Opposition Brief — Beiswenger Enterprises Corp. v. Carletta

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Supren » Court, Uda

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No. 96-1630 | OFFICE ub Tn Cues

In The

Supreme Court of the United States

October Term, 1996

+

BEISWENGER ENTERPRISES CORP.,

Petitioner,

KATHLEEN CARLETTA and ELNORA MYERS,

_ As Personal Representative Of The

Estate Of George Myers,

Respondents.

e

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

&

RESPONDENTS’ BRIEF IN OPPOSITION

¢

James B. Ti.GHMan, Jr., Esa.

Florida Bar No. 207209

STEWART TILGHMAN Fox &

BIANCHI, P.A.

One S.E. Third Avenue, Suite 3000

Miami, FL 33131

(305) 358-6644

Attorney for Respondents

COCKLE LAW BRIEF PRINTING CO, (800) 225-6964

OR CALL COLLECT (402) 342-2831

‘

i

|

QUESTION PRESENTED FOR REVIEW

Whether multiple claimants may pursue their com-

mon law remedies in state court pursuant to the “savings

to suitors” clause of 28 U.S.C. § 1333(1) while affording a

shipowner the protection contemplated by the Limitation

of Liability Act, 46 U.S.C. § 181 et seq., by stipulating to

the priority of their claims and providing the same pro-

tective stipulations required of a single claimant who

wishes to pursue his common law rights?

ii

NAMES OF THE PARTIES

The following individuals claim through Elnora

Myers, as Personal Representative, and their names do

not appear in the caption:

Julian Myers

George Myers, Jr.

Shante Myers

Tiffany Carter

ili

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW ............ i

RP RNNEE SE ORE USOT icc thcesaecibeaevcives ii

I ee aie Sa dnc ew acsaveeuuvoas iii

BE TT PUR ROE oo 5g 55 be cikbe san xeoduceces iv

STATUTES INVOLVED OTHER THAN THOSE SET

ot iy ts Gy ee +. A i ne ee ]

epee aeeees GM Pee CAGE. oo... cece cccaess ]

REASONS FOR DENYING THE WRIT............. 5

I. The Decision Below Does Not Conflict With

This Court’s Decision In Lake Tankers Corp. v.

REN Si ARE aap ag RR ested mane Rae Red eee 5

Il. The Decision Below Does Not Conflict With

Decisions Of Other Courts Of Appeals ...... 10

III. The Decision Below Does Not Conflict With

Other Decisions Of The Eleventh Circuit..... 14

IV. The Decision Below Does Not Undermine Fed-

erat Daaritime Jurisdiction.,............:..... 16

os oes Voy whl ee Swvdie eked 18

iv

TABLE OF AUTHORITIES

Page

Cases

American Dredging Co. v. Lambert, 81 F.3d 127 (11th

| pe Per ree ey sme te Te Mee ot ar 14, 15

Beiswenger Enterprises Corp. v. Carletta, 86 F.3d

eee Be | | renee erie ree 4, 8, 16

ex farts Green, 206 tie G57 CRSese ose ci dicate ©

Gorman v. Cerasia, 2 F.3d 519 (3d Cir. 1993)....6, 8, 10, 11

In re Dammers & Vanderheide & Scheepvaart

Maats Christina B.V., 836 F.2d 750 (2d Cir.

Ce TT TESTE ery Pee rete ere ye a, te My Ae, 80

In re Great Lakes Dredge & Dock Co., 162 F.R.D. 160

Es Se. rere eer See re ope = rear 15

In re McCarthy Bros. Co./Clark Bridge, 83 F.3d 821

Pie BO sk shod vis eowesesewnt onus saaions 6, 15

In re Port Arthur Towing Co., 42 F.3d 312 (5th Cir.),

cert. denied sub nom. Jarreau v. Port Arthur Towing

Lae iis WES eet WO ae OE LEPOES byes kb an beep 10

In re Red Star Barge Line, Inc., 160 F.2d 436 (1947)..... 6

In re Trinidad Corp., 229 F.2d 423 (2d Cir. 1955)....... 6

In re Two “R” Drilling Co., 943 F.2d 576 (5th Cir.

