The general rule of state immunity is that direct suit cannot be maintained against the U.S. or it’s property. U.S. Congress is empowered to waive this exemption of immunity. By waiving the sovereign immunity, Congress consents to go with the trial of the suit against the U.S. Congress can make a general waiver or waiver in a specific case. Also, waiver of exemption can be in particular types of cases. The U.S. waives the exemption expressly or impliedly. Express waiver is made by government executive’s declaration. When the U.S. sues for damages inflicted on its vessel or cargo, there is implied waiver of exemption on the part of the U.S. to counter suit on same transaction by other party.
The Tort Claims Act, and the Public Vessels and Suits in Admiralty Act state the law relating to waiver of sovereign immunity, and the right to institute suits. Waiver of immunity is made especially in cases where the vessel or cargo were privately owned or possessed. When the U.S. waives the exemption, a proceeding could be maintained in admiralty court. The exemption is waived to allow the defendant to present legal or equitable set-off to the demand of the government. When the U.S. proceed with trial, all claims and equities regarding the subject matter is considered in the same trial. In such proceedings, the U.S. is considered to be a private party in the action, and the state is exempted only from cost and affirmative reliefs.[i] It was also observed that when an action is brought by the U.S. to recover damages from a party who has a legal claim against the state, his/her right of set off cannot be denied.
Sovereign immunity of the U.S. did not extend to the substantive right of setoff and counterclaim in suits brought by the U.S. A sovereign state is obliged to surrender to a court’s jurisdiction in respect of set off and counter claim when the state itself approaches the court. State should be subject to the substantive requirements of law and justice once the sovereign chooses its forum.[ii]
Generally, when two vessels are involved in collision, the trial in the ordinary course is upon libel and cross libel. In case of mutual default, the entire damages would be divided equally between the parties. The U.S. could not avoid the consequences of the rule although the damage to the other vessel might bar its recovering anything. Complicated issues like resjudiciata and division of damages will arise if cross libel is denied in admiralty of mutual fault[iii]
In Clyde-Mallory Lines v. The Eglantine, 317 U.S. 395 (U.S. 1943), a merchant vessel owned by the U.S. government collided with a steamship. The government’s vessel was sold to a private operator. The steamship owner filed a libel in rem action against the vessel and a marshal took the vessel from the private owner under an admiralty warrant of attachment. The government voluntarily appeared in the action contending that the action was barred because the action was brought more than two years after the collision. The district court found the judgment for the steamship owner on the issue. The circuit court reversed. The Supreme Court affirmed the reversal, holding that when the government voluntarily appeared in an action, it cannot claim exemption afterwards.
In waiving exemption, the intention of Congress is effected and a waiver is usually construed strictly in favor of the interests of the U.S. The U.S. cannot be sued in its courts without its consent. Also when granting such consent, Congress has an absolute discretion to specify the cases and contingencies in which the acts of the government is submitted for judicial determination.[iv]
[i] Siren, 74 U.S. 152, 154-155 (U.S. 1869).
[ii] The Gloria, 286 F. 188 (D.N.Y. 1923).
[iii] United States v. Norwegian Barque “Thekla“, 266 U.S. 328 (U.S. 1924).
[iv] Schillinger v. United States, 155 U.S. 163 (U.S. 1894).