Sullivan, et al. v. Bay Point Resort Operations LLC et al

Filing 40

Memorandum Opinion and Order: Plaintiffs' motion to remand is granted, but the request for attorney fees presented therein is denied. Defendants' motions to consolidate and Plaintiffs' motion to stay discovery are denied, as moot. re 15 13 33 14 . Judge Jeffrey J. Helmick on 1/8/2019. (S,AL)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

Steven R. Sullivan, et al.,

Case No. 3:18-cv-984

Plaintiffs
v.

MEMORANDUM OPINION

Bay Point Resort Operations LLC, et al.,
Defendants
I.

INTRODUCTION

In January 2017, Defendant Bay Point Rentals LLC (“Rentals”) filed a petition for limitation
of liability under the Limitation of Liability Act, 46 U.S.C. §§ 30501, et seq. (the “Act”) in this Court
relating to an incident which occurred on or around June 22, 2016 (the “Incident”). (In re Bay Point
Rentals LLC, No. 3:17-cv-1966 (N.D. Ohio 2017) (the “Limitation Action”), Doc. No. 1). After
making the necessary findings, I ordered, among other things, a monition to “all persons asserting
claims with respect to the ‘Incident’” that any claim which was not filed with this Court by June 5,
2017, would be defaulted. (Limitation Action, Doc. No. 7). Plaintiff Steven R. Sullivan was the only
person to file a claim. (Limitation Action, Doc. No. 10).
Thereafter, on March 28, 2018, Plaintiffs Steven R., Robin, and Sarah Sullivan filed a
complaint in the Erie County, Ohio Court of Common Pleas, asserting State law claims of wrongful
death, negligence, spoliation and destruction of evidence, and loss of society. (Doc. No. 1-1).
Rentals, as a named Defendant to the complaint, removed the action to this Court. (Doc. No. 1).
In response, Plaintiffs move to remand the action to State court. (Doc. No. 15). Both Rentals and
Defendant Bay Point Acquisitions (“Acquisitions”) filed a memorandum in opposition to remand,
(Doc. Nos. 16 & 17), and Plaintiffs filed a reply in support of remand. (Doc. No. 23).

I will consider the merits of remand in due course. But before doing so, I remind Plaintiffs
that an order from this Court is expected to be followed.

Apparently, this was not clear before

since Plaintiffs filed the complaint in State court against Rentals in direct violation of my standing
order that “any and all lawsuits, causes of action, and claims against [Rentals] and its property arising
out of the ‘Incident’…except in this civil action, shall cease and be enjoined.” (Limitation Action,
Doc. No. 7). While such a lapse in judgment will not affect the outcome of the motion to remand, it
does foreclose any attorney fees which Plaintiffs have requested. Had Plaintiffs properly sought to
first dissolve the injunction to pursue the State court action, Defendants would have had no
objectively reasonable basis to remove the action. As it stands, the appropriateness of removal is
still in question.
II.

JURISDICTION

“[A]ny civil action brought in a State court of which the district courts of the United States
have original jurisdiction, may be removed by the defendant or the defendants, to the district court
of the United States for the district and division embracing the place where such action is pending.”
28 U.S.C. § 1441(a). “The party seeking removal bears the burden of demonstrating that the district
court has original jurisdiction.” Eastman v. Marine Mech. Corp., 438 F.3d 544, 549 (6th Cir. 2006).
Further, “[b]ecause lack of jurisdiction would make any decree in the case void and the continuation
of the litigation in federal court futile, the removal statute should be strictly construed and all doubts
resolved in favor of remand.” Eastman, 438 F.3d at 449-50 (quotation omitted).
“When ruling on a motion to remand, a court generally looks to the plaintiff's complaint, as
it is stated at the time of removal, and the defendant's notice of removal.” Gentek Bldg. Prods., Inc. v.
Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). In this case, the complaint claims the State
court has jurisdiction under 28 U.S.C. § 1333(1). (Doc. No. 1-1 at 5). But in the notice of removal,
Defendants allege the action is removable under the same statute. (Doc. No. 1 at 2).

