Campbell Transportation Company, Inc. et al

Filing 21

MEMORANDUM OPINION AND ORDER GRANTING CLAIMANTS' 17 AMENDED MOTION TO STAY THIS ACTION AND LIFT INJUNCTION AGAINST STATE COURT PROCEEDING. Accordingly, this action is hereby STAYED. Further, the parties are DIRECTED to file the appropriate motion with this Court, seeking either recommencement of proceedings under the Limitation Act in this Court or dismissal of this action within 30 days of the conclusion or appeal from the state proceedings, whichever is later. Signed by Senior Judge Frederick P. Stamp, Jr on 8/20/2013. (kac) (Copy to counsel)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
COMPLAINT OF:
CAMPBELL TRANSPORTATION COMPANY, INC.
and C&C MARINE MAINTENANCE COMPANY,

Civil Action No. 5:12CV68
(STAMP)

For Exoneration of Limitation Liability
MEMORANDUM OPINION AND ORDER
GRANTING CLAIMANTS’ AMENDED MOTION TO STAY THIS ACTION
AND LIFT INJUNCTION AGAINST STATE COURT PROCEEDING
I.

Background

On March 27, 2013, this Court entered a memorandum opinion and
order denying the claimants’ motion to stay this action and lift
the

injunction

against

the

state

court

proceedings

without

prejudice to refiling the motion with stipulations drafted in
accordance with this Court’s findings.1

In the opinion denying the

claimants’ motion, this Court made the following four specific
findings as to the claimants’ motion and stipulations: (1) the
claimants’ stipulation that the claims of claimant Harry White, Jr.
(“White”) will have irrevocable priority over the claims for
damages of claimant Roxanne Y. Murphy (“Murphy”) transforms this
case into the functional equivalent of a single claimant case,
protecting the vessel owner while allowing the claimants to pursue
their state court action; (2) the claimants are not required to
agree to limit damages to the value of the vessel and its attending
freight, nor are they required to stipulate to the precise amount

1

For a detailed explanation of the background and a more
detailed explanation of this Court’s prior findings, see ECF No.
16.

of the limitation, or rather the precise amount of the plaintiffs’
interest

in

the

vessel

and

freight;

(3)

the

claimants’

clarification in Stipulation No. 3 limiting claimants’ waiver of
their res judicata rights was improper, but this finding did not
require a stipulation waiving their res judicata rights with
respect to exoneration, only a waiver of their rights concerning
limitation of liability; and (4) it was improper to determine
whether the claimant White’s maintenance and cure claim was subject
to the Vessel Owners’ Limitation of Liability Act, 46 U.S.C.
§ 30501, et. seq. (“Limitation Act”).

Further, based on the

claimants’ agreement, this Court directed the claimants to include
a

stipulation

indicating

their

agreement

with

this

Court’s

retention of jurisdiction if the claimants did choose to file
amended stipulations.
Thereafter, the claimants filed an amended motion to stay this
action and lift the injunction against the prosecution of their
state court suit together with amended stipulations.

The amended

motion and stipulations were both drafted in accordance with this
Court’s prior opinion.

The amended stipulations read as follows:

1.
Claimants stipulate and agree that Campbell
Transportation Company, Inc. (“CTC”) and C&C Marine
Maintenance Company (“C&C”), collectively “Plaintiffs,”
are entitled to litigate all issues relating to
limitation of liability pursuant to the provisions of the
Vessel Owners’ Limitation of Liability Act, 46 U.S.C.
§ 30501, et seq. (“the Act”) in this Court.
2.
Claimants waive any claim of res judicata relevant
to the issue of limitation of liability pursuant to the
provisions of the Act based on any jury or non-jury trial
decision or judgment they may obtain in state court.
2

