BLANK RIVER SERVICES, INC. v. TOWLINE RIVER SERVICE, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

BLANK RIVER SERVICES, INC., )

Plaintiff, )

) 2:19-cv-00418

V. )

)

TOWLINE RIVER SERVICE, INC., )

Defendant. )

OPINION

Mark R. Hornak, Chief United States District Judge

Plaintiff, Blank River Services, Inc. (“Blank River”) brings a complaint in admiralty

against Defendant, TowLine River Service, Inc. (“TowLine”). Among other things, Blank River

alleges that it chartered a towboat to TowLine and that TowLine returned the vessel in an

unacceptable condition. Blank River seeks to recover damages based on a breach of the charter

agreement, a maritime contract. Blank River also brings claims of tortious damage and

conversion, unjust enrichment, and negligent bailment. Blank River’s Complaint also asserted an

independent claim for “Punitive Damages” as Count V. (See Compl. {§ 45-47, ECF No. 1). This

claim was dismissed by the Court on the record during the Oral Argument on TowLine’s Motion

to Dismiss on July 11, 2019, (ECF No. 17), as both parties agreed that a claim for punitive

damages cannot be asserted as a separate and independent cause of action. The Court dismissed

Count V without prejudice as a stand-alone claim. (ECF No. 20).

Now before the Court is TowLine’s Motion to Dismiss for Failure to State a Claim and

Motion to Dismiss for Lack of Jurisdiction, pursuant to Federal Rules of Civil Procedure

12(b)(1) and 12(b)(6). (ECF No. 7). TowLine seeks dismissal of the remaining claims asserted

against it. For the reasons that follow, the Court concludes that this case is properly before the

Court and there are no exceptional circumstances in this case that would justify abstaining. The

Court further concludes that Counts II and IV are not barred by Pennsylvania’s “gist of the

action” doctrine because federal law governs this dispute and, even if Pennsylvania law did

apply, the duties that were alleged to have been breached in Counts II and IV arise independently

of the charter agreement. Finally, the Court concludes that it would be premature to dismiss

Count III, seeking equitable relief under an unjust enrichment theory, because TowLine disputes

whether the charter agreement was in effect. For all of these reasons and as further explained

below, the balance of TowLine’s Motion will be DENIED.

I. BACKGROUND

a. Factual Background

The following material facts are derived from Blank River’s Complaint and attached

exhibits. (Compl., ECF No. 1). At all relevant times to this case, Blank River owned the towboat

M/V FRANCIS J. BLANK (the “Towboat”). (/d. § 1). On or about February 8, 2009, Blank

River and TowLine entered into a charter agreement (the “Charter Agreement”), and pursuant to

the Charter Agreement, TowLine took possession of the Towboat in or about March 2009. (/d.

q{ 5-6). The Charter Agreement provided that TowLine was responsible for maintaining the

Towboat, (Charter Agreement § 9, ECF No. 1-2), and further provided that TowLine was

responsible for reimbursing Blank River for the costs of refueling the Towboat in the event that

the Towboat was returned to Blank River with less fuel than when TowLine took possession of

the Towboat, (id. § 7). The Towboat was allegedly in excellent physical and mechanical

condition when TowLine took possession of it, and the Towboat’s 9,500-gallon fuel tanks were

topped-off and full. (Compl. §§ 7-8). TowLine continuously and exclusively possessed and

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operated the Towboat from March 2009 until June 2, 2018, when TowLine returned the Towboat

to Blank River. Ud. § 14). The Towboat was allegedly returned with only 4,488 gallons of fuel

and in “appalling condition,” with several pieces of equipment missing, broken, or damaged. (/d.

49 15, 17). Blank River represents that it has been unable to re-charter the vessel since TowLine

returned it. (/d. § 20). On March 1, 2019, Blank River sent TowLine a notice of default listing

amounts owed due to these and other alleged breaches of the Charter Agreement. (/d. § 25).

b. Related Litigation

Following receipt of Blank River’s notice of default, TowLine filed a declaratory

judgment action in the Court of Common Pleas for Allegheny County, Pennsylvania, on April 5,

2019, pending on that court’s docket as No. GD-19-005139. (See ECF Nos. 8-1, 8-2). TowLine

demanded a jury trial, (ECF No. 8-2), served document requests, (ECF No. 8-3), and noticed the

depositions of Blank River (as a corporate entity) and a Blank River employee, (ECF Nos. 8-4,

8-5). Blank River initiated this suit on April 12, 2019, one week after TowLine filed its

declaratory judgment action.

Blank River filed Preliminary Objections to TowLine’s complaint on May 13, 2019, and

these were overruled by the Court of Common Pleas in their entirety on June 25, 2019. (ECF

Nos. 16-1, 16-2). Blank River thereafter filed a Motion for Reconsideration of the Court of

Common Pleas’ Order of June 25, 2019, (ECF No. 16-6), and also filed a Motion to Stay

Discovery, (ECF No. 16-7). Meanwhile, TowLine renewed its request for document production

and re-noticed the depositions of Blank River and a Blank River employee. (ECF Nos. 16-3, 16-

4, 16-5).

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Il. STANDARD OF REVIEW

A claim may be dismissed for “failure to state a claim upon which relief can be granted,”

Fed. R. Civ. P. 12(b)(6), or when the Court lacks subject-matter jurisdiction, Fed. R. Civ. P.

12(b)(1). In reviewing a motion to dismiss the Court conducts a two-part analysis, first

separating the factual and legal elements of a claim. Fowler v. UPMC Shadyside, 578 F.3d 203,

210-11 (3d Cir. 2009). The Court “may disregard any legal conclusions,” id., and then must

“accept all factual allegations as true, construe the complaint in the light most favorable to the

plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff

may be entitled to relief.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)

(quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). However, the

Court need not accept as true any unsupported conclusions, unsupported inferences, nor

“threadbare recitals of elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009). A plaintiff's factual allegations must “raise a right to relief above the speculative level”

and state a “plausible claim for relief” to survive a motion to dismiss. Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007). “The plausibility standard is not akin to a “probability requirement,”

but it asks for more than the sheer possibility that a defendant has acted unlawfully.” Jgbal, 556

US. at 678.

