Agribusiness United DMCC, et al v. Blue Water Shipping Co., Inc.
Filing
24
ORDER: IT IS HEREBY ORDERED that the 7 Motion to Dismiss is DENIED. IT IS FURTHER ORDERED that Plaintiffs are granted leave to amend their complaintwithin fourteen days of this Order to cure the deficiencies noted as to their claims for fraudulent misrepresentation, negligence, and gross negligence, if possible. If Plaintiffs are unable to do so, on motion of Defendant, the Court will dismiss those claims. Signed by Judge Nannette Jolivette Brown on 3/26/2018. (mmv)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
AGRIBUSINESS UNITED DMCC, et al.
CIVIL ACTION
VERSUS
CASE NO. 16-15926
BLUE WATER SHIPPING CO., INC.
SECTION: “G”(1)
ORDER
Pending before this Court is Defendant Blue Water Shipping Company, Inc.’s
(“Defendant”) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6).1 In this litigation, Plaintiffs Agribusiness United DMCC and Agribusiness United North
America Corp. (collectively, “Plaintiffs”) were charterers/shippers of a vessel and allege that
Defendant, who Plaintiffs hired to arrange services for cargo to be loaded onto the vessel, failed
to obtain certain necessary certificates and documents, causing a 10-day delay in the vessel’s
schedule. Accordingly, Plaintiffs brought claims against Defendant for (1) breach of contract; (2)
fraudulent misrepresentation; (3) negligence; and (4) gross negligence. In the instant motion,
Defendant argues that this Court does not have admiralty jurisdiction over Plaintiffs’ claims;
Plaintiffs’ tort claims are time-barred pursuant to state law; and alternatively, if the Court finds
that admiralty jurisdiction exists, all of Plaintiffs’ claims are time-barred pursuant to the doctrine
of laches. Having considered the motion, the memoranda in support and opposition, and the
applicable law, the Court will deny the motion and grant Plaintiffs leave to amend the complaint
as to their claims for fraudulent misrepresentation, negligence, and gross negligence.
1
Rec. Doc. 7.
1
I. Background
A.
Factual Background
In the complaint, Plaintiffs allege that in or about October 2012, Plaintiffs were
charterers/shippers of the M.V. FENGLI 11 (the “Vessel”).2 Plaintiffs allege that they hired
Defendant as a Freight Forwarder to arrange services for cargo to be loaded onto the Vessel at
Savannah, Georgia, and Myrtle Grove, Louisiana.3 Plaintiffs aver that in connection with those
services, Plaintiffs provided Documentary Instructions to the Defendant on or about November 1,
2012, requiring Defendant to arrange for, inter alia, issuance of bills of lading, phytosanitary
certificates, fumigation certificates, and numerous other documents.4
On or about December 5, 2012, Plaintiffs aver, the Vessel arrived at Savannah, Georgia,
and began loading operations the following day.5 However, according to Plaintiffs, Defendant did
not arrange for a Federal Grain Inspection Service (“FGIS”) inspection of the holds.6 According
to Plaintiffs, Defendant also failed to obtain a phytosanitary certification prior to loading and did
not arrange for the FGIS surveyor to be present at commencement of loading.7
Plaintiffs aver that loading operations commenced without the needed surveyor.8
According to Plaintiffs, “when nearly two Vessel holds were already loaded,” they learned that no
one from USDA/FGIS was present, and, therefore, no official phytosanitary certificate would be
2
Rec. Doc. 1 at 2.
3
Id. at 3.
4
Id.
5
Id.
6
Id.
7
Id.
8
Id.
2
issued.9 As a result, Plaintiffs aver, they had to order that the cargo be unloaded, and then reloaded
in the presence of the surveyor, and cargo already loaded had to be shifted.10 According to
Plaintiffs, this caused a ten day delay in the Vessel’s schedule.11
Plaintiffs allege that as a result, Plaintiffs sustained losses in Vessel demurrage, extra costs
incurred for failure to timely inspect holds, shortages of cargos, and extension penalties incurred
at the second loading port.12 Plaintiffs aver that on or about June 2, 2014, Plaintiffs demanded
Defendant pay $636,234.61 in damages plus interest and costs.13 According to Plaintiffs,
Defendant rejected the claim, and, to date, has failed to pay Plaintiffs any amount for their losses.14
B.
Procedural Background
On October 28, 2016, Plaintiffs filed a complaint in this Court.15 On May 23, 2017,
Defendant filed the instant motion to dismiss.16 On June 27, 2017, Plaintiffs filed an opposition.17
On July 7, 2017, with leave of Court, Defendant filed a reply.18
9
Id. at 4.
10
Id.
11
Id.
12
Id.
13
Id.
14
Id.
15
Rec. Doc. 1.
16
Rec. Doc. 7.
17
Rec. Doc. 14.
18
Rec. Doc. 17.
3
II. Parties’ Arguments
A.
Defendant’s Motion to Dismiss
1.
Defendant argues that all of Plaintiffs’ maritime claims should be dismissed
pursuant to Rule 12(b)(1) because this Court lacks admiralty jurisdiction
In the motion to dismiss, Defendant argues that admiralty subject matter jurisdiction is
unavailable in this case and dismissal of Plaintiffs’ maritime claims is proper pursuant to Rule
12(b)(1).19 Defendant specifically argues that Plaintiffs’ complaint includes four claims against
Defendant: breach of contract, fraudulent misrepresentation, negligence, and gross negligence.20
Defendant asserts that the first claim sounds in contract and the remaining three sound in tort, and
because none of them are maritime claims, admiralty jurisdiction is not established.21
With respect to Plaintiffs’ breach of contract claim, Defendant asserts that a breach of
contract claim is subject to Section 1333 jurisdiction if it involves a maritime contract.22 According
to Defendant, a maritime contract is one relating to a ship in its use as such, or to commerce or
navigation on navigable waters, or to transportation by sea or to maritime employment.23 In this
case, Defendant argues, the contract charged Defendant with assisting Plaintiffs in collecting
documents that were all to be issued by various third parties in connection with a vessel’s voyage
and sending them via courier to an addressee designated by Plaintiffs.24 Thus, Defendant argues,
19
Rec. Doc. 7-1 at 4.
20
Id. at 5.
21
Id.
22
Id. (citing Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 240 (5th Cir. 2010)).
23
Id. at (citing Gulf Coast Shell & Aggregate LP, 623 F.3d at 240).
24
Id. at 6.
