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Bunker Holdings Ltd. v. Yang Ming Liberia Corp.

United States Court of Appeals, Ninth Circuit

October 11, 2018

Bunker Holdings Ltd., Plaintiff-Appellant,
v.
Yang Ming Liberia Corp., Owner of Defendant M/V YM Success, Claimant-Appellee, M/V YM Success (IMO 9294800), her tackle, boilers, apparel, furniture, engines, appurtenances, etc., in rem, Defendant-Appellee.

          Argued and Submitted June 14, 2018 Seattle, Washington

          Appeal from the United States District Court for the Western District of Washington, No. 3:14-cv-06002-BHS Benjamin H. Settle, District Judge, Presiding

          Briton P. Sparkman (argued) and George M. Chalos, Chalos & Co. P.C., Houston, Texas, for Plaintiffs-Appellants.

          Barbara L. Holland (argued) and Tyler W. Arnold, Garvey Schubert Barer, Seattle, Washington, for Claimant-Appellee.

          Before: Milan D. Smith, Jr. and Paul J. Watford, Circuit Judges, and Douglas L. Rayes, [*] District Judge.

         SUMMARY [**]

         Maritime Law

         The panel affirmed the district court's summary judgment against a supplier of bunkers (marine fuel) in the supplier's in rem action for a maritime lien against a containership, and the panel reversed the district court's award of costs to the vessel owner.

         Assuming that United States law applies, the panel held that, under 46 U.S.C. § 31342(a), the bunker supplier would be entitled to a maritime lien if it provided necessaries to a vessel on the order of the owner or a person authorized by the owner. Agreeing with other circuits, the panel held that the supplier did not provide the bunkers on the order of the owner or a person authorized by the owner because the owner ordered the bunkers from a fuel broker, which purchased the bunkers, pursuant to a separate contract, from the supplier and did not act as the owner's agent or have authority to bind the vessel.

         The panel reversed the district court's award of costs, under a local rule, to the vessel owner for the cost of keeping in place a letter of undertaking that enabled the owner to secure the release of the ship, which had been arrested at the outset of the action. The panel held that the local rule lacked statutory authority because premiums paid on undertakings or bonds are not authorized by 28 U.S.C. § 1920 or by any other statute. The panel wrote that this result was undesirable, but a return to an earlier practice awarding such costs would require action by Congress or by the Supreme Court pursuant to its delegated rulemaking authority under 28 U.S.C. § 1925.

         Erich P. Wise and Alisa Manasantivongs, Flynn Delich & Wise LLP, Long Beach, California; Bruce G. Paulsen, Jeffrey M. Dine, and Brian P. Maloney, Seward & Kissell LLP, New York, New York; for Amicus Curiae ING Bank N.V.

          OPINION

          WATFORD, CIRCUIT JUDGE:

         This is an in rem action for a maritime lien brought by Bunker Holdings Ltd. against the containership M/V YM Success. Bunker Holdings supplied bunkers (marine fuel) to the YM Success while the ship was docked in Nakhodka, Russia. Under United States law, which we will assume applies here, Bunker Holdings is entitled to a maritime lien if it "provid[ed] necessaries to a vessel on the order of the owner or a person authorized by the owner." 46 U.S.C. § 31342(a).

         Bunker Holdings provided "necessaries" to a "vessel," as the statute requires, because bunkers are considered necessaries and the YM Success qualifies as a vessel. The only issue is whether Bunker Holdings provided the bunkers "on the order of the owner or a person authorized by the owner." On cross-motions for summary judgment, the district court held that Bunker ...


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