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Appellate litigation is generally the final throw of the dice, so to speak, in U.S. trade regulatory disputes. Litigants, therefore, should carefully consider both the substance and presentation of their appellate arguments. To illuminate what may seem like an obvious point, this note focuses on two recent decisions of the U.S. Court of Appeals for the Federal Circuit (CAFC).

The CAFC is almost invariably the court of last resort in appeals from decisions by the U.S. trade enforcement agencies – the Department of Commerce and the International Trade Commission. The CAFC tends to exercise a large degree of deference to the decisions of the agencies it reviews. The U.S. Supreme Court in Chevron instructed courts to apply a deferential standard of review toward decisions of administrative agencies – an instruction that the CAFC has taken very seriously, peppering its opinions with statements regarding the “tremendous deference” afforded to Commerce,[1] and the agencies’ “broad discretion”.[2] These statements would appear to bode poorly for parties seeking to overturn such determinations.

There are sources of authority, however, that the CAFC appears willing to evaluate with less deference toward the agencies’ interpretations. One such source is obvious – namely, the statutory texts enacted by Congress to govern trade remedy proceedings – although as I discussed in a recent note, even this source is subject to conflicting modes of interpretation by the Court of Appeals. Intriguingly, another external source of authority for which the CAFC has been willing to employ a searching inquiry is the statistical analytics of numeric data. In two recent decisions, the CAFC has undertaken a probing review of statistical concepts, which resulted in skepticism toward the Commerce Department’s practice.

A closer look at the Court’s treatment of these two categories of sources is worthwhile for parties preparing their appellate strategy.

The Court’s treatment of statutory text has not been linear. The Court has, on occasion, taken a bold position by parsing the statutory text, but then, when blowback erupted and the broad implications of its position became apparent, it has retreated from its interpretation without formally overruling it. One example of this dynamic involved the International Trade Commission’s analysis of causation – i.e., whether the material injury felt by the U.S. industry was “by reason of” the imports subject to an investigation. In Gerald Metals, Inc. v. United States, the CAFC ruled that, at least in an investigation involving a fungible commodity product, the ITC had to consider the possibility that the presence of fairly-traded imports in the U.S. market disrupted the causal link between the subject imports and the injury felt by the U.S. industry.[3] The Court reiterated that ruling in subsequent cases involving commodity products, such as Caribbean Ispat Ltd. v. United States,[4] and Bratsk Aluminum Smelter v. United States, in which it held that “the Commission is required . . . to directly address whether non-subject imports would have replaced the subject imports without any beneficial effect on domestic producers.”[5]

This series of appellate decisions caused an uproar in the trade remedies practice, and the ITC added a step to its injury inquiry, while protesting that it was compelled to do so by Court directive, unmoored from the statutory text. The Court subsequently retreated from the potential breadth of Gerald and Bratsk, in Mittal Steel Point Lisas Ltd. v. United States.[6] There the Court explained that it had not intended to reorient the ITC’s injury inquiry toward the future effectiveness of a proposed antidumping order; rather, it just meant that the ITC must consider, in a market involving a commodity product in which non-subject merchandise was present, whether injury could be attributed to the subject merchandise, as part of its “but for” causation analysis.

Another example of judicial sally-and-retreat is seen in Dongbu Steel v. United States,[7] and JTEKT Corp. v. United States,[8] in the context of a “targeted dumping” / “zeroing” dispute. The Court in those cases wondered how Commerce could interpret a single statutory text, 19 U.S.C. 1677(35), to mean one thing in antidumping investigations and something different in annual administrative reviews. These decisions released a flood of uncertainty among parties to antidumping proceedings as to whether Commerce’s express abandonment of zeroing in investigations (in response to several unfavorable WTO decisions), now compelled the abandonment of that practice in reviews as well. Commerce, however, persevered in applying zeroing in administrative reviews, and explained how a statutory provision could tolerate different meanings depending on the situation. The Court retreated from the implications of Dongbu and JTEKT, and affirmed Commerce’s explanation in Union Steel v. United States.[9]

