Loveall et al v. Nordic Underwater Services, Inc. et al

Filing 19

ORDER granting 15 Motion to Dismiss Intervention and Third Party Complaint. Signed by Judge Jay C. Zainey. (jrc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DALE E. LOVEALL, ET AL.

CIVIL ACTION

VERSUS

NO: 16-724

NORDIC UNDERWATER SERVICES,
INC., ET AL.

SECTION: "A" (3)

ORDER AND REASONS
The following motion is before the Court: Motion to Dismiss Intervention
and Third Party Complaint (Rec. Doc. 15) filed by The American Longshore
Mutual Association (“ALMA”). Intervenor MEL Underwriters opposes the motion. The
motion, noticed for submission on August 10, 2016, is before the Court on the briefs
without oral argument. For the reasons that follow, the motion is GRANTED.
I.

BACKGROUND
Dale E. Loveall, Jr. filed this lawsuit for injuries that he allegedly sustained

working aboard the M/V AMERICAN 12. Loveall claims that he is a Jones Act seaman
and he has filed suit under the Jones Act and general maritime law against his
employers, Nordic Underwater Services and AMI Consulting Engineers. In the event
that Loveall is not a Jones Act seaman, Loveall has pleaded in the alternative a claim for
benefits under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”).
Nordic’s LHWCA carrier is ALMA. MEL Underwriters is Nordic’s maritime
employer’s insurer. MEL Underwriters has voluntarily paid maintenance and cure to
Loveall even though it disputes whether Loveall is actually a Jones Act seaman.
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Neither Loveall nor any defendant brought either of these insurers into this case.
Instead, on June 9, 2016, counsel for Nordic, who also represents MEL Underwriters,
attempted to file into the record an Intervention and Third Party Complaint on behalf of
MEL Underwriters. (Rec. Doc. 10). The Clerk of Court struck that pleading because leave
of court had not been requested or granted. The next day, MEL Underwriters was
granted leave to Intervene and file its Third Party Complaint against ALMA. 1 (Rec.
Docs. 11, 12, & 13). MEL Underwriters asserted that the intervention was appropriate
under Rule 24(a)(2) because MEL sought to recoup the maintenance and cure funds
that it paid to Loveall in the event it is determined that Loveall is not a Jones Act
seaman. (Rec. Doc. 13). If Loveall is not a seaman after all, MEL Underwriters contends
that ALMA, Nordic’s LHWCA carrier, should have been paying Loveall’s medical
expenses and worker’s comp benefits all along, and therefore ALMA must reimburse
MEL Underwriters. Thus, MEL Underwriters brought ALMA in as a third party
defendant.
ALMA now moves to dismiss the intervention and third party demand arguing
inter alia that MEL Underwriters improperly intervened in this lawsuit and that the
Court lacks subject matter jurisdiction over MEL Underwriters’ claim against ALMA.
II.

DISCUSSION
The Court begins by assuming for the sake of argument two legal points that the

parties have mired themselves in unnecessarily. First, the Court assumes that if it is
determined that Loveall is not a Jones Act seaman then MEL Underwriters will have a

The motion was not opposed by any of the existing parties given that MEL was not attempting
to assert a claim against any of them.
1

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reimbursement claim against ALMA. Second, the Court will assume that any such
reimbursement claim against ALMA is not one subject to the exclusive jurisdiction of
either the Office of Workers’ Compensation Programs or the Louisiana Office of
Workers’ Compensation Administration. In other words, if MEL Underwriters were to
establish that a federal court has original jurisdiction over its reimbursement claim then
there is no statutory bar to bringing the claim in a federal court. With these two issues
out of the way, the Court turns its attention to the determinative question of whether the
intervention itself was appropriate under Rule 24(a)(2). 2
Federal Rule of Civil Procedure 24(a)(2), entitled Intervention of Right, states in
relevant part:
On timely motion, the court must permit anyone to intervene who:
***
claims an interest relating to the property or transaction that is the subject
of the action, and is so situated that disposing of the action may as a
practical matter impair or impede the movant's ability to protect its interest,
unless existing parties adequately represent that interest.
Fed. R. Civ. P. 24.
The parts of the intervention test pertinent to this case are 1) an interest relating
to the action, 2) that would be impaired or impeded by the case, 3) that is not adequately
represented by the existing parties. 3 In re Lease Oil Antitrust Litig., 570 F.3d 244, 247
(5th Cir. 2009) (citing Sierra Club v. Espy, 18 F.3d 1202, 1204-05 (5th Cir. 1994)). To
The propriety of the intervention is clearly the seminal issue that drives the analysis because
even if subject matter jurisdiction exists, it cannot cure the procedural problem that arises when
an intervention does not comport with Rule 24. See Howse v. S/V CANADA GOOSE I, 641 F.2d
317 (5th Cir. 1981) (vacating a final judgment entered on a claim asserted in an intervention that
did not comport with Rule 24 even though the court clearly had subject matter jurisdiction).
2