BONES BKC RNT ONS Kee ENURESIS EE AT ERR DUDA EES ON 12

Lake Tankers Corp. v. Henn, 354 U.S. 147 (1957) .. passim

Langnes v. Green, 282 U.S. 531 (1931)......... 2, 6, 8, 15

Magnolia Marine Tansp. Co. v. Laplace Towing Corp.,

SOG F.2m ESTE COGN Cole BORE aes canis eke oi 6, 8, 9, 11

ee

TABLE OF AUTHORITIES — Continued

Page

Odeco Oil & Gas Co. v. Bonnette, 4 F.3d 401 (5th

Cir. 1993), cert. denied, 511 U.S. 1004 (1994),

appeal after remand, 74 F.3d 671, cert. denied,

Sigs MA iu sig BOE ee FO REPO oa as 9, 20, 52; i¢

Pershing Auto Rentals, Inc. v. Gaffney, 279 F.2d 546

2S. | re ert Pree he er peer eee 16

S&E Shipping Corp. v. Chesapeake & Ohio Ry. Co.,

GPS nee Ore COU TIE esse eviews eescvas 6, 13

Tittle v. Aldacosta, 544 F.2d 752 (5th Cir. 1977)....... 15

Universal Towing Co. v. Barrale, 595 F.2d 414 (8th

Sg Se EPO PIER STEEL ETS CR OTe er rere 13, 14

STATUTES AND RULES

SP Ss PE oS a ci hehe koe eee ee passim

Limitation of Liability Act, 46 U.S.C. § 181 et seq. passim

Rule F, Supplemental Rules for Certain Admiralty

URGE: TIO SD sv kn Ss cco Fs bs ca ESS 1

STATUTES INVOLVED OTHER THAN THOSE

SET FORTH IN THE PETITION

28 U.S.C. § 1333(1)

The district courts shall have original jurisdiction,

exclusive 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 enti-

tled.

STATEMENT OF THE CASF

On December 4, 1990, George Myers and his fiancee,

Kathleen Carletta, went parasailing off Clearwater Beach,

Florida. When the wind picked up, they were cut loose

from the vessel. Kathleen Carletta ended up in the Gulf of

Mexico and was injured. George Myers was dragged over

land and killed.

Anticipating its liability for these events, Petitioner

Beiswenger Enterprises Corp. (“Beiswenger”), the owner

of the parasailing vessel, invoked the district court’s

admiralty jurisdiction and petitioned for exoneration and

limitation of its-liability to the value of the vessel pur-

suant to the Limitation of Liability Act, 46 U.S.C. § 181 et

seq., and Rule F of the Supplemental Rules for Certain

Admiralty and Maritime claims. Following standard pro-

cedure under Rule F, Beiswenger posted a bond for what

it believed to be the value of the vessel and pending

freight, and the district court entered an injunction pro-

viding, inter alia, that “the institution and prosecution of

any suits ... of any nature... in any court whatsoever

against the Petitioner . . . be and the same are here-

by ... restrained until the hearing and determination of

this proceeding... . ”

The Respondents, Kathleen Carletta and Elnora

Myers, on behalf of the Estate of George Myers and his

survivors (collectively referred to as the “Claimants”),

filed claims against Beiswenger in the limitation of lia-

bility action. They also, however, brought suit in state

court against other persons and entities responsible for

the incident pursuant to the “savings to suitors” clause of

28 U.S.C. § 1333(1). Both actions proceeded on parallel

courses until the Claimants moved the district court in

late 1994 to lift its injunction and stay the limitation

proceeding so that Beiswenger could be added as a

defendant in the state court action and the claims could

be tried together before a jury.

