Intracoastal Tug and Barge Company, L.L.C. v. Magnolia Fleet, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

INTRACOASTAL TUG AND CIVIL ACTION

BARGE COMPANY, L.L.C.

VERSUS NO. 23-5859

C/W: NO. 23-7210

RELATED TO: ALL

MAGNOLIA FLEET, LLC ET AL. SECTION “B”(4)

ORDER AND REASONS

Before the Court are claimant Quinices Hill’s motion to bifurcate limitations proceedings

(Rec. Doc. 23), petitioners Magnolia Fleet, LLC and M/V KRISTIN, LLC’s opposition (Rec. Doc.

30), and plaintiff and claimant Intracoastal Tug and Barge Company, LLC’s opposition (Rec. Doc.

31). For the following reasons,

IT IS HEREBY ORDERED that claimant Quinices Hill’s motion to bifurcate limitations

proceedings is GRANTED IN PART. The Court will try the issues of liability, limitation, and

apportionment of fault in a bench trial. In the event of no finding of limitation, Hill’s personal

injury damages will be tried separately in a forum of his choosing, that is, in his state court action

currently enjoined by this proceeding.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This consolidated action arises out of a collision in the Mississippi River between the M/V

REPOSE, owned and operated by Intracoastal, and the M/V LOUISE, operated by Magnolia Fleet,

LLC and owned by M/V Kristin, LLC. See Rec. Doc. 1 at 2–3 ¶¶ 5–7; In the Matter of Magnolia

Fleet, LLC et al., No. 23-7210 (E.D. La. Dec. 7, 2024), ECF No. 1 at 1. Magnolia Fleet, LLC and

M/V Kristin, LLC share the same address and file collectively. See No. 23-7210 (E.D. La. Dec. 7,

2024), ECF No. 1 at 1–2 ¶¶ 2, 4. As the first federal filing related to the incident, Intracoastal sued

Magnolia Fleet, LLC and the M/V LOUISE for repair costs and lost charter hire. Rec. Doc. 1 at

5–6 ¶ 11. Two months later, Magnolia Fleet, LLC and M/V Kristin, LLC (collectively hereafter

“Magnolia Fleet”) instituted a limitation proceeding. See No. 23-7210 (E.D. La. Dec. 7, 2024),

ECF No. 1. Magnolia Fleet asserted M/V LOUISE’s value at voyage end to be $1,100,000.00. Id.

at 6–7 ¶¶ 24–25. This Court consolidated both actions, with Intracoastal’s earlier action designated

as the master case. Rec. Doc. 9.

Claimant Hill, a Jones Act seaman and employee of Intracoastal, was assigned to and

aboard the M/V REPOSE at the time of the collision. Rec. Doc. 10 at 10 ¶¶ 2–3. Averring “severe

injuries to his spine, back, neck, and other parts of his body,” Hill alleges he was “thrown from his

bunk” due to the impact. Id. at 10 ¶ 3. Against Magnolia Fleet and Intracoastal, Hill raises Jones

Act and third party negligence, unseaworthiness, and maintenance and cure claims. Id. at 10–12

¶¶ 4–10. Additionally, Hill requests a trial by jury. Id. at 14 ¶ 14. Rec. Doc. 29. Aside from those

of Hill and Intracoastal, no other claim was filed. See Rec. Docs. 10, 14, 15, and 29.

Hill now moves to bifurcate the limitation and non-limitation issues of the case. See Rec.

Doc. 23. Magnolia Fleet and Intracoastal oppose. See Rec. Docs. 30 and 31. The Court held oral

argument on the issues on August 1, 2024. See Rec. Doc. 32.

II. LAW AND ANALYSIS

A. Motion to Bifurcate Standard

Under Federal Rule of Civil Procedure 42(b), a court “may order a separate trial of one or

more separate issues” for reasons of “convenience, to avoid prejudice, or to expedite and

economize[.]” Fed. R. Civ. P. 42(b). Although within a district court’s discretion, the Fifth Circuit

has instructed bifurcation is only appropriate in exceptional circumstances. See McDaniel v.

Anheuser-Busch, Inc., 987 F.2d 298, 304 (5th Cir. 1993) (“Separation of issues, however, is not

the usual course that should be followed.”). As part of that caution, the “issue to be tried separately

must be so distinct and separable from the others that a trial of it alone may be had without

injustice.” Laitram Corp. v. Hewlett-Packard Co., 791 F. Supp. 113, 115 (E.D. La. 1992)

(quotation cleaned up) (quoting Swofford v. B & W, Inc., 336 F.2d 406, 415 (5th Cir. 1964)). Thus,

a court must assess the facts of an individual case to determine whether bifurcation is appropriate

for the achievement of judicial economy and the avoidance of party prejudice. See Matter of

Diamond B. Indus., LLC, No. 22-127, 2022 WL 4608140, at *1 (E.D. La. Sept. 30, 2022). “The

party moving for bifurcation has the burden to demonstrate that judicial economy would be

promoted and that the non-moving party will not suffer prejudice.” Becnel v. Lamorak Ins. Co.,

No. 19-14536, 2022 WL 2467675, at *1 (E.D. La. July 6, 2022) (citation omitted).

