In Re: Mike Hooks L L C
MEMORANDUM RULING re 21 MOTION to Dismiss for Failure to State a Claim filed by David Tyrone Lavan, 20 MOTION to Modify & Partially Lift Stay filed by David Tyrone Lavan. Signed by Judge James D Cain, Jr on 2/17/2021. (crt,Benoit, T)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION
IN RE: MIKE HOOKS LLC
CASE NO. 2:20-CV-00691
JUDGE JAMES D. CAIN, JR.
MAGISTRATE JUDGE KAY
Before the court are a Motion to Modify and Partially Lift Stay [doc. 20] and a
Motion to Dismiss [doc. 21] filed by David Tyrone Lavan, who is a claimant in this
limitation of liability action brought by Mike Hooks, LLC (“Hooks”). Hooks opposes both
motions. Docs. 24, 25. The case and motions were originally pending in the Lafayette
division, before Judge Michael J. Juneau and Magistrate Judge Carol B. Whitehurst, but
have been transferred to the undersigned and to the Lake Charles division at Lavan’s
motion. Docs. 9, 32.
This suit arises from injuries allegedly incurred by Lavan as a result of an explosion
or fire that occurred on April 29, 2020, aboard the dredge vessel MIKE HOOKS in the
Calcasieu River. See doc. 1. On June 1, 2020, Hooks – as owner of the vessel – filed a
complaint in this court under the Limitation of Liability Act, 46 U.S.C. § 30505 et seq.
Lavan, apparently the sole victim of the accident, filed an answer and admiralty claim and
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Hooks filed a claim for declaratory judgment against Lavan’s right to maintenance and
cure benefits. Docs. 18, 19.
Lavan now moves to modify and partially lift the stay automatically imposed under
this limitation action, so that he might file a suit against Hooks in state court under the
Jones Act. Doc. 20. To this end he offers a stipulation that he alleges will preserve both
parties’ rights and interests in their respective forums. Doc. 20, att. 2. He also moves to
dismiss the claim for declaratory judgment, arguing that the matter is more appropriately
handled in state court. Doc. 21. Hooks opposes both motions. Docs. 24, 25.
LAW & APPLICATION
A. Motion to Lift Stay
When a vessel owner invokes the Limitation of Liability Act, the federal district
court must stay all other proceedings against it and require claimants to timely assert their
claims in the limitation court. Texaco, Inc. v. Williams, 47 F.3d 765, 767 (5th Cir. 1995).
This results in “a recurring and inherent conflict” between the federal court’s exclusive
jurisdiction over the limitation proceeding and the common law remedies embodied in the
savings to suitors clause of 28 U.S.C. § 1333, which the injured party may pursue in state
court. Id. In an attempt to resolve this conflict, federal courts have allowed state court
claims to proceed outside the limitation action if (1) they total less than the value of the
vessel or (2) the claimants stipulate that the federal courts have exclusive jurisdiction over
the limitation proceeding and that they will not seek to enforce a greater damage award
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until the limitation action has been heard. Odeco Oil and Gas Co. v. Bonnette, 4 F.3d 401,
404 (5th Cir. 1993).
Here Lavan has offered the following stipulations in support of his request to
partially lift the stay:
(1) that Hooks has the right to pursue its limitation action in this court;
(2) that, while he intends to file a suit under the Jones Act in state
court upon a lifting of the stay, he will not seek in that action a ruling or
judgment on Hooks’s right to a limitation of liability and consents to waive
any issues of res judicata regarding Hooks’s right to a limitation based on
any state court ruling or judgment;
(3) that he consents to waive any defenses of issue preclusion
regarding Hooks’s privity or knowledge based on any state court ruling or
(4) that he will not seek to enforce any judgment against Hooks or
recover in excess of the value of the limitation fund established by this court
until after the adjudication of Hooks’s limitation proceeding;
(5) that he will not seek to enforce any judgment exposing Hooks to
liability in excess of the value of the vessel and its freight then pending,
whether by enforcement against Hooks itself or against any party entitled to
indemnity or contribution from Hooks, until after the adjudication of Hooks’s
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(6) that this court will have exclusive jurisdiction over the proper
value of the limitation fund, though Lavan does not stipulate at this time to
the value itself.
Doc. 20, att. 2. In response, Hooks maintains that the stipulation is inadequate because (1)
the “in excess of” language in Sections 4 and 5 fails to adequately protect Hooks’s right to
limitation; (2) the stipulation does not allow Hooks the right to prioritize its claim to
insurance proceeds; and (3) the motion is premature and does not protect Hooks from
potential claims for contribution or indemnity from codefendants. Doc. 25. Lavan disputes
the first and third grounds but offers a supplemental stipulation covering the second. Doc.
31; see doc. 31, att. 1.