Il. ANALYSIS

a. There are no “exceptional circumstances” justifying abstention in this case.

TowLine asserts that this Court should abstain from hearing this case pursuant to the

Colorado River abstention doctrine.! See Colorado River Water Conservation Dist. v. United

! Despite TowLine purportedly bringing its Motion in part pursuant to Federal Rule of Civil Procedure 12(b)(1), the

Court notes that TowLine does not appear to actually challenge the Court’s subject-matter jurisdiction. The doctrine

of abstention applies only where the exercise of jurisdiction is otherwise proper in the federal forum. See, e.g.,

Hamilton v. Bromley, 862 F.3d 329, 332 (3d Cir. 2017) (“[A] federal court can abstain from exercising its

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States, 424 U.S. 800 (1976). Generally, “the pendency of an action in the state court is no bar to

proceedings concerning the same matter in the Federal court having jurisdiction.” Jd. (quoting

McClellan v. Carland, 217 U.S. 268, 282 (1910)). However, in very limited circumstances, a

district court may abstain from hearing a case otherwise properly before it in light of parallel

proceedings in a state court. See generally Colo. River, 424 U.S. at 817-20. But this is an

“extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy

properly before it,” id. at 813, and “{o]nly the clearest of justifications will warrant dismissal,”

id. at 819 (internal quotations omitted).

Whether abstention is appropriate under the Colorado River doctrine is a two-part

inquiry: a court must first determine whether the state-court proceedings are “parallel,” and if so,

the court then “look[s] to a multi-factor test to determine whether “extraordinary circumstances”

meriting abstention are present.” Nationwide Mut. Fire Ins. Co. v. George V. Hamilton, Inc., 571

F.3d 299, 307-08 (3d Cir. 2009) (citation omitted). A court need not determine whether a state-

court proceeding is parallel if the actions do not present the requisite “extraordinary

circumstances” warranting abstention. See id. at 308. A state-court proceeding is considered to

be “parallel” when it presents “substantially identical claims [and] nearly identical allegations

and issues.” Jd. at 307 (quoting Yang v. Tsui, 416 F.3d 199, 204 n.5 (3d Cir. 2005)) (alterations

in original), Courts in the Third Circuit consider the following six factors in determining whether

a case presents “extraordinary circumstances” warranting abstention:

(1) [in an in rem case,] which court first assumed jurisdiction over

[the] property; (2) the inconvenience of the federal forum; (3) the

desirability of avoiding piecemeal litigation; (4) the order in which

jurisdiction was obtained; (5) whether federal or state law controls;

jurisdiction only if it has jurisdiction to abstain from.”). Thus, the Court will treat TowLine’s “subject-matter

jurisdiction” challenge as, instead, an argument for this Court to abstain from exercising its jurisdiction. No basis

has been asserted in TowLine’s Motion or associated briefing to call this Court’s subject-matter jurisdiction into

question.

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and (6) whether the state court will adequately protect the interests

of the parties.

Hamilton, 571 F.3d at 308 (quotation omitted) (alterations in original).

i. The Court will assume that this case is parallel to the declaratory judgment

action in state court.

TowLine asserts that the proceedings before this Court and the Court of Common Pleas

are “parallel” because they involve the same parties and the same legal and factual issues.

TowLine further asserts that the proceedings are parallel because the resolution of the issues

before the Court of Common Pleas would dispose of all of the legal and factual issues before this

Court. Blank River does not vigorously dispute that there is a complete identity of the parties

between the two proceedings and, at minimum, a substantial overlap of factual and legal issues.

Rather, Blank River argues that such proceedings cannot be parallel because Blank River seeks

money damages in this action whereas TowLine seeks only declaratory relief before the Court of

Common Pleas. See Harris v. Pernsley, 755 F.2d 338, 346 (3d Cir. 1985) (holding that the “test

for application of the parallel litigation exception set forth Colorado River . . . cannot be satisfied

. since the federal court plaintiffs seek money damages while the state court plaintiffs did

not.”).

Some district courts in this Circuit have seemingly interpreted this language from Harris

as announcing a bright-line rule—actions cannot be parallel for Colorado River doctrine

purposes when declaratory relief is sought in one action and money damages are sought in

another. See Spellman v. Express Dynamics, LLC, 150 F. Supp. 3d 378, 385 (D.N.J. 2015); Viola

v. Fireman’s Fund Ins. Co., 965 F. Supp. 654, 660 (E.D. Pa. 1997). This Court does not

understand Harris to support a rule of such breadth. First, the cases cited by TowLine are

distinguishable. The Viola court relied on Complaint of Bankers Trust Company v. Chatterjee,

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636 F.2d 37, 40 (3d Cir. 1980), for its observation that federal and state litigations are not

parallel “when the claims, parties or requested relief differs.” 965 F. Supp. at 660. However,

Chatterjee concerned the “first to file” rule as between two actions filed in two federal courts,

not as between an action in state court and an action in federal court. As recognized by the court

in Spellman, these situations and relevant tests for parallelism are markedly different. See 150 F.

Supp. 3d at 386-87. Turning to Spellman, it too is distinguishable because additional claims

were asserted in the federal case that were not asserted in the state case, contributing to the

Spellman court’s determination that the actions were not parallel. /d. at 385.

