Ecuadorean Crew Can Sue|U.S. Over Cargo Damage

(CN) - The crew of an Ecuadorean vessel may sue the United States for the cargo and fish allegedly damaged when the Coast Guard boarded and searched their ship for drugs, the 9th Circuit ruled Wednesday.

The United States is not entitled to sovereign immunity from the lawsuit, the three-judge panel ruled, based on the notion of "reciprocity": If the nationalities were flipped, and Ecuadoreans had similarly searched a U.S. ship, the American crew would be able to sue the Ecuadorean government.

Members of the U.S. Coast Guard aboard the USS McClusky stopped the Ecuadorean vessel in international waters near the Galapagos Islands in 2005, suspecting the crew of smuggling and possessing drugs.

The Coast Guard boarded and searched the ship but found no drugs, according to the crew's federal complaint against the United States. Yet the Coast Guard still arrested and detained the crew for more than 99 days, seized the vessel, and destroyed the fish and cargo on board, the crew claimed.

The lawsuit was transferred from Galveston, Texas, to San Diego, where U.S. District Judge William Hayes dismissed the original suit - and an amended version - for lack of jurisdiction.

Hayes said the crew members failed to demonstrate reciprocity, a requiring for waiving sovereign immunity.

A 9th Circuit panel in Pasadena partially revived the lawsuit in 2011, sending the case back to the district court for further evidence and briefing on whether reciprocity with Ecuador exists.

The parties submitted affidavits by experts in Ecuadorean law on remand, but Hayes remained unconvinced. He again held that the U.S. government had not waived its sovereign immunity.

The federal appeals court disagreed and said some of the claims could proceed, mainly the ship owners' demand to be reimbursed for the damaged cargo.

Because the concept of "sovereign immunity" does not exist in Ecuadorean law, according to the experts, there would be nothing to stop an American from suing the Ecuadorean government in similar circumstances.

The experts' affidavits "establish that, in similar circumstances, a United States citizen would be able to sue Ecuador in Ecuadorian courts," Judge Susan Graber wrote for the panel. "Accordingly, reciprocity exists."

The court also rejected the government's claim that it was immune while exercising a "discretionary function" such as boarding a vessel suspected of illicit activity.

While the Coast Guard has the authority to board and inspect ships, the court ruled, it cannot exceed the terms of that authorization or refuse to compensate ship owners for any "damages or losses sustained" if there are no drugs on board.

Doing so would violate its own policies and regulations, the 9th Circuit ruled, and that's exactly what the plaintiffs say the United States did.

All claims that "fall outside the non-discretionary duty to pay damages" are barred by the "discretionary function" exception to the waiver of sovereign immunity, the court concluded. In other words, the United States is immune from claims arising from policy-based decisions such as whether to board, search and tow ships.

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