Recent cases involving statistics, however, demonstrate that the Court of Appeals does not always retreat after its sally, even in important but highly technical applications of the antidumping law. An example involves, again, Commerce’s “targeted dumping” methodology. The Court has affirmed several major aspects of that methodology (despite a series of unfavorable decisions by the WTO Appellate Body), concerning issues such as Commerce’s use of the “average-to-transaction” comparison method in annual administrative reviews even though the statute only authorizes that comparison method in investigations,[10] and Commerce’s reliance on the difference in the magnitude of margins between the average-to-average and average-to-transaction comparison methods to satisfy the statutory test whether the former method can “adequately account for” any targeted dumping that is found to exist.[11]

The Court’s deference to Commerce’s “targeted dumping” methodology appears to have reached its limit, however, when it came to issues regarding the use of statistics. In recent years, Commerce has applied a statistical test, known as “Cohen’s d”, to determine whether a foreign exporter has engaged in “targeted dumping” – i.e., a pattern of export sales that differ significantly among purchasers, geographic regions, or time periods. Put simply, Commerce applies the Cohen’s d test by calculating the difference between the means of the sales prices of the test group and the comparisons group of export sales, and then dividing that difference by the simple average of the two groups’ standard deviations.[12]

Within the past nine months, the Court of Appeals has twice issued opinions rejecting various aspects of Commerce’s methodology. The CAFC found that Commerce’s methodology, although derived from a statistical test to determine whether pricing differences were significant, had deviated from important premises that were necessary to ensure that the statistical test would generate meaningful results. In Stupp Corp. v. United States, the Court reviewed the literature on Cohen’s d, and spotlighted “Commerce’s application of the Cohen’s d test to data that do not satisfy the assumptions on which the test is based.”[13] The Court identified three characteristics of export price data that would render the test results suspect – namely, where the data groups being compared were small, were not normally distributed (i.e., not approximating the shape of a bell curve), and had disparate variances – and noted that Commerce applied the test without evaluating the data to determine the presence of those characteristics.

And just last week, in Mid Continent Steel & Wire, Inc. v. United States,[14] the Court found that the use of a simple average, rather than a weighted average, in the denominator of the Cohen’s d ratio could distort the results, particularly where the groups of sales being compared were of unequal size. The Court relied on statistics-based reasoning to reject Commerce’s defenses of its methodology, and concluded that:

Commerce's job is not to follow a statistical test as explained in published literature for its own sake, but to implement the statutory mandate to determine when prices of certain groups “differ significantly.” In implementing a statutory mandate, an agency is not duty-bound to follow published literature . . . . But here Commerce embraced the Cohen's d statistics measure and relied on the literature for that measure in making its statutory significance assessment . . . .[15]

As a practical matter, Stupp and Mid Continent may have a significant impact on antidumping proceedings, because Commerce applies the targeted dumping (or “differential pricing”) analysis in almost every case in which dumping margins are calculated.[16] The machinery by which Commerce makes its targeted dumping determinations is detailed and complex, so revisions may be complex and far-ranging. Nonetheless, the Court in Mid Continent did not appear to be discouraged from pursuing its logic regardless where it may have led. It linked its statistics-based analysis to the underlying legal standard of judicial review, stating:

. . . Commerce needs a reasonable justification for departing from what the acknowledged literature teaches about Cohen's d. It has departed from those teachings about how to calculate the denominator of Cohen's d, specifically in deciding to use simple averaging when the groups differ in size. And its explanations for doing so fail to meet the reasonableness threshold (a deferential one, in recognition of expertise) for the reasons we have set forth.[17]

Despite the nod to the “deferential” standard of review, this statement reveals a willingness on the part of at least some of the Judges on the Court of Appeals to engage in a rigorous consideration of statistics issues, and are willing to be skeptical of Commerce’s efforts to simplify the application of statistics in discharging its statutory obligations.

The focus of arguments presented to the Court, and the manner of their presentation, do indeed matter.

