In the Matter of Lynx Production Services, Inc.

Filing 47

ORDER AND REASONS denying 38 Motion to Stay; dismissing as moot 46 Motion for Leave to File Opposition; granting in part and denying in part 18 Motion to Stay as set forth in document. Signed by Judge Ivan L.R. Lemelle on 4/7/2014. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN RE MATTER OF LYNX PRODUCTION
SERVICES

CIVIL ACTION
NO. 13-5067
SECTION “B”(2)

ORDER & REASONS
Nature of Motion and Relief Sought:
Before

the

Court

are

Limitation

Action

Complainant

Lynx

Production Services, Inc.'s ("Lynx") Motion to Stay State Court
Proceedings,

Claimants

Brittini

Garner

and

Angela

Sharpe's

Opposition thereto, and Lynx's Reply. (Rec. Docs. 18, 20, & 29).
Also

before

the

Court

is

Limitation

Claimant

Specialty

Boat

Rentals, LLC's ("Specialty") Motion to Stay state court proceedings
(Rec. Doc. 38), to which no timely opposition has been filed.
IT IS ORDERED that Specialty's Motion to Stay (Rec. Doc.

38)

is DENIED in its entirety.
IT IS FURTHER ORDERED that Danielle Ann Ray's Ex Parte Motion
for Leave to file opposition to Specialty's motion is DISMISSED as
moot. (Rec. Doc. 46).
IT IS FURTHER ORDERED that Lynx's Motion to Stay (Rec. Doc.
18) is GRANTED to the extent it seeks to stay claims against
American Interstate Insurance Company and DENIED to the extent it
seeks to stay all other claims.
Procedural History and Facts of the Case:
This case arises from an accident on February 8, 2013. On that

date David Garner ("Garner") lost his life when the M/V KAMERYN, a
bare

boat

owned

by

Claimant

Specialty

Boat

Rentals,

Inc.

("Specialty") and chartered to Lynx, capsized in Terrebonne Parish
waters. Garner, an employee of Lynx, worked as pumper gauger on the
vessel. Although the exact facts remain unclear, it appears that
Lynx had chartered the KAMERYN to transport chemicals procured from
Gulf Coast Chemical, LLC ("Gulf Coast") and that the accident
occurred during such transport.
On March 1, 2013, Danielle Ann Ray, who was Garner's divorced
wife at the time of his death, filed suit against Lynx as a sole
defendant in state court on her own behalf and on behalf of her and
Garner's child, Hunter Wayne Garner (the "Ray Claimants"). (Rec.
Doc. 38-2 at 1). Lynx then initiated the instant case on July 12,
2013, as owner pro hac vice of the KAMERYN, by filing a Complaint
for Exoneration from and Limitation of Liability and posting a
$55,000 security. (Rec. Doc. 1).
Roughly a week later, the Court approved Lynx's security and
stipulation for value of $55,000, and enjoined "the initiation or
prosecution" of any and all suits against Lynx outside of the
instant proceeding, effectively staying the state suit initiated on
March 3. (Rec. Doc. 3).
On August 9, Specialty filed an answer and claim in this
limitation

action,

alleging

that

Lynx

negligently

caused

the

accident, arguing that lynx was not entitled to limitation of

2

liability, seeking recovery for a variety of damages, and asserting
as an affirmative defense that it "reserves the right to claim all
benefits of those provisions of Title 46, United States Code,
dealing with Limitation of Liability." (Rec. Doc. 6 at 1-3).
A few days later Brittini Garner, who was Garner's wife at the
time

of

his

death,

also

filed

an

answer

and

claim

in

this

proceeding on her own and on her children's behalf (the "Garner
Claimants"), alleging that the KAMERYN's unseaworthiness and the
negligence of each Lynx, Specialty, and other non-parties caused
Garner's death. (Rec. Doc. 7 & 7-1). Finally, the Ray Claimants
also asserted claims in this limitation action, alleging that
Lynx's negligence, the unseaworthiness of the KAMERYN, and other
negligent actors caused Garner's death. (Rec. Doc. 8). No other
answer or claim has been asserted in this proceeding.
Ten days after filing their answer and claim in the instant
case, the Garner Claimants filed a petition for damages in the 32nd
District Court for the Parish of Terrebonne, against Specialty,
Scully's

Aluminum

Boats,

Inc.

