Williams v. Wilmington Trust
DMC Category Rating: Developed
Case Note Submitted by Alan M. Weigel, an attorney with the firm of Healy & Baillie, LLP, in New York. Healy & Baillie are the International Contributors to the website for the United States
The vessel was nominally held in trust by defendant Wilmington Trust Co. ("Wilmington"). Wilmington held title to the ship in order to qualify it for certain subsidies available solely to U.S.-flagged vessels. Wilmington then bareboat chartered the vessel to American Ship Management ("ASM"), which exercised control over the ship and managed its daily operations. ASM time chartered the vessel back to the foreign beneficiaries of Wilmington.
Williams alleged that he demanded and did not receive timely payment for his work aboard he vessel, and that therefore, as nominal owner, Wilmington was liable for the wage penalty under 46 U.S.C. §§ 10313 and 10504.
The seaman’s wage statute provides that: "The master shall pay a seaman the balance of wages due the seaman within 2 days after . . . the seaman is discharged . . . When payment is not made without sufficient cause, the master or owner shall pay to the seaman 2 days’ wages for each day payment is delayed." 46 U. S. C. § 10504. These provisions apply to "coastwise," or domestic voyages. An essentially identical provision applies to international voyages. 46 U. S. C. § 10313.
Wilmington moved to dismiss, arguing that it was not an owner. The magistrate judge denied the motion. The United States District Court for the Southern District of New York granted Wilmington summary judgment. The parties appealed.
The Second Circuit recognized that, in the law of admiralty, for most purposes a bareboat charterer is to be treated as the owner, generally called the owner pro hac vice [roughly translated "for this purpose" – Editor] The owner pro hac vice consequently becomes subject to the duties and responsibilities of ownership. The court presumed that Congress, when it acted in 1983, was cognizant of this interpretive background. Thus, the court held that where a putative owner of a vessel enters into a bareboat charter sufficient to render another entity the owner pro hac vice of the vessel, it is the owner pro hac vice that is liable for a wage penalty.
The Second Circuit found that there was no real dispute that ASM was "in complete and exclusive possession, command, and navigation" of the vessel. The court concluded that as the nominal owner of the vessel, Wilmington, had given over control and operation of the vessel to another entity, such that the Wilmington was not an "owner" subject to penalties under the seaman’s wage statutes.
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