On the first basis Hooks maintains that the stipulations are inadequate because
Lavan is not foreclosed from seeking to enforce a judgment up to the amount of the
limitation on fund while the limitation is still pending, circumventing the purpose of the
exclusivity doctrine because Hooks might be exonerated from all liability under this
proceeding. Doc. 25, pp. 2–3. As it notes, the Eastern District has rejected such stipulations
and instead required the claimant to stipulate that he will not seek to enforce any judgment
prior to the termination of the limitation proceeding. See In the Matter of Complaint of T.
Baker Smith & Son, Inc., 1998 WL 151435, at *3–*4 (E.D. La. Mar. 25, 1998) (collecting
cases). Since that time, however, the Fifth Circuit has held that no exoneration stipulation
is required to protect the vessel owner’s rights under the Limitation Act so long as the
claimant stipulates to exclusive federal jurisdiction over the limitation issues and waives
any res judicata claims with regards to the state court’s resolution of those issues. In re
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Tetra Applied Technologies LP, 362 F.3d 338, 343 (5th Cir. 2004). Accordingly, this
omission will not defeat the Motion to Lift Stay.
Hooks also complains that the stipulations are inadequate for only specifying that
the claimant will not seek any excess judgment until “after the adjudication of [Hooks’s]
right to limitation in this Court,” because they do not limit Lavan’s right to collect such a
judgment after the limitation case is concluded, including during the pendency of any
appeal. Hooks notes that such language was found inadequate in Matter of Complaint of
Neches-Gulf Marine, Inc., 2002 WL 13214396 (E.D. Tex. Mar. 18, 2011). There, however,
the court’s concern was that the claimant could collect the full limitation amount from the
vessel owner, “thereby following the spirit of the limitation of liability ruling,” then seek
to collect any excess amounts from a jointly and severally liable party who had offered no
such stipulation and could seek contribution from the vessel owner. Id. at *2. In this matter,
Lavan has stipulated to the court’s jurisdiction over the limitation issue. This is adequate
under Fifth Circuit precedent, as outlined above, and the court will presume that he will
not act in violation of any suspensive appeal.
Finally, Hooks maintains that the motion is premature because the deadline for filing
claims in the limitation action does not expire until December 15, 2020, and because Lavan
has not stipulated that the state court suit will not include any other defendants.
Accordingly, any lifting of the stay could expose Hooks to potential claims for indemnity
or contribution from co-defendants. Since Hooks filed its response, however, the filing
deadline has passed. Moreover, Lavan asserts that he has no knowledge of any potential
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codefendants. Doc. 31. The court thus regards this argument as moot and will grant the
motion, subject to Lavan’s stipulations.
B. Motion to Dismiss
Under Rule 12(b)(6), Lavan moves for dismissal of Hooks’s claim for declaratory
judgment on his right to maintenance and cure. Doc. 21. He argues that the court should
instead allow that matter to be resolved in the state court suit. Doc. 21, att. 1.
Rule 12(b)(6) allows for dismissal of a claim when a plaintiff “fail[s] to state a claim
upon which relief can be granted.” Such motions are reviewed with the court “accepting
all well-pleaded facts as true and viewing those facts in the light most favorable to the
plaintiff.” Bustos v. Martini Club, Inc., 599 F.3d 458, 461 (5th Cir. 2010). However, “the
plaintiff must plead enough facts ‘to state a claim to relief that is plausible on its face.’” In
re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Accordingly, the court’s task is not to
evaluate the plaintiff’s likelihood of success but instead to determine whether the claim is
both legally cognizable and plausible. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC,
594 F.3d 383, 387 (5th Cir. 2010).
Under Brillhart v. Excess Insurance Co. of America, 316 U.S. 491 (1942), the
district court has broad discretion to stay or dismiss a claim brought under the Declaratory
Judgment Act “when a parallel suit not governed by federal law and presenting the same
issues is pending in state court.” Kelly Inv., Inc. v. Continental Common Corp., 315 F.3d
494, 497 (5th Cir. 2002); Century Sur. Co. v. Blevins, 799 F.3d 366, 373 (5th Cir. 2015).
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To this end the court looks to factors outlined in St. Paul Insurance Company v. Trejo, 39
F.3d 585 (5th Cir. 1994), which include:
(1) Whether there is pending state court litigation in which all matters in controversy
may be fully litigated;
(2) Whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant;
(3) Whether the plaintiff engaged in forum shopping in bringing the suit;
(4) Whether possible inequities exist in allowing the declaratory plaintiff to gain
precedence in time or to change forum;
(5) Whether the federal court is a convenient forum for the parties and witnesses;
(6) Whether retaining the lawsuit would serve the purposes of judicial economy;
(7) Whether the federal court is being called on to construe a state judicial decree
involving the same parties and entered by the court hearing the parallel pending
Sherwin-Williams, Inc. v. Holmes Cnty., 343 F.3d 383, 388 (5th Cir. 2003) (citing Trejo,
39 F.3d at 590–91). These factors balance the following concerns: (1) proper allocation of
decision-making between the state and federal courts, (2) fairness, and (3) efficiency.
