Petition for Writ of Certiorari — Denbury Management, Inc. v. Goulas
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(i) supreme Coe. US.
02 10 8 JUL 12 2002
No. OFFICE OF THE CLERK
In the
Supreme Court of the Anited States
DENBURY MANAGEMENT, INC.
Petitioner
VERSUS
ARLENE GOULAS; RUSSELL J. GOULAS, JR.,
Individually and on behalf of Blake Goulas
Respondents
ON PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
DENBURY MANAGEMENT, INC.’S
PETITION FOR WRIT OF CERTIORARI
PAUL C. MINICLIER
DAVID A. BINEGAR
LAW OFFICE OF PAUL C. MINICL” 8
1305 Dublin Street
New Orleans, Louisiana 70118
Telephone: (504) 864-1276
Attorneys for Petitioner,
Denbury Management, Inc.
i
QUESTION PRESENTED FOR REVIEW
Whether a contested affirmative defense filed in state
court pursuant to the Limitation of Shipowner’s Liability
Act, 46 U.S.C. §183, can be removed to federal court?
More specifically:
Did the lower courts err in holding that the six-
month time limit of 46 U.S.C. §185 applies to an
affirmative defense of limitation of liability filed in
state court pursuant to 46 U.S.C. §183?
Did the lower courts err in holding that failure to file
a Petition for Limitation of Liability under 46 U.S.C.
§185 precluded the removal of a contested defense of
limitation of liability filed in state court pursuant to
46 U.S.C. §183?
Did the Court of Appeals err in holding that the
district court’s order of remand did not contain
separable and reviewable collateral orders?
ii
LISTING OF ALL PARTIES TO THIS PROCEEDING
&
2.
Denbury Management, Inc., Petitioner
ARLENE GOULAS; RUSSELL J. GOULAS, JR.,
Individually and on behalf of Blake Goulas,
Respondents
LAW OFFICE OF PAUL C. MINICLIER
Paul C. Miniclier, Esq.
David A. Binegar, Esq.
Counsel for Petitioner
LAW OFFICE OF THOMAS SHELTON
Thomas Robert Shelton, Esq.
Counsel for Arlene Goulas, Russell J. Goulas, Jr.,
Individually and on behalf of Blake Goulas,
Respondents
BLR CONSTRUCTION - Defendant in state court
action (not a party to this appeal)
VOORHIES & LABBE
John N. Chappuis, Esq.
Counsel for BLR Construction
C.F. BEAN - Defendant in state court action (not a
party to this appeal)
GALLOWAY, JOHNSON, TOMPKINS
& BURR
Jason Waguespack, Esq.
Counsel for C.F. Bean
Gulf Inland - Defendant in state court action (not a
party to this appeal)
10.
ili
SIMON, PERAGINE, SMITH &
REDFEARN, L.L.P.
Daniel J. Caruso, Esq.
Counsel for Gulf Inland
iv
RULE 29.6 STATEMENT
At the time of plaintiff's alleged accident, Denbury
Management, Inc. was a wholly-owned subsidiary of
Denbury Resources, Inc. Subsequently, Denbury
Management, Inc. was subsumed by Denbury Resources,
Inc. Denbury Resources, Inc. is a publicly traded
corporation.
Vv
TABLE OF CONTENTS
Questions Presented for Review .............0.00eeees i
Listing of All Parties to this Proceeding ............... ii
ETT ere ee iv
Teer CE. co ec eaei ee Vv
Teen GE I 95 5 6ci.i VN RSet rec eee viii
Petition for Writ of Certiorari to the United States Court
of Appeals for Get PII CUCU ous os sc cissce nan teses. 1
Citations to Opinions Below .................eeeeeee- 1
SI 6 5s eT Ea eee 2
Constitutional and Statutory Provisions Involved ...... 2
I. Sintomat OF ee CAS asics ocecviscsarecesevs 2
A. FD ii hae 2es be aE wie ices Hees 2
B FORCE OOP ii ca cacvetveseeees 2
Il. Summary of the Argument................005 4
Il LET IP LEE CLIPS ROLLE ETT Eee 6
A Pe PUI hh ON ca cescces rca hnvass 6
B. The Limitation of Shipowners’ Liability
Act Provides Denbury with the Right
gt Bere eee 7
vi
The Plaintiffs’ Decision to Contest
Limitation of ‘Liability Conferred
Jurisdiction on the Lower Court ......... 8
The District Court Erred in Determining
that a Six-Month Time Limitation
Attached to a Limitation of Liability
Defense Removed from State Court ..... 11
The District Court Further Erred in
Holding that Failure to File a
Complaint for Limitation of Liability
Precluded Invocation of Federal
SOSRDUR «. s0.0sp'n 2.06 hale Va 14
The Court of Appeals Erred in Finding
that the District Court's Time Bar
Determinations Were Not Separable
and Reviewable Orders ............... 17
a The Orders Below ............. 17
2. Thee Errore BOIOW 3... ccc ccccess 18
3. The Law On Separability and
FROVIIUNIIIIIN bu vies i ecsentanes 19
4. The District Court's Time Bar
Determinations Were Separable
from the Order of Remand ...... 21
5. The District Court’s Time Bar
Determinations are Reviewable
Under the Collateral Order
Exception to 28 U.S.C. §1291 .... 22
Vii .
a. Conclusive Determination
of the Disputed Question . 22
b. Collateral to the Merits... 23
c Unreviewable on Appeal . 23
d. Importance of the
Disputed Question ...... 24
The Erroneous Decisions Below
Significantly Impact The Delicate
Balance Between the Savings to Suitors
Clause and Federal Admiralty Law ..... 25
Compelling the Vessel Owner to File a
Complaint of Limitation of Liability
Unnecessarily Strains and Consumes
Limited Judicial Resources ............ 26
The Decisions Below Will Have a
Significant Economic Impact on the
Marine Industry and Circumvent the
Express Intent Underlying the
Limitation of Liability Act ............ 27
aOR T F066 66 bak5 45 Sab ch ep eens deans 29
;
i
'
Viii
TABLE OF AUTHORITIES
Aliota v. Graham, 984 F.2d 1350 (3rd Cir);
cert. denied, 510 U.S. 817, 126 L. Ed. 2d 37,
TBAS. CO BIG) oc ccccccccsccvesccccccevcccccesce 20
li Vv.
117 B.Sd SSS (Giia Cis. 1997) 2.0 cccccccccccvcccccccess 22
Black Diam i Vv Ww.
& Sons, Ltd., 336 U.S. 386, 93 L. Ed. 754,
GDS. CR, G22 (IDE) 5 nn cccsescccccceccccsvccses 23, 24, 28
Catlin v. United States, 324 U.S. 229,
89 L. Ed. 911, 65S. Ct. 631 (1945) 2.2... eee eee ee eee 20
Chapman v. Powermatic, Inc., 969 F.2d 160
(5th Cir. 1992); cert. denied, 507 U.S. 967,
122 L. Ed. 2d 774, 113 S. Ct. 1402 (1993) ..............- 12
incinnati Electri Vv.
533 F.2d 1001 (6th Cir.); cert. denied, 429 U.S. 858,
50 L.Ed.2d 136, 97 S. Ct. 158 (1976) ........ 2c eee eee eee 11
Cohen v. Beneficial Industrial Loan Corp.,
337 U.S. 541, 93 L. Ed. 1528, 69S. Ct. 1221 (1949) ....... 20
aT
258 F.2d 757 (2nd Cir. 1958); cert. denied, 358 U.S.
933, 3 L. Ed. 2d 305, 79 S. Ct. 316 (1959) ............ 11-13"
Doleac ex rel. Doleac v. Michalson,
264 F.3d 470 (5th Cir. 2001) ...............005- 18, 20, 22
Ex Parte Green,
286 US. 437, 76 L. Ed. 1212, 52S. Ct. 602 (1932) ... 8-10, 15
ix
Hartford Accident & Indemnity Co. v.
Southern Pacific Co., 273 U.S. 207, 215,
oe Be ee Re err rrr
In the Matter of the Complaint of Vatican
Shrimp Co., Inc., 820 F.2d 674 (5th Cir.);
cert. denied, 484 U.S. 953, 98 L. Ed. 2d 371,
Oe a Ane pies Cane
Katsaris v. United States
ey oe ee ere ere rere err
Kimbro v. Velten |
30 F.3d 1501 (D.C. Cir. 1994), cert. denied,
515 U.S. 1145, 132 L. Ed. 2d 833,
Ry ie Ae COTE 6 ko 8 Son oe keene Nab asrrceesek snes
Langnes v. Green,
282 U.S. 531, 75 L. Ed. 520,
of So ty 2: | errr er ee eer er 7-10, 13, 15-16, 22-25
Lauro Lines S.R.L. v. Chasser
490 U.S. 495, 104 L. Ed. 2d 548,
Pe es MIs aa 95a boas vad eerie iceres
Lewis v. Lewis & Clark Marine, Inc.
531.U.S. 438, 148 L.Ed.2d 931,
BEE ee PPE Rods ence ksisepies 7-8, 16, 25-26
Moses H. Cone Memorial Hospital v.