Second, the Court is unaware of any subsequent precedential authority from the Third

Circuit explicitly or implicitly affirming such an understanding of Harris. And based on the

Court’s independent research, such a rule would appear to be a minority—if not unique—view

among the Circuits, That is, the Court is unaware of any precedential authority from a federal

appellate court holding that actions are not parallel merely because declaratory relief is sought in

one action and money damages are sought in another. Rather, other courts have explicitly held

that the operative consideration for whether two actions are parallel is whether the state litigation

will dispose of all of the issues in the federal case. See, e.g., vonRosenberg v. Lawrence, 849

F.3d 163, 168 (4th Cir. 2017); Spectra Commn’s Grp., LLC vy. City of Cameron, 806 F.3d 1113,

1121 (8th Cir. 2015); AAR Int’l, Inc. v. Nimelias Enters. S.A., 250 F.3d 510, 518 (7th Cir. 2001),

cert. denied, 122 S. Ct. 463 (2001); Mazuma Holding Corp. v. Bethke, 1 F. Supp. 3d 6, 20

(E.D.N.Y. 2014); Mass. Biologic Labs. of the Univ. of Mass. v. MedImmune, LLC, 871 F. Supp.

2d 29, 36 (D. Mass. 2012); ITW Mortg. Investments III, Inc. v. Mich. Nat’l Bank, No. 00-71886,

2000 WL 1279166, at *2 (E.D. Mich. 2000). Courts in the Third Circuit have likewise articulated

such a rule for parallelism. See N.C.A.A. v. Corbett, 25 F. Supp. 3d 557 (M.D. Pa. 2014) (“The

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cases do not need to be precisely identical, but “there must be a likelihood that the state litigation

will dispose of all the claims presented in the federal case.’”’) (quoting Flint v. A.P. Desanno &

Sons, 234 F, Supp. 2d 506, 510-11 (E.D. Pa. 2002)).

Lastly, Harris is distinguishable in terms of the relief sought in the federal- and state-

court proceedings. In Harris, prisoners in the Philadelphia Prison System sought and obtained

injunctive relief related to their conditions of confinement in the state courts. 755 F.2d at 340-41.

Other inmates in the prison system (none of whom were plaintiffs in the first action) later sued in

federal court seeking damages and injunctive relief related to their conditions of confinement. /d.

at 341. The state-court case was still ongoing, though the liability phase of the litigation had

concluded. /d. at 346. The Third Circuit held that abstention under the Colorado River doctrine

was not appropriate because the cases in state and federal court were not parallel because money

damages were not sought in the state-court case and liability had already been determined. □□□

But even though money damages are likewise not sought in the state-court case here, the state-

court plaintiffs are seeking a legal determination under apparently the same legal rules that will

directly bear on the federal action for money damages. Unlike in Harris, injunctive relief is not

at issue, nor are the disparate legal standards for the issuance of injunctive relief. Rather, the case

before this Court presents essentially the exact same legal questions and factual issues as the case

pending in state court—the only difference between the two actions is the respective procedural

postures of the parties.

In sum, this Court does not read Harris as establishing a bright-line rule for parallelism

based on the relief sought in respective federal- and state-court actions. Rather, Third Circuit

authority is clear that a state-court proceeding is parallel when it presents “substantially identical

claims, raising nearly identical allegations and issues.” Yang, 416 F.3d at 204 n.5 (internal

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quotation and quotation marks omitted); see also Kelly v. Maxum Specialty Ins. Grp., 868 F.3d

274, 285 (3d Cir. 2017) (“[P]arallel proceedings are those that are truly duplicative, that is, when

the parties and the claims are identical, or at least effectively the same.”) (internal quotation and

quotation marks omitted).

The Court will assume without concluding that, for the purposes of this Motion, the

relevant proceedings are parallel. And there is a substantial basis for the Court to do so. Both the

proceedings before the Court of Common Pleas and the proceedings before this Court raise

factual issues regarding the condition of the Towboat when it was returned to Blank River, the

fuel levels on the Towboat, and the construction and interpretation of the Charter Agreement.

Should the Court of Common Pleas reach a final judgment as to these issues, such judgment

would be entitled to full faith and credit in this Court and would preclude relitigation of the same

issues to the same extent that such a judgment would in Pennsylvania courts. See 28 U.S.C. §

1738; Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005). Under Pennsylvania

law, issue preclusion applies if the following factors are met:

(1) the issue decided in the prior adjudication was identical with

the one presented in the later action; (2) there was a final judgment

on the merits; (3) the party against whom the plea is asserted was a

party or in privity with a party to the prior adjudication; and (4) the

party against whom it is asserted has had a full and fair opportunity

to litigate the issue in question in a prior action.

Greenleaf v. Garlock, Inc., 174 F.3d 352, 357-58 (3d Cir. 1999) (applying Pennsylvania

law). Given the identity of factual disputes and legal issues, such a judgment would resolve the

issues presented in Blank River’s Complaint and be entitled to preclusive effect. And of course,

the parties in both proceedings are identical—save for the procedural posture that each party is

assuming as against the other.

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However, the Court need not conclusively determine this issue, as the Court concludes

that this case lacks the “extraordinary circumstances” necessary to warrant abstention, and thus

abstention under the Colorado River doctrine would be unjustified whether the proceedings in

this Court and the Court of Common Please were parallel or not. See Hamilton, 571 F.3d at 308.

ii. There are no “extraordinary circumstances” justifying abstention.

At the outset, TowLine concedes that three of the six factors informing the abstention

determination do not weigh in its favor. This is not an in rem action, so the first factor is

inapplicable. The second factor clearly weighs against abstention. The federal forum in this case

is not inconvenient for the parties, as both this Court and the Court of Common Pleas are

geographically located in Pittsburgh, Pennsylvania. R.R. Street & Co. Inc. v. Transport Ins. Co.,

656 F.3d 966, 979 (9th Cir. 2011) (observing that the “inconvenience” factor was irrelevant

because “both the federal and state forums [were] located in [the same city]”). TowLine also

acknowledges that—because this is a complaint in admiralty—federal law controls this dispute.

See Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 206 (1996) (“With admiralty

jurisdiction . . . comes the application of substantive admiralty law.”) (quotation omitted). And,

therefore, the fifth factor clearly weighs against abstention as well. See Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 (1983) (“[T]he presence of federal-law issues

must always be a major consideration weighing against surrender.”).

The Court also concludes that the sixth factor—whether the state court will adequately

protect the interests of the parties—does not weigh in favor of abstention. This factor is

“normally relevant only when the state forum is inadequate” and otherwise “carries little

weight.” Ryan v. Johnson, 115 F.3d 193, 200 (3d Cir. 1997) (emphasis in original). In other

words, this factor generally serves “only to weigh against abstention where a state court is

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incapable of protecting a party’s interests.” Golden Gate Nat’l Senior Care, LLC v. Minich ex

rel. Estate of Shaffer, 629 F. App’x 348, 352 (3d Cir. 2015) (emphasis in original). Thus, even if

the Court assumes that the state court is capable of adequately protecting the parties’ interests,

such a conclusion would be immaterial for TowLine’s arguments in favor of abstention.

TowLine relies primarily on the remaining two factors—the order in which jurisdiction

was obtained and the desirability to avoid piecemeal litigation—as its basis for arguing that

abstention is warranted. But neither of these factors weighs in favor of abstention here. Though it

is undisputed that TowLine filed its declaratory judgment action in state court prior to Blank

River commencing this action, the precise timing of when jurisdiction was obtained in each court

is not a dispositive consideration.” There is no “first to file” rule in the Colorado River analysis.

See Moses H. Cone, 460 U.S. at 21 (rejecting a “mechanical” application of this factor in favor

of analyzing priority in a “pragmatic, flexible manner with a view to the realities of the case at

hand”). Indeed, “priority should not be measured exclusively by which complaint was filed first,

but rather in terms of how much progress has been made in the two actions.” Jd.

Notwithstanding TowLine winning the race to the state courthouse by one week, the

declaratory judgment action remains in its earliest stages. No answer has been filed by Blank

River, no significant discovery has been undertaken by the parties, and no significant factual

findings or legal conclusions have been rendered by the Court of Common Pleas. Cf Harris vy.

Vitran Express, Inc., No. 14-0704, 2014 WL 5795687, at *5 (W.D. Pa. Oct. 15, 2014)

? Blank River asserts in its brief that TowLine was actually served with the Complaint in this case prior to TowLine

serving the state-court complaint on Blank River. (Br. in Opp’n at 10, ECF No. 11). Blank River then expanded on

this argument during Oral Argument to suggest that jurisdiction had, in fact, actually first been established in this

Court rather than in the state court. The Court will not consider this argument at this juncture for two reasons. First,

there are no allegations pled in the Complaint to support Blank River’s assertions, and this case is at the Motion to

Dismiss stage. But more importantly, as explained above, the exact moment when each court obtained jurisdiction

over the respective actions is irrelevant in this case and in Colorado River abstention analyses generally. See Moses

H. Cone, 460 U.S. at 21 (“[P]riority should not be measured exclusively by which complaint was filed first, but

rather in terms of how much progress has been made in the two actions”).

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(concluding that the “order in which jurisdiction was obtained” factor militated against

abstention even though a declaratory judgment action was filed in state court six months prior to

a federal action being initiated and “a number of minor preliminary matters ha[d] taken place in

state court”). At most, this factor does not weigh conclusively in favor of either party, and

certainly does not weigh strongly in favor of abstention here.

The final factor for consideration is whether the desirability to avoid piecemeal litigation

should compel this Court to abstain. Undoubtedly, should this Court decline to abstain, both a

declaratory judgment action and an action for damages involving the same parties and covering

the same issues would proceed in this Court and the Court of Common Pleas. But, “[t}]he general

rule regarding simultaneous litigation of similar issues in both state and federal courts is that

both actions may proceed until one has come to judgment, at which point that judgment may

create a res judicata or collateral estoppel effect on the other action.” Univ. of Md. at Baltimore

Cty. v. Peat Marwick Main & Co., 923 F.2d 265, 275-76 (3d Cir. 1991) (citing McClelland v.

Carland, 217 U.S. 268, 282 (1910); Stanton v. Embrey, 93 U.S. 548, 554 (1877)). Accordingly, it

is well-settled that “Colorado River abstention must be grounded on more than just the interest in

avoiding duplicative litigation.” Spring City Corp. v. Am. Bldgs. Co., 193 F.3d 165, 171-72 (3d

Cir. 1999). “[R]ather, there must be a strongly articulated congressional policy against piecemeal

litigation in the specific context of the case under review.” Ryan, 115 F.3d at 198 (emphasis in

original). In other words, the “avoidance of piecemeal litigation” factor only supports abstention

“when there is evidence of a strong federal policy that all claims should be tried in the state

courts.” /d. at 198 (citing Ky. W. Va. Gas Co. v. Pa. Pub. Util. Comm’n, 791 F.2d 1111, 1118 (3d

Cir. 1986)).

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The language above from Ryan v. Johnson is particularly harmful to TowLine’s position,

given that the United States Constitution extends the judicial Power of the United States to “all

Cases of admiralty and maritime Jurisdiction,” U.S. Const. Art. III §2, and 28 U.S.C. § 1333

grants the district courts original jurisdiction in any civil case of admiralty or maritime

jurisdiction. It seems as though Congress and our Founding Fathers have clearly indicated that

cases such as this one should be tried in the federal courts, and at minimum, have not announced

a “strong federal policy” that claims such as these should be tried in the state courts. Colorado

River itself provides a useful contrast. There, the “most important” consideration for the Court in

its decision to affirm the District Court’s decision to abstain was the “clear federal policy” of

adjudicating water rights in unified proceedings, as evinced by the McCarran Amendment’s

waiver of the United States’ sovereign immunity in state courts for certain state-court suits to

adjudicate water rights.? 424 U.S. at 819-20. The Colorado River Court viewed this waiver of

sovereign immunity as a Congressional acknowledgement that the states are well-suited to

adjudicate water rights, and discussed such proceedings available to the litigants in the Colorado

courts. /d, The Court also viewed the McCarran Amendment as indicating a strong legislative

preference to avoid piecemeal litigation, which could result in inconsistent dispositions as to

water rights, which the Court analogized to the general preference to avoid inconsistent

dispositions as to property disputes. /d. The issues in this case do not present these issues or

concerns.

