In Re: In the Matter of American River Transportation Co. LLC.
Filing
181
ORDER AND REASONS - IT IS HEREBY ORDERED that defendant LG Chem Ltd.'s 162 Rule 12(b)(2) and 12(b)(6) Motion to Dismiss the complaints of claimants Ronald D. Neal, Philip Graves, and Rebecca Whaley Graves is DENIED. The Rule 12(b)(2) motion may be re-urged following completion of discovery limited to the issue of personal jurisdiction. Signed by Judge Mary Ann Vial Lemmon on 4/7/2021. (sbs)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN THE MATTER OF AMERICAN
RIVER TRANSP. CO. LLC, AS
OWNER AND OERATOR OF THE
M/V LOUISIANA LADY, PRAYING
FOR EXONERATION FROM OR
LIMITATION OF LIABILITY
CIVIL ACTION
NO: 18-2186
SECTION: "S" (2)
ORDER AND REASONS
IT IS HEREBY ORDERED that defendant LG Chem Ltd.'s Rule 12(b)(2) and 12(b)(6)
Motion to Dismiss the complaints of claimants Ronald D. Neal and Philip Graves and Rebecca
Whaley Graves, (Rec. Doc. 162) is DENIED. The Rule 12(b)(2) motion may be re-urged
following completion of discovery limited to the issue of personal jurisdiction.
BACKGROUND
On September 3, 2017, the M/V LOUISIANA LADY, an inland tug owned and operated
by American River Transportation Company ("ARTCO"), caught fire when it was doing fleet
work on the Mississippi River. The fire broke out in the deck locker on the vessel's main deck.
Two crew members, Spencer Graves and Ronald D. Neal, who were in their crew quarters on the
main deck, suffered smoke inhalation and loss of consciousness. Graves, who was a Jones Act
seaman aboard the vessel, died as a result of the accident. Neal, who was also a Jones Act
seaman aboard the vessel, sustained injuries as a result of the accident.
On March 1, 2018, ARTCO filed the instant petition for limitation of liability pursuant to
46 U.S.C. § 30501, et seq. and within the meaning of Rules 9(h) and F of the Supplemental
Rules of Admiralty or Maritime Claims and Asset Forfeiture Actions seeking exoneration from
or limitation of liability for the September 3, 2017, accident. Philip and Rebecca Whaley Graves,
Spencer Graves' parents, filed a claim in their individual capacities and as representatives of
Spencer Graves' estate. Neal also filed a claim.
On September 3, 2018, the claimants filed claims pursuant to the Louisiana Products
Liability Act, La. R.S. 9:2800.51 et seq., and the general maritime law. In their complaint, which
they denominated as a third-party complaint, the claimants (hereinafter, "plaintiffs") alleged,
inter alia, that an electronic cigarette with a lithium battery exploded on a shelf in the deck
locker, ignited, caught fire, and was propelled around the room, causing the fire that resulted in
Graves' death Ronald Neal's injuries. They further alleged, inter alia, that the defective lithium
ion battery, which was responsible for the subject fire and claimants' resulting injuries and death,
was designed, manufactured and/or distributed by LG Electronics U.S.A., Inc.
On December 10, 2018, plaintiffs amended to substitute LG Chem America, Inc. for LG
Electronics, USA, Inc., alleging that LG Chem America, Inc., a wholly-owned subsidiary of LG
Chem Ltd., manufactured the lithium ion battery in question.
