Opinion
CIVIL ACTION NO. H-07-3918.
May 30, 2008
MEMORANDUM OPINION AND ORDER
Petitioner King Fisher Marine Service, L.P., brings this action for exoneration and/or limitation of liability, civil and maritime, under the Limitation of Liability Act, 46 U.S.C. §§ 30501- 30512, Rule 9(h) of the Federal Rules of Civil Procedure, and Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims. Pending before the court is Claimants' Motion to Dismiss Petitioner's Limitation Action; or Alternatively, to Require Petitioner to Establish a Separate Limitation Fund for Each Distinct Occurrence (Docket Entry No. 23). For the reasons explained below, claimants' motion will be denied.
See Amended Complaint and Petition for Exoneration From or Limitation of Liability, Docket Entry No. 1.
I. Factual and Legal Allegations
See id.
Petitioner alleges that it owns the J.N. Fisher, its engines, gear, tackle, etc. (the Vessel), and that on February 20, 2007, the Vessel commenced a voyage in the vicinity of Corpus Christi, Texas, that ended on August 11, 2007, in the vicinity of Victoria, Texas. On March 25, 2007, claimant Hector De Leon sustained personal injuries when he slipped on the deck of a tender boat that was appurtenant to the Vessel's dredging operations. Approximately one month later on April 18, 2007, claimant Jesus Rodriguez sustained personal injuries while carrying a heavy load of materials down a stairwell on the Vessel. Both men subsequently filed suit in state court against petitioner under the Jones Act and general maritime law alleging that their injuries were caused by petitioner's negligence and the unseaworthiness of the Vessel. Petitioner alleges that it exercised due diligence to make and maintain the Vessel in all respects seaworthy, and that the injuries sustained by claimants were not caused or contributed to by any design, fault, neglect or want of care on the part of petitioner, or by any unseaworthiness attributable to the Vessel. Petitioner alleges that any injury sustained by the claimants could only have been occasioned and incurred without its privity or knowledge, and that the value of its interest in the Vessel at the end of the voyage on which claimants sustained injury did not exceed $1.5 million.
II. Applicable Law
The Limitation of Liability Act ("the Act"), 46 U.S.C. §§ 30501- 30512, "allows a vessel owner to limit liability for damage or injury, occasioned without the owner's privity or knowledge, to the value of the vessel or the owner's interest in the vessel." Lewis v. Lewis Clark Marine, Inc., 121 S.Ct. 993, 1000 (2001). See also Butler v. Boston and Savannah Steamship Co., 9 S.Ct. 612, 616-17 (1889) (holding that the right to limit liability extends to claims for personal injury and death). In cases where limitation of liability is at issue, a vessel owner may also seek exoneration from liability. Id. at 1003. See also In re Tetra Applied Technologies L.P., 362 F.3d 338, 342 (5th Cir. 2004).
While the Act accords vessel owners the right to seek limited liability, the actual procedure for a limitation action is set forth in Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims. Lewis, 121 S.Ct. at 1001. The Supreme Court has explained the procedure in general terms, as follows:
The district court secures the value of the vessel or owner's interest, marshals claims, and enjoins the prosecution of other actions with respect to the claims. In these proceedings, the court, sitting without a jury, adjudicates the claims. The court determines whether the vessel owner is liable and whether the owner may limit liability. The court then determines the validity of the claims, and if liability is limited, distributes the limited fund among the claimants.Id.
Courts employ a two-part analysis to determine whether the vessel owner is entitled to limitation. See Farrell Lines Inc. v. Jones, 530 F.2d 7, 10 (5th Cir. 1976). First, the court must decide whether the vessel owner's negligence or conditions of unseaworthiness caused the accident. Id. On this question, the claimant bears the burden of proof. Id. If the claimant successfully establishes the vessel owner's liability, the court must then determine whether the vessel owner had knowledge or privity of the acts of negligence or conditions of unseaworthiness that caused the accident. Id. The vessel owner bears the burden of proof on this "privity or knowledge" question. Id.
