Eliezer et al v. Caribbean Petroleum Corporation et al
Filing
1437
MEMORANDUM AND ORDER re 1230 Motion for Miscellaneous Relief; and re 1232 Motion in Compliance. Cape Bruny's Rule 14(c) tender in the LOL action, (Docket No. 910), is proper. The third-party defendants' motion for a bench trial, (Dock et No. 1230), is GRANTED and the claimants' request to empanel a jury for the LOL proceeding, (Docket No. 1232), is DENIED. The LOL proceeding will commence on February 1, 2016, as a non-jury bench trial at 9:00 a.m. in Courtroom 2 before Judge Francisco A. Besosa. Signed by Judge Francisco A. Besosa on 11/02/2015. (brc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
ELIEZER CRUZ APONTE, et al.,
Civil No. 09-2092 (FAB)
Plaintiffs,
v.
This document pertains to
CARIBBEAN PETROLEUM CORP., et
al.,
Civil No. 10-1337 (FAB)
Defendants.
MEMORANDUM AND ORDER
After consideration of the parties’ briefs addressing the
Rule 14(c) tender in the Limitation of Liability (“LOL”) action,1
the LOL trial structure,2 and the LOL claimants’ right to a jury
trial,3 the Court issues the following order.
I.
A.
BACKGROUND
Factual Background
On October 23, 2009, an explosion and fire occurred at the
Gulf Oil Facility located in Bayamon, Puerto Rico.
was
owned
(“CAPECO”).
and
operated
by
Caribbean
Petroleum
The facility
Corporation
The explosion occurred while a vessel named the M/T
Cape Bruny - which was owned and chartered, respectively, by Cape
Bruny Tankschiffarts GmbH and Co. KG and Cape Bruny Shipping
1
Docket Nos. 1198-1199, 1205-1206, 1212, 1214.
2
Docket Nos. 1155-1156.
3
Docket Nos. 1229-1232, 1236-1239, 1250-1253.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
2
Company Ltd. (collectively, “Cape Bruny”) - was discharging its
cargo of unleaded gasoline into storage tanks at the facility. One
or more of the tanks overflowed, and the spilled fuel found a
source of ignition, causing the explosion.
The explosion and
subsequent fire created a large plume of smoke and spread hazardous
material
over
Bayamon,
San
Juan,
and
other
neighboring
municipalities.
B.
The Consolidated Actions
In the immediate aftermath of the explosion, numerous lawsuits
were filed in this Court:
(1) nine putative class actions,4
(2) ten “non-class mass-joinder” actions,5 and (3) two “individual”
actions.6
On April 22, 2010, Cape Bruny, which had been named as a
defendant
in several
of
the
lawsuits, filed
a
complaint for
exoneration from, or limitation of, liability pursuant to the LOL
Act, 46 U.S.C. § 30501 et seq.
The LOL Act allows a vessel owner
to limit its liability to the value of the vessel plus pending
freight, provided that the circumstances causing the damage were
outside the owner’s privity and knowledge.
46 U.S.C. § 30505.
4
Civil Case Nos. 09-2092, 09-2095, 09-2096, 09-2118, 09-2215, 101030, 10-2030, 10-2036, 10-2040.
5
Civil Case Nos. 10-2059, 10-2063, 10-2070, 10-2077, 10-2088, 102097, 10-2105, 10-2202, 10-2214, 11-1206.
6
Civil Case Nos. 10-1207, 10-2035.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
The
twenty-one
lawsuits
and
the
LOL
action
3
have
been
consolidated before the Court for the purpose of docket management,
and all filings and orders are entered on the docket of Civil Case
No. 09-2092.
C.
Stays
In accordance with Supplemental Rule for Admiralty or Maritime
Claims F(3) (generally, “Rule F”), the Court stayed all claims
against Cape Bruny outside the LOL action on May 10, 2010. (Docket
No. 343; see Fed. R. Civ. P. Supplemental R. F(3).)
On August 16, 2010, the Court stayed all claims against CAPECO
in the consolidated actions after CAPECO filed for bankruptcy.
(Docket No. 501.)
stay
to
all
No. 533.)
On October 25, 2010, the Court extended this
litigation
in
the
consolidated
cases.
