In Re: In the Matter of the Complaint of Kirby Inland Marine, LP
Order denying 28 request, construed as a motion, to preclude the Tyson-Benoit claimants and all other potential state court plaintiffs from prosecuting their claims against ORCA in state court pending this Court's determination of liability. The requests for oral argument (Docs. 26 & 28) are denied Signed by Chief Judge William H. Steele on 8/6/2013. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
IN RE: THE MATTER OF THE
COMPLAINT OF KIRBY INLAND
MARINE, L.P., etc., PETITIONING
FOR EXONERATION FROM OR
LIMITATION OF LIABILITY
) CIVIL ACTION 13-0319-WS-C
The Court has by separate order granted the motion of claimants Casey
Tyson, Justin Kyle Benoit and Maebell Muns Benoit (collectively, “the TysonBenoit claimants”)1 to clarify the scope of the limitation injunction entered herein.
(Doc. 42). That order clarifies that the injunction does not extend to the
prosecution of claims or cases against Oil Recovery Co., Inc. of Alabama
ORC and an apparently related entity, ORCA, Inc. (collectively, ORCA”)
opposed the Tyson-Benoit claimants’ motion. (Doc. 28). The conclusion of their
brief reads as follows:
Wherefore, premises considered, ORC and ORCA respectfully
request that this Court deny the Personal Injury Claimants’ Motion to
Clarify and enter an order that the Personal Injury Claimants (and any
other potential state court plaintiffs) are precluded from prosecuting
claims against ORC and ORCA arising out of the April 24, 2013 barge
explosion in any state court pending this Court’s determination of
(Id. at 9-10). The Court construes this request as a motion for an order precluding
the prosecution in state court of claims against ORCA. See Fed. R. Civ. P. 7(b)(1)
Some parties refer to the Tyson-Benoit claimants as the “personal injury
claimants.” (Doc. 28). Because there are other personal injury claimants besides the
Tyson-Benoit claimants, the Court uses the quoted term only to refer to all such claimants
as a group. The plaintiff refers to the Tyson-Benoit claimants as “the claimants.” (Doc.
25). Because there are other claimants besides the personal injury claimants, the Court
uses the quoted term only to refer to all claimants of any type.
(“A request for a court order must be made by motion.”). The precise issue of
whether the Court may or should enjoin the prosecution of claims against ORCA
has been fully briefed by ORCA, the plaintiff, the Tyson-Benoit claimants, and all
other claimants, (Docs. 12, 25, 27, 28, 31, 33, 37), and the motion is ripe for
On April 24, 2013, a fire and explosions occurred on the Mobile River.
The filings indicate that this calamity occurred while two barges owned by the
plaintiff were being cleaned at ORCA’s facility by ORCA employees. The
plaintiff, the owners of the tug that delivered the barges to ORCA, and the owners
of another vessel in the area at the time filed three separate actions for exoneration
or limitation. The limitation plaintiffs3 all are, or claim to be, owners of a vessel
potentially related to the casualty. ORCA claims no similar status; it is at best a
potential joint tortfeasor.
Subject to various restrictions and qualifiers, “the liability of the owner of a
vessel” may be limited to “the value of the vessel and pending freight.” 46 U.S.C.
§ 30505(a). “The owner of a vessel may bring a civil action in a district court of
the United States for limitation of liability under this chapter.” Id. § 30511(a).
“When an action has been brought under this section and the owner has complied
The requests for oral argument, (Doc. 26; Doc. 28 at 1), construed as motions,
are denied. See Local Rule 7.3.
The plaintiff argues it would be premature to lift the stay prior to August 21,
2013, the deadline for filing claims. (Doc. 25 at 2-3). ORCA, however, is not requesting
a lifting of the stay as to it but an extension of the stay to cover it. The obscure
prematurity argument raised by certain claimants, (Doc. 31), fails for similar reasons.
The Court refers to the plaintiff herein simply as “the plaintiff” and to the
plaintiffs in the three limitation actions collectively as “the limitation plaintiffs.”
with subsection (b), all claims and proceedings against the owner related to the
matter in question shall cease.” Id. § 30511(c).4
“The procedure for a limitation action is now found in Supplemental
Admiralty and Maritime Claims Rule F.” Lewis v. Lewis & Clark Marine, Inc.,
531 U.S. 438, 448 (2001). “Not later than six months after receipt of a claim in
writing, any vessel owner may file a complaint in the appropriate district court …
for limitation of liability pursuant to statute.” Supplemental Rule F(1). “Upon
compliance by the owner with the requirements of subdivision (1) of this rule, all
claims and proceedings against the owner or the owner’s property with respect to
the matter in question shall cease.” Id. Rule F(3). “On application of the plaintiff
the court shall enjoin the further prosecution of any action or proceeding against
the plaintiff or the plaintiff’s property with respect to any claim subject to
limitation in the action.” Id.