An action filed by a shipowner seeking to limit its liability "must be brought within six months after a claimant gives the owner written notice of a claim." 46 U.S.C. § 30511. See also Supplemental Rules for Certain Admiralty and Maritime Claims F(1) ("Not later than six months after receipt of a claim in writing, any vessel owner may file a complaint in the appropriate district court, as provided in subdivision (9) of this rule, for limitation of liability pursuant to statute."); and Karim v. Finch Shipping Co., Ltd., 265 F.3d 258, 263-64 (5th Cir. 2001). The six-month prescriptive period requires the shipowner to act promptly to gain the benefit of the right to limit liability, and prevents the shipowner from waiting to file until the later stages of any state court litigation. See Exxon Shipping Co. v. Cailleteau, 869 F.2d 843, 846 (5th Cir. 1989). "If a petition is not filed within the six-month period, it must be dismissed as untimely." Id.
The Fifth Circuit has noted that a shipowner may choose to set up a defense of limitation of liability in one of two ways. First, the shipowner may file a petition in a federal district court within the six-month time period. See Vatican Shrimp Co., Inc. v. Solis, 820 F.2d 674, 677-79 (5th Cir.), cert. denied, 108 S.Ct. 345 (1987); Karim, 265 F.3d at 263. Second, the shipowner may establish the defense by pleading the substantive provisions of the Act in a properly filed answer in any court. However, the Fifth Circuit has noted that "to ensure access to limitation of liability, shipowners must . . . file . . . petitions in federal court to account for the possibility that the petitions may be contested." Karim, 265 F.3d at 266 n. 10 (citing 46 U.S.C. § 185, now 46 U.S.C. § 30511). This is because defensive pleading in a state court answer does not provide the federal court with jurisdiction to hear the shipowner's limitation claim. Id. (citing Vatican Shrimp, 820 F.2d at 677). Therefore, "a shipowner cannot always rely upon raising limitation in a state court answer because, once the limitation is contested, it falls within the exclusive jurisdiction of a federal admiralty court. As such, if a shipowner has not filed its . . . petition within the six-month time frame, it forfeits that defense." Id.
When a vessel owner initiates a limitation action, the federal court stays all related proceedings against the vessel owner and requires all claimants to assert their claims in the limitation action. See Magnolia Marine Transport Co., Inc. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992); Texaco, Inc. v. Williams, 47 F.3d 765, 767 (5th Cir. 1995) ("When a shipowner invokes the Act the federal court may stay all other proceedings against the shipowner arising out of the same accident and require all claimants to timely assert their claims in the limitation court."). Limitation actions are typically "directed at maritime misfortunes where the losses claimed exceed the value of the vessel and freight." Id. (citing Lake Tankers Corp. v. Henn, 77 S.Ct. 1269, 1272 (1957)). This process provides federal courts "exclusive admiralty jurisdiction of suits brought under the Act, while "saving to suitors . . . all other remedies to which they are otherwise entitled." Id. (quoting 28 U.S.C. § 1333). Federal courts resolve the inherent tension between a vessel owner's right to limitation of liability and an injured plaintiff's right to a jury trial by allowing common law claims to continue, so long as a vessel owner's federal rights are not jeopardized. Id. Thus, the federal limitation court may lift the stay and allow claimants to proceed in state court, if "all claimants . . . sign a stipulation protecting the vessel owner's rights under the . . . Act." In re Complaint of ADM/Growmark River Sys., Inc., 234 F.3d 881, 885-86 (5th Cir. 2000).
See Claimants' Stipulation, Exhibit A attached to Claimants' Unopposed Motion to Lift Stay Subject to Their Pending Motion to Dismiss, Docket Entry No. 24, in which the claimants in this action stipulate not to seek enforcement of any state court judgment that exceeds the amount established as the proper limitation fund in this action. See also Order on Claimants' Unopposed Motion to Lift Stay Subject to Their Pending Motion to Dismiss, Docket Entry No. 26, lifting the stay of claimants' state court actions.