On October 14, 2020, plaintiffs filed a second supplemental and amending complaint
("second amended complaint"), alleging that LG Chem, Ltd. ("LG Chem") was the
manufacturer, designer, patent holder, seller, and distributor of the subject lithium ion batteries
which exploded, causing the fire. The second amended complaint further alleges that
co-claimant, John Wolfe, purchased the e-cigarette mod and lithium ion batteries from Epic
E-Cigs in Prairieville, Louisiana, and the "LG chem lithium ion batteries housed inside the e2
cigarette mod exploded," causing the fire and resulting injuries and death.1
LG Chem has filed the instant motion to dismiss under Federal Rule 12(b)(2) arguing that
it is not subject to personal jurisdiction. In support of this motion, it has supplied the declaration
of Kyung Taek Oh, a sales professional at LG Energy Solution, Ltd. a newly-formed spin-off
and wholly owned subsidiary of LG Chem. Oh declares that LG Chem is a Korean company
with its headquarters and principal offices in Seoul, South Korea, and that "as of November 30,
2020, LG Chem did not have an office in the United States, was not registered to do business in
the United States, did not have a registered agent for service of process in the United States, or
have employees who worked in the United States."2 He further declared that he had "no reason to
believe that LG Chem currently has" an office, business registration, a registered agent, or
employees in the United States. Id.
Oh further declared that LG Chem previously manufactured 18650-sized lithium-ion
batteries for use in "specific applications by sophisticated companies," and "no longer
manufactures or sells lithium-ion battery cells."3 Oh stated that "LG chem never designed,
manufactured, distributed, advertised or sold 18650 lithium-ion cells for sale to or use by
individual consumers as standalone, removable batteries," or authorized any other entity to do
so.4
1
Rec. Doc. 148, ¶ 8.
2
Rec. Doc. 162-2, Decl., ¶¶ 7-11.
3
Id. at ¶ 18.
4
Id.
3
LG Chem has also filed an alternative motion under Rule 12(b)(6) seeking dismissal on
the grounds that the claims against LG Chem are too late, and do not relate back to the original
filing date, and, further, that there is no valid procedural vehicle for plaintiffs' third-party claims
against LG Chem.
Plaintiffs oppose the Rule 12(b)(2) motion, arguing that LG Chem has consented to
personal jurisdiction in another district, and further, that additional discovery on personal
jurisdiction is required to establish the extent and contours of LG Chem's activities and corporate
structure, and to resolve the question whether LG Chem delivered the product into the stream of
commerce with the expectation that it would be used in Louisiana. LG Chem further argues that
the second amended complaint relates back to the date of the claimants' original filing, and that
their claims are properly brought as a third-party complaint within this limitation action.
DISCUSSION
I.
Motion to Dismiss under Federal Rule 12(b)(2)
A. Legal Standards
Personal jurisdiction “is an essential element of the jurisdiction of a district court,
without which it is powerless to proceed to an adjudication.” Ruhrgas AG v. Marathon Oil Co.,
526 U.S. 574, 584(1999) (internal quotation omitted). Rule 12(b)(2) of the Federal Rules of Civil
Procedure provides that a defendant can move to dismiss an action against it for lack of personal
jurisdiction. “The plaintiff bears the burden of establishing [personal] jurisdiction but is required
to present only prima facie evidence.” Seiferth v. Helicopteros Attuneros, Inc., 472 F.3d 266,
270 (5th Cir. 2006). The allegations of the complaint, except as controverted by opposing
4
affidavits, are taken as true and all factual conflicts are resolved in the plaintiff’s favor.
Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985). In resolving a motion
to dismiss for lack of personal jurisdiction, the court may consider “affidavits, interrogatories,
depositions, oral testimony, or any combination of the recognized methods of discovery.” Revell
v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002) (quotations omitted). Further, courts may permit
discovery to allow the parties to ascertain facts relevant to determining personal jurisdiction. See
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 & n. 13 (1978).
Personal jurisdiction over a non-resident defendant is determined by the state’s long-arm
statute and the due process clause. ICEE Distrib., Inc. v. J&J Snack Foods, 325 F.3d 586, 591
(5th Cir. 2003). Because Louisiana’s long-arm statute extends to the limits of the due process
clause of the Fourteenth Amendment, the inquiry is whether subjecting a defendant to personal
jurisdiction in Louisiana would offend due process. See Dickson Marine Inc. v. Panalpina, Inc.,
179 F.3d 331, 335 (5th Cir. 1999). Due process is not offended if the defendant has “certain
minimum contacts with [the forum] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945) (internal quotation and citation omitted).
