SHEERAN et al v. M/V SWAN CHACABUCO et al

Filing 57

OPINION filed. Signed by Chief Judge Jerome B. Simandle on 12/16/2015. (drw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

STEVEN SHEERAN and KELLY
SHEERAN,
Plaintiffs,

HONORABLE JEROME B. SIMANDLE

Civil No. 14-5482 (JBS/AMD)

v.
BLYTH SHIPHOLDING S.A., et al.

OPINION

Defendants.
APPEARANCES:
Brian D. Kent, Esq.
LAFFEY BUCCI & KENT LLP
1435 Walnut Street, 7th Floor
Philadelphia, PA 19102
-andBruce David Zeidman, Esq.
COSKY & ZEIDMAN, Attorneys at Law
209 Haddon Ave.
Haddonfield, NJ 08033
Attorneys for Plaintiffs
Patrick M. Northen, Esq.
Francis P. Maneri, Esq.
Jordan M. Rand, Esq.
DILWORTH PAXSON, LLP
457 Haddonfield Road, Suite 700
Cherry Hill, NJ 08002
Attorneys for Defendant Holt Logistics Corp.
SIMANDLE, Chief Judge:
I.

INTRODUCTION
Plaintiff Steven Sheeran filed this action under the

Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. §
905(b), after he was injured while working aboard the M/V Swan
Chacabucco in the Port of Gloucester, New Jersey. His Complaint

names a number of different defendants and alleges that all
defendants were negligent by collectively breaching two dozen
different duties.
Presently before the Court is a motion to dismiss under
Fed. R. Civ. P. 12(b)(6) and a motion for sanctions under Fed.
R. Civ. P. 11(c) by Holt Logistics Corp. [Docket Items 36 & 53.]
Defendant argues that the Complaint must be dismissed because it
fails to place Defendant on notice of the particular claims
against it, and that sanctions are warranted because the claims
against Holt Logistics are entirely groundless. For the reasons
set forth below, the Court will grant Defendant’s motion to
dismiss but will deny Defendant’s motion for sanctions.
II.

FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs’ Complaint (Second Amended Complaint (“SAC”)

[Docket Item 15]) is short and straightforward.1 On January 13,
2012, Steven Sheeran was working in the hold of the vessel M/V
Swan Chacabucco (“the Swan Chacabucco” or “the Ship”), which was
berthed in the Port of Gloucester, when his leg was crushed
underneath a crane-controlled tray, causing permanent and severe
injuries. (SAC ¶¶ 18-19; 22.) He subsequently brought this

1

The facts are taken from Plaintiffs’ Second Amended Complaint
(“SAC”). For purposes of this motion, the Court must accept
Plaintiffs’ allegations as true.
2

action,2 which named eight business entities as defendants in the
Second Amended Complaint, including Holt Logistics Corp. (“Holt
Logistics”).3
Before Holt Logistics Corp. filed the instant motions, the
parties had agreed to dismiss three of the entities from the
case. (See Mar. 11, 2015 Stip. [Docket Item 30] ¶ 4). A fourth
has since been dismissed (see June 29, 2015 Stip. [Docket Item
46]), leaving only Blyth Shipholding S.A. (“Blyth Shipholding”),
Inchape Shipping Services (“Inchape Shipping”), NYK Cool a/k/a
Cool Carriers AB (“NYK Cool”), and Holt Logistics as the named
defendants.
The Complaint does not allege the specific roles and duties
of each Defendant in the action. Rather, it pleads generally
that all Defendants “owned, leased, operated, managed, possessed
and/or controlled” the Swan Chacabucco. (SAC ¶ 9.) It also
alleges that “all Defendants owned, leased, operated, occupied,