(Docket
The Court modified the stay for the limited purpose of
determining whether it had subject matter jurisdiction over the LOL
action.
it
had
(Docket No. 585.)
admiralty
On June 21, 2012, the Court found that
jurisdiction over
the
LOL action.
(Docket
No. 663.)
On January 15, 2014, the Court vacated the bankruptcy stay.
(Docket No. 809.)
The Rule F(3) stay for all claims against Cape
Bruny outside the LOL action, (Docket No. 343), however, remained
in place.
On July 14, 2014, the Court found that “proceeding with the
LOL action first will best achieve the orderly and expeditious
Civil No. 10-1337 consolidated with 09-2092 (FAB)
disposition
of
issues
arising
explosion.”
(Docket No. 1114.)
out
of
the
October
23,
2009
Accordingly, the Court stayed all
of the consolidated cases outside the LOL action.
D.
4
Id.
Claims Filed in the LOL Action
Thousands of claims have been filed in the LOL action.
Most
claims are by individuals who allege that they suffered personal
injury and property damage as a result of the explosion and fire.7
These claimants are also plaintiffs in the twenty-one consolidated
lawsuits.
Other claims are by entities seeking contribution and
indemnity
for
any
sums
that
they
may
be
compelled
to
pay
individuals that suffered damage as a result of the explosion and
fire.8 Generally speaking, these claimants, along with Cape Bruny,
are defendants in some or all of the twenty-one consolidated
lawsuits.9
7
See Docket No. 375 (claims by three individuals); Docket No. 381
(claims by approximately one thousand individuals); Docket No. 385
(claims by approximately one hundred individuals); Docket No. 391
(claims by 1,516 individuals); Docket No. 915 (claims by
approximately 250 individuals).
8
See Docket No. 382 (claim by Harbor Bunkering Corporation);
Docket No. 383 (claim by Total Petroleum Puerto Rico Corp.); Docket
No. 389 (claim by BP Products North America Inc.); Docket No. 390
(claim by CAPECO); Docket No. 724 (claim by AOT Limited, Astra Oil
Trading N.V., and Astra Oil Company LLC); Docket No. 906 (claim by
Shell Trading (U.S.) Company); Docket No. 908 (claim by Intertek
USA, Inc.); Docket No. 919 (claim by Antares Oil Services, LLC).
9
Claims in the LOL action have also been filed by the Commonwealth
of Puerto Rico, alleging that it suffered damages to natural
resources, see Docket No. 395, and by RLI Insurance Co., alleging
that it had to pay its insured for damages that the explosion and
fire caused, see Docket No. 397.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
E.
5
Cape Bruny’s Third-Party Complaint and Rule 14(c) Tender
On
March
28,
2014,
Cape
Bruny,
as
the
petitioner
for
exoneration from or limitation of liability, filed a third-party
complaint in the LOL action pursuant to Federal Rule of Civil
Procedure 14(c) (“Rule 14(c)”).
(Docket No. 910.)
is against seventeen third-party defendants.10
The complaint
Ten of these third-
party defendants also filed claims for contribution and indemnity
in the LOL action.11
Cape Bruny alleges that the explosion “may
have been caused in whole or in part by the acts, omissions, or
culpable conduct” of the third-party defendants.
Id. at p. 12.
Pursuant to Rule 14(c)(2), Cape Bruny demands judgment in the
claimants’ favor against the third-party defendants. Id. at p. 11.
F.
Discovery and Scheduling Order
The parties in all consolidated actions submitted a proposed
scheduling order that would govern “the determination of the
10
Cape Bruny’s third-party complaint in the LOL action was filed
against the following seventeen third-party defendants: Antares
Oil Services, LLC; Intertek USA, Inc.; AOT Limited; Astra Oil
Company LLC; Astra Oil Trading N.V.; Shell Trading (U.S.) Company;
Commonwealth of Puerto Rico; Gad Zeevi; Ram Zeevi; Inpecos A.G.;
First Oil International; GTRIMG Foundation; Harbor Bunkering
Corporation; Total Petroleum Puerto Rico Corp.; BP Products North
America; Westerchester Surplus Lines Insurance Company; and
Navigators Insurance Company. (Docket No. 910 at pp. 4-7.)