In both the statute and the rule, reference is made repeatedly and uniformly
to the owner of a vessel and not to any other class of individual or entity. It is the
“owner of a vessel” that may bring a limitation action, and it is claims “against the
owner” or “the plaintiff” (defined as a “vessel owner”) that are stayed. The Fifth
Circuit, discussing a prior but substantively parallel version of the Limitation Act,
has declared that benefits of the limitation remedy and the cessation of other
claims and proceedings “are, by their plain terms, conferred on ship owners only.”
Zapata Haynie Corp. v. Arthur, 926 F.2d 484, 485 (5th Cir. 1991) (emphasis in
original). The Tyson-Benoit claimants urge Zapata as dispositive, but other cases
indicate more play in the joints.
In Maryland Casualty Co. v. Cushing, 347 U.S. 409 (1954), the Supreme
Court directed that a limitation claimant’s direct action against the limitation
plaintiff’s underwriter be continued until after completion of the limitation
“In this chapter, the term ‘owner’ includes a charterer that mans, supplies, and
navigates a vessel at the charterer’s own expense or by the charterer’s own procurement.”
46 U.S.C. § 30501.
proceedings. Id. at 423. There was no majority opinion in Cushing and only a
single ground common to five Justices. The four-Justice plurality and Justice
Clark agreed that allowing the direct action to proceed could result in exhaustion
of insurance benefits in that action, leaving the limitation plaintiff (if successful in
obtaining limitation) to pay the limitation amount out of its own pocket rather than
by its insurer – a result that would violate important rights contemplated by the
Limitation Act. Id. at 417-19; id. at 423-26 (Clark, J., concurring).
In addition to Cushing, the plaintiff and ORCA rely on two appellate
decisions. In Guillot v. Cenac Towing Co., 366 F.2d 898 (5th Cir. 1966), the
limitation claimants sought to pursue a lawsuit against the owner’s president and
vice-president and a direct action against these executive officers’ liability insurer.
The trial court allowed the filing of these suits (to avoid limitations problems) but
not their prosecution. Id. at 902-03. The Fifth Circuit identified two risks in
allowing the suits to proceed. First, insurance covering the owner but also the
officers as additional insureds might be exhausted in satisfying a judgment against
the officers, resulting in the same problem as in Cushing. Id. at 906. Second, the
actions “inescapably trespass[s] upon the exclusive domain of the Admiralty in
adjudicating whether the quality of the actions of the corporate officers is such as
to charge the corporate shipowner with privity and knowledge of them.” Id. Such
privity or knowledge would defeat limitation, 46 U.S.C. § 30505(b), and, due to
the close relation between owner and executive officer, res judicata and/or
collateral estoppel could bar the owner from contesting privity and knowledge in
the limitation action. Id. Even if it did not, the limitation judge likely would be
unable to ignore the verdicts against the officers in resolving the limitation issue.
Id. at 907. The Guillot Court thus permitted entry of a stay, but only “to assure an
orderly efficient administration of that part of the controversy committed
exclusively to the Admiralty,” id., and only on the condition that the limitation
plaintiff agree that any favorable findings or conclusions concerning the nature or
quality of the officers’ actions would not foreclose independent examination and
determination of such matters in the direct actions. Id. at 908.5
In In re: Complaint of Paradise Holdings, Inc., 795 F.2d 756 (9th Cir.
1986), suit was filed against the owner and the vessel captain. Id. at 758. The
Ninth Circuit held that the limitation judge properly stayed this action as to the
captain because allowing the action to proceed could, as in Cushing, drain the
owner’s insurance and because the state litigation could have some preclusive
effect on issues in the limitation proceeding. Id. at 762-63.
