Lead Opinion
This case concerns whether the prevailing party in a dispute arising from a dredging contract is entitled to collect attorneys’ fees. Misener Marine Construction, Inc. subcontracted Norfolk Dredging Company to dredge sections of the Savannah River, a navigable waterway, as part of a larger construction project at the Port of Savannah (the “Port”). After problems at the construction site Misener sued Norfolk, and Norfolk counterclaimed. Norfolk
I. FACTS AND PROCEDURAL HISTORY
The Port of Savannah is the “fourth-largest container port in the United States and the largest single-terminal operation in North America.”
Norfolk started the dredging work on March 23, 2004 and completed it within the time specified by the contract. The area in which Norfolk was dredging was close to two temporary mooring dolphins.
Misener’s complaint stated that the lawsuit was filed pursuant to the district court’s maritime jurisdiction. Norfolk answered Misener’s complaint and counterclaimed for payment for the dredging work, interest, and attorneys’ fees pursuant to the GPPA. In pleading its counterclaim Norfolk stated that the district court had jurisdiction, but did not explicitly state the basis for jurisdiction.
On January 6, 2006, the district court entered summary judgment for Norfolk, granting Norfolk attorneys’ fees pursuant to the GPPA, and reserving ruling on the amount of attorneys’ fees to be awarded. The summary judgment order held that this Court’s precedent allowed state laws dealing with attorneys’ fees to supplement maritime law.
A new district court judge was subsequently assigned to the case. In determining the amount of attorneys’ fees Norfolk was entitled to recover, the new judge found that the GPPA conflicted with a general principle of maritime law, that each party bears its own attorneys’ fees. The district court entered an order denying Norfolk attorneys’ fees under the GPPA. Norfolk appeals this order.
II. STANDARD OF REVIEW
We review the district court’s application of maritime law de novo. All Underwriters v. Weisberg,
III. DISCUSSION
Norfolk presents several arguments all aimed at recovery of attorneys’ fees pursuant to the GPPA. First, Norfolk argues that this case arises under diversity jurisdiction and Georgia law, i.e. the GPPA, should apply. The dredging contract at issue, however, makes this case one of maritime jurisdiction and thus the district court properly applied substantive maritime law. Second, Norfolk contends that our precedent supports the application of the GPPA to dredging cases. This argument is based on a misinterpretation of our precedent and has no merit. Third, Norfolk argues that the GPPA can supplement substantive maritime law because the bar against shifting attorneys’ fees is not a characteristic feature of maritime law and the GPPA will not contravene the uniformity interests of maritime law. We find
A. Substantive Maritime Law Controls This Case
The federal courts have primary jurisdiction of maritime issues.
The primary objective of the contract between Norfolk and Misener was dredging a navigable waterway in a port that services international and national commerce. There is no doubt that the work contracted for and performed by Norfolk had a direct effect on maritime services and commerce. Further, the Supreme Court has previously held that dredging is traditionally a maritime activity.
“With admiralty jurisdiction comes the application of substantive admiralty
B. Maritime Law Generally Requires That Each Party Bear Its Own Attorneys’ Fees
The law in this Circuit regarding attorneys’ fees in maritime disputes is clear.
Norfolk asserts that the first exception applies because the GPPA, a state
The dredging contract did not contain a provision providing for the indemnification of attorneys’ fees. Norfolk was a sophisticated party who was, or should have been, well aware of the law of our Circuit concerning attorneys’ fees in maritime cases. Furthermore, Norfolk drafted the contract.
C. The GPPA Cannot Supplement Substantive Maritime Law
In the alternative, Norfolk asks this Court to incorporate the GPPA into substantive maritime law. “[W]hen neither statutory nor judicially created maritime principles provide an answer to a specific legal question, courts may apply state law provided that the application of state law does not frustrate national interests in having uniformity in admiralty law.” Coastal Fuels,
D. The American Rule is a Characteristic Feature of Substantive Maritime Law
The principle that each party should bear its own attorneys’ fees, the American Rule,
In American Dredging the Court found that forum non conveniens was not a characteristic feature of maritime law because it “neither originated in admiralty nor has exclusive application there. To the contrary, it is and has long been a doctrine of general application.”
The GPPA is distinguishable from the Supreme Court’s holding in American Dredging. First, the GPPA is a substantive law as opposed to forum non conveniens, which is a procedural rule. Second, in American Dredging there was not a firmly established principle regarding forum non conveniens in maritime cases. In contrast, it has long been an established rule in maritime law that each party generally bears the costs of its own attorneys’ fees.