By late 1994 it had become fairly common for federal

courts to balance the savings to suitors clause and the

Limitation of Liability Act by permitting multiple plain-

tiffs whose claims exceeded the value of the vessel to

pursue their common law remedies if they were willing,

through stipulations, to provide a shipowner with the

protection otherwise afforded by the Act. The procedure

called for making the case the functional equivalent of a

single claimant case through stipulations prioritizing the

various claims, thus eliminating the need for concursus,

and then having the claimants enter into the stipulations

which, under the Court's decision in Langnes v. Green, 282

U.S. 531 (1931), and cases that followed, permit a single

claimant whose claim exceeds the value of the limitation

fund to pursue his or her common law remedies in state

court. This course of action had been sanctioned by each

Circuit Court of Appeals that had considered it, and this

Court had already declined to review one of those deci-

sion on certiorari.

After requiring some changes to correct perceived

deficiencies in the Claimants’ stipulations, the district

court followed the above procedure and granted the

Claimants’ motion to lift the injunction based upon the

their agreement that: Beiswenger had the exclusive right

to litigate the limitation of liability issue and have the

value of its vessel determined in federal court; that any

res judicata effect a state court judgment might have on

these issues was waived; that no action would be taken to

enforce any state court judgment against anyone that

might expose Beiswenger to liability in excess of the

value of its vessel prior to a determination of its limita-

tion rights in federal court; and that, if Beiswenger was

found to be entitled to limit its liability, the limitation

fund would go first to discharge any fees or costs

Beiswenger might owe to third parties, second to satisfy

the claim of the Personal Representative of George

Myers’ Estate, and last to satisfy the claim of Kathleen

Carletta. (Appendix “A” to Petition, pp. 8a-10a).

Beiswenger appealed the district court’s decision to

lift the injunction to the Eleventh Circuit, which sanc-

tioned the use of the procedure followed by the district

court as being in keeping with both the teachings of this

Court and the decisions of other Circuit Courts of

Appeals:

Although no prior case in this Circuit has

employed the foregoing stipulation method to

transform a multiple-claims-inadequate-fund

case into the functional equivalent of a single

claim case, we follow the numerous decisions

cited above in doing so today. As an initial

matter, we note that the Supreme court has

approved the use of stipulations in other con-

texts to accomplish similar purposes.

(86 F.3d at 1039, Petitioner’s Appendix, pp. 17a).!

The reasons Beiswenger gives for granting a writ of

certiorari are all based upon one of two premises. The

first is that, by failing to require the Claimants to concede

Beiswenger’s right to limit its liability through stipula-

tions reducing the value of their claims to the amount of

the limitation fund, the decision of the Eleventh Circuit

conflicts with the decision of this Court in Lake Tankers

Corp. v. Henn, 354 U.S. 147 (1957), and the decisions of

five other Circuit Courts of Appeals. As set forth below,

however, such a requirement neither exists nor makes

sense. Rather, the approach taken by the Eleventh Circuit

is completely consistent with the decisions of both this

Court and the other Circuit Courts of Appeals.

The second premise is that, by failing to make the

Claimants waive any res judicata effect a state court

judgment might have on liability as well as the limitation

issues, as Opposed to just on the limitation issues, the

1 The Eleventh Circuit did, however, vacate the district

court’s order lifting the injunction until such time as the

Claimants amended their stipulations to provide Beiswenger

with certain additional protection unrelated to any issue raised

in the Petition For Writ of Certiorari. (86 F.3d at 1044-1045,

Petitioners’ Appendix, pp. 28a-30a). On remand, the Claimants

made these amendments so that the stay could again be lifted.

The state court trial is set for August 18, 1997.

decision of the Eleventh Circuit conflicts with «er deci-

sions in that Circuit and undermines the maritime juris-

diction of federal courts in actions brought under the

Limitation of Liability Act. Again, however, neither the

requirement nor the perceived conflict exists. By leaving

the issue of liability to the state court, and the limitation

issues to the district court, the Eleventh Circuit balanced

the dictates of the savings to suitors clause and the Lim-

itation of Liability Act the same way numerous other

federal courts have done.

