Opinion
CIVIL ACTION NO: 99-3425 SECTION: "R" (5)
August 4, 2000
ORDER AND REASONS
Before the Court is defendant-in-limitation John A. LeBoeuf, Sr.'s motion to lift the Court's November 19, 1999 order staying state court proceedings. For the following reasons, defendant in limitation's motion is denied.
I. Background
John A. LeBoeuf, Sr. filed suit in the 17th Judicial District Court for the Parish of Lafourche on August 9, 1999 against Crosby Tugs, L.L.C. and Crosby Tugs, Inc., alleging injuries sustained while employed aboard M/V ALLISON MARIE. In response, Crosby Offshore Marine Service, L.L.C. and Crosby Tugs, L.L.C. (collectively "Crosby") filed a complaint in limitation before this Court on November 12, 1999 for exoneration from or limitation of liability. Crosby also fixed the value of its interest in M/V ALLISON MARIE and her pending freight at the time of the alleged accident at not more than one million dollars and deposited in the Court security in that amount for claimant's benefit. On November 19, 1999, this Court ordered a stay of the commencement or further prosecution of any action or proceedings arising out of this accident until the determination of the limitation proceedings.
Seeking to lift the stay, LeBoeuf filed a motion on June 22, 2000 wherein he sought to trigger an exception to the Limited Liability Act by declaring certain stipulations. He subsequently filed two revised stipulations.
Originally LeBoeuf styled his motion as a "Motion to Remand," but by joint stipulation, filed July 27, 2000, it was retitled "Motion to Lift Stay Order."
Crosby opposes this motion on two grounds. First, as LeBoeuf failed to pray for a jury trial in his state court action, there is no statutory conflict between the Limitation of Liability Act and the "saving to suitors" clause warranting lifting the stay order. Second, LeBoeuf's stipulations are deficient because they do not adequately take into account that the limitation proceeding is also an action for exoneration.
ii. Discussion
The Limited Liability Act, 46 U.S.C. app. § 181 et seq., (the "Limitation Act") allows a shipowner, who lacks privity or knowledge, to limit liability for damages arising from a maritime accident to the "amount or value of the interest of such owner in such vessel, and her freight then pending." 46 U.S.C. app. § 183(a). By congressional design, the Limitation Act is designed to protect shipowners when the losses claimed exceed the value of the vessel and freight. See Magnolia Marine Transp. Co. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992). "A shipowner's right to limitation, however, is cabined by the `saving to suitors' clause" because the clause "evinces a preference for jury trials and common law remedies in the forum of the claimant's choice." Odeco Oil Gas Co. v. Bonnette, 74 F.3d 671, 674 (5th Cir. 1996) (citing 28 U.S.C. § 1333 (1) (giving federal district courts exclusive jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction," but "saving to suitors in all cases other remedies to which they are otherwise entitled"); Magnolia Marine Transp. Co., 964 F.2d at 1575). Notwithstanding this tension between the Limitation Act and the saving to suitors clause, "the [district] court's primary concern is to protect the shipowner's absolute right to claim the [Limitation] Act's liability cap, and to reserve the adjudication of that right in the federal forum." Id. (quoting Magnolia Marine Transport Co. 964 F.2d at 1575)
In balancing the right of shipowners to limit their liability in federal court and the rights of claimants to sue in the forum of their choice, federal courts have identified two circumstances in which a district court must allow a state court action to proceed:
(1) when the total amount of the claims does not exceed the shipowner's declared value of the vessel and its freight; and (2) when all claimants stipulate that the federal court has exclusive jurisdiction over the limitation proceeding, and that the claimants will not seek to enforce a damage award greater than the value of the ship and its freight until the shipowner's right to limitation has been determined by the federal court.Id. (citing Texaco, Inc. v. Williams, 47 F.3d 765, 768 (5th Cir. 1995)). See also Seabulk Offshore, Ltd. v. Honora, 158 F.3d 897, 900 (5th Cir. 1998). In both instances, allowing the state court to proceed is contingent on protecting the shipowner's "absolute" right to limit his liability. See Odeco Oil Gas Co., 74 F.3d at 674 (citing Port Arthur Towing Co. v. John W. Towing, Inc., 42 F.3d 312, 316 (5th Cir. 1995))
A. Saving to Suitors Clause