3.
Claimants
neither
stipulate
nor
agree
that
Plaintiffs are entitled to litigate the issue of
exoneration from liability in this Court, as they are not
required to under this Court’s March 27, 2013, Memorandum
Opinion and Order (CM/ECF Doc. No. 16), and applicable
law.
4.
While not stipulating or agreeing that the value of
the limitation fund in this action is, as alleged by
Plaintiffs, not in excess of $1,420,000.00 (one million
four hundred twenty thousand dollars and no cents), and
specifically reserving their right to file at a later
time a motion under Rule F(7) of the Supplemental Rules
for Admiralty or Maritime Claims and Asset Forfeiture
Actions seeking an appraisement of the value of
Plaintiffs’ interest, if any, in the M/V GEORGETOWN and
its pending freight, together with the value of and
pending freight on any other vessels which this Court may
find, under the Flotilla Doctrine, should be included in
the limitation fund, Claimants stipulate and agree that
in the event there is a judgment or recovery on any jury
or non-jury trial decision or judgment in state court in
excess of $1,420,000.00 against Plaintiffs, Claimants
will not seek to enforce such excess judgment or recovery
to the extent same may expose Plaintiffs to liability in
excess of the sum of $1,420,000.00 until adjudication of
Plaintiffs’ right to limitation of liability pursuant to
the provisions of the Act in this Court.
5.
Claimants expressly reserve for later determination
by this Court, if necessary, the issue of whether
Plaintiffs are entitled to the protections of the Act in
this Court as to Claimant White’s general maritime law
maintenance and cure claim.
6.
Claimants stipulate and agree that this Court has
the exclusive right under the Act to determine the proper
value of the limitation fund, under the procedures
outlined in Rule F(7).
7.
Claimants stipulate and agree that White’s claims
for damages will have irrevocable priority over Murphy’s
claims for damages.
8.
Claimants stipulate and agree this Court will retain
continuing jurisdiction while this case is stayed pending
the completion of the state court suit Claimants have
filed against Plaintiffs in the Circuit Court of Hancock
County, West Virginia, and any appeal(s) which may lie
therefrom.
3

ECF No. 18 (emphasis in original).
The
amended

plaintiffs,
motion

and

however,

responded

stipulations,

in

arguing

opposition

to

that

amended

the

the

stipulations and proposed order attempt to carve out exceptions to
this

Court’s

limitation.

jurisdiction

and

the

plaintiffs’

right

to

seek

This Court will address each of the plaintiffs’

arguments below. However, it notes that all but one of plaintiffs’
arguments in opposition to the amended motion and stipulations were
previously addressed in detail in this Court’s prior opinion.

See

ECF No. 16.
II.

Discussion

Under Article III, § 2 of the United States Constitution, the
federal courts are vested with jurisdiction over all admiralty and
maritime jurisdiction cases.

Lewis v. Lewis & Clark Marine, Inc.,

531 U.S. 438, 443 (2001).

This grant of jurisdiction is now

codified in 28 U.S.C. § 1333, with a limitation “so as to save
seamen their remedies.”
205, 208 (4th Cir. 2006).

Norfolk Dredging Co. v. Wiley, 439 F.3d
The statute specifically states:

The district courts shall have original jurisdiction,
exclusive of the courts of the States, of: (1) any civil
case of admiralty or maritime jurisdiction, saving to
suitors in all cases all other remedies to which they are
otherwise entitled.
28 U.S.C. § 1331 (emphasis added). This “saving to suitors” clause
“preserves remedies and the concurrent jurisdiction of state courts
over some admiralty and maritime claims.”

4

Lewis, 531 U.S. at 445.

The saving to suitors clause, however, as recognized by the
Supreme

Court,

may

occasionally

come

in

conflict

with

the

Limitation Act. The Limitation Act is a provision of admiralty and
maritime law that “allows a vessel owner to limit liability for
damage

or

injury,

occasioned

without

the

owner’s

privity

or

knowledge, to the value of the vessel or the owner’s interest in
the vessel.”

Id. at 446; see 46 U.S.C. § 30505.

Supplemental

Admiralty and Maritime Claims Rule F sets forth the procedure for
a limitation of liability action.

The Supreme Court briefly

explained the procedure as follows:
The district court secures the value of the vessel or
owner’s interest, marshals claims, and enjoins the
prosecution of other actions with respect to the claims.
In these proceedings, the court, sitting without a jury,
adjudicates the claims.
The court determines whether
the vessel owner is liable and whether the owner may
limit liability. The court then determines the validity
of the claims, and if liability is limited, distributes
the limited fund among the claimants.
Id. at 448.
The tension between the saving to suitors clause and the
Limitation Act results because “[o]ne statute gives suitors the
right to a choice of remedies, and the other statute gives the
owners the right to seek limitation of liability in federal court.”
Id.

The Supreme Court addressed this issue in Lewis.

In Lewis,

the claimant sued the vessel owner in state court for negligence
under the Jones Act,2 unseaworthiness of the ship, and maintenance

2

“A Jones Act claim is an in personam action for a seaman who
suffers injury in the course of employment due to negligence of his
employer, the vessel owner, or crew members.” Lewis, 531 U.S. at
5

and cure. The vessel owner then filed a complaint in federal court
to limit the vessel owner’s liability. After the claimant provided
certain stipulations to protect the plaintiff’s limitation rights,
the

district

court

dissolved

claimant’s state court action.

the

injunction

placed

on

the

In regards to the district court’s

decision, the Supreme Court stated that “case law makes clear that
state courts, with all their remedies, may adjudicate claims like
petitioner’s against vessel owners so long as the vessel owner’s
right to seek limitation of liability is protected.”
(emphasis added).
the

stipulations

Id. at 455

The Supreme Court further found that, because
offered

had

adequately

protected

the

vessel

owner’s limitation of liability rights, it was “well within” its
discretion
proceedings.

to

A.

lift

the

injunction

against

the

state

court

Id. at 454.

