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Subject: X, 90-34--OPINION



EXXON CORP. v. CENTRAL GULF LINES, INC.



NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports.  Readers are requested
to notify the Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print goes to
press.
SUPREME COURT OF THE UNITED STATES


No. 90-34



AEXXON CORPORATION, PETITIONER v. CENTRAL GULF LINES, INC., et al.

Bon writ of certiorari to the united states court ofappeals for the second
circuit

C[June 3, 1991]



A Justice Marshall delivered the opinion of the Court.

B This case raises the question whether admiralty jurisdiction extends to
claims arising from agency contracts.  In Minturn v. Maynard, 17 How. 477
(1855), this Court held that an agent who had advanced funds for repairs
and supplies necessary for a vessel could not bring a claim in admiralty
against the vessel's owners.  Minturn has been interpreted by some lower
courts as establishing a per se rule excluding agency contracts from
admiralty.  We now consider whether Minturn should be overruled.
CI
D This case arose over an unpaid bill for fuels acquired for the vessel,
Green Harbour ex William Hooper (Hooper).  The Hooper is owned by
respondent Central Gulf Lines, Inc. (Central Gulf) and was chartered by the
Waterman Steamship Corporation (Waterman) for use in maritime commerce.
Petitioner Exxon Corporation (Exxon) was Waterman's exclusive worldwide
supplier of gas and bunker fuel oil for some 40 years.
    In 1983, Waterman and Exxon negotiated a marine fuel requirements
contract.  Under the terms of the contract, upon request, Exxon would
supply Waterman's vessels with marine fuels when the vessels called at
ports where Exxon could supply the fuels directly.  Alternatively, in ports
where Exxon had to rely on local suppliers, Exxon would arrange for the
local supplier to provide Waterman vessels with fuel.  In such cases, Exxon
would pay the local supplier for the fuel and then invoice Waterman.  Thus,
while Exxon's contractual obligation was to provide Waterman's vessels with
fuel when Waterman placed an order, it met that obligation sometimes in the
capacity of "seller" and other times in the capacity of "agent."
    In the transaction at issue here, Exxon acted as Waterman's agent,
procuring bunker fuel for the Hooper from Arabian Marine Operating Co.
(Arabian Marine) of Jeddah, Saudi Arabia.  In October 1983, Arabian Marine
delivered over 4,000 tons of fuel to the Hooper in Jeddah and invoiced
Exxon for the cost of the fuel.  Exxon paid for the fuel and invoiced
Waterman, in turn, for $763,644.  Shortly thereafter, Waterman sought
reorganization under Chapter 11 of the Bankruptcy Code; Waterman never paid
the full amount of the fuel bill.  During the reorganization proceedings,
Central Gulf agreed to assume personal liability for the unpaid bill if a
court were to hold the Hooper liable in rem for that cost.
    Subsequently, Exxon commenced this litigation in federal district court
against Central Gulf in personam and against the Hooper in rem.  Exxon
claimed to have a maritime lien on the Hooper under the Federal Maritime
Lien Act, 46 U.9S.9C. 9971 (1982 ed.). {1}  The District Court noted that
"[a] prerequisite to the existence of a maritime lien based on a breach of
contract is that the subject matter of the contract must fall within the
admiralty jurisdiction."  707 F. Supp. 155, 158 (SDNY 1989).  Relying on
the Second Circuit's decision in Peralta Shipping Corp. v. Smith & Johnson
(Shipping) Corp., 739 F. 2d 798 (CA2 1984), cert. denied, 470 U.9S. 1031
(1985), the District Court concluded that it did not have admiralty
jurisdiction over the claim.  See 707 F.Supp, at 159-161.  In Peralta, the
Second Circuit held that it was constrained by this Court's decision in
Minturn v. Maynard, supra, and by those Second Circuit cases faithfully
adhering to Minturn, to follow a per se rule excluding agency contracts
from admiralty jurisdiction.  See Peralta, supra, at 802-804.  The District
Court also rejected the argument that Exxon should be excepted from the
Minturn rule because it had provided credit necessary for the Hooper to
purchase the fuel and thus was more than a mere agent.  To create such an
exception, the District Court reasoned, "9`would blur, if not obliterate, a
rather clear admiralty distinction.'9"  707 F. Supp., at 161, quoting
Peralta, supra, at 804. {2}
    The District Court denied Exxon's motion for reconsideration.  The
court first rejected Exxon's claim that in procuring fuel for Waterman it
was acting as a seller rather than an agent.  Additionally, the District
Court declined Exxon's invitation to limit the Minturn rule to either
general agency or preliminary service contracts. {3}  Finally, the District
Court determined that even if it were to limit Minturn, Exxon's contract
with Waterman was both a general agency contract and a preliminary services
contract and thus was excluded from admiralty jurisdiction under either
exception.  See 717 F. Supp. 1029, 1031-1037 (SDNY 1989).
    The Court of Appeals for the Second Circuit summarily affirmed the
judgment of the District Court "substantially for the reasons given" in the
District Court's two opinions.  App. to Pet. for Cert. A2, judgt. order
reported at 904 F. 2d 33 (1990).  We granted certiorari to resolve a
conflict among the Circuits as to the scope of the Minturn decision9 {4}
and to consider whether Minturn should be overruled.  498 U.9S. Z (1991).
Today we are constrained to overrule Minturn and hold that there is no per
se exception of agency contracts from admiralty jurisdiction.
CII
D Section 1333(1) of Title 28 U.9S.9C. grants federal district courts
jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction."
In determining the boundaries of admiralty jurisdiction, we look to the
purpose of the grant.  See Insurance Co. v. Dunham, 11 Wall. 1, 24 (1871).
As we recently reiterated, the "fundamental interest giving rise to
maritime jurisdiction is `the protection of maritime commerce.'9"  Sisson
v. Ruby, 497 U.9S. Z, Z (1990) (slip op., at 8), quoting Foremost Ins. Co.
v. Richardson, 457 U.9S. 668, 674 (1982).  This case requires us to
determine whether the limits set upon admiralty jurisdiction in Minturn are
consistent with that interest.
    The decision in Minturn has confounded many, and we think the character
of that three-paragraph opinion is best appreciated when viewed in its
entirety:

