In the Matter of: Marquette Transportation Company, LLC

Filing 82

ORDER AND REASONS that Kostmayer's to Dismiss, R. 68, filed in In the Matter of: Marquette Transportation Company, Case No. 15-2316, is DENIED. FURTHER ORDERED that Kostmayer's Motion to Dismiss, R. 48, filed in Kostmayer Construction, LLC v. Marquette Transporation Company, LLC, Case No. 15-1395, is GRANTED IN PART. The motion is GRANTED insofar as Kostmayer seeks the dismissal of Marquettes Third-Party-Demand as to CEMUS, LLC and 234 Terminal. Marquette requested leave to amend its R ule 13(c) Third-Party Demand in the event the Motion to Dismiss was granted. The Court finds this appropriate, and grants Marquette thirty days to amend its Third Party Demand. If not timely amended, the Third Party Demand shall be dismissed. Kostmayer's motion is otherwise DENIED. Signed by Judge Eldon E. Fallon on 8/15/2016. (cms)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

KOSTMAYER CONSTRUCTION, LLC V.
MARQUETTE TRANSPORTATION COMPANY

CIVIL ACTIONS

AND

NO. 15-1395;
NO. 15-2316

IN THE MATTER OF:
MARQUETTE TRANSPORTATION COMPANY

SECTION "L" (1)

ORDER & REASONS
Before the Court are two motions to dismiss filed by Kostmayer. The first Motion to
Dismiss, R. 48, was filed in Kostmayer Construction, LLC v. Marquette Transporation
Company, LLC, Case No. 15-1395. The second Motion to Dismiss, R. 68, was filed in In the
Matter of: Marquette Transportation Company, Case. No. 15-2316. These cases have been
consolidated for discovery purposes, and the Court finds it appropriate to address the present pretrial motions in the same Order & Reasons, as the motions present the same legal questions.
Having reviewed the parties’ briefs and the applicable law, the Court now issues this Order &
Reasons.
I.

BACKGROUND
Kostmayer v. Marquette, Case No. 15-1395, arises out of damages allegedly sustained by

Plaintiff Kostmayer on September 22, 2014, when the M/V Blake Denton, operated by
Defendant Marquette Transportation Company struck the Barge CP-12, chartered to Plaintiff
Kostmayer, and pushed the CP-12 into Barge OU-701, also owned by Kostmayer. Plaintiff
invokes the Court’s jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1333. Both of the Plaintiff’s
barges were tied to a dock in the Mississippi River in East Baton Rouge Parish when Barge CP12 was struck by the M/V Blake Denton, which was traveling southbound with approximately
thirty-five barges in tow. Barge CP-12 was pushed into Barge OU-701, and both barges were

detached from the dock and floated freely downriver until a tow boat pushed them to the east
bank Plaintiff alleges that the barges sustained substantial damages as a result of the impact and
required extensive repairs.
Plaintiff asserts multiple negligence theories based on the actions of the captain and crew
manning the Defendant’s vessel: (1) inattentiveness to their duties, (2) failing to see what they
should have seen, (3) failing to maintain control of the towed barges, and (4) any other acts of
negligence. Plaintiff seeks to recover property damages, including the cost of repairs, loss of
use, and loss of profits.
The Court has consolidated Interested Underwriters at Lloyd's, London v. Marquette,
Case No. 15-5170, and CEMUS, LLC et al v. Marquette Transportation Company, LLC, Case
No. 15-4571, with Kostmayer v. Marquette, Case No. 15-1395, for all purposes as they arise out
of the same incident.
A separate and unrelated accident between Kostmayer and Marquette occurred on
December 29, 2014. Marquette filed a limitation action, In re: Marquette, Case No. 15-2316,
regarding the allision. The limitation action concerns a separate Marquette vessel, the M/V Myra
Eckstein, striking the aforementioned dock. In re: Marquette has been consolidated with
Kostmayer v. Marquette for discovery purposes.
II.

Present Motions
On July 11, 2016, Kostmayer filed a Motion to Dismiss and/or Motion for Judgment on

the Pleadings, R. 48, in Kostmayer, Case No. 15-1395. On that same day, Kostmayer filed a
Motion to Dismiss, R. 68, in In re Marquette, Case No. 15-2316. Both motions asserted that