We hold that the consistent and continued application of the American Rule to maritime disputes has established the American Rule as a characteristic feature of substantive maritime law. Although we recognize the position of those who argue that the American Rule is not a characteristic feature of maritime law, the long developed precedent of this Circuit and others cannot be so easily set aside. Therefore, the GPPA’s entitlement to attorneys’ fees is in direct conflict with this principle of substantive maritime law. Thus, the GPPA cannot be incorporated into substantive maritime law.
TV. CONCLUSION
We find that the dredging contract between Norfolk and Misener is governed by substantive maritime law. Further, the rule that each party bear its own attorneys’ fees is a characteristic feature of substantive maritime law. Norfolk freely drafted the contract but chose not to contract out of this general rule. We will not allow Norfolk to alter the terms of its contract through the retroactive injection of a state law that contravenes a principle of substantive maritime law. We affirm the order of the district court denying Norfolk’s request for attorneys’ fees.
AFFIRMED.
Notes
. The GPPA is a chapter of the Georgia Code that regulates construction contracts and payments between contractors and subcontractors. O.C.G.A. § 13-11-1 et seq. Section 8 of the GPPA provides for the recovery of attorneys' fees by a prevailing party. O.C.G.A. § 13-11-8 (“In any action to enforce a claim under this chapter, the prevailing party is entitled to recover a reasonable fee for the services of its attorney including but not limited to trial and appeal and arbitration, in an amount to be determined by the court or the arbitrators, as the case may be.'').
. The terms "maritime law” and "admiralty law” are used interchangeably throughout our opinion.
. Georgia Ports Authority, http://www. gaports.com/Default.aspx?tabid=122 (last visited Nov. 24, 2009).
. Savannah Economic Development Authority, http://seda.org (follow "Industries & Companies” hyperlink; then follow "Port Related/ Distribution” hyperlink) (last visited Nov. 24, 2009)
. Mooring dolphins are man-made structures that rise above the water and are used for various purposes such as securing vessels, supporting warning signs, or protecting nearby piers.
. Norfolk asserts on appeal that it filed its counterclaim under diversity jurisdiction, but
. The order cited three opinions to support this proposition: All Underwriters v. Weisberg,
. We have jurisdiction over final orders of the district courts pursuant to 28 U.S.C. § 1291.
. "The judicial Power shall extend to all Cases ... of admiralty and maritime Jurisdiction.” U.S. Const, art. Ill, § 2, cl. 1. Congress codified this Constitutional grant of jurisdiction as follows: "The 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.” 28 U.S.C. § 1333.
. See Stewart v. Dutra Constr. Co.,
. Norfolk has argued that they pleaded diversity jurisdiction in their counterclaim, thus Georgia law and the GPPA should apply. Even if this case were filed under diversity, substantive maritime law would still apply. See Pope & Talbot, Inc. v. Hawn,
. Norfolk futilely cites United States ex. rel. Garrett v. Midwest Construction Co.,
. Our decision in All Underwriters v. Weisberg,
. See Noritake Co., Inc. v. M/V Hellenic Champion,
. "The traditional rule of construction in admiralty cases is to 'construe the contract language most strongly against the drafter.’ ” Edward Leasing Corp. v. Uhlig & Assocs., Inc.,
. The application of this rule has not been completely clear and consistent. "It would be idle to pretend that the line separating permissible from impermissible state regulation is readily discernible in our admiralty jurisprudence, or indeed is even entirely consistent within our admiralty jurisprudence.” Am. Dredging Co. v. Miller,
. The idea that each party should bear its own attorneys' fees is referred to as the American Rule in contrast to the English standard wherein the prevailing party is awarded attorneys' fees. See Panola Land Buying Ass’n v. Clark,
. See Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,
. In Hughes v. Foster Wheeler Co.,
. See supra Section III.B.; see also Arcambel v. Wiseman,
Concurrence Opinion
concurring:
While I concur in the result, I write separately because I would analyze differently the issue of whether the GPPA can supplement admiralty law. I would hold application of the GPPA would disrupt the proper harmony and uniformity of admiralty law, and thus I would not reach the issue of whether the American Rule is a characteristic feature of admiralty law.
In American Dredging, the Court found a state law rejecting forum non conveniens did not disrupt the uniformity of maritime law because the doctrine “is procedural rather than substantive, and it is most unlikely to produce uniform results.”
. The Court in American Dredging states the uniformity analysis is not limited to the state law's impact on maritime commerce. Id. at 453 n. 3,
. Norfolk argues the exceptions to the American Rule demonstrate that maritime law already tolerates a lack of uniformity in the provision of attorneys' fees. These exceptions, however, are consistently applied on a national level. The American Rule thus yields consistent and predictable results despite its limited exceptions.
