Government Contracts District Court Asserted Maritime Jurisdiction over Dredging Contract
Monday, June 22, 2020

District Court Asserted Maritime Jurisdiction over Dredging Contract

By Government Contracts Editorial Staff

A motion to dismiss a breach claim for the termination of a dredging contract was denied because the District Court of Massachusetts determined substantial portions of the contract were dedicated to improving the navigability of a waterway, which facilitated maritime commerce and gave rise to the court’s maritime jurisdiction. The parties disputed whether the claim arose from a construction contract subject to the Court of Federal Claims’ exclusive jurisdiction under 28 USC 1491(a)(1) or a maritime contract subject to the district courts’ admiralty jurisdiction under the Contract Disputes Act (41 USC 7102(d)). Maritime jurisdiction hinges on determining whether the “principal objective of [the] contract is maritime commerce,” which requires a “conceptual rather than spatial” approach because maritime commerce is “often inseparable from some land-based obligations” (Norfolk S. Ry. Co. v. Kirby, 543 US 14). Although the CFC and its predecessor, the United States Claims Court, have exercised jurisdiction over government dredging contract disputes since 1857, the district court concluded no court had squarely considered whether a government dredging contract is a maritime contract.

Contract’s Purpose. Turning to the contract at issue, the court found its undisputed purpose was to dredge a navigable waterway and then deposit sand on a beach. Further, courts have held that dredging a navigable waterway is traditionally a maritime activity that facilitates maritime commerce, giving rise to maritime jurisdiction. The government noted that approximately one-quarter to one-third of the contract period was allocated for grading the beach, a “significant period” was to be spent constructing a temporary land-borne pipeline, and much of the equipment required to complete the contract was not vessel-borne. However, the government provided no legal support as to why these considerations outweighed the contract’s plain language and compensation scheme, and it conceded that less time was allocated to grading the beach than to dredging the sediment. (J-Way Southern, Inc. v. U.S., DC Mass, 64 CCF ¶81,920)

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