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Through his 38 years of experience in the international trade regulatory field, Neil Ellis has litigated numerous cases involving the U.S. trade laws before the administrative agencies, U.S. courts, and in WTO dispute settlement proceedings. Please contact us at with questions that you may have regarding trade litigation strategy.

[1] Smith-Corona Group v. United States, 713 F.2d 1568 (Fed. Cir. 1983).

[2] Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. Amer. Cast Iron Pipe Co., 5 F.4th 1367 (Fed. Cir. 2021).

[3] 132 F.3d 716 (Fed. Cir. 1997).

[4] 450 F.3d 1336 (Fed. Cir. 2006).

[5] 444 F.3d 1369, 1375 (Fed. Cir. 2006).

[6] 542 F.3d 867 (Fed. Cir. 2008).

[7] 635 F.3d 1363 (Fed. Cir. 2011).

[8] 642 F.3d 1378 (Fed. Cir. 2011).

[9] 713 F.3d 1101 (Fed. Cir. 2013).

[10] JBF RAK LLC v. United States, 790 F.3d 1358 (Fed. Cir. 2015).

[11] Apex Frozen Foods Pvt. Ltd. v. United States, 862 F.3d 1322 (Fed. Cir. 2017).

[12] The calculation is more complex than this, but it will suffice for purposes of this note.

[13] 5 F.4th 1341, 1357 (Fed. Cir. 2021).

[14] 2022 U.S. App. LEXIS 10767 (Fed. Cir. April 21, 2022) (reaffirming and expanding on its decision in a prior iteration of the same appeal, 940 F.3d 662 (Fed. Cir. 2019)).

[15] 2022 U.S. App. LEXIS 10767, at *32.

[16] Indeed, the Court of Appeals recently remanded another case in light of Stupp. See Nexteel Co. v. United States, 28 F.4th 1226 (Fed. Cir. March 11, 2022).

[17] 2022 U.S. App. LEXIS 10767, at *33 (emphasis added).

Lawyers spend lifetimes interpreting words. One type of such interpretation addresses the meaning of legislative texts governing agency decision-making, and a sub-type interprets the meaning of silence in those texts.[1] Silence can be significant. In fact, it can be outcome-determinative, particularly in situations involving asymmetry – i.e., when the text in one statutory provision that authorizes administrative action is counterbalanced by silence in another.

In U.S. trade regulatory cases, there has been a long history of cases involving the interpretation of the statutory texts and the meaning of statutory silence. This debate is currently active before the U.S. Court of Appeals for the Federal Circuit in cases interpreting the amendments to the anti-dumping statute enacted by Congress in 2015 that authorize the U.S. Department of Commerce to address “particular market situations” (“PMS”).

The statutory amendments permit Commerce to adjust the calculation of costs incurred by foreign exporters in manufacturing the merchandise that is subject to an anti-dumping proceeding, if a PMS exists “such that the costs of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade”. 19 U.S.C. § 1677b(e). This adjustment is authorized in the calculation of “constructed value” – i.e., in constructing the “normal value” to compare to export prices to determine the dumping margin in cases where home market sales prices have been rejected because they are below the “cost of production”. However, Congress enacted no provision authorizing a PMS adjustment for the purpose of calculating the cost of production in the first place. 19 U.S.C. § 1677b(b).[2]

Commerce interpreted the statutory silence as allowing it to consider whether a PMS exists and to apply cost adjustments in calculating the cost of production as well as the constructed value of the subject merchandise. In other words, it concluded that the lack of express language regarding PMS in the cost of production statutory provision did not entail a prohibition but rather a gap that the agency had the authority to fill. This logic was challenged by the foreign exporters in several cases, and the U.S. Court of International Trade (“CIT”) consistently rejected Commerce’s statutory interpretation.[3]

The issue recently came before the Court of Appeals in Hyundai Steel Co. v. United States, 19 F. 4th 1346 (Fed. Cir. 2021), and the Court affirmed the CIT’s rejection of Commerce’s interpretation. Under the Supreme Court’s long-established Chevron framework for judicial review of agency statutory interpretation, the first step is to determine whether a statute expressly addresses an issue, in which case the agency and the reviewing court must give effect to that “unambiguously expressed intent”. Id., 19 F. 4th at 1352 (quoting Chevron, 467 U.S. at 842). If not, then, in the second step of the analysis, the court must determine whether the agency has adopted a “permissible construction” of the statute.