4
no substantial link exists between the tasks covered by the contract and the operation of the ship,
its navigation, or its management afloat to give rise to maritime jurisdiction.25
Defendant anticipates that Plaintiffs will allege that claims against international freight
forwarders are maritime in nature, however, Defendant argues, there are cases that have held the
opposite.26 Moreover, Defendant asserts, it is the nature of the services rendered, not the label
given to the transaction, that determines whether maritime jurisdiction exists; and here, Defendant
was not acting as an international freight forwarder in the ordinary sense of the term.27 Moreover,
Defendant argues, it was not tasked with arranging for the transportation by common carrier of the
shipper’s goods, and therefore, Plaintiffs’ breach of contract claim does not support admiralty
jurisdiction.28
With respect to Plaintiffs’ tort claims, Defendant argues that neither the location nor
connection conditions for admiralty jurisdiction over a tort claim apply in this case.29 Defendant
argues that as to location, none of the alleged tortious activity occurred on navigable waters, nor
was any alleged injury caused by a vessel on navigable waters.30 As to connection, Defendant
argues, there was no disruptive impact on maritime commerce.31 Defendant contends that any
delay caused by the absence of USDA inspectors at the loading time was merely in obtaining a
25
Id.
26
Id. (citing Johnson Products Co. v. M/V La Molinera, 619 F. Supp. 764, 767 (S.D.N.Y. 1985)).
27
Id. at 7.
28
Id.
29
Id.
30
Id. at 7–8.
31
Id. at 8.
5
phytosanitary certificate, which is not a prerequisite for any maritime commerce.32 To the extent
the certificate was a requirement of Plaintiffs’ end buyer, Defendant argues, such had no impact
on whether the cargo could in fact be transported from the load port to the discharge port.33
Likewise, Defendant contends, failing to arrange for USDA attendance at loading, the alleged
tortious conduct, does not have a substantial relationship to maritime activity.34 Moreover,
Defendant argues, the shore-side behavior required to issue certificates had no consequence on
whether and how the vessel could sail.35 Accordingly, Defendant argues, there is no maritime
jurisdiction over the tort claims alleged in Plaintiffs’ complaint.36
2.
Defendant argues that Plaintiffs’ tort claims should be dismissed pursuant to Rule
12(b)(6) because those claims are prescribed pursuant to state law, and
alternatively, if this Court finds that admiralty jurisdiction exists, all of Plaintiffs’
claims are time-barred pursuant to the doctrine of laches.
Next, Defendant argues that Plaintiffs’ state law tort claims are prescribed pursuant to
Louisiana Civil Code Article 3492, which states that delictual, or tort, actions are subject to a oneyear liberative prescription.37 Defendant avers that Plaintiffs’ alleged damages occurred on or
about December 5, 2012, and Plaintiffs learned about the alleged damages on the same day.38
32
Id.
33
Id.
34
Id.
35
Id.
36
Id.
37
Id. at 9.
38
Id.
6
Accordingly, Defendant argues, Plaintiffs’ tort claims prescribed on or about December 5, 2013,
approximately three years before this lawsuit was filed.39
In the alternative, Defendant argues, if the Court finds that maritime jurisdiction exists,
Plaintiffs’ tort claims are time-barred pursuant to the doctrine of laches, which provides that a
marine cause of action will be dismissed if there has been inexcusable delay in instituting a suit,
which results in prejudice to the defendant.40 Defendant asserts that in considering whether laches
is applicable to a given case, the analogous state statute of limitations and the equitable
circumstances of each case must be considered.41 Defendant argues that the analogous Louisiana
prescription period for tort claims is Louisiana Civil Code Article 3492, which provides a one-year
period to file suit asserting a tort claim.42 Since more than one year has passed since the date of
injury in this case, Defendant avers, Plaintiffs’ claims have prescribed under the analogous
Louisiana law, and prejudice and inexcusable delay are therefore presumed.43
Accordingly, Defendant asserts, Plaintiffs have the burden to show that their delay was
excusable or Defendant was not unduly prejudiced by their inexcusable delay.44 Relying on a
declaration by John Imms, an employee of Defendant at the time of the alleged injury and at present
(the “Imms Declaration”), Defendant asserts that Plaintiffs cannot meet this burden because
Defendant has been prejudiced in the following ways: (1) after such a substantial period of time
has passed, both hard documents and electronic files have been difficult to locate or lost; (2)
39
Id. at 10.
40
Id.
41
Id.
42
Id. at 11.
43
Id.
44
Id.
7
whether relevant witnesses can be identified is unknown; and (3) even if witnesses can be
identified, their memory of the events in question has likely faded with time.45 Defendant further
asserts that Plaintiffs have never presented Defendant with any excuse for their delay.46 Thus,
Defendant argues, Plaintiffs’ tort claims must also be dismissed as time-barred under the doctrine
of laches.47
Furthermore, Defendant argues that the analogous state law period to bring a contract claim
under Louisiana law is ten years pursuant to Louisiana Civil Code Article 3499.48 Although
Defendant acknowledges that Plaintiffs filed this lawsuit within ten years of the alleged injury,
Defendant contends that Plaintiffs’ contract claims should nevertheless be dismissed as timebarred under the doctrine of laches.49 Defendant asserts that it has met its burden to prove that
Plaintiffs’ excuse for the delay is invalid and that Defendant has been prejudiced by the delay.50
Specifically, Defendant contends that “Plaintiffs have failed to give any excuse, let alone a valid
excuse, why they waited so long to pursue their claims.”51 Additionally, Defendant argues that it
“suffered prejudice by the inordinate period of time Plaintiffs waited to bring their claims” for the
45
Id.
46
Id.
47
Id.
48
Id.
49
Id.
50
Id. In Defendant’s motion, Defendant states that it has met its burden to prove that Plaintiffs’ excuse for the delay
is “valid.” Id. at 11. However, considering the context of Defendant’s argument that Plaintiffs’ contract claim is timebarred because Plaintiffs have not provided a valid excuse for their delay and Defendant was prejudiced, the Court
assumes that the word, “valid,” in the aforementioned sentence was a typographical error, and Defendant intended to
write, “invalid.”
51
Rec. Doc. 7 at 11.
8
same reasons set forth regarding the tort claim.52 Accordingly, Defendant argues, Plaintiffs’
contract claim is time-barred under maritime law pursuant to the doctrine of laches.53
B.
Plaintiffs’ Arguments in Opposition to Defendant’s Motion to Dismiss
1.
Plaintiffs argue that dismissal pursuant to Rule 12(b)(1) is not warranted because
the Court has maritime jurisdiction over the contract claim, and the Court may
exercise jurisdiction over the remaining claims because they affect Plaintiffs’ rights
as parties to the maritime action.