REASONS FOR DENYING THE WRIT

I. The Decision Below Does Not Conflict With This

Court’s Decision In Lake Tankers Corp. v. Henn

When a shipowner asserts the right to limit its lia-

bility under the Limitation of Liability Act, federal dis-

trict courts have exclusive jurisdiction to determine the

limitation issues, Ex Parte Green, 286 U.S. 437, 439-440

(1932), and claimants are not entitled to a jury trial. This

exclusive jurisdiction can deprive claimants of the right

to pursue their common law remedies before a jury -

rights which are preserved for admiralty plaintiffs in

general under the “savings to suitors” clause of 28 U.S.C.

§ 1333(1). The result, as noted by numerous courts and as

described by the Second Circuit in In re Dammers &

Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d

750, 754 (2d Cir. 1988), is

a recurring and inherent conflict in admiralty

law: the apparently exclusive jurisdiction vested

in admiralty courts by the Limitation of Liability

Act versus the presumption in favor of jury

trials and common law remedies embodied in

the ‘savings to suitors’ clause of 28 U.S.C. § 1333

(1982).

Accord, e.g., In re McCarthy Bros. Co./Clark Bridge, 83 F.3d

821, 826 (7th Cir. 1996); Gorman v. Cerasia, 2 F.3d 519, 524

(3d Cir. 1993); Magnolia Marine Transp. Co. v. Laplace Tow-

ing Corp., 964 F.2d 1571 (5th Cir. 1992).

The Court has dealt with the tension between these

statutes before, and its decisions form the basis for sev-

eral exceptions to exclusive federal jurisdiction which

ameliorate the conflict. From Langnes and Ex Parte Green

come what is known as the “single claimant” exception,

whereby district courts must abstain from exercising

jurisdiction and lift their injunctions if there is only one

claim, and if the claimant is willing to concede the ship-

owner's right to litigate the limitation issues in federal

court free of any res judicata effect a state court judgment

might have. See, e.g., Gorman v. Cerasia, 2 F.3d at 524; S&E

Shipping Corp. v. Chesapeake & Ohio Ry. Co., 678 F.2d 636,

643-644 (6th Cir. 1982); In re Red Star Barge Line, Inc., 160

F.2d 436 (1947).

Similarly, the Court’s decision in Lake Tankers, solidi-

fied an “adequate fund” exception whereby district

courts must lift their injunctions even when there are

multiple claims if the value of the vessel and its cargo

exceeds the aggregate total of the claims against the

shipowner. E.g., Gorman, 2 F.3d at 524; S&E Shipping Corp.

v. Chesapeake of Ohio Ry Co., 678 F.2d at 643-644; In re

Trinidad Corp., 229 F.2d 423, 428 (2d Cir. 1955).

The foundation for both of these exceptions is the

premise that, if the shipowner does not need or can

otherwise be afforded the protection of the Act, claimants

should be allowed to pursue their common law remedies

and their right to a jury trial. As the Court explained in

Lake Tankers:

The state proceeding could have no possible

effect on the petitioner’s claim for limited lia-

bility in the admiralty court and the provisions

of the Act, therefore, do not control. It follows

that there can be no reason why a shipowner,

under such conditions, should be treated any

more favorably than an airline, bus, or railroad

company. None of them can force a damage

claimant to trial without a jury. They, too, must

suffer a multiplicity of suits. Likewise, the ship-

owner, so long as his claim of limited liability is

not jeopardized, is subject to all common-law

remedies available against other parties in dam-

age actions.

