Smithland Towing & Construction, LLC et al
Filing
172
MEMORANDUM OPINION & ORDER signed by Senior Judge Thomas B. Russell on 10/2/2019. Denying 75 Motion to Dismiss for Lack of Jurisdiction; denying 139 Motion for Entry of Default; granting 154 Motion to Stay. cc: Counsel(KJA)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CIVIL ACTION NO. 5:18-CV-00113-TBR
IN THE MATTER OF THE COMPLAINT OF SMITHLAND
TOWING & CONSTRUCTION, LLC, AS TITLE OWNER,
AND WRBM, LCC D/B/A WESTERN RIVERS BOAT
MANAGEMENT, INC. AS OPERATOR AND OWNER
PRO HAC VIC OF THE WILLIAM E. STRAIT, OFFICIAL NO. 270550,
FOR EXONERATION FROM OR LIMITATION OF LIABILITY
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Limitation Petitioners, Smithland Towing &
Construction, LLC and WRBM, LLC d/b/a Western Rivers Boat Management, Inc.’s Motion to
Stay, or Alternatively to Coordinate Discovery. [DN 154]. Claimants have responded, [DN 155,
156, 159, 160, 162, 163, 167, 168], and Limitation Petitioners replied, [DN 171]. This matter is
ripe for adjudication. For the reasons stated herein: Limitation Petitioners’ Motion to Stay, or
Alternatively to Coordinate Discovery is GRANTED.
BACKGROUND
The William E. Strait was a steel inland river towboat owned and operated by Smithland
Towing & Construction, LLC and WRBM, LLC. [DN 1 at 2]. On December 14, 2015, the William
E. Strait was proceeding southbound on the Mississippi River when it was involved in a collision
and sank. Id. at 3. After this incident, the First Marine Shipyard took possession of the boat and
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began rebuilding it. Id. On January 19, 2018, a fatal explosion occurred at First Marine Shipyard
during the rebuilding process. Id.
On July 24, 2018, Limitation Petitioners filed the current action seeking exoneration from
or limitation of liability in connection with the explosion pursuant to the Limitation of Liability
Act, 46 U.S.C. § 30501, et seq. Id. at 1. Limitation Petitioners have since filed a Motion to Stay
this proceeding pending the outcome of several related cases in Marshall Circuit Court. [DN 154].
Alternatively, Limitation Petitioners request the Court order coordination of discovery efforts in
both the federal and state court litigation in order to prevent unnecessary duplication and expense.
Id. No party objected to Limitation Petitioners’ request to coordinate discovery. [DN 171 at 1139].
However, three claimants opposed the Motion to Stay the proceeding on the grounds that they are
not parties to the state litigation, and thus, would be excluded from the discovery process if the
current action was stayed. [DN 160, 167, 168].
LEGAL STANDARD AND ANALYSIS
The current action was brought by Limitation Petitioners pursuant to the Limitation of
Liability Act (“LOLA”), 46 U.S.C. § 30501, et seq. “When faced with liability for a maritime
accident, a vessel owner may file a petition in federal court seeking limitation of liability under
LOLA. Provided that the accident in question occurred without the owner’s ‘privity or
knowledge,’ LOLA limits the owner’s liability to the value of his interest in the vessel and its
pending freight.” In re Muer, 146 F.3d 410 (6th Cir. 1998). While admiralty law provides
exclusive jurisdiction to federal courts in determining the extent to which a shipowner is entitled
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to limited liability, in some instances state courts may also exercise jurisdiction over related
litigation. See 28 U.S.C. § 1333(1) (“The district courts shall have original jurisdiction, exclusive
of the courts of the States, 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.”).
An action brought pursuant to LOLA may be stayed by the federal district court when there
are parallel state court proceedings. The Sixth Circuit explained:
While the state court action is pending adjudication, the limitation action is held
in abeyance. If the plaintiff challenges the shipowner’s right to limit liability
during the state court proceedings, the federal court may reinstate its stay of the
state court proceedings in order to protect the paramount federal right. If no such
challenge is made and the state court renders a judgment in favor of the
shipowner, or in favor of the claimant in an amount less than the limitation fund,
the limitation proceeding is dismissed as moot. However, if the claimant
receives a state court judgment in excess of the limitation fund, the federal action
proceeds in order to determine those issues relevant to the limitation of liability.
Id. at 417–18 (internal citations, quotation marks, and internal footnotes omitted); see also Lewis
v. Lewis & Clark Marine, Inc., 531 U.S. 438, 454 (2001) (“The district courts have jurisdiction
over actions arising under [LOLA], and they have discretion to stay or dismiss Limitation Act
proceedings to allow a suitor to pursue his claims in state court.”).
In this case, Limitation Petitioners request the Court stay the current LOLA action until the
resolution of state litigation involving the same incident. Limitation Petitioners are not named in
any of the parallel state actions and claim they filed the current action as a “precautionary measure
in the event they were implicated in anticipated state court litigation.” [DN 154-1 at 1075]. Thus,
staying the current proceeding will still afford Limitation Petitioners the necessary protections
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under LOLA. Moreover, it is a more efficient use of judicial resources to allow issues pertaining
to liability and damages among the claimants to proceed in state court. If the state court renders a
judgment against the claimants, or in favor of the claimants in an amount less than the limitation
fund, this proceeding may be dismissed as moot. But, if the claimants receive a state court
judgment in excess of the limitation fund, this action will continue in order to determine issues
regarding limitation of liability. While three claimants objected to the Motion to Stay on the
grounds that they are not parties to the state litigation and thus will be barred from discovery, the
Court finds that the claimants will be not prejudiced by staying this proceeding as they will be able
to conduct any additional discovery needed when or if this proceeding continues after the
conclusion of the state litigation. Accordingly, the Court finds that the case at bar should be held
in abeyance until further notice.
CONCLUSION
For the foregoing reasons, IT IS ORDERED:
(1) Limitation Petitioners’ Motion to Stay the Proceedings, [DN 154], is GRANTED. This
matter will be held in abeyance until further notice.
(2) Despite the stay, the Court finds it is in the interest of judicial economy and in the best
interest of all prospective parties and witnesses if discovery can be coordinated between
this matter and the state court cases. Therefore, Limitation Petitioners’ Motion to
Coordinate Discovery, [DN 154], is GRANTED. The parties will coordinate their
discovery in this matter with the state court.
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(3) Defendants Ferrellgas, L.P. and Ferrellgas, Inc.’s Motion to Dismiss for Lack of
Jurisdiction, [DN 75], and Limitation Petitioners’ Motion for Entry of Default, [DN
139], are DENIED at this time with leave to refile.
(4) The telephonic conference scheduled for October 18, 2019 is cancelled.
(5) Limitation Petitioners are directed to notify the Court when a telephonic conference is
required.
October 2, 2019
CC: Attorneys of Record
Mail to:
Joe Rupke
Rupcke’s Blasting & Painting
1604 Broad Street
Paducah, KY 42003
Four Rivers Marine Coating
4485 Clarks River Road
Paducah, KY 42003
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