11
The following ten parties are both claimants and third-party
defendants in the LOL action: Antares Oil Services, LLC; Intertek
USA, Inc.; AOT Limited; Astra Oil Company LLC; Astra Oil Trading
N.V.; Shell Trading (U.S.) Company; Commonwealth of Puerto Rico;
Harbor Bunkering Corporation; Total Petroleum Puerto Rico Corp.;
and BP Products North America. See supra notes 10-11.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
6
liability of all defendants as to all of the plaintiffs’ claims in
all cases filed in relation to the explosion.”
The
Court
approved
a
February 21, 2014.
modified
version
(Docket No. 858.)
of
(Docket No. 838.)
that
schedule
on
Pursuant to that order,
discovery commenced on March 1, 2014, and concluded on May 15,
2015.
Id. at pp. 2-3.
Trial is set for February 1, 2016.
Id. at
p. 3.
II.
CAPE BRUNY’S RULE 14(c) TENDER
Certain claimants in the LOL action challenge Cape Bruny’s
Rule 14(c) tender. These claimants are also plaintiffs in the nine
putative class actions and ten “non-class mass-joinder” actions
that have been stayed during the LOL proceeding. They contend that
Cape Bruny’s Rule 14(c) tender improperly forces them to prosecute
claims against other parties within the LOL action.
No. 1199 at pp. 5-8.)
(Docket
Rule 14(c)(1) provides as follows:
If a plaintiff asserts an admiralty or maritime claim
under Rule 9(h), the defendant . . . 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.
Fed. R. Civ. P. 14(c)(1).
Claimants insist that Cape Bruny is the
plaintiff in the LOL action because it initiated the action by
filing the complaint for exoneration from, or limitation of,
liability.
(Docket No. 1199 at pp. 7-8.)
Because Rule 14(c)(1)
allows only defendants to implead third parties, claimants argue
Civil No. 10-1337 consolidated with 09-2092 (FAB)
7
that Rule 14(c)(1) does not authorize plaintiff Cape Bruny to
implead third parties in the LOL action.
The
Court
agrees
with claimants
Id.
that
Cape
Bruny
is
the
plaintiff in the LOL action and that, accordingly, Rule 14(c)(1)
does not expressly allow Cape Bruny to implead third parties.
Nonetheless, courts routinely allow a party that initiated a LOL
action to bring in additional parties that it asserts may be liable
for the claims against it.
6 Charles Alan Wright, et al., Federal
Practice and Procedure § 1465 (3d ed. 2015); accord 3-14 Richard D.
Freer, Moore’s Federal Practice § 14.52 (3d ed. 2015) (“[W]hen a
petitioner files for exoneration or limitation of liability, after
one claimant has answered and has made its claim for full recovery,
the petitioner may implead a third-party defendant to the claim.”);
see, e.g., In re Motor Ship Pac. Carrier, 489 F.2d 152, 153-57 (5th
Cir. 1974); In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of
Mexico, on Apr. 20, 2010, 21 F. Supp. 3d 657, 668 (E.D. La. 2014);
Williamson Towing Co. v. Illinois, 396 F. Supp. 431, 433 (E.D. Ill.
1975) (“The right of a petitioner under the [LOL Act] to implead
third parties in the course of litigation is clear.”); In re
McAninch, 392 F. Supp. 96, 97 (S.D. Tex. 1975) (permitting vessel
party that initiated LOL action to use Rule 14(c) to implead third
party that it alleged caused the maritime disaster, reasoning that
this is “a very common-sense approach” that “expedite[s] matters by
Civil No. 10-1337 consolidated with 09-2092 (FAB)
getting
all
the
parties
concerned
involved
8
in
a
single
proceeding”).
Claimants retreat in their response and reply briefs on this
issue, arguing that Rule 14(c)(1) “could possibly be read” to allow
Cape
Bruny
to
implead
third
parties,
but
that
Cape
Bruny’s
Rule 14(c)(2) tender of the third parties to claimants is “clearly
improper.”
(Docket No. 1206 at p. 3; see Docket No. 1212 at p. 2.)