3 The McCarran Amendment allows for the joinder of “the United States as a defendant in any suit (1) for the

adjudication of rights to the use of water of a river system or other source, or (2) for the administration of such

rights, where it appears that the United States is the owner of or is in the process of acquiring water rights by

appropriation under State law, by purchase, by exchange, or otherwise, and the United States is a necessary party to

such suit.” 43 U.S.C. § 666.

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Nonetheless, TowLine asserts that the “Savings to Suitors” Clause of 28 U.S.C. § 1333

announces a Congressional declaration and preference to avoid piecemeal litigation. That Clause

provides that “[t]he district courts shall have original jurisdiction, exclusive of the courts of the

States, of .. . [a]ny civil case of admiralty or maritime jurisdiction, savings to suitors in all cases

all other remedies to which they are otherwise entitled.” 28 U.S.C. § 1333 (emphasis added).

TowLine submits that it is such a suitor and is entitled to have its action for declaratory relief

heard in state court before a jury. First, though this Court is unaware of any Third Circuit

authority so holding, the Fifth Circuit has held in a non-precedential opinion that the availability

of a jury trial is not a consideration for a court undertaking a Colorado River analysis. See

Transocean Offshore USA, Inc. v. Catrette, 239 F. App’x 9, 13 (Sth Cir. 2007) (“Indeed, the

availability of a jury trial is not one of the factors the Supreme Court has authorized lower courts

to consider in determining whether a stay is warranted under . . . Colorado River.”). Given that

the Third Circuit has explained that courts examine six factors—which are not described as

“non-exhaustive” or anything similarly open-ended—it appears to this Court that the Third

Circuit would reach a similar conclusion. See Hamilton, 571 F.3d at 308 (“In determining

whether an action presents “extraordinary circumstances” we consider six factors{.]”).

TowLine relies primarily on Langnes v. Green, 282 U.S. 531 (1931), to argue that a

separate “abstention doctrine” exists under the Savings to Suitors Clause. As a preliminary

matter, it is far from clear whether Langnes truly established a distinct federal abstention

doctrine. The Seventh Circuit characterized the rule in Langnes as a separate abstention doctrine,

see In re Compl. of McCarthy Bros. Co./Clark Bridge, 83 F.3d 821, 827 (7th Cir. 1996), but on

the other hand, Colorado River itself—decided forty-five years after Langnes—began its

analysis by recognizing that the Supreme Court’s decisions “have confined the circumstances

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appropriate for abstention to three general categories.” 424 U.S. at 814-17 (describing the

Pullman, Thibodaux, and Younger abstention doctrines). There was no mention of a “form of

abstention in admiralty cases under the Savings to Suitors clause,” (Br. in Supp. at 7, ECF No.

8), nor, in this Court’s estimation, did the Supreme Court in Langnes purport to establish a

specific abstention doctrine premised on the Savings to Suitors Clause.

In Langnes, a shipowner initiated a declaratory action in federal court pursuant to a then-

operative statute permitting a shipowner to petition for a declaration from a federal court to limit

his liability in relation to certain tortious acts. See 282 U.S. at 532-33. The federal respondent

had already filed an action in state court seeking damages for personal injuries suffered on the

vessel. Jd. At issue in Langnes was the narrow question of whether the district court abused its

discretion by not staying the federal action—seeking only declaratory relief—in light of an

alleged victim seeking a common-law remedy in state court. See id. at 539-40. The Langnes

Court held that the district court should have stayed the federal action because to do otherwise

would “destroy the right of the suitor in the state court to a commonlaw remedy” and

“remit[ting}] the cause to the state court would be to preserve the rights of both parties.” Jd. at

541. On this narrow point—that a federal court could stay a shipowner’s federal action for

declaratory relief seeking to limit liability where there is a single claimant—Langnes appears to

remain good law throughout the Courts of Appeals. See McCarthy Bros., 83 F.3d at 826-28,

cert. denied, Campbell v. McCarthy Bros. Co./Clark Bridge, 519 U.S. 950 (1996); Gorman v.

Cerasia, 2 F.3d 519, 524-25 (3d Cir. 1993); In re Compl. of Midland Enters., Inc., 886 F.2d 812,

814 (6th Cir. 1989); Compl. of Dammers & Vanderheide & Scheepvaart Maats Christina B.V.,

836 F.2d 750, 755 (2d Cir. 1988); Jefferson Barracks Marine Serv., Inc. v. Casey, 763 F.2d

1007, 1009-10 (8th Cir. 1985).