E "The respondents were sued in admiralty, by process in personam.  The
libel charges that they are owners of the steamboat Gold Hunter; that they
had appointed the libellant their general agent or broker; and exhibits a
bill, showing a balance of accounts due libellant for money paid, laid out,
and expended for the use of respondents, in paying for supplies, repairs,
and advertising of the steamboat, and numerous other charges, together with
commissions on the disbursements, &c.
    "The court below very properly dismissed the libel, for want of
jurisdiction.  There is nothing in the nature of a maritime contract in the
case.  The libel shows nothing but a demand for a balance of accounts
between agent and principal, for which an action of assumpsit, in a common
law court, is the proper remedy.  That the money advanced and paid for
respondents was, in whole or in part, to pay bills due by a steamboat for
repairs or supplies, will not make the transaction maritime, or give the
libellant a remedy in admiralty.  Nor does the local law of California,
which authorizes an attachment of vessels for supplies or repairs, extend
to the balance of accounts between agent and principal, who have never
dealt on the credit, pledge, or security of the vessel.
    "The case is too plain for argument."  17 How. 477.
F

While disagreeing over what sorts of agency contracts fall within Minturn's
ambit, lower courts have uniformly agreed that Minturn states a per se rule
barring at least some classes of agency contracts from admiralty.  See
n.94, supra. {5}
    Minturn appears to have rested on two rationales: (1) that the agent's
claim was nothing more than a "demand for a balance of accounts" which
could be remedied at common law through an action of assumpsit; and (2)
that the agent had no contractual or legal right to advance monies "on the
credit, pledge, or security of the vessel."  The first rationale appears to
be an application of the then-accepted rule that "the admiralty has no
jurisdiction at all in matters of account between part owners," The
Steamboat Orleans v. Phoebus, 11 Pet. 175, 182 (1837), or in actions in
assumpsit for the wrongful withholding of money, see Archawski v. Hanioti,
350 U.9S. 532, 534 (1956) ("A line of authorities emerged to the effect
that admiralty had no jurisdiction to grant relief in such cases").  The
second rationale appears to be premised on the then-accepted rule that a
contract would not be deemed maritime absent a "hypothecation" or a pledge
by the vessel's owner of the vessel as security for debts created pursuant
to the contract.  In other words, to sue in admiralty on a contract, the
claimant had to have some form of a lien interest in the vessel, even if
the action was one in personam.  See e.9g., Gardner v. The New Jersey, 9 F.
Cas. 1192, 1195 (No.95233) (D. Pa. 1806); see generally, Note, 17 Conn. L.
Rev. 595, 597-598 (1985).
    Both of these rationales have since been discredited.  In Archawski,
supra, the Court held that an action cognizable as assumpsit would no
longer be automatically excluded from admiralty.  Rather, "admiralty has
jurisdiction, even where the libel reads like indebitatus assumpsit at
common law, provided the unjust enrichment arose as a result of the breach
of a maritime contract."  350 U.9S., at 536.  Only 15 years after Minturn
was decided, the Court also cast considerable doubt on the "hypothecation
requirement."  In Insurance Co. v. Dunham, 11 Wall. 1 (1871), the Court
explained that, in determining whether a contract falls within admiralty,
"the true criterion is the nature and subject-matter of the contract, as
whether it was a maritime contract, having reference to maritime service or
maritime transactions."  Id., at 26.  Several subsequent cases followed
this edict of Dunham and rejected the relevance of the hypothecation
requirement to establishing admiralty jurisdiction.  See North Pacific S.S.
Co. v. Hall Bros. Marine Railway & Shipbuilding Co., 249 U.9S. 119, 126
(1919); Detroit Trust Co. v. The Thomas Barlum, 293 U.9S. 21, 47-48 (1934).
{6}
    Thus, to the extent that Minturn's theoretical under pinnings can be
discerned, those foundations are no longer the law of this Court.
Minturn's approach to determining admiralty jurisdiction, moreover, is