354 U.S. at 153 (citations omitted).

The instant case does not fit within either of these

longstanding exceptions because it involves multiple

claimants and a limitation fund that is inadequate. In

recent years, however, the federal courts have recognized

that, through the expanded use of stipulations, a ship-

owner can be afforded the protection of the Act so that

claimants can proceed in state court even in multiple

claimant — inadequate fund cases. This has been accom-

plished by expanding the stipulations historically

required in a single claimant case to reflect the existence

of multiple claimants, and by adding a requirement that

all of the claimants stipulate to the priority of their

claims. The modified single claimant stipulations give the

shipowner the protection the Court found sufficient in

Langnes, and the priority stipulations eliminate the need

for a concursus. As the Third Circuit explained this use of

priority stipulations:

[SJeveral courts of appeal have permitted the

use of priority stipulations to convert what

would otherwise constitute a ‘multiple-claims-

inadequate-fund’ case into the equivalent of a

single claim case, thereby eliminating the need

for a concursus. As the court in Magnolia Marine

Transport explained, ‘[m]ultiple claimants may

reduce their claims to the equivalent of a single

claim by agreeing and stipulating as to the pri-

ority in which the claimants will receive satis-

faction against the shipowner from the limited

fund.’

Gorman v. Cerasia, 2 F.3d at 525 (citations omitted) (quot-

ing Magnolia Marine Transp. Co. v. Laplace Towing Corp.,

964 F.2d at 1576. Accord, In re Dammers, 836 F.2d at 756.

None of the cases require the stipulation Beiswenger

seeks — that the aggregate of the claims will not exceed

the limitation fund. Rather, they sanction the same pro-

cedure followed by the Eleventh Circuit in this case. (86

F.3d at 1038-1039, Petitioner’s Appendix, pp. 16a-17a).

To promote the appearance of conflict between the

Court’s decision in Lake Tankers and the Eleventh Circuit's

decision in this case, Beiswenger misconstrues the narrow

holding in Lake Tankers and ignores the broader one. Lake

Tankers was a multiple claimant case in which the claim-

ants had agreed, for whatever reason, to reduce their

claims so that the aggregate was less than the limitation

fund. The issue before the Court was whether, given this

circumstance, the claimants could proceed in state court.

The Court held that they could. However, contrary to

Beiswenger’s suggestion, the Court in no way held that

such a stipulation was the only method by which multi-

ple claimants could afford a shipowner sufficient protec-

tion to be allowed to proceed in state court. Instead, the

Court pointed the way to future exceptions with a

broader holding - that a shipowner, “so long as his claim

of limited liability is not jeopardized, ‘is subject to all

common-law remedies available against other parties in

damage actions.” 354 U.S. at 153.

The Circuits which, along with the Eleventh Circuit,

have approved the use of priority stipulations in multiple

claimant - inadequate fund cases do not share

Beiswenger’s view that the procedure conflicts with Lake

Tankers. Rather, they are of the view, and correctly so, that

the procedure flows directly from the teachings of Lake

Tankers. E.g., Odeco Oil & Gas Co. v. Bonnette, 4 F.3d 401,

404-405 (Sth Cir. 1993), cert. denied, 511 U.S. 1004 (1994),

appeal after remand, 74 F.3d 671, cert. denied, _ USS. ne

117 S.Ct. 79 (1996) (Sanctioning the procedure because

“... the Supreme Court explained in [Lake Tankers] that

liability may and should be limited consistent with pre-

serving the claimants’ right to proceed in the fora of their

choice.”); Magnolia Marine, 964 F.2d at 1576 (Approving

multiple claimant stipulations because, under Lake

Tankers, “the provisions of the Act... do not control”

when “the state court proceeding could have no possible

effect on the [shipowner’s] claim for limited liability. . . .

”); In re Dammers, 836 F.2d at 759 (2d Cir. 1988) (Approv-

ing multiple claimant stipulations because the Court in

Lake Tankers “explained” that “the shipowner, so long as

10

his claim of limited liability is not jeopardized, is subject

to all common-law remedies available against other par-

ices ee

The Court also apparently agrees that there is no

conflict, having twice declined to review cases which

approved of the use of priority stipulations in multiple

claimant — inadequate funds cases without requiring a

concession that the claims would not exceed the limita-

tion fund. Odeco Oil & Gas Co. v. Bonnette, 4 F.3d 401, cert.

denied, 511 U.S. 1004; in re Port Arthur Towing Co. v. John

W. Towing, Inc., 42 F.3d 312 (Sth Cir.), cert. denied sub nom.

Jarreau v. Port Arthur Towing Co., __ 3S 346 SA. 87

(1995).

