Buffalo Naval Park Committee Inc. -against- Water Quality Insurance Syndicate

Background

Buffalo Naval Park Committee Inc. maintains the decommissioned World War II vessel USS The Sullivans as a fixed naval museum. In or around April 2022, the vessel took on water, became partially submerged, and leaked oil into the water. Buffalo Naval Park had an insurance policy from Water Quality Insurance Syndicate that covered certain pollution-response and pollution-damage costs involving the vessel.

The policy also contained a forum-selection clause requiring lawsuits against Water Quality concerning the policy or its coverage to be brought in the U.S. District Court for the Southern District of New York. Buffalo Naval Park filed this action on July 31, 2025, asserting three claims about Water Quality’s obligation to reimburse costs related to the oil spill. Buffalo Naval Park argued in its complaint that the case involved no federal question and that the parties were not diverse. It explained that an earlier state-court action had been dismissed because the forum-selection clause required the dispute to be litigated in this federal court, and that dismissal had been affirmed on appeal.

The court requested briefing on whether the case fell within federal admiralty, or maritime, jurisdiction and on the effect of the forum-selection clause.

Maritime jurisdiction

Federal courts have original jurisdiction over civil cases involving admiralty or maritime matters. The court applied a two-part inquiry: whether the dispute was sufficiently connected to maritime commerce and whether the contract itself was maritime.

On the first question, Buffalo Naval Park described the case as an ordinary insurance-coverage dispute unrelated to commercial maritime activity. Water Quality argued that the dispute involved marine pollution on a navigable waterway that could affect maritime commerce. The court agreed with Water Quality. It concluded that the dispute concerned whether the policy covered losses from an oil spill on the navigable Buffalo River, which had the potential to affect maritime commerce. The court stated that the insured vessel did not need to be directly involved in commercial activity for the dispute to be sufficiently maritime.

On the second question, the court examined whether the insurance policy was marine insurance. It explained that coverage for pollution risks is widely recognized as maritime in nature. The policy covered costs connected with oil spills, including investigation, certain fines and penalties, public-relations efforts during remediation, and mitigation. The court therefore found that the policy’s subject matter was maritime.

Because both the dispute and the policy were maritime, the court held that it had maritime jurisdiction over the action.

Forum-selection clause

The court applied federal maritime law to interpret the policy. Under that law, a forum-selection clause is presumed valid unless the party resisting it shows that enforcement would be unreasonable or that the clause resulted from fraud, overreaching, or a similar defect.

Buffalo Naval Park did not claim that the clause resulted from fraud or overreaching, and it did not identify a specific hardship or injustice that enforcement would cause. Its only argument was that enforcement would be unreasonable because the court lacked jurisdiction. The court’s jurisdictional ruling rejected that argument. Because Buffalo Naval Park had not made the required strong showing against enforcement, the court enforced the clause.

Disposition

The court found that it had maritime jurisdiction and that the forum-selection clause was enforceable. It concluded that venue was proper in the Southern District of New York. The court directed Water Quality Insurance Syndicate to answer or otherwise respond to the complaint within 21 days of the Opinion and Order. The opinion did not resolve the parties’ underlying dispute about insurance coverage or whether Water Quality must reimburse Buffalo Naval Park’s costs.