B. Limitation of Liability Act Standard

The Limitation of Liability Act permits a shipowner, lacking in privity or knowledge, to

limit liability for damages arising from a maritime accident to the value of the vessel involved in

the accident. SCF Waxler Marine, L.L.C. v. Aris T M/V, 24 F.4th 458, 472 (5th Cir. 2022). A

shipowner can assert the right to limitation of liability in two ways: (1) by filing a pre-emptive

petition for limitation of liability pursuant to 46 U.S.C. § 30529, or (2) by pleading limitation of

liability as a defense in the answer to an existing complaint pursuant to 46 U.S.C. § 30523. Signal

Oil & Gas Co. v. Barge W–701, 654 F.2d 1164, 1173 (5th Cir. 1981); Karim v. Finch Shipping

Co., 265 F.3d 258, 263 (5th Cir. 2001). Here, Magnolia Fleet filed its limitation action, see No.

23-7210 (E.D. La. Dec. 7, 2024), ECF No. 1, and Intracoastal raised its own limitation of liability

as an affirmative defense, Rec. Doc. 15 at 9–10.

As a concursus, the limitation proceeding gathers claims into one action. See 46 U.S.C. §

30529(c) (“[A]ll claims and proceedings against the owner related to the matter in question shall

cease.”). Courts have determined bringing all related claims in the federal forum protects

shipowners, provides fairness for claimants to a limited fund, and ensures uniformity of decisions.

See In re Exoneration From or Limitation of Liab. of Shell Oil Co., 780 F. Supp. 1086, 1091 (E.D.

La. 1991) (quoting Maryland Cas. Co. v. Cushing, 347 U.S. 409, 415 (1954)).

The Limitation Act, however, acts as shield, not sword. For instance, the Fifth Circuit has

recognized two conditions that mandate state court litigation despite a limitation injunction:

(1) [W]hen the total amount of the claims does not exceed the shipowner’s declared

value of the vessel and its freight, and (2) when all claimants stipulate that the

federal court has exclusive jurisdiction over the limitation proceeding, and that the

claimants will not seek to enforce a damage award greater than the value of the ship

and its freight until the shipowner’s right to limitation has been determined by the

federal court.

In re N&W Marine Towing, L.L.C., 31 F.4th 968, 971 (5th Cir. 2022). Here, Hill has provided no

such stipulation. See generally Rec. Doc. 23-1; see also Rec. Doc. 30 at 9–10.

C. Saving-to-Suitors Exception

These mandatory conditions, however, do not present the exclusive route to state court

litigation. Even in the absence of a stipulation, a shipowner can still be protected from abuse of its

limitation rights by state court proceedings that follow—and are not simultaneous with—the

federal limitation proceeding. See, e.g., Matter of Diamond B. Indus., LLC, No. 22-127, 2022 WL

4608140, at *3 (E.D. La. Sept. 30, 2022). The saving-to-suitors clause of 28 U.S.C. § 1333 supports

further inquiry on the question of state court litigation. See 28 U.S.C. § 1333(1). The Fifth Circuit

has long-recognized the tension between the Limitation Act and the saving-to-suitors clause: “This

statutory framework has created recurring and inherent conflict between the saving-to-suitors

clause of § 1333, with its presumption in favor of jury trials and common law remedies, and the

apparent exclusive jurisdiction vested in admiralty courts by the Act.” Magnolia Marine Transp.

Co. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992) (citation omitted).

As an initial consideration, the appellate court has counseled that “the district court’s

primary concern is to protect the shipowner’s absolute right to claim the Act’s liability cap.” In re

N&W Marine Towing, L.L.C., 31 F.4th at 971 (citation omitted). However, with limitation rights

protected, courts in the Eastern District of Louisiana have considered whether the saving-to-suitors

clause provides a basis for bifurcation—with conclusions differing in the case-by-case inquiries.

See, e.g., In re Crescent Energy Servs., LLC, No. 15-5783, 2015 WL 7574771, at *4 (E.D. La.

Nov. 25, 2015) (Milazzo, J.) (granting bifurcation to permit federal bench and jury trials); Matter

of M/V UNCLE ROBERT, No. 18-10526, 2020 WL 3576839, at *2 (E.D. La. July 1, 2020) (Guidry,

J.) (same); Matter of N&W Marine Towing, LLC, No. 20-2390, 2021 WL 3206292, at *2 (E.D. La.

July 29, 2021) (Guidry, J.) (denying bifurcation because “the issues of liability, causation, and

damages are inextricably linked to [claimant’s] testimony and credibility”); In re Bertucci

Contracting Co., LLC, No. 12-1783, 2015 WL 114174, at *3–4 (E.D. La. Jan. 8, 2015) (Barbier,

J.) (denying bifurcation due to overlapping evidence in class-action property damage claims).