Rule 14(c)(2) provides as follows:
The third-party plaintiff may demand judgment in the
plaintiff’s favor against the third-party defendant. In
that event, the third-party defendant must defend under
Rule 12 against the plaintiff’s claim as well as the
third-party plaintiff’s claim; and the action proceeds as
if the plaintiff had sued both the third-party defendant
and the third-party plaintiff.
Fed. R. Civ. P. 14(c)(2).
Claimants fail to present a developed
argument (or any legal authority) that explains why Rule 14(c)(2)
is unavailable in LOL proceedings.
The purposes of Rule 14(c)’s “unique liberal joinder policy”
are to “expedite and consolidate admiralty actions by permitting a
third-party plaintiff to demand judgment against a third-party
defendant in favor of the plaintiff,” to “reduce the possibility of
inconsistent results in separate actions, [to] eliminate redundant
litigation, and [to] prevent a third party’s disappearing if
jurisdiction and control over the party and his assets [are] not
immediately established.”
Texaco Exploration & Prod. Co. v.
AmClyde Engineered Products Co., 243 F.3d 906, 910 (5th Cir. 2001).
Civil No. 10-1337 consolidated with 09-2092 (FAB)
9
All of these purposes are served by allowing Rule 14(c)(2) tenders
in LOL actions.
Here, claimants allege in the various consolidated cases that
multiple parties are liable for causing the explosion and fire.
The current scheduling order calls for a determination of liability
of all of these defendants.
(Docket Nos. 838, 858.)
The most
efficient way to determine which parties are liable for causing the
explosion
and
fire,
and
the
best
way
to
avoid
inconsistent
liability findings through piecemeal litigation, is to bring all
potentially liable parties into a single action.
what Cape Bruny’s Rule 14(c) tender does:
This is exactly
it brings all claimants
and all potentially liable parties into the LOL action.
The Court finds that Cape Bruny’s Rule 14(c) tender in the LOL
action, (Docket No. 910), is proper.
III.
LOL TRIAL STRUCTURE
Having found that Cape Bruny’s Rule 14(c) tender is proper,
the Court is now in a position to determine the structure for the
LOL trial scheduled for February 1, 2016.
LOL proceedings traditionally involve a two-part analysis.
“First,
the
court
must
determine
unseaworthiness caused the accident.
whether
negligence
or
Second, the court must
determine whether the shipowner was privy to, or had knowledge of,
the causative agent (whether negligence or unseaworthiness).” Carr
v. PMS Fishing Corp., 191 F.3d 1, 4 (1st Cir. 1999) (internal
Civil No. 10-1337 consolidated with 09-2092 (FAB)
citations omitted).
10
Claimants bear the initial burden of proving
negligence or unseaworthiness.
Id.
The burden then shifts to the
shipowner to prove its lack of privity and knowledge.
Id.
As set forth below, the Court modifies this structure to
account for the participation of third-party defendants brought
into the action by Cape Bruny’s Rule 14(c) tender.
A.
Issues to be Resolved at Trial
The case scheduling order calls for discovery and trial solely
on liability. (Docket Nos. 838, 858.) Accordingly, the trial will
address all issues of liability that have not been resolved by
settlement, summary judgment, or stipulation.
Specifically, the
following issues will be resolved at trial:
1.
Whether
Cape
Bruny’s
negligence
or
its
vessel’s
unseaworthiness caused the explosion and fire.
2.
If
Cape
Bruny
was
negligent
or
its
vessel
was
unseaworthy, then whether Cape Bruny had privity or knowledge of
the negligence or unseaworthiness.
3.
Whether any third-party defendant is liable for causing
or contributing to the explosion and fire.
4.
If two or more parties are liable for the explosion and
fire, then the apportionment of liability between the parties.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
B.
11
Order of Proceedings at Trial
First, claimants will present factual and expert evidence in
support
of
their
claims
against
Cape
Bruny
and
third-party
defendants.
Second, Cape Bruny will present factual and expert evidence in
support of its exoneration, limitation, and liability defenses as
well as its claims against third-party defendants.
Third, third-party defendants will present factual and expert
evidence in support of their defenses to all claims against them as
well as their claims against Cape Bruny and other third-party
defendants.