In short, in deciding this case the Eleventh Circuit

simply followed the Court's lead in Lake Tankers.

Il. The Decision Below Does Not Conflict With Deci-

sions Of Other Courts Of Appeals

In a somewhat confusing discourse, Beiswenger also

suggests that the Eleventh Circuit’s decision in this case

conflicts with decisions in five other Circuits because the

Eleventh Circuit did not require the Claimants to concede

Beiswenger’s ultimate right to limit its liability by stipu-

lating to the adequacy of furd. However, none of these

cases require such a stipulation, and most affirmatively

show that it is unnecessary.

In Gorman, the Third Circuit acknowledged the via-

bility of the priority stipulation approach in a multiple

claimant - inadequate fund case but reversed the district

court’s decision to lift its limitation injunction because the

PRR eis sede Hk as ait

11

claimants’ stipulations were not adequate to protect the

shipowner. The perceived inadequacies, however, had

nothing to do with the claimants stipulating to a reduction

in the amount of their claims or otherwise conceding that

the shipowner was entitled to limit his liability. To the

contrary, the stipulation on this point, which the Third

Circuit found acceptable, was like the one in this case:

In the event that a judgment is recovered in any

staie court action against Gorman that exceeds

the fund representing the value of the plaintiff's

vessel, neither party will seek to enforce the

judgment against Gorman pending adjudication

of the Limitation of Liability action in this

Cowt ...

2 F.3d at 522.

In Magnolia Marine, the Fifth Circuit was concerned

with issues not involved in this case: whether an insur-

ance company has standing to assert a shipowners’ lim-

itation rights, and whether a district court can entertain a

claim for declaratory relief to interpret the shipowner’s

policy. The claimants in Magnolia Marine, like those in

Lake Tankers, had agreed to limit their claims to the value

of the fund, so there was no issue concerning the ade-

quacy of the stipulations. 964 F.2d at 1576 n.1. The Fifth

Circuit did, however, acknowledge the priority stipula-

tion approach used by the Eleventh Circuit in this case:

Multiple claimants may reduce their claims to

the equivalent of a single claim by agreeing and

stipulating as to the priority in which the claim-

ants will receive satisfaction against the ship-

owner from the limited fund.

964 F.2d at 1576 (citation omitted) (emphasis added).

12

Beiswenger suggests that the Fifth Circuit’s phrase

“from the limited fund” refers to a concession that the

shipowner can limit its liability. The reference, however,

is simply to the situation that would exist if and when the

shipowner proved its right to limit its liability. This is

made clear both by a moment’s thought and by other

decisions in the Fifth Circuit. Lake Tankers permits multi-

ple claimants to proceed in state court if they agree that

the aggregate of the claims will not exceed the limitation

fund. No priority stipulations are needed if the claims are

less than the fund, and none are required by Lake Tankers.

Priority stipulations only become important if the total of

the claims exceeds the fund, i.e. when there is no agree-

ment to reduce the value of the claims, because at that

point they act as a substitute for a concursus. The Fifth

Circuit’s understanding of this dynamic is demonstrated

by its prior and subsequent approval of stipulations in

multiple claimant — inadequate fund cases which did not

include a stipulation that the claims would be less than

the fund. See In re Two “R” Drilling Co., 943 F.2d 576 (5th

Cir. 1991); Odeco, 4 F.3d 401.

In In re Dammers, the Second Circuit affirmed the use

of priority stipulations in a multiple claimant - inade-

quate fund case without requiring the claimants to reduce

the aggregate of their claims to the value of the fund. In

fact, the Circuit Court expressly rejected the notion that

multiple claimants must concede a shipowner’s right to

limit its liability as part of the price of proceeding in state

court:

As we have held, a claimant need not concede a

shipowner’s ultimate right to have its liability

limited, only the shipowner’s right to have that

13

matter adjudicated exclusively in the admiralty

court.