2

The statute at issue grants the district court original jurisdiction of “[a]ny civil case of
admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are
otherwise entitled.”1 28 U.S.C. § 1333(1). The final clause of the statute, commonly referred to as
the saving to suitors clause, “preserves remedies and the concurrent jurisdiction of state courts over
some admiralty and maritime claims.” Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 445 (2001).
Specifically, while federal courts have exclusive admiralty jurisdiction over in rem causes of action,
state courts have concurrent jurisdiction over in personam causes of action. See id. at 444-46; Madruga
v. Super. Ct. of State of Cal., Cnty. of San Diego, 346 U.S. 556, 560-61 (1954).
There is no dispute that I have exclusive jurisdiction over the Limitation Action asserted
under the Limitation of Liability Act, which “enjoin[s] the further prosecution of any action or
proceeding against the plaintiff or the plaintiff's property with respect to any claim subject to

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I reject Defendants assertion that any admiralty and maritime claim is removable under § 1441(a),
as amended in 2011. (Doc. No. 21 at 4-7; Doc. No. 22 at 4-6). In making this argument,
Defendants rely upon Ryan v. Herculues Offshore, Inc., 945 F. Supp. 2d 772 (S.D. Tex. 2013) and its
progeny. But while Ryan emphasizes the substantive change in § 1441(b) and plain language of the
statute alone, it ignores the language of § 1333(1) entirely and the fact that § 1333(1) remained
consistent through the 2011 Amendment. Reading § 1333(1) and its related caselaw, I conclude that
my “original jurisdiction” over admiralty and maritime claims is not limitless, but subject to the
saving to suitors clause. As stated by the Supreme Court,
We have previously refused to hold that admiralty claims, such as a limitation claim,
fall within the scope of federal question jurisdiction out of concern that saving to
suitors actions in state court would be removed to federal court and undermine the
claimant's choice of forum. Romero v. International Terminal Operating Co., 358 U.S. 354,
371-372, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959). We explained that to define admiralty
jurisdiction as federal question jurisdiction would be a “destructive oversimplification
of the highly intricate interplay of the States and the National Government in their
regulation of maritime commerce.” Id., at 373, 79 S.Ct. 468. … Respondent's
arguments to limit and enumerate the saved remedies under the saving to suitors
clause must fail in view of the consistent recognition by Congress and this Court that
both state and federal courts may be proper forums for adjudicating claims such as
petitioner's.
Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 455 (2001). To hold as Defendants urge would
effectively nullify the saving to suitors clause, an outcome long rejected by Congress and the Court.
Applying the logic of Ryan, if Congress had wished to break from this well-settled law, it could have
done so by removing the saving to suitors clause from § 1333(1). Further, any doubt as to
interpretation of the removal statute must be resolved in favor of Plaintiffs. See Eastman, 438 F.3d at
449-50.
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limitation in the action.” Fed. R. Civ. P. Supp. Rule F; see also 46 U.S.C. § 30511. But, because the
causes of action in the complaint are asserted against the owner of the jet skis and not the jet skis
themselves, this is an in personam proceeding over which the state court has concurrent jurisdiction.2
This conflict between the Limitation of Liability Act and the saving to suitors clause has
been addressed by the Supreme Court multiple times. See, e.g., Lewis, 531 U.S. 438; Lake Tankers
Corp. v. Henn, 354 U.S. 147 (1957); and Langnes v. Green, 282 U.S. 531 (1931). Most recently, the
Court in Lewis held,
The district courts have jurisdiction over actions arising under the Limitation Act,
and they have discretion to stay or dismiss Limitation Act proceedings to allow a
suitor to pursue his claims in state court. If the district court concludes that the
vessel owner's right to limitation will not be adequately protected-where for example
a group of claimants cannot agree on appropriate stipulations or there is uncertainty
concerning the adequacy of the fund or the number of claims-the court may proceed
to adjudicate the merits, deciding the issues of liability and limitation….But where, as
here, the District Court satisfies itself that a vessel owner's right to seek limitation
will be protected, the decision to dissolve the injunction is well within the court's
discretion.
531 U.S. at 454 (citations omitted). This discretion is fairly limited.3
In Langnes, the Court concluded the district court had abused its discretion in retaining the
cause since “[t]o retain the cause would be to preserve the right of the shipowner, but to destroy the
right of the suitor in the state court to a commonlaw remedy; to remit the cause to the state court
would be to preserve the rights of both parties.” 282 U.S. at 541. Similarly, the Court in Lake
Tankers cautioned that “to expand the jurisdictional provisions of the [Limitation of Liability] Act to
prevent respondent from now proceeding in her state case would transform the Act from a