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Marquette’s Rule 14(c) Third Party Demands against Kostmayer are procedurally improper. R.
48.
A. Kostmayer’s Motion to Dismiss Third-Party-Demand in Kostmayer v. Marquette,
Case No. 15-1395
Kostmayer asserts that a defendant may only invoke Rule 14(c) of the Federal Rules of
Civil Procedure when the plaintiff has either asserted a claim which has been specifically
identified in the Complaint as one in admiralty pursuant to Rule 9(h), or if it is apparent from a
reading of the complaint that admiralty jurisdiction is the only basis for federal subject matter
jurisdiction. R. 48-1 at 3. Kostmayer contends that a reference to the Jones Act or general
maritime law is insufficient to serve as an explicit 9(h) designation. R. 48-1 at 3.
Kostmayer then turns to the allegedly improper Third Party Demands stemming from the
Complaints in CEMUS, LLC, et al., Case No. 15-4571, and Lloyd’s, London, Case No. 15-5170.
R. 48-1 at 3. Kostmayer points out that neither of these Complaints included a Rule 9(h)
designation. R. 48-1 at 3. The CEMUS Complaint asserts federal subject matter jurisdiction. R.
48-1 at 4. The Lloyd’s Complaint was filed in state court so it does not contain a specific
jurisdictional amount, but Marquette’s Notice of Removal acknowledges that the state court
action was removed based on both federal question jurisdiction and diversity jurisdiction. R. 481 at 4. With the preceding in mind, Kostmayer contends that Marquette’s Rule 14(c) Third Party
Demands were inappropriate, because Rule 9(h) was not explicitly referenced and admiralty
jurisdiction was not the sole asserted basis for federal subject matter jurisdiction in these claims.
R. 48-1 at 4.

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B. Marquette’s Opposition
Marquette opposes the motion. Marquette contends that the 14(c) designations were
proper, because Marquette asserted admiralty jurisdiction as a basis for removal, and that the
respective Rule 14(c) tenders in both cases incorporate Rule 9(h) in the manner typical of an
admiralty case. R. 52 at 3–4.
Marquette notes that Kostmayer’s action was filed in state court, so there was no basis for
to designate the initial Complaint under Federal Rule of Civil Procedure 9(h). Marquette also
notes that Rule 9(h) provides that a claim that is only cognizable in admiralty jurisdiction is
considered an admiralty claim, even if the claim is not explicitly designated as one in admiralty.
R. 52 at 11.
In the alternative, Marquette argues that dismissal is not proper because Marquette may
plead an alternative third party demand under Rule 14(a). R. 52 at 12. As a maritime party,
Marquette could be liable to Interested Underwriters at Lloyd’s, London (“Lloyd’s”) or CEMUS
for more than its percentage of fault. R. 52 at 12. Marquette avers that is entitled to pursue
indemnity and contribution from Kostmayer on this ground. R. 52 at 12. Marquette therefore
asserts that Marquette should be given an opportunity to amend its Third Party Demand to assert
a claim under Rule 14(a) as opposed to being dismissed.
Marquette also takes the position that CEMUS has an interest in maintaining its direct
claims against Kostmayer, so the Court should grant CEMUS an opportunity to respond.
C. Kostmayer’s Reply
Kostmayer timely replies. R. 57. Kostmayer reiterates its argument that Rule 14(c) may
only be invoked where a plaintiff asserts a claim specifically identified as one in admiralty
pursuant to Rule 9(h), or where it is apparent from a reading of the complaint that admiralty

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jurisdiction is the only basis for federal subject matter jurisdiction over the action. R. 57 at 2.
Kostmayer notes that neither CEMUS nor Lloyd’s made an explicit Rule 9(h) designation in
their pleadings. R. 57 at 2. Kostmayer also points out that CEMUS’s Complaint asserts
diversity jurisdiction, and that the Lloyd’s action was removed in part based on diversity
jurisdiction. Kostmayer concludes that the terms of Rule 14(c) are inapplicable based on the
preceding.
D. Kostmayer’s Motion to Dismiss Third Party Demand in In re Marquette, Case
No. 15-2316
Kostmayer contends that Marquette’s Rule 14(c) Third Party Demands tendering the
claims asserted by Joseph and Jennifer Solomon, Michael Bankston, James Ainsworth, CEMUS,
LLC, 234 Terminal Corp., and Lloyd’s should be dismissed, because the cited parties’ claims do
not give rise to a procedurally proper Rule 14(c) Third Party Demand. Kostmayer takes the
position that only Ameri-Force Craft Services, Inc., and Signal Mutual Indemnity Association,
Ltd. properly asserted cognizable admiralty or maritime claims under Rule 9(h), so the 14(c)
Third Party Demands stemming from the preceding claimants’ actions must be dismissed.
Kostmayer contends that a Rule 14(c) Third Party Demand is only proper where the
claim giving rise to the Third Party Demand either made an explicit Rule 9(h) designation, or if
admiralty jurisdiction is the only basis for federal subject matter jurisdiction over the claim. R.
68-1 at 3. Kostmayer direct the Court to the limitation plaintiffs’ pleadings, and avers that only