836 F.2d at 758 (citation omitted).

The Eighth Circuit was perhaps the first Court of

Appeals to approve the use of priority stipulations to

create the functional equivalent of a single claimant case.

In Universal Towing Co. v. Barrale, 595 F.2d 414 (8th Cir.

1979), a multiple claimant — inadequate fund case existed

because the widow of a deceased seaman sought

$2,000,000 when the limitation fund was $85,000, and

because there was a third party indemnity claim against

the shipowner which included a claim for fees and costs.

The claimant did not agree to reduce her claim, as

Be 'swenger argues is required, but she did agree to per-

mit the claim for fees and costs to have first priority

against the limitation fund — just as the Claimants did in

this case. She then argued “that by filing her consent to

[the third party] claim for attorneys’ fees and costs, she

. . reestablished a one-claim situation.” 595 F.2d at 410.

The Eighth Circuit agreed and reversed the district court

for refusing to dissolve the limitation injunction — a deci-

sion wholly consistent with the Eleventh Circuit's deci-

sion in this case. The portion of the Universal Towing

decision Beiswenger quotes in its Petition, which

describes the two standard exceptions to admiralty juris-

diction in limitation cases, was simply part of the Eighth

Circuit's historical review. Its holding was that the prior-

ity stipulation approach is another viable exception.

Lastly, Beiswenger purports to find conflict between

the Eleventh Circuit’s decision in this case and the Sixth

Circuit’s decision in S&E Shipping. Again, no conflict

14

exists. The Sixth Circuit had before it a multiple claimant

~ inadequate fund case in which the claimants tried to

have the district court’s injunction lifted through the use

of priority stipulations. The Sixth Circuit noted that the

Eighth Circuit had permitted this in Universal Towing, but

did not reach the issue because the stipulations were filed

late and were “not properly brought before this court... .

” 678 F.2d at 641. As with its analysis of Universal Towing,

the portion of the opinion Beiswenger quotes in its Peti-

tion is a recap of prior history, not the Sixth Circuit's

hclding or view on the use of priority stipulations in

multiple claimant - inadequate fund cases.

Contrary to Beiswenger’s position, then, reality is

that every Circuit Court of Appeals that has decided the

question has sanctioned the use of priority stipulations to

reduce a multiple claimant - inadequate fund case to the

functional equivalent of a single claimant — inadequate

fund case. Once that is accomplished, the claimants can

pursue their common law remedies in state court by

providing the protective stipulations long recognized in

single claimant cases. Such harmony among the Circuits

dictates denying, not granting the writ Beiswenger seeks.

III. The Decision Below Does Not Conflict With Other

Decisions Of The Eleventh Circuit

Apart from the questionable significance of intra-

circuit conflict, Beiswenger’s claim that review is war-

ranted because the Eleventh Circuit’s decision in this case

conflicts with its decisions in American Dredging Co. v.

Lambert, 81 F.3d 127 (11th Cir. 1996), and the old Fifth

15

Circuit’s decision in Tittle v. Aldacosta, 544 F.2d 752 (5th

Cir. 1977), is frivolous.

Beiswenger’s complaint is that the Claimants were

only required to waive the res judicata effect of a state

court judgment on the issue of Beiswenger’s right to limit

its liability, thus allowing any jury verdict and conse-

quent state court judgment on the question of liability to

stand. Not surprisingly, Beiswenger would like the right

to retry that issue in federal court as a safety net. No case

or statute, however, gives Beiswenger that right.