Depending on the extent and quality of a defendant's contacts with a forum, personal
jurisdiction may be either specific jurisdiction or general jurisdiction. A court has general
jurisdiction over a nonresident defendant “to hear any and all claims against [it] when [its]
contacts with the state are so constant and pervasive as to render [it] essentially at home in the
forum.” Daimler AG v. Bauman, 571 U.S. 117, 122 (2014) (quotations omitted). The “test is a
5
difficult one to meet, requiring extensive contacts between a defendant and a forum.”
Submersible Sys., Inc. v. Perforadora Cent., S.A. de C.V., 249 F.3d 413, 419 (5th Cir. 2001).
Specific jurisdiction exists when a nonresident defendant “has purposefully directed its
activities at the forum State and litigation results from alleged injuries that arise out of or relate
to those activities.” Panda Brandywine Corp. v. Patomac Elec. Power Co., 253 F.3d 865, 868
(5th Cir. 2001) (quotations omitted). The United States Court of Appeals for the Fifth Circuit
applies a three-step analysis to determine specific jurisdiction:
(1) whether the defendant has minimum contacts with the forum state, i.e.,
whether it purposely directed its activities toward the forum state or purposefully
availed itself of the privileges of conducting activities there; (2) whether the
plaintiff’s cause of action arises out of or result from the defendant’s
forum-related contacts; and (3) whether the exercise of personal jurisdiction is
fair and reasonable.
Seiferth, 472 F.3d at 271.
“In cases involving a product sold or manufactured by a foreign defendant,” the Fifth
Circuit employs a “ ‘stream-of-commerce’ approach to personal jurisdiction, under which the
minimum contacts requirement is met so long as the court finds that the defendant delivered the
product into the stream of commerce with the expectation that it would be purchased or used by
consumers in the foreign state.” Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 177 (5th Cir.
2013). Under Ainsworth, “mere foreseeability or awareness is a constitutionally sufficient basis
for personal jurisdiction if the defendant's product made its way into the forum state while still in
the stream of commerce, but the defendant's contacts must be more than random, fortuitous, or
attenuated, or of the unilateral activity of another party or third person.” Id.
6
A third potential basis for personal jurisdiction exists under Federal Rule of Civil
Procedure 4(k)(2) when the underlying claim arises under federal law, including admiralty and
maritime law. World Tanker Carriers Corp. v. M/V Ya Mawlaya, 99 F.3d 717 (5th Cir. 1996).
"Rule 4(k)(2) provides for service of process and personal jurisdiction in any district court for
cases arising under federal law where the defendant has contacts with the United States as a
whole sufficient to satisfy due process concerns and the defendant is not subject to jurisdiction in
any particular state." Adams v. Unione Mediterranea Di Sicurta, 364 F.3d 646, 650 (5th Cir.
2004).
B. Analysis
1. General jurisdiction
LG Chem moves to dismiss arguing that it is not "at home" in the forum, and thus not
subject to general jurisdiction in this court. In support of its dismissal motion, LG Chem has
provided the affidavit of Kyung Taek Oh, a sales professional and former employee of LG
Chem, now employed by a spinoff company. In his affidavit, Oh attests that LG Chem is a
Korean company with its headquarters and principal offices in Seoul, South Korea. All of his
other averments concerning LG Chem's contacts are qualified with the preface "As of November
30, 2020. . . ." For example, "As of November 30, 2020, LG Chem was not registered to do
business in any U.S. State." Similarly, Oh states that as of November 30, 2020, LG Chem did not
have an office in the United States, did not have a registered agent in the United States, and did
not have any employees who worked in the United States.
Plaintiffs have alleged that LG Chem batteries made their way into Louisiana and caused
7
the fire, which occurred in 2017. Oh's affidavit does not shed light on the nature and extent of
LG Chem's contacts with the forum state (or the United States) until December 2020. It does not
enlighten the court on the scope and breadth of LG Chem's contacts during the time-frame
relevant to this case.