2

Plaintiffs filed a separate identical complaint under Sheeran
v. Blyth Shipholding S.A., Civ. No. 15-272 (Jan. 14, 2015), but
both cases have since been consolidated under this action.
(Stip. [Docket Item 30] ¶ 1.)
3 The Complaint named the following entities: NYK Container Line,
Ltd; NYK Line (North America), Inc.; NYK Cool, a/k/a/ Cool
Carriers AB; Cool Carriers Chile SA; Cool Carriers USA Inc.;
Chartworld Shipping Corp.; Inchape Shipping Services; and Holt
Logistics Corp. (SAC ¶¶ 1-8), along with unnamed entities ABC
Companies 1-10 and Def. Companies 1-20. Blyth Shipholding S.A.
was later substituted as a named defendant for Chartworld
Shipping Corp. (Mar. 11, 2015 Stip. [Docket Item 30] ¶ 2.)
3

maintained, managed and/or otherwise controlled the Ship and/or
the Port and specifically maintained, managed, oversaw,
directed, controlled, contracted for and/or participated in the
operation of stevedoring and/or longshoring services on the Ship
and/or at the Port.” (Id. ¶ 11.)
Holt Logistics is identified as a “business entity with a
registered place of business” in Gloucester City, New Jersey.
The Complaint alleges that Holt Logistics and Inchape Shipping
“were responsible for training, screening, certifying, hiring
and/or providing crane operators and/or other persons involved
in stevedoring and/or longshoring operations at the Port.” (SAC
¶ 10.)
The Complaint contains three causes of action. Count One
alleges negligence. Without identifying each individual
defendant’s negligent conduct, Count One enumerates 24 duties
allegedly violated by all Defendants, including but not limited
to: violating OSHA regulations; failing to properly train
employees; failing to warn of dangerous and unsafe conditions;
failing to “comply with federal and state statutes, local
ordinances, and all other rules, enactments, or regulations
applicable”; failing to properly supervise; failing to provide
adequate safety protection; failing to evaluate the work
performed for potential hazards; and negligently controlling the
4

work performed on premises. (Id. ¶ 20.)
Count Two is a personal injury claim brought against all
Defendants “in their capacity as ‘owner’ or ‘owner pro hac vice’
of the aforementioned Ship” under the Longshore and Harbor
Workers’ Compensation Act (“LHWCA”), 33 U.S.C. § 905(b). (Id. ¶¶
18-24.) Section 905(b) provides an injured longshoreman with a
cause of action against a ship owner for negligence, and
Plaintiffs allege that Defendants “owned, operated, managed,
possessed and/or controlled the Ship which it operated in the
navigable waters of the United States.” (Id. ¶ 24.) Finally,
Count Three is an action by Sheeran’s spouse, Kelly Sheeran, for
loss of consortium. (Id. ¶¶ 29-31.)4
III. DEFENDANT’S MOTION TO DISMISS WILL BE GRANTED
Holt Logistics filed this motion to dismiss, arguing that
in lumping all of the defendants together and accusing them all
of the same general negligent conduct, the Complaint fails to
put Holt Logistics on notice of the claims against them, as
required by Fed. R. Civ. P. Rule 8(a). (Mot. to Dismiss [Docket

4

Because Plaintiffs allege that the Swan Chacabucco was berthed
in the Port of Gloucester, New Jersey when the injuries occurred
(SAC ¶ 22), the Court exercises subject matter jurisdiction over
Plaintiffs’ claims under the maritime jurisdiction statute, 28
U.S.C. § 1333. The Court also has diversity jurisdiction under
28 U.S.C. § 1332, because Plaintiffs are citizens of
Pennsylvania and all Defendants have principal places of
business outside of Pennsylvania, and the matter in controversy
exceeds $75,000. (SAC ¶¶ 1-9; 15.)
5

Item 36-1] at 8-10.) Defendant also contends that Count Two must
be dismissed because the Complaint does not contain any factual
basis for its allegations that Holt Logistics is the “ship
owner” or “owner pro hac vice” of the Swan Chacabuco for
purposes of an LHWCA claim. (Id. at 10-11.)
The Court agrees with Defendant that Plaintiffs’ Complaint
fails to plead the liability of Holt Logistics with the
requisite specificity and must be dismissed.
Federal Rule of Civil Procedure 8(a)(2) requires that a
complaint contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” A to dismiss
under Fed. R. Civ. P. 12(b)(6) may be granted if a court
concludes that the plaintiff has failed to set forth fair notice
of what the claim is and the grounds upon which it rests that
make such a claim plausible on its face. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007).
Although a complaint does not require detailed factual
allegations, it must contain enough well-pleaded facts to show
that the claim is facially plausible. This “allows the court to
draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). The plaintiff must plead enough facts to “raise a
reasonable expectation that discovery will reveal evidence of
6