Neither the Eleventh Circuit’s decision in American

Dredging nor the old Fifth Circuit’s decision in Tittle even

address the question of whether a state court's finding of

liability is or should be binding when a case returns to

federal court for trial on the limitation issues. Those cases

involved a trial of both liability and the limitation issues,

i.e. knowledge and privity, in federal court. The pro-

cedure they describe - first determining what acts of

negligence caused the injury and then whether the ship-

owner was in privity with or had knowledge of those acts

- is certainly appropriate in that context. The cases do not

hold, however, that the same court must determine both

issues, much less that a state court cannot determine one

while a federal court determines the other. And that, of

course, is precisely the way it is supposed to be done to

satisfy the conflicting dictates of the savings to suitors

clause and the Limitation of Liability Act. See, e.g., Lan-

gnes, 282 U.S. at 543-544; In re McCarthy Bros. Co./Clark

Bridge, 83 F.3d at 828; In re Great Lakes Dredge & Dock Co.,

162 F.R.D. 160, 164-165 (M.D. Fla. 1995).

16

IV. The Decision Below Does Not Undermine Federal

Maritime Jurisdiction

Beiswenger’s final lament that things are not as they

should be in Mobile, Tampa and Savannah is based on

two misconceptions. The first is that things are different

elsewhere. As pointed out above, the procedure followed

by the Eleventh Circuit in this case is followed in every

Circuit that has considered whether priority stipulations

can be used to afford claimants their rights under the

savings to suitors clause in multiple claimant - inade-

quate fund cases.

Beiswenger cites Pershing Auto Rentals, Inc. v. Gaffney,

279 F.2d 546 (5th Cir. 1960), in support of its argument

that things are different in the Fifth Circuit, but it mis-

reads the case. The Pershing Court was confronted with a

multiple claimant situation in which some, but not all of

the claimants were willing to enter into protective stipu-

lations. Under these circumstances, the claimants were

properly kept in federal court. However, both the Elev-

enth Circuit in this case, 86 F.3d at 1039-1041, and the

Fifth Circuit itself have correctly distinguished this situa-

tion from one in which all of the claimants are willing to

provide the necessary stipulations:

If the claimants’ stipulation here covers all pos-

sible claimants and assures [the vessel owner]

would never have to pay more than limitation

fund if the admiralty court so determines, this

case is instantly distinguishable from Pershing

Auto Rentals v. Gaffney, 279 F.2d 546 (5th Cir.

1960). In that case, written shortly after Lake

Tankers, only two out of four claimants offered

to execute protective stipulations. The sum of

17

the multiple ciaims still far exceeded the limita-

tion fund.

Odeco, 4 F.3d at 405 n.7. (citations omitted).

Beiswenger’s second misconception is that the Lim-

itation of Liability Act gives it the right to have its lia-

bility determined in a non-jury trial in federal court. It is

because of this belief that Beiswenger rails against the

procedure approved by the Eleventh Circuit:

In every case, it would be possible for multiple

claimants to make stipulations which would not

be at all harmful to themselves but would meet

this Eleventh Circuit rule avoiding a concursus

and thereby securing jury trials of liability and

damage issues [in state court].

(Petition for Writ of Certiorari, p. 18). The Act, how-

ever, is only designed to limit a shipowner’s liability if it

can prove that it had no privity or knowledge. It is the

savings to suitors clause which speaks to the question of

a claimant’s remedies, and it gives claimants a right both

to common law damages and a jury trial. In short,

Beiswenger seeks to enforce rights which this Court, in a

holding worth repeating, has already said that ship-

owners do not have:

[T]here can be no reason why a shipowner

. . should be treated any more favorably than

an airline, bus or railroad company. None of

them can force a damage claimant to trial with-

out a jury... . Likewise, the shipownerx, so long

as his claim of limited liability is not jeopar-

dized, is subject to all common-law remedies

18

available against other parties in damage

actions.

Lake Tankers, 354 U.S. at 153.

+

CONCLUSION

For the above reasons, it is respectfully submitted

that Beiswenger’s Petition for Writ of Certiorari should

be denied.

James B. TILGHMAN, Jr., Esa.

Florida Bar No. 207209

STEWART TILGHMAN Fox &

BiANcHI, P.A.

One S.E. Third Avenue, Suite 3000

Miami, FL 33131

(305) 358-6644

Attorney for Respondents