Discretion to lift injunction
The plaintiffs first object to the stipulations, stating that

this Court is not required to lift the injunction, as such a
decision is within this Court’s discretion.

This Court previously

recognized the fact that it was within this Court’s discretion to
lift the injunction.
at 449.

See ECF No. 3 n.2; see also Lewis, 531 U.S.

There is nothing in the claimants’ motion or stipulations

that abrogates this discretion. If this is meant as an argument by
the plaintiffs as to why the claimants’ motion should not be
granted, this Court finds that it is without merit. The claimants’

441; see 46 U.S.C. § 30104.
6

amended stipulations are in accordance with the Court’s prior
opinion and order and the plaintiffs have not provided this Court
with any new reason as to why, in its discretion, this Court should
deny the claimants’ motion.
B.

Multiple claimants
The plaintiffs’ second argument is that the claimants should

not be permitted to proceed with their state court claims when the
limitation fund is alleged to be inadequate because there are
multiple claimants in this action.

This Court previously found

that based on the claimants’ priority stipulation claimant White’s
claims “will have irrevocable priority over [claimant] Murphy’s
claims for damages,” which effectively transforms this case into
the functional equivalent of a single claimant case and adequately
protects the plaintiffs’ limitation of liability rights.
No. 16 *12.

See ECF

This Court’s decision was based on the case law from

other circuits and other district courts within the United States
Court of Appeals for the Fourth Circuit.

See Texaco, Inc. v.

Williams, 47 F.3d 765, 767-768 (5th Cir. 1995); Beiswenger Enters.
Corp. v. Carleeta, 86 F.3d 1032 (11th Cir. 1996); Complaint of
Dammers & Vanderhide & Scheepvaart Maats Christina B.V., 836 F.2d
750, 756 (2d Cir. 1988); S & E Shipping Corp. v. Chesapeake & O.
Ry. Co., 678 F.2d 636, 644 (6th Cir. 1982); In re Illinois Marine
Towing, Inc., 498 F.3d 645, 651 (7th Cir. 2007); In re Ingram Barge
Co., 419 F. Supp. 2d 885, 888-891 (S.D. W. Va. 2006); Complaint of
Mohawk Associates and Furlough, Inc., 897 F. Supp. 906, 911-912 (D.

7

Md. 1995).

The plaintiffs have not provided any further support

for their argument other than merely referencing their prior
response to the claimants’ original motion to lift the stay, which
this Court previously addressed in its prior opinion.

Thus, this

Court finds this argument to be without merit and continues to find
that

claimants’

priority

stipulation

adequately

protects

the

plaintiffs’ limitation of liability rights.
C.

Limitation on recovery
The plaintiffs’ third argument in opposition to the claimants’

amended motion and stipulations argues that the claimants should
not be permitted to proceed in state court unless they agree to
limit their recovery to the value of the vessel and its attending
freight.

This Court again notes that this argument was previously

addressed in its prior opinion.
prior

opinion,

this

Court

See ECF No. 16 *12-16.

stated

that

based

on

the

In its
binding

precedent of Norfolk Dredging Co. v. Wiley, 439 F.3d 205, 208 (4th
Cir. 2006), and this Court’s reading of Ex parte Green, 286 U.S.
437 (1932), the claimants were not required to agree to limit their
damages to the value of the vessel and its attending freight in
Id. at *16.

order to proceed in state court.

The plaintiffs have

not provided any further support for their argument, other than
merely restating it and referring this Court to their response to
the plaintiffs’ initial motion to stay.

Thus, this Court finds

this argument to be without merit as it was previously addressed
and decided.

As such, this Court continues to find that claimants

8

need not stipulate to limit their recovery to the value of the
vessel and its attending freight.
D.

Exoneration stipulation
The plaintiffs lastly argue that the claimants’ refusal to

stipulate that the plaintiffs are entitled to litigate the issue of
exoneration from liability in this Court fails to adequately
protect the plaintiffs’ right to seek limitation of liability. The
claimants’ original stipulation regarding the issues that the
claimants agreed that the plaintiffs could litigate in this Court
read as follows:
[T]his Court . . . shall then proceed to determine only
(a) whether Plaintiffs had ‘privity to or knowledge of’
. . . the acts, events, conditions, omissions, etc. upon
which their liability was based in the state court action
and, if so, (b) the value of the Plaintiffs’ interest in
the M/V Georgetown, and its pending freight if any (and
any such other vessels and any such vessels’ pending
freight which this Court may later find pursuant to the
provisions of Rule F(7) should be included in the
limitation fund) as specified under the Act.
ECF No. 13 *2.

