Opinion
Civil Action No: 00-0848, Section: "J"(1).
November 9, 2000.
Before the Court is a Motion to Lift Stay (Rec. Doc. 6) filed by claimant Curtis Gregory ("Gregory") in a limitation of liability proceeding brought by LeBeouf Brothers Towing Company, Inc. ("LeBeouf Brothers") as owner of the M/V Erika Leigh and the Barge LB-16. LeBeouf Brothers opposes the motion. The motion, set for hearing on October 25, 2000, is before the Court on briefs without oral argument. Finding that claimant Gregory has satisfied the elements required to lift a stay in a limitation proceeding, the motion is granted.
BACKGROUND
On September 23, 1999, seaman Curtis Gregory allegedly sustained injuries to his knee and back while performing his regular duties aboard the M/V ERIKA LEIGH as it towed the Barge LB-16. As a result of the injury, LeBeouf Brothers Towing filed a complaint in this Court on March 17, 2000 for exoneration from or limitation of liability, following which a stay was issued on March 20, 2000, restraining all claimants from prosecuting any action against LeBeouf Brothers arising from this incident. In accordance with the Limitation of Liability Act, 46 U.S.C. App. §§ 181-89, and Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims, this Court ordered that all claims arising from the events set forth in the complaint be submitted on or before September 29, 2000, and that notice be published once per week in the Times Picayune for four successive weeks prior to the date fixed for the filing of claims. Rec. Doc. 2. After the period for submitting claims expired, Gregory remained the only claimant in this matter.
Gregory filed suit in the Southern District of Texas on a Jones Act claim and moved this Court to lift the stay restraining him from prosecuting his action outside of the limitation proceeding. In Gregory's motion, he stipulated to have all issues relating to liability adjudicated in this Court, to not seek final adjudication on issues of limitation of liability or exoneration or the valuation of the vessel in State court or any other federal court, and to waive any claim of res judicata and not seek to enforce or execute any judgment in excess of the value of the limitation fund adjudicated by this Court. In opposition, LeBeouf Brothers argues that the stay should not be lifted because Gregory is merely "forum shopping" and has failed to stipulate to the exoneration aspect of the limitation proceeding.
ANALYSIS
Under 46 U.S.C. App. §§ 181-89, the Limitation of Liability Act, the owner of a vessel which causes injury, damage, loss, etc., may file a federal action limiting liability to "the amount or value of the interest of such owner in such vessel, and her freight then pending." Id.; Texaco, Inc. v. Williams, 47 F.3d 765, 767 (5th Cir. 1995). Further, when a vessel owner initiates limitation proceedings under the Act, a federal court "may stay all other proceedings against the shipowner arising out of the same accident." Texaco, 47 F.3d at 767. Numerous courts have recognized that the exclusive jurisdiction vested within federal courts by the Limitation of Liability Act has created an inherent conflict with common law remedies available to plaintiffs in either state or federal court under the saving to suitors clause of 28 U.S.C. § 1333.
The "Saving to Suitors" Clause of 28 U.S.C. § 1333 states "[t]he district courts shall have original jurisdiction . . . of (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." For recognition of the inherent conflict between the Limitation of Liability Act and the "Saving to Suitors" clause, See, e.g., Langnes v. Green, 282 U.S. 531, 539-40, 51 S.Ct. 243 (1931); Texaco, 47 F.3d at 767; Complaint of Port Arthur Towing Co. on behalf of M/V Miss Carolyn, 42 F.3d 312, 315-16 (5th Cir. 1995); Odeco Oil and Gas Co. v. Bonnette I, 4 F.3d 401, 404 (5th Cir. 1993); In the Matter of Falcon Inland Inc., 2 F. Supp.2d 835, 836 (E.D. La. 1998); In the Matter of Tidewater Inc., 938 F. Supp. 375, 377-78 (E.D. La. 1996).
