906 F.3d 843
9th Cir.2018Background
- Bunker Holdings supplied 3,500 metric tons of bunkers to the containership M/V YM Success after OWB Far East contracted to provide fuel for the vessel under a contract with owner Yang Ming Liberia Corp.
- Yang Ming contracted with OWB Far East (a broker) to buy bunkers; OWB Far East separately contracted with Bunker Holdings to purchase and deliver the bunkers.
- OWB Far East billed Yang Ming; Bunker Holdings billed OWB Far East. OWB Far East later filed for bankruptcy, and Bunker Holdings sued in rem against the YM Success to enforce a maritime lien for the unpaid bunkers.
- Statutory test (46 U.S.C. § 31342(a)) requires necessaries be supplied “on the order of the owner or a person authorized by the owner” to create a maritime lien; statutory presumptions of authority appear in § 31341(a).
- The district court granted summary judgment for Yang Ming; the Ninth Circuit affirmed that Bunker Holdings did not supply bunkers on the owner’s order or on the order of a person shown to be authorized by the owner.
- The district court awarded Yang Ming ~$54,000 costs for premiums on the letter of undertaking; the Ninth Circuit reversed that award for lack of statutory authorization under 28 U.S.C. § 1920.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bunker Holdings supplied bunkers “on the order of the owner or a person authorized by the owner” so as to create a maritime lien | Bunker: OWB Far East ordered bunkers for the YM Success and Bunker supplied them, so Bunker has a lien; Ken Lucky supports lien where intermediaries ordered fuel | Yang Ming: Yang Ming ordered from OWB Far East, not Bunker; OWB Far East was not shown to be Yang Ming’s agent or otherwise authorized to bind the vessel | Held: No lien. Bunker did not supply on owner’s order and OWB Far East lacked proven authority to bind the vessel; Ken Lucky is distinguishable. |
| Whether Yang Ming could recover as taxable costs the premiums/expenses for a letter of undertaking securing vessel release | Bunker: Local rule permitting recovery of premiums on undertakings is invalid without statutory authorization; such costs are not among § 1920 categories | Yang Ming: Local rule allows recovery of reasonable premiums paid on undertakings as taxable costs | Held: Reversed. District court lacked statutory authority to award those costs; premiums on undertakings are not taxable under § 1920 absent Sup. Ct. rulemaking or congressional authorization. |
Key Cases Cited
- Marine Fuel Supply & Towing, Inc. v. M/V Ken Lucky, 869 F.2d 473 (9th Cir. 1988) (held maritime lien where intermediary order was treated as originating from an entity with presumed authority based on factual admission)
- Port of Portland v. M/V Paralla, 892 F.2d 825 (9th Cir. 1989) (subcontractors to a general contractor lack lien when contractor lacks authority to bind vessel)
- Farwest Steel Corp. v. Barge Sea-Span 241, 828 F.2d 522 (9th Cir. 1987) (same rule as to general contractor/subcontractor relationships and vessel-binding authority)
- Valero Marketing & Supply Co. v. M/V Almi Sun, 893 F.3d 290 (5th Cir. 2018) (reached same outcome on similar facts)
- ING Bank N.V. v. M/V Temara, 892 F.3d 511 (2d Cir. 2018) (reached same outcome on similar facts)
- Barcliff, LLC v. M/V Deep Blue, 876 F.3d 1063 (11th Cir. 2017) (reached same outcome on similar facts)
- West Virginia University Hospitals, Inc. v. Casey, 499 U.S. 83 (1991) (each item of costs must be grounded in explicit statutory authority)
- Taniguchi v. Kan Pacific Saipan, Ltd., 566 U.S. 560 (2012) (statutory text controls what expenses are taxable as costs)