(the

KAMERYN's

manufactuer,

"Scully's" hereinafter), Gulf Coast, and Lynx's liability insurer,
American Interstate Insurance Company ("American"). (Rec. Doc. 18-1
at 2; full complaint at 18-2). In this state complaint, the Garner
Claimants alleged, inter alia, that Specialty negligently provided
Lynx with a vessel incapable bearing the anticipated load; that
Scully's negligently designed, constructed, and represented the

3

capacity of the KAMERYN; that Gulf Coast negligently represented or
calculated the weight of its cargo; and that Lynx was negligent in
stowing the KAMERYN's load. (Rec. Doc. 18-2 at 4-6). In short, the
Garner Claimants filed a state suit against all actors and entities
related to the accident except for Lynx; they sued Lynx's insurer,
rather than Lynx, for Lynx's alleged negligence under Louisiana's
direct action statute, LA R.S. 22:1269.
On February 7, the Ray Claimants initiated a separate but
similar action against the same parties, omitting as defendants
both Lynx and American. (See Rec. Doc. 38-2 at 2).
Both the Ray Claimants and Garner Claimants assert claims for
amounts severely in excess of $55,000, the stipulated value of the
vessel and cargo in question.
After an interval of several months, Lynx moved to stay the
state proceeding initiated by the Garner Claimants ("the Garner
Proceeding"),
proceeding

and

Specialty

initiated

by

later
the

moved
Ray

to

stay

Claimants

the

state

(the

"Ray

Proceeding")(Rec. Docs. 18 & 38). After reviewing the parties'
filings, the Court ordered briefing on whether the Anti-Injunction
Act, 28 U.S.C. § 2283, prohibits the relief requested. (Rec. Doc.
37). Both Lynx and the Garner Claimants complied and submitted
briefs on the issue.1 (Rec. Docs. 40 & 41).

1

While Specialty has neither filed nor sought leave to file nor been
directed to file a brief on this issue, it certainly has had fair notice and
ample opportunity to address this issue.

4

Law & Analysis
At issue is whether and to what extent the Limitation of
Liability Act, 46 U.S.C. § 30505 et seq. (the "Limitation Act"),
permits or requires the Court to stay state proceedings and whether
and to what extent the saving to suitors clause, 28 U.S.C. § 1333,
and the Anti-Injunction Act, 28 U.S.C. § 2283 (the "AIA"), prohibit
such a stay.
Briefly put, "the Limitation Act provides that the liability
of a shipowner shall not exceed the value of the vessel at fault
and her pending freight if the casualty occurred without the
privity or knowledge of the shipowner." Texaco, Inc. v. Williams,
47 F.3d 765, 767 (5th Cir. 1995). The operative section of that
act, 46 U.S.C. § 30511 (formerly 46 U.S.C. App. § 185), provides
that an "owner of a vessel may bring a civil action in a district
court of the United States for limitation of liability under this
chapter. The action must be brought within 6 months after a
claimant gives the owner written notice of a claim." 46 U.S.C. §
30511(a). A bareboat charterer, such as Lynx, is considered an
owner pro hac vice and may therefore seek protection under the Act.
Id. at § 30501; see also Complaint of McDonough Marine Serv., a
Div. of Marmac Corp., 749 F. Supp. 128, 131 (E.D. La. 1990)(so
stating). To invoke those protections, an owner "shall" deposit
with the court or court-appointed trustee "an amount, or approved
security, that the court may fix from time to time as a necessary

