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Sixth Circuit Has Jurisdiction to Hear Interlocutory Appeal of State-law Claims in Admiralty Case
Practical Law Legal Update 6-544-5908 (Approx. 3 pages)
Sixth Circuit Has Jurisdiction to Hear Interlocutory Appeal of State-law Claims in Admiralty Case
by Practical Law Litigation
| Published on 07 Oct 2013 • USA (National/Federal) |
In Williams v. Recovery Limited Partnership, the US Court of Appeals for the Sixth Circuit held in a case of first impression that it has jurisdiction to hear an interlocutory appeal of state-law claims in a case that also involves admiralty claims, under the exception to the final judgment rule for admiralty cases (28 U.S.C. § 1292(a)(3)).
On October 2, 2013, the US Court of Appeals for the Sixth Circuit issued an opinion in Williamson v. Recovery Limited Partnership, holding in a case of first impression that it has jurisdiction to hear an interlocutory appeal of state-law claims in a case that also involves admiralty claims, under the exception to the final judgment rule for admiralty cases (28 U.S.C. § 1292(a)(3)).
This case stems from a shipwreck that occurred in 1857 when the S.S. Central America sank en route from Havanna to New York, taking many tons of gold and over 400 passengers with her. The wreckage was discovered 130 years later by a group of explorers led by defendant Thomas Thompson. Plaintiffs, who assisted Thompson in locating the wreckage and recovering the gold, later sued Thompson and his business entities, claiming that the defendants breached agreements that promised plaintiffs a percentage of the net recovery of the gold. The business entities asserted state-law counterclaims for breach of contract, civil conspiracy and unfair competition. Among other things, the district court granted summary judgment for the plaintiffs on all of the defendants' counterclaims. The defendants took an interlocutory appeal of that decision.
On appeal, the Sixth Circuit held that it has jurisdiction to hear the interlocutory appeal of the summary adjudication of defendants' state-law counterclaims. Although the final judgment rule generally prevents federal appeals courts from asserting jurisdiction over appeals from interlocutory orders, an exception to the rule exists for admiralty cases (28 U.S.C. §§ 1291, 1292(a)(3)). The court explained that because the case contains admiralty claims, it is an "admiralty case" and falls within the exception to the final judgment rule (FRCP 9(h)(2)). The Sixth Circuit disagrees with the majority of circuit courts, which hold that the exception in 28 U.S.C. §1292(a)(3) only applies when an admiralty claim is the jurisdictional basis for the issues raised on appeal.