III. Claimants' Motion to Dismiss
Claimants argue that this action should be dismissed because to state a claim under the Act, petitioner must file a separate limitation action for each distinct occurrence, and that since petitioner has lumped together two distinct occurrences into the same limitation action that petitioner has failed to state a claim upon which relief may be granted.A. Standard of Review
Claimants' motion to dismiss the complaint for failure to state a claim upon which relief may be granted is grounded on Federal Rule of Civil Procedure 12(b)(6). A Rule 12(b)(6) motion to dismiss tests the formal sufficiency of the pleadings and is "appropriate when a defendant attacks the complaint because it fails to state a legally cognizable claim." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied sub nom Cloud v. United States, 122 S.Ct. 2665 (2002). The court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff's favor. Id.When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.Swierkiewicz v. Sorema N.A., 122 S.Ct. 992, 997 (2002) (quotingScheuer v. Rhodes, 94 S.Ct. 1683, 1686 (1974)). To avoid dismissal, pleadings must contain specific, well-pleaded facts, not mere conclusory allegations. See Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992). Although "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of [the alleged] facts is improbable, and that a recovery is very remote and unlikely," Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007), plaintiffs are required to provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. A plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Id. at 1974. Factual allegations must be enough to raise a right to relief above the speculative level. Id.
B. Analysis
Citing Exxon Shipping, 869 F.2d at 843, claimants argue that this action should be dismissed because pursuant to the "distinct occasion" rule initially codified under 46 U.S.C. § 183(d) and now recodified under 46 U.S.C. § 30506(d), petitioner is required to file a separate limitation action for each claimant because each claimant suffered injuries during unrelated, "distinct occasions." Petitioner counters that claimants' motion to dismiss should be denied because (1) Exxon Shipping concerned only whether limitation actions were timely filed, and timely filing of this action is not in dispute; (2) unlike Exxon Shipping this action does not concern two "distinct occasions;" and (3) even if the court concludes that this action does concern two distinct occasions, claimants' motion to dismiss should be denied
because the factual foundation for a Limitation of Liability proceeding still exists. The only difference would be that possibly separate limitation funds, and not one fund, would be warranted. But, since the J.N. FISHER is not a "seagoing vessel," separate funds are not required.
Petitioner King Fisher Marine Service, L.P.'s Response to the Motion to Dismiss of Claimants Hector DeLeon and Jesus Gilberto Rodriguez (Petitioner's Response), Docket Entry No. 27, pp. 2-4 ¶¶ 3-7.
1. Exxon Shipping and the Distinct Occasion Rule
In Exxon Shipping a barge exploded and sank on November 13, 1985, during a gas-freeing and cleaning operation on the Harvey Canal in Gretna, Louisiana. 869 F.2d at 844. Although Exxon marked the wreckage with a day marker and night beacon, two days later on November 15, 1985, another barge sustained damage when it collided with the wreckage of the Exxon barge. Id. at 844-845. Exxon received notice of a claim arising from the collision on November 29, 1985, and notice of claims arising from the explosion on February 13, 1986. Id. at 845. On June 5, 1986, Exxon filed a petition to limit liability with respect to claims arising from the explosion. Id. The claimants moved for summary judgment seeking dismissal of Exxon's petition on the ground that it was not timely filed because Exxon had received notice of the collision more than six moths before it filed the limitation action with respect to claims arising from the explosion. The district court granted the claimants' motion and dismissed Exxon's petition after concluding that notice of the collision claim was sufficient to commence the running of the six-month prescriptive period for claims arising from both the collision and the explosion. Id. The district court "applied a `but for' theory of tort causation in ruling the explosion and the collision were `proximately related' and therefore part of the same occurrence for the purpose of filing a limitation petition."Id. The Fifth Circuit reversed the district court, holding that the explosion and collision were two distinct occasions and, consequently, that the date on which Exxon received notice of the collision claim had no effect on the prescriptive period for filing its petition for limitation of liability on claims arising from the explosion. Id. The court reached this holding by examining the "distinct occasion" rule, then codified at 46 U.S.C. App. § 183(d).
On October 6, 2006, Congress repealed this section and re-codified it as 46 U.S.C. § 30506(d), which now reads:
(d) Claims arising on distinct occasions. — Separate limits of liability apply to claims for personal injury or death arising on distinct occasions.
See Notes to subsection (d) ("the words `Separate limits of liability apply' are substituted for "[t]he owner . . . shall be liable . . . to the same extent as if no other loss of life or bodily injury had arisen' to eliminate unnecessary words.").
