Exxon Corporation v. Central Gulf Lines, Inc.

PETITIONER: Exxon Corporation
RESPONDENT: Central Gulf Lines, Inc.
LOCATION: Oklahoma City Board of Education

DOCKET NO.: 90-34
DECIDED BY: Rehnquist Court (1990-1991)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 500 US 603 (1991)
ARGUED: Apr 15, 1991
DECIDED: Jun 03, 1991

ADVOCATES:
Armand Maurice Pare, Jr. - on behalf of the Petitioner
Francis A. Montbach - on behalf of the Respondents
Stephen L. Nightingale - as amicus curiae, in support of the Petitioner

Facts of the case

For certain contract disputes within admiralty jurisdiction, an action in rem is authorized against the vessel herself, even when jurisdiction cannot be asserted over her owner or operator. To satisfy a judgment for the plaintiff, the court may order the vessel sold at public auction. Such an action is permitted those who go unpaid after furnishing a vessel with supplies essential for her continued voyaging. But maritime law long distinguished the contracts of middlemen, that is, agents or brokers procuring supplies for a vessel from other sources. Such intermediary contracts were considered ordinary agency agreements, and therefore outside admiralty jurisdiction. The Supreme Court embraced this distinction in Minturn v. Minyard, 58 U.S. (17 How.) 477 (1854).

In this case, EXXON sued a cargo ship, the William Hopper, in rem and her owner, Central Gulf Lines, in personam for the price of fuel delivered to the ship in the ports of New York and Jeddah. Exxon had a contract with Waterman Steamship Company to supply fuel for its fleet anywhere in the world. Sometimes EXXON furnished its own fuels; otherwise, EXXON procured fuels from other sellers. Among the vessels operated by Waterman was the William Hopper, leased from Central Gulf Lines. When she visited New York, Exxon supplied her with its own fuel. When she visited Jeddah, EXXON got her fuel from Arabian Marine Operating Company. EXXON paid Arabian Marine, but Waterman went bankrupt before paying EXXON. In the bankruptcy proceedings, Central Gulf agreed to pay EXXON if a court found the William Hooper liable in rem. Invoking Minturn and its progeny, the Southern District of New York agreed with Central Gulf Lines that Exxon's claim for the fuel procured in Jeddah was one of agency, and therefore outside admiralty jurisdiction. On appeal, the U.S. Court of Appeals for the Second Circuit affirmed without opinion.

Question

Whether a contract to procure for a vessel fuel from a third party is a maritime contract within admiralty jurisdiction and enforceable in an action in rem?

Media for Exxon Corporation v. Central Gulf Lines, Inc.

Audio Transcription for Oral Argument - April 15, 1991 in Exxon Corporation v. Central Gulf Lines, Inc.

Audio Transcription for Opinion Announcement - June 03, 1991 in Exxon Corporation v. Central Gulf Lines, Inc.

William H. Rehnquist:

The opinion of the Court in No. 90-34 Exxon Corporation versus Central Gulf Lines will be announced by Justice Marshall.

Thurgood Marshall:

This case is here on certiorari to the United States Court of Appeals for the Second Circuit.

The question in this case is whether Admiral de jurisdiction extends to claims arising from agency contracts.

In an opinion filed with the clerk today, we hold that there is no per se rule following agency contracts from admiralty.

Accordingly, we reverse the judgment of the Second Circuit.