the necessary element,” Twombly, 550 U.S. at 556. Although all
well-pleaded factual allegations must be accepted as true, the
court may disregard any legal conclusions couched as factual
allegations. Id.; Iqbal, 556 U.S. at 678; Fowler v. UPMC
Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). If the wellpleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged – but
it has not “show[n]” – “that the pleader is entitled to relief.”
Iqbal, 556 U.S. at 679.
Plaintiffs’ Complaint fails to separate out the liability
for each defendant. Instead, it lumps Defendants together as a
group and asserts general common factual allegations against all
of them. Count One, for example, contains 24 different
allegations of negligence that vary widely, from violation of
OSHA regulations to failure to provide a safe work place to
failure to properly train employees to failure to supervise to
negligent hiring. Rather than specify which Defendants were
responsible for which duties, the Complaint merely states that
all Defendants were negligent in the enumerated ways. Without
any additional guidance as to the Defendants themselves and what
functions they performed, it is impossible to untangle
Plaintiffs’ specific theory of liability against each individual
Defendant.
7

Courts in this district generally agree that this type of
“group pleading” does not satisfy Rule 8, because it does not
place Defendants on notice of the claims against each of them.
See, e.g., Ingris v. Borough of Caldwell, No. 14-855, 2015 WL
3613499, at *5 (D.N.J. June 9, 2015) (“[T]o the extent Plaintiff
seeks to lump several defendants together without setting forth
what each particular defendant is alleged to have done, he has
engaged in impermissibly vague group pleading.”); Shaw v.
Housing Auth. of Camden, No. 11-4291, 2012 WL 3283402, at *2
(D.N.J. Aug. 10, 2012) (dismissing complaint because it failed
to contain allegations showing how each defendant was liable and
noting that “[e]ven under the most liberal notice pleading
requirements of Rule 8(a), a plaintiff must differentiate
between defendants.” (citing Pietrangelo v. NUI Corp., No. 043223, 2005 WL 1703200 (D.N.J. July 20, 2005))); see also H2O
Plus, LLC v. Arch Personal Care Prods., L.P., 2011 WL 2038775,
at *2 (D.N.J. May 22, 2011) (holding that complaint did not
violate Rule 8 because while plaintiff “did lump the Arch
Defendants together in the description of facts, looking to the
Complaint and the attached exhibits as a whole clearly shows
which claims are made against Arch PCP and which against Arch
Chemicals.”)
Had the Complaint described the nature of each entity
8

Defendant and precisely what they were responsible for on the
Ship, the Court might have been able to infer the theory of
liability for each Defendant by comparing the specific role each
played on the Swan Chacabucco with the list of duties allegedly
breached.5 But the Complaint does not do even that. Holt
Logistics, like the other named Defendants in the case, is
identified only as a “business entity” with a registered place
of business; the Complaint describes neither its line of work
nor its function on the ship. Instead, eight named Defendants
are collectively alleged to have “owned, leased, operated,
occupied, maintained, managed and/or otherwise controlled the
Ship and/or the Port” and to have “maintained, managed, oversaw,
directed, controlled, contracted for and/or participated in the
operation of stevedoring and/or longshoring services on the Ship

5

For example, had Plaintiffs identified Holt Logistics as the
entity responsible for hiring and providing stevedores for work
on the Ship, and another Defendant as the entity responsible for
the day-to-day supervision of their work, it may have been
possible to partially deduce, based on the list of alleged
negligent conduct, some of the duties each defendant is alleged
to have breached. The only thing that comes close is Plaintiffs’
allegation that Holt Logistics and Inchape Shipping “were
responsible for training, screening, certifying, hiring and/or
providing crane operators and/or other persons involved in
stevedoring and/or longshoring operations at the Port.” (SAC ¶
10.) But even this assertion continues to lump Holt Logistics
together with an unconnected entity, Inchape Shipping, and
asserts seven different duties that either Defendant or Inchape
Shipping could have been responsible for. The allegation can
hardly be said to narrow down Defendants’ liability in this
case.
9