The Fifth Circuit began its analysis by examining the "distinct occasion" rule as developed in Great Britain:
In Lucullite, Lord Anderson described "distinct occasions" for limitation of liability purposes as follows:
(a) that there were distinct acts of negligence whereby the two ship[s] were respectively injured; and
(b) that the later act or acts of negligence whereby the second vessel was injured were not necessitated or rendered inevitable by the earlier.Id. at 847. In Lucullite a collision occurred due to improper mooring. Subsequently, a second collision occurred after the ship that was improperly moored released its lines from the dock to proceed into the harbor. The Fifth Circuit analogized the facts of the two cases as follows:
The [British] court noted that the reason the ship was in the harbor was because of its improper mooring; however, the court found the second collision not an inevitable occurrence from the first one. It could have been prevented by proper management after the first collision. The situation is analogous to our facts. The collision with the Hollywood Barge would not have occurred if the explosion had not happened; however, the collision was not inevitable because subsequent events such as additional markings and warnings might have prevented it. Negligence principles then are used, but the test goes beyond a simple "but for" test.Id. Thus, adopting the British description of "distinct occasions," the Fifth Circuit held that a shipowner seeking to file a petition for limitation of liability must do so within six months after receiving notice of each "distinct occasion," even when a simple "but for" theory of causation linked separate incidents resulting in different damages. Id.
The Exxon Shipping court then considered the "American Development of the Meaning of Distinct Occasion." Id. at 847. The court began its consideration by quoting 46 U.S.C. § 183(d), which provided that "[t]he owner of any . . . seagoing vessel shall be liable in respect to loss of life or bodily injury arising on distinct occasions to the same extent as if no other loss of life or bodily injury had arisen." The court acknowledged that § 183(d) did not literally apply to the facts before it because the explosion at issue had not occurred during a voyage, but reasoned that the rationale behind that section was, nevertheless, relevant to the facts of the case. Id. at 847. Stating that § 183(d) was intended to prevent "a shipowner from limiting to a single fund all injuries occurring on a voyage," id. (quoting 79 Cong. Rec. 14109, 14329-30 (1935)), the Fifth Circuit explained that § 183(d) had been added to the Act
to prevent the inequities such as occurred in The Scotland, 105 U.S. 24 (1882). In Scotland, the shipowner was able to limit his entire liability to the value of the vessel even though there was more than one accident involving injury on the voyage. The fund fell far short of compensating the victims of the more than one accident on the voyage. Gilmore Black, § 10-38, at 925. Under our facts the same situation arises. The victims of an explosion and collision would have to compete for a limited amount of money as they did in Scotland if the "but for" reasoning of the district court is upheld. Under § 185 then, we find the "unit of limitation" as having an analogous meaning to "distinct occasion" within § 183(d). We next must look to the meaning of "distinct occasion" within § 183(d).
In In re Alva Steamship Company, 262 F.Supp. 328 (S.D.N.Y. 1966), the only American case that has considered the "distinct occasion" principle of § 183(d), the court appropriately applied British law. See Gilmore Black, § 10-38, at 925. N. Healy D. Sharpe, Admiralty Cases Materials, 781 n. 27 (1974); 3 Benedict, Admiralty § 53, at 6-12 n. 6; Greenman, 57 Tul. L. Rev. at 1177. The court in Alva looked to the meaning of "distinct occasion" to determine if damage that resulted from a collision was a distinct occasion from an explosion that occurred two weeks later at the dock during salvage and gas-freeing operations. While the court never reached the merits of this determination, it looked to the established British law for guidance:
If successive collisions occur as a result of the same negligent act, all constitute one "distinct occasion," but if there is time and opportunity after the first collision to take action which would avoid the second collision, each is a "distinct occasion." Maclachlan, Merchant Shipping, 95 n. 1 (7th Ed. 1933), quoted in 3 Benedict. Admiralty, 401 n. 6 (6th Ed. Knauth 1940).Id. at 847-48. Applying this test, the Fifth Circuit concluded that Exxon had time and opportunity to mark the wreck after the explosion in a manner that would have avoided the subsequent collision and that the two occasions were thus separate and distinct. The court explained that "simply because the owner of the ship is liable for both occurrences does not mandate that the [two] occurrences be lumped together as one unit of limitation."Id. at 848.