In Hyundai Steel, the Court of Appeals reasoned that the express authorization for Commerce to consider PMS in the statutory provision governing constructed value but its absence from the statutory provision on cost of production did not create a “gap” that could be filled by Commerce. Rather, the legislative silence indicated a lack of authority to engage in a PMS analysis in calculating cost of production. Thus, this question was resolved under step one of the Chevron analysis (i.e., the express statutory language resolved the question), and the silence did not create an ambiguity that required a move to step two.

But why wasn’t the lack of PMS authority in the statutory cost of production provision a “silence” that required the move to Chevron step two and judicial deference to the agency’s reasoning? The Court’s response to this question was straightforward: “Because Congress amended section 1677b(e) to allow for a PMS adjustment, but did not amend section 1677b(b), it is reasonable to infer that Congress intended for the PMS adjustment to be available for calculations of constructed value, but not for calculations of the cost of production.” Hyundai Steel, 19 F. 4th at 1353. It noted that a failure expressly to prohibit an action is not the same as an authorization to take that action. The Court rejected petitioner’s argument that this logic was an “improper application” of the old canon of textual construction, expressio unius est exclusio alterius (i.e., the express mention of one thing impliedly excludes others). Id., 19 F. 4th at 1353 n.9.[4]

Whatever the analytic framework, it is not surprising that, considering the complexity and level of detail in the U.S. antidumping law, issues of textual silence and asymmetry have arisen on a number of occasions. And the judicial decisions do not appear to have articulated consistent principles to resolve those issues.

Several decisions declined to apply the “expressio unius” logic in interpreting statutory silence. For example, in one of the Federal Circuit’s earliest trade decisions after it was restructured in 1982, the Court affirmed Commerce’s policy of adjusting “foreign market value” (the pre-URAA term for normal value) to account for home market selling expenses in certain situations, even though there was no statutory provision granting authority to do so. This adjustment was perceived as necessary to counterbalance the adjustment to U.S. price for the same types of expenses, which was expressly authorized by statute. Smith-Corona Group v. United States, 713 F. 2d 1568 (Fed. Cir. 1983). The Court recognized an expansive grant of authority to Commerce to undertake such adjustments in fulfillment of the underlying statutory objective of achieving a “fair comparison”. Id., 713 F. 2d at 1578-79.

The same sort of interpretation of statutory silence as a gap to be filled, rather than as a prohibition against agency action, is found in JBF RAK LLC v. United States, 790 F. 3d 1358 (Fed. Cir. 2015). Here, the foreign exporter challenged Commerce’s use of its “targeted dumping” analysis and the “average-to-transaction” comparison methodology in annual administrative reviews even though the statute only authorized that methodology in investigations. The Court of Appeals concluded that the expressio unius argument “fail{ed}”. Id., 790 F. 3d at 1363. The statute did not specify the comparison methodology to be used in annual reviews, and the silence in this instance was interpreted as a gap, not a prohibition. Therefore, the Court concluded that it must turn to step 2 of the Chevron analysis to determine if Commerce’s interpretation of the statute was permissible, and the Court found that it was, because no source contradicted Commerce’s authority to use the same comparison methodology in reviews as in investigations.

But the Court of Appeals has also regularly applied the converse reasoning. For example, in Zenith Electronics Corp. v. United States, 988 F. 2d 1573 (Fed. Cir. 1993), the Court rejected Commerce’s attempt to address the asymmetry in the (pre-URAA) statutory text regarding the adjustment to export price for taxes that were collected on sales in the home country but forgiven on exports to the United States, by adding an ameliorative adjustment to foreign market value. The Court explained that the sole method authorized by the statute to address taxes forgiven on export was through an adjustment to export price, and it noted that “{t}he statute is not silent about the disparity created” between export price and foreign market value merely because it expressly provided only for the former. Id., 988 F. 2d at 1582.

