United States Court of Appeals
For the First Circuit
No. 05-1637
THE PUERTO RICO PORTS AUTHORITY
(AUTORIDAD DE LOS PUERTOS DE PUERTO RICO),
Plaintiff, Appellant,
MIGUEL SOTO-LACOURT,
Plaintiff,
v.
JOSE ALBERTO UMPIERRE-SOLARES;
DIVERS SERVICE CENTER, INC.; MILTON ANDREWS-FIGUEROA;
MILTON ANDREWS CRANE SERVICES, INC.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Camille L. Velez-Rive, U.S. Magistrate Judge]
Before
Selya, Lipez, and Howard, Circuit Judges.
Edward W. Hill-Tollinche, with whom Quiñones Sánchez & Guzmán,
P.S.C., Humberto Guzman-Rodriguez, and Tessie Leal-Garabis were on
brief, for appellant.
Lorenzo J. Palomares, with whom Lorenzo Palomores, P.S.C. was
on brief, for appellees.
July 27, 2006
LIPEZ, Circuit Judge. Resolved in the district court on
the basis of its admiralty jurisdiction, this case involves a
contract dispute over the disposal of a sunken ship. We must
decide whether the district court had admiralty jurisdiction over
this matter and, if so, whether the district court correctly ruled
that the relief sought by the Puerto Rico Ports Authority ("PRPA")
was barred by the doctrine of laches. Because we answer both
questions in the affirmative, we affirm the judgment of the
district court.1
I.
In 1989, the vessel "La Isla Nena" sunk in the navigable
waters of San Juan Harbor during Hurricane Hugo. In 1991, the
United States Army Corps of Engineers ("Corps") instructed the
PRPA, the owner of La Isla Nena, to remove the vessel because it
was obstructing navigation. In January 1992, Defendants Jose
Alberto Umpierre Solares, Divers Service Center, Inc., Milton
Andrews-Figueroa, and Milton Andrews Crane Service, Inc.
(collectively, "Defendants")2 submitted a proposal to the PRPA for
the removal of the vessel from San Juan Harbor. The proposal
presented two alternatives: Defendants could raise and put the
1
All references to the district court herein refer to the
magistrate judge exercising her consent authority pursuant to Rule
73(a) of the Federal Rules of Civil Procedure.
2
Umpierre Solares is an officer of Divers Service Center, Inc.
Milton Andrews-Figueroa is the sole shareholder of Milton Andrews
Crane Service Center, Inc.
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vessel on shore for $75,000, or raise and dispose of the vessel for
$85,000. In April 1992, the PRPA and Defendants entered into a
contract ("Contract") for "the removal and disposition of the
vessel Isla Nena, sunken at the bottom of the sea in the area of
the Army Terminal" in exchange for payment of $85,000. Defendants
subsequently raised the vessel and moored it at a shipyard in the
city of Cataño. When required permits made re-sinking the vessel
unfeasible, the parties modified the Contract in September 1992.
The PRPA agreed to pay Defendants $84,000 (instead of $85,000) to
dispose of the vessel "in the most convenient and speedy way
possible." The PRPA issued payment to Defendants on September 9,
1992. The vessel is presently partially sunk (as the result of a
storm) at the shipyard in Cataño.
II.
On October 31, 2003, the PRPA and its Executive Director,
Miguel Soto-LaCourt3 (collectively, "Plaintiffs"), filed a
complaint in Puerto Rico Superior Court seeking specific
performance under the Contract to remove and dispose of La Isla
Nena. Invoking admiralty jurisdiction, Defendants removed the case
to the district court. Defendants subsequently filed a motion for
summary judgment, claiming that the action was time-barred pursuant
3
Aside from the complaint, the only filings in which Soto-
LaCourt's name appears are Plaintiffs' motion to remand and the
joint discovery report. All other filings in opposition to
Defendants, including the Notice of Appeal and Amended Notice of
Appeal, were brought solely by the PRPA.
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to the laches doctrine, and that the Contract was a salvage
contract subject to a two-year statute of limitations. The PRPA
filed its opposition, arguing that laches did not apply, and that
the Contract was a contract for professional services, not a
salvage contract, and subject to a fifteen-year statute of
limitations. On March 1, 2005, the district court granted
Defendants' motion for summary judgment under the laches doctrine,
and dismissed Plaintiffs' complaint with prejudice.
