CSX Transportation, Inc. v. M/V WAWASAN RUBY et al

Filing 63

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 6/10/13. (bmhs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CSX TRANSPORTATION, INC.,

:

Plaintiff,

:

v.

:

M/V WAWASAN RUBY, her engines, :
apparel, etc., in rem,
:
and
:
TRIO HAPPINESS, S.A.,
in personam,
:
Defendants.

Civil Action No. GLR-12-2551

:
MEMORANDUM OPINION

THIS MATTER is before the Court on proposed Intervenors
David

Rienas

Motion

to

and

Ressalina

Intervene.

Transportation,

Inc.

Rienas’
(ECF

(“CSXT”)

(collectively,

No.

40).

commenced

“Movants”)

Plaintiff

this

action

CSX

against

Defendants M/V WAWASAN RUBY (the “Vessel”), in rem, and Trio
Happiness, S.A. (“Trio”), in personam, after the Vessel allided
with the Bayside Coal Pier owned by CSXT.
reviewed

the

pleadings

hearing necessary.

and

supporting

The Court, having

documents,

finds

See Local Rule 105.6 (D.Md. 2011).

no
For

reasons outlined in specific detail below, the Court will grant
in part and deny in part Movants’ Motion.

I.

BACKGROUND1

On August 25, 2012, the Vessel, destined for a dock located
at 6000 Pennington Avenue in Baltimore, Maryland, allided with
CSXT’s Bayside Coal Pier (the “Pier”).

The allision caused

substantial damage to the Pier, thereby affecting CSXT’s ability
to utilize it.

The allision also resulted in personal injury to

Mr. Rienas, a CSXT employee working on the Pier at the time of
the allision.
On August 26, 2012, CSXT commenced this action against the
Defendants.

(See Verified Compl., ECF No. 1).

That day, CSXT

also sought a warrant from the Court to arrest the Vessel.
ECF

Nos.

2-10).

On

August

27,

2012,

the

parties

(See

arranged

security for the Vessel via a letter of undertaking (“LOU”) in
the amount of $22,000,000, which resulted in the release of the
Vessel.

(See ECF Nos. 12-16).

CSXT filed an Amended Verified

Complaint on September 26, 2012, seeking relief “for property
damage,
damages.”

for

loss

of

revenue,

lost

profits,

and

(Am. Verified Compl. ¶ 7, ECF No. 27).

for

other

In that

document, CSXT also states “[i]n addition, there is one CSXT
employee who alleges injury as a result of the allision.”2

1

(Id.)

Unless otherwise noted, the following facts are taken from
CSXT’s Amended Verified Complaint, and the Movants’ proposed
Intervening Complaint. (See ECF Nos. 27 & 40-3).
2
The original Verified Complaint seeks the same relief and
references the same injury. (See Verified Compl. ¶ 7).
2

On February 15, 2013, approximately seven months after the
parties executed the LOU and the Court released the Vessel,
Movants filed the pending Motion to Intervene, which includes a
proposed four-count “Intervening Complaint” alleging two in rem
claims against the Vessel and two in personam claims against
Trio.

The

proposed

Intervening

Complaint

seeks

damages

associated with Mr. Rienas’ personal injuries and the Movants’
loss

of

consortium.

Mr.

Rienas’

personal

injury

damages

allegedly include lost wages, medical expenses, and disabling
conditions such as mental anguish and emotional distress.

The

Movants made no attempts to rearrest the Vessel prior to filing
their Motion.
II.
A.

DISCUSSION

Standard of Review
The Movants claim an intervention of right under Federal

Rule of Civil Procedure 24(a) and, alternatively, seek a right
to permissive intervention under Rule 24(b).
Under an intervention of right,
“the court must permit anyone to intervene who: (1) is
given an unconditional right to intervene by a federal
statute; or (2) claims an interest relating to the
property or transaction that is the subject of the
action, and is so situated that disposing of the
action may as a practical matter impair or impede the
movant’s ability to protect its interest, unless
existing parties adequately represent that interest.”

3

Fed.R.Civ.P. 24(a)(1)-(2).