If “a plaintiff presents factual allegations that suggest with reasonable particularity the
possible existence of the requisite contacts . . . plaintiff's right to conduct jurisdictional discovery
should be sustained.” Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 429 (5th Cir. 2005)
(quotations omitted); see also, 4 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL
PRACTICE & PROCEDURE § 1067.6 (4th ed. 2013) (jurisdictional discovery can be obtained “when
there is some basis for believing that [it] would be fruitful”).
Because the provided affidavit provided does not directly address the disputed facts, the
court agrees with plaintiff that further discovery is warranted to determine LG Chem's
relationship to the forum during the relevant time period.
2. Specific Jurisdiction
LG Chem further argues that specific jurisdiction is not present because the lithium
battery in question arrived in the forum not through its contacts with the forum, but due to the
unilateral activities of unrelated third parties. In connection with this argument, LG Chem points
again to Oh's affidavit, in which he avers that LG Chem previously manufactured 18650-sized
lithium-ion batteries for use in specific applications by sophisticated companies, but that it no
longer manufactures or sells lithium-ion batteries. Oh further attests that LG chem never
designed, manufactured, distributed, advertised or sold the batteries to individual consumers as
8
standalone, removable batteries, or authorized any other entity to do so. Accordingly, LG argues
that the battery did not enter the forum through its contacts with the forum.
LG Chem's argument hinges on the fact that the batteries it manufactured were not
standalone batteries sold to individual consumers, but it is not clear that the exploding battery
was a standalone battery, rather than an integrated battery. While the batteries were sold to
"sophisticated customers", there is no averment that those sophisticated customers were not ecigarette manufacturers that integrated them into their products, and/or whether LG Chem was
aware of that fact. Oh's averments do not resolve the question whether it was foreseeable that
once introduced into the stream of commerce, the LG Chem batteries could find their way to
Louisiana. Additional facts are needed to ascertain the extent of LG Chem's contacts with
Louisiana, and thus the court finds that the issue whether it may exercise personal jurisdiction
over LG Chem warrants limited discovery.
3. Federal Rule 4(k)(2) jurisdiction
Three elements are required for the exercise of jurisdiction under Rule 4(k)(2): “the
plaintiff's claim must arise under federal law, the defendant must not be subject to jurisdiction in
any state's courts of general jurisdiction, and exercise of jurisdiction must comport with due
process.” Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1412 (Fed. Cir. 2009)).
In the present case, LG Chem acknowledges the potential applicability of Rule 4(k)(2) to
this case,5 but argues that it lacks the required contacts with the United States as a whole, and
thus the third prong, requiring the exercise of jurisdiction to comport with due process, is not
5
Rec. Doc. 162-1, p. 6.
9
met.
It is undisputed that the matter falls within the court's admiralty jurisdiction, and thus the
first prong is met. As for the second prong, the Fifth Circuit has held that “so long as a defendant
does not concede to jurisdiction in another state, a court may use 4(k)(2) to confer jurisdiction.”
Adams (citing ISI Int'l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 552 (7th Cir. 2001)
(“If ... the defendant contends that he cannot be sued in the forum state and refuses to identify
any other where suit is possible, then the federal court is entitled to use Rule 4(k)(2).”). In this
case, LG Chem contends it cannot be sued in Louisiana and has not identified another forum
where suit is possible.
With respect to the third prong, because the Fifth Amendment due process analysis
applicable to Rule 4 is the same as that for the Fourteenth Amendment analysis under the longarm statute, the court's conclusion that further discovery is warranted regarding the nature and
extent of LG Chem's contacts with the forum applies equally with respect to its contacts with the
nation as a whole.