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Ameri-Force and Signal Mutual made a 9(h) designation or asserted claims which are only
cognizable under admiralty jurisdiction. R. 68-1 at 3–4.
E. Marquette’s Opposition
Marquette opposes the motion, arguing that admiralty jurisdiction was asserted in all
claims and that Rule 14(c) and Rule 9 are specifically asserted in the Third Party Demands
tendering Kostmayer to the limitation claimants. R. 72 at 1. Marquette notes that Marquette’s
Complaint contends that the sole basis of jurisdiction is admiralty, and Marquette identified Rule
9(h) in the Complaint.
F. Kostmayer’s Reply
Kostmayer timely replies. R. 78. Kostmayer asserts that Marquette’s arguments do not
address the procedural requirements of Rule 14(c). According to Kostmayer, Marquette’s ThirdParty-Demands are only procedurally viable where a claimant asserted a claim designated as one
in admiralty pursuant to Rule 9(h), or it is apparent from a reading of the complaint that
admiralty jurisdiction is the only basis for federal subject matter jurisdiction over the claim. R.
78 at 2. Kostmayer therefore avers that Marquette’s arguments regarding Rule 9(h) designations
in Marquette’s Limitation Complaint and Third-Party-Demands are irrelevant. R. 78 at 2–3.
III.

DISCUSSION
A. Applicable Law
The motions at issue hinge on the interpretation of Rule 14(c)(1) and Rule 9(h) of the

Federal Rules of Civil Procedure. Rule 14(c)(1) provides that:

When a plaintiff asserts an admiralty or maritime claim
within the meaning of Rule 9(h), the defendant or person who
asserts a right under Supplemental Rule C(6)(b)(i), as a third-party
plaintiff, may bring in a third-party defendant who may be wholly
or partly liable, either to the plaintiff or to the third-party plaintiff,
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by way of remedy over, contribution, or otherwise on account of the
same transaction, occurrence, or series of transactions or
occurrences.
Fed. R. Civ. P. 14(c)(1). Rule 14(c)(1) in turn refers to Rule 9(h), which provides that:
If a claim for relief is within the admiralty or maritime
jurisdiction and also within the court’s subject-matter jurisdiction
on some other ground, the pleading may designate the claim as an
admiralty or maritime claim for purposes of Rules 14(c), 38(e), and
82 and the Supplemental Rules for Admiralty or Maritime Claims
and Asset Forfeiture Actions. A claim cognizable only in the
admiralty or maritime jurisdiction is an admiralty or maritime
claim for those purposes, whether or not so designated.
Fed. R. Civ. P. 9(h)(1).
B. Analysis
Beginning with In re Marquette, in order to determine whether Rule 14(c) was properly
invoked in a Third Party Demand, the Court must examine the claims of the parties being
tendered by the Rule 14(c) Third-Party-Demand. The Court therefore turns to the respective
Answers and Claims filed by Joseph and Jennifer Solomon, Michael Bankston, James
Ainsworth, CEMUS, LLC, 234 Terminal Corp., and Interested Underwriters at Lloyd’s. R. 4, 7,
8, 15, 19.
Upon review of the preceding Answers and Claims, the Court finds each of the
aforementioned limitation claimants properly identify their claims as claims in admiralty
pursuant to Rule 9(h). Kostmayer cites Tipton v. General Marine Catering Co., 1919 WL
13554, at *2 (E.D. La. 1989), for the proposition that a claimant cannot make a Rule 9(h)
designation merely by stating a claim under the Jones Act or the general maritime law. But the
Fifth Circuit construes Rule 9(h) classifications more broadly than was held by the Tipton court.
The present legal question has its roots in T.N.T. Marine Service, Inc. v. Weaver Shipyards &

