893 F.3d 290
5th Cir.2018Background
- The Almi Sun (Vessel), owned by Verna Marine and represented by agent Almi Tankers, needed fuel in Corpus Christi; Almi Tankers contracted with fuel trader O.W. Bunker Malta, which identified Valero as the physical supplier.
- O.W. Malta issued a sales order naming Valero as supplier; O.W. USA contracted with Valero; Valero coordinated delivery with the Vessel, the crew tested and accepted the fuel, and an officer signed the bunkering certificate.
- After delivery, O.W. Bunker entities filed bankruptcy; Valero was not paid and sued in rem against the Vessel seeking a maritime lien for the unpaid bunkers.
- District court granted summary judgment for Verna (the vessel owner); Valero appealed, arguing it provided necessaries "on the order of the owner or a person authorized by the owner."
- The Fifth Circuit analyzed CIMLA's requirement that necessaries be supplied on order of the owner or a statutorily authorized person and applied its Lake Charles precedent governing subcontractor vs. middle-man scenarios.
Issues
| Issue | Plaintiff's Argument (Valero) | Defendant's Argument (Verna) | Held |
|---|---|---|---|
| Whether Valero is entitled to a maritime lien under CIMLA for bunkers it supplied | Valero: Provided necessaries directly to the Vessel, accepted by crew, and owner/agent knew of and accepted Valero pre-delivery — so lien attaches | Verna: Valero supplied at O.W.'s request; O.W. (a trader) is not a statutorily authorized person; mere awareness by owner/agent is insufficient | Court: No lien — Valero supplied at trader's direction and did not show an authorized person controlled selection or performance |
| Whether awareness/acceptance by owner/agent alone creates authorization under CIMLA | Valero: Owner/agent’s awareness, inspection, testing, and signed delivery certificate show acceptance/authorization | Verna: Awareness and acceptance do not equal authority to bind the vessel absent evidence owner controlled selection/performance | Court: Mere awareness/acceptance is insufficient; stricti juris applies; no evidence owner controlled selection/performance |
| Whether Ken Lucky (Ninth Circuit) controls to permit a lien here | Valero: Ken Lucky allowed a lien when order originated from an entity with authority to bind the ship | Verna: In Ken Lucky the order came from an entity with authority; here Valero dealt with O.W., and no agency between O.W. and owner is shown | Court: Ken Lucky inapplicable because no concession or evidence that O.W. was authorized to bind the ship |
| Whether following Eleventh Circuit decisions (e.g., Barcliff) would require a different outcome | Valero: Some Eleventh Circuit cases allow liens where owner was sufficiently involved/aware | Verna: Barcliff and Galehead support denying liens where supplier acted on trader's order, not owner's | Court: Follows Barcliff and other circuit decisions holding suppliers in O.W.-style chains lack authority to claim liens |
Key Cases Cited
- Lake Charles Stevedores, Inc. v. Professor Vladimir Popov MV, 199 F.3d 220 (5th Cir. 1999) (establishes subcontractor rule: subcontractors generally lack liens unless an entity authorized to bind the vessel controlled selection or performance)
- Marine Fuel Supply & Towing, Inc. v. M/V Ken Lucky, 869 F.2d 473 (9th Cir. 1988) (physical supplier had lien where order originated from an entity with authority to bind the vessel)
- Barcliff, LLC v. M/V Deep Blue, 876 F.3d 1063 (11th Cir. 2017) (physical supplier of bunkers acting at trader’s order was not entitled to a lien where supplier acted on O.W. USA’s order, not the owner’s)
- Galehead, Inc. v. M/V Anglia, 183 F.3d 1242 (11th Cir. 1999) (supplier providing bunkers at a trader’s request did not supply on order of an owner or authorized person)
- Atlantic & Gulf Stevedores, Inc. v. M/V Grand Loyalty, 608 F.2d 197 (5th Cir. 1979) (discusses scope of maritime lien statutes and officer authority; referenced in historical context)