and/or at the Port.” (SAC ¶ 11.) The “and/or” conjunction
appears no less than five times in this single sentence, making
it impossible to determine Plaintiffs’ theory of liability for
each Defendant – and for Holt Logistics in particular.
Contrary to Plaintiffs’ contention (see Opp’n to Mot. to
Dismiss [Docket Item 38] at 3), the mere fact that the Complaint
recites the type of negligent conduct at issue does not place
the parties sufficiently on notice of the claims against them.
Even though the misconduct is alleged with some specificity,
Rule 8 is not satisfied because the allegations do not inform
each Defendant of the particular claims against it. Moreover,
lumping all defendants together for different misconduct fails
to demonstrate each defendant’s individual liability. Without
pleading how, if at all, Holt Logistics was involved with the
alleged conduct at issue, the Complaint lacks sufficient facts
to draw a reasonable inference that Holt Logistics is actually
responsible for any the negligence alleged. See Phillips v.
Cnty. of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008) (“We
caution that without some factual allegation in the complaint, a
claimant cannot satisfy the requirement [under Rule 8(a)(2)]
that he or she provide not only ‘fair notice,’ but also the
‘grounds’ on which the claim rests.” (quoting Twombly, 550 U.S.
at 555)).
10

Nor is the Court persuaded by Plaintiffs’ citations to In
re Riddell Concussion Reduction Litig., 77 F.3d 422 (D.N.J.
2015) (Simandle, J.), and the two unpublished district court
opinions, Capitol Records LLC v. ReDigi Inc., No. 12-95, 2014 WL
4354675 (S.D.N.Y. Sept. 2, 2014), and Toback v. GNC Holdings,
Inc., No. 13-80526, 2013 WL 5206103 (S.D. Fla. Sept. 13, 2013),
which have little weight in this Circuit. In Riddell, this Court
rejected an argument that the complaint violated Rule 8 by
lumping all defendants together without specifying the alleged
misconduct of each defendant, because it was “apparent” that the
claims were asserted against all defendants “for their concerted
conduct under the ‘Riddell’ brand.” 77 F. Supp. 3d at 431. The
Court emphasized that group pleading was permissible in that
particular case because the defendants did not dispute their
collective role in the manufacture, sale, and marketing of the
product in question, and they were related entities operating
under a single brand, accepting service as a single entity, and
represented by the same counsel. Id. at 432. Capitol Records and
Toback similarly involve closely related Defendants. See Capitol
Records, 2014 WL 4354675, at *3 (noting that the defendants were
a small start-up and two corporate officers “who directed and
controlled essentially all of its activities”); Toback, 2013 WL
5206103 (holding that complaint satisfied Rule 8 despite
11

referring to defendants – GNC Holdings, Inc., GNC Corp, General
Nutrition Corporation, and General Nutrition Centers, Inc. –
collectively as “GNC” because defendants were interrelated
corporate defendants and demonstrated their understanding of the
allegations against them).
Riddell, Capitol Records, and Toback provide no support
that collective-style pleading is permissible in this case,
since there are no allegations that Defendants acted jointly or
in concert or are closely related corporate entities, such that
conduct by one may be ascribed to the others.6 See T.J. McDermott
Transp. Co., Inc. v. Cummins, Inc., 2015 WL 1119475, at *7
(D.N.J. Mar. 11, 2015) (holding Rule 8 was satisfied even though
complaint failed to distinguish defendants’ respective conduct
because complaint specifically alleged that defendants formed a
partnership).
Because Counts One, Two, and Three all suffer from the same
infirmity by asserting that the injuries sustained by Plaintiff
“were caused by the carelessness and negligence of all
Defendants,” (SAC ¶ 23), and failing to allege any specific act
of misconduct by Holt Logistics, the Complaint as a whole must