On March 16, 2005, the PRPA, through new legal counsel,
filed a motion to alter, amend, or vacate judgment ("Motion to
Alter/Amend"), arguing for the first time that the district court
lacked admiralty jurisdiction under the "dead ship" doctrine. On
March 30, 2005, the PRPA appealed the district court's grant of
Defendants' motion for summary judgment. We refused to entertain
the appeal pending the outcome of Defendants' Motion to
Alter/Amend, pursuant to Federal Rule of Appellate Procedure
4(a)(4)(A).4 On June 1, 2005, the district court denied the PRPA's
Motion to Alter/Amend because there were issues of fact as to
whether La Isla Nena was a "dead ship."5 The PRPA subsequently
4
Federal Rule of Appellate Procedure 4(a)(4)(A) provides that
"[i]f a party timely files in the district court [a motion to alter
or amend the judgment under Rule 59, or a motion for relief under
Rule 60] the time to file an appeal runs for all parties from the
entry of the order disposing of the last such remaining motion."
5
It is unclear from the record why the district court denied the
PRPA's Motion to Alter/Amend and let stand its prior order granting
Defendants' motion for summary judgment, despite finding that there
were "significant controversies of fact to be elucidated" regarding
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amended its notice of appeal to include the district court's June
1 decision.
III.
We review grants of summary judgment de novo. DeNovellis
v. Shalala, 124 F.3d 298, 305 (1st Cir. 1997). Summary judgment is
proper when "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Fed. R. Civ. P. 56(c). We review a district
court's denial of a motion to alter or amend judgment for abuse of
discretion. See Earnhardt v. Commonwealth of Puerto Rico, 744 F.2d
1, 2 (1st Cir. 1984). We may affirm a district court decision on
any ground supported by the record. See Doe v. Anrig, 728 F.2d 30,
32 (1st Cir. 1984) (appellate court free to affirm based on any
ground supported by the record).
IV.
A. Jurisdiction
The PRPA argues that the district court lacked admiralty
jurisdiction over the removed action because La Isla Nena was a
the jurisdictional issue. The logical next step, we think, would
have been for the court to grant the PRPA's Motion to Alter/Amend,
vacate the summary judgment order, and resolve the jurisdictional
issue. Nevertheless, because we affirm the district court's
admiralty jurisdiction over this dispute on other grounds, this
apparent inconsistency in the district court's ruling poses no
problem on appeal.
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"dead ship."6 Under the dead ship doctrine, a ship loses its
status as a vessel subject to admiralty jurisdiction "when its
function is so changed that it has no further navigation function."
Mullane v. Chambers, 333 F.3d 322, 328 (1st Cir. 2003) (internal
citation and quotation marks omitted). Defendants argue that the
removed action was within the district court's admiralty
jurisdiction because the Contract relates to the removal and
disposal of La Isla Nena – "a marine peril [of which the Corps] had
demand[ed] removal . . . [because it] posed a risk to the maritime
navigation and maritime commerce traveling the navigable waters of
San Juan Bay."7 We agree with Defendants that the Contract was
maritime in nature and, therefore, within the admiralty
jurisdiction of the district court.
6
Defendants argue that the PRPA waived this jurisdictional claim
by not raising it prior to the district court's grant of summary
judgment in Defendants' favor. This argument is without merit.
"[T]he objection to subject matter jurisdiction is not waivable and
may be raised for the first time on appeal." F.A.C., Inc. v.
Cooperativa de Seguros de Vida de Puerto Rico, 449 F.3d 185, 189
(1st Cir. 2006). Here, the PRPA raised its objection in a Motion
to Alter/Amend filed before its Notice of Appeal and, thus, the
district court did not err in reaching the merits of the objection.
7
Defendants raise several additional – albeit somewhat convoluted
– arguments in favor of admiralty jurisdiction, namely, that: the
Contract is a "salvage contract" and is therefore subject to
admiralty jurisdiction; and La Isla Nena sank "in the navigable
waters of San Juan Bay" and, therefore, "admiralty jurisdiction
[is] apparent on its face." Because we agree with Defendants that
admiralty jurisdiction extends to this action because the Contract
relates to the removal and disposal of an obstruction to
navigation, we do not address Defendants' alternative arguments.
