Oral Argument in Great Lakes

Image by David Mark from Pixabay

On October 10, 2023, the U.S. Supreme Court heard oral argument in Great Lakes Insurance v Raiders Retreat Realty LLC. The issue presented was whether, as a matter of federal admiralty law, a choice-of-law clause in a maritime contract may be rendered unenforceable if enforcement is contrary to the “strong public policy” of the state whose law is displaced.

There are several blog posts that provide an overview of the oral argument in this case. Ronald Mann has a good rundown at SCOTUSblog. And Raffi Melkonian live-tweeted the argument. In this post, I aspire to provide something slightly different. Instead of offering a chronological account of the questioning, or a summary of the arguments made by each of the litigants, I have organized the post around the questions posted by each Justice as a way of examining their interest in various issues presented by the case.

This approach necessarily presupposes some familiarity with facts and the arguments in the parties’ briefs. Readers coming to this case for the first time may want to read the posts here and here and here.

Justice Kagan

Justice Kagan was the only Justice who seemed to be unequivocally on the side of Raiders Retreat Realty LLC (“Raiders”). She seemed to believe that Wilburn Boat provided the controlling precedent, that the enforceability of a choice-of-law clause in a maritime insurance contract was governed by state (rather than federal) law, and that maritime insurers should not be permitted to rely on choice-of-law clauses to evade state insurance laws seeking to protect policyholders within that state.

Early in the argument, for example, Justice Kagan observed that “states have long regulated the area [of marine insurance] and strongly regulated the area [of marine insurance], and the federal rule is that we should allow that to continue.” When counsel for Great Lakes Insurance (“Great Lakes”) described the Pennsylvania laws in question as “idiosyncratic,” Justice Kagan responded that “you can call them idiosyncratic, but what they really are is consumer protective as against insurance companies.” She also observed (correctly) that “if the plaintiff here were an airline company or a railroad or a trucking concern, probably the Restatement rule applies, probably Pennsylvania law applies because of it. Why is this so different?”

Later in the argument, Justice Kagan suggested that Raiders should have no issue with a federal rule of enforceability, so long as that federal rule was broadly consistent with the rule laid down in Section 187 of the Restatement (Second) of Conflict of Laws. That Section states that a choice-of-law clause should not be enforced when another state has a superior interest in the dispute and does not conflict with federal law.

Justice Alito

Justice Alito expressed concerns about the “harshness” of a rule which allows marine insurers to deny coverage based on a technicality—like the fire extinguishers on a yacht being out of date—when the cause of the accident had nothing to do with fire. He also posed a hypothetical involving a small non-U.S. jurisdiction with laws that were incredibly pro-insurer.  He asked counsel for Great Lakes whether a choice-of-law clause would still be enforced if it chose the laws of such a jurisdiction.

Counsel for Great Lakes initially responded that it would not be enforced because the insurer would lack a substantial connection to the chosen jurisdiction and there was no reasonable basis for choosing it. When Justice Alito altered the hypothetical to assume that the insurer was based in the small country, counsel for Great Lakes stated that we shouldn’t be “too worried about sort of unfairness because you’re talking about people who can’t otherwise get insurance in the market.” He then went on to add that “there are very few people that will write the insurance” and that the insured was “on notice of the clause.”

Perhaps recognizing that this was not the most reassuring answer to Justice Alito’s hypothetical, counsel for Great Lakes subsequently stated that the clause would not be enforceable if (1) the law of the chosen jurisdiction limits the liability of marine insurers in a way that fails to deter negligence, (2) the law of the chosen jurisdiction deprives the insured of any remedy, or (3) there is no substantial relationship between the chosen jurisdiction and the parties (or the transaction) and there is no other reasonable basis for the choice. In any event, counsel for Great Lakes stated that none of these concerns were relevant in this case. He argued that the law of New York did not fall within any of these exceptions because policyholders could always sue for breach of contract under New York law.

Justice Barrett

Justice Barrett asked several questions about waiver and whether the enforceability of a choice-of-law clause in a maritime contract was governed by state or federal law.

She first observed that, during the Third Circuit argument, it seemed as though all the parties had “assumed and kind of took as a given that there was this well-established federal rule that choice-of-law clauses were presumptively enforceable.” She noted that the Court had relied on this assumption when it granted cert. She said she was confused when she started reading the brief by Raiders and it was all about Wilburn Boat and state law.

Justice Barrett subsequently asked whether “Wilburn Boat adopted state substantive law as the federal common law rule” or whether “Wilburn Boat said this is a state law matter and federal law has nothing to say.” After first observing that there wasn’t much difference between these two positions, counsel for Raiders stated its preference for the second.

Justice Barrett also pushed counsel for Raiders to be more specific about which “federal policy” he had in mind when he used that term. Was he referring to federal policy as it relates to the enforcement of choice-of-law clauses? Or was he referring to federal policy as it relates to the substantive claim? Counsel for Raiders replied that he was referring to the former.