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Dry Docks, Inc., 702 F.2d 585 (5th Cir. 1983), which was recently reaffirmed in Luera v. M/V
Alberta, 635 F.3d 181 (5th Cir. 2011). The Luera court found that
Although Rule 9(h) appears to require an affirmative
statement from the plaintiff to invoke the admiralty rules for claims
cognizable under admiralty and some other basis of jurisdiction,
we have held that the mere assertion of admiralty jurisdiction as a
dual or an alternate basis of subject matter jurisdiction for a claim
is sufficient to make a Rule 9(h) election to proceed in admiralty
for that claim. T.N.T. Marine, 702 F.2d at 58788. . . . We held [in
T.N.T. Marine] that by the “simple statement asserting admiralty or
maritime claims” the plaintiff had elected to proceed under
admiralty jurisdiction and procedures even without an explicit
reference to Rule 9(h). Id.
Luera, 635 F.3d 188–89. Therefore, a plaintiff or claimant who makes a “simple statement
asserting admiralty or maritime claims” properly asserts a Rule 9(h) designation, and may be
subject to a Rule 14(c) Third Party Demand. T.N.T. Marine, 702 F.2d at 578–88. The Answers
and Claims filed by Joseph and Jennifer Solomon, Michael Bankston, and James Ainsworth each
assert claims arising under admiralty and maritime law. See R. 4 at 6; R. 7 at 5; R. 8 at 5.
Therefore, Marquette’s Rule 14(c) Third Party Demands were proper as to these claims.
The joint Answer and Claims of CEMUS, LLC and 234 Terminal Corp. does not
reference general maritime law or assert a basis for jurisdiction. R. 15. Lloyd’s smilarly fails to
reference the general maritime law or assert a basis for jurisdiction. R. 19. Kostmayer concedes
in its Motion to Dismiss that the Court has multiple bases of subject matter jurisdiction over the
Answers and Claims at issue. R. 68-1 at 2. “When a party’s claim is governed by multiple bases
for jurisdiction and it is not clear whether the party made a Rule 9(h) designation, . . . we
examine the totality of the circumstances, as demonstrated by the party’s pleadings and actions,
to determine whether a Rule 9(h) declaration has been made.” Apache Corp. v. Global Santa Fe
Drilling Co., 435 Fed. Appx. 322, 325 (5th Cir. 2011) (citing Bodden v. Osgood, 879 F.2d 184,

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186 (5th Cir. 1989). Upon weighing the totality of the circumstances, the Court finds that
Lloyd’s, CEMUS, and 234 Terminal implicitly made Rule 9(h) designations. The claimants each
filed an Answer and Claims in a limitation action regarding a vessel allision with a dock. R. 15
at 4–7. Each Answer and Claims asserts theories of liability such as negligent towage, violations
of the standards of good seamanship, failure to follow navigation standards of the Mississippi
River, and unseaworthiness. R. 15 at 6–7. The claims will not be tried by jury. As such, the
claims were sufficiently maritime to implicitly carry a Rule 9(h) designation, and Marquette’s
subsequent Rule 14(c) Third Party Demand was appropriate.
Kostmayer’s Motion to Dismiss, R. 48, in Kostmayer, Case No. 15-1395, fails for similar
reasons regarding the Third Party Demand as to Lloyd’s. The state court petition filed in
Lloyd’s, Case No. 15-5170, is virtually identical to the Answer and Claims asserted by Lloyd’s in
Marquette, Case No 15-2316. Therefore, as analyzed supra, Lloyd’s implicitly made a Rule 9(h)
designation in its Complaint.
However, diversity jurisdiction is the sole asserted basis for subject matter jurisdiction in
the Complaint in CEMUS, Case No. 15-4571. The Fifth Circuit has held that “[i]f a claim is
pleaded under diversity jurisdiction, the rules of civil procedure will apply, and the parties will
be guaranteed, under the Seventh Amendment, a right to have the claim tried by a jury.” Luera,
635 F.3d at 188. The Court may presume a Rule 9(h) designation when a party pleads multiple
bases for jurisdiction, or where it is unclear from the substance of the claim whether admiralty
jurisdiction is asserted. See Apache, 435 Fed. Appx. 322, 325. The Court may also find a Rule
9(h) designation where a party pleads a claim that solely arises under maritime jurisdiction. Fed.
R. Civ. P. 9(h). But where, as here, a party solely asserts diversity jurisdiction and the claims
arise under multiple jurisdictional premises, the Court may not weigh the “totality of the

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circumstances” to find a Rule 9(h) designation. See Apache, 435 Fed. Appx. 322, 325. CEMUS
and 234 Terminal chose to bring their claims solely pursuant to this Court’s diversity
jurisdiction. The Court may not disregard this choice and designate CEMUS and 234 Terminal’s
claims as claims in admiralty.
IV.

CONCLUSION

IT IS ORDERED that Kostmayer’s Motion to Dismiss, R. 68, filed in In the Matter of:
Marquette Transportation Company, Case No. 15-2316, is DENIED.
IT IS FURTHER ORDERED that Kostmayer’s Motion to Dismiss, R. 48, filed in
Kostmayer Construction, LLC v. Marquette Transporation Company, LLC, Case No. 15-1395, is
GRANTED IN PART. The motion is GRANTED insofar as Kostmayer seeks the dismissal of
Marquette’s Third-Party-Demand as to CEMUS, LLC and 234 Terminal. Marquette requested
leave to amend its Rule 13(c) Third-Party Demand in the event the Motion to Dismiss was
granted. The Court finds this appropriate, and grants Marquette thirty days to amend its Third
Party Demand. If not timely amended, the Third Party Demand shall be dismissed. Kostmayer’s
motion is otherwise DENIED.
New Orleans, Louisiana, this 15th day of August, 2016.

________________________________
UNITED STATES DISTRICT JUDGE

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