IN RE: Crescent Energy Services, LLC

Filing 63

ORDER AND REASONS denying Shoulder's 22 Motion to Bifurcate; granting Carrizo's 29 Motion to Bifurcate; denying Shoulder's 37 Motion to Dismiss for Lack of Jurisdiction. The Court will try Crescent's limitation action and allow Shoulder to try his personal injury claims before a jury in this court. Signed by Judge Jane Triche Milazzo. (Reference: Both Cases)(ecm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CIVIL ACTION
IN RE: CRESCENT ENERGY
SERVICES, LLC

NO: 15-819 c/w 15-5783
SECTION: “H”
(Applies to: Both Cases)

ORDER AND REASONS
Before the Court is Claimant Corday Shoulder’s (“Shoulder”) Motion to
Bifurcate (Doc. 22), Claimant Carrizo, LLC’s (“Carrizo”) Motion to Bifurcate
(Doc. 29), and Claimant Shoulder’s Motion to Dismiss for Lack of Subject Matter
Jurisdiction (Doc. 37). For the following reasons, Shoulder’s Motion to Bifurcate
is DENIED, Carrizo’s Motion to Bifurcate is GRANTED, and Shoulder’s Motion
to Dismiss is DENIED.
BACKGROUND
This is a limitation action brought by Crescent Energy Services, LLC
("Crescent") as owner of the S/B OB 808. Claimant Shoulder alleges that he was
a seaman employed by Crescent and assigned to the S/B OB 808 while it
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performed work on offshore wells owned by Carrizo. On February 13, 2015,
Claimant Shoulder sustained an injury while working on Carrizo's offshore
wells. The injury occurred when a valve blew out due to excess pressure, forced
Shoulder into the Gulf of Mexico, and resulted in the amputation of his lower left
leg.
On March 18, 2015, Shoulder brought a Jones Act and general maritime
law claim against Crescent and Carrizo in the 61st Judicial District Court of
Texas. Unbeknownst to him, Crescent filed this limitation action on March 13,
2015, and an order restraining the prosecution of other claims was issued on
March 16, 2015.

On May 20, 2015, Shoulder filed claims in response to

Crescent’s limitation action in this Court. Carrizo likewise filed an answer and
claim in this limitation action denying liability and asserting a claim for
contractual defense and indemnity. Crescent then filed a third-party complaint
against Carrizo alleging that Carrizo is liable for Shoulder’s injuries.
Pending before this Court are a Motion to Dismiss and two Motions to
Bifurcate. Shoulder first asks this Court to dismiss Crescent’s limitation claim
for lack of federal admiralty subject matter jurisdiction. Claimant Shoulder also
filed a Motion to Bifurcate, asking this Court to bifurcate his claims so that he
may return to state court to try his personal injury claims before a jury. Finally,
Claimant Carrizo’s Motion to Bifurcate asks this Court to bifurcate the claims
within federal court, such that Crescent’s entitlement to limitation of liability
is tried by this Court and the remaining personal injury claims are tried by a
jury. This Court will address each of these motions in turn.
2

LEGAL STANDARD
A. Subject Matter Jurisdiction
Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, a
complaint may be dismissed for lack of subject matter jurisdiction. A complaint
lacks federal subject matter jurisdiction when the district court “lacks the
statutory or constitutional power to adjudicate a case.”1 District courts are
granted federal admiralty jurisdiction in 28 U.S.C. § 1333. A district court has
the power to dismiss a complaint for lack of subject matter jurisdiction on three
separate bases: “(1) the complaint alone; (2) the complaint supplemented by
undisputed facts evidenced in the record; or (3) the complaint supplemented by
undisputed facts plus the court's resolution of disputed facts.”2 The party
asserting federal admiralty jurisdiction bears the burden to prove that federal
admiralty jurisdiction exists.3
B. Bifurcation
This Court has the discretion to bifurcate claims.4 A district court may
order separate trials of one or more claims or issues “[f]or convenience, to avoid
prejudice, or to expedite and economize.”5 However, the Fifth Circuit has
cautioned courts before bifurcating issues and ordering separate trials that the
“issue to be tried [separately] must be so distinct and separable from the others
1

Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.

2

Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981).

3

Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995).

1998).

4
5

Fed. R. Civ. Pro. 42(b).
Id.

