Fourth Circuit issues opinion on jury trials in admiralty cases

In Re: LOCKHEED MARTIN CORP, Lockheed was denied a jury trial on Lockheed's counterclaim seeking money damages in an admiralty case. The dispute was over damage to a ship and National originally filed a declaratory judgment action seeking a finding that any claim by Lockheed was time barred under the relevant insurance policy. Once the district judge denied a jury trial on the counterclaim, Lockheed filed a petition for writ of mandamus, arguing that it had a Seventh Amendment right to a jury trial which the district court violated. The Fourth Circuit held that Lockheed did have a right to a jury trial.

Although the action sounds in admiralty, that is only because National won the race to the courthouse door and made the Rule 9(h) designation first. Beacon Theatres, however, requires us to ignore National’s status as the declaratory judgment plaintiff and to instead look to how the action otherwise would have proceeded. Without the declaratory judgment vehicle, Lockheed would have sued National for breach of the insurance policy, a claim over which admiralty and "law" courts have concurrent jurisdiction. As the plaintiff, Lockheed would have been entitled under the saving-to-suitors clause to designate its claim as a legal one as to which there is a Seventh Amendment right to jury trial.

The "saving to suitors" clause is found in 28 U.S.C.A. § 1333 (West 2006), and states that "district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." The effect of the saving-to-suitors clause is to permit maritime in personam claims to be pursued in federal court as maritime (and thus non-jury) claims, in state court as legal claims, or in federal court as legal claims (for which a jury trial is available) if an independent basis for federal court jurisdiction exists. Under this clause, Lockheed had a right to proceed at law on its claim of breach of insurance contract.

Court of Appeals issues insurable interest opinion relating to UM coverage

In Nationwide v. Smith, a 1999 Montero vehicle was involved in an accident with an uninsured vehicle. The Montero was insured by Nationwide Policy Number: 61 39 K 931345. While the Montero was owned by and registered to Son, and the Nationwide policy covering the Montero was taken out and owned by Father. Nationwide denied coverage and filed a declaratory judgment action for a determination that the policy covering the Montero was void for lack of an insurable interest. Nationwide argued Father lacked an insurable interest in the vehicle because he did not own the Montero, did not control the Montero, or was not responsible for or could be held liable for its operation or use. Son argued because he used the Montero to transport Father, Father benefited from its use and therefore had an insurable interest in the Montero. Regardless, Son averred the insurable interest requirement for liability coverage was irrelevant when dealing with UM coverage inasmuch as the uninsured motorist statute mandates insurers to provide UM coverage to the named insured and resident relatives of the named insured’s household at all times. The trial court held the insurable interest requirement was irrelevant to UM coverage and Nationwide appealed.

Although recognizing the purpose of the uninsured motorist statute is to provide benefits and protection against the peril of injury or death by an uninsured motorist to an insured motorist and his family, the Court found that the lower court erred in ignoring "the well settled rule of law in this country that an insured must possess an interest in the subject matter of the policy." The case was remanded to determine whether Father had an insurable interest in the vehicle.

4th Circuit is Split Down the Middle

Over at Law.com, Brendan Smith has a good piece up on the beginning of the Fourth Circuit's term and how the number of vacancies will impact the Court. Here's a link.

"I think the ideological balance of that court is completely in play," says Jay Sekulow, chief counsel of the conservative American Center for Law and Justice. "I think this is the most important judicial nominee fight that we've had in decades, and you've got an entire court of appeals hanging in the balance."

A full third of the 15 active judgeships on the 4th Circuit are vacant, accounting for five of the 16 vacancies on circuit courts nationwide. The 10 active judges are split 5-5 in an ideological divide that potentially pits five judges appointed by President Bill Clinton against five judges appointed by Presidents George W. Bush, George H.W. Bush or Ronald Reagan.