2. Is this Action Subject to Dismissal because Petitioner Filed One Limitation Action Instead of Two?
Relying on Exxon Shipping claimants argue that this action should be dismissed because petitioner improperly lumped together two unrelated occurrences into one limitation action in an attempt to limit its monetary exposure, and petitioner is now time-barred from filing separate limitation actions. In other words, claimants argue that the Fifth Circuit's discussion of the "distinct occasion" rule in Exxon Shipping requires petitioner to have filed a separate limitation act for each of them because they were each injured on separate and unrelated "distinct occasions." Assuming without deciding that claimants' are correct in asserting that the injuries they suffered did, in fact, occur on two distinct occasions under the Act, the court nevertheless concludes that their motion to dismiss should be denied for three reasons.
First, in Exxon Shipping the Fifth Circuit only held that a vessel owner seeking to file a petition for limitation of liability must do so within six months after receiving notice of each "distinct occasion." 869 F.2d at 845. Neither the holding in that case — the now repealed versions of the statutes on which the court relied, i.e., 46 U.S.C. §§ 183 and 185 — nor the recodified versions of those statutes — i.e., 46 U.S.C. §§ 30506(d) and 30511 — require a vessel owner to file a separate action for each "distinct occasion."
Second, claimants fail to cite any case in which a district court has either dismissed a petitioner's complaint under similar circumstances, or improperly allowed a petitioner to limit its monetary exposure by including claims that arise from more than one "distinct occasion" in a single limitation action. See In re Complaint of Hollywood Marine, Inc., 2000 WL 461659, *2 (E.D. La. 2000) (acknowledging that the presence of claims arising from more than one "distinct occasion" would not be cause to dismiss but, instead, cause for claimants to argue that the limitation fund should not be limited to the value of one vessel).
Finally, even if Exxon Shipping and/or the underlying statutes required petitioner to file separate actions for each "distinct occasion," claimants' motion to dismiss should be denied because dismissal would not be the proper remedy. See Alva Steamship, 262 F.Supp. at 331 (denying motion to dismiss asserted on grounds similar to those asserted in this action and declining to sever absent factual development needed to determine whether claims at issue arose from one or two distinct occasions). See also Black Diamond S.S. Corp. v. Robert Stewart Sons, 69 S.Ct. 622, 627 (1949) (in light of the six-month prescriptive period applicable to limitation actions, dismissal for failure to establish sufficient limitation fund was improper).
Accordingly, the court concludes that claimant's motion to dismiss on the ground that petitioner improperly filed one instead of two limitation actions should be denied.
IV. Claimants' Motion to Require Petitioner to Establish a Separate Limitation Fund for Each Distinct Occurrence
Since the court has concluded that claimants' motion to dismiss should be denied, the court will address claimants' "request that, at a minimum, this Court order Petitioner to establish a separate limitation fund as to each Claimant, which Petitioner has averred to be $1,500,000." Petitioner counters that the establishment of two separate limitation funds is not required because (1) two "`distinct occasions' did not occur," and (2) the Vessel is not a "seagoing vessel."
Claimants' Motion to Dismiss, Docket Entry No. 23, p. 6 ¶ 17.
Petitioner's Response, Docket Entry No. 27, p. 4 ¶ 6.
Id. at 4 ¶ 7.
A. Standard of Review
Neither claimants nor petitioner have provided the court any guidance on the standard of review to apply in ruling on claimants' request for petitioner to establish two limitation funds, and claimants have cited only Exxon Shipping, 869 F.2d at 843, in support of their request. Since the issue in Exxon Shipping was not the establishment of multiple limitation funds but how to determine the commencement date of the six-month prescriptive period for filing a limitation action, Exxon Shipping does not constitute direct authority on the issue now before the court. However, since the court in Exxon Shipping looked for guidance to the "distinct occasion" rule incorporated into the personal injury and loss of life amendments to the Limitation of Liability Act, the court will do the same. The most analogous provision is 46 U.S.C. § 30506(d), which provides: "Claims arising on distinct occasions. — Separate limits of liability apply to claims for personal injury or death arising on distinct occasions." Although the court has not found any authority explaining the standard of proof to apply in ruling on an application to establish multiple limitation funds pursuant to this provision or its predecessor, i.e., 46 U.S.C. § 183(d), claimants' motion is analogous to motions filed by claimants seeking to increase the size of an established fund on the ground that the fund is insufficient pursuant to § 30506(b). Such claimants bear the burden of showing that the vessel owner likely faces exposure to damages in excess of the fund prescribed by 46 U.S.C. § 30505(a). See Complaint of Caribbean Sea Transport Ltd., 748 F.2d 622, 628-29 (11th Cir. 1984). Accordingly, the court concludes that claimants bear the burden of persuading the court that two separate limitation funds need to be established in this case.