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that a trial of it alone may be had without injustice.”6 Even if bifurcation
promotes judicial economy, courts should not permit it when it will lead to delay,
additional expenses, and prejudice.7 Because bifurcation is discretionary, courts
should balance equities before bifurcating issues.8 When a court decides to
bifurcate issues and order separate trials, the court must preserve a party’s
federal right to a jury trial.9
LAW AND ANALYSIS
A. Motion to Dismiss for Lack of Subject Matter Jurisdiction
Shoulder argues that this Court should dismiss Crescent's limitation
action for lack of federal admiralty subject matter jurisdiction. Shoulder argues
that the limitation action fails both the maritime location and connection tests
required to establish jurisdiction. He also contends that his Jones Act claim
against Crescent cannot compel federal jurisdiction because it too fails the
location and connection tests. This Court will consider each of these arguments
in turn.
"The Limitation of Liability Act does not confer jurisdiction upon federal
courts."10 Federal admiralty jurisdiction requires maritime locus (location) and
6

Swofford v. B&W, Inc., 336 F.2d 406, 415 (5th Cir. 1964); Laitram Corp. v. Hewlett
Packard Co., 791 F.Supp. 113, 115 (E.D. La. 1992).
7
Laitram Corp. v. Hewlett-Packard Co., 791 F. Supp. 113, 115 (E.D. La. 1992);
Willemijn Houdstermaatschaapij BV v. Apollo Computer Inc., 707 F.Supp. 1429, 1433 (D. Del.
1989).
8
Laitram Corp., 791 F. Supp. at 115.
9
Id.
10
Guillory v. Outboard Motor Corp., 956 F.2d 114, 115 (5th Cir. 1992).

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maritime nexus (activity) conditions.11 The maritime locus test is satisfied by
demonstrating that either: (1) the injury occurred on navigable waters or (2) the
vessel caused the injury.12 The maritime nexus test is satisfied by showing that
(1) the injury has a “potentially disruptive impact on maritime commerce” and
(2) the character of the activity giving rise to the incident has a “substantial
relationship” to “traditional maritime activity.”13
Shoulder claims that Crescent's limitation action lacks federal admiralty
jurisdiction because it fails both necessary conditions. Shoulder argues that the
limitation action fails the maritime location test because the injury occurred on
a fixed oil platform, which is neither a navigable vessel nor over navigable
waters. In addition, he argues that no vessel caused or contributed to his
injuries because he was injured by the well components on the oil platform.
Crescent rebuts that the location test is satisfied because Shoulder’s personal
injury claims allege that Crescent's unseaworthy vessel and inadequate crew
contributed to his injury. Indeed, Shoulder's claims in this action allege that his
injury was caused by the negligence of Crescent "and/or the unseaworthiness of
the S/B OB 808."14 Crescent's alleged negligence includes "failure to provide
adequate safety equipment," "failure to provide necessary equipment needed to
carry out duties," and "operating a vessel and platform with an inadequate

11
12

582.

13
14

Jerome B. Grubart, Inc., 513 U.S. at 534.
The Plymouth, 70 U.S. 20 (1865); see also Jerome B. Grubart, Inc., 513 U.S at 534,
Jerome B. Grubart, Inc., 513 U.S at 534.
Doc. 6.

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crew."15

Likewise, in Shoulder's original state court petition, he alleges that

Crescent was negligent in supervising and training its crewmembers, that the
vessel was unseaworthy because the vessel lacked "necessary equipment," and
that the vessel was "improper" and "unsafe."16 By bringing these Jones Act and
unseaworthiness claims, Shoulder has acknowledged that Crescent's vessel may
be responsible for his injury. Shoulder cannot make these claims and then argue
that Crescent's limitation action lacks a maritime location. Accordingly,
Crescent’s limitation action satisfies the maritime location test because
Shoulder's Jones Act and general maritime law claims presuppose that Shoulder
was injured on navigable waters and that Crescent’s vessel contributed to the
injury. Therefore, the maritime location test is met.
Shoulder next contends that the limitation action fails the maritime
connection test because Shoulder’s construction work on an oil platform is not
related to traditional maritime commerce. Crescent rebuts that the maritime
activity test is satisfied because Shoulder's Jones Act claim requires that
Shoulder be a seaman, which presupposes traditional maritime activity. This
Court agrees. In order to bring a Jones Act personal injury claim, the claimant
must be a seaman.17 Seaman status requires (1) a connection to a vessel in
navigation that is substantial in duration and nature and (2) contribution to the
vessel's function or its mission.18 Thus, assuming that Shoulder is a Jones Act
seaman as he has alleged, he is necessarily involved in traditional maritime
15

Doc. 6.
Doc. 37-4.
17
Chandris, Inc. v. Latsis, 515 U.S. 347, 354 (1995).
18
Id. at 368.
16

