver's SCUBA equipment or air hoses could extend from the module's tanks directly to the divers underwater. The contract specifications indicate the intention of the Government to place the diving module upon the converted boat. For instance, one clause required Umpqua to check "space restrictions shipboard ... to ensure piping/valve/gauge final shipboard installation will be satisfactory." Umpqua at 111, 122 (citing General Note 21 on Diver's Air System Drawing). Moreover, in the boat conversion project, the contractor was to fashion a hole in the deck through which the diving module could be lowered via crane into the hold. However, the Government acknowledges that the diving module could be lifted out of the hold later and used elsewhere. The module was also designed to be used upon a pier should that eventuality ensue.

Both the Government and Umpqua agree that the two projects are intermingled so as to make separation untenable because only a single contract was issued, performance was supervised together, and the dispute involves an intermingled appraisal of the costs relevant to both projects.

II

Generally, we have exclusive jurisdiction to review "an appeal from a final decision of an agency board of contract appeals brought pursuant to section 8(g)(1) the Contract Disputes Act of 1978 (41 U.S.C. Sec. 607(g)(1))." 28 U.S.C. Sec. 1295(a)(10) (1988). However, we have recently held that the admiralty public contract jurisdiction statute, 41 U.S.C. Sec. 603 (1988), requires that contract decisions in admiralty are to be appealed exclusively to U.S. District Courts. Southwest Marine, Inc. v. United States, 896 F.2d 532 (Fed.Cir.1990). The Government, contending that all aspects of this contract are maritime, moves that we order this appeal transferred. Umpqua responds that the contract, with its more extensive part being attributable to construction of a diving

module, is not within traditional admiralty jurisdiction.

In the alternative, both parties urge that the equitable doctrine of pendent jurisdiction is applicable. UMWA v. Gibbs, 383 U.S. 715, 721-29, 86 S.Ct. 1130, 1136-41, 16 L.Ed.2d 218 (1966). Umpqua contends that the boat conversion project should be treated as pendent to a non-maritime module construction project, with jurisdiction over the whole to remain here. The Government contends that the module construction, if non-maritime in nature, should be considered pendent to the boat conversion with jurisdiction properly before the District Court. Unless we can hold the contract here wholly in or out of admiralty jurisdiction, we must address the question of whether the equitable doctrine of pendent jurisdiction may be applied to achieve jurisdiction over two joined claims when each claim has been statutorily consigned exclusively to two different federal fora. The complexity of this novel legal proposition is cemented by our agreement that the merits of the claims regarding the two construction projects are so inextricably intertwined as to thwart compulsory separation.

III

The origins of admiralty are at least as old as the origin of those laws which we more familiarly apply. Compare Darcy v. Allen, 72 Eng.Rep. 830 (Moore 671), 74 Eng.Rep. 1131 (Noy 173), 11 Coke Rep. 86 (King's Bench 1602) and G. Mandich, Venetian Patents (1450-1550), 30 J.P.O.S. 166 (1948) with G. Gilmore & C. Black, The Law of Admiralty, 9 n. 30 (2d ed. 1975) (citing the statute of 13 Rich. II, c. 5 (1389) which limited admiralty jurisdiction to "a thing upon the sea"). "A case in admiralty does not, in fact, arise under the constitution or laws of the United States. These cases are as old as navigation itself; and the law, admiralty and maritime, as it has existed for ages, is applied by our courts to the cases as they arise." American Ins. Co. v. Ocean Ins. Co., 26 U.S. (1 Pet.) 511, 545-46, 7 L.Ed. 242 (1828). One of the ancient tenets of admiralty provides that a contract for the repair, renovation, or conversion of an existing vessel is maritime in nature because "[i]n the baptism of launching she receives her name, and from the moment her keel touches the water she is transformed, and becomes a subject of admiralty jurisdiction. She acquires a personality of her own; becomes competent to contract, and is individually liable for her obligations; upon which she may sue in the name of her owner, and be sued in her own name." Tucker v. Alexandroff, 183 U.S. 424, 438, 22 S.Ct. 195, 201, 46 L.Ed. 264 (1902); see also Thames Towboat Co. v. The "Francis MacDonald", 254 U.S. 242, 244, 41 S.Ct. 65, 66, 65 L.Ed. 245 (1920) (if vessel is not yet seaworthy, completion is new construction rather than repair or conversion); Northwest Marine Iron Works v. United States, 493 F.2d 652, 656, 203 Ct.Cl. 629 (1974). Accordingly, Umpqua was compelled to concede that the aspect of the contract directing conversion of the existing vessel falls within admiralty jurisdiction. Appellant's Response at 2 (citing New Bedford Dry Dock Co. v. Purdy, 258 U.S. 96, 42 S.Ct. 243, 66 L.Ed. 482 (1922)).

IV

We must turn then to the question of whether the part of the contract concerning the construction of the diving system

module lies within admiralty jurisdiction. Umpqua contends that the fabrication of "an independent self sustained" diving system module that could conceivably be operated from a land-based pier, rather than from a floating vessel, cannot be a maritime contract. The Government contends that the fact that the diving module could later be removed from the vessel should not defeat the maritime nature of the construction of the diving module since the module was intended to be placed upon a vessel that was to be specifically customized to receive it.

The Government argues that the admiralty law governing contracts for repair of finished vessels, or contracts for supplies, services, or facilities furnished to finished vessels should convince us that the construction of the diving module involved a necessary supply for a Navy Diving Boat. 7A J. Moore, Federal Practice p .230[4.-1], at 2781 (1990); The General Smith, 17 U.S. (4 Wheat.) 438, 438, 4 L.Ed. 609 (1819) ("necessaries have been furnished to a foreign ship") (Story, J.). In sum, the Government argues that if we were to conclude that the diving module fell within the category of a "supply" for the boat, then the entire contract would perforce be maritime. In support of this contention, the Government cites American Shipbldg. & Dock Corp. v. John Rourke & Sons, 4 F.2d 845 (5th Cir.), cert. denied, 268 U.S. 702, 45 S.Ct. 638, 69 L.Ed. 1166 (1925). In American Shipbldg., the appellant contracted to construct a "loading and unloading apparatus" on a common barge to permit the use of the barge in the sugar trade. Id. The court's conclusion that the construction contract was maritime turned on the fact that the apparatus was to be affixed to a barge that was "completed" although never previously engaged in commerce, and therefore, the construction was an addition, or repair, to an already operable vessel. Id. The construction of an independent diving module is, however, clearly distinguishable from the loading apparatus, which was a permanent addition to the boat, and was not specifically designed to be easily removed to a location on land, as is the diving module. The same distinction applies to...