Section 30506(b) provides:
(b) Minimum liability. — If the amount of the vessel owner's liability determined under section 30505 of this title is insufficient to pay all losses in full, and the portion available to pay claims for personal injury or death is less than $420 times the tonnage of the vessel, that portion shall be increased to $420 times the tonnage of the vessel. That portion may be used only to pay claims for personal injury or death.
Section 30505(a) provides:
(a) In general. — Except as provided in section 30506 of this title, the liability of the owner of a vessel for any claim, debt, or liability described in subsection (b) shall not exceed the value of the vessel and pending freight.
B. Analysis
Petitioner alleges that the claimants were injured in two separate events that occurred almost a month apart. Claimants assert and petitioner does not dispute that their injuries occurred "under completely disparate circumstances and temporal remoteness" such that their injuries could not possibly have been caused by the same negligent act. These allegations leave little doubt that application of the distinct occasion test developed and applied by the Fifth Circuit in Exxon Shipping to the facts alleged in this action would lead to the conclusion that the two claimants sustained their injuries on two "distinct occasions." However, instead of grounding their request for two limitation funds on the personal injury and loss of life amendments added to the Act, claimants merely cite Exxon Shipping, 869 F.2d at 843, in support of their request that petitioner establish two limitation funds.
Amended Complaint and Petition for Exoneration from or Limitation of Liability, Docket Entry No. 14, p. 2 ¶ IV.
Claimants' Motion to Dismiss, Docket Entry No. 23, p. 4 ¶ 11.
See Claimants' Motion to Dismiss, Docket Entry No. 23, p. 4 n. 4.
Petitioner argues that two "distinct occasions" did not occur, but does not argue that application of the distinct occasion test articulated by the Fifth Circuit in Exxon Shipping to the facts alleged in its petition would not lead to the conclusion that the two claimants sustained their injuries on two "distinct occasions." Instead, petitioner argues that the "distinct occasion" test applied in Exxon Shipping is inapplicable to this case because the two cases are factually distinct. Alternatively, petitioner argues that the "distinct occasion" test applied in Exxon Shipping is inapplicable to this case because the Vessel in this action is not a seagoing vessel.
Petitioner's Response, Docket Entry No. 27, p. 4 ¶ 6.
Id. at 4 ¶ 7.
1. Does Exxon Shipping Reguire Petitioner to Establish Two Limitation Funds?
Petitioner argues that the reasoning and "distinct occasion" test applied in Exxon Shipping are not applicable to the facts of this case because the barge at issue in Exxon Shipping was not on a voyage when the explosion occurred, while the Vessel at issue in this case was on the same voyage when both claimants suffered their injuries. Since the Vessel at issue here was on a voyage when claimants were injured, petitioner argues that the unit of limitation for purposes of this action is the Vessel's voyage, not the allegedly "distinct occasions" in which the claimants were each injured. In support of this argument, petitioner cites the following passage from Exxon Shipping: "When a ship is not on a voyage, as was the situation of the Exxon barge, the measure or unit for limitation of liability is `the event, accident or disaster giving rise to the claim or group of claims.'" 869 F.2d at 846. From this passage petitioner reasons by inference that when a ship is on a voyage, the unit of limitation is the voyage.
Petitioner's argument is grounded on the law as it existed before amendment of the Act to include the personal injury and loss of life provisions initially codified at 46 U.S.C. § 183 and recodified at 46 U.S.C. § 30506, and as the law still exists today for cases to which those provisions do not apply. In such cases a single limitation fund consisting of the value of the vessel and its pending freight at the end of the voyage is shared pro rata by all claimants from all casualties or occasions that occur during any one voyage. See, e.g., Place v. Norwich New York Transp. Co., 68 S.Ct. 1150, 1155 and 1156 (1886) ("thevoyage defines the limits and boundary of the casus or case to which the law is to be applied"; and although there may be "more than one case of loss and destruction, and they may happen at different and successive times, . . . [all claimants] are to be compensated pro rata") (emphasis in original)). As the Fifth Circuit explained in Exxon Shipping, the personal injury and loss of life provisions were added to the Act
to prevent the inequities such as occurred in The Scotland, 105 U.S. 24 (1882). In Scotland, the shipowner was able to limit his entire liability to the value of the vessel even though there was more than one accident involving injury on the voyage. The fund fell far short of compensating the victims of the more than one accident on the voyage. Gilmore Black, § 10-38, at 925.869 F.2d at 847.
