A subcontractor once again was denied a maritime lien despite having supplied “necessaries” for a vessel.
Ruling on another case involving a supplier of bunkers, or marine fuel, the Fifth Circuit reached the same result in a 2/1 opinion on June 19 as the Second Circuit did the week before in ING Bank NV v. M/V Temara, 16-3923, 2018 BL 208497 (2d Cir. June 13, 2018), and the Eleventh Circuit in November in Barcliff LLC v. M/V Deep Blue, 876 F.3d 1063 (11th Cir. Nov. 30, 2017).
Like ING Bank and Barcliff, the Fifth Circuit appeal arose from the bankruptcy of O.W. Bunker Group, a worldwide supplier of bunkers. Over a dissent, Fifth Circuit Judge Patrick E. Higginbotham cited the other two circuits for the proposition that a supplier of physical bunkers does not qualify for a maritime lien by providing fuel under contract with a general contractor.
Judge Higginbotham went a step further by dealing with the theory that a subcontractor can qualify for a maritime lien if the vessel’s owner controlled the selection of the subcontractor or its performance. On the facts of the case, he held that the owner was merely aware of the selection of the subcontractor and did not control the selection or performance.
Circuit Judge Catharina Haynes dissented, contending that the majority misapplied Fifth Circuit precedent and created a split with the Eleventh. She would have allowed a maritime lien, saying that the majority “significantly” understated the owner’s involvement in the selection of the physical supplier.
Interesting and complex though the issues may be, the maritime lien question may not warrant a grant of certiorari by the Supreme Court in the absence of a clear-cut circuit split. Aware that appellate opinions are trending against them, physical suppliers may be able to alter their contracts to change their outcomes.
To read ABI’s reports on ING Bank and Barcliff, click here and here.