Mercury Construction Corp., 460 US. 1,
yop ee oS a A ds, ..)
Murray v. New York Central Railroad Co.,
287 F.2d 152 (2nd Cir.); cert. denied, 366 U.S. 945,
6 L.Ed.2d 856, 81 S. Ct. 1674 (1961) .............6..06.
x
Pelleport Investors, Inc. v. Budco Quality Theatres, Inc.
Fe ee DOU 00 54 040660 s.05-0068 p00 eds 20
Quackenbush v. Allstate Ins. Co.,
517 US. 706, 135 L.Ed.2d 1,
See el BP 6 $e 5h cb pec een sweeps eeneess 20, 22-23
Sana v. Hawaiian Cruises, Ltd.,
ee PE I NSE, BUOD oc cccecvecsecsceceevenss 12
Signal Oil & Gas Co. v. The Barge W-701,
654 F.2d 1164 (5th Cir. 1981); cert. denied
455 US. 944, 71 L.Ed.2d 656, 102S. Ct. 1440 ........... 12
The Aloha, 56 F.2d 647 (W.D. Wash. 1932) ............. 9
The Chickie, 141 F.2d 80 (3rd Cir. 1944) ........... 11,15
Thermtron Products, Inc. v. Hermansdorfer,
423 US. 336, 46 L.Ed.2d 542,
RN is i vew ison cieassenss i ca
Ti v. CSX Tra rtation, Inc.
929 F.2d 1023 (5th Cir.); cert. denied
502 U.S. 859, 116 L.Ed.2d 139,
FF ee eT ee 18
W Vv. it Fidelity & anty Co.
293 US. 140, 79 L.Ed. 244, 55S. Ct. 6 (1934) ..... 19-22, 25
CONSTITUTION, STATUTES AND RULES
United States Constitution Art. II], §2 ................. 2
aa IE on 5 os sk etin's coins 2
x1
I OO ii ics ccs Fab ks oh bans 18, 20, 22, 24-25
ak aE eee ee aE ee ean Eyam 10
I oii vaiecvviesaverncits 2,12, 25
Lo i ne nee ee trio e eee 2,14
I se ins kis vik ee 2,10
icy ceeces rae 2, 18-19, 24
I IS ios vv denonxccecdeyscyskevesss 000) 2
46 U.S.C. §§181-196 .............. 2-7, 11-18, 21, 23, 25-29
ego ean is 3
An Assessment of the U.S. Marine Transportation
System - A Report to Congress, (1999) ................ 28
1
IN THE
SUPREME COURT OF THE UNITED STATES”
OCTOBER TERM, 2002
DENBURY MANAGEMENT, INC.
Petitioner
VERSUS
ARLENE GOULAS; RUSSELL J. GOULAS, JR.,
Individually and on behalf of Blake Goulas
Respondents
ON PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Denbury Management, Inc. respectfully petitions for
a Writ of Certiorari to the United States Court of Appeals for
the Fifth Circuit to review the Judgment of the United States
District Court for the Western District of Louisiana in this
case.
CITATIONS TO OPINIONS BELOW
The Memorandum Ruling of the United States
District Court for the Western District of Louisiana dated
July 17, 2001, granting Plaintiff's Motion to Remand was
unreported, but, is reproduced in Appendix B to Petitioners’
Petition for Writ of Certiorari.
The Fifth Circuit Court of Appeals entered Judgment
on April 15, 2002. This decision also unreported, but is
reproduced as Appendix C to Petitioners’ Petition for Writ
of Certiorari.
2
JURISDICTION
Jurisdiction of this Court is involved under 28 U.S.C.
§1254(1) and 28 U.S.C. §2101(c)."
CONSTITUTIONAL AND STATUTORY PROVISIONS
INVOLVED
The United States Constitution Art. ITI §2; 28 U.S.C.
§§1333, 1441, 1446, 1447; 46 U.S.C. §§181 et seq.
I. STATEMENT OF THE CASE
A. Facts. !
Russell J. Goulas, Jr. was employed by Denbury
Management, Inc. as a pumper-gauger in the Lake Chicot
Field in St. Martin Parish, Louisiana. Mr. Goulas read
gauges on oil and gas wells, filed reports of these readings
and perform various tasks at Denbury’s land-based Lake
Chicot Production Facility.
Mr. Goulas used the M/V CRAWFISH, a 28-foot
aluminum boat, to commute to the Denbury facility. Mr.
Goulas also used the M/ V CRAWFISH to travel to and from
the well platforms. Most of Mr. Goulas’ work, however, was
at the Denbury land-based production facility.
On April 25, 1998, Mr. Goulas was operating a tractor
at Denbury’s production facility when he allegedly injured
his back while pulling on a piece of pipe.
B. Proceedings Below.
On April 23, 1999, plaintiffs (Mr. Goulas, his wife,
and minor child) filed suit against Denbury, C.F. Bean Corp.
and Gulf Inland Contractors, Inc. pursuant to the Jones Act,
'28 U.S.C. §1441 is attached hereto as Appendix A-3.1-
A-3.2; 28 U.S.C. §1446 is attached hereto as Appendix A-4.1-
A-4.3; 28 U.S.C. §1447 is attached hereto as Appendix A5.1; and
46 U.S.C. §181 et.seq. is attached hereto as Appendix A-6.1-A-
6.9.
3
46 U.S.C. §688, and the general maritime laws of the United
States in the 16th Judicial District Court, Parish of St. Martin,
Louisiana. In their complaint, plaintiffs alleged that the
unseaworthiness of the M/V CRAWFISH caused Mr.
Goulas’ accident and injuries, and that his employer,
Denbury, and the other defendants were negligent.
On May 7, 1999, Denbury filed an Exception of No
Right of Action due to a lack of seaman status which was
granted by the trial court on June 2, 1999 without a hearing.
Goulas appealed this order and, on December 6, 2000, the
Louisiana Third Circuit Court of Appeals reversed the trial
court’s order granting Denbury’s Exception of No Right of
Action and ordered a hearing be held.
On March 16, 2001, Denbury timely filed Exceptions,
Answers and Defenses which asserted as an affirmative
defense its right to seek exoneration from or limitation of
liability pursuant to 46 U.S.C. §183. On March. 16, 2001,
Denbury also propounded to plaintiffs Requests for
Admissions concerning its right to exoneration from or
limitation of liability. On March 31, 2001, plaintiffs
responded to the Requests for Admissions and contested
Denbury’s right to exoneration from or limitation of liability.
On April 19, 2001, Denbury timely filed its removal
petition in United States District Court for the Western
District of Louisiana. Once plaintiffs contested Denbury’s
limitation defense, exclusive jurisdiction was conferred on
the district court and the case became removable pursuant to
46 U.S.C. §§181, et seq. On May 17, 2001, plaintiffs filed their
motion to remand. On July 16, 2001, the district court
determined that the six-month time limitation of 46 U.S.C.
§185 applied to the removal of the 46 U.S.C. §183 limitation
defense and entered an order remanding the case to state
court.
*Memorandum Ruling is attached hereto as Appendix
B-1 - B-9.
4
In turn, Denbury timely sought review in the United
States Court of Appeals for the Fifth Circuit. On April 15,
2002, the appellate court entered its decision, holding that
Denbury had not identified a separable order in the
Memorandum Ruling of the district court.’ On May 23, 2002,
the appellate court denied Denbury’s motion for leave to file
a petition for rehearing en banc.
II. SUMMARY OF THE ARGUMENT
Petitioner Denbury places before this Honorable
Court a matter of unique importance to our nation’s marine
industry involving the Limitation of Shipowners’ Liability
Act, 46 U.S.C. §181 et. seq. (“the Limitation Act”): Can a
contested limitation of liability defense in state court be
removed to federal court?
Within this simplified issue are two more specific
sub-issues: 1) Is a contested 46 U.S.C. §183 limitation defense
subject to the six -month time bar of 46 U.S.C. § 185? and 2)
Was the district court’s determination that a contested 46
U.S.C. §183 defense is subject to the six-month time bar of 46
U.S.C. § 185 a separable and reviewable collateral order?
As this Court is aware, the Limitation Act provides
that the vessel owner's liability for damage or injury shall
not exceed the value of the vessel or her pending freight.
The shipowner can avail itself of the Limitation Act by filing
a petition for exoneration from or limitation of liability in
federal district court pursuant to §185 of the Limitation Act
within six months of written notice of a potential claim.
Alternatively, and at issue here, this Court has long held that
a shipowner may assert the right to limit liability through
defensive pleadings in any court pursuant to §183 of the
Limitation Act.
In the instant case, Denbury timely asserted a
limitation defense in its answer to respondent Goulas’ Jones
Judgment is attached hereto as Appendix C-1 - C-5.
5
Act cause of action in state court. Once Goulas contested
Denbury’s right to limit its liability, the limitation defense
fell within the exclusive jurisdiction of federal court and,
therefore, the case became removable. Denbury’s removal
was based on this Court's long standing precedent that a
contested limitation defense is cognizable only in federal
court. Despite this precedent, the district court remanded
the matter to state court because it held that Denbury’s
limitation defense was time barred due to the application of
the six month time limit of §185 to the §183 defense and that
Denbury had failed to timely file a separate petition for
exoneration from or limitation of liability.