6

The fact that Defendants are all represented by different
counsel and that no other defendant has joined Holt Logistics’
motion to dismiss is an additional indication that Defendants
are independent and concerted action is lacking.
12

be dismissed for failing to place Holt Logistics on notice of
the claims against it.
Count Two of the Complaint must additionally be dismissed
because Plaintiffs have not pleaded sufficient facts to
establish a plausible cause of action against Holt Logistics
under the Longshore and Harbor Workers’ Compensation Act.
Specifically, the Complaint does not plead that Holt Logistics
qualifies as a “vessel” for purposes of the LHWCA. (Mot. to
Dismiss at 10-11; Reply in Supp. of Mot. to Dismiss [Docket Item
40] at 6-7.) Section 905(b) of the LHWCA codifies the exclusive
remedy for longshoremen and permits an “action against [a]
vessel as a third party” for injuries “caused by the negligence
of [such] vessel.” 33 U.S.C. § 905(b). The LHWCA, in turn,
defines a “vessel” within the meaning of section 905(b) to
include the “vessel’s owner, owner pro hac vice, agent,
operator, charter or bare boat charterer, master, officer, or
crew member.” 33 U.S.C. § 902(21).
A “vessel owner pro hac vice” is “one who assumes by
charter or otherwise exclusive possession, control, command and
navigation of the vessel for a specified period of time.”
DeArmond v. Southwire Co., 109 Fed. App’x 722, 724 (6th Cir.
2004) (internal quotations and citation omitted); see also
Bossard v. Port Allen Marine Serv., Inc., 624 F. 2d 671, 672-73
13

(5th Cir. 1980) (“[T]he charterer takes over the ship, lock,
stock and barrel, and mans her with his own people. He becomes .
. . the owner pro hac vice.” (internal quotations and citation
omitted)); Irby v. Tokai Lines, No. 88-6890, 1990 WL 18880, at
*3 (E.D. Pa. Feb. 23, 1990) (noting requirement of “exclusive
possession, control, command, and navigation”). The term
“vessel,” in other words, encompasses “the ship’s owner and the
owner’s agents.” Browning v. Safmarine, Inc., No. 11-2436, 2012
WL 6089481, at 3 n.1 (D.N.J. Dec. 5, 2012).
This Court recently had occasion to explicate the duties of
the “vessel” and the “pro hac vice owner” to an offloading
stevedore under the LHWCA in Jones v. Sanko Steamship Co., ___
F. Supp. 3d _____, 2015 WL 8361745 (D.N.J. Dec. 8, 2015). The
LHWCA requires that the liability of defendants be separately
determined in light of their respective functions relating to
the ship and its cargo. Id. at 7-8. Such an assessment of LHWCA
duties for a particular defendant is not viable where the
plaintiff engages in group pleading against unrelated, disparate
parties.
Count Two alleges only that all Defendants, including Holt
Logistics, “owned, operated, managed, possessed and/or
controlled the Ship which it operated in the navigable waters of
the United States.” (Id. ¶ 24) (emphasis added). This assertion,
14

however, does not rule out the possibility that Holt Logistics
merely “controlled” the Ship. Generally speaking, “those who
exercise control over a vessel for a particular purpose such as
repairing, cleaning or unloading are not considered to be owners
pro hac vice.” DeArmond, 109 Fed. App’x at 725. In DeArmond, the
Sixth Circuit gave the example of a stevedore hired to unload a
barge and who exercises control and dominion over the barge in
order to do so, and noted that the stevedore was clearly not an
owner pro hac vice. The Court explained that this was because
even though a party may “control command and navigate the vessel
while it is in their possession to accomplish the designated
task, the owner of the vessel has not relinquished complete
dominion and control of the vessel tantamount to a demise of the
vessel.” Id. Because the Complaint fails to contain a wellpleaded factual allegation that Holt Logistics was the owner or
owner pro hac vice of the Swan Chacabucco, Plaintiffs have not
stated a plausible claim for relief under Count Two.
For all the reasons above, Defendant’s motion to dismiss
will be granted in its entirety. The Court will, however,
dismiss Plaintiffs’ claims against Holt Logistics without
prejudice and permit Plaintiffs to file a motion to amend, along
with a Proposed Amended Complaint which corrects the multiple
deficiencies discussed herein. In so doing, the Court again
15