In sum, plaintiffs have alleged that a defective battery manufactured by LG Chem made
its way into Louisiana and caused their damages. They argue that by introducing the battery into
the stream of commerce, it was potentially foreseeable that the battery would be used in
Louisiana. LG Chem's affidavit in support of its motion to dismiss does not discuss this issue. It
reflects that LG Chem had no presence in the United States after November 2020, but the
relevant time period predates that. The affidavit establishes that the batteries were sold as
integrated batteries to sophisticated customers, but not that the battery in question was not
10
integrated, or that it was not purchased from one of LG Chem's sophisticated customers.
Accordingly, the court orders the parties to conduct discovery concerning personal jurisdiction,
to be concluded within 90 days of this order.
II.
Motion to Dismiss under Rule 12(b)(6)
A. Statute of limitations argument
A three-year statute of limitations applies to plaintiffs' federal maritime law claims. 46
U.S.C. § 763(a). LG Chem argues that the claims against it are time-barred because plaintiffs did
not file their motion for leave of court to amend and name LG Chem until September 25, 2020,
more than three years beyond September 3, 2017, the date of the accident. Plaintiffs oppose,
arguing that under Federal Rule of Civil Procedure 15, their claims against LG Chem relate back
to the date of the original claim against LG Electronics USA, Inc., which was filed on September
18, 2018.
Rule 15(c)(1) provides in pertinent part:
An amendment to a pleading relates back to the date of the original pleading
when:
....
(B) the amendment asserts a claim or defense that arose out of the conduct,
transaction, or occurrence set out--or attempted to be set out--in the original
pleading; or
(C) the amendment changes the party or the naming of the party against whom
a claim is asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period
provided by Rule 4(m) for serving the summons and complaint, the party to
be brought in by amendment:
(i) received such notice of the action that it will not be prejudiced in
defending on the merits; and
11
(ii) knew or should have known that the action would have been brought
against it, but for a mistake concerning the proper party's identity.
“Federal Rule of Civil Procedure 15(c) is a procedural provision to allow a party to amend an
operative pleading despite an applicable statute of limitations in situations where the parties to
litigation have been sufficiently put on notice of facts and claims which may give rise to future
related claims.” Kansa Reinsurance v. Congressional Mortgage Corp., 20 F.3d 1362, 1366–67
(5th Cir.1994). The “relation back” doctrine recognizes that the purpose of the statute of
limitations is accomplished by the filing of the initial pleading. Id.
Plaintiffs first named an LG entity, LG Electronics, USA, Inc., in their First
Supplemental and Amending Answer and Claims filed on September 3, 2018. They alleged that
LG Electronics, USA, Inc. was the manufacturer of the lithium ion battery housed in an
electronic cigarette which ignited and/or exploded and caused a fire on board the LOUISIANA
LADY. On December 10, 2018, plaintiffs amended again to substitute LG Chem America, Inc.
for LG Electronics, USA, Inc., alleging that LG Chem America, Inc., a wholly-owned subsidiary
of LG Chem Ltd., manufactured the lithium ion battery housed in an electronic cigarette that
caused the fire. Then, on October 14, 2020, the court granted plaintiffs' motion for leave to
amend filed on September 25, 2020, allowing plaintiffs to add LG Chem, Ltd., which it alleged
was the manufacturer, designer, patent holder, seller, and distributor of the subject lithium ion
batteries.
It is undisputed that the claims against LG Chem arise out of the occurrence set out in the
original pleading, and thus the requirement of Rule 15(c)(1)(B) is met. It is also clear that from
12
the beginning, the allegations against the LG entities constituted an attempt to sue the LG entity
responsible for manufacturing the lithium battery at issue, and the allegedly late amendment is
an attempt to correctly identify the lithium battery manufacturer, meeting the "mistake"
requirement of Rule 15(C)(ii).