inconsistent with the principle that the "nature and subject-matter" of the
contract at issue should be the crucial consideration in assessing
admiralty jurisdiction.  Insurance Co. v. Dunham, supra, at 26.  While the
Minturn Court viewed it as irrelevant "[t]hat the money advanced and paid
for respondents was, in whole or in part, to pay bills due by a steamboat
for repairs or supplies," the trend in modern admiralty case law, by
contrast, is to focus the jurisdictional inquiry upon whether the nature of
the transaction was maritime.  See e.9g., Kossick v. United Fruit Co., 365
U.9S. 731, 735-738 (1961).  See also Krauss Bros. Lumber Co. v. Dimon S.S.
Corp., 290 U.9S. 117, 124 (1933) ("Admiralty is not concerned with the form
of the action, but with its substance").
    Finally, the proposition for which Minturn stands--a per se bar of
agency contracts from admiralty--ill serves the purpose of the grant of
admiralty jurisdiction.  As noted, the admiralty jurisdiction is designed
to protect maritime commerce.  See supra, at Z.  There is nothing in the
nature of an agency relationship that necessarily excludes such
relationships from the realm of maritime commerce.  Rubrics such as
"general agent" and "special agent" reveal nothing about whether the
services actually performed pursuant to a contract are maritime in nature.
It is inappropriate, therefore, to focus on the status of a claimant to
determine whether admiralty jurisdiction exists.  Cf. Sisson, 497 U.9S., at
Z, n.92 (slip op., at 5, n.92) ("the demand for tidy rules can go too far,
and when that demand entirely divorces the jurisdictional inquiry from the
purposes that support the exercise of jurisdiction, it has gone too far").
    We conclude that Minturn is incompatible with current principles of
admiralty jurisdiction over contracts and therefore should be overruled.
We emphasize that our ruling is a narrow one.  We remove only the precedent
of Minturn from the body of rules that have developed over what types of
contracts are maritime.  Rather than apply a rule excluding all or certain
agency contracts from the realm of admiralty, lower courts should look to
the subject matter of the agency contract and determine whether the
services performed under the contract are maritime in nature.  See
generally Kossick, supra, at 735-738 (analogizing the substance of the
contract at issue to established types of "maritime" obligations and
finding the contract within admiralty jurisdiction).

NIII
D There remains the question whether admiralty jurisdiction extends to
Exxon's claim regarding the delivery of fuel in Jeddah.  We conclude that
it does.  Like the District Court, we believe it is clear that when Exxon
directly supplies marine fuels to Waterman's ships, the arrangement is
maritime in nature.  See 707 F. Supp., at 161.  Cf. The Golden Gate, 52 F.
2d 397 (CA9 1931) (entertaining an action in admiralty for the value of
fuel oil furnished to a vessel), cert. denied sub nom. Knutsen v.
Associated Oil Co., 284 U.9S. 682 (1932).  In this case, the only
difference between the New York delivery over which the District Court
asserted jurisdiction, see n.92, supra, and the Jeddah delivery was that,
in Jeddah, Exxon bought the fuels from a third party and had the third
party deliver them to the Hooper.  The subject matter of the Jeddah claim,
like the New York claim, is the value of the fuel received by the ship.
Because the nature and subjectmatter of the two transactions are the same
as they relate to maritime commerce, if admiralty jurisdiction extends to
one, it must extend to the other.  Cf. North Pacific, supra, at 128
("[T]here is no difference in character as to repairs made upon .9.9. a
vessel .9.9. whether they are made while she is afloat, while in dry dock,
or while hauled up [on] land.  The nature of the service is identical in
the several cases, and the admiralty jurisdiction extends to all"). {7}  We
express no view on whether Exxon is entitled to a maritime lien under the
Federal Maritime Lien Act.  That issue is not before us, and we leave it to
be decided on remand.
    The judgment of the Court of Appeals is reversed, and the case is
remanded for further proceedings consistent with this opinion.