Rentals asserts the proceedings against it are in rem but couches this assertion on only conclusions.
(Doc. No. 21 at 3-4). Acquisitions correctly notes that while the initial Limitation Action brought by
Rentals is in rem, Plaintiffs claims are in personam. (Doc. No. 22 at 2, 7).
3
Prior to Lewis, the Sixth Circuit did not recognize any discretion relating to cases involving single
claimants, stating, “it is clearly established that where there is a single claimant, the district court
must allow that claimant to use the state courts.” In re Muer, 146 F.3d 410, 418 (6th Cir. 1998)
(citing cases).
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protective instrument to an offensive weapon by which the shipowner could deprive suitors of their
common-law rights.” 354 U.S. at 152.
Heeding the advice of Langnes and Lake Tankers Corp., I conclude it would be an abuse of my
discretion to retain this case. The facts at issue are similar to those presented in Langnes. 4 There, as
here, only one claim has been presented and the time fixed by the monition has expired.5 282 U.S. at
542. Further, there is only one owner of the vessels in question. Therefore, since there is one
claimant and one owner, I conclude that, the State court could competently adjudicate single
claimant Steven R. Sullivan’s in personam claims while preserving Rentals right to limitation of
liability.
Accordingly, I remand this action and dissolve the injunction against State court proceedings
on claims relating to the Limitation Action.6 The Limitation Action is stayed and will be held in
abeyance until either judgment is rendered in the State case or an issue within my exclusive admiralty
jurisdiction arises, at which time the State court proceeding will be enjoined, and the matter will
return to federal court. See In re Muer, 146 F.3d at 418.

4

While Plaintiffs cite to Lewis, which devotes considerable discussion to Langnes, they omit
discussion of the case of Plaintiff Steven R. Sullivan’s status as the single claimant to the Limitation
Action. But all parties clearly were on notice of the jurisdictional and single claimant issues by virtue
of Plaintiffs citation to Lewis.
5
In the complaint, all three Plaintiffs collectively assert claims against Rentals. But because Steven
R. Sullivan is the only Claimant in the Limitation Action and the time proscribed in the monition has
expired, any claim by Robin and Sarah Sullivan in the Limitation Action is defaulted. Accordingly,
while Robin and Sarah Sullivan may proceed with these claims in State court, they will be able to
recover damages from Rentals only if Steven R. Sullivan, as the single claimant to the Limitation
Action, is able to prove Rentals is not entitled to limitation of liability under the Act by establishing
both negligence and Rentals’ privity or knowledge of such negligence. See In re Muer, 146 F.3d at
415-16.
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In so holding, I reject Acquisitions’ outstanding arguments against remand. (Doc. No. 22 at 7-13).
First, because Acquisitions cites no legal authority for its proposition that Plaintiff waived the
remedy of a jury trial by filing a claim in the federal action without such a demand, I reject the
argument summarily. Second, Acquisitions’ contention that remand is unnecessary simply because
the federal court can provide a jury trial completely disregards the holding in Lewis, which held a jury
trial is not the exclusive remedy reserved under the saving to suitors clause. See 531 U.S. at 454-56.
Lastly, Acquisitions’ assertion that I may exercise ancillary jurisdiction over Plaintiffs’ claims through
the Limitation of Liability Act is in direct violation of binding Sixth Circuit precedent. See In re Muer,
146 F.3d at 417-19.
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III.

CONCLUSION

For the foregoing reasons, Plaintiffs’ motion to remand is granted, but the request for
attorney fees presented therein is denied. (Doc. No. 15). Defendants’ motions to consolidate and
Plaintiffs’ motion to stay discovery are denied, as moot. (Doc. Nos. 13, 14, & 33).
So Ordered.
s/ Jeffrey J. Helmick
United States District Judge

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