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Section 1333(1) of Title 28 U.S.C. provides that federal
district courts shall have jurisdiction over "[a]ny civil case of
admiralty or maritime jurisdiction." The Supreme Court has
reiterated that "the fundamental interest giving rise to maritime
jurisdiction is the protection of maritime commerce." Exxon Corp.
v. Cent. Gulf Lines, Inc., 500 U.S. 603, 608 (1991) (internal
quotation marks and citation omitted). Therefore, in determining
whether a contract falls within maritime jurisdiction, we focus our
inquiry on "whether the nature of the transaction was maritime,"
id. at 611, that is, whether the contract "relate[s] to the
navigation, business or commerce of the sea." Cunningham v.
Director, Office of Workers' Compensation Programs, 377 F.3d 98,
109 n.11 (1st Cir. 2004) (quoting Nacirema Co. v. Johnson, 396 U.S.
212, 215 n.7 (1969)); see also Norfolk S. Ry. Co. v. Kirby, 543
U.S. 14, 23-24 (2004) ("To ascertain whether a contract is a
maritime one . . . the answer depends upon the nature and character
of the contract, and the true criterion is whether it has reference
to maritime service or maritime transactions." (internal quotation
marks and citations omitted)).
After La Isla Nena sunk in the navigable waters of San
Juan Harbor, the Corps issued a "Mark and Removal Order" to the
PRPA to remove the obstruction, pursuant to Section 15 of the
Rivers and Harbors Act of 1899 ("RHA"), 33 U.S.C. § 409.8 Section
8
Section 15 of the RHA states, in relevant part, that:
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15 of the RHA, entitled "Obstruction of navigable waters by
vessels; floating timber; marking and removal of sunken vessels,"
seeks "to maintain and promote the safety of navigation," The
Bohemian Club v. Moller, 320 U.S. 462, 466 (1943), by providing for
the prompt removal of obstructions to navigation. Accordingly,
when the PRPA entered into a contract with Defendants for the
removal of La Isla Nena from the navigable waters of San Juan
Harbor, this transaction was maritime in nature because it related
to the removal of an obstruction to the "navigation, business or
commerce of the sea." Cunningham, 377 F.3d at 109 n.11; compare
D.M. Picton & Co., Inc. v. Eastes, 160 F.2d 189, 192-93 (5th Cir.
1947) (stating that "it would be difficult to imagine a contract
more completely maritime" than a contract for removal of damaged
pilings and timber which constituted "menaces to navigation," and
holding that claim for breach of contract "to remove hazards to
navigation" was, therefore, within admiralty jurisdiction), with R.
Maloblocki & Assocs., Inc. v. Metro. Sanitary Dist., 369 F.2d 483,
485 (7th Cir. 1966) (holding that contract for dredging navigable
waterway was not maritime in nature because the purpose of the
It shall not be lawful to . . . sink, or permit or cause
to be sunk, vessels or other craft in navigable channels
. . . . And whenever a vessel, raft or other craft is
wrecked and sunk in a navigable channel, it shall be the
duty of the owner, lessee, or operator of such sunken
craft to . . . commence the immediate removal of the
same, and prosecute such removal diligently . . . .
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contract was flood control and that "any effect the project may
have had upon navigability was, at best, incidental." (internal
quotation marks omitted)). The district court therefore had
admiralty jurisdiction to entertain the removed action.
We acknowledge the PRPA's reliance upon a line of cases
holding that contracts involving "dead ships" are not maritime in
nature and thus are not subject to admiralty jurisdiction. See,
e.g., Robert E. Blake, Inc. v. Excel Envtl., 104 F.3d 1158, 1160,
1162 (9th Cir. 1997) (holding that indemnity claim arising under
contract involving repair and activation of ship which had been
stored for several years and had been deactivated was outside
admiralty jurisdiction); Murray v. Schwartz, 175 F.2d 72, 72-73 (2d
Cir. 1949) ("A wharfage contract touching a dead ship is not
maritime, and a contract which is not maritime cannot create a lien
subject to the jurisdiction of admiralty."). This reliance is
misplaced. Not one of the cases cited by the PRPA involves a
contract for the removal of a ship obstructing navigable waters.