At the very heart of the district court’s order of
remand was its erroneous determination that the six month
time limit of §185 barred the removal of a contested
limitation defense in state court under §183. In so holding,
the district court ignored this Court’s precedent which
establishes that a contested limitation defense falls within
the exclusive jurisdiction of federal court.
Compounding this error, the Fifth Circuit erred in
determining that the district court's time bar determinations
were not a separable and reviewable orders. While orders of
remand are generally unreviewable, this Court long ago
crafted an exception to a complete bar to appellate review in
recognizing that orders separable from the remand itself
were not beyond review. Such separable and reviewable
orders are now before this Court.
The district court's time bar determinations preceded
the remand order in both logic and fact. Furthermore, the
order was conclusive against the parties. The Fifth Circuit
erred in failing to identify and review this as a separable
order. This failure is one of the errors sought to be reviewed.
The issue before this Honorable Court begs
clarification given its significant potential impact. This
Court has long sought to balance the plaintiff's choice of
forum and remedy with the shipowner’s federal statutory
right to limit liability. The decisions below upset this
6
delicate balance by forcing the shipowner to race to the
courthouse to file a petition for exoneration from or
limitation of liability in federal court, thereby restricting the
plaintiff's ability to proceed in the forum of his choice and
further exhausting scarce judicial resources. For the district
courts, which have within their respective jurisdictions
navigable lakes, rivers, and oceans, the volume of such
filings would be astronomical.
The effect of the decisions below would be to
undermine the express intent behind the Limitation.
Originally passed in 1851, the Limitation Act was designed
to encourage investment in the domestic marine industry.
A petition for limitation of liability in federal court is
attended by the significant expenses of filing and posting the
required bond. Committing such resources to potentially
unnecessary litigation, especially for small-vessel owners,
will negatively impact investment and overall growth in the
marine industry.
Finally, the decisions below conflict with the
precedent of this Honorable Court and that of the other
circuits. If permitted to stand, these decisions will eviscerate
a longstanding limitation defense in a state forum.
Ill. ARGUMENT
A. Issue Presented.
In its simplest form, the issue before the Court is
whether a contested limitation defense under 46 U.S.C. §183
can be removed to federal court? In addressing this issue,
Denbury seeks review of the determinations by the district
court and Fifth Circuit. The matters of substance concerns
the Fifth Circuit's affirmance of the district court’s erroneous
time bar determinations under the Limitation Act. The
matter of procedure concerns the Fifth Circuit's erroneous
ruling that the district court’s order of remand did not
contain a separable and reviewable collateral order. In
presenting its argument-below, Denbury will address the
7
substantive issue first as a way of providing the Court with
the proper factual and legal framework within which to
perform its review of the Fifth Circuit's and district court's
orders.
B. The Limitation of Shipowners’ Liability Act Provides
Denbury with the Right to Limit Liability.
Passed in 1851, the Limitation of Shipowners’
Liability Act provides a vessel owner with the statutory right
to limit liability for damage or injury, occasioned without the
owner's privity or knowledge, to the value of the vessel and
its pending freight. See Lewis v. Lewis & Clark Marine, Inc.
531 U.S. 438, 446, 148 L. Ed. 2d 931, 121 S. Ct. 993 (2001).
Two procedural mechanisms exist to safeguard the
owner's right to limit liability. First, the Limitation Act
provides that a vessel owner, within six months of notice,
may petition a federal district court for limitation of liability.
46 U.S.C. app. §185 (2002). Second, this Court has held that
the advantages of limitation of liability may be secured in
any court, including a state court, by pleading it as a defense.
See Langnes v. Green, 282 U.S. 531, 540, 75 L. Ed. 520, 51S.
Ct. 243 (1931). Once contested, however, the issue of
limitation becomes exclusively cognizable ina federal forum.
Id. at 543.
In the instant case, Denbury elected to follow this
Court’s precedent by asserting a limitation of liability
defense in its answer to the plaintiffs’ petition in state court.
In turn, Denbury propounded request for admissions to
plaintiff to determine if its defense of limitation was
contested. In responding to these requests, the plaintiffs
chose to contest limitation of liability. At this juncture, the
contested limitation defense invoked the exclusive
jurisdiction of federal court which allowed Denbury to
remove this matter to the district court.
8
C. The Plaintiffs’ Decision to Contest Limitation of
Liability Conferred Jurisdiction on the Lower Court.
This Court has held that a claim for limitation of
liability does not fall within the scope of federal question
jurisdiction. Lewis & Clark, 531 U.S. at 455. As such, a
savings to suitors action in state courts cannot be removed to
federal court by the mere assertion of a limitation defense.
However, once Denbury’s limitation defense was contested,
_ the issue became exclusively cognizable in a federal court.
Langnes, 282 U.S. at 543. Once contested, the only
procedural vehicle available to Denbury to protect this
defense was a removal petition.
While acknowledging that the mere assertion of a
limitation defense state court did not make Goulas’ case
removable, the lower courts cut short their analyses and
ignored this Court’s precedent regarding the exclusivity of
federal jurisdiction once the limitation defense was
“contested”.
The precedent for removing a contested limitation
defense from the state court into the exclusive federal forum
arises from this Honorable Court's decisions in Langnes v.
Green and ExParte Green, 286 U.S. 437, 76 L. Ed. 1212, 52S.
Ct. 602 (1932). Since the district court's order and the Fifth
Circuit’s subsequent affirmance ignore the clear
pronouncements of this Court in Langnes and ExParte
Green, a closer examination of these cases is in order.
In Langnes, the owner of the fishing vessel Aloha
filed a petition for limitation of liability in a federal district
court two days prior to trial of a state claim arising from
injuries suffered on the vessel. Id. at 532-33. The district
court issued an order restraining further proceedings in the
state court and a monition to all claimants to present their
claims before the district court. Id. at 533. After the district
court denied a motion to dissolve the restraining order, the
plaintiff claimant appealed. Id. The court of appeals
9
reversed and remanded the case with instructions to dismiss
the limitation action. Id. at 534.
On certiorari, this Court reversed the decisions of
both the appellate and district courts. Id. at 544. Since it
appeared that only one claim existed and that the right to
limit liability would not be contested in the state court, the
Langnes Court directed the district court to dissolve the
restraining order. ‘In addition, as a precautionary measure,
the Langnes Court instructed the district court to retain the
limitation proceeding in the event the petitioner’s right to
limit was contested. Id. at542. This Court explained that the
state court was competent to adjudge liability and to
ascertain the value of the vessel in order to limit the vessel
owner's liability. Id. at 543. However, should the vessel
owner's right to limit liability be contested, exclusive
jurisdiction of the issue would be vested in the federal court.
Id.
Following the decision in Langnes, the claimant in
the state court action indeed challenged the vessel owner's
right to limit liability, prompting the owner of the Aloha to
seek relief once again from the federal court. The federal
court issued an injunction preverting the claimant from
proceeding in state court, concluding:
To pursue common-law remedy in the state
court, the suitor must admit the right to limit
liability, thus withdrawing from the case any
federal question, and his recovery, if any, will
be limited to the value of the schooner; and,
if issue is taken upon the right to limit, then
this court has jurisdiction of the entire
controversy.
The Aloha, 56 F.2d 647, 648 (W.D. Wash. 1932).
The claimant then soughta writ of mandamus, which
was denied. In Ex Parte Green, the Supreme Court left in
tact the above holding of the district court, stating:
It is clear from our opinion [Langnes_v.
Green] that the state court has no jurisdiction
10
to determine the question of the owner's right
to a limited liability, and that, if the value of
the vessel be not accepted as the limit of the
owner's liability, the federal court is
authorized to resume jurisdiction and dispose
of the whole case.
Id. at 439-440. Thus, this Court concluded that, once the
claimant contested the shipowner to limit liability, the state
court lost its concurrent jurisdiction, and the issue of the
shipowner’s right to limit liability was cognizable solely in
the federal court.
In the instant case, the district court was initially
correct in positing that the mere assertion of a limitation of
liability defense in state court alone did not confer
jurisdiction on the federal courts. (See App. B-4) As is clear
from the Langnes and Ex Parte Green decisions allow state
courts to have concurrent jurisdiction in saving to suitors
cases when the vessel owner's right to limit liability is
uncontested. Unfortunately, this is where the lower courts
stopped their respective analyses.
However, under this Court's precedent, the analysis
must continue because, once the respondents chose to
contest Denbury’s right to limit its liability, no other forum
beside that of the federal courts existed with authority to
resolve the issue. Id. At that juncture, the claim became
removable pursuant to 28 U.S.C. §1446(b) and 28 U.S.C.
§1331. In fact, removal was the only procedural vehicle
remaining for Denbury to preserve its defense of limitation.
By failing to take their analysis to this next logical and
necessary step, the courts below wandered from the clear
path this Court's precedent and, as a result, the lower courts
committed reversible error.