A movant seeking intervention under

Rule 24(a)(2) must demonstrate “(1) an interest in the subject
matter of the action; (2) that the protection of this interest
would

be

impaired

because

of

the

action;

and

(3)

that

the

applicant’s interest is not adequately represented by existing
parties to the litigation.”

Teague v. Bakker, 931 F.2d 259,

260-61 (4th Cir. 1991) (citation omitted).
Conversely,

permissive

intervention

is

appropriate

“[o]n

timely motion” when the movant “(A) is given a conditional right
to intervene by a federal statute; or (B) has a claim or defense
that shares with the main action a common question of law or
fact.”

Fed.R.Civ.P. 24(b)(1)(A)-(B).

The decision to grant or

deny a motion to intervene pursuant to Rule 24(b) “lies within
the

sound

discretion

of

the

trial

court”

although

“some

standards have been developed to guide the courts in making
intervention determinations.”

Hill v. W. Elec. Co., 672 F.2d

381, 386 (4th Cir. 1982) (citation omitted).
B.

Analysis
Defendants oppose the Motion as it relates to the Movants’

in rem claims against the Vessel, but do not object to their in
personam claims against Trio.

The Court will deny the Motion as

it relates to the in rem claims, but will grant the Motion
regarding the in personam claims under Rule 24(b).

4

Although it is readily apparent that the Movants have an
interest

in

the

subject

matter

of

this

case,

compulsory

intervention is inappropriate because the subsistence of their
in rem claims rest entirely upon a crucial jurisdictional issue.
Supplemental Rule E(5) of the Federal Rules of Civil Procedure
governs the release of an arrested vessel through the posting of
a special bond “to cover the amount of plaintiff’s claim fairly
stated with accrued interest and costs.”

Fed.R.Civ.P. E(5)(a).

The execution of a bond in admiralty “becomes the res which
alone is sufficient to give the court in rem jurisdiction.”

2

C.J.S. Admiralty § 156 (2013) (alteration added).
Typically, a special bond is “posted to assure the payment
of a single claim, not to stand in place of the vessel for all
claims that might be asserted against her.”

Overstreet v. Water

Vessel Norkong, 706 F.2d 641, 644 (5th Cir. 1983).

In other

words, “[t]he introduction . . . of a new cause of action is
something which the sureties are not bound to contemplate . . .
.”

The Beaconsfield, 158 U.S. 303, 311 (1895).

When a “cause

of action remains practically the same,” however, “a mere change
in the name of the libelant, as by substituting the real party
in interest for a nominal party, will not avoid the stipulation
as against the sureties.”

Id. at 310-11.

Upon the execution of

a special bond and the release of the vessel, all subsequent in

5

rem claims require a new warrant of arrest and a rearrest of the
vessel.

The Oregon, 158 U.S. 186, 210 (1895).

Under this standard, the dispositive issue in this matter
is whether the Movants may assert their in rem claims under the
LOU

executed

by

CSXT

and

the

Vessel.

CSXT

avers

that

the

Movants may not utilize the LOU as a res for their in rem claims
because the LOU is considered a special bond that only covers
the

claims

before

the

Court

at

the

time

it

was

executed.

Movants agree that the LOU constitutes a special bond, but aver
that they may use the LOU as a res because (1) CSXT sued for
personal injury damages, and thus the claim was before the Court
at the time the LOU was executed, and (2) the language of the
LOU extends the security to them.

The pivotal inquiry, however,

is what causes of action were before the Court at the time the
parties executed the LOU.

See, e.g., The Beaconsfield, 158 U.S.

at 310-11; The Oregon, 158 U.S. at 206; Overstreet, 706 F.2d at
644; Norkin v. The Sister Katingo, 201 F.Supp. 223, 224 (D.Conn.
1962).
In its Amended Verified Complaint, CSXT alleges that its
“damages are believed . . . to be in excess of $22,000,000 for
property damage, for loss of revenue, lost profits, and for
other damages.”

(Am. Verified Compl. ¶ 7).

Moreover, CSXT

alleges “there is one CSXT employee who alleges injury as a
result of the allision.”