Whether La Isla Nena was "live" or "dead" when it was lying at the
bottom of San Juan Harbor, obstructing navigation, is of no
consequence to our jurisdictional inquiry. What matters is that La
Isla Nena was lying at the bottom of San Juan Harbor, obstructing
navigation, and that the Contract related to the removal of this
obstruction.
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The PRPA's reliance upon our decision in Luvi Trucking,
Inc. v. Sea-Land Service, Inc., 650 F.2d 371 (1st Cir. 1981), is
likewise unavailing. In that case, we held that a trucking
company's contract with a sea carrier to haul cargo containers
overland from one ocean pier to another was not maritime in nature,
and relied on an influential treatise for the proposition that a
contract is not maritime in nature
merely because the services to be performed under the
contract have reference to a ship, or to its business, or
that the ship is the object of such services or that it
has reference to navigable waters. In order that such
character should attach, there must be present a direct
and proximate juridical link between the contract and the
operation of the ship, its navigation or its management
afloat . . . .
Id. at 373 (quoting 1 Benedict on Admiralty § 182, at 11-5 (6th ed.
1974)). The PRPA argues that admiralty jurisdiction does not
attach in this case because the Contract is not linked to "the
operation, navigation or management of a vessel afloat," but rather
to La Isla Nena, which "is not a vessel, but rather a dead ship."
We decline to adopt the PRPA's strained reading of the language
quoted in Luvi.
In Luvi, the jurisdictional inquiry did not turn on
whether a ship was "live" or "dead". Rather, the issue in that
case was whether admiralty jurisdiction should attach to a contract
for services provided by a trucking company which "never came in
contact with a ship," and which "merely picked up the [cargo
containers] at one terminal and drove them to the other." Id. at
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373-74. We concluded that these services were too far removed from
maritime matters to provide "a basis for characterizing the
contract as maritime." Id. at 374; see also Atl. Mut. Ins. Co. v.
Balfour Maclaine Int'l, Ltd., 968 F.2d 196, 200 (2d Cir. 1992)
("[T]he subject matter of the dispute is so attenuated from the
business of maritime commerce that it does not implicate the
concerns underlying admiralty and maritime jurisdiction."). Here,
it is undisputed that Defendants came in contact with La Isla Nena
– they removed it from the bottom of San Juan Harbor and moored it
at a shipyard in the city of Cataño. Unlike the overland hauling
contract in Luvi, the removal services provided by Defendants under
the Contract closely relate to maritime commerce and thus provide
a firm basis for characterizing the Contract as maritime in nature,
regardless of whether La Isla Nena was a dead ship.
B. Laches
Having concluded that the district court had admiralty
jurisdiction over this action, we now turn to whether the district
court erred in holding that the PRPA's breach-of-contract action
was barred by laches. The district court so held because the PRPA
waited more than eleven years to file its claim. Specifically, the
court held that the PRPA's commencement of this action in 2003,
"when [the PRPA] knew at least since 1992 [that] 'La Isla Nena' had
not been re-sunk and [] was re-floated and navigated to Cataño,"
constituted "excessive and unreasonable" delay and economically
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prejudiced Defendants. The PRPA does not dispute this delay,
conceding that "12 years elapsed since the execution of the
Contract." Nevertheless, the PRPA argues that laches does not
apply because the Contract was for professional services and was
therefore subject to a fifteen-year statute of limitations under
Article 1864 of the Civil Code of Puerto Rico, 31 P.R. Laws Ann. §
5294.9
"In an admiralty case, maritime law and the equitable
doctrine of laches" – not federal or state statutes of limitations
– "govern the time to sue." TAG/ICIB Servs., Inc. v. Pan American
Grain Co., Inc., 215 F.3d 172, 175 (1st Cir. 2000); accord Puerto
Rican-American Ins. Co. v. Benjamin Shipping Co. Ltd., 829 F.2d
281, 283 (1st Cir. 1987); Pierre v. Hess Oil Virgin Islands Corp.,
624 F.2d 445, 450 (3d Cir. 1980) ("[D]elay in bringing suit on an
admiralty claim is barred by laches, not by any statute of
limitations."); Hill v. W. Bruns & Co., 498 F.2d 565, 568 (2d Cir.