Most precisely—and most persuasively—certain courts in the Eastern District have

ordered a more nuanced approach: liability, limitation, and apportionment of fault tried in the

federal forum and, upon a finding of no limitation, damages tried in the forum of the claimant’s

choosing. See Matter of Diamond B. Indus., LLC, 2022 WL 4608140, at *3 (Vance, J.); Ingram

Barge Co. LLC v. Caillou Island Towing Co. Inc., No. 21-261, 2022 WL 952257, at *4 (E.D. La.

Mar. 30, 2022) (Fallon, J.) (same); Matter of Jack’d Up Charters LLC, 681 F. Supp. 3d 560, 566–

68 (E.D. La. 2023) (Brown, C.J.) (same); Cont’l Ins. Co. v. L&L Marine Transportation Inc., No.

14-2967, 2018 WL 774771, at *4 (E.D. La. Feb. 8, 2018) (Feldman, J.) (same); see also In re Aries

Marine Corp., No. 24-96, 2024 WL 3181446, at *3 (M.D. La. June 26, 2024) (Jackson, J.). This

approach assures a limitation owner protection, limits needless personal damages-related

discovery at the limitation phase, and protects a claimant’s right to a selected forum. More to the

point, it is the approach we favor.

Both Magnolia Fleet and Intracoastal argue the case’s complexity disfavors bifurcation. In

particular, Magnolia Fleet insists the complexity of the case leads to overlapping issues. In addition

to the limitation action and Hill’s personal injury claims, Magnolia Fleet notes Intracoastal’s own

claims for property damage and maintenance and cure reimbursement. See Rec. Doc. 30 at 6.

Although cross-claims exist, they do not overtake the exoneration and limitation inquiries. Further,

the limitations-related claims are not so “inextricably linked” to Hill’s testimony and credibility to

make them unresolvable. See Matter of N&W Marine Towing, LLC, 2021 WL 3206292, at *2

The circumstances in the determinations of sister sections supports this conclusion. In

Continental Insurance Company v. L&L Marine Transportation Inc., Judge Feldman considered

a bifurcation motion related to the allision of one vessel with a bridge during a three-vessel

transport of a barge. Cont’l Ins. Co., 2018 WL 774771, at *1. Two vessel owners instituted

limitation actions, bringing together no fewer than five claims for personal injury and property

damages. Id. Despite the complexity of issues, Judge Feldman determined both limitation and

savings-to-suitors interests would be served by bifurcation of two seamen’s damages claim. Id. at

*4. In fact, the complexity of issues favored bifurcation: “This case presents complicated facts and

issues, and bifurcation will allow the Court and the parties to entirely address one type of issue

before turning to another.” Id. Judge Feldman granted bifurcation but deferred consideration of the

forum the seamen’s damages claims until after the bench trial on liability, limitation, and

apportionment of fault. Id. at *4–5.

Moreover, in a case involving a vessel’s collision with a dredge pipe being towed by

another vessel, Judge Fallon ordered bifurcation of the personal injury claims of a Jones Act

seaman who “was violently knocked around in his bunk as a result of the collision, sustaining

serious injuries to his neck, head, shoulder, and arm.” Ingram Barge Co. LLC, 2022 WL 952257,

at *1. Each vessel involved claimed exoneration or limitation of liability, and each filed cross-

claims against the others. Id. Granting the Jones Act claimant’s bifurcation request, the court

described its initial inquiry: “The limitation proceedings require the Court to determine first,

whether a vessel’s negligence or unseaworthiness caused the incident at issue (and apportion fault,

if necessary), and second, whether the owner of the at-fault vessel had privity or knowledge of the

relevant acts of negligence or unseaworthiness.” Id. at *2. With a factually similar case to Ingram

Barge, this Court finds such reasoning sound. The limited nature of the staged inquiry should not

elongate these proceedings and, instead, will very likely streamline the issues initially under

consideration. The various claims do not preclude bifurcation.

As an additional argument, Intracoastal contends bifurcation presents the threat of an

inconsistent result in federal and state fora. See Rec. Doc. 31 at 4. We disagree. By providing the

allocation of collision fault in the federal proceeding, we ensure no different treatment of Magnolia

Fleet and Intracoastal in a state forum. Further, parties move to such a stage in the litigation only

after exoneration and limitation rejections, possibly preventing the arrival of the damages-related

litigation altogether.

In sum, our trying the issues of liability, limitation, and apportionment of fault in a bench

trial and Hill’s separate trial on personal injuries maintains judicial efficiency and promotes

the rights of all parties. To the extent found as found above, claimant Hill meets the exceptional

bifurcation standard. Fed. R. Civ. P. 42(b).

New Orleans, Louisiana, this 2nd day of August, 2024

________________________________________

SENIOR UNITED STATES DISTRICT JUDGE