3

No party has challenged the timeliness of the intervention.

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support intervention as of right, the movant must show that it has a “direct, substantial,
legally protectable interest in the action, meaning ‘that the interest be one which the
substantive law recognizes as belonging to or being owned by the applicant.’” Id.
(quoting Cajun Elect. Power Coop. v. Gulf States Utils., Inc., 940 F.2d 117, 119 (5th Cir.
1991) (emphasis in original)). Moreover, an economic interest alone is not a legally
sufficient interest for intervention under Rule 24(a)(2), and such intervention is
improper where the intervenor does not itself possess the only substantive legal right it
seeks to assert in the action. In re Lease Oil, 570 F.3d at 251 (quoting NOPSI v. United
Gas Pipe Line Co., 732 F. 2d 452, 466 (5th Cir. 1984) (en banc)).
The main demand in this case—over which the Court has original jurisdiction
grounded in admiralty—is Loveall’s Jones Act claim against Nordic. Undisputedly, MEL
Underwriters does not have a direct, substantial, legally protected interest in Loveall’s
case. MEL Underwriters will have no rights to assert against any recovery that Loveall
obtains on his Jones Act claim because success on the Jones Act claim implies that MEL
Underwriters was properly paying benefits all along, and therefore has no lien on the
settlement proceeds.
MEL Underwriters’ reliance on Chenevert v. Travelers Indemnity Co., 746 F.3d
581 (5th Cir. 2014), is misplaced because the intervenor in that case had a subrogation
lien on the Jones Act settlement proceeds. That lien arose because the intervenor had
paid LHWCA benefits to the plaintiff, and the payment of those benefits was
inconsistent with seaman status. The intervenor therefore had a right to recoup from the
plaintiff’s recovery the LHWCA benefits that it had paid. The intervenor’s interest in the
main demand was therefore direct and substantial, and the sole means for the
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intervenor to efficaciously execute its lien was to intervene in the Jones Act plaintiff’s
case. MEL Underwriters is not similarly situated to the intervenor in Chenevert because
if Loveall prevails on his Jones Act claim then MEL Underwriters has no subrogation
lien.
Although MEL Underwriters may potentially benefit from an adverse ruling on
seaman status, MEL Underwriters’ interest in the main demand is indirect, solely
economic in nature, and completely tangential to the main demand. This is borne out by
the fact that MEL Underwriters insinuated itself into this case not to assert a claim
against any existing party but rather to pursue a new independent claim against a nonparty. MEL Underwriters has no right to litigate seaman status in Loveall’s case beyond
what its own insured — who is represented by the same attorney and who more than
adequately can protect its interests — is already doing. The intervention in this case
serves only to add new issues to an existing case, and the issues to be added need not be
litigated as part of Loveall’s case. And crucially, to the extent that MEL Underwriters
would have a reimbursement claim, that claim would only arise when and if Loveall is
determined not to be a seaman. MEL Underwriters cannot intervene in this case to
prosecute a claim that has not even accrued and may never accrue. Simply, MEL
Underwriters is an interloper in this case and the intervention is not proper.
Accordingly, and for the foregoing reasons;
IT IS ORDERED that the Motion to Dismiss Intervention and Third
Party Complaint (Rec. Doc. 15) filed by The American Longshore Mutual
Association is GRANTED. The Intervention and Third Party Complaint filed by MEL
Underwriters is DISMISSED. MEL Underwriters is terminated as a party to this case
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and all claims against ALMA are dismissed.
August 19, 2016

JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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