Cushing, Guillot and Paradise support the proposition that a limitation
judge may sometimes enjoin claims against non-owners, but the concerns
animating these decisions are not present here. As to the depletion of the
plaintiff’s insurance, ORCA is a stranger to the plaintiff, and there is not the
slightest suggestion that they share insurance coverage, the benefits of which
could be siphoned off to the plaintiff’s detriment should suit against ORCA
As to the potential for state court determinations carrying legal or practical
preclusive effect in this proceeding, ORCA suggests there is a danger of
inconsistent results because it has filed herein a claim for indemnity and/or
contribution and “will also seek indemnity and/or contribution from [the three
limitation plaintiffs] in any state court lawsuit.” (Doc. 28 at 6). ORCA continues
that both courts thus will make determinations of the relative fault of itself and the
limitation plaintiffs and that “[t]he determinations of fault made by each court may
conflict with each other and may subject the parties to this (and the other)
limitation actions to the effects of collateral estoppel.” (Id.). But a necessary
premise of ORCA’s argument – that it will pursue indemnity/contribution claims
against the limitation plaintiffs in state court before this Court resolves the
Guillot also involved an attempted direct action against the owner’s underwriter,
as to which the Court followed Cushing by staying the action pending resolution of the
limitation proceedings. 366 F.2d at 905.
limitation issue – is fatally flawed; the limitation injunction entered herein
precludes ORCA from doing so.
Both ORCA and the plaintiff cite In re: Complaint of Clearsky Shipping
Corp., 1997 WL 772808 (E.D. La. 1997), as showing that allowing the injured
claimants to proceed against ORCA could result in conflicting findings. That case
(which apparently has never been cited in another opinion) provides little analysis
and less authority, but it does state that, in evaluating another tortfeasor’s claims
for indemnity and contribution, the limitation judge would have to consider the
fault attributable to that tortfeasor, which findings might conflict with the findings
of the state court should a claimant be permitted to proceed against the tortfeasor
before limitation was resolved. Id. at *2.
But ORCA and the plaintiff have not explained how the Clearsky Court’s
concern could be present here. Louisiana is a comparative fault state, and “the
degree or percentage of fault of all persons causing or contributing to the injury,
death, or loss shall be determined, regardless of whether the person is a party to
the action or a nonparty ….” La. Civ. Code art. 2323A. Thus, the state court in
Clearsky would be required to assign a percentage of fault to each potentially
culpable entity, largely mimicking the limitation judge’s task in evaluating
indemnity and contribution claims.
Alabama, in contrast, does not recognize comparative fault. Rather,
“[u]nder Alabama law governing joint and several liability, “[a] tort-feasor whose
negligent act or acts proximately contribute in causing an injury may be held liable
for the entire resulting loss.” Holcim (US), Inc. v. Ohio Casualty Insurance Co.,
38 So. 3d 722, 729 (Ala. 2009) (emphasis in original; internal quotes omitted).
The state court thus will not decide the percentage of fault to be assigned to any of
the limitation plaintiffs, or even to ORCA; either ORCA will be found not liable
or it will be found liable for the entirety of the claimants’ damages. In neither
event is it possible for this Court to make an inconsistent finding.
Unable to show any risk of depleted insurance, inconsistent results or
collateral estoppel, ORCA and the plaintiff are reduced to arguing that less
weighty matters – which no cited appellate decision has recognized as sufficient to
extend the limitation stay beyond the owner and its property – nevertheless should
persuade the Court to do so.
The first of these is “judicial economy.” The plaintiff and ORCA rely on
many cases for the proposition that a key purpose of the limitation procedure is to
bring together in one proceeding all claims against the owner.6 The procedure is
no doubt efficient and economical, and protective of the rights of both the owner
and the claimants to a potentially limited fund, but allowing the personal injury
claimants to proceed against ORCA in state court does not in any way undercut
this economy, since all claims against the owner and its vessel remain within the
The plaintiff and ORCA identify only two cases citing “judicial economy,”
but neither advances their position. The Clearsky Court acknowledged that
unidentified “concerns of judicial efficiency and economy prompted” it initially to
preclude the prosecution of claims against joint tortfeasors outside the limitation
proceeding but, in the order on which the plaintiff and ORCA rely, the Court
shifted to the inconsistent-results rationale discussed above. 1997 WL 772808 at
The plaintiff and ORCA cite several cases stating that the limitation concursus
extends to “all claims” or “every dispute,” but their cases address only claims and
disputes against the owner, not claims against unrelated, land-based tortfeasors arising
out of the casualty. For example, ORCA stresses British Transport Commission v.
United States, 354 U.S. 129 (1957), but that case involved only the claims of two owners
against each other and of injured parties against them both. Id. at 130. The plaintiff
frankly acknowledges that a limitation proceeding “provides a single forum in which all
claimants may seek relief against the vessel owner, in personam, and against the vessel,
in rem.” (Doc. 25 at 5 (emphasis added)).
