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Nederland Shipping Corp. v. United States

3rd Circuit

November 16, 2021

This case is about the Reefer. No, not that kind of Reefer. The shipping vessel M/V Nederland Reefer was held off the coast of Delaware for more than two weeks while its perishable cargo went bad. The owners of the Reefer agreed to post a $1 million surety bond to cover any potential fines regarding “an illegal discharge of bilge water” while waiting at the port. But the vessel was detained longer, and its goods perished. Its owners sued in District Court, but the Court dismissed the complaint, holding that the Court lacked subject matter jurisdiction and that the claims had to be brought in the United States Court of Federal Claims. The Third Circuit reversed, holding that the agreement was maritime in nature and thus invoked the District Court’s admiralty jurisdiction. The Third Circuit then held that Congress explicitly waived sovereign immunity for damages under the Act to Prevent Pollution from Ships.

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