The current version of the personal injury and loss of life provision is 46 U.S.C. § 30506, which provides:
(a) Application. — This section applies only to seagoing vessels, but does not apply to pleasure yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels, fish tender vessels, canal boats, scows, car floats, barges, lighters, or nondescript vessels.
(b) Minimum liability. — If the amount of the vessel owner's liability determined under section 30505 of this title is insufficient to pay all losses in full, and the portion available to pay claims for personal injury or death is less than $420 times the tonnage of the vessel, that portion shall be increased to $420 times the tonnage of the vessel. That portion may be used only to pay claims for personal injury or death.
(c) Calculation of tonnage. — Under subsection (b), the tonnage of a self-propelled vessel is the gross tonnage without deduction for engine room, and the tonnage of a sailing vessel is the tonnage for documentation. However, space for the use of seamen is excluded.
(d) Claims arising on distinct occasions. — Separate limits of liability apply to claims for personal injury or death arising on distinct occasions.
(e) Privity or knowledge. — In a claim for personal injury or death, the privity or knowledge of the master or the owner's superintendent or managing agent, at or before the beginning of each voyage, is imputed to the owner.
The barge at issue in Exxon Shipping was not on a voyage when it exploded and sank. Consequently, the Fifth Circuit determined that the measure or unit of limitation for liability was "`the event, accident or disaster giving rise to the claim or group of claims.'" 869 F.2d at 846 (citing 3 Benedict, Admiralty § 53 at 6-11, and G. Gilmore C. Black, The Law of Admiralty, § 10-47 at 949 (2d Ed. 1975) ("The [owner's] protection, time-wise, is limited to the group of claims which arise from the particular accident."). Although the Exxon Shipping court acknowledged that the "distinct occasion" rule contained in the personal injury and loss of life amendments to the Act, i.e., 46 U.S.C. § 183(d), did "not literally apply" to the facts before it because the barge "was not on a voyage," 869 F.2d at 847, the court nevertheless concluded that "the rationale behind the section [did] apply."Id.
The "distinct occasion" test and the rationale underlying it applied by the court in Exxon Shipping can reasonably be applied by other courts to cases in which "the measure or unit for limitation of liability is the event, accident or disaster giving rise to the claim or group of claims," id. at 846, but not to cases in which the measure or unit for limitation of liability is the voyage during which the events, accidents, or disasters giving rise to the claim or group of claims occurred. Since the Vessel in this action was on a voyage when the claimants were injured, the measure or unit for limitation of liability is the voyage and not the "distinct occasions" in which they were injured, unless the "distinct occasion" rule contained in the Act's personal injury and loss of life provision, 46 U.S.C. § 30506, can be applied. Since the "distinct occasions" in which the claimants were injured occurred during a single voyage, the court agrees with petitioner that the facts of this case are substantively distinguishable from those at issue in Exxon Shipping, and that the rationale underlying Exxon Shipping's application of the "distinct occasion" rule cannot be applied in this case. Therefore, unless the Vessel was a "seagoing vessel" under the Act, the measure or unit for limitation of liability is, as petitioner argues, the voyage and not, as claimants argue, the "distinct occasions" in which they were injured. Thus, the court is not persuaded that Exxon Shipping requires petitioner to establish two limitation funds.
2. Does the Act's Personal Injury and Loss of Life Provision Reguire Petitioner to Establish Two Limitation Funds?
Citing 46 U.S.C. § 30506(a), Matter of Talbot Big Foot, Inc., 854 F.2d 758 (5th Cir. 1988), and the affidavit of its Vice-Chairman, Waymon Boyd, petitioner argues that it need not establish two limitation funds because the Vessel on which claimants suffered their injuries is not a "seagoing vessel." In pertinent part § 30506 provides:
§ 30506. Limit of liability for personal injury or death
(a) Application. — This section applies only to seagoing vessels, but does not apply to pleasure yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels, fish tender vessels, canal boats, scows, car floats, barges, lighters, or nondescript vessels.
Id. at 9-12 ¶¶ 17-22.