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But those cases, with federal claimants seeking declaratory relief under the Shipowners

Limitation of Liability Act (“SLLA”), 46 U.S.C. §§ 30501 ef seq., are distinguishable in material

respects from this case. In SLLA cases, a shipowner seeks declaratory relief from a federal court

limiting its liability in cases of its alleged wrongdoing. Essentially, it is the opposite scenario of

what is happening here. Blank River—the shipowner—is seeking damages from TowLine in

federal court while TowLine is seeking to limit its liability through a declaratory action in state

court. The primary concern underpinning the Langnes Court’s ruling—that permitting the federal

claimant’s action to proceed would destroy the state-court plaintiff's common-law remedy—is

simply not present here. Save for TowLine’s preferences for a jury trial and state forum—which

have never been identified by controlling appellate authority as relevant considerations in this

context—TowLine can present the same claims and defenses in federal court as it would be

afforded in state court.*

Essentially, TowLine asks this Court to read 28 U.S.C. § 1333 as evidencing a

Congressional intention that every “suitor” in an admiralty case have its first-choice of a forum,

and the “suitor” that files first has its preference honored, i.e., a “first to file” rule. Based on the

foregoing reasons, the Court finds no justification to adopt such an expansive reading of § 1333,

and therefore concludes that the “avoidance of piecemeal litigation” factor does not weigh in

favor of abstention. But more importantly, even if TowLine’s understanding of § 1333 were

adopted, it would mean that, at most, one out of the six relevant Colorado River factors may be

in TowLine’s favor. Given that the balancing of these factors is “heavily weighted in favor of the

‘ Even if this Court were to agree with the Seventh Circuit’s conclusion in McCarthy Brothers by reading Langnes

as establishing a separate federal abstention doctrine under the Savings to Suitors Clause, the case before this Court

would be outside of the scope of such an abstention doctrine. McCarthy Brothers and the other appellate authority

cited above plainly contextualize Langnes as applying in the factual scenario presented in Langnes—a shipowner

seeking declaratory relief in federal court to limit his liability after a single claimant files an action for damages in

state court. See, e.g., McCarthy Bros., 83 F.3d at 827-28. Not only is the SLLA not invoked in this case, but the

shipowner is seeking damages in federal court rather than declaratory relief to limit its liability.

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exercise of jurisdiction” this falls far short of the necessary showing that abstention is warranted

here. See Moses, 460 U.S. at 16.

In conclusion, an analysis of the six relevant factors in a Colorado River abstention

analysis demonstrates that there are no “exceptional circumstances” about this case that would

justify abstention. Three out of the six factors plainly weigh against abstention or are facially

inapplicable. The state court is apparently capable of protecting the parties’ interests in this case,

but this factor can only weigh against abstention, so it is of no help to TowLine. Though

TowLine filed its action in state court first, that action remains in its infancy. And finally, there is

no strong Congressional preference to avoid piecemeal litigation in this context. The Court will

therefore decline to abstain from hearing Count I in this case, which is properly before the Court,

as none of the six relevant factors weigh in favor of abstention, and several factors weigh

convincingly against abstention.

b. Pennsylvania law does not apply in this case, but even if it did,

Pennsylvania’s “gist of the action” doctrine would not bar Counts II and IV.

Pennsylvania’s “gist of the action” doctrine operates to “preclude[] plaintiffs from

recasting ordinary breach of contract claims into tort claims.” Jones v. ABN Amro Mortg. Grp.,

Inc., 606 F.3d 119, 123 (3d Cir. 2010) (quoting Erie Ins. Exch. v. Abbott Furnace Co., 972 A.2d

1232, 1238 (Pa. Super. Ct. 2009)). Even though Pennsylvania courts have formally recognized

this principle, see Bruno y. Erie Ins. Co., 106 A.3d 48, 68-69 (Pa. 2014), the same cannot be said

for federal courts sitting in admiralty. Blank River invoked this Court’s admiralty jurisdiction

pursuant to 28 U.S.C. § 1333 and Federal Rule of Civil Procedure 9(h) in the Complaint.

(Compl. 4 3).> Federal courts sitting in admiralty apply the general maritime law as developed by

> TowLine does not contest the Court’s exercise of its admiralty jurisdiction in this case, and the Court concludes

that it has admiralty jurisdiction over the case. It is axiomatic that federal courts may exercise admiralty jurisdiction

over maritime contracts, see, e.g., Andrews v. Wall, 44 U.S. 568, 572-73 (1845), such as agreements to charter a

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the federal courts proceeding “in the manner of [] common law court[s].” See The Dutra Grp. v.

Batterton, 139 S. Ct. 2275, 2278 (2019) (quoting Exxon Shipping Co. v. Baker, 554 U.S. 471,

489-90 (2008)). This is not a diversity case; Pennsylvania law does not apply. See Yamaha, 516

U.S. at 206 (“With admiralty jurisdiction . . . comes the application of substantive admiralty

law.”) (quotation omitted).

TowLine submits that, because the Charter Agreement provides that it is to be interpreted

by the general maritime law of the United States as “supplemented by the laws of the

Commonwealth of Pennsylvania,” that the gist of the action doctrine is applicable in this case.°

The Court is not convinced. First, even if the Charter Agreement’s interpretation is supplemented

by Pennsylvania law, TowLine has not provided a sufficient basis (nor is the Court aware of one)

to extend this choice of law in contractual interpretation so far as to apply substantive

Pennsylvania law to the asserted tort claims in the Complaint. Second, TowLine has not

identified a supposed “gap” or ambiguity in the general maritime law in this case—relating to

vessel, see, e.g,, Natasha, Inc. v. Evita Marine Charters, Inc., 763 F.2d 468, 490-91 (Ist Cir. 1985) (Breyer, J.). The

Court has reviewed the Charter Agreement and finds that it concerns the operation of a ship and its management,

and is thus a maritime contract. See Berkshire Fashions, Inc. v. MV. Hakusan LI, 954 F.2d 874, 880 (3d Cir. 1992).

The Court is unaware of a precedential Third Circuit or Supreme Court decision indicating that a Court may exercise

supplemental jurisdiction over related tort claims in an admiralty case premised on a breach of a maritime contract.

However, the district courts have original jurisdiction of any “civil case of admiralty or maritime jurisdiction.” 28

U.S.C. § 1333(1). The Court thus concludes that it has jurisdiction over the remaining claims in the Complaint

because they arise from the same common nucleus of operative facts as the breach of maritime contract claim and

thus comprise the admiralty “case” before the Court. See United Mine Workers v. Gibbs, 383 U.S. 715 (1966); see

also 28 U.S.C. § 1367(a). At least one district court in this Circuit, relying on persuasive authority from outside of

the Third Circuit, endorses such an understanding of the jurisdictional grant in § 1333. See Dadgostar v. St. Croix

Fin. Ctr., Inc., No. 10-00028, 2011 WL 4383424, at *4-*5 (D.V.I. Sept. 20, 2011) (citing Roco Carriers, Ltd. v.