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activities, and thus the maritime nexus requirement is satisfied. Accordingly,
this Court holds that it has independent jurisdiction over Crescent's limitation
action, and therefore need not consider Shoulder's additional arguments on this
front.
B. Motions to Bifurcate
Next, Claimant Shoulder's Motion to Bifurcate asks this Court to bifurcate
his personal injury action from Crescent's limitation action and allow him to
return to state court. Shoulder argues that while Crescent has a right to a
federal bench trial, he has a right to a state jury trial. Claimant Carrizo, on the
other hand, moves this Court to allow Shoulder to try his claims before a jury in
this forum while Crescent tries its claims before this Court.
"Tension exists between the saving to suitors clause and the Limitation
Act because the former affords suitors a choice of remedies, while the latter gives
shipowners the right to seek limitation of their liability exclusively in federal
court."19 Under the saving-to-suitors clause, plaintiffs have the option to request
a state jury trial for personal injury claims involving the Jones Act and general
maritime law.20 Pursuant to the Limitation Liability Act, vessel owners have a
right to a federal bench trial if "the amount of the claims exceed[s] the value of
the ship and its cargo," and the vessel owner is "seek[ing] to limit liability to the
value of the ship and its cargo."21
19

In re Tetra Applied Techs. L P, 362 F.3d 338, 340 (5th Cir. 2004).
28 U.S.C. § 1333.
21
CHARLES ALAN WRIGHT, ARTHER R. MILLER, ET AL., 14A FEDERAL PRACTICE AND
PROCEDURE § 3672 (4th ed. 2014); see also In re the Matter of Marquette Transp. Co.
Gulf-Inland, LLC, No. 13-6351, 2014 WL 6389978, at *5 (E.D. La. Nov. 13, 2014).
20

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The bifurcation of the personal injury and limitation claims can resolve
this conflict by allowing two separate trials—a federal bench trial and a state
jury trial. The Supreme Court has allowed such a bifurcation "where a single
claimant sues a shipowner in state court and the owner files a petition for
limitation of liability in federal court."22 The situation is complicated, however,
when a limitation action involves multiple claimants, as it does here. The Fifth
Circuit has held that claims involving multiple claimants "may proceed outside
the limitation action (1) if they total less than the value of the vessel, or (2) if the
claimants stipulate that the federal court has exclusive jurisdiction over the
limitation of liability proceeding and that they will not seek to enforce a greater
damage award until the limitation action has been heard by the federal court.”23
These requirements ensure that the right of the vessel owner to limit its liability
to the value of the vessel is protected.24
In this case, Shoulder's claim far exceeds the value of the vessel. In its
limitation action, Crescent states that the total value of the S/B OB 808, its
appurtenances, and pending freight is $247,000.25 Shoulder's state court petition
estimated his claim at more than $1,000,000, far exceeding the vessel's value.26
In addition, the parties have expressed no willingness to stipulate otherwise.
Given these facts, bifurcation in which Shoulder is allowed to proceed in state

22

In re Tetra Applied Techs. L P, 362 F.3d at 340 (citing Langnes v. Green, 282 U.S. 531,
541 (1931); see Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438 (2001).
23
In re Tetra Applied Techs. L P, 362 F.3d at 341.
24
Lewis, 531 U.S. 438.
25
Doc. 1
26
Doc. 30-1.

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court is inappropriate because this Court would be unable to protect Crescent's
right to limitation.27 Further, such an order would lead to two separate,
duplicative, and expensive trials, which would be inconvenient and a violation
of judicial economy.28 Accordingly, Shoulder's request to bifurcate is denied.
The Court next considers Carrizo's request that this Court try all
limitation of liability issues, while Shoulder's remaining personal injury claims
are tried by a jury in this forum. Other courts have allowed this procedure, and
this Court holds that it is an appropriate compromise here as well.29 In light of
Shoulder's statutory right to try his Jones Act and general maritime law claims
to a jury and Crescent's right to a bench trial on the issue of limitation, "this
Court will follow the procedure adopted by other district courts and bifurcate
trial here."30 This procedure will avoid prejudice to either party.31 Accordingly,
Carrizo's request to bifurcate trial between the bench and a jury in this forum
is granted.
CONCLUSION
For the foregoing reasons, Shoulder’s Motion to Dismiss for lack of subject
matter jurisdiction is DENIED. In addition, Shoulder’s Motion to Bifurcate is
DENIED, and Carrizo’s Motion to Bifurcate is GRANTED. The Court will try
27

Lewis, 531 U.S. at 453.
See Fed. R. Civ. Pro 42(b).
29
See Marquette, 2014 WL 6389978; CHARLES ALAN WRIGHT, ARTHER R. MILLER, ET AL.,
14A FEDERAL PRACTICE AND PROCEDURE § 3672 (4th ed. 2014); Brister v. A.W.I., Inc., 946 F.2d
350, 353 (5th Cir. 1991).
30
See Marquette, 2014 WL 6389978 at *5.
31
Fed. R. Civ. Pro. 42(b).
28

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Crescent's limitation action and allow Shoulder to try his personal injury claims
before a jury in this court.

New Orleans, Louisiana, this 25th day of November, 2015.

___________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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