In Matter of Talbot Big Foot, 854 F.2d at 761-62, the Fifth Circuit defined a "seagoing vessel" for purposes of the Act as a vessel that is either intended to navigate or does navigate beyond twelve nautical miles from the Coast of the United States. The court explained that
[i]t is not enough to decide that a particular craft has the capability to go beyond the inland waters and the Boundary Line, because most of the vessels enumerated in § 183(f) have that capability. Nor is it the actual use of the vessel that matters, because ocean liners may be used on inland water for entertainment purposes. It is rather the usual operations to be expected, for a vessel of its design, that defines whether a particular vessel is seagoing in the meaning of the statute.
We conclude that the inquiry to determine whether a particular vessel is "seagoing" under . . . [the Act] is whether the vessel does, or is intended to, navigate in the seas beyond the Boundary Line in the regular course of its operations. These operations may in fact proceed on either side of the Boundary line; but the court must find that, considering the design, function, purpose, and capabilities of the vessel, it will be normally expected to engage in substantial operations beyond the nautical boundary.
The "Boundary Line," as established by the United States Coast Guard, is twelve nautical miles from the Gulf Coast. Id. at 761.
In his affidavit, Waymon Boyd states that the Vessel is a 18 inch cutter head suction dredge owned and operated by King Fisher Marine Service, L.P. The design, function, and purpose of the . . . [Vessel] is to conduct dredging operations in the inland waterways. [The Vessel] is not a seagoing vessel and does not, is not intended to, and is not capable of navigating or operating beyond the boundary line of twelve (12) nautical miles from the Gulf Coast.
Exhibit C attached to Petitioner's Response, Docket Entry No. 27, p. 1 ¶ 3.
Claimants have not filed a reply to Petitioner's Response and its assertion that the Vessel is not a "seagoing vessel" under the Act. However, Claimants' Motion to Dismiss includes a footnote in which they assert
Claimants anticipate that Petitioner will argue that the Vessel, which is a dredge, is not a "seagoing vessel" under Section 30506(a); and that therefore, the distinct occasion provision in that same section does not apply. Even assuming that Petitioner could establish that a dredge is not a "seagoing vessel" for purposes of this Section, such a finding would be irrelevant to this Court's analysis, just as it was to the . . . [Exxon Shipping] court's analysis. In . . . [Exxon Shipping], the watercraft in question was a barge, which is specifically excluded from "seagoing vessel" status under this Section, both pre and post re-codification. Even so, the Fifth Circuit applied the distinct occasion principle. . . .
Claimants' Motion to Dismiss, Docket Entry No. 23, p. 4 n. 4.
For the reasons explained above in § IV.B.1, claimants' reliance on Exxon Shipping for their argument that a finding that the Vessel was not a "seagoing vessel" would not preclude the court from applying the "distinct occasion" principle is misplaced. As previously explained, the Fifth Circuit applied the "distinct occasion" principle in Exxon Shipping only after concluding that the measure or unit for limitation of liability was the explosion because the barge at issue was not on a voyage when the explosion occurred. Because the claimants in this action were injured while the Vessel was on a single voyage, the "distinct occasion" principle can only be applied if the Vessel was a "seagoing vessel" under the Act.
Claimants have neither argued that the Vessel is a "seagoing vessel" for purposes of the Act nor offered any evidence to counter the evidence contained in the Boyd affidavit. The Boyd affidavit states that the
design, function, and purpose of the . . . [Vessel] is to conduct dredging operations in the inland waterways. [The Vessel] is not a seagoing vessel and does not, is not intended to, and is not capable of navigating or operating beyond the boundary line of twelve (12) nautical miles from the Gulf Coast.
Exhibit C attached to Petitioner's Response, Docket Entry No. 27, p. 1 ¶ 3.
Since the Fifth Circuit has defined "seagoing vessel" for purposes of the Act as a vessel that is either intended to navigate or does navigate beyond twelve nautical miles from the Coast of the United States, Matter of Talbot Big Foot, 854 F.2d at 761-62, the undisputed evidence provided by the Boyd affidavit establishes that the Vessel is not a "seagoing vessel" under the Act. Accordingly, the court is not persuaded that the "distinct occasion" rule contained in the Act's personal injury and loss of life provision requires petitioner to establish two limitation funds.