M/V Nurnberg Express, 899 F.2d 1292, 1296-97 (2d Cir. 1990); Loeber v. Bay Tankers, Inc., 924 F.2d 1340, 1346—

47 (Sth Cir. 1991)).

® It should be noted that this argument was underdeveloped in TowLine’s briefing for this Motion, to put it mildly.

During Oral Argument, counsel for TowLine argued (without discussion of applicable authority) that the Court

should look to Pennsylvania law to supplement the “gaps” of federal maritime law in this case, and this

supplementation provides an avenue for the gist of the action doctrine to operate. The Court was and is not

persuaded by this argument, as TowLine has failed to provide a compelling justification as to why there is a gap

and/or ambiguity in federal maritime law here so as to justify importation of what is arguably a unique feature of

Pennsylvania law. See Lauren Anthony, Home is Where the Confusion is: Pennsylvania Formally Adopts the “Gist

of the Action” Doctrine and Builds a House for Ambiguity in Bruno v. Erie Insurance Co., 61 Vill. L. Rev. 235, 240

n.23 (2016) (observing that the gist of the action doctrine is “relatively unique to Pennsylvania law” and discussing

the limited instances in which courts outside of Pennsylvania have applied an analogous doctrine).

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interpretation of the Charter Agreement or otherwise—such that any supplementation by

Pennsylvania law is necessary. Cf Richard v. Anadarko Petroleum Corp., 850 F.3d 701, 709

(Sth Cir. 2017) (‘[S]tate law may occasionally be utilized to fill the gaps in an incomplete and

less than perfect maritime system.”) (quoting J. Ray McDermott & Co. v. Vessel Morning Star,

457 F.2d 815, 818 (Sth Cir. 1972) (en banc)); Williamson v. Recovery Ltd. P’ship, 542 F.3d 43,

49 (2d Cir. 2008) (explaining that, in admiralty, state law may supplement “any area of contract

law for which federal common law does not provide”). In short, this is a case under federal law,

not Pennsylvania law, so Pennsylvania’s gist of the action doctrine does not apply.

What is more, even if Pennsylvania law did apply in this case, such that the gist of the

action doctrine applied as well, the Court would nonetheless conclude that the doctrine would

not bar the asserted tort claims. The mere existence of a contractual relationship between two

parties does not automatically bar one party from bringing tort claims against the other for

conduct during performance of the contract. See Bruno, 106 A.3d at 69. The critical inquiry is

whether the cause of action is premised on “breaches of duties imposed by law as a matter of

social policy” rather than for “breaches of duties imposed by mutual consensus agreements

between particular individuals.” Ash v. Cont’ Ins. Co., 932 A.2d 877, 884 (Pa. 2007) (quotation

and citations omitted). As recently observed by the Third Circuit, the relevant inquiry is as

follows:

If the facts of a particular claim establish that the duty breached is

one created by the parties by the terms of their contract—i.e., a

specific promise to do something that a party would not ordinarily

have been obligated to do but for the existence of the contract—

then the claim is to be viewed as one for breach of contract. If,

however, the facts establish that the claim involves the defendant’s

violation of a broader social duty owed to all individuals, which is

imposed by the law of torts and, hence, exists regardless of the

contract, then it must be regarded as a tort.

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Norfolk S. Ry. Co. v. Pittsburgh & W. Va. R.R., 870 F.3d 244, 256 (3d Cir. 2017)

(quoting Bruno, 106 A.3d at 68) (internal citations omitted). In other words, would TowLine’s

alleged conduct constitute conversion and/or negligent bailment even if TowLine and Blank

River had never entered into the Charter Agreement?

Moreover, the Court is mindful that this action is at the motion to dismiss stage and the

Federal Rules of Civil Procedure authorize pleading in the alternative. Fed. R. Civ. P. 8(d)(2).

For this reason, “[a] court should be cautious when determining that a claim should be dismissed

under the gist of the action doctrine.” Partners Coffee Co., LLC v. Oceana Servs. & Prods. Co.,

No. 09-236, 2009 WL 4572911, at *4 (W.D. Pa. Dec. 4, 2009). This is especially so where, as

here, the moving party disputes the validity or enforceability of the contract. See, e.g., Premier

Payments Online, Inc. v. Payment Systems Worldwide, 848 F. Supp. 2d 513, 529 (E.D. Pa. 2012)

(“When the validity and if valid, the effect, of a contract is uncertain, courts have found the

application of the gist of the action doctrine on a motion to dismiss to be inappropriate.”)

(collecting cases). TowLine asserts in its Brief in Support that it “disputes [Blank River’s]

allegation that the Charter attached to the [Blank River] Complaint . . . was in effect.” (Br. in

Supp. at 9 n.3, ECF No. 8).

The Court has little difficulty concluding that Blank River’s allegations derive from

greater societal duties rather than solely from the mutual consensus between Blank River and

TowLine as memorialized in the Charter Agreement. “A conversation is the deprivation of

another’s right of property in, or use or possession of, a chattel, or other interference therewith,

without the owner’s consent and without lawful justification.” Stevenson v. Econ. Bank of

Ambridge, 197 A.2d 721, 726 (Pa. 1964). Blank River owns the Towboat in question and alleges

that “TowLine tortiously converted certain items of equipment on the Towboat such as

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appliances, firehoses, life preservers, fuel gauge rods and the like, all of which must now be

replaced in order to make the Towboat serviceable for charter.” (Compl. § 34). Surely, if

TowLine did indeed destroy Blank River’s property aboard the Towboat, said acts would be

tortious regardless of whether Blank River had chartered the Towboat to TowLine. These

assertions involve allegations of harm to Blank River’s property beyond non-compliance with

the Charter Agreement. And further, because Blank River owns the property that was the subject

of the contract and was allegedly converted, the gist of the action doctrine is not applicable. See

Brown & Brown, Inc. v. Cola, 745 F. Supp. 2d 588, 623 (E.D. Pa. 2010) (collecting cases for the

proposition that “[w]hen . . . a plaintiff has a property interest in the thing subject to the

conversion claim, the gist of the action doctrine does not bar a tort theory of recovery, despite the

fact that the property is also the subject of a separate contract”).