Fourth Circuit decides SC Contracts Clause Case

In CATAWBA INDIAN TRIBE v. CITY OF ROCK HILL, the Tribe and the City entered into an Agreement whereby the City would provide the Tribe with water and sewer services. Under the Agreement, each water meter costed $55.00 and would be installed upon the Tribe's request. Later in 2003, the City adopted an Ordinance imposing water and waste water impact fees "for all water and/or waste water service requests," including requests for "new service, water and/or waste water extension requests and agreements, additional meters, or upgrades of existing services that will create any new or additional demand on the City’s water and/or waste water systems." The Tribe did not request service and installation of the meters until August 2003, and thus the City asserted that the Tribe must pay the impact fee. The Tribe brought suit under the Contracts Clause of the Constitution.

The Fourth Circuit disagreed with the Tribe. The Tribe conceded that it expected to pay the regular fee that the City charged services; and thus the Fourth Circuit held that the natural extension of this argument is that nothing restricts a public utility from raising or otherwise varying its fees. The original agreement simply did not touch on this later issue--all the original agreement contemplated was for the City to provide services, which it was willing to do. Hence, there was no impairment of contracts.

Governor Orders WCC to strictly apply AMA Guides

Yesterday, the Governor signed an Executive Order requiring the Workers' Compensation Commissioners to strictly apply either American Medical Association Guides or any other accepted medical treatise when making compensation determinations.

The SC Bar has the Executive Order posted here.

The Honorable Emory Widener: RIP

I regret to pass on that the Fourth Circuit's Judge Emory Widener passed away today. I had the pleasure to argue in front of Judge Widener last fall and he was a true gentleman. He will be missed. Judge Widener served on the bench since 1969 and through 1000 volumes of the Federal Reporter.

Many thanks to this distinguished jurist for his years of service. The Fourth Circuit will not be the same without him.

S.C. Court of Appeals clarifies pleading requirements for attorney fee award

In SCE&G v. Hartough, a declaratory action was instituted regarding an option contract to purchase land. SCE&G prevailed and was awarded attorney fees against Hartough. On appeal Hartough argued the special referee erred in awarding attorney’s fees inasmuch as SCE&G did not specifically plead it was seeking attorney’s fees pursuant to the option contract but merely stated in its pleading that it sought attorney’s fees for bringing the action. The Court of Appeals found nothing to bar the award of fees:

SCE&G commenced the action in order to determine the validity of the option pursuant to the contract. The contract permitted any prevailing party to seek attorney’s fees in an action to enforce any right under the contract. In addition, the pleadings requested attorney’s fees. Therefore, Hartough was apprised SCE&G would be seeking a recovery of fees if successful. Accordingly, the special referee did not err in awarding fees.

John Yoo to speak in Charleston

For those readers in the Charleston area, drop by the Charleston School of Law on September 24 to hear John Yoo speak on Presidential Power in Time of Emergency. John Yoo is a professor of law at the University of California at Berkeley School of Law, where he has taught since 1993. From 2001-03, he served as a deputy assistant attorney general in the Office of Legal Counsel of the U.S. Department of Justice, where he worked on issues involving foreign affairs, national security, and the separation of powers. He served as general counsel of the U.S. Senate Judiciary Committee from 1995-96, where he advised on constitutional issues and judicial nominations.

Time and place:

Monday, September 24
12:00 Noon
The Charleston School of Law
81 Mary Street

SC in the vanguard on pink outfits for inmates

A South Carolina inmate forced to wear a pink uniform after gratifying himself in front of a female prison guard has brought the "pink punishment" to the national scene. As this article demonstrates, the punishment has been implemented elsewhere and the SC inmate's case will likely have national implications.

Michael Mukasey or Wlliam Wilkins??

The word on the street is that Dubya will nominate Michael Mukasey to become the next attorney general of the United States. However, don't be suprised to see Judge Wilkins' name mentioned again if Mukasey does not pan out for the White House.

On Sunday, the Greenville News had a good article on the politics behind the scenes and implications for a Wilkins nomination.

Vacation Time

I'll be traveling through Germany until September 15. Thus, all will be quiet at this blog for the next two weeks. Check back mid-September for the latest SC appellate law updates.