As for the Rule 15(C)(i) and (ii) requirements that the newly-added, correctly named
party must have received notice so that it will not be prejudiced, and it must have known or
should have known that it would have been sued but for a naming mistake, it is undisputed that
the original defendant, LG Chem, America Inc., is currently a wholly-owned subsidiary of LG
Chem Ltd., and previously it was owned by LG Chem Michigan, Inc., another wholly-owned
subsidiary of LG Chem Ltd. Further, both LG Chem America, Inc. and LG Chem Ltd. are
represented by the same counsel. Notice of the institution of an action by one closely related
entity to another may be imputed to the new party through shared counsel. Jacobsen v. Osborne,
133 F.3d 315, 320 (5th Cir. 1998). LG Chem Ltd. knew or should have known that as
manufacturer, the action would have been brought against it but for the naming mistake, and
there is no prejudice to LG Chem Ltd. in allowing the amendment.
On this record, the court finds that plaintiffs timely filed suit against the entity they
believed was the battery manufacturer, and the subsequent correction of their mistaken identity
relates back to the initial timely filing against LG Electronics, USA, Inc. The motion dismiss the
claims against LG Chem as time-barred is denied.
B. LG Chem's Rule 14(c) argument
Alternatively, LG Chem argues the claims against it should be dismissed because under
13
Federal Rule of Civil Procedure 14(c)(1),6 governing impleader in admiralty and maritime
claims, a claimant in a limitation may not implead third parties which are not already before the
court into the concursus. In so arguing, LG Chem points the court to In re Katrina Dredging
Limitations Actions, 2008 WL 3876461 (E.D. La. 2008), in which the court held that Federal
Rule of Civil Procedure 14(c)(1) did not permit a claimant to file an independent third-party
claim for damages against a party that has not appeared in the limitation action.
LG Chem's argument based on Rule 14(c) is misplaced, because notwithstanding the fact
the plaintiffs have labeled their claims against LG Chem as third-party claims, they are not thirdparty claims. "Rule 14 is available to any defending party." 6 WRIGHT & MILLER, FED. PRAC. &
PROC. § 1442 (emphasis added). "The crucial characteristic of a Rule 14 claim is that defendant
is attempting to transfer to the third-party defendant the liability asserted against defendant by
the original plaintiff." Id. at § 1446 (emphasis added). Because a limitation action is "essentially
a mirror image of a normal lawsuit," in which the claimants, nominally defendants, seek money,
and the plaintiff in limitation seeks to avoid paying it, the true defending party in the matter
before the court is ARTCO. 3 BENEDICT ON ADMIRALTY § 18 (2010). In actuality, plaintiffs'
6
Federal Rule of Civil Procedure 14(c)(1) provides:
If a plaintiff asserts an admiralty or maritime claim under Rule 9(h), the defendant
or a person who asserts a right under Supplemental Rule C(6)(a)(i) may, as a
third-party plaintiff, bring in a third-party defendant who may be wholly or partly
liable--either to the plaintiff or to the third-party plaintiff--for remedy over,
contribution, or otherwise on account of the same transaction, occurrence, or
series of transactions or occurrences.
14
claims against LG Chem are first-party claims, and thus what plaintiffs have attempted is not the
impleading of a third-party, but permissive joinder of LG Chem as a direct defendant.
Rule A(2) of the Supplemental Admiralty Rules provides: "The Federal Rules of Civil
Procedure . . . apply to . . . [actions for exoneration from or limitation of liability,] except to the
extent that they are inconsistent with these Supplemental Rules." Id. and id. at (iv). Federal Rule
of Civil Procedure 20, addressing permissive joinder, is not inconsistent with the Supplemental
Admiralty Rules. It provides:
Persons—as well as a vessel, cargo, or other property subject to admiralty process in
rem—may be joined in one action as defendants if:
(A) any right to relief is asserted against them jointly, severally, or in the alternative
with respect to or arising out of the same transaction, occurrence, or series of
transactions or occurrences; and
(B) any question of law or fact common to all defendants will arise in the action.