11
D. The District Court Erred in Determining that a Six-
Month Time Limitation Attached to a Limitation of
Liability Defense Removed from State Court.
In its remand order, the district court errantly
determined that the six-month time limitation of §185 barred
the removal of a contested §183 limitation of liability
defense. (See App. B-7-B-8) The district court’s erroneous
decision stems, in part, from its confusion over the 1936
Amendments to the Limitation Act and reliance on a US.
Fifth Circuit precedent which contravenes this Court's
controlling precedent and conflicts with other circuits’
decisions.
Prior to the 1936. amendments, a petition for
limitation of liability, made pursuant to 46 U.S.C. §185, could
be filed in a federal district court at any time. See Cincinnati
Gas & Electric Co. v. Abel, 533 F.2d 1001, 1003 (6th Cir.); cert.
denied, 429 U.S. 858, 50 L.Ed.2d 136, 97 S.Ct. 158 (1976). The
petition could even be filed once a decision had been
rendered by another court. Id. In response to these tactics,
Congress drafted the 1936 Amendments.to ensure prompt
action on the part of vessel owners and to deter duplicative
adjudication. See Deep Sea Tankers v. The Long Branch, 258
F.2d 757, 772 (2d Cir. 1958); cert. denied, 358 U.S. 933, 3 L.
Ed. 2d 305, 79 S. Ct. 316 (1959). Glaring in its absence in the
1936 Amendments is any reference to the applicability of the
six-month time limitation to an affirmative defense of
limitation of liability filed in state court under §183. Id.
The Court of Appeals for the Third Circuit squarely
addressed the inapplicability of the six-month time
limitation to the defense of limitation of liability in The
Chickie. 141 F.2d 80 (3d Cir. 1944). The court therein held:
We think it is abundantly clear, in view of the
historical development of the statute, that the
time limitation put in §185 by the 1936
amendment and made expressly applicable to
a proceeding by petition at the suit of the
12
owner, is not to be read into §183(a) by
implication, particularly in view of the fact
that both sections were simultaneously
amended in 1936.
Id. at 85. The Court of Appeals for the Fifth Circuit has
apparently adopted the foregoing reasoning, as have the
Second and Ninth Circuits. See Signal Oil & Gas Co. v. The
654 F.2d 1164, 1173, (5th Cir. 1981); cert.
denied, 455 US. 944,71 L. Ed. 2d 656, 102S. Ct. 1440. See also
Sana v. Hawaiian Cruises, Ltd., 181 F.3d 1041 (9th Cir. 1999);
Deep Sea Tankers v. The Long Branch, 258 F.2d 757 (2d Cir.
1958); Murray v. New York Central Railroad Co., 287 F.2d
152 (2d Cir.); cert. denied, 366 U.S. 945, 6 L. Ed. 2d 856, 81 S.
Ct. 1674 (1961).*
In departing from this line of precedent, the district
court's opinion relied on In the Matter of Vatican Shrimp
Co., Inc., 820 F.2d 674 (Sth Cir.); cert. denied, 484 U.S. 953, 98
L. Ed. 2d 371, 108 S. Ct. 345 (1987) to deprive Denbury of any
benefit of asserting a §183 defense in state court. Under the
district court's order, the six-month time limit of §185
applied to Denbury’s §183 defense. As a result, a
shipowner’s only recourse is to file a §185 petition, which
results in significant expense and a “race to the courthouse.”°
*As discussed more thoroughly below, the district court
and court of appeals below followed different circuit precedent
which appeared to reach an opposite conclusion. See In the
Matter of the Complaint of Vatican Shrimp Co, Inc., 820 F. 2d
674 (5™ Cir.); cert. denied, 484 U.S. 953, 98 L. Ed. 2d 371, 108 S.
Ct. 345 (1987).
‘Such a requirement runs counter to analogous areas of
law. For example, a diversity case does not become removable
until the amount in controversy exceeds the jurisdictional
amount. See U.S.C. §1333, See Chapman v. Powermatic, Inc., 969
F.2d 160 (5® Cir. 1992); cert. denied, 507 U.S. 967, 122 L. Ed. 2d
774, 113 S. Ct. 1402 (1993).
13
Besides being a unique deprivation of a vessel
owner's rights to exclusive federal jurisdiction, the district
court's decision is inapposite to the intent of the drafters of
the Limitation of Shipowner’s Liability Act. As noted,
Congress sought through the 1936 Amendments to prevent
eleventh-hour filing of petitions for limitation of liability,
thus precluding duplicative adjudication and waste of
judicial resources. See Deep Sea Tankers, 258 F.2d at 772.
Such concerns are not germane to the issue of an affirmative.
defense of limitation of liability asserted in state court. The
vessel owner's petition for limitation of liability is an
offensive tool to consolidate claims before a single forum
and restrain suit in state court. The timing of such a
limitation petition is completely » ithin the control of the
vessel owner. Incontradistinction, the assertion of limitation
of liability as a defense, as filed herein, affords the plaintiff
in the state court action the unfettered ability to control the
invocation of federal jurisdiction. If the plaintiff chooses not
to contest the right to limit liability, the claim will proceed in
the state forum. It is only when the decision to contest the
right is made that the issue must be joined in federal court.
Langnes, 282 U.S. at 543. As the Deep Sea Tankers court
noted, “the abuses which resulted under Section 185 prior to
its amendment are not encountered when limitation is
pleaded by way of answer, because the libelant, by filing its
libel, controls the time within which the remedy must be
invoked.” 258 F.2d at 772-73.
As the district court's determination that a six-month
time limitation attaches to removal of a contested limitation
of liability defense directly conflicts with decisions of the
other circuits and the intent of the legislature, this Court
should accept certiorari and reverse.
14
E. The District Court Further Erred in Holding that Failure
to File a Complaint for Limitation of Liability Precluded
Invocation of Federal Jurisdiction.
Based on Vatican Shrimp, the district court
determined that, while vessel owners may choose to plead
limitation of liability as an affirmative defense in state court,
the right will be forfeited unless it timely files a petition for
limitation of liability in federal court. (See App. B-5) Owing
to this determination’s conflict with the precedent of this
Court and other circuits, a closer review of Vatican Shrimp
is required.
In Vatican Shrimp, the defendant asserted the
defense of limitation of liability in a state court and
subsequently filed a separate petition for limitation of
liability under §185 more than six months after its receipt of
notice of claim. 820 F.2d at 676. The petition for limitation
of liability was dismissed by the district court as untimely
and the defendant appealed. Id.
The Vatican Shrimp defendant subsequently
removed the state case under 28 U.S.C. §1441. Id. The
district court remanded the case to state court on the basis
that it had previously ruled that defendant could not limit its
liability in the federal courts. Id. The defendant similarly
appealed the order of remand. Id. The court of appeals
consolidated these appeals.
The court of appeals then affirmed the dismissal of
the complaint for limitation of liability on the uncontradicted
facts that it was filed more than six months following the
defendant's receipt of notice of claim. Id. at 679. Next, the
Vatican Shrimp court addressed the propriety of removal.
Id. at 680. The court posited the following:
[W]e recognize that shipowners may choose
to set up the defense of limitation of liabili
under either method: by pleading the
substantive provisions of section 183 in a
15
properly filed answer in any court, or by
filing a section 185 petition in a federal
district court. However, if a shipowner is
sued in state court, the owner's failure to file
a_section 185 petition in a federal district
court within six months after receiving
written notice of the claim will result in
forfeiture of the right to limit liability should
the claimant contest the limitation defense.
This is so because solely filing in the state
court an answer in which limitation is pled
obviously does not provide a federal court
with jurisdiction to act. Id. at 678. (Emphasis
added).
The Vatican Shrimp’s court’s holding that a vessel
owner's failure to timely file a petition for limitation of
liability forfeits the limitation defense in the state forum, is
clear error and conflicts with this Court’s precedent. In fact,
the Vatican Shrimp court admitted its decision was in
conflict. Id. Specifically, the Vatican Shrimp court
erroneously modified the procedure prescribed by this Court
in Langnes “to reflect the 1936 amendment to section 185.”
Id.° As discussed more fully above, there is no evidence in
the record surrounding the 1936 Amendments to indicate
such an intent on the part of the legislature. It is this holding
which creates a direct conflict with the decisions of the other
circuits. The Chickie, 141 F.2d at 85.
In relying on Vatican Shrimp, the courts below erred
in their analysis of the predicate for exercising jurisdiction.
®While Langnes and Ex Parte Green were decided before
the 1936 Amendments to the Limitation Act, the time limits in
those Amendments were not directed to §183 and, as such, do
not affect this Court's prior precedent. The Chickie, Supra.
Moreover, after the Amendments, removal was the correct
procedure for protecting a contested limitation defense.
16
As with the federal interpleader statute, 28 U.S.C. §1335,
which provides a similar concursus of claims, the federal
courts’ authority to adjudicate a petition for limitation of
liability pursuant to 46 U.S.C. §185 is predicated on the
establishment of a res from which claims will be disbursed.