In opposition, Plaintiffs first argue that contracts involving freight forwarders support the
existence of maritime jurisdiction.54 Specifically, Plaintiffs contend that Defendant’s argument
that there are cases which have found that claims against international freight forwarders are not
maritime in nature has been rejected, and to the contrary, federal circuit court jurisprudence
instructs that contracts involving freight forwarders support the existence of maritime
jurisdiction.55
Quoting Ingersoll Milling Machine Co. v. M/V BODENA, a case in the Second Circuit,
Plaintiffs argue, “The procurement of the proper papers and documents relating to a shipment by
sea is an essential and integral part of the shipping process; a contract to obtain those papers,
therefore, falls squarely within the admiralty jurisdiction of the federal courts.”56 Plaintiffs
additionally cite BDL International v. Sodetal USA, Inc., a case decided by a district court in the
District of South Carolina, for the proposition that services may be classified as essential to the
52
Id. at 13.
53
Id.
54
Rec. Doc. 14 at 2 (citing Ingersoll Milling Mach. Co. v. M/V BODENA, 829 F.2d 293 (2d Cir. 1987)).
55
Id. (citing Rec. Doc. 7-1 at 6).
56
Id. at 3 (quoting Ingersoll Milling Mach. Co., 829 F.2d at 302–03)
9
successful shipment of materials to the extent that without such services, a vessel’s material could
not enter their destination.57 Finally, citing Rainly Equipos de Riego S.R.L. v. Pentagon Freight
Services., Inc., a case decided by a district court in the Southern District of Texas, Plaintiffs argue
that a “freight forwarder” normally only acts for the shipper in arranging for transportation of the
cargo, and here, Defendant was tasked with preparing and issuing various certificates which related
directly to the loading and transportation of cargo on a vessel.58 Accordingly, Plaintiffs argue,
Defendant acted as a freight forwarder in preparing and issuing documents that were essential to
transportation of cargo on the Vessel, and therefore, the contract at issue involved a maritime
service giving rise to admiralty jurisdiction.59 Accordingly, Plaintiffs argue, their claims should
not be dismissed pursuant to Rule 12(b)(1) for lack of admiralty jurisdiction.60
In the alternative, Plaintiffs argue that this Court has diversity jurisdiction.61 Plaintiffs aver
that one of the Plaintiffs is domiciled in Georgia, the other is domiciled in the United Arab
Emirates, and Defendant is domiciled in Louisiana, and therefore, there is complete diversity.62
Plaintiffs further assert that the amount in controversy exceeds $75,000, and Defendant has not
challenged that assertion.63 Moreover, Plaintiffs contend, even if the Court were to conclude that
57
Id. at 4 (citing BDL Intl. v. Sodetal USA, Inc., 377 F.Supp.2d 518, 523 (D.S.C. 2005)).
58
Id. at 5 (citing Rainly Equipos de Riego S.R.L. v. Pentagon Freight Svs., Inc., 979 F.Supp. 1079 (S.D. Tex. 1997)).
59
Id.
60
Id.
61
Id.
62
Id. at 6.
63
Id.
10
there is not subject matter jurisdiction, the appropriate remedy would be dismissal without
prejudice.64
Finally, Plaintiffs argue that since admiralty jurisdiction is established by Plaintiffs’
contract claim, the Court “may entertain an issue of fraud where it is alleged as affecting the rights
of parties to a maritime action.”65
2.
Plaintiffs argue that dismissal pursuant to Rule 12(b)(6) is not warranted because
all of Plaintiffs’ claims are contractual in nature and therefore not prescribed.
Plaintiffs argue that all of their claims are contractual in nature, and therefore, the one-year
prescription period that applies to delictual claims does not apply here.66 Pursuant to Louisiana
Civil Code Article 3499, Plaintiffs argue, a personal action based on contract is subject to a
liberative prescription of ten years, and therefore, Plaintiffs claims are not prescribed.67
With respect to the doctrine of laches under maritime law, Plaintiffs argue that the relevant
analogous state law is the 10-year prescription period for contract claims pursuant to Civil Code
Article 3499.68 Plaintiffs further argue that, contrary to Defendant’s assertion, it is the “party who
pleads laches as a defense [that] must show not only unreasonable delay but also resultant undue
prejudice,” and Defendant, as the party who pleaded laches, has failed to meet either burden.69
As an initial matter, Plaintiffs note that the Imms Declaration offered by Defendant in
support of its motion to dismiss pursuant to Rule 12(b)(6) is inappropriate and should not be
64
Id.
65
Id.
66
Id.
67
Id. at 7.
68
Id.
69
Id. at 8 (quoting West Wind Africa Line, Ltd. v. Corpus Christi Marine Svs. Co., 834 F.2d 1232 (5th Cir. 1988)).
11
considered because affidavits are typically not considered on a motion to dismiss.70 In any event,
Plaintiffs argue, the Imms Declaration fails to meet Defendant’s burden of showing undue
prejudice insofar as Imms admits that he received demand letters from Plaintiffs before this lawsuit
was filed, putting Defendant on notice in advance of December 26, 2014.71 Furthermore, Plaintiffs
argue that in the declaration, Imms merely contends that documents have been difficult to locate,
not that they have been impossible to find, and gives no examples of how many instances of lost
documents have occurred.72 Finally, Plaintiffs argue that Defendant fails to establish that an
inordinate amount of time has passed, and Defendant was not prejudiced since it was put on notice
of Plaintiffs’ claims by 2014 when Plaintiffs demanded that Defendant pay $636,234.61 in
damages, plus interest and cost, as a result of the failure of performance alleged in this matter,
which Defendant rejected.73 Therefore, Plaintiffs assert, the defense of laches has not been proven
by Defendant, as there was no lengthy delay in alerting Defendant to this claim, and the motion
should be denied.74
C.
Defendant’s Arguments in Further Support of the Motion to Dismiss
1.
Defendant argues that Plaintiffs’ claims should be dismissed pursuant to Rule
12(b)(1) because the services rendered pursuant to the contract did not create a
substantial link between the contract and the operation of the ship, and therefore,
this Court lacks admiralty jurisdiction.
70
Id. (citing Clemmons v. Georgia-Pacific Corp., 2015 WL 9307272, 4 (M.D. La. 2014)).
71
Id.
72
Id. at 8–9.
73
Id. at 9.
74
Id.
