In United States v. Ernst Jacob GmbH & Co. KG, No. 23-1969 (1st Cir. Oct. 23, 2025), the First Circuit rejects a holding in the Fifth Circuit and holds that a third-party defendant’s complaint for subrogation or contribution is enough to give a U.S. Court of Appeals jurisdiction over an interlocutory appeal under 28 U.S.C. § 1292(a)(3).
While federal appeals must typically be from final judgments, section 1292 lays out exceptions to that rule, notably appeals from preliminary injunctions and certified orders. A less famous exception (except to specialists) is 28 U.S.C. § 1292(a)(3), which provides appellate jurisdiction to review interlocutory orders “determining the rights and liabilities of the parties to admiralty cases.” See also Fed. R. Civ. P. 9(h)(2) (“[a] case that includes an admiralty or maritime claim within this subdivision (h) is an admiralty case within 28 U.S.C. §1292(a)(3)”).
This case concerns the April 2006 stranding of the T/V Margara, “a 748-foot double-hulled tanker carrying more than 300,000 barrels of oil,” that ran aground off the coast of Puerto Rico. The United States filed a complaint in 2021 against the owner and the insurer of the tanker in federal court under the Oil Pollution Act of 1990, 33 U.S.C. § 2702(a), seeking (among other things) restoration costs associated with the wreck.
Relevant to this discussion, defendants “filed third-party complaints for subrogation or contribution against another of the ship’s owners, Margara Shipping, Ltd. (‘Margara Shipping’), as well as another of the ship’s insurers, Steamship Mutual Underwriting Association, Ltd. (‘Steamship’). The parties agree that these third-party claims — unlike the United States’s claims under § 2702(a) — were brought in admiralty.”
“On September 7, 2023, the District Court granted the United States’s motion for partial summary judgment.” The district court upheld as not arbitrary or capricious a finding by a federal agency that the vessel posed a “substantial threat” of a discharge of oil, such that the grounding of it constituted an “incident” for purposes of § 2702(a). The order did not concern the third-party claims, which would only become ripe upon a finding of liability against the principal defendants.
The First Circuit holds, as an initial matter, that it has jurisdiction under § 1292(a)(3) to review the partial grant of summary judgment because the case “includes” the third-party admiralty claims.
The United States, opposing appellate jurisdiction, argued that the third-party claims are not part of the same “case” that it filed and are thus not “include[d]” for appellate jurisdiction purposes.
The United States argued for the definition of “case” set out in United Mine Workers of America v. Gibbs, 383 U.S. 715 (1966), for reviewing pendent (now called “supplemental”) jurisdiction, i.e., that the claims are related “such that [the plaintiff] would ordinarily be expected to try them all in one judicial proceeding.” It argued that the third-party claims could not be tried together with the original case because they only ripen on a finding of liability. Sidestepping whether the Gibbs definition of a “case” applied here, the panel notes that “[i]t is well-settled that supplemental jurisdiction may extend to a third-party indemnity claim that ripens only after judgment,” citing (among other authority) Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (1978).
The United States also argued that it is the privilege of the plaintiff to “designate[] the action as an admiralty case.” It cited Poincon v. Offshore Marine Contractors, Inc., 9 F.4th 289 (5th Cir. 2021) for this proposition. But the First Circuit chooses not to follow Poincon.
“[W]e decline to follow Poincon to the extent that it may be understood to hold that a properly designated third-party claim cannot make a case an ‘admiralty case.’ We see no basis in the text of Rule 9(h)(2) or 28 U.S.C. § 1292(a)(3) for differentiating between a counterclaim . . . and a third-party claim as in this case. Nor did Poincon address the language of Rule 9(h)(2), even though the plain text of the rule seems to support the opposite result from the one reached in that case.”
The panel also rejects the suggestion that allowing a third-party claim to reclassify a lawsuit as an admiralty case would endanger the plaintiff’s Seventh Amendment right to a jury trial. The panel observes that Rule 9(h)(2) “does not address whether such a case would necessarily be an admiralty case within the Seventh Amendment, and at least some circuits have ruled that a party may have a right to a jury in a case with an admiralty claim.” (Underlining in original.)
“Therefore, we conclude that, in accord with the plain text of Rule 9(h)(2), this case does include an admiralty claim because it includes the third-party claims, which the parties agree are themselves admiralty claims . . . . We see no basis for concluding that those claims are included in some other case rather than in this one.”
(On the merits, the panel reverses summary judgment, holding that a “preponderance of the evidence,” not an “arbitrary or capricious,” standard applies in this case.)
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