Generally, it is the federal courts that have jurisdiction over admiralty issues. Article III of the U.S. constitution authorizes federal courts to adjudicate admiralty cases. Federal courts exclusively deal with actions in rem while exercising their admiralty jurisdiction. However, in cases of actions in personam, state courts are also given power to adjudicate admiralty matters.
When federal admiralty courts are approached to protect rights available under state law, the federal courts determine the issues in accordance with the substantive law of the state.[i] In matters related to marine insurance disputes, federal admiralty courts use state insurance laws to resolve the issues. State laws supplement admiralty laws when admiralty law is silent or when a local matter is at issue. However, state law cannot be applied when it is substantially different from admiralty law. Reasonable uniformity expected in decisions is to be maintained while borrowing state law to solve an admiralty dispute.[ii]
Expansion in admiralty law is the result of adoption of new rules and principles by federal courts. Most of these new principles have been adopted from pre existing state laws.[iii] When Congress adopts a state law into maritime law, state and federal courts are given concurrent admiralty jurisdiction.
[i] The Tungus v. Skovgaard, 358 U.S. 588, 593 (U.S. 1959)
[ii] Continental Cas. Co. v. Anderson Excavating & Wrecking Co., 189 F.3d 512 (7th Cir. Ill. 1999)
[iii] Just v. Chambers, 312 U.S. 383 (U.S. 1941)