12
In reply, Defendant argues that no direct and substantial link between the contract and the
operation of the ship exists insofar as Defendant was not engaged to perform any essential
maritime tasks, nor was it appointed as vessel agent for the port call, nor was it requested to review
load orders as issued by Plaintiffs to the loading terminal, and there is no evidence to the contrary.75
Defendant further argues that the cases cited by Plaintiff, Ingersoll Milling Machine, a case
in the Second Circuit, and BDL International, a case in the District of South Carolina, are not
binding on this Court.76 Furthermore, Defendant argues, both are distinguishable in that, here,
Defendant was tasked with assisting Plaintiffs in collecting documents that were all to be issued
by various third parties in connection with a vessel’s voyage and sending them via courier to an
addressee designated by Plaintiffs.77 Defendant additionally argues, the contract itself must be
maritime in nature, and “any resulting claim for demurrage is insufficient to bring the case within
the court’s maritime jurisdiction.”78
Defendant argues that of their tort claims, Plaintiffs only addressed fraud in the opposition,
and accordingly, Plaintiffs’ claims for negligence and gross negligence should be dismissed as
unopposed.79 With regard to the fraud claim, Defendant argues, “there is no evidence that the
underlying contract was maritime in nature, undermining Plaintiffs’ very abbreviated
Opposition.”80
75
Rec. Doc. 17 at 1–2.
76
Id. at 2.
77
Id.
78
Id. at 3.
79
Id.
80
Id.
13
With regard to Plaintiffs’ alternative basis for jurisdiction pursuant to 28 U.S.C. § 1332,
Defendant does not contend that the parties are not diverse or that Plaintiffs’ claim does not purport
to exceed $75,000.81 However, Defendant argues that “the Court can and should dismiss the
Complaint’s claims filed under the Court’s maritime jurisdiction under 28 U.S.C. § 1333, leaving
only the claims to be resolved under the Court’s diversity jurisdiction.”82
2.
Defendant argues that Plaintiffs’ claims for fraudulent misrepresentation,
negligence, and gross negligence should be dismissed pursuant to Rule 12(b)(6)
because those are by definition, tort claims, not contract claims, and are prescribed
pursuant to state law.
Defendant argues that the term “delictual claim” is synonymous with the term “tort claim;”
claims sounding in fraudulent misrepresentation, negligence, and gross negligence are
delictual/tort claims; and Plaintiffs’ contract and delictual/tort claims are not mutually exclusive.83
Furthermore, Defendant argues, Plaintiffs admit they have asserted both a breach of contract claim
and separate tort claims insofar as Plaintiffs divide their arguments in support of maritime
jurisdiction into two parts, one under the heading, “a. Contract Claim,” and the second under the
heading, “b. Tort Claim.”84 Accordingly, Defendant asserts, the one-year prescription period under
Louisiana Civil Code Article 3492 applies to Plaintiffs’ claims for fraudulent misrepresentation,
negligence, and gross negligence; and as more than one year has passed between the incident
81
Id.
82
Id.
83
Id. at 4–6.
84
Id. at 5.
14
giving rise to this litigation and the time of its filing, these claims are prescribed and should be
dismissed.85
3.
Defendant argues that if admiralty jurisdiction exists, Plaintiffs’ breach of contract
claim should be dismissed pursuant to Rule 12(b)(6) because the claim is timebarred pursuant to the doctrine of laches as Defendant has been prejudiced by
Plaintiffs’ inexcusable delay.
Finally, with regard to the breach of contract claim, Defendant argues that it has been
prejudiced by the inordinate delay in the filing of this lawsuit.86 Defendant argues specifically that
the jurisprudence is clear that “loss of records, destruction of evidence, fading memories, or
unavailability of witnesses” may constitute prejudice sufficient to bar a claim under the doctrine
of laches, 87 and that courts can and have dismissed claims under the doctrine of laches where, as
here, the plaintiffs fail to explain why they delayed in asserting their claims, even when the claims
were brought within the forum state’s baseline prescription period.88
III. Law
A.
Legal Standard on a Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter
Jurisdiction
Federal Rule of Civil Procedure 12(b)(1) provides that an action may be dismissed “for
lack of subject-matter jurisdiction.”89 “The burden of proof for a Rule 12(b)(1) motion to dismiss
85
Id. at 6.
86
Id.
87
Id. (quoting Cornetta v. United States, 851 F.2d 1372, 1378 (Fed. Cir. 1988)).
88
Id. (citing Powell v. Global Marine, LLC, 671 F. Supp. 2d 830, 839 (E.D. La. 2009)).
89
Fed. R. Civ. P. 12(b)(1).
15
is on the party asserting jurisdiction.”90 “When a Rule 12(b)(1) motion is filed in conjunction with
other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before
addressing any attack on the merits.”91
B.
Legal Standard on Establishing Admiralty Jurisdiction
“A federal court’s authority to hear cases in admiralty flows initially from the Constitution,
which ‘extend[s]’ federal judicial power ‘to all Cases of admiralty and maritime Jurisdiction.’”92
“Congress has embodied that power in a statute giving federal district courts ‘original jurisdiction
. . . of . . . [a]ny civil case of admiralty or maritime jurisdiction . . . .’”93
A breach of contract claim falls within the Court’s admiralty jurisdiction if it involves a
maritime contract.94 According to the Supreme Court, “A maritime contract is one in which the
‘primary objective is to accomplish the transportation of goods by sea . . . .’”95 In determining
whether a contract is maritime, courts look to “the nature and character of the contract” to
determine whether it has “reference to maritime service or maritime transactions.”96 Moreover,
according to the Fifth Circuit, “A maritime contract is one ‘relating to a ship in its use as such, or
to commerce or navigation on navigable waters, or to transportation by sea or to maritime
90
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (citing McDaniel v. United States, 899 F. Supp. 305,
307 (E.D. Tex. 1995)).
91
Id. (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977)).
92
Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 531 (1995) (citing U.S. Const., Art. III,
§ 2).
93
Id. (quoting 28 U.S.C. § 1333(1)).
94
See Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 240 (5th Cir. 2010).
95
Norfolk Southern Ry. Co. v. Kirby, 543 U.S. 14, 24 (2004).
96
Id. at 23.