(Id.)
6

CSXT goes on to reference the

personal injuries of its employee in paragraphs nine and twentysix of the Amended Verified Complaint.3
Beyond these references, however, there is no indication
that

CSXT

alleges

Mr.

Rienas’

personal

injury

claim.

The

Amended Verified Complaint references the LOU as security for
CSXT’s

claims,

references

the

interference
things.

identifies
damage

with

CSXT’s

breaches
to

CSXT’s

business

of

duties

owed

property,

to

and

operations,

among

CSXT,

alleges
other

(See Am. Verified Compl. ¶¶ 13, 28-29, 35).

Moreover, CSXT asserts that it did not, and could not,
assert

Mr.

Rienas’

Complaints.

personal

injury

claim

in

either

of

its

According to CSXT, its references to Mr. Rienas’

personal injuries in the Amended Verified Complaint are merely
for recoupment of the payments made to Mr. Rienas under the
Longshore

&

Harbor

Workers’

Compensation

Act

(“LHWCA”),

33

U.S.C. §§ 901 et seq. (2012), not an attempt to assert Mr.
Rienas’ personal injury claim.

To support this averment, CSXT

propounds two arguments: (1) it could not have asserted Mr.

3

The exact language reads: “Thus, the Vessel was scheduled
to leave the Port of Baltimore and this District in less than
twenty four hours after the subject allision that caused
significant damage to the Pier, the equipment on the Pier and
the personal injuries alleged by CSXT’s employee.”
(Am.
Verified Compl. ¶ 9); “The damages are believed at this time to
be in excess of $22,000,000 for property damage, for loss of
revenue, lost profits, and for other damages.
In addition,
there is one CSXT employee who alleges injuries as a result of
the allision.” (Id. ¶ 26).
7

Rienas’

personal

injury

claim

under

the

LHWCA;

and

(2)

the

references to Mr. Rienas personal injuries in its Complaints
constitute a Burnside claim, see Fed. Marine Terminals, Inc. v.
Burnside Shipping Co., 394 U.S. 404 (1960), which permits CSXT
to recover the sum advanced under the LHWCA from a third-party
tortfeasor.
As to the first averment, CSXT avers, and Movants concede,
that the event that triggers the Act, namely the distribution of
a formal compensation award, has yet to occur.
933(b).

See 33 U.S.C. §

Therefore, CSXT could not have asserted Mr. Rienas’

claim under the LHWCA.

Secondly, CSXT avers that its Burnside

claim is wholly independent of Mr. Rienas’ claim because they
were only advanced to recoup payment of the sum CSXT made to Mr.
Rienas under the LHWCA.

Therefore, Movants’ averment that CSXT

alleged the personal injury claim on behalf of Mr. Rienas is
unpersuasive.4
Furthermore, CSXT makes no reference to the Movants’ loss
of consortium claim in the Amended Verified Complaint.

Movants’

argument that the loss of consortium claim is considered a joint

4

Movants argue that the intent of CSXT is irrelevant to
deciding this issue. Although the ambiguous terms of a bond may
be construed under the intention of the court, see The
Beaconsfield, 158 U.S. at 311, there is no indication that this
interpretation extends to the intent of the party drafting the
complaint. Therefore, CSXT’s intent when filing its Complaints
is relevant to determining the claims before the Court at the
time the parties executed the LOU.
8

claim

under

Maryland

law

is

unavailing.

See

generally

Overstreet, 706 F.2d at 641 (affirming district court’s denial
of intervention when wife of injured seaman sought to assert
loss of consortium claims in seaman’s personal injury suit).
The Court finds that Movants’ claims are not asserted in
either of CSXT’s Complaints and, therefore, constitute a new
cause of action.

As a result, the Movants’ claims are not

covered under the LOU because they were not before the Court
when the parties executed the agreement.
III. CONLCUSION
Accordingly,

the

Motion

to

Intervene

GRANTED IN PART and DENIED IN PART.

(ECF

No.

40)

is

Movants may proceed with

their in personam claims against Trio, pursuant to Rule 24(b),
but their in rem claims against the Vessel may not.

A separate

Order follows.
Entered this 10th day of June, 2013

________/s/_________________
George L. Russell, III
United States District Judge

9