5

to carry out this chapter." Id. at § 30511(b). Finally, and most
relevant here, "when an action has been brought under [section
30511] and the owner has complied with subsection (b), all claims
and proceedings against the owner related to the matter in question
shall cease." Id. at § 30511(c).
Rule F of the Supplemental Admiralty Rules further defines the
procedural requirements to invoke the Limitation Act's protections.
It provides that "[o]n application of the plaintiff the court shall
enjoin the further prosecution of any action or proceeding against
the plaintiff or plaintiff's property with respect to any claim
subject to limitation in the action." Supplemental Admiralty Rule
F(3). Thus, a shipowner possesses both the right to protection from
suits outside the limitation proceeding and the right to seek the
intervention of the federal admiralty court to enjoin such suits.
The

scope

of

those

rights,

however,

are

subject

to

several

limitations.
First, the "inherent conflict" between the saving to suitors
clause and the Limitation Act tempers the latter's restrictions.
Magnolia Marine Transport Co., Inc v. Laplace Towing Corp., 964
F.3d 1571, 1575 (5th Cir. 1992). Thus, where claims do not exceed
the value of vessel and freight, "the saving to suitors clause
dictates that the admiralty court must allow suits pending against
the shipowner in a common law forum, [including] state court, to
proceed." Id. (citing Lake Tankers Corp. v. Henn, 354 U.S. 147, 151

6

(1957)(emphasis in original). Moreover, "even when the claim does
exceed that value, the claimant may still prefer the state court,"
when, for example, the claimant has related claims against a party
not protected by the limitation act. Id. (citing In re Complaint of
McDonough Marine Service, Div. of Marmac Corp., 749 F. Supp. 128,
130 (E.D. La. 1990). Additionally, the savings to suitors clause
allows claimants to pursue claims of any value in state court if
they first make stipulations in the admiralty court preserving
exclusive jurisdiction to determine "all issues related to the
shipowner's right to limit liability, and that no judgment against
the shipowner will be asserted to the extent it exceeds the value
of the limitation fund." Id.
Next, the Anti–Injunction Act forbids a federal court from
granting an injunction to stay proceedings in a state court with
three exceptions: (1) as previously authorized by Act of Congress;
(2) where necessary in aid of its jurisdiction; or (3) to protect
or effectuate its judgment. 28 U.S.C. § 1651. In general, courts
must narrowly construe these exceptions. See, e.g., Atl. Coast Line
R. Co. v. Bhd. of Locomotive Engineers, 398 U.S. 281, 287, 90 S.
Ct. 1739, 1743, 26 L. Ed. 2d 234 (1970). ("[S]ince the statutory
prohibition

against

such

injunctions

in

part

rests

on

the

fundamental constitutional independence of the States and their
courts, the exceptions should not be enlarged by loose statutory
construction.") Furthermore, all doubts are to be resolved in favor

7

of allowing the state court action to proceed. Texas Employers'
Ins. Ass'n v. Jackson, 862 F.2d 491, 499 (5th Cir. 1988) (en banc).
Here, Specialty's Motion must be denied for the simple fact
that there is no record of it initiating a limitation suit in this
or any federal court. In fact, Specialty's entire argument in
support

of

its

motion

stems

from

the

fact

that

asserted

it

limitation of liability as an affirmative defense. Asserting the
Limitation Act as an affirmative defense, however, does not afford
a party a right of concursus. Black Diamond S. S. Corp. v. Robert
Stewart & Sons, 336 U.S. 386, 401 (1949)(stating that petitioning
for

limitation

precedent

to

of

liability

obtaining

a

and

posting

forum

bond

concursus

are

"condition

to

adjudicate

liability."); see also El Paso Prod. GOM, Inc. v. Smith, 406 F.
Supp. 2d 671, 676 (E.D. La. 2005) ("Merely asserting limitation as
a defense in a pending action does not bring all claims arising out
of the incident together in a single forum, and it does not stay
other actions pending against the ship or its owners.") The plain
language of both section 30511(c) and Rule F of the Supplemental
Admiralty Rules make clear that the right to concursus only follows
the satisfaction of specific procedural requirements that Specialty
has not satisfied here. Specialty may be allowed some of the
Limitation Act's protections, but it has not filed a complaint for
limitation of liability or deposited a security and therefore is
not entitled to a stay of state court proceedings. Accordingly, it