1974) ("In an admiralty suit state statutes of limitations are not
strictly applied; instead, the doctrine of laches controls."); see
also The Key City, 81 U.S. 653, 660 (1871) ("[W]hile the courts of
admiralty are not governed in [cases involving the enforcement of
maritime liens] by any statute of limitation, they adopt the
principle that laches or delay in the judicial enforcement of
9
Article 1864 of the Civil Code of Puerto Rico states, in relevant
part, that "[a] personal [action] . . . for which no special term
of prescription is fixed, [shall lapse] after fifteen (15) years."
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maritime liens will, under proper circumstances, constitute a valid
defence.").10
While we look to the limitations period contained in the
most analogous federal or state statute in order "to establish
burdens of proof and presumptions of timeliness and untimeliness,"
the focus of our inquiry is "whether the plaintiff's delay in
bringing suit was unreasonable and whether defendant was prejudiced
by the delay." TAG/ICIB Servs., Inc., 215 F.3d at 175. Even
assuming that the fifteen-year statute of limitations is the most
analogous one in this case11 – a matter on which we take no view –
the fact that the PRPA filed its action against Defendants within
10
Admiralty's application of the doctrine of laches in lieu of
statutes of limitations is traceable to proceedings in equity, in
which "[s]tatutes of limitation had no application," and where "the
judicially created doctrine of laches required the court to weigh
the reasons for prejudicial delay." Alan L. Adlestein, Conflict of
the Criminal Statute of Limitations with Lesser Offenses at Trial,
37 Wm. & Mary L. Rev. 199, 257 n.249 (1995); see also Cornetta v.
United States, 851 F.2d 1372, 1375 (Fed. Cir. 1988) ("The doctrine
of laches emerged in an era when equity courts were not bound by
statutes of limitations."). Federal courts sitting in admiralty
"traditionally have been, and still are, governed by formal
Admiralty Rules and by a body of judge-made remedial law [which] .
. . has borrowed much from equity, including the rule of laches,
and the employment of local statutes of limitations 'by analogy'
where not inconsistent with admiralty principles." Alfred Hill,
State Procedural Law in Federal Nondiversity Litigation, 69 Harv.
L. Rev. 66, 115 (1955).
11
In their motion for summary judgment, Defendants argued that the
two-year statute of limitations applicable to salvage contracts
under 46 U.S.C. § 730 should apply here. Section 730 states, in
relevant part, that "[a] suit for the recovery of remuneration for
rendering assistance or salvage services shall not be maintainable
if brought later than two years from the date when such assistance
or salvage was rendered."
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this period of time does not save the action from being barred by
laches. Rather, this fact merely shifts the burden of proving
unreasonable delay and prejudice onto Defendants.
The uncontested facts demonstrate that the PRPA knew at
least since 1992 that La Isla Nena had not been re-sunk and was
instead moored at a shipyard in Cataño. Nevertheless, as noted by
the district court, "the record is devoid of any evidence to show
plaintiffs made any extra-judicial or judicial effort during the
eleven (11) year-period to request from defendants the specific
performance of the contract." In light of this undisputed evidence
of inaction on the part of the PRPA, and the absence of any
reasonable explanation for such inaction, we agree with the
district court that the PRPA's eleven-year delay in bringing this
action was unreasonable. See Cornetta, 851 F.2d at 1375 ("The
doctrine of laches . . . [i]s premised on the maxim vigilantibus
non dormientibus aequitas subvenit, equity aids the vigilant not
those who slumber on their rights.").
It is also undisputed that in 1998, approximately four
years after Defendants refloated La Isla Nena and moored it at the
shipyard in Cataño, the vessel became partially sunk again.
Defendants argue that they would be prejudiced if the PRPA were to
"obtain a free second refloat of 'La Isla Nena' at no cost to the
PRPA." We agree with the district court that Defendants would
unquestionably be prejudiced by the cost of a second re-float. We
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conclude, therefore, that the district court did not err in
applying the laches doctrine to bar the PRPA's action.
V.
For the foregoing reasons, the district court's judgment
granting Defendants' motion for summary judgment and denying the
PRPA's Motion to Alter/Amend, is affirmed. Costs are taxed against
the PRPA.
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