Likewise, in FAG Italia S.p.A. v. United States, 291 F. 3d 806 (Fed. Cir. 2002), the statute authorized Commerce to conduct “duty absorption” inquiries only in the second and fourth years after an antidumping duty order was published. Commerce argued that it could conduct such inquiries in additional years, based on the absence of an explicit prohibition and silence in the legislative history. The Court of Appeals rejected this argument, stating that “no case of which we are aware holds that an administrative agency has authority to fill gaps in a statute that exist because of the absence of statutory authority.” Id. at 816.[5]

Can the two lines of analysis be reconciled? When does the absence of statutory text signify a gap that may be filled by Commerce, subject to a deferential standard of judicial review under Chevron step two, and when does it signify, under Chevron step one, that Congress withheld authority from Commerce to undertake the proposed action?

A recent effort to articulate the distinction was offered in the appeal of the Canadian Lumber countervailing duty expedited review, in which the CIT explained that “{s}tatutory silence regarding a specific issue is not . . . the same as the absence of statutory authority for an agency activity, in this case, CVD expedited reviews.”[6] The CIT quoted an earlier decision which, in turn, “characterized FAG Italia as drawing ‘a distinction between ambiguous statutory language that creates a “gap” in the statute that an agency could reasonably fill and a silence in the statute from which an agency cannot create authority’.”[7]

This is a valiant effort to distinguish a “gap” from “silence”. And the outcomes in the individual cases discussed above may have been correct in terms of resolving the specific issues that confronted the courts. But for the purpose of establishing a coherent framework to analyze this fundamental issue as it arises in future trade litigation, the job remains unfinished.

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Through his 38 years of experience in the international trade regulatory field, Neil Ellis has worked extensively in cases interpreting the text of the U.S. trade laws. Please contact us at with questions that you may have regarding those laws.


[1] The U.S. Supreme Court has recently expressed a willingness to rethink fundamental issues regarding Congressional delegation of authority to administrative agencies. See, e.g., AMG Capital Mgt LLC v. FTC, 141 S. Ct. 1341 (2021); West Va. v. EPA, S. Ct. No. 20-1530 (cert. granted). As a result, predictions abound that well-established principles of judicial review of agency decision-making, such as found in Chevron U.S.A. v. Nat. Res. Def. Council, 467 U.S. 837 (1984), may be subject to re-evaluation.

[2] The term “particular market situation” is found elsewhere in the antidumping statute. Thus, sales in the “ordinary course of trade” are defined to exclude sales for which a PMS is found to “prevent{} a proper comparison” between home market and export prices. 19 U.S.C. § 1677(15). See also 19 U.S.C. § 1677b(a)(1)(B)(ii)(III) (authorizing Commerce to use third country prices as the basis for normal value to compare to U.S. prices, unless it finds that a PMS in the third country “prevents a proper comparison”); 19 U.S.C. § 1677b(a)(1)(C)(iii) (authorizing Commerce to use third country prices for normal value when a PMS in the exporting country “does not permit a proper comparison” with the export prices).

[3] See, e.g., Saha Thai Steel Pipe Pub. Co. v. United States, 422 F. Supp. 3d 1363 (Ct. Int’l Trade 2019); Borusan Mannesmann Boru Sanayi ve Ticaret A.Ş. v. United States, 426 F. Supp. 3d 1395 (Ct. Int’l Trade 2020); Dong-A Steel Co. v. United States, 475 F. Supp. 3d 1317 (Ct. Int’l Trade 2020).

[4] The petitioner in Hyundai Steel has requested rehearing en banc by the full Court of Appeals, which is pending as of the date of this note. See Appellant’s Combined Petition for Rehearing and Rehearing En Banc, in Hyundai Steel Company v. United States, No. 2021-1748 (filed Feb. 8, 2022).