In balancing both the claimant's "Saving to Suitors" rights and the petitioner's limitation of liability rights, the Fifth Circuit has found two scenarios in which it will allow a stay to be lifted in a limitation proceeding and a claimant to pursue his claim in the fora of his choice. In a series of decisions, the Fifth Circuit held that claims may proceed outside the limitation action if 1) they total less than the value of the vessel, or 2) all claimants stipulate that the federal court has exclusive jurisdiction over limitation issues and the claimants will not seek to enforce a greater damage award than the limitation fund. See Texaco, 47 F.3d at 768; Port Arthur Towing, 42 F.3d at 316; Odeco Oil I, 4 F.3d at 404; Magnolia Marine Transp. Co. v. LaPlace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992); In re Two "R" Drilling Co., 943 F.2d 576, 578 (5th Cir. 1991).
While the Fifth Circuit has held that for a stay to be lifted the claimant must stipulate that all limitation issues be exclusively adjudicated by the admiralty court, it has not squarely addressed the issue of whether or not such a stipulation must also include an agreement that exoneration be exclusively adjudicated in the admiralty court. Odeco Oil Gas Co. v. Bonnette II, 74 F.3d 671, 675 n. 7 (5th Cir. 1996). As a result of Odeco Oil II, the Eastern District of Louisiana has split over the issue of whether or not a stipulation to exoneration is required to lift a stay. See In the Matter of Falcon Inland, Inc., 2 F. Supp.2d 835 (E.D. La. 1998) (Fallon, J.) (concluding that the absence of the term exoneration in the text of the Act means the Act is only applicable to limitation and that Rule F only refers to exoneration with the passive verb "may"); In the Matter of Tidewater Inc., 938 F. Supp. 375 (E.D. La. 1996) (Vance, J.) (concluding that a stipulation failing to cover the issue of exoneration is inadequate).
In the instant case, it is undisputed that Gregory has stipulated to having all limitation issues adjudicated in this Court. As a result, Gregory correctly argues that the Fifth Circuit mandates a lift of the stay so that he may exercise his "Saving to Suitors" rights. However, LeBeouf Brothers argues that lifting the stay would be inappropriate because the "Saving to Suitors" clause applies strictly to state common law remedies rather than federal statutory schemes or, in the alternative, that Gregory has failed to make the necessary stipulation with respect to exoneration. The Court will discuss each of LeBeouf Brothers' arguments in turn.
In addition, LeBeouf Brothers appears to argue against the lifting of the stay on the ground that Gregory is merely "forum shopping". Rec Doc. 9, p. 4-5. However, LeBeouf Brothers has failed to provide any authority supporting this position and as a result, this Court will not address the argument. However, the text of the "Saving to Suitors" clause does allow claimants to choose their fora. 28 U.S.C. § 1333 (1).
Application of Saving to Suitors Clause not Limited to State Common Law Remedies .
LeBeouf Brothers first argues that the "Saving to Suitors" clause is applicable only to state common law remedies and not to federal causes of action litigated in a federal court. Thus, because Gregory has filed a parallel action in a federal district court alleging a federal Jones Act cause of action, LeBeouf Brothers argues that the "Saving to Suitors" clause is inapplicable and the stay must not be lifted. LeBeouf Brothers argument is flawed for two reasons. First, LeBeouf Brothers' reading of the statute is simply unsupported by its text. A plain reading of the statute does not distinguish between which remedies are accorded to suitors and which are not. Rather, it merely says that suitors may save all other remedies to which they are entitled. The statute speaks to no preference of common law remedies over statutory remedies nor does it deny statutory remedies to any suitor, nor does it state within which court, federal or state, the suitor must seek his other remedies.
The second flaw resides within LeBeouf Brothers' interpretation of the relevant caselaw. LeBeouf Brothers argues that in the cases in which a stay was lifted, the claimant, through the "Saving to Suitors" clause, sought a remedy under state common rather than federal law. While the Court in Lake Tankers Corp. v. Henn, 354 U.S. 147, 77 S.Ct. 1269 (1957) interprets the clause as preserving "common-law remedies", the focus of that decision, as well as Fifth Circuit jurisprudence, is to ensure the petitioner will not be liable for an amount exceeding the value of the limitation fund in an alternative forum rather than merely ensuring the claimant pursues a common law claim. Thus, even though those cases are distinguishable from the instant case in that the claimants were pursuing state common law remedies, the Courts' decisions were based upon ensuring the issue of limitation be adjudicated exclusively in federal court and that the limitation fund not be exceeded in any other proceeding rather than being based upon the remedies sought.