Crosby first argues that the two exceptions, which allow claimants to proceed with state court actions, are only applicable when there is a conflict between the exclusive jurisdiction of the federal court over limitation of liability and exoneration issues and the claimant's right to a common-law remedy. (Mem. Opp. Mot. at 4.) Specifically, Crosby cites a recent Eighth Circuit case for the proposition that a district court may not lift its stay on state court proceedings when the claimant elects a non-jury trial because that election eliminates any conflict between exclusive federal jurisdiction over limitation proceedings and the saving to suitors clause. See Lewis and Clark Marine, Inc. v. Lewis, 196 F.3d 900, 910 (8th Cir. 1999), cert. granted, ___ U.S. ___, 120 S.Ct. 2193 (2000)
Notwithstanding the Eighth Circuit's analysis in Lewis Clark Marine, the Fifth Circuit's holding in Linton v. Great Lakes Dredge Dock Co., 964 F.2d 1480 (5th Cir. 1992), compels a different result. In Linton, the court analyzed whether only jury trials were saved under the saving to suitors clause. After examining Madruga v. Superior Court, 346 U.S. 556, 74 S.Ct. 298 (1954), and Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 44 S.Ct. 274 (1924), the court concluded that "a non-jury trial in state court is not, in and of itself, offensive to the general maritime law." Linton, 964 F.2d at 1487. Accordingly, "the Supreme Court cases do not require a jury trial as an element of a `saving to suitors' remedy. Stated differently, a maritime non-jury action is not necessarily outside the `saving to suitors' clause and within the exclusive admiralty jurisdiction of the federal courts." Id. Therefore, the Court rejects Crosby's contention that the two exceptions to the Limitation Act are unavailable because, under Fifth Circuit jurisprudence, LeBoeuf's election of a non-jury trial in state court does not eliminate the conflict between exclusive federal jurisdiction over limitation proceedings and the "saving to suitors" clause. Consequently, if LeBoeuf can satisfy one of the two exceptions to the Limitation Act, the Court will lift its stay of the state court action.
C. Stipulations
In his motion to lift stay, LeBoeuf presents a set of stipulations, which he asserts satisfies the second exception to the Limitation Act. Crosby disagrees, arguing that LeBoeuf's stipulations do not adequately account for the exoneration aspect of the limitation proceeding.
With proper stipulations, a claimant may proceed outside the limitation action. As this Court has stated before, the claimant must: "(1) concede the sufficiency of the limitation fund, (2) consent to waive any claim of res judicata from a state court judgment that is relevant to the issues of limited liability, and (3) concede the petitioner's right to litigate all issues relating to limitation in the limitation proceeding." In re D.N.H. Towing Co., 1998 WL 252169, at *3 (E.D. La. May 19, 1998) (citing In re McCarthy Bros. Co./Clark Bridge, 83 F.3d 821, 831 (7th Cir. 1996); In re Mister Wayne, 729 F. Supp. 1124, 1128 (E.D. La. 1989); Magnolia Marine Transp. Co., 964 F.2d at 1575). While the Fifth Circuit has not squarely addressed whether exoneration is another necessary element in a stipulation, several courts in this district have ruled that a stipulation is deficient if it also does not protect a party's right to litigate the issue of exoneration in federal court. See, e.g., In re Tidewater Inc., 938 F. Supp. 375, 379 (E.D. La. 1996) (Vance, J.); New Orleans Yacht Club v. Sheldon, 1998 WL 118117, at *1 (E.D. La. Mar. 12, 1998) (Porteous, J.); In re Twenty Grand Offshore, Inc., 1997 WL 149950 (E.D. La. Mar. 20, 1997) (Schwartz, J.). See also SUPP. R. CERTAIN ADMIRALTY MARITIME ACTIONS F. The concern is that the rights of the party seeking exoneration in federal court would not be adequately protected if a party could recover in state court an amount below the amount of the limitation fund. See Tidewater Inc., 938 F. Supp. at 379 (citing Falcon Drilling, 1996 WL 363445, at *1)
Here, while LeBoeuf agrees in his third stipulation not to enforce any judgment that exceeds the limitation fund, he is presumably free to collect any judgment below the limitation amount, despite the pendency of the exoneration action in federal court. Therefore, the Court finds LeBoeuf's stipulations to be deficient because they fail to protect Crosby's right to litigate the issue of exoneration in federal court. See Supp. R. CERTAIN ADMIRALTY MARITIME ACTIONS F.
III. Conclusion
It is ordered that defendant in limitation LeBoeuf's motion to lift the Court's stay of state court proceedings is denied.