Fourth, claimants will present rebuttal evidence.
At the conclusion of trial, the Court will order the parties
to submit proposed findings of fact and conclusions of law.
IV.
CLAIMANTS’ RIGHT TO A JURY TRIAL
Finally, the Court must determine whether the LOL trial
scheduled for February 1, 2016, will be a bench or jury trial.
At the core of this question is the tension between the LOL
Act and the saving to suitors clause of 28 U.S.C. § 1333.
See
Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 448 (2001).
The
LOL Act allows shipowners to seek to limit their liability in an
admiralty court proceeding.
See id.
Because there is no right to
Civil No. 10-1337 consolidated with 09-2092 (FAB)
12
a jury trial in admiralty actions,12 and because LOL claimants are
enjoined from prosecuting their claims in other forums, claimants
are necessarily denied their right to pursue common law claims
before a jury.
In re Complaint of Dammers & Vanderheide &
Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d Cir. 1988).
This conflicts with the saving to suitors clause, which promises
suitors that the exercise of admiralty jurisdiction will not deny
them their right to “all other remedies to which they are otherwise
entitled,” 28 U.S.C. § 1333.
Lewis, 531 U.S. at 448-49.
To ease this tension, courts recognize two exceptions to the
admiralty court’s exclusive jurisdiction over LOL proceedings:
“where there is only a single claimant” and “where the total claims
do not exceed the value of the limitation fund.”
Id. at 451.
Neither exception applies here because there are over two thousand
claimants,13 and the aggregate value of the claims exceeds the value
of the limitation fund.14
12
The United States Supreme Court has held “that the Seventh
Amendment does not require jury trials in admiralty cases.”
Fitzgerald v. U.S. Lines Co., 374 U.S. 16, 20 (1963).
It also
clarified that no “provision of the Constitution[,] . . . statute
of Congress or Rule of Procedure, Civil or Admiralty, forbid[s]
jury trials in maritime cases.” Id.
13
14
See supra notes 7-9.
Cape Bruny’s limitation fund is valued at $27,017,275.58. (Civil
Case No. 10-1337, Docket No. 1 at p. 8.)
The Commonwealth of
Puerto Rico’s claim alone exceeds this value. See Docket No. 395
at p. 5 (claiming damages of not less than $500,000,000).
Civil No. 10-1337 consolidated with 09-2092 (FAB)
13
Nonetheless, the same claimants who challenged Cape Bruny’s
Rule 14(c) tender (who are also plaintiffs in the nine putative
class actions and ten “non-class mass-joinder” actions) demanded a
jury trial when they filed claims in the LOL action.
No. 391 at p. 15; Docket No. 915 at p. 14.
See Docket
The parties submitted
briefs on this issue15 and discussed it at length with the Court
during a status conference on June 20, 2014.16
At the status
conference, claimants conceded that Cape Bruny “has a right to a
bench trial” in the LOL action.
(Docket No. 1125 at p. 43.)
They
argued that the Court should hear and decide the liability issues
as to Cape Bruny at the same time that a jury hears and decides the
liability issues as to the third-party defendants.
38.
Id. at pp. 37-
Claimants asserted that their right to a jury trial against
the third-party defendants is guaranteed by the Seventh Amendment
to
the
United
States
Constitution
if
they
can
establish
an
independent basis of jurisdiction for their claims against those
defendants.
Id. at p. 48.
On July 14, 2014, the Court deferred its ruling on the jury
trial issue.
(Docket No. 1114 at p. 8.)
The Court explained that
it lacked sufficient evidence to determine whether claimants’ nonadmiralty
claims
against
third-party
defendants
carry
an
15
See Docket Nos. 1070 & 1094 (briefs by claimants in favor of jury
trial); Docket Nos. 1069 & 1091 (briefs by Cape Bruny and several
third-party defendants in favor of bench trial).
16
See Docket No. 1104 (minute entry); Docket No. 1125 (transcript).
Civil No. 10-1337 consolidated with 09-2092 (FAB)
14
independent basis of federal jurisdiction, and that it would allow
limited discovery to determine whether jurisdiction under the Class
Action Fairness Act (“CAFA”) exists.