emphasizes that it is not sufficient to fail to identify each
defendant’s role and function or say that each of the defendants
is responsible for everything. Plaintiffs must be careful to
specify the basis (i.e., the factual grounds) for Defendant’s
liability under each Count.
IV. THE COURT WILL DENY DEFENDANT’S MOTION FOR SANCTIONS
Defendant argues that sanctions are warranted because there
are no facts to support Plaintiffs’ claim that Holt Logistics
was in any way liable for Sheeran’s injury. (Mot. for Sanctions
[Docket Item 49-1], at 9-12; Reply in Support of Mot. for
Sanctions [Docket Item 53], at 4-9.)
Federal Rule of Civil Procedure 11 requires an attorney to
conduct a “reasonable inquiry” into the law and facts before
filing a pleading with the court, and to certify that the legal
arguments contained therein are not being presented for any
improper purpose and are not frivolous, and the factual
contentions have or “will likely have evidentiary support after
a reasonable opportunity for further investigation or
discovery.” Fed. R. Civ. P. 11(b)(1)-(3). By discouraging the
filing of frivolous, unsupported, or unreasonable claims, and
permitting sanctions to be imposed for violations, Rule 11
“seeks to strike a balance between the need to curtail abuse of
the legal system and the need to encourage creativity and
16

vitality in the law.” Fed. R. Civ. P. 11(c); Gaiardo v. Ethyl
Corp., 835 F.2d 479, 483–84 (3d Cir. 1987); see also Lieb v.
Topstone Indus. Inc., 788 F.2d 151, 157 (3d Cir. 1986); Leuallen
v. Borough of Paulsboro, 180 F. Supp. 2d 615, 618 (D.N.J. 2002).
When evaluating whether conduct violates Rule 11, the Third
Circuit applies a “reasonableness under the circumstances”
standard, which is defined as “an objective knowledge or belief
at the time of the filing of a challenged paper that the claim
was well grounded in law and fact.” Ford Motor Co. v. Summit
Motor Prod., Inc., 930 F.2d 277, 289 (3d Cir. 1991). The wisdom
of hindsight should be avoided, and the attorney's conduct must
be judged by “what was reasonable to believe at the time the
pleading, motion, or other paper was submitted.” Fed. R. Civ. P.
11 advisory committee note; Mary Ann Pensiero, Inc. v. Lingle,
847 F. 2d 90, 94 (3d Cir. 1988).7
The Court does not find that the circumstances of this case
meets the “high standard for imposing sanctions under Rule 11,”

7

The Court notes that Defendant has complied with the “safe
harbor” provision of Rule 11, which requires a moving party to
notify the party against which it seeks sanctions of its
intention to move for sanctions, and allows the non-moving party
21 days to take remedial action before the court imposes
sanctions. Fed. R. Civ. P. 11(c)(2); see Hockley by Hockley v.
Shan Enterp. Ltd., 19 F. Supp. 2d 235, 240 (D.N.J. 1998).
Defendant sent a “safe harbor” letter together with a copy of
the motion on September 18, 2015, 25 days before filing the
instant motion with the Court. (See Sept. 18, 2015 Letter, Ex. 1
to Mot. for Sanctions [Docket Item 49-2].)
17

Oswell v. Morgan Stanley Dean Witter & Co., Inc., 507 F. Supp.2d
484, 492 (D.N.J. 2007) (Simandle, J.). Counsel for Plaintiffs
had a good-faith basis to believe that Defendant had a hand in
controlling stevedoring activities at the site where Steven
Sheeran was injured. In particular, it was reasonable for
counsel to believe that the operations of Sheeran’s employer,
Gloucester Terminals, LLC, at the Port of Gloucester, were being
overseen by Holt Logistics. The N.L.R.B. decision, upon which
counsel asserts he relied, describes the involvement of the Holt
brothers and their various companies (including Holt Logistics)
in operations in and around the Port of Gloucester, where the
Swan Chacabucco was berthed. (Ex. 1 to Opp’n to Mot. for
Sanctions [Docket Item 52-2].) The decision identifies Holt as
the CEO of Gloucester Terminals, LLC, and also identifies an
individual named Walter Curran who was hired by Holt and who
“actively managed” the work of Gloucester Terminals, LLC. (Id.
at 9.)
Thus, Defendant’s argument that Sheeran, who has already
settled a claim with Gloucester Terminals, LLC, is barred from
asserting a claim against Holt Logistics,8 holds no water.