16
employment.’”97 The Fifth Circuit has further explained:
In order to be considered maritime, there must be a direct and substantial link
between the contract and the operation of the ship, its navigation, or its management
afloat, taking into account the needs of the shipping industry, for the very basis of
the constitutional grant of admiralty jurisdiction was to ensure a national uniformity
of approach to world shipping.98
“[A] party seeking to invoke federal admiralty jurisdiction pursuant to 28 U.S.C. § 1333(1)
over a tort claim must satisfy conditions both of location and of connection with maritime
activity.”99 To satisfy the “location” requirement, a plaintiff must show that the alleged “tort at
issue either ‘occurred on navigable water,’ or if the injury is suffered on land, that it was ‘caused
by a vessel on navigable water.’”100 The “connection” requirement involves a two-pronged
analysis: (1) whether the incident, described in general characteristics, has a potentially disruptive
impact on maritime commerce; and (2) whether the general character of the alleged tortious
conduct giving rise to the incident has a substantial relationship to maritime activity.101
Moreover, in Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., the Supreme
Court held that it was appropriate to exercise admiralty jurisdiction over a “subsidiary or derivative
issue in a litigation clearly maritime,” where “necessary to the complete adjustment of rights over
which admiralty has independent jurisdiction.”102 To do otherwise, the Supreme Court reasoned,
“would require an absolute rule that admiralty is rigorously excluded from all contact with
97
Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 240 (5th Cir. 2010) (quoting J.A.R., Inc. v. M/V Lady
Lucille, 963 F.2d 96, 98 (5th Cir. 1992)).
98
Alphamate Commodity GMBH v. CHS Europe SA, 627 F.3d 183, 187 (5th Cir. 2010).
99
Jerome Grubart, Inc., v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 534 (1995); see also Barker v. Hercules
Offshore, Inc., 713 F.3d 208, 215 (5th Cir. 2013).
100
Barker, 713 F.3d at 215 (quoting Grubart, 513 U.S. at 534).
101
Id. (citing Grubart, 513 U.S. at 534).
102
339 U.S. 684, 691–93 (1950).
17
nonmaritime transactions and from all equitable relief, even though such nonmaritime transactions
come into play, and such equitable relief is sought, in the course of admiralty’s exercise of its
jurisdiction over a matter exclusively maritime.”103 In Swift & Co. Packers, the Supreme Court
concluded, “We find no restriction upon admiralty by chancery so unrelenting as to bar the grant
of any equitable relief even when that relief is subsidiary to issues wholly within admiralty
jurisdiction.”104
C.
Legal Standard on a Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim Upon
Which Relief Can Be Granted
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed for
“failure to state a claim upon which relief can be granted.”105 A motion to dismiss for failure to
state a claim is “viewed with disfavor and is rarely granted.”106 “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that
is plausible on its face.’”107 “Factual allegations must be enough to raise a right to relief above the
speculative level.”108 A claim is facially plausible when the plaintiff has pleaded facts that allow
the court to “draw a reasonable inference that the defendant is liable for the misconduct alleged.”109
103
Id. at 691.
104
Id. at 691–92.
105
Fed. R. Civ. P. 12(b)(6).
106
Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
107
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2008)).
108
Twombly, 550 U.S. at 556.
109
Id. at 570.
18
On a motion to dismiss, asserted claims are liberally construed in favor of the claimant,
and all facts pleaded are taken as true.110 However, although required to accept all “well-pleaded
facts” as true, a court is not required to accept legal conclusions as true.111 “While legal conclusions
can provide the framework of a complaint, they must be supported by factual allegations.”112
Similarly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements” will not suffice.113 The complaint need not contain detailed factual allegations, but it
must offer more than mere labels, legal conclusions, or formulaic recitations of the elements of a
cause of action.114 That is, the complaint must offer more than an “unadorned, the defendantunlawfully-harmed-me accusation.”115 From the face of the complaint, there must be enough
factual matter to raise a reasonable expectation that discovery will reveal evidence as to each
element of the asserted claims.116 If factual allegations are insufficient to raise a right to relief
above the speculative level, or if it is apparent from the face of the complaint that there is an
“insuperable” bar to relief, the claim must be dismissed.117
110
Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); see also
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23 (2007).
111
Iqbal, 556 U.S. at 677–78.
112
Id. at 679.
113
Id. at 678.
114
Id.
115
Id.
116
Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009).
117
Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Human Serv. Dep’t, No. 09-6470, 2010
WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199, 215 (2007)).
19
D.
The Doctrine of Laches
Pursuant to the doctrine of laches, a claim within a district court’s admiralty jurisdiction
may be barred if there has been inexcusable delay in instituting a suit which results in prejudice to
the defendant.118 In applying the doctrine of laches, the first step is to identify the state prescription
period that is analogous to the claim being asserted in admiralty jurisdiction.119 “A plaintiff’s
failure to bring a claim within the time allowed under the analogous state statute of limitations
creates a rebuttable presumption of prejudice and inexcusable delay.”120 To rebut this presumption,
a plaintiff must show that the delay was excusable and that the defendant suffered no prejudice.121
If the plaintiff fails to meet their burden, the claim may be time-barred pursuant to the doctrine of
laches.122
IV. Analysis
A.
Whether This Court Lacks Admiralty Jurisdiction and Therefore Plaintiffs’ Claims
Are Subject to Dismissal Pursuant to Rule 12(b)(1)
With respect to Plaintiffs’ breach of contract claim, Defendant argues that no substantial
link exists between the tasks covered by the contract and the operation of the ship, its navigation,
or its management afloat to give rise to maritime jurisdiction. With respect to Plaintiffs’ tort claims,
118
See Woessner v. Johns-Manville Sales Corp., 757 F.2d 634, 636 (5th Cir. 1985) (“The sole issue before this court
is whether the appellants’ tort claims were within the district court's admiralty jurisdiction, thus affording the
appellants the doctrine of excusable laches.”); see also, e.g., Vega v. The Malula, 291 F.2d 415, 416 (5th Cir. 1961)
(applying the doctrine of laches in finding that a tort claim for libel was not time-barred).
119
Uisdean R. Vass, The Admiralty Doctrine of Laches, 53 LA. L. REV. 495, 517 (1992); see also Underwriters Ins.
Co. v. Offshore Marine Contractors, Inc., 442 F. Supp. 2d 325, 332 (E.D. La. 2006) (“In considering whether laches
is applicable in a given case, the analogous state statute of limitations and the equitable circumstances of each case
must be considered.”).
120
Underwriters Ins. Co., 442 F. Supp. 2d at 332.
121
Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1057 (5th Cir. 1982).
122
Id. (“Because the pleadings show no excusable reason for [the counterclaimant’s] delay, its laches argument must
fail.”).
20
Defendant argues that neither the “location” nor “connection” conditions for maritime jurisdiction
over a tort claim are satisfied in this case. Therefore, Defendant argues, Plaintiffs’ claims filed
pursuant to the Court’s admiralty jurisdiction should be dismissed pursuant to Rule 12(b)(1).
