Cape Flattery Limited v. Titan Maritime, LLC

Plaintiff Cape Flattery Limited (“Cape Flattery”) sued Defendant Titan Maritime (“Titan”) for gross negligence in its salvage of Cape Flattery’s vessel, the MW Cape Flattery. Titan appeals the district court’s decision denying its motion to compel arbitration of the dispute under the Federal Arbitration Act (“FAA”). Titan argues that the district court erred in refusing to apply English arbitrability law. Titan further argues that even under federal arbitrability law, the dispute is arbitrable. We conclude that federal arbitrability law applies, and that under federal arbitrability law the dispute is not arbitrable. We therefore affirm the district court.

I. Background

On February 2, 2005, the MW Cape Flattery ran aground on a submerged coral reef off Barbers Point, Oahu, Hawaii. Cape Flattery Ltd. v. Titan Maritime LLC, 607 F.Supp.2d 1179, 1181 (D.Hawail 2009). In response, the U.S. Coast Guard issued a Notice of Federal Interest in connection with the vessel’s grounding and activated Unified Command to respond to the threat of potential oil discharge. Id. Under 33 U.S.C. § 2702 , Cape Flattery, as the vessel’s owner, was liable for the cost of removing the vessel from…