8

Specifically, Defendant argues that because a plaintiff who
recovers against an employer under LHWCA worker’s compensation
scheme is barred from suing that employer under the LHWCA for
further damages, see 33 U.S.C. §§ 904(b), 905(a), counsel lacked
a good-faith basis to file suit against Holt Logistics because
18

Counsel for Plaintiffs had a good-faith basis to believe that
Holt Logistics was not Sheeran’s employer “via common ownership”
with Gloucester Terminals, LLC, but rather an entity that owned
and supervised Sheeran’s employer and its stevedoring
operations. Counsel thus had a reasonable basis to believe that
Sheeran’s settlement with his direct employer did not extinguish
his rights under the LHWCA to file suit against Holt Logistics.
Counsel’s belief that Holt Logistics should remain in the
action is also not unreasonable under the high Rule 11 standard.
Counsel notes that depositions taken after the Complaint
continue to raise the possibility that Gloucester Terminals, LLC
was managed by Holt Logistics, because certain higher-level
employees seemed to be affiliated with both entities. While
depositions from individuals employed by Gloucester Terminals,
LLC, identified John Florkiewicz and P.J. Inskeep as the
stevedore manager and Vice President of Gloucester Terminals,
LLC, respectively, both had Holt Logistics-affiliated email
addresses. (Quigley Dep., Ex. 3 to Opp’n to Mot. for Sanctions
[Docket Item 52-4], at 39:8-41:9; Mountney Dep., Id. Ex. 4
[Docket Item 52-5], at 20:8-21:2.) Moreover, an operations
representative for Defendant Inchape Shipping identified

Sheeran had already settled a claim with Gloucester Terminals,
LLC, and Holt Logistics was his co-employer. (Opp’n to Mot. for
Sanctions, at 11-12.)
19

Florkiewicz and Inskeep as being from Holt Logistics, and
additionally testified that he copied several people from Holt
Logistics on every email that he sent regarding vessel movements
and berthing details. (Hubbard Dep., Id. Ex. 2 [Docket Item 523], at 53:20-56:7.)
Given the evidence indicating a close relationship between
Defendant and Sheeran’s employer, it was not palpably
unreasonable for Plaintiffs’ counsel to believe that Holt
Logistics maintained some supervisory role over the stevedoring
work of Gloucester Terminals, LLC. Although counsel may not have
had a precise understanding of Holt Logistics’ responsibilities,
it was not unreasonable for counsel to infer that Defendant had
a separate duty to ensure the safety of the premises, and that
the duty was breached.
“Rule 11 is intended for only exceptional circumstances,”
Gaiardo, 835 F.2d at 483, and a “district court must exercise
discretion and sound judgment in dealing with the myriad methods
with which lawyers may abuse the judicial process.” Eavenson,
Auchmuty & Greenwald v. Holtzman, 775 F.2d 535, 540 (3d Cir.
1985). While it remains to be seen whether Plaintiffs can plead
sufficient facts to plausibly establish Holt Logistics’
liability in this case, the Court is satisfied that counsel did
not drag Holt Logistics into this case based solely upon
20

unsupported, unreasonable, and frivolous allegations.
Defendant’s motion for sanctions is denied.
IV. CONCLUSION
For the foregoing reasons, the Court will grant Defendant’s
motion to dismiss. The dismissal is without prejudice to
Plaintiffs’ right to file a motion for leave to file an Amended
Complaint within fourteen (14) days of the date of entry of this
Order, accompanied by a Proposed Amended Complaint which
remedies the deficiencies discussed herein. The Court will deny
Defendant’s motion for sanctions, but takes this opportunity to
remind counsel that any attempt to replead against Holt or any
other defendant is governed by the requirements of Rule 11(b),
including that the legal claims are warranted by existing law
and that the factual contentions have evidentiary support or (if
specifically identified) will likely have evidentiary support
after a reasonable opportunity for further investigation or
discovery, see Rule 11(b)(2) & (3), Fed. R. Civ. P. An
accompanying Order will be entered.

December 16, 2015

s/ Jerome B. Simandle

Date

JEROME B. SIMANDLE
Chief U.S. District Judge

21