Plaintiffs, in turn, argue that Defendant’s role in preparing and issuing documents was a maritime
service, and therefore, the contract for those services is a maritime contract giving rise to admiralty
jurisdiction. Plaintiffs further argue that this Court may entertain an issue of fraud where it is
alleged as affecting the rights of parties to a maritime action. Therefore, Plaintiffs contend, this
Court has admiralty jurisdiction over Plaintiffs’ tort claims.
In order for a contract to be considered maritime, there must be a direct and substantial link
between the contract and the operation of the ship, its navigation, or its management afloat.123
Defendant relies on Alphamate Commodity GMBH v. CHS Europe SA in support of its argument
that the label of “freight forwarder” ascribed to Defendant in the complaint is insufficient to give
rise to maritime jurisdiction over Plaintiffs’ breach of contract claim, where the services at issue
here were not of the typical nature performed by a freight forwarder.124 Moreover, Defendant
argues, that whether or not Plaintiffs label Defendant as a “freight forwarder,” there was not a
direct and substantial link between the contract at issue here and the operation of the ship, its
navigation, or its management afloat sufficient to give rise to admiralty jurisdiction.
In Alphamate Commodity GMBH, the defendant contracted to sell corn to a third party,
who allegedly owed money to the plaintiff.125 The plaintiff sought and obtained an attachment on
123
Alphamate Commodity GMBH, 627 F.3d at 187.
124
Rec. Doc. 7-1 at 6 (citing Alphamate Commodity GMBH, 627 F.3d at 187).
125
Id. at 185.
21
a shipment of corn from the defendant bound for the third party.126 The defendant contended that
they, not the third party, owned the corn, because title transferred upon payment, which had not
occurred.127 The plaintiff did not dispute that the primary subject matter of the contracts between
itself and the third party owing it money was the sale of grain.128 Moreover, the only link between
the contracts and the operation of the ship was that the contracts contemplated that the plaintiff
would ship the grain via sea transport and included the term “CFR” (Cost and Freight), meaning
that the plaintiff was responsible for arranging and paying for transport.129
In Alphamate Commodity GMBH, citing the Supreme Court case, Norfolk Southern Ry.
Co. v. Kirby, the Fifth Circuit emphasized, “[a] maritime contract is one in which the ‘primary
objective is to accomplish the transportation of goods by sea.’”130 Accordingly, reasoning that the
primary purpose of the contracts was the sale of grain, and sea transport was merely “incidental,”
rather than direct, to accomplishing that purpose, the Fifth Circuit held that the plaintiff in
Alphamate Commodity GMBH did not present a prima facie admiralty claim.131
Plaintiffs cite two cases, Ingersoll Milling Machine. Co. v. M/V BODENA, a case in the
Second Circuit, and BDL International. v. Sodetal USA, Inc., a case in the District of South
Carolina, in support of their argument that a “freight forwarding” contract is maritime in nature.132
However, neither case is binding on this Court. Instead, New Orleans Stevedoring Co. v. United
126
Id.
127
Id.
128
Id. at 187.
129
Id. at 186.
130
Id. at 187 (citing 543 U.S. 14, 24).
131
Id. at 188.
132
Rec. Doc. 14 at 3–4.
22
States, a case in the Fifth Circuit, provides analogous authority.133 There, the Fifth Circuit held
that the contracts at issue were maritime contracts, and therefore, the district court had admiralty
jurisdiction.134 In New Orleans Stevedoring Co., the conflict arose out of the alleged breach of
two contracts between New Orleans Stevedoring Company and the Department of Defense.135
One contract provided for “the unloading and loading of cars, barges, or trucks to and from piers,
docks, wharves” at New Orleans and the other provided for stevedoring services at New Orleans
in which the company agreed “to load and discharge cargoes and in connection therewith . . . [and]
perform all duties of a stevedore on any (designated) vessel . . . .”136 “After considering the nature
and subject matter of the contracts [] in question, the district court held that they were both
essentially maritime in nature.”137 Finding no error, the Fifth Circuit affirmed.138
Although Defendant’s reliance on Alphamate Commodity GMBH for the applicable legal
standard to determine whether a contract is maritime in nature is valid, this case is distinguishable
on the facts. Here, sea transport was not merely incidental to accomplishing the purpose of the
contract between Plaintiffs and Defendant; rather, the central purpose of the contract, regardless
of the “freight forwarding” label, was to facilitate the transportation of goods by sea. In effect, the
contract served no other purpose but to acquire the documents necessary to effectuate “commerce
. . . on navigable waters,” and is therefore a maritime contract.139
133
439 F.2d 89 (5th Cir. 1971).
134
Id. at 92.
135
Id. at 90.
136
Id.
137
Id. at 92.
138
Id.
139
Gulf Coast Shell & Aggregate LP, 623 F.3d at 240 (quoting J.A.R., Inc., 963 F.2d at 98).
23
Moreover, the contractual duties of Defendant in this case are more similar to those of the
defendant in New Orleans Stevedoring Co., to the extent that as in New Orleans Stevedoring Co.,
Defendant’s contractual duties included various tasks for the preparation of shipper’s cargo.
Specifically, Plaintiffs allege that they hired Defendant as a freight forwarder to arrange services
for cargo to be loaded onto the Vessel.140 Additionally, Plaintiffs allege that Defendant’s
contractual responsibilities included securing all necessary inspections, approvals, bills of lading,
and certificates for the Plaintiffs’ cargo, including a phytosanitary certification.141 Pursuant to New
Orleans Stevedoring Co., and contrary to Defendant’s argument, the duties of the shipper’s agent
need not include booking the vessel for transportation of the shipper’s goods for the contract to be
considered a maritime contract. Moreover, in New Orleans Stevedoring Co., the Fifth Circuit made
clear that contracts essentially for the preparation of cargo for sea transport may constitute
maritime contracts.142
Accordingly, Plaintiffs have met their burden of establishing a substantial link between the
contract and the operation of the ship in transporting Plaintiffs’ goods, such that the contract
constitutes a maritime contract. Therefore, this Court has admiralty jurisdiction over Plaintiffs’
claim for breach of contract.
Furthermore, the two cases cited by Plaintiffs, Ingersoll Milling Machine Co. v. M/V
BODENA and BDL International. v. Sodetal USA, Inc., though not binding on this Court, support
the Court’s conclusion that admiralty jurisdiction exists over Plaintiffs’ claim for breach of
contract, insofar as both courts in those cases determined that the services rendered, as here, were
140
Rec. Doc. 1 at 3.
141
Id.