Id. at pp. 7-10.
More than three months later, claimants requested another
opportunity
to
“fully
No. 1156 at p. 6.)
2014,
ordering
the
brief” the
jury trial
issue.
(Docket
The Court granted this request on November 13,
parties
to
submit
simultaneous
memoranda,
oppositions, and replies on the issue in February and March 2015.
(Docket No. 1177 at p. 2.)
The parties complied, and now before
the Court are claimants’ briefs in support of a jury trial (Docket
Nos. 1232, 1239, 1253), Cape Bruny’s briefs in support of a bench
trial (Docket Nos. 1229, 1236, 1250), and certain third-party
defendants’17 briefs in support of a bench trial (Docket Nos. 1230,
1237, 1251).
Claimants’ opening brief is surprisingly brief; they repeat
the same cursory arguments that they made nine months previously
without any new development.
Nos.
1070,
1094.
Notably,
Compare Docket No. 1232, with Docket
although
claimants
asserted
CAFA
jurisdiction in their amended complaints in the putative class
actions, see, e.g., Docket No. 917 at p. 13, and the Court
encouraged the parties to develop this issue through discovery,
17
Third-party defendants Intertek USA, Inc., Antares Oil Services,
LLC, and BP Products North America submitted joint briefs (Docket
Nos. 1230, 1237, 1251), which third-party defendants Total
Petroleum Puerto Rico Corp. and Harbor Bunkering Corporation joined
(Docket Nos. 1231, 1233, 1238, 1240, 1252, 1254).
Civil No. 10-1337 consolidated with 09-2092 (FAB)
15
(Docket No. 1114 at pp. 8-10), claimants do not present an argument
on CAFA jurisdiction in their opening brief on the jury trial
issue,
see
Docket
No.
1232.
Accordingly,
for
purposes
of
determining whether claimants are entitled to a jury trial in the
LOL action, the Court considers waived any argument that CAFA may
serve as a foundation for jurisdiction in the putative class
actions.
Devoting less than a page of argument to establish that their
claims carry independent bases of federal jurisdiction, claimants
argue that they have a jury trial right for their claims against
third-party defendants in the LOL action (1) because the Court has
admiralty and supplemental jurisdiction over their claims against
those
defendants
in
the
nine
putative
class
actions,
and
(2) because the Court has diversity jurisdiction over their claims
against two of the defendants - Intertek USA, Inc. and Antares Oil
Services, LLC18 - in the ten “non-class mass-joinder” actions.
(Docket No. 1232 at p. 6.)
Claimants’ first argument is based on a flawed premise. There
is no right to a jury trial in federal court for claims based
solely in admiralty and supplemental jurisdiction.
F/V
18
Fjord,
892
F.2d
763,
769
(9th
Cir.
1988)
Churchill v.
(holding
that
All but two of the defendants in the “non-class mass-joinder”
actions have been dismissed. See Docket No. 1239 at p. 4. The
remaining defendants are Intertek USA, Inc. and Antares Oil
Services, LLC. Id.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
16
plaintiffs were not entitled to a jury trial on claims based in
admiralty and supplemental jurisdiction, reasoning that “to hold
otherwise would contravene the manifest purpose of Federal Rule of
Civil Procedure 38(e) by allowing jury trials in admiralty cases in
which plaintiffs allege a pendent state law claim”); Tallentire v.
Offshore Logistics, Inc., 754 F.2d 1274, 1287 (5th Cir. 1985),
rev’d on other grounds, 477 U.S. 207 (1986).
Thus, claimants have
not established that their claims in the nine putative class
actions have an independent basis of federal jurisdiction that
would give them right to a jury trial.
Claimants’
second
argument
is
that
their
claims
against
Intertek USA, Inc. and Antares Oil Services, LLC should be tried to
a
jury
in
the
LOL
trial
because
their
claims
against
these
defendants in the “non-class mass-joinder” cases are based in
diversity.
argument,
(Docket No. 1232 at p. 6.)
the
Court
assumes
without
For the purposes of
deciding
that
diversity
Civil No. 10-1337 consolidated with 09-2092 (FAB)
17
jurisdiction over those claims does exist in the “non-class massjoinder” actions.19
The practice of splitting a case between two fact-finders when
the claims arise from one set of facts, as claimants encourage the
Court to do here, has been condemned by the United States Supreme
Court because it “unduly complicates and confuses a trial” and
“creates difficulties in applying doctrines of res judicata and
collateral estoppel.”