In Henn, the Court found that denying claimants the right to proceed in alternative fora in all circumstances would "transform the Act from a protective instrument to an offensive weapon" and that "[t]he Act was not adopted to insulate shipowners from liability but merely to limit it to the value of the vessel and the pending freight." Id. at 152-53, 77 S.Ct. at 1272 emphasis added). Further, in Odeco Oil II, the Court stated that a "court's primary concern is to protect the shipowner's absolute right to claim the Act's liability cap, and to reserve the adjudication of that right in the federal forum." Id. at 674. (quoting Magnolia Marine, 964 F.2d at 1575). Both Texaco and Port Arthur Towing have similar language expressing that the Act's primary concern is protecting the shipowner's interest in limiting liability. Texaco, 47 F.3d at 767;Port Arthur Towing, 42 F.3d at 315-16. Finally, an important case out of the First Circuit, Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623 (1st Cir. 1994), held that under the "Saving to Suitors" clause, "an injured party may have claims arising from a single accident both under federal maritime law and under state law, whether legislation or common law." Id. at 625-26 (citing Gilmore Black, The Law of Admiralty, §§ 1-13, at 37 (2d ed. 1975)). Thus, these cases merely hold that LeBeouf Brothers' limitation rights are adequately protected so long as their right to limitation is adjudicated exclusively by the admiralty court and the limitation fund is not exceeded by an alternative forum.
While Not Necessary, Claimant has Stipulated to Federal Adjudication of Exoneration Issue .
LeBeouf Brothers also argues that in order for the stay to be lifted, Gregory must stipulate to exclusive adjudication in federal court with respect to the issue of exoneration. The Fifth Circuit has not squarely addressed this issue and this Court has split on whether such a stipulation is required. See, generally, Odeco Oil II, 74 F.3d 671 (5th Cir. 1996); In the Matter of Tidewater Inc., 938 F. Supp. 375 (E.D. La. 1996) (finding stipulation with respect to exoneration required); In the Matter of Falcon Inland, Inc., 2 F. Supp.2d 835 (E.D. La. 1998) (finding stipulation with respect to exoneration not required). This Court agrees with Judge Fallon's analysis of the exoneration issue in Falcon Inland, Inc., and finds that under the Limitation of Liability Act and Supplemental Admiralty Rule F, a stipulation that exoneration be adjudicated exclusively in federal court is not required to lift a stay in a limitation proceeding. As Judge Fallon indicates, the Act itself exclusively references limitation and fails to mention exoneration. Id. at 837. Coupled with the language of Rule F which only refers to exoneration with the permissive verb "may", this Court concludes that the Act only guarantees a petitioner the right to limit liability exclusively in federal court. Exoneration is left to the fora of the claimant's choice.
Notwithstanding this, even if the Court were to conclude that stipulation to exoneration is required, the motion to lift stay should be granted. In his Stipulation document Rec. Doc. 7, ¶ 2, Gregory stipulates that he will exclusively submit to this court on the issues of both limitation and exoneration. The stipulation reads, "[c]laimant Curtis Gregory, hereby stipulates that he will not seek within either his pending Federal Court action in the Southern District of Texas, . . . or any other state or federal court aside from the appropriate, federal limitation proceeding, any decision, ruling or judgment on the issue of Petitioner LeBeouf Brothers . . . , alleged right to limitation of or exoneration from liability pursuant to 46 U.S.C. § 183." (emphasis added). And under Texaco, if a party adequately stipulates to protect the limiting party's right to receive exoneration or limit liability, then the stay should be lifted. Texaco, 47 F.3d at 769-70.
Therefore, the Court finds that Gregory has satisfied all of the conditions required to lift the stay. Accordingly;
IT IS ORDERED that Gregory's Motion to Lift Stay (Rec. Doc. 6) should be and hereby is GRANTED and claimant may proceed with his action in the venue of his choice.