142
439 F.2d at 89.
24
essential to the shipment of goods by sea.143 In contrast, Johnson Products, a case in the Southern
District of New York, which Defendant cites, though also not binding, is distinguishable.144 There,
the plaintiff argued that the requisite maritime contract was a fraudulent bill of lading which was
presented to the plaintiff by the defendant.145 However, the bill was actually prepared by an entity
who was not party to the action, and the defendant merely passed the bill on to the plaintiff.146 The
court recognized that while a bill of lading itself may be a maritime contract, the forwarding of a
bill of lading did not in itself create a maritime contract between the plaintiff and the defendant,
and therefore, there was no admiralty jurisdiction over the plaintiff’s claims.147 Here, Plaintiffs
allege that Defendant, who was a party to the contract at issue, agreed to perform certain services
pursuant to that contract, and those services had a direct and substantial link to the transportation
of goods by sea. Accordingly, Johnson Products is not persuasive that the Court lacks admiralty
jurisdiction over Plaintiffs’ claim for breach of contract in this case.
Having found that Plaintiffs’ breach of contract claim supports admiralty jurisdiction,
pursuant to Swift & Co. Packers, this Court has admiralty jurisdiction over any subsidiary or
derivative issue necessary to the complete adjustment of Plaintiffs’ rights. Here, Plaintiffs allege
the same set of facts and injuries in support of their claims for fraud, negligence, and gross
negligence. In Swift & Co. Packers, the Supreme Court held that exercising jurisdiction over the
plaintiff’s claim for fraud arising in connection with an attachment seeking to effectuate a claim
143
Ingersoll Milling Mach. Co., 829 F.2d 293; BDL Intl., 377 F.Supp.2d 518.
144
Johnson Products Co., Inc., 619 F. Supp. 764.
145
Id. at 767.
146
Id.
147
Id.
25
incontestably in admiralty was proper.148 Likewise, the exercise of jurisdiction over Plaintiffs’ tort
claims here is proper for the complete adjustment of Plaintiffs’ rights.
Thus, this Court has admiralty jurisdiction over all of Plaintiffs’ claims, and Defendant’s
Rule 12(b)(1) motion to dismiss for lack of admiralty jurisdiction is hereby denied.
B.
Whether Plaintiffs’ Claims Are Time-Barred and Therefore Subject to Dismissal
Pursuant to Rule 12(b)(6) for Failure to State a Claim
Defendant argues that Plaintiffs’ tort claims are time-barred under the doctrine of laches
because the analogous Louisiana prescriptive period for tort claims pursuant to Louisiana Civil
Code Article 3492 is one year, that period has expired, and Plaintiffs cannot demonstrate that
Defendant was not unduly prejudiced by their inexcusable delay. Defendant additionally argues
that Plaintiffs’ breach of contract claim, although subject to a ten-year prescriptive period, is also
time-barred pursuant to the doctrine of laches because Plaintiffs’ delay in bringing the breach of
contract claim was unreasonable.
Plaintiffs argue that all of their claims are contractual in nature, and therefore, the one-year
prescription period that applies to delictual claims does not apply here. Rather, Plaintiffs argue,
the ten-year prescription period, found at Louisiana Civil Code Article 3499, is the applicable
analogous Louisiana prescription period under the doctrine of laches. Furthermore, Plaintiffs
argue, Defendant has not met its burden of showing that Plaintiffs’ alleged delay was unreasonable
and resulted in undue prejudice.
As discussed above, under the doctrine of laches, a claim within a district court’s admiralty
jurisdiction may be barred if there has been inexcusable delay in instituting a suit and prejudice
148
Swift & Co. Packers, 339 U.S. 684, 693 (1950).
26
resulting therefrom to the defendant.149 In applying the doctrine of laches, the court first identifies
the state statute of limitations that is analogous to the claim being asserted in admiralty
jurisdiction.150 “A plaintiff’s failure to bring a claim within the time allowed under the analogous
state statute of limitations creates a rebuttable presumption of prejudice and inexcusable delay.”151
Louisiana Civil Code article 3492 provides in pertinent part that “delictual actions are
subject to a liberative prescription of one year.” Louisiana Civil Code article 3499 provides that
“[u]nless otherwise provided by legislation, a personal action is subject to a liberative prescription
of ten years.” Considering these provisions, the Louisiana Supreme Court has recognized that “[a]n
action in tort is governed by the prescriptive period of one year while an action on a contract is
governed by the ten year prescriptive period for personal actions.”152 Moreover, the Louisiana
Supreme Court has recognized that “[i]t is the nature of the duty breached that should determine
whether the action is in tort or in contract.”153
Plaintiffs allege that the injury giving rise to their claims occurred in December 2012, and
Plaintiffs filed this lawsuit on October 28, 2016.154 Both parties agree that the ten-year prescriptive
period found at Article 3499 applies to Plaintiffs’ breach of contract claim. Therefore, the breach
of contract claim was brought within the analogous prescriptive period under Louisiana law.
Nevertheless, Defendant contends that Plaintiffs’ breach of contract claim should be barred under
the doctrine of laches because there has been inexcusable delay in instituting the suit. Defendant
149
See supra Section III(D).
150
Vass, supra note 120 at 517; see also Underwriters Ins. Co., 442 F. Supp. 2d at 332.
151
Id.
152
See Roger v. Dufrene, 613 So. 2d 947, 948 (La. 1993) (citing La. Civ. Code arts. 3492, 3499.
153
Id. (citing Sciacca v. Polizzi, 403 So.2d 728, 730 (La. 1981)).
154
Rec. Doc. 7-1 at 1.
27
also argues that it was prejudiced by the delay because documents and electronic files are difficult
to locate, it is unknown whether witnesses can be identified, and witnesses’ memories of the events
in question have likely faded with time. However, these arguments are merely conclusory and
insufficient to establish that Defendant is prejudiced by the delay such that Plaintiffs’ breach of
contract claims should be barred by the doctrine of laches.155 Accordingly, the Court denies
Defendant’s motion to the extent it argues that Plaintiffs’ breach of contract claim is time-barred.