Fitzgerald v. U.S. Lines Co., 374 U.S. 16,
18-21 (1963) (holding that an admiralty claim joined with a Jones
Act claim, which carries a jury trial right by statute, must be
submitted to the jury when both arise from one set of facts).
Here, the threshold issue to decide in the LOL trial is which
parties are liable for causing the explosion and fire.
Having a
jury determine whether two third-party defendants are liable while
the Court decides whether Cape Bruny and the other third-party
defendants are liable will unduly complicate the trial, create res
19
Cape Bruny and certain third-party defendants argue that the
“non-class mass-joinder” complaints are improper under Federal Rule
of Civil Procedure 20 because plaintiffs “impermissibly bundled
together hundreds of unrelated individuals into a handful of
complaints in an effort to satisfy the amount in controversy
requirement.” See Docket No. 1236 at pp. 4-5; Docket No. 1237 at
p. 8. The third-party defendants also argue that the “non-class
mass-joinder” suits will likely be dismissed pursuant to Federal
Rule of Civil Procedure 19(b) because the plaintiffs impermissibly
left out parties who are indispensable (like Harbor Bunkering
Corporation and Total Petroleum Puerto Rico Corp., both Puerto Rico
corporations that are defendants in the putative class actions),
and joining those parties would destroy diversity. (Docket No.
1237 at pp. 7-8.) These cases are stayed and consequently have not
advanced procedurally.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
judicata
difficulties,
and
Fitzgerald, 374 U.S. at 18-21.
waste
judicial
18
resources.
See
Consequently, the Court finds that
one trier of fact should be used to determine liability and
allocation of fault as to all parties in the LOL action.
This
leaves the final question of whether that trier of fact should be
the Court or a jury.
In this regard, the Court finds persuasive the reasoning of
the Fifth Circuit Court of Appeals in Powell v. Offshore Nav.,
Inc., 644 F.2d 1063 (5th Cir. 1981).
In Powell, the plaintiff
brought maritime claims and invoked admiralty jurisdiction against
non-diverse defendants and diversity jurisdiction against diverse
defendants.
644 F.2d at 1065.
The Fifth Circuit Court of Appeals
upheld the district court’s denial of the plaintiff’s request for
a jury trial as to the diverse defendants.
Id. at 1071.
The court
first applied the reasoning of Fitzgerald, 374 U.S. at 18-19, to
reject the option of splitting the case by holding a jury trial as
to the diverse defendants and a bench trial as to the non-diverse
defendants.
Powell, 644 F.2d at 1069.
The Fifth Circuit Court of Appeals then considered granting a
jury trial with respect to all defendants.
Id. at 1069-71.
Although this approach would have been arguably consistent with
that taken in Fitzgerald, in which the Supreme Court ruled that
when an admiralty claim is joined with a Jones Act claim against
the same defendant, both claims must be tried by the jury, the
Civil No. 10-1337 consolidated with 09-2092 (FAB)
19
Fifth Circuit Court of Appeals distinguished Fitzgerald because
there, the
plaintiff’s
claim
under
the
Jones Act
carried
an
explicit jury trial right, so the only two options were splitting
the case or trying the whole matter to the jury.
Id. at 1070 n.7.
In Powell, in contrast, there was no cause of action that carried
an explicit jury trial right, so the Fifth Circuit Court of Appeals
“had the additional option of trying the whole matter to the
court.”
Id.
The Fifth Circuit Court of Appeals reasoned that
sending admiralty claims to a jury solely because some defendants
are diverse “would cause a far greater change in the number and
type of claims cognizable only at admiralty but nevertheless tried
to a jury.”
Id. at 1070.
A huge exception would be created by
which the no-jury rule in admiralty could be avoided any time there
was a diverse defendant, “render[ing] diversity a very different
concept in the maritime context than in other areas.”