8

is ORDERED that Specialty's Motion to Stay (Rec. Doc. 38) is
DENIED.
Lynx, on the other hand, initiated these proceedings with a
limitation

complaint

and

has

at

least

met

those

conditions

precedent. Lynx's motion and briefs clarify that it is seeking two
alternative forms of relief. First, Lynx seeks to stay the entire
Garner Proceeding–-to enjoin claims against each of Specialty, Gulf
Coast, Scully's, and Lynx's insurer, American. Alternatively, and
"to the extent the Court finds that the Anti-Injunction Act limits
its ability to stay the entire state court action," Lynx requests
that the Court stay only the Garner claims against American. (Rec.
Doc. 40 at 6).
As explained below, the law is clear in requiring this Court
to stay the claims against American and prohibiting a stay as to
all other claims. As for state proceedings against shipowners'
liability insurers, the Fifth Circuit has adopted the so-called
"Cushing Chronology," a doctrine first espoused by Justice Clark in
the 4-1-4 opinion in Maryland Casualty Co. v. Cushing, 347 U.S. 409
(1954). That doctrine, briefly put, requires limitation actions to
precede direct actions against insurers where the latter threaten
to deplete an owner's insurance coverage. Magnolia Marine Transp.
Co., Inc. v. Laplace Towing Corp., 964 F.2d 1571, 1579 (5th Cir.
1992)("to avoid depletion of the owner's coverage, this Court has
required the limitation action to precede the direct action.")
9

Accordingly, direct actions against a limitation-complainant's
insurer must be stayed unless "other methods" are employed to
protect the limitation-complainant's right to insure itself, such
as stipulations giving priority to a shipowner's claims to its
insurance proceeds in the event of a finding of limitation. Id. at
1579-80. Here, no such stipulations and in fact no attempt at
prioritizing Lynx's claims for its insurance coverage have been
made. Accordingly, IT IS ORDERED that the Garner Claimants' claims
against American Interstate Insurance Company are STAYED in any and
all courts.
The Anti-Injunction Act, however, prohibits this Court from
enjoining the rest of the Garner Claimants' claims in state court.
While

that

act

authorizes

injunction

of

state

suits

against

shipowners, corporate officers, and their insurers, it prohibits
courts

from

staying

state

proceedings

against

other

alleged

tortfeasors. In Re Complaint of River City Towing Services, Inc.,
199 F. Supp. 2d 495 (2002)(citing Zappata Haynie Corp. v. Authur,
926 F.3d 484, 485-86 (5th Cir. 1991); see also In re Diamond B
Marine Services,

Inc., WL 726885 at *4 (E.D. La. 2000)("the

Limitation Act authorizes a court to enjoin only state court
actions brought against shipowners, corporate officers and insurers
of a vessel;" not non-ship owning employers.); In re Complaint of
McDonough Marine Service, Div. of Marmac Corp., 749 F.Supp. 128,
130 (E.D.La.1990) (Limitation Act does not authorize staying claims
10

against

barge

manufacturer).

To

the

extent

that

it

argues

otherwise, Lynx simply construes the issue broadly and cites only
cases

allowing

or

enforcing

a

stay

of

state

claims

against

shipowners, corporate officers, and insurers of a vessel. (Rec.
Doc. 40 at 3-7). Accordingly, IT IS ORDERED that Lynx's Motion is
DENIED in part to the extent it seeks to enjoin Garner claims
against all other parties.
Conclusion
IT IS ORDERED that Specialty's Motion to Stay (Rec. Doc.

38)

is DENIED in its entirety.
IT IS FURTHER ORDERED that Danielle Ann Ray's Ex Parte Motion
for Leave to file opposition to Specialty's motion is DISMISSED as
moot. (Rec. Doc. 46).
IT IS FURTHER ORDERED that Lynx's Motion to Stay (Rec. Doc.
18) is GRANTED to the extent it seeks to stay claims against
American Interstate Insurance Company and DENIED to the extent it
seeks to stay all other claims; all claims against American
Interstate Insurance Company relating to the capsizing of the M/V
KAMERYN on February 8, 2013 are HEREBY STAYED.
New Orleans, Louisiana, this 7th day of April, 2014.

____________________________
UNITED STATES DISTRICT JUDGE
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