See Hartford Accident & Indemnity Co. v. Southern Pacific
Co., 273 U.S. 207, 215, 47 S. Ct. 357, 71 L. Ed. 612 (1927). The
limitation petition takes on the nature of a proceeding in
rem. In contrast, the federal court's authority to adjudicate
a contested limitation defense is predicated solely on the
nature of the issue, i.e., its exclusive cognizance in a federal
court exercising admiralty jurisdiction. See Langnes, 282
USS. at 543.
The Fifth Circuit’s holding in Vatican Shrimp is
perhaps excused in its reasoning by the lack of evidence in
the opinion demonstrating that the defendant's right to limit
liability had even been contested in the state forum. The
appellate court herein, however, has no such excuse. While
the lower courts were correct in holding that the mere
assertion of a limitation defense in state court does not
confer jurisdiction on the federal court, Vatican Shrimp, 820
F.2d at 678; see also Lewis & Clark, 531 U.S. at 455, the iower
courts’ analyses fall short by failing to recognize that it is the
contest of the right to limit liability which confers exclusive
jurisdiction on the federal court and presents the
opportunity for removal. Langnes, 282 U.S. at 543.
: Had Congress intended to make the procedure
outlined in 46 U.S.C. §185 the sole method for invoking the
jurisdiction of the federal courts, it undoubtedly might have
done so. The clear absence of such an intent should have
precluded the Fifth Circuit from altering the established
precedent of this Court. The plain language of 46 U.S.C.
§185 itself is an acknowledgment by the drafters of multiple
procedural mechanisms for securing the right to limit
liability because §185 provides that a vessel owner “may”
petition the federal courts for limitation of liability.
The district court erred in relying on the Court of
17
Appeals for the Fifth Circuit’s flawed reasoning in Vatican
Shrimp to determine that Denbury’s decision not to file a
petition for limitation of liability somehow precluded the
federal courts from assuming jurisdiction. Unlike Vatican
Shrimp, Denbury did not “solely” file a limitation defense in
state court. Rather, Denbury confirmed that plaintiff
contested its right to limitation which, under this Court's
precedent, does “provide a federal court with jurisdiction to
act.”
F, The Court of Appeals Erred in Finding that the District
Court’s Time Bar Determinations Were Not Separable and
Reviewable Orders.
Following the above analysis of the substantive rights
of a vessel owner under the Limitation Act, the Court now
has a better framework within which to review the lower
courts’ procedural errors regarding the reviewability of the
separate and collateral orders.
1. The Orders Below
In its order, the district court stated “this Court
agrees the Limitation Act, 46 U.S.C. §181, provides federal
district courts with exclusive jurisdiction over the vessel
owner's right to limit its liability and that state courts do not
have concurrent jurisdiction over actions for limitation of
liability” (emphasis added). (App. B-4) Despite this holding,
the district court ignored this Court’s precedent and
analyzed Denbury’s removal under Vatican Shrimp to hold
that “Plaintiffs’ Motion to Remand must be GRANTED on
the basis this Court now lacks jurisdiction to hear the
limitation action as six months has passed and a limitation
proceeding filed would be untimely” (emphasis added).
(App. B-7-B-8)
In turn, the court of appeals held “(t)he district
court’s remand was based explicitly on Vatican Shrimp’s
18
holding that a defensive §183 pleading does not make a case
removable because it provides no basis for federal
jurisdiction. Denbury can identify no order that is separable
and reviewable under the collateral order doctrine”. (App.
C-5)
2. The Errors Below
A close examination of the district court’s order,
however, does show that two separable and reviewable
orders can be discerned from this ruling. First, the district
court determined that Denbury’s limitation defense was
untimely. Second, the district court ruled that Denbury’s.
failure to timely file a petition for exoneration from or
limitation of liability pursuant to §185 precluded Denbury
from removing its §183 limitation defense from state court.
(See App.B-7-B-8)
In dismissing Denbury’s appeal under the collateral
order doctrine, the Fifth Circuit, citing Tillman v. CSX
Transp., Inc., 929 F.2d 1023, 1026-27 (5" Cir.); cert. denied
502 U.S. 859, 116 L. Ed. 2d 139, 112 S. Ct. 176 (1991), stated
that “the district court need not explicitly state that it is
remanding the case pursuant to §1447(c); it need only utter
the ‘magic words’ that it believes it ‘lacks subject matter
jurisdiction’ for the remand to be ‘totally unreviewable.’”” Id.
However, a later Fifth Circuit panel in Doleac ex rel. Doleac
v. Michalson, 264 F. 3d 470 (5th Cir. 2001), criticized Tillman
for using overly broad language and suggesting that, if the
resulting remand of the district court cannot be reviewed by
the appellate court, then a prior, underlying order of the
district court also cannot be reviewed. Id. at 484. In response
to this suggestion, Doleac states:
“{O]ur cases both preceding and following
Tillman have allowed appellate review of a
separate issue, if it is reviewable under §1291
or under an exception to §1291-finality, such
as the collateral order doctrine. In short,
Tillman, or at least its dicta, conflicts with our
19
prior precedent that allows review of a
separable, collateral order despite preclusion
of the review of remand.” Id.
3. The Law On Separability and Reviewability
While it is true that this Court has held that 28 U.S.C.
§1447(d) generally bars review of orders of remand issued
pursuant to 28 U.S.C. 1447(c), Thermtron Products, Inc. v.
Hermansdorfer, 423 U.S. 336, 343, 46 L. Ed. 2d 542, 96S. Ct.
584 (1976), this Court long ago crafted an exception to this
general bar by recognizing that an order separable from that
of remand are reviewable on appeal. See Waco v. United
States Fidelity & Guaranty Co., 293 U.S. 140, 143, 79 L.Ed.
244, 55 S.Ct. 6 (1934).
In Waco, the district court’s order of remand
encompassed three separate orders. 293 US. at 142.
Included in the Waco order was a determination that the
cross-defendant was an unnecessary and improper party
which required dismissal of the cross-complaint. Id. As the
dismissal undermined the diversity of the remaining parties,
the district court remanded the case for lack of jurisdiction.
Id. The City of Waco appealed arguing that the decision was
contrary to the laws of Texas and, on remand, the district
court’s order would be treated as conclusive on the issue of
the City’s right to maintain the cross-action. Id. at 142-43.
The court of appeals dismissed the appeal, holding that the
order of remand was unreviewable. Id. at 142.
In reversing the court of appeals and remanding for
a determination of the propriety of the district court’s
dismissal of the cross-claim, this Court held:
True, no appeal lies from the order of
remand; but in logic and in fact the decree of
dismissal preceded that of remand and was
made by the District Court while it had
control of the cause. Indisputably this order
is the subject of an appeal; and, if not
20
reversed or set aside, is conclusive upon the
petitioner.
Id. at 143. Premised on the language in Waco, a separable
order must (1) precede the order of remand in logic and fact
and (2) be conclusive against the parties. See Doleac, 264
F.3d at 481.
The courts of appeal and district courts have
interpreted Waco to fashion a functioning doctrine of
separability which affords limited appellate jurisdiction. See
Doleac ex rel. Doleac v. Michalson, 264 F.3d 470 (5th Cir.
2001); Kimbro v. Velten, 30 F.3d 1501 (D.C. Cir. 1994); cert.
denied, 515 U.S. 1145, 132 L. Ed. 2d 833, 115 S. Ct. 2584
(1995); Aliota v. Graham, 984 F.2d 1350 (3d Cir.) cert. denied,
510 U.S. 817, 126 L.Ed.2d 37, 114 S.Ct. 68 (1993); Pelleport
Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273
(9th Cir. 1984); Katsaris v. United States, 684 F.2d 758 (11th
Cir. 1982). |
In addition to Waco’s requirement of separability,
this Court’s decisions in Cohen v. Beneficial Industrial Loan
Corp., 337 U.S. 541, 93 L.Ed. 1528, 69 S.Ct. 1221 (1949) and,
recently, in Quackenbush v. Allstate Ins. Co., 517 U.S. 706,
135 L. Ed. 2d 1, 116 S. Ct. 1712 (1996), also subjects these
orders to further analysis to determine their reviewability
under the Collateral Order Doctrine. See Doleac, 264 F.3d at
489; Kimbro, 30 F.3d at 1503.
An order is reviewable under §1291 if it “ends the
litigation on the merits and leaves nothing for the court to do
but execute the judgment.” See Catlin v. United States, 324
US. 229, 233, 89 L. Ed. 911, 65 S. Ct. 631 (1945).
Nevertheless, this Court has recognized a narrow class of
collateral orders which are immediately reviewable because
they ‘“conclusively determine [a] disputed question”’ that is
completely separable from the merits of the action,”’
effectively unreviewable on appeal from a final
judgment,”’ and ‘“too important to be denied review.”
Quackenbush, 517 US. at 712.
4a
4a
21
4. The District Court’s Time Bar
Determinations Were Separable from the
Order of Remand
Under the “separable” analysis required by Waco, it
cannot be seriously disputed that the district court's
determination that the removal of Denbury’s §183 defense
was time barred preceded the order of remand “in logic and
in fact.” In fact, the order of remand was predicated solely
on these determinations. Prior to ordering removal, the
district court acknowledged that the Limitation Act provided
a district court with exclusive jurisdiction over
administration of the Limitation Act. Despite this
acknowledgment, the district court remanded the case based
on its erroneous belief that Denbury’s defense was time
barred and the federal forum had to be preserved by filing a
separate petition for exoneration from or limitation of
liability under §185.