[5] The Court did the same with regard to Commerce’s adjustment to foreign market value for pre-sale home market freight despite the silence of the (pre-URAA) statute regarding that expense item and the express authorization only for the deduction of pre-sale freight on export sales. Commerce relied on “its inherent power as the administering authority to fill ‘gaps’ in the statutory framework in reasonable ways consistent with the objectives of the antidumping law.” Ad Hoc Committee v. United States, 13 F. 3d 398, 400-01 (Fed. Cir. 1994). The Court, however, rejected Commerce’s argument that the statutory silence comprised a “gap” that Commerce could fill, even if the asymmetry created a perceived unfairness in the dumping margin calculation. On the latter point the Court struggled somewhat to distinguish the precedent in Smith-Corona.

[6] COALITION v. United States, 483 F. Supp. 3d 1253, 1266 (Ct. Int’l Trade 2021) (“COALITION”) (finding that the lack of express statutory authority for Commerce to conduct a countervailing duty expedited review did not create a gap that Commerce could fill, but rather signified a lack of authority for Commerce to conduct such reviews). This case is currently on appeal to the Federal Circuit.

[7] COALITION, 483 F. Supp. 3d at 1266 n.22 (quoting Marine Harvest (Chile) S.A. v. United States, 244 F. Supp. 2d 1364, 1379 (Ct. Int’l Trade 2002)).

Questions regarding U.S. federal courts’ maritime jurisdiction and the sources of maritime law have bedeviled practitioners since the Founding of the Republic. While such questions are often handled routinely, in some cases interesting (meaning, unwanted) disputes arise regarding the choice of law and/or the choice of forum. These disputes arise due to a shifting kaleidoscope of factors: the uncertain boundaries of maritime law, the multiple sources of law (the U.S. Constitution, federal statutes, common law, state law, treaties, other international sources, and even commercial practice), the multiple venues in which maritime disputes may be heard, and the American federal structure with dual sources of sovereignty (federal and state).

The practical effect of the kaleidoscope of jurisdictional factors can be seen in two recent federal court decisions. Both cases concerned the definition of the relevant claims for the purpose of determining federal admiralty jurisdiction. The first case raised the question whether and in what forum the United States itself may be sued, and the second raised the question whether an in personam lawsuit commenced in state court may be removed to federal court along with an in rem claim that was later dismissed.

The first case, Nederland Shipping Corp. v. United States, 2021 U.S. App. LEXIS 33920 (3d Cir. Nov. 16, 2021), concerned a refusal by US. Customs and Border Protection to clear a vessel for departure at the port of Wilmington, Delaware, because of suspected illegal discharge of “bilge” into the port waters. In order to permit departure, the vessel owner entered into a surety contract with the U.S. Government and posted a bond to cover its potential liability, but the vessel remained unreleased for several weeks. The vessel owner sued the U.S. Government in the U.S. District Court for the District of Delaware for losses caused by the delayed release of the vessel.

This dispute raised two questions: (i) whether the United States waived its sovereign immunity to be sued on the contract, and, if yes, then (ii) whether the federal district court was the appropriate forum to resolve the dispute, rather than the U.S. Court of Federal Claims (which is the default forum for non-tort monetary damage actions against the United States).[1] The trial court dismissed the case on the ground that the U.S. Government may be sued for money damages only in the Court of Federal Claims in the absence of an independent source of jurisdiction. The Court of Appeals, finding that there was such an independent source of jurisdiction, reversed.

The parties and the Court of Appeals all agreed that, if the surety contract was maritime in nature, then the answer to both questions would be affirmative, because: (i) the United States has waived its sovereign immunity for damage actions in admiralty (46 USC § 30903), and (ii) it is well established that the federal courts have the authority to hear “all Cases of admiralty and maritime Jurisdiction.” U.S. Const. Art. III, § 2; 28 USC § 1333. Relying extensively on the Supreme Court’s decision in Norfolk Southern Ry. Co. v. Kirby, 543 U.S. 14 (2004), the Court of Appeals proceeded to find that the surety contract was maritime in nature, rejecting the Government’s arguments to the contrary.