In the present case, it is undisputed that plaintiffs' claims against LG Chem arise out of
the same occurrence they are litigating against ARTCO in the limitation, and involve common
questions of law and fact. Just as plaintiffs in non-limitation cases may join defendants, there
appears to be no prohibition from claimants in a limitation proceeding doing so. This
interpretation accords with the well-established principle that “[l]iberal rules of joinder are
applied in limitation proceedings, allowing the court to adjudicate the claims and cross-claims of
all interests.” 2 SCHOENBAUM, ADMIRALTY & MAR. LAW § 15:6 (6th ed. 2019) (citing British
Transport Commission v. United States, 354 U.S. 129 (1957)). Likewise, it is consistent with the
1966 Advisory Committee Note to Rule 20, which states that “[a] basic purpose of unification of
15
admiralty and civil procedure is to reduce barriers to joinder . . . .” The court also emphasizes
that in holding that limitation claimants may make cross-claims against other claimants within
the limitation, the United States Supreme Court observed:
[A]s we have pointed out, the Rules were not promulgated as technicalities
restricting the parties as well as the admiralty court in the adjudication of relevant
issues before it. There should therefore be no requirement that the facts of a case
be tailored to fit the exact language of a rule. . . . . The question is not what "tag"
we put on the proceeding, . . . but rather whether the Court has jurisdiction of the
subject matter and of the parties. It is sufficient to say as did Chief Justice Taft for
a unanimous Court in Hartford Accident & Indemnity Co. of Hartford v. Southern
Pacific Co., 1927, 273 U.S. 207, 47 S. Ct. 357, 71 L. Ed. 612, "that all the ease
with which rights can be adjusted in equity is intended to be given to the
(limitation) proceeding. It is the administration of equity in an admiralty court. *
* * It looks to a complete and just disposition of a many-cornered controversy * *
*." Id., 273 U.S. at 216.
....
Logic and efficient judicial administration require that recovery against all
parties at fault is as necessary to the claimants as is the fund which limited the
liability of the initial petitioner. Otherwise this proceeding is but a "water haul"
for the claimants, a result completely out of character in admiralty practice.
British Transport, 354 U.S. at 136–39.
There is precedent in this district to adjudicate limitation claimants' claims against a nonvessel entity within the limitation proceeding, due to the judicial efficiency and economy gained
by so proceeding. See Complaint of Clearsky Shipping Corp., 1998 A.M.C. 802, 1997 WL
772808 (E.D. La. 1997).7 Accordingly, LG Chem's motion to dismiss based on its
7
Clearsky was a limitation proceeding invoked in the wake of the collision of the M/V
BRIGHT FIELD with the New Orleans Riverwalk, including a shopping center, condominium,
and hotel. In Clearsky, the court initially required all limitation claimants who alleged a cause of
action against a non-vessel entity or individual to join that party in the limitation proceeding, or
wait until after the limitation proceeding was concluded to prosecute the cause of action. In
deference to the Saving to Suitors clause, and acknowledging that no specific authority existed to
permit the court to compel the assertion of claims against non-vessel entities, the court retreated
16
Rule 14 argument is denied. Therefore,
IT IS HEREBY ORDERED that defendant LG Chem Ltd.'s Rule 12(b)(2) and 12(b)(6)
Motion to Dismiss the complaints of claimants Ronald D. Neal and Philip Graves and Rebecca
Whaley Graves, (Rec. Doc. 162) is DENIED. The Rule 12(b)(2) motion may be re-urged
following completion of discovery limited to the issue of personal jurisdiction.
New Orleans, Louisiana, this _____ day of April, 2021.
7th
____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE
from requiring the joinder of non-vessel parties, but made clear that it was permissible. In so
holding, the court emphasized that in the event that it found limitation appropriate, it would be
called upon to assess the value of the claims for indemnity and contribution, which would
involve consideration of fault attributable to the non-vessel interests, and those findings might
conflict with the findings of a state court. The court further noted that it had jurisdiction over the
claims pursuant to 28 U.S.C. §§ 1333 and 1367.
17
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