While encompassed within the district court's order
of remand, these distinct determinations preceded the
remand order. After admitting that federal courts have
“exclusive jurisdiction,” the district court herein consciously
interpreted 46 U.S.C. §§181, et seq., in making its
determinations regarding the applicability of the six-month
time limitation and the necessity of filing a petition for
limitation of liability.
These determinations also precede the remand order
in logic, as the district court was powerless to remand the
case unless it concocted some means of circumventing the
admitted exclusive jurisdiction of federal court. Once the
district court made its legally unsupported rulings that the
§183 defense was time barred and that Denbury had failed
to preserve federal jurisdiction by filing a separate petition
for exoneration from or limitation of liability within six
months, the district court was then free to remand the case
to state court. Without those rulings, remand would have
been impossible.
-
22
The second facet of the Waco analysis on separability
is conclusiveness. Owing to the similarity of this facet with
the conclusive requirements under the analysis of
reviewability, petitioner refers the Court to the section
below.
5. The District Court’s Time _ Bar
Determinations are Reviewable Under the
Collateral Order Exception to 28 U.S.C.
§1291
In order for the separate order to be “reviewable,” the
order must be conclusive of the disputed question, collateral
to the merits of the principal action, unreviewable on appeal
and address an important disputed issue. Quackenbush, 517
USS. at 712.
a. Conclusive Determination of the Disputed
Question
The district court’s time bar determinations
effectively and conclusively determined a disputed question
between the parties. The plaintiffs in the instant case chose
to contest Denbury’s right to limit liability, thus invoking
exclusive federal jurisdiction. See Langnes, 282 U.S. at 543.
Denbury, seeking the federal forum guaranteed by statute
and the Court's precedent, removed the case to the district
court. Conclusivity here is predicated on the exclusive
jurisdiction of the federal court.
The Fifth Circuit has defined conclusivity as having
the preclusive effect of being functionally unreviewable in
the state court. Doleac, 264 F.3d at 482 (citing Angelides v.
Baylor College of Medicine, 117 F.3d 833, 837 (Sth Cir. 1997)).
Conclusivity in the instant case hinges solely on the issue of
the district court's exclusive jurisdiction to hear a contested
limitation of liability defense. Ordinarily, a district court's
decision that the running of a statute of limitations precludes
it from hearing a case might have little effect on a state court
proceeding in which the parties have already joined the
23
issue. However, this Court's insistence that the limitation
defense, once contested, is exclusively cognizable in federal
court would effectively preclude a review of the issue on
remand to the state court. See Langnes, 282 U.S. at 543. On
remand, the state court would lack the jurisdiction to
adjudicate the contested right to limit liability and that right
will be effectively lost.
Similarly here, if the district court's determinations
herein are allowed to stand, the limitation issue cannot be
joined in any other proceeding given the exclusive nature of
the federal jurisdiction over this issue.
b. Collateral to the Merits
Denbury’s right to limit its liability is collateral to the
merits of the instant case. While 46 U.S.C. §§181, et seq.,
confers on Denbury the right to limit its liability in the
federal forum, the import of the statute is to cap the vessel
owner's liability. As the Hon. Justice Jackson noted:
In order that disaster at sea might not
jeopardize the shipowner’s other assets,
Congress limited his liability to the “value of
the interest of such owner in such vessel, and
her freight then pending.” This limitation
serves much the same purpose for maritime
ventures that the corporate fiction serves for
the landsman’s enterprises.
Black Diamond Steamship Corp. v. Robert Stewart & Sons
Ltd., 336 U.S. 386, 399, 93 L. Ed. 754, 69 S. Ct. 622 (1949). A
shipowner’s limitation right is secondary to the primary
purpose of any maritime litigation -- the proof of fault and
recovery of damages by the claimant.
c. Unreviewable on Appeal
The district court’s determinations are effectively
unreviewable on appeal. In Quackenbush, this Court |
addressed the issue of reviewability, stressing the finality of
an order of remand. 517 U.S. at 714. Once the district court
remands a case to state court, it completely disassociates
itself from matter. Id.
: ont —— ae -
24
In the instant case, if the district court's
determinations are allowed to stand, Denbury’s right to limit
liability will be irretrievably forfeited. Given the cloak of
non-reviewability afforded by 28 U.S.C. §1447(d), nothing
will remain of the instant case in federal court to afford
review. On remand, the state court will lack jurisdiction to
adjudicate the contested limitation defense. See Langnes,
282 U.S. at 543.
d. Importance of the Disputed Question
Finally, Denbury’s right to limit liability is too
important to be denied review. The legislature has made a
conscious decision to allow a vessel owner to limit its
liability for damages to the value of the vessel and its
pending freight. Black Diamond Steamship Corp., 336 U.S.
at 399. If left in place, the effect of the decisions below
would be to strip the vessel owner of that right.
In Moses Cone, this Court found thata stay of federal
court proceedings while a state court action was pending, in
effect, amounted to a refusal to adjudicate the merits and
was sufficiently important for immediate review. 460 U.S. at
12. In the instant case, the district court, by its order of
remand, has effectively refused to adjudicate the limit of the
vessel owner's liability and precluded the state court from
hearing the issue by its finding of exclusive federal
jurisdiction.
The importance of the right asserted in the instant
case is analogous to the issue presented in Lauro Lines S.R.L.
v. Chasser. 490 U.S. 495, 104 L. Ed. 2d 548, 109 S. Ct. 1976
(1989). In Lauro Lines, the defendant moved to dismiss the
pending case in the Southern District of New York on the
grounds that a forum selection clause precluded
adjudication. Id. at 496. The district court denied the
motion, prompting an appeal. Id. In joining the majority's
holding that the district court’s denial of the motion did not
satisfy the elements of the Collateral Order exception to 28
U.S.C. §1291, the Hon. Justice Scalia drew the distinction
between the right to be sued in a particular forum and the
235
right to immunity from suit. Id. at 502. The latter was
deemed sufficiently important for immediate review as
delaying an appellate decision would amount to stripping
the defendant of his right. Id. The right would be
eviscerated by subjecting the defendant to trial. Id. In
contrast, the defendant's right to adjudication in a particular
forum was vindicable on review. Id.
Like Lauro Lines, the instant case presents this Court
with the interpretation of 46 US.C. §§181, ef #@ and
Denbury’s right to remove a contested limitation for
adjudication in a federal forum. If allowed to stand, the
effect of the decisions below would be to completely strip
Denbury of its right to limit its liability.
Petitioner respectfully submits that the district court s
time bar determinations satisfy the elements of both Waco
and the Collateral Order exception to 28 US.C. §1291. As
such, the Fifth Circuit erred in holding that Denbury did not
show a separate and reviewable order.
G. The Erroneous Decisions Below Significantly Impact
The Delicate Balance Between the Savings to Suitors
Clause and Federal Admiralty Law.
As long ago as the decision in Langnes, this Court
has recognized the tension between the saving to suitors
clause and the right of a vessel owner to limit liability for
damage or injury. 282 US. at 538. United States District
Courts are granted original and exclusive jurisdiction ower
any civil admiralty or maritime case, “saving to suitors in all
cases all other remedies to which they are otherwise
entitled.” 28 U.S.C. §1333(1). In contrast, the vessel owner's
right to limit liability, once contested, is exclusively
cognizable in federal court. Langnes, 282 US. at S43. As
evidenced by the decision in Lewis & Clark, this Court hae
consistently endeavored to balance the plaintiff's right to
seek a remedy in the forum of his choice with the weasel
26
owner's right to have its contested limitation rights
adjudicated exclusively in the federal forum. 531 U.S. 438.
In Lewis & Clark, this Court struck that balance by
permitting a claim to proceed in state court after the plaintiff
stipulated that the vessel owner's right to limit liability
would not be contested. 531 U.S. at 451.
If allowed to stand, the effect of the decisions below
would be to disrupt the balance between plaintiffs remedy
and vessel owner's right. Now, vessel owners, such as
Denbury, would be cast unwittingly into a “race to the
courthouse”. To preserve the right to limit liability, a vessel
owner would be compelled to preemptively file a complaint
for limitation of liability in the federal forum, even before a
lawsuit is filed by a potential plaintiff.
An effect of this “race to the courthouse” would be to
usurp the plaintiff's initial choice of forum. While the
plaintiff may stipulate in the federal proceedings that the
limitation defense will not be contested, he or she would
nonetheless be compelled to answer the monition in federal
court. Such a practice would place the plaintiff at a practical
disadvantage. At such an early juncture in the proceedings,
the plaintiff would be precluded from making a reasoned
decision to contest the limitation of liability if he or she
desires to preserve his or her remedy in a state court.
H. Compelling the Vessel Owner to File a Complaint of
Limitation of Liability Unnecessarily Strains and
Consumes Limited Judicial Resources.