Trejo, 39 F.3d at 390–91. A district court must address and balance the purposes of the
Declaratory Judgment Act and the above factors on the record. Vulcan Materials Co. v.
City of Tehuacana, 238 F.3d 382, 390 (5th Cir. 2001).
Under the first factor, Lavan admits that he has not yet filed a parallel proceeding
in state court but that he intends to do so upon the granting of the motion to lift stay. This
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factor is an important one and “the lack of a pending parallel state proceeding . . . weighs
strongly against dismissal.” New England Ins. Co. v. Barnett, 2007 WL 3288880, at *4
(W.D. La. Nov. 6, 2007) (citing Sherwin-Williams, 343 F.3d at 394) (emphasis in original).
However, the absence of such a proceeding does not require the federal court to retain the
claim. Offshore Lift Boats, LLC v. Bodden, 2012 WL 2064496, at *2 (E.D. La. Jun. 7,
2012). Accordingly, this factor weighs against abstention but is not dispositive. Moreover,
the court makes note of a “well-established practice” of dismissing preemptive declaratory
judgment actions in maritime personal injury actions even when the injured party has not
yet filed a state or federal court action, and analogizes it to Hooks’s attempt to raise claims
for declaratory relief in this limitation proceeding. See Bodden, 2012 WL 2064496, at *2.
Because Lavan has been unable to file a parallel state court proceeding due to the stay, the
court assigns little weight to this factor. The seventh factor, which likewise addresses the
proper allocation of decision-making authority between the state and federal courts, is not
Factors 2, 3, and 4 concern whether the party bringing the declaratory claim “is
using the declaratory judgment process to gain access to a federal forum on improper or
unfair grounds.” Sherwin-Williams, 343 F.3d at 391–2. As the Fifth Circuit has noted,
however, these labels cannot be applied literally. Id. Declaratory judgment suits are often
“anticipatory” because they are “appropriately filed when there is an actual controversy
that has resulted in or created a likelihood of litigation” and because more than one forum
may be proper, the plaintiff is entitled to make a selection. Id. The court requires more than
the plaintiff’s ability to “predict that there would be a related suit filed in state court” to
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make his actions “an instance of forum-shopping instead of a reasonable assertion of its
rights under the declaratory judgment statute . . . .” Ironshore Specialty Ins. Co. v. Tractor
Supply Co., 624 F. App’x 159, 167 (5th Cir. 2015). Instead, courts look to factors that
suggest “procedural fencing,” such as filing the declaratory action before the other party is
legally able to bring a state action due to some exhaustion requirement or using the federal
court suit for the sole purpose of determining which state’s law would apply. SherwinWilliams, 343 F.3d at 397–99. Here the court can detect no procedural fencing. Hooks is
entitled to bring its limitation proceeding in this court and its forum selection has no bearing
on the choice of law applicable to Lavan’s maintenance and cure claim. While Lavan
alleges that he is being deprived of his right to a jury, Hooks notes that he has already
invoked that right for all claims triable by jury in this limitation proceeding. Doc. 19, p. 10.
Accordingly, these factors are neutral.
The fifth factor, concerning convenience of the federal forum, is likewise neutral.
Lavan intends to bring his state court suit in Calcasieu Parish, where the Lake Charles
division of this court also sits. The sixth factor, however, concerns judicial economy and
favors rejection of the claim. Because the court has agreed to lift the stay, supra, claims
relating to Lavan’s right to maintenance and cure may be resolved in the state court
proceeding soon to be filed along with other matters bearing on Lavan’s right to relief
under the Jones Act. Additionally, unlike cases where the court has retained declaratory
claims for maintenance and cure, 1 this is not an instance where discovery in the federal suit
See Rowan Cos., Inc. v. Ainsworth, 5 F.Supp.2d 420 (W.D. La. 1998); Bisso Marine, LLC v. Wyble, 2020 WL 730284
(W.D. La. Feb. 13, 2020).
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outpaces the state court suit or where Lavan has unduly delayed in bringing his suit.
Combined with the court’s lifting of the stay on Lavan’s state court remedies, the balance
of factors favors dismissing the claim for declaratory relief this suit and allowing all matters
relating to Lavan’s right to maintenance and cure to be decided together in the state court
For the reasons stated above, the Motion to Modify and Lift Stay [doc. 20] and
Motion to Dismiss [doc. 21] will be granted. Hooks’s claim for declaratory judgment [doc.
18] will be DISMISSED WITHOUT PREJUDICE.
THUS DONE AND SIGNED in Chambers on this 17th day of February, 2021.
JAMES D. CAIN, JR.
UNITED STATES DISTRICT JUDGE
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