Exxon Corp. v. Central Gulf Lines

Central Gulf Lines, Inc. (Central Gulf) (defendant) owned the vessel Green Harbour ex William Hooper (Hooper), which it commissioned to the Waterman Steamship Corporation (Waterman). Exxon Corporation (Exxon) (plaintiff) entered into a contract with Waterman whereby Exxon promised to supply all the fuel the Hooper required. Under the contract, Exxon itself would provide the Hooper with fuel at ports in which Exxon had direct access. At ports where Exxon did not have direct access, Exxon would act as Waterman’s agent to arrange for a local seller to provide the fuel. Exxon could not directly supply the Hooper with fuel while the vessel was docked in Jeddah, Saudi Arabia. Instead, Exxon, acting as Waterman’s agent, purchased fuel from a local vendor, whom Exxon paid. Exxon then invoiced Waterman for the balance. Before paying the balance, Waterman underwent a reorganization pursuant to Chapter 11 of the Bankruptcy Code. The reorganization also provided that Central Gulf would assume Waterman’s liability if a court held that Exxon had a maritime lien against the Hooper for the unpaid invoice. Exxon brought suit in district court. The district court applied the rule of Minturn v. Maynard, which categorically excluded agency contracts from admiralty jurisdiction to deny Exxon’s claim of a maritime lien. The court of appeals affirmed, and the United States Supreme Court granted certiorari.