In addition to rely on this Court's precedent, the
vessel owner's decision to assert a defense of limitation of
liability in state court flows from its logical belief that filing
a petition for limitation of liability pursuant to 46 U.S.C. §185
may be both duplicative and unnecessary. The vessel owner
may assert the defense despite its reasoned belief that, under
the circumstances of the case, the right will not be contested
or that the value of the plaintiff's claim will fall far below the
27
value of the vessel. Moreover, the vessel owner in a single
claimant scenario will not benefit from the principal
advantage of the petition for limitation of liability, i.e., the
concursus of claims afforded by 46 U.S.C. §185. The vessel
owner may likewise desire to avoid the expense of
duplicative litigation by remaining in state court until his
right to limit liability is contested or the value of the claim
rises to exceed the value of the vessel.
Despite the foregoing concerns, all mitigating against
invocation of federal jurisdiction at an early stage in the
proceedings, the decisions below now compel the vessel
owner to protect his right by filing a preemptive petition for
limitation in federal court. Despite the fact that the plaintiff's
claim may initially be valued only at $10,000, juxtaposed
against a vessel owner's $100,000 interest in the vessel and
its pending freight, the owner would be unwise to forego
filing a petition in the federal forum. Under the decisions
below, should the calculation of the likely value of the
plaintiff's claim prove erroneous, by merely asserting a
defense in state court the vessel owner would forfeit his right
to limit liability.
The resulting practice emanating from the lower
courts’ decision will unnecessarily consume judicial
resources in the already crowded federal docket by
compelling adjudication of a petition in which the vessel
owners right to limit liability may ultimately go
uncontested. Attendant to these considerations is the
expense visited on both plaintiff and defendant by
compelling unnecessary litigation in the federal forum.
I. The Decisions Below Will Have a Significant Economic
Impact on the Marine Industry and Circumvent the
Express Intent Underlying the Limitation of Liability Act.
It is axiomatic that the risk in maritime commerce has
existed since our ancestors first plied the seas. In the words
of the Hon. Justice Jackson and by the express language of
28
the statute, the Limitation Act “is designed to encourage
American capital to risk itself in shipping ventures where
‘ships are but boards, sailors but men: . . . and then there is
the peril of waters, winds, and rocks.” Black Diamond _, 336
U.S. at 399. Despite technology and advanced ship
construction, those risks remain.
As of January 1, 1999, the U.S. domestic marine fleet
included 55 container ships, 56 dry bulk carriers, 8 cement
carriers, 107 tankers, 26,650 dry cargo and tank barges,
hundreds of passenger vehicles serving as ferries, excursion,
and gaming vessels, and approximately 110,000 commercial
fishing vessels. See U.S. Department of Transportation, An
Assessment of the U.S. Marine Transportation System - A
Report to Congress, (1999). Relative to this considerable
fleet, the number of small vessels dwarfs the commercial
vessel numbers. It is these small boat owners who may be
legally unsophisticated, lacking unfettered access to counsel
and sizable financial resources, that will most acutely feel the
effects of the decisions below.
A petition for limitation of liability, made pursuant
to 46 U.S.C. §185, requires the posting of security in the
amount of the vessel and its pending freight. Alternatively,
vessel owners would have to assign their rights to the vessel
to a court-appointed trustee pending resolution of the claim.
It is unnecessary to further expound on the considerable
expense attended by this procedural mechanism. In a
multiple claimant scenario, the posting of security is
necessary to establish the res justifying federal jurisdiction
and the resulting concursus. Yet, as posited above, such a
requirement is unnecessary when a contested limitation
defense is removed to federal court as the nature of the issue
singularly invokes the federal court's jurisdiction. In short,
the vessel owner filing a petition for limitation of liability
must come before the court with a heavy wallet and be
prepared to commit resources that could otherwise be
expended on the maintenance and growth of his or her own
business.
A\
29
In light of the express intent of the drafters of the
Limitation of Shipowner’s Liability Act to encourage
investment and growth in the marine industry, the lower
courts’ decisions should compel this Court to revisit the
issue. The burdensome costs attending a petition for
limitation of liability will discourage further investment in
. the industry and necessarily limit the amount of financial
resources that might otherwise be committed to the growth
of the domestic industry. Vessel owners are already beset by
dwindling fish populations, excessive regulations, and the
ever present risk of their chosen commercial endeavor.
Further burdening the industry is unwise. At the very least,
such a decision should result from a conscious decision on
the part of the legislature, not by the judiciary.
IV. CONCLUSION
If allowed to stand, the lower courts’ decision would
perpetuate a conflict between the circuits, stand in stark
contract to this Court’s precedent and upset the carefully
crafted balance between a plaintiff's and a shipowner’s
rights.
Equally as important, a denial of this writ or
affirmance of the lower courts would completely eviscerate
a shipowner’s right to raise a defense of limitation in state
court. Neither the Limitation Act or this Court’s precedent
allow such a radical denial of rights. Fromits very inception,
the Limitation Act has granted a shipowner alternate means
for protecting its right to limit liability. Here, Denbury chose
to follow this Court's precedent and raised its limitation
defense in state court. Once this limitation became
contested, Denbury properly removed this case to federal
court, where exclusive jurisdiction rested.
Contrary to the district court’s and court of appeals’
holdings, there is no time bar for raising a §183 defense
under the Limitation Act. Nor does the Limitation Act
require a shipowner to file a §185 petition to protect its
30
rights. By judicial fiat, the lower courts herein have chosen
a path which creates a conflict across the board.
Aside from the lower courts’ departure from the
controlling precedent on the substantive limitation issues,
the court of appeals elected to avoid the procedural issue
presented by the district court’s separable and reviewable
order. Contrary to the court of appeals’ holding, the use of
the “magic words” jurisdiction should not end the court's
analysis. Especially, where the district, as it did here, admits
that federal courts have “exclusive jurisdiction” over a vessel
owner's right to limit liability. (App. at B-4). Once such
exclusive jurisdiction is admitted, any order which attempts
to circumvent such jurisdiction should be reviewed under
the Collateral Order doctrine. Under such a review, the
district court’s time bar determinations met all of the
requirements for separable and reviewable orders.
After such a review, Denbury firmly believes this
Court will accept the review of this writ and reverse the
lower courts’ holding. The relief sought by Denbury is to
preserve its limitation defense in federal court. This relief
will still allow the plaintiffs, upon agreeing to well
established stipulations, to remand their case to state court.
Thus, achieving the balance long crafted by this Court.
PAUL C. MINICLIER
DAVID A. BINEGAR
LAW OFFICE OF PAUL C. MINICLIER
1305 Dublin Street
New Orleans, Louisiana 70118
Telephone: (504) 864-1276
Attorneys for Petitioner,
Denbury Management, Inc.
Appendix A-1 -
Me Rats GRAPE 5 sn ve seu eas bo aed Eee eess ees A-1.1
Appendix A-2 -
ee A-2.1 through A-2.4
Appendix A-3 -
pA eS) eee A-3.1 through A-3.2
Appendix A-4 -
5 oa | re ee A-4.1 through A-4.3
Appendix A-5 -
ere ere ne pee ees A-5.1
Appendix A-6 -
46 U.S.C. §§181-196 ......... A-6.1 through A-6.9
Appendix B -
Memorandum Ruling of the
United States District Court for
the Western District of Louisiana
dated July 17, 2001, granting
Plaintiff's Motion to Remand .... B-1 through B-9
Appendix C -
Judgment of Fifth Circuit Court of
Appeals dated April 15, 2002 .... C-1 through C-5
A-1.1
TITLE 28 - JUDICIARY AND JUDICIAL PROCEDURE
PART IV - JURISDICTION AND VENUE
CHAPTER 83 - COURTS OF APPEALS
Sec. 1291. Final decisions of district courts
The courts of appeals (other than the United States Court of
Appeals for the Federal Circuit) shall have jurisdiction of
appeals from all final decisions of the district courts of the
United States, the United States District Court for the District
of the Canal Zone, the District Court of Guam, and the
District Court of the Virgin Islands, except where a direct
review may be had in the Supreme Court. The jurisdiction of
the United States Court of Appeals for the Federal Circuit
shall be limited to the jurisdiction described in sections
1292(c) and (d) and 1295 of this title.
A-2.1
Sec. 1292. Interlocutory decisions
(a)
Except as provided in subsections (c) and (d) of this
section, the courts of appeals shall have jurisdiction of
appeals from:
(b)
(1) Interlocutory orders of the district courts of
the United States, the United States District Court for
the District of the Canal Zone, the District Court of
Guam, and the District Court of the Virgin Islands, or
of the judges thereof, granting, continuing,
modifying, refusing or dissolving injunctions, or
refusing to dissolve or modify injunctions, except
where a direct review may be had in the Supreme
Court;
(2) Interlocutory orders appointing receivers, or,
refusing orders to wind up receiverships or to take
steps to accomplish the purposes thereof, such as
directing sales or other disposals of property;
(3) Interlocutory decrees of such district courts or
the judges thereof determining the rights and
liabilities of the parties to admiralty cases in which
appeals from final decrees are allowed.