Id. at 1069-
71; see 2 Thomas J. Schoenbaum, Admiralty and Maritime Law § 21-10
(5th ed. 2014) (stating that the decision in Powell to try all
claims in a bench trial is “manifestly correct” because there was
no independent statutory basis of jurisdiction carrying a jury
trial right for the non-diverse claim). Here, given that claimants
have not established a non-admiralty basis of jurisdiction as to
the other third-party defendants, their invocation of diversity
jurisdiction as to two third-party defendants cannot serve to
bootstrap the entire LOL action and put it before a jury.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
20
Finally, claimants encourage the Court to follow the reasoning
of In re Complaint of Poling Transp. Corp., 776 F. Supp. 779
(S.D.N.Y. 1991), and In re Complaint of Great Lakes Dredge & Dock
Co., 895 F. Supp. 604 (S.D.N.Y. 1995).
See Docket No. 1232 at
pp. 2, 6.20
In those cases, juries were empaneled to determine
damages
any
and
determined
the
limitation.
Supp.
at
remaining
admiralty
state
law
issues,
issue
after
including
the
courts
negligence
and
Poling, 776 F. Supp. at 786-87; Great Lakes, 895 F.
615-16.
Declining
to
empanel
a
jury
here
is
not
inconsistent with those cases because here, the initial trial is
only on liability, limitation, and apportionment of fault; no
evidence will be presented as to damages.
This bifurcation approach - deciding liability and limitation
first in a bench trial and then lifting the stay to allow claimants
to choose where to litigate the remaining issues, including damages
- is common among courts as a way to ease the conflict between the
saving to suitors clause and the LOL Act.
See, e.g., Pickle v.
Char Lee Seafood, Inc., 174 F.3d 444, 449-51 (4th Cir. 1999)
(explaining that a court sitting in admiralty without a jury must
20
Claimants merely mention Poling and Great Lakes “in the most
skeletal way, leaving the [C]ourt to do counsel’s work, create the
ossature for the argument, and put flesh on its bones.” See United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990); Docket No. 1232
at pp. 2, 6 (citing to Poling and Great Lakes with no elaboration
or discussion of how the cases support claimants’ arguments).
Although the Court would normally consider reliance on these cases
waived, see Lebron v. Commonwealth of Puerto Rico, 770 F.3d 25, 31
(1st Cir. 2014), it nonetheless discusses the cases briefly.
Civil No. 10-1337 consolidated with 09-2092 (FAB)
conduct the
LOL
action,
but
if the
court
21
denies limitation,
claimants will be released to pursue their claims in the LOL action
or revive their original suits wherein they demanded jury trials);
In re Matter of Hill, 935 F. Supp. 710, 711-12 (E.D.N.C. 1996)
(holding that the court would hear and determine liability and
limitation issues first, and if it denies limitation, it would lift
the stay to permit the remaining issues, included damages, to be
determined in state court by a jury); In re Complaint of Sheen, 709
F. Supp. 1123, 1126 n.2 (S.D. Fla. 1989) (explaining that the
court’s decision to bifurcate the LOL trial would not result in
judicial inefficiency because the court’s findings on negligence
will be entitled res judicata effect in the subsequent trial).
For
these
reasons,
the
Court
GRANTS
the
third-party
defendants’ motion for a bench trial, (Docket No. 1230), and DENIES
claimants’ request to empanel a jury for the LOL proceeding,
(Docket No. 1232).
This decision applies only to the LOL trial for
liability and limitation, and does not mean or imply that a jury
will not be empaneled for any subsequent damages trial.
V.
CONCLUSION
Cape Bruny’s Rule 14(c) tender in the LOL action, (Docket
No. 910), is proper.
The third-party defendants’ motion for a
bench trial, (Docket No. 1230), is GRANTED and the claimants’
request
No.
to
1232),
empanel
is
a
DENIED.
jury
The
for
LOL
the
LOL
proceeding,
proceeding
will
(Docket
commence
on
Civil No. 10-1337 consolidated with 09-2092 (FAB)
22
February 1, 2016, as a non-jury bench trial following the structure
set forth in this Order.
IT IS SO ORDERED.
San Juan, Puerto Rico, November 2, 2015.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE
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