Plaintiffs also contend that the ten-year prescriptive period found at Article 3499 applies
to their fraudulent misrepresentation, negligence, and gross negligence claims because, Plaintiffs
argue, those claims are contractual in nature. Plaintiffs cite Landis & James Construction Company
v. Gee Gee Corp., a Louisiana Fourth Circuit Court of Appeal case, to support this assertion.156 In
Landis & James Construction Company, the court considered whether a subcontrator’s claim
against an architect, with whom the subcontractor had no contractual relationship, was in tort or
quasi-contract.157 Moreover, in that case, the subcontractor did not allege that a contract existed
between it and the architect at all, only that the obligation at issue was quasi-contractual, such that
155
To the extent Defendant relies on the Imms Declaration to show prejudice, the Court does not consider the
document. It is well established that, in deciding whether to grant or deny a motion to dismiss pursuant to Rule
12(b)(6), a district court may not “go outside the complaint.” Carter v. Target Corp., 541 F. App’x. 413, 416–17 (5th
Cir. 2013); Rodriguez v. Rutter, 310 F. App’x 623, 626 (5th Cir. 2009); Mabile v. BP, p.l.c., No. 11-1783, 2016 WL
5231839, at *16 (E.D. La. Sept. 22, 2016) (Brown, J.). Generally, when considering a motion to dismiss, the Court
may only consider the contents of the pleadings and its attachments. Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498 (5th Cir. 2000). The Fifth Circuit permits a limited incorporation exception, which allows documents attached
to a motion to dismiss to be considered part of the pleadings if they are referred to in the plaintiff’s complaint and are
central to the plaintiff’s claim. See Scanlan v. Tex. A & M Univ., 343 F.3d 533, 536 (5th Cir. 2003). See also In re
Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (holding that it was appropriate for the district court
to consider contracts attached to the defendants’ motion to dismiss because the contracts were referred to in the
complaints and are central to the plaintiffs’ claims). Here, the declaration of Lucas Sandmeier is not referenced in
Plaintiffs’ complaint. Accordingly, the Court cannot consider this document on a motion to dismiss. Therefore, these
arguments are best left for summary judgment after the parties have had sufficient time to conduct discovery.
156
Landis & James Const. Co. v. Gee Cee Corp., No. 95-1927 (La. App. 4 Cir. 2/15/96); 669 So. 2d 1265, writ denied,
96-0695 (La. 4/26/96); 672 So. 2d 910.
157
Id. at 1266.
28
the ten-year prescription period would apply.158 There, the court held that the subcontractor’s
economic damages resulted from defective designs by the architect, and that an action for such
sounds in tort and is therefore governed by the one year prescription period set forth in Article
3492.159
This case is distinguishable from Landis because here Plaintiffs bring both a claim for
breach of contract and claims that appear to be delictual in nature. Moreover, Plaintiffs fail to plead
any facts showing how their fraudulent misrepresentation, negligence, and gross negligence claims
are contractual in nature. Although the ten-year prescriptive period found at Article 3499 is a
“catch-all” provision applicable to all personal actions unless otherwise provided by legislation,
Plaintiffs have not cited any authority to support their assertion that it applies to these claims.
Therefore, the one-year prescriptive period found at Article 3492 appears to apply to these claims.
Plaintiffs allege that the injury giving rise to their claims occurred in December 2012.
Plaintiffs filed this lawsuit on October 28, 2016, nearly four years later. Accordingly, because
Plaintiffs’ failed to bring their tort claims within the analogous state statute of limitations, Plaintiffs
have the burden of showing that their delay was excusable and that Defendant was not
prejudiced.160 Plaintiffs argue that there was no prejudice to Defendant and any delay was
excusable because Defendant was put on notice by June 2014 of Plaintiffs’ claims, when Plaintiffs
demanded that Defendant pay $636,234.61 in damages, plus interest and costs, as a result of the
alleged failure of performance alleged in this matter.161 However, Plaintiffs neither explain nor
158
Id.
159
Id. at 1267.
160
Kaiser Aluminum & Chem. Sales, 677 F.2d at 1057.
161
Rec. Doc. 14 at 9.
29
cite case law for the proposition that notice to a defendant of alleged liability for damages
ameliorates prejudice resulting from a plaintiff’s delay in actually bringing a legal claim, and the
Court is aware of no such authority. Even if Plaintiffs are correct that Defendant was put on notice
of its alleged liability by June 2014, and that this somehow ameliorates prejudice, more than one
year since the date of injury had still elapsed by June 2014. Moreover, Plaintiffs provide no excuse
for the delay in bringing their tort claims, and do not explain why Defendant was not prejudiced
by the delay between the date of injury and the date of filing, or between the date of injury and the
date of purported notice, both of which exceeded the prescription period of one year. Accordingly,
Plaintiffs have failed to rebut the presumption that Defendant was prejudiced and Plaintiff’s delay
was not excusable where Plaintiffs failed to file their tort claims within one year of the date of
injury. Thus, Plaintiffs’ tort claims appear to be time-barred pursuant to the doctrine of laches.
However, dismissal is a harsh remedy, and the Court is cognizant of the Fifth Circuit’s
instruction that a motion to dismiss under Rule 12(b)(6) “is viewed with disfavor and is rarely
granted.”162 Short of granting a motion to dismiss, a court may grant Plaintiffs leave to amend the
complaint.163 Accordingly, the Court will grant Plaintiffs leave to amend their complaint to show
either how Article 3499 applies to their fraudulent misrepresentation, negligence, and gross
negligence claims or how those claims are not time-barred by the doctrine of laches.
V. Conclusion
For the reasons set forth above, the Court finds that it has admiralty jurisdiction over all
claims asserted by Plaintiffs. Accordingly, Defendant’s motion to dismiss pursuant to Rule
12(b)(1) is denied. The Court further finds that Plaintiffs’ claim for breach of contract is not time162
Beanal v. Freeport–McMoran, Inc., 197 F.3d 161, 164 (5th Cir. 1999).
163
See Carroll v. Fort James Corp., 470 F.3d 1171, 1175 (5th Cir. 2006) (quoting Dussouy v. Gulf Coast Inv. Corp.,
660 F.2d 594, 597–98 (5th Cir. 1981)).
30
barred; and therefore, Defendant’s motion to dismiss pursuant to Rule 12(b)(6) is denied as to this
claim. Finally, the Court finds that Plaintiffs’ fraudulent misrepresentation, negligence, and gross
negligence appear to be time-barred. The Court will grant Plaintiffs leave to amend the complaint
as to these claims, if Plaintiffs can do so to establish these claims have not prescribed or are not
time-barred by the doctrine of laches.
Accordingly,
IT IS HEREBY ORDERED that the “Motion to Dismiss”164 is DENIED.
IT IS FURTHER ORDERED that Plaintiffs are granted leave to amend their complaint
within fourteen days of this Order to cure the deficiencies noted as to their claims for fraudulent
misrepresentation, negligence, and gross negligence, if possible. If Plaintiffs are unable to do so,
on motion of Defendant, the Court will dismiss those claims.
NEW ORLEANS, LOUISIANA, this 26th day of March, 2018.
____
_________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE
164
Rec. Doc. 7.
31
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