Matson Navigation Co. v. United States

Background

A private shipowner sued the United States after the Shipping Board requisitioned seven merchant ships in 1917 and put the owner back to work operating them under a “requisition charter.” The charter required the owner to operate the vessels and promised reimbursement for increased wages and bonuses under a special clause. The owner accepted a partial settlement but reserved $49,373.11 claimed under that clause and filed suit in the Court of Claims. The owner had also filed separate suits in a federal district court.

Reasoning

The central question was whether the owner’s claim for wage increases arose from a maritime contract and thus belonged in admiralty courts. The Court explained that the asserted right sprang from the express charter to operate the ships for the Government, including payment for use, services, and operating expenses. Those matters are classic maritime subjects. The Suits in Admiralty Act gives district courts exclusive power to handle maritime causes of action against the United States. Because the petition did not allege the ships were not operated as merchant vessels, the Court concluded the Court of Claims lacked jurisdiction and affirmed dismissal, while noting the owner might seek leave to amend.

Real world impact

Shipowners who enter government operating agreements must bring maritime contract claims in federal admiralty (district) courts rather than the Court of Claims. The ruling decides where such wage-and-operation disputes are heard and is procedural rather than a final decision on the merits.