The Court reaches a similar conclusion with respect to the negligent bailment claims.

Under Pennsylvania law, a “‘bailment” involves “a delivery of personalty for the accomplishment

of some purpose upon a contract, express or implied, that after the purpose has been fulfilled, it

shall be redelivered to the person who delivered it, otherwise dealt with it according to his

directions or kept until he reclaims it.” Price v. Brown, 680 A.2d 1149, 1151 (Pa. 1996) (quoting

Smalich v. Westfall, 269 A.2d 476, 480 (Pa. 1970)). An actionable breach occurs when the bailee

fails to return the property or returns it in a damaged condition. Am. Enka Co. v. Wicaco Mach.

Corp., 686 F.2d 1050, 1053 (3d Cir. 1982). Liability under this theory is predicated on the bailee

failing to exercise reasonable care as is required of a bailee under the common law. Jd. This is a

separate and independent basis of recovery than the breach of contract claim, because

“[a]lthough the bailor-bailee relationship has its origins in contract, liability is based on the tort

concept of negligence.” Jd. The common law of bailment sets the standard of care for the

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negligent bailment claim whereas the Charter Agreement provides the standard of care for the

breach of contract claim. (See, e.g., Charter Agreement § 9). Both theories may continue at this

stage of the litigation. See, e.g., Penn City Invs., Inc. v. Soltech, Inc., No. 01-5542, 2003 WL

22844210, at *9 (E.D. Pa. Nov. 25, 2003) (allowing a breach of contract claim and a negligent

bailment claim to proceed because “[f]ailure or success under one theory does not automatically

guarantee the same result under the other.”). This is especially so because, as mentioned,

TowLine disputes the validity of the Charter Agreement and pleading in the alternative is

authorized. Fed R. Civ. P. 8(d)(2).’

c. The unjust enrichment claim cannot be dismissed at this time because the

validity of the Charter has been placed in dispute.

TowLine argues that Count III, asserting a claim of unjust enrichment, should be

dismissed because Blank River has an adequate remedy at law. A party cannot recover under an

unjust enrichment theory when a written or express contract exists that would govern the conduct

at issue. See, e.g., Crown Coal & Coke Co. v. Powhatan Mid-Vol Coal Sales, L.L.C., 929 F.

Supp. 2d 460, 474 (W.D. Pa. 2013). However, because the Federal Rules of Civil Procedure

authorize pleadings in the alternative, the Court concludes that it would not be appropriate to

dismiss Count III at this juncture due to TowLine disputing the validity and effect of the Charter

Agreement. If later developments reveal that the Charter Agreement was, in fact, not valid and in

7 It appears to the Court that the elements of the maritime torts of conversion and negligent bailment differ from

those analogous torts under Pennsylvania law in potentially material respects. For instance, “the federal maritime

tort of conversion requires a party to plead that a defendant appropriated the property in question for its own use or

gain and that the wrongful act occurred on navigable waters.” Dynamic Worldwide Logistics, Inc. v. Exclusive

Expressions, LLC, 77 F. Supp. 3d 364, 369 (S.D.N.Y. 2015) (quotation omitted); see also Minott v. M/Y

BRUNELLO, 891 F.3d 1277, 1282-83 (11th Cir. 2018). And, a claim of negligent bailment under admiralty law

requires that “(1) delivery to the bailee is complete and (2) he has exclusive possession of the bailed property, even

as against the property owner.” QT Trading, L.P. v. M/V SAGA MORUS, 641 F.3d 105, 111-12 (Sth Cir. 2011)

(quotation and citations omitted). But TowLine did not move to dismiss Blank River’s tort claims on the basis of

whether the causes of action were sufficiently pled; TowLine’s asserted basis for dismissal was limited to the “gist

of the action” argument. Thus, the Court expresses no opinion at this time as to whether Blank River adequately pled

the tort claims under the applicable substantive law of this case, federal maritime law.

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effect during the relevant times in the Complaint, Blank River may be able to recover under a

quasi-contract theory for unjust enrichment. See Santova Logistics, Ltd. v. Castello 1935, Inc.,

No. 12-00007, 2012 WL 4408733, at *3 (W.D. Va. June 19, 2012) (denying a motion to dismiss

and asserting admiralty jurisdiction over a quasi-contractual dispute because unjust enrichment

claims based on quasi-contractual theories are often brought by parties who “for various reasons,

could not prevail on a contract claim.”) (quoting Barna Conshipping, S.L. v. 2,000 Metric Tons,

More or Less, of Abandoned Steel, 410 F. App’x 716, 722 (4th Cir. 2011)); see also Freeman v.

Pittsburgh Glass Works, LLC, No. 10-1515, 2011 WL 832897, at *5 (W.D. Pa. Mar. 3, 2011)

(permitting an unjust enrichment claim to proceed past the motion to dismiss stage despite

concluding that an alternatively pleaded breach of contract claim was based upon an invalid

contract and therefore must be dismissed).

IV. CONCLUSION

For the foregoing reasons, the balance of TowLine’s Motion at ECF No. 7 will be

DENIED, except as to Count V as a “stand-alone” claim. An appropriate Order will issue.

Mark R. Hornak

Chief United States District Judge

Dated: August 21, 2019

cc: All counsel of record

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