This Court found that such clarification of what

the plaintiffs are entitled to litigate in this Court was improper
and perhaps did not adequately protect the plaintiffs’ rights under
the Limitation Act.

See ECF No. 16 *20.

This Court, however,

stated that this finding did not require the claimants to waive
their rights with respect to exoneration. See id. at 21. Instead,
this Court stated that it was only requiring that the plaintiffs’
rights be protected by the complete waiver of the claimants’ res
judicata rights concerning limitation of liability.

9

Id.

Based on

this finding, the claimants replaced the above stipulation with the
following amended stipulations:
1.
Claimants stipulate and agree that Campbell
Transportation Company, Inc. (“CTC”) and C&C Marine
Maintenance Company (“C&C”), collectively “Plaintiffs,”
are entitled to litigate all issues relating to
limitation of liability pursuant to the provisions of the
Vessel Owners’ Limitation of Liability Act, 46 U.S.C.
§ 30501, et seq. (“the Act”) in this Court.
2.
Claimants waive any claim of res judicata relevant
to the issue of limitation of liability pursuant to the
provisions of the Act based on any jury or non-jury trial
decision or judgment they may obtain in state court.
3.
Claimants
neither
stipulate
nor
agree
that
Plaintiffs are entitled to litigate the issue of
exoneration from liability in this Court, as they are not
required to under this Court’s March 27, 2013, Memorandum
Opinion and Order (CM/ECF Doc. No. 16), and applicable
law.
ECF No. 18 (emphasis in original).
The plaintiffs do not provide any support for their argument
concerning the exoneration stipulation, other than a mere statement
that because the claimants failed to stipulate that the plaintiffs
may

litigate

the

issue

of

exoneration

in

this

plaintiffs’ rights are not adequately protected.
nonetheless, will address the argument.
the

plaintiffs’

confusion

as

to

Court,

the

This Court,

This Court assumes that

whether

the

claimants

must

stipulate that the plaintiffs may litigate the issue of exoneration
in this Court arises from the conflict between the Limitation Act
and the Federal Rules of Civil Procedure.

While this Court is

unaware of any Fourth Circuit case explaining this conflict, the

10

Fifth Circuit in In re Tidewater provides the following explanation
and analysis of the issue:
The Limitation Act itself does not expressly provide the
shipowner with a right to exoneration.
However, The
Federal Rules of Procedure [Rule F] provide that a
limitation claimant “may demand exoneration.” In Falcon
Inland, the court noted that Rule F uses the permissive
verb “may” and reasoned that the word “shall” would have
been used if the exoneration issue were reserved
exclusively to federal courts.
In re Falcon Inland,
Inc., 2 F. Supp. 2d 835, 836 (E.D. La. 1998).
249

F.3d

342,

347

(5th

Cir.

2001)

(some

internal

citations

omitted). Further, as explained by the Fifth Circuit, supplemental
rules,

like

Rule

F,

“cannot

enlarge

the

substantive

rights

conferred on shipowners by the Limitation Act.” Id. at 347 (citing
28

U.S.C.

§

2072(b)).

If

courts

required

an

exoneration

stipulation prior to lifting the stay on a case, courts would be
“enlarg[ing]

shipowners’

rights

under

the

Limitation

Act

and

abridg[ing] claimants’ rights under the savings to suitor clause.”
Id.

As a result, the Fifth Circuit found that an exoneration was

not required before a stay can be lifted.

Id.; see

In re

Association of Maryland Pilots, 596 F. Supp. 2d 915, 920-21 (D. Md.
2009) (applying the Fifth Circuit’s analysis in In re Tidewater and
finding a stipulation to exoneration of liability is not required).
This Court agrees with the Fifth Circuit’s explanation and analysis
of the issue. Thus, again this Court finds that the claimants need
not stipulate to the plaintiffs’ right to litigate the exoneration
issue in this Court. The claimants’ stipulation to the plaintiffs’
right

to

litigate

all

issues

related

11

to

the

limitation

of

liability,

along

with

the

claimants’

other

stipulations,

is

sufficient for this Court to lift the injunction on the state court
action and grant the motion to stay this action.
III.

Conclusion

For the reasons stated above, the claimants’ motion to stay
this action and lift the injunction on the state court proceedings
(ECF No. 17) is hereby GRANTED. Accordingly, this action is hereby
STAYED.

Further, the parties are DIRECTED to file the appropriate

motion

with

this

Court,

seeking

either

recommencement

of

proceedings under the Limitation Act in this Court or dismissal of
this action within 30 days of the conclusion or appeal from the
state proceedings, whichever is later.
IT IS SO ORDERED.
The Clerk is directed to transmit a copy of this order to
counsel of record herein.
DATED:

August 20, 2013

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

12