It is so ordered.
T






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1
    9The relevant provision of the Federal Maritime Lien Act has been
amended and recodified at 46 U.9S.9C. 931342.

2
    9In the same action, Exxon also claimed a maritime lien on the Hooper
for a separate unpaid fuel bill for approximately 42 tons of gas oil Exxon
had supplied directly to the Hooper in New York.  The District Court held
that because Exxon was the "supplier" rather than an agent with respect to
the New York delivery, the claim for $13,242 fell within the court's
admiralty jurisdiction.  The court granted summary judgment in Exxon's
favor on this claim.  707 F. Supp., at 161-162.  This ruling is not at
issue here.

3
    9The preliminary contract rule, which excludes "preliminary services"
from admiralty, was enunciated in the Second Circuit as early as 1881.  See
The Thames, 10 F. 848 (SDNY 1881) ("The distinction between preliminary
services leading to a maritime contract and such contracts themselves have
[sic] been affirmed in this country from the first, and not yet departed
from").  In the Second Circuit, the agency exception to admiralty
jurisdiction--the Minturn rule--has been fused with the preliminary
contract rule.  See Cory Bros. & Co. v. United States, 51 F. 2d 1010, 1012
(CA2 1931) (explaining Minturn as involving a preliminary services
contract).  In denying Exxon's motion for reconsideration, the District
Court declined to "disentangle" the two rules, asserting that Circuit
precedent had established the rule of Minturn "as a subset of the
preliminary contract rule."  717 F. Supp. 1029, 1036 (SDNY 1989).

4
    9Compare E. S. Binnings, Inc. v. M/V Saudi Riyadh, 815 F. 2d 660,
662-665, and n.94 (CA11 1987) (general agency contracts for performance of
preliminary services excluded from admiralty jurisdiction); and Peralta
Shipping Corp. v. Smith & Johnson (Shipping) Corp., 739 F. 2d 798 (CA2
1984) (all general agency contracts excluded), cert. denied, 470 U.9S. 1031
(1985) with Hinkins Steamship Agency, Inc. v. Freighters, Inc., 498 F. 2d
411, 411-412 (CA9 1974) (per curiam) (looking to the character of the work
performed by a "husbanding agent" and concluding that the contract was
maritime because the services performed were "necessary for the continuing
voyage"); and id., at 412 (arguably limiting Minturn to general agency as
opposed to special agency contracts); and Hadjipateras v. Pacifica, S. A.,
290 F. 2d 697, 703-704, and n.915 (CA5 1961) (holding an agency contract
for management and operation of a vessel within admiralty jurisdiction and
limiting Minturn to actions for "an accounting as such").  See also Ameejee
Valleejee & Sons v. M/V Victoria U., 661 F. 2d 310, 312 (CA4 1981)
(espousing a "general proposition of law" that a general agent may not
invoke admiralty jurisdiction while a special agent can).

5
    9As early as 1869, however, this Court narrowed the reach of Minturn
and cast doubt on its validity.  See The Kalorama, 10 Wall. 204, 217 (1869)
(distinguishing Minturn and allowing agents who had advanced funds for
repairs and supplies for a vessel to sue in admiralty where it was
"expressly agreed that the advances should be furnished on the credit of
the steamer").

6
    9These decisions were part of a larger trend started in the 19th
century of eschewing the restrictive prohibitions on admiralty jurisdiction
that prevailed in England.  See e.9g., Waring v. Clarke, 5 How. 441,
454-459 (1847) (holding that the constitutional grant of admiralty
jurisdiction did not adopt the statutory and judicial rules limiting
admiralty jurisdiction in England); The Propeller Genesee Chief v.
Fitzhugh, 12 How. 443, 456-457 (1852) (rejecting the English tide-water
doctrine that "measure[d] the jurisdiction of the admiralty by the tide");
Insurance Co. v. Dunham, 11 Wall., at 26 (rejecting the English locality
rule on maritime contracts "which concedes [admiralty] jurisdiction, with a
few exceptions, only to contracts made upon the sea and to be executed
thereon").

7
    9As noted, the District Court regarded the services performed by Exxon
in the Jeddah transaction as "preliminary" and characterized the rule
excluding agency contracts from admiralty as "a subset" of the preliminary
contract doctrine.  See supra, at Z, and n.93.  This Court has never ruled
on the validity of the preliminary contract doctrine, nor do we reach that
question here.  However, we emphasize that Minturn has been overruled and
that courts should focus on the nature of the services performed by the
agent in determining whether an agency contract is a maritime contract.