The Cushing plurality noted that “[d]irect actions against the liability
underwriter of the shipowner or charterer would detract from the benefit of a concursus
….” 347 U.S. at 416. But a direct action encompasses resolution of the injured party’s
claim against the insured limitation plaintiff and so effectively removes that claim from
the limitation proceeding. Nothing remotely similar can occur here.
*2. In In re: Complaint of Shell Oil Co., 780 F. Supp. 1086, the Court
acknowledged judicial economy as “the bedrock of the Limitations Act and
procedures,” but it relied on that concern only to reject the injured parties’ attempt
to sue the owner in another capacity outside the limitation context. Id. at 1091.
Nor are the inefficiencies of allowing the state action against ORCA to
proceed particularly impressive, distilling into a single phrase: “duplicative
discovery.” (Doc. 25 at 8; Doc. 28 at 9). Even if it were shown that the parties
cannot coordinate discovery between the two proceedings,8 the plaintiff and
ORCA have not explained how any resulting inconvenience to them outweighs the
inconvenience to the personal injury claimants of delaying their potential recovery
from ORCA. Much less do the plaintiff and ORCA explain how any
inconvenience to them could outweigh the prejudice to the personal injury
claimants, should limitation be granted, of having ORCA’s liability to them
ultimately determined by a federal judge rather than by a state jury. Cf. Guillot,
366 F.2d at 907 (recognizing the injured party’s “valuable right to have the
personal unlimited liability of the corporate officers determined in the forum of
their choice and … by a jury”).
ORCA offers prejudice as a final basis for staying state litigation against it.
(Doc. 28 at 9). ORCA identifies no case ever suggesting prejudice to a limitationineligible tortfeasor as justifying the extension of injunctive protection to it, and it
seems unlikely that the Limitation Act – designed as it is to aid vessel owners and
claimants against them – contemplates concern for such a tortfeasor merely
because it is also a claimant. But, in any event, ORCA’s alleged “prejudice” is
modest to the point of imaginary. ORCA first re-packages duplicative discovery
as prejudice, but it is no more impressive in this wrapping. ORCA next conceives
The plaintiff insists that “[t]he parties can stipulate or this Court may order that
discovery within the limitation proceeding may be used for any subsequent state court
lawsuits related to the incident,” (Doc. 25 at 8), a position that suggests coordinated
discovery between two lawsuits is also attainable, mooting the plaintiff’s protestation it
has “no standing” to participate in the depositions of ORCA’s employees. (Id.).
itself prejudiced because the limitation injunction precludes it from obtaining fact
discovery from the plaintiff herein. (Id. at 6-7, 9). ORCA’s premise simply does
not exist; while the limitation injunction precludes ORCA from prosecuting any
claim “against” the plaintiff, (Doc. 8 at 3), it does not insulate the plaintiff from
providing discovery for use in connection with the personal injury claimants’ suits
The plaintiff and ORCA acknowledge that, even if the circumstances on
which they rely existed, the Court would possess “considerable,” even “broad”
discretion whether to extend the stay to cover ORCA. (Doc. 25 at 6, 8; Doc. 28 at
9). As discussed above, those circumstances do not exist. Even if they did,
however, the Court would exercise its discretion against the requested extension,
given the absence of a discernible impairment of any key purpose of the
Limitation Act and the potentially prejudicial impact of such a stay on the personal
The plaintiff’s final argument is that the Tyson-Benoit claimants should not
be allowed to proceed against ORCA before all claimants herein, including
ORCA, the other limitation plaintiffs, and all personal injury claimants, enter
“appropriate stipulations” which “protect[t] the [plaintiff] from the risk of
judgment in excess of the limitation fund until the federal court has determined the
[plaintiff’s] right to limitation.” (Doc. 25 at 11 (emphasis added)). But here there
is no such risk to be alleviated, since neither the personal injury claimants nor
ORCA can, in the state lawsuits, obtain any judgment against the limitation
plaintiffs (since the actions are stayed as to them). All that can occur is that the
personal injury claimants receive one or more judgments against ORCA, which
will supply a numerical value to ORCA’s previously filed claims against the
limitation plaintiffs for indemnity and/or contribution. The cases on which the
plaintiff relies – which address permitted suits against the limitation plaintiff
outside the limitation proceeding – are inapposite.
For the reasons set forth above, ORCA’s motion to preclude the TysonBenoit claimants and all other potential state court plaintiffs from prosecuting their
claims against ORCA in state court pending this Court’s determination of liability,
(Doc. 28), is denied.
DONE and ORDERED this 6th day of August, 2013.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?