Justice Sotomayor

Justice Sotomayor’s first question echoed one asked by Justice Barrett: “Why does Wilburn Boat even apply here or to this question at all? I’m not sure it does.” Later in the argument, she asked: “Is there a [federal] presumption of enforceability in a choice-of-law provision?” This time around, she elaborated on her reasons for thinking that there probably was: “We want uniformity in maritime interpretation. We want people to be secure in knowing which laws are going to apply, not what the substance of those laws are, but which law is going to apply. Everything that moved us to find that presumption in the forum-selection world seems to apply here.”

Justice Jackson

Justice Jackson also inquired if there was an established federal policy related to the enforceability of choice-of-law clauses. Counsel for Raiders responded that there was not. She seemed skeptical of this answer. After acknowledging that the states had an interest in consumer protection, she asked “if our entire kind of framing is about ensuring predictability and uniformity, why would it be the case that we would be in a world in which state interests or state policy could override the federal presumption of enforceability?”

Justice Jackson also asked counsel for Great Lakes how one could say that there was an “established” federal rule in support of enforcing choice-of-law clauses when there were no precedents on point from the Supreme Court. Counsel for Great Lakes responded that many lower federal courts had articulated such a rule. Justice Jackson asked whether there was a meaningful difference between lower court decisions dealing with forum selection clauses and those dealing with choice-of-law clauses. Counsel for Great Lakes responded that there was a difference but that it actually favored his position. He argued that once the courts accepted that there was a federal admiralty rule favoring the enforceability of forum selection clauses—which happened more than fifty years ago—it was an easy and uncontroversial step to apply the same rule to choice-of-law clauses.

Justice Kavanaugh

Justice Kavanaugh’s asked a number of specific and technical questions which suggested—at least to this listener—that he expected to be assigned the opinion.

Like many of his colleagues, Justice Kavanaugh seemed to believe that there was a federal presumption in favor of enforcing choice-of-law clauses as a matter of admiralty law. With this assumption in mind, he asked counsel for Great Lakes to “define the content of the exception” to that rule. He specifically asked whether Section 187(2)(b) of the Restatement (Second) of Conflict of Laws was relevant. He asked about the difference between the “substantial relationship” test and the “reasonable basis” test. He also asked about the “materially greater interest” requirement.

Later in the argument, Justice Kavanaugh asked counsel for Great Lakes to identify its proposed exceptions to the federal rule. He observed that “you don’t necessarily need to be precise to win the case for your client, but we need to be precise in how we write the opinion.” In response, counsel for Great Lakes referred to the three bases for non-enforcement referenced above. At this point, Justice Kavanaugh pressed him on whether a clause was unenforceable if it deprived the claimant of “any” remedy or just a remedy for the “particular issue in dispute.”

Still later in the argument, Justice Kavanaugh again invoked the exceptions to the general rule of enforceability and observed that these exceptions have to be “a central part of the inquiry” even though they were not a “big deal” in this case. He (correctly) pointed out that these exceptions are “going to be a big deal in some other cases” and pressed counsel for Raiders to explain whether and to what extent the Restatement was relevant.

Finally, Justice Kavanaugh referenced my and Kim Roosevelt’s amicus brief and asked counsel for Great Lakes whether Section 187 could be used in maritime disputes even thought it was designed for interstate disputes. He stated that “if we get to this, this will be really important what we say about this, so I want to give you a chance to respond to that.” Counsel for Raiders invoked the distinction between horizontal and vertical conflicts of law and argued that Section 187 should be applied in this maritime case because the conflict was horizontal (between New York and Pennsylvania) rather than vertical (between state law and federal law).

Justice Gorsuch

Justice Gorsuch questioned the viability of a rule that treated marine insurance contracts differently from other maritime contracts. He asked counsel for Raiders to offer a principled basis for concluding that state law governed the enforceability of choice-of-law clauses in marine insurance contracts but that federal law governed the enforceability of choice-of-law clauses and forum selection clauses with respect to all other types of maritime contracts.

Justice Thomas

Justice Thomas expressed skepticism that Wilburn Boat provided the controlling rule in this case. Among other things, he noted that the Court had subsequently decided several other cases—among them Kossick and Kirby –that seemed to cut back on the rule in Wilburn Boat. He also pointed out that the original fact pattern in Wilburn Boat – a case about a houseboat used for transportation of passengers on an inland lake straddling Texas and Oklahoma – didn’t necessarily translate well to maritime shipping cases.

Chief Justice Roberts

Chief Justice Roberts asked counsel for Great Lakes for examples of established federal maritime rules on issues not relating to choice of law, e.g. the doctrine of utmost good faith. He also asked whether it would be appropriate for the Court to look to state law for guidance in areas where there was no federal rule. Counsel for Great Lakes said that it would be appropriate.


 In light of questions posed by the Justices, it seems highly likely that the Court will recognize a federal presumption in favor of enforcing choice-of-law clauses in maritime contracts. This is the position that Kim Roosevelt and I urged the Court to adopt in our amicus brief. It is less clear what form this federal rule will take and whether it will be modeled on The Bremen or on Section 187. Nor is it clear what the exceptions to the rule will be. A decision is expected before July 2024.