The Court of Appeals found that the “primary objective of the Agreement was . . . to set the {vessel} free to pursue maritime commerce” (at *13), and it found support in other cases involving “contracts that provide security in exchange for a vessel’s freedom to continue on its journey” (at *14). The Court distinguished cases in which there was no surety contract (i.e., cases that focused directly on the vessel owner’s liability for pollution) or in which the surety contract was not intended to enable release of a vessel to engage in seagoing commerce – the core principle underlying admiralty jurisdiction. Finally, the Court of Appeals noted that the surety contract, which was drafted by the U.S. Government, stated that any dispute regarding payment under the contract would be brought in federal district court, and provided that the Government’s in rem claims against the vessel would attach to the security per Federal Supplemental Admiralty Rule E. These contractual provisions evinced the parties’ view at the time it was negotiated that the contract was indeed maritime in nature.

The second decision, Finney v. Bd of Comm’s of Port of New Orleans, 2021 U.S. Dist. LEXIS 238412 (E.D. La. Dec. 14, 2021), concerned state-federal relations, particularly the question whether a maritime cause of action commenced in state court could be removed to federal court. The plaintiff, a crane operator at the Port of New Orleans who was injured while loading a vessel, filed suit in state court, claiming injuries due to negligence on the part of the Port, the owner of the vessel, and in rem against the vessel itself. The in rem claim was later voluntarily dismissed by the plaintiff. The Port defendant removed the case to federal district court under 28 USC § 1441, after which the plaintiff moved to remand back to Louisiana state court. The federal court agreed with the plaintiff and remanded the case.

The court noted that the claims fell within the federal “original jurisdiction,” so jurisdiction would certainly have vested if the case had initially been brought in federal court. However, since its first enactment in 1789, the statute establishing federal admiralty jurisdiction (28 USC § 1333(1)) has included a “saving to suitors” clause, which “sav{es} to suitors in all cases all other remedies to which they are entitled” – thus granting concurrent jurisdiction to state courts over maritime claims. This matters for removal purposes, because the – counter-intuitive but well-established – upshot is that, for removal purposes, federal district courts do not have “original jurisdiction” over maritime claims unless there is an independent basis for federal jurisdiction, such as diversity.

In rem proceedings provide such an independent basis for federal jurisdiction, because they have been recognized as exclusively federal in nature. In other words, an in rem proceeding is not an “other remedy” to which the authorization for remand would apply due to operation of the “saving to suitors” clause. Thus, it would appear that this case was properly removed to federal court. So why the remand?

This case, it should be recalled, involved both in personam claims against the Port and the vessel owner and an in rem claim against the vessel itself. There was no independent jurisdictional basis supporting removal of the in personam claims, and the court declined to exercise “supplemental jurisdiction” under 28 USC § 1367 to assert jurisdiction over the in personam claims after the in rem claim was voluntarily dismissed by the plaintiff. In fact, the court’s logic would have supported remand of the in personam claims even if the in rem claim had not been dismissed, which would have resulted in the potential awkwardness of parallel proceedings in state and federal courts arising from a single injury. That tension was avoided in this instance by the dismissal of the in rem claim, but it is clear that such a situation would be tolerated – indeed, anticipated – by the concept of dual sovereignties inherent in the United States’ federal system, as the court expressly noted.

One may ask, why does it matter whether a case proceeds in state or federal court? Or federal district court versus the Court of Federal Claims? To this question there are many answers – including perceived differences in procedures, scheduling, remedies, the degree of sympathy on the part of juries (if available) and judges, the level of skill and knowledge of the judges, etc. These are the sort of tactical objectives that lawyers love to thrash about and that, in fact, may very well influence the outcome of a dispute.

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Please contact us at for more information on developments in jurisdiction and sources of law in American maritime proceedings.

[1] The appeal also involved a separate issue whether the vessel owner could commence an action against the U.S. Government for compensation arising from unreasonable detention of the vessel, under the Act for Prevention of Pollution by Ships, 33 U.S.C. § 1904(h). That aspect of the appeal is not discussed further in this note.

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