Opinion
No. 99-951, c/w 99-984 1346, SECTION "N".
September 5, 2000.
ORDER AND REASONS
Before the Court are three motions: (1) Trico's Motion for Relief under Rule 19(a) of the Federal Rules of Civil Procedure; (2) Cheramie and Heller's Motion to Intervene as Defendants with Respect to the Claims of the Passenger Claimants; and (3) Cheramie and Heller's Motion to Set Aside Default and File Late Answer and Claim in Civil Action No. 99-1346. For the following reasons, the Court DENIES the Motions for Relief under Rule 19(a) and to Intervene and GRANTS the Motion to Set Aside Default and File Late Answer and Claim in Civil Action No. 99-1346.
"Trico" refers collectively to Trico Marine Assets, Inc. and Trico Marine Operators, Inc., the owners/operators/owners pro hac vice of the CANE RIVER.
A. BACKGROUND
These consolidated cases arise from the March 25, 1999 collision of Trico Marine's downbound vessel, the OSV CANE RIVER, and Diamond B's upbound vessel, the C/B MISS BERNICE, while operating in the fog on the Mississippi River below Venice, Louisiana.
"Diamond B" refers to Diamond B Marine Services, Inc., the owner and operator of the MISS BERNICE.
Subsequent to the collision, Trico filed suit in federal court against Diamond B for damages in admiralty, and Trico and Diamond B both filed exoneration/limitation actions in federal court. All three cases were consolidated in the present action. Several parties filed claims in the limitation proceedings, including Lonnie Fontenot, Wayne Thibodaux and Alan LeBlanc and their respective family members (collectively, "the passenger claimants"). On March 23, 2000, the passenger claimants filed a Petition for Damages in Louisiana state court against several defendants, including Michael A. Cheramie and Kenneth B. Heller, both of whom were crew members of the CANE RIVER at the time of the collision. These four cases have resulted in a tremendous amount of litigation, a trend which continues with the instant motions.
B. LAW AND ANALYSIS
The Court first addresses Trico's Motion for Relief Under Rule 19(a) of the Federal Rules of Civil Procedure. Trico argues that Cheramie, Heller and the other state court defendants are necessary parties within the meaning of Rule 19(a) for several reasons. First, Trico argues that in the absence of the state court defendants the passenger claimants will not be able to obtain complete relief in the federal action. Second, Trico argues that the state court defendants have an interest in the federal proceedings that will be impaired or impeded in their absence. And third, Trico argues that the fault of the state court defendants should be litigated in the federal action so that Trico and Diamond B are not found responsible for any such fault. The Court rejects Trico's arguments. Trico fails to cite any case in which a court has granted a Rule 19(a) motion in a limitation of liability proceeding. The Court believes that there is good reason for the absence of such jurisprudence. The Limitation of Vessel Owner's Liability Act, 46 U.S.C. App. § 181 et seq., was designed to protect maritime commerce and encourage development of an American merchant fleet. See Kattelman v. Otis Eng'g Corp., 696 F. Supp. 1111, 1113 (E.D. La. 1988) (citingMaryland Gas. Co. v. Cushing, 347 U.S. 409 (1954)). Accordingly, the purpose of a federal limitation proceeding is to ascertain whether the ship owner is entitled to the Act's protection and, if so, to determine how the limitation fund should be distributed. The purpose of the proceeding is not to provide complete relief to all parties, as evidenced by the fact that the Act precludes state court suits against ship owners, but allows such suits against all other parties. See Zapata Haynie Corp. v. Arthur, 926 F.2d 484, 485 (5th Cir. 1991). In light of the nature of the Act, the Court finds that the state defendants are not necessary parties to the present litigation and denies Trico's Motion.
For the same reasons, the Court denies Cheramie and Heller's Motion to Intervene as Defendants with Respect to the Claims of the Passenger Claimants. The Court finds that Cheramie and Heller are not entitled to intervention as of right under Federal Rule of Civil Procedure 24(a) because, as discussed above, they do not have a protectable interest in the limitation proceeding. And although it is true that Cheramie and Heller's defenses share common questions of law and fact with the limitation proceeding, it would be awkward to make Cheramie and Heller "defendants" in that proceeding, since the passenger claimants are not actually "plaintiffs." Accordingly, the Court finds permissive intervention under Rule 24(b) inappropriate.
Cheramie and Heller fail to cite any cases in which courts have allowed parties to intervene in a limitation proceeding. The Court's research revealed McKeithen v. S.S. FROSTA, 75 F.R.D. 7 (E.D. La. 1977), in which the district court granted the vessel owner's insurer's motion to intervene. The circumstances in McKeithen were significantly different than those in the cases at bar. Most importantly, McKeithen involved an insurer, an entity which, as the Court has discussed in a previous order, stands in a special relationship to the vessel owner for Limitation Act purposes. Additionally, in McKeithen the direct actions and the limitation proceeding were consolidated in federal court, and "the only practical effect of allowing intervention is to make the [insurer] a party to the limitation proceeding." Id. at 9 n. 2. Finally, the insurer in McKeithen sought to intervene in order to obtain a declaratory judgment that its liability could not exceed a certain sum and to interplead all claims to that sum. Thus, McKeithen is of uncertain, if any, value to Cheramie and Heller.
This decision does not work any particular hardship on Cheramie and Heller, however, as the Court grants their Motion to Set Aside Default and File Late Answer and Claim in Civil Action No. 998-1346, Diamond B's limitation proceeding. In Texas Gulf Sulphur v. Blue Stack Towing Co., 313 F.2d 359 (5th Cir. 1963), Judge Brown wrote that, "so long as the limitation proceeding is pending and undetermined, and the rights of the parties are not adversely affected, the court will freely grant permission to file late claims . . . upon showing of the reasons therefore." Id. at 362 (citations omitted). See also Odeco Oil and Gas Co., Drilling Div. v. Bonnette, 74 F.3d 671, 674 n. 6 (5th Cir. 1996) (applying same standard); Lloyd's Leasing Ltd. v. Bates, 902 F.2d 368, 371 (5th Cir. 1990) (same). Here, Cheramie and Heller state that, since they were not injured in the collision, they had no reason to file a claim against Diamond B until they were sued in state court by the passenger claimants, which then created the possibility of a claim of indemnity or contribution against Diamond B. Although they waited over four months since the filing of the state court claim to file the instant motion, this can be explained, at least in part, by the fact that Trico and Diamond B had filed a motion to stay the state court suit in light of the limitation proceeding. Considering this reason, the fact that the limitation proceeding is not set to be tried until January 2001, and the fact that little if any prejudice will result, the Court grants the Motion to Set Aside Default and File Late Answer and Claim.
"[P]arties seeking indemnification and contribution from a shipowner must be considered claimants within the meaning of the Limitation Act." Odeco, 74 F.3d at 675.
C. CONCLUSION
For the reasons set forth above,
IT IS ORDERED that Trico's Motion for Relief under Rule 19(a) of the Federal Rules of Civil Procedure is DENIED; Cheramie and Heller's Motion to Intervene as Defendants with Respect to the Claims of the Passenger Claimants is DENIED; and Cheramie and Heller's Motion to Set Aside Default and File Late Answer and Claim in Civil Action No. 99-1346 is GRANTED.