When a district judge, in making in a civil action an
order not otherwise appealable under this section, shall be of
the opinion that such order involves a controlling question
of law as to which there is substantial ground for difference
of opinion and that an immediate appeal from the order may
materially advance the ultimate termination of the litigation,
he shall so state in writing in such order. The Court of
A-2.2
Appeals which would have jurisdiction of an appeal of such
action may thereupon, in its discretion, permit an appeal to
be taken from such order, if application is made to it within
ten days after the entry of the order: Provided, however,
That application for an appeal hereunder shall not stay
proceedings in the district court unless the district judge or
the Court of Appeals or a judge thereof shall so order.
(c)
The United States Court of Appeals for the Federal
Circuit shall have exclusive jurisdiction -
(d)(1)
(1) of an appeal from an interlocutory order or
decree described in subsection (a) or (b) of this
section in any case over which the court would have
jurisdiction of an appeal under section 1295 of this
title; and
(2) of anappeal froma judgment ina civil action
for patent infringement which would otherwise be
appealable to the United States Court of Appeals for
the Federal Circuit and is final except for an
accounting.
When the chief judge of the Court of International
Trade issues an order under the provisions of section
256(b) of this title, or when any judge of the Court of
International Trade, in issuing any other
interlocutory order, includes in the order a statement
that a controlling question of law is involved with
respect to which there is a substantial ground for
difference of opinion and that an immediate appeal
from that order may materially advance the ultimate
termination of the litigation, the United States Court
of Appeals for the Federal Circuit may, in its
A-2.3
discretion, permit an appeal to be taken from such
order, if application is made to that Court within ten
days after the entry of such order.
(2) When the chief judge of the United States
Court of Federal Claims issues an order under
section 798(b) of this title, or when any judge of the
United States Court of Federal Claims, in issuing an
interlocutory order, includes in the order a statement
that a controlling question of law is involved with
respect to which there is a substantial ground for
difference of opinion and that an immediate appeal
from that order may materially advance the ultimate
termination of the litigation, the United States Court
of Appeals for the Federal Circuit may, in its
discretion, permit an appeal to be taken from such
order, if application is made to that Court within ten
days after the entry of such order.
(3) Neither the application for nor the granting of
an appeal under this subsection shall stay
proceedings in the Court of International Trade or in
the Court of Federal Claims, as the case may be,
unless a stay is ordered by a judge of the Court of
International Trade or of the Court of Federal Claims
or by the United States Court of Appeals for the
Federal Circuit or a judge of that court.
(4)(A) The United States Court of Appeals for the
Federal Circuit shall have exclusive jurisdiction of an
appeal from an interlocutory order of a district court
of the United States, the District Court of Guam, the
District Court of the Virgin Islands, or the District
Court for the Northern Mariana Islands, granting or
denying, in whole or in part, a motion to transfer an
A-2.4
action to the United States Court of Federal Claims
under section 1631 of this title.
(B) When a motion to transfer an action to the Court
of Federal Claims is filed in a district court, no
further proceedings shall be taken in the district
court until 60 days after the court has ruled upon the
motion. If an appeal is taken from the district court's
grant or denial of the motion, proceedings shall be
further stayed until the appeal has been decided by
the Court of Appeals for the Federal Circuit. The stay
of proceedings in the district court shall not bar the
granting of preliminary or injunctive relief, where
appropriate and where expedition is reasonably
necessary. However, during the period in which
proceedings are stayed as provided in this
subparagraph, no transfer to the Court of Federal
Claims pursuant to the motion shall be carried out.
(e) The Supreme Court may prescribe rules, in accordance
with section 2072 of this title, to provide for an appeal of an
interlocutory decision to the courts of appeals that is not
otherwise provided for under subsection (a), (b), (c), or (d).
A-3.1
Sec. 1441. Actions removable generally
(a) Except as otherwise expressly provided by Act of
Congress, any civil action brought in a State court of which
the district courts of the United States have original
jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the
district and division embracing the place where such action
is pending. For purposes of removal under this chapter, the
citizenship of defendants sued under fictitious names shall
be disregarded.
(b) Any civil action of which the district courts have
original jurisdiction founded on a claim or right arising
under the Constitution, treaties or laws of the United States
shall be removable without regard to the citizenship or
residence of the parties. Any other such action shall be
removable only if none of the parties in interest properly
joined and served as defendants is a citizen of the State in
which such action is brought.
(c) Whenever a separate and independent claim or cause
of action within the jurisdiction conferred by section 1331 of
this title is joined with one or more otherwise non-removable
claims or causes of action, the entire case may be removed
and the district court may determine all issues therein, or, in
its discretion, may remand all matters in which State law
predominates.
A-32
(d) Any civil action brought in a State court ageiret «
foreign state as defined in section 160M) of thus tithe may be
removed by the foreign state to the distrikt court of Ge
United States for the district and division embracing te
place where such action is pending Upon remowal the acthon
shall be tried by the court without jury. Where remowal &
based upon this subsection, the time limvtations of sexthar
1446(b) of this chapter may be enlarged at ary theme for camer
shown.
(e) The court to which such civil action @ remnowed & mot
precluded from hearing and determining any claim im each
civil action because the State court from which each coed
action is removed did not have jurisdiction ower Gast «ieee
A-4.1
Sec. 1446. Procedure for removal
(a) A defendant or defendants desiring to remove any
civil action or criminal prosecution from a State court shall
file in the district court of the United States for the district
and division within which such action is pending a notice of
removal signed pursuant to Rule 11 of the Federal Rules of
Civil Procedure and containing a short and plain statement
of the grounds for removal, together with a copy of all
process, pleadings, and orders served upon such defendant
or defendants in such action.
(b) The notice of removal of a civil action or proceeding
shall be filed within thirty days after the receipt by the
defendant, through service or otherwise, of a copy of the
initial pleading setting forth the claim for relief upon which
such action or proceeding is based, or within thirty days
after the service of summons upon the defendant if such
initial pleading has then been filed in court and is not
required to be served on the defendant, whichever period is
shorter. If the case stated by the initial pleading is not
removable, a notice of removal may be filed within thirty
days after receipt by the defendant, through service or
otherwise, of a copy of an amended pleading, motion, order
or other paper from which it may first be ascertained that the
case is one which is or has become removable, except that a
case may not be removed on the basis of jurisdiction
conferred by section 1332 of this title more than 1 year after
commencement of the action.
(c) (1) A notice of removal of a criminal prosecution
shall be filed not later than thirty days after the
in the State court, or at any time before
trial, whichever is earlier, except that for good cause
shown the United States district court may enter an
A-4.2
order granting the defendant or defendants leave to
file the notice at a later time.
(2) A notice of removal of a criminal prosecution
shall include all grounds for such removal. A failure
to state grounds which exist at the time of the filing
of the notice shall constitute a waiver of such
grounds, and a second notice may be filed only on
grounds not existing at the time of the original
notice. For good cause shown, the United States
district court may grant relief from the limitations of
this paragraph.
(3) The filing of a notice of removal of a criminal
prosecution shall not prevent the State courtin which
such prosecution is pending from proceeding further,
except that a judgment of conviction shall not be
entered unless the prosecution is first remanded.
(4) The United States district court in which such
notice is filed shall examine the notice promptly. If it
clearly appears on the face of the notice and any
exhibits annexed thereto that removal should not be
permitted, the court shall make an order for
summary remand.
(5) If the United States district court does not
order the summary remand of such prosecution, it
shall order an evidentiary hearing to be held
promptly and after such hearing shall make such
disposition of the prosecution as justice shall require.
If the United States district court determines that
removal shall be permitted, it shall so notify the
A-4.3
State court in which prosecution is pending, which
shall proceed no further.
(d) Promptly after the filing of such notice of removal of
a civil action the defendant or defendants shall give written
notice thereof to all adverse parties and shall file a copy of
the notice with the clerk of such State court, which shall
effect the removal and the State court shall proceed no
further unless and until the case is remanded.
(e) If the defendant or defendants are in actual custody
on process issued by the State court, the district court shall
issue its writ of habeas corpus, and the marshal shall
thereupon take such defendant or defendants into his
custody and deliver a copy of the writ to the clerk of such
State court.
(f) With respect to any counterclaim removed to a
district court pursuant to section 337(c) of the Tariff Act of
1930, the district court shall resolve such counterclaim in the
same manner as an original complaint under the Federal
Rules of Civil Procedure, except that the payment of a filing
fee shall not be required in such cases and the counterclaim
shall relate back to the date of the original complaint in the
proceeding before the International Trade Commission
under section 337 of that Act.
A-5.1
Sec. 1447. Procedure after removal genefally
(a) In any case removed from a State court, the district
court may issue all necessary orders and process to bring
before it all proper parties whether served by process issued
by the State court or otherwise.
(b) It may require the removing party to file with its
clerk copies of all records and proceedings in such State
court or may cause the same to be brought before it by writ
of certiorari issued to such State court.
(c) A motion to remand the case on the basis of any
defect other than lack of subject matter jurisdiction must be
made within 30 days after the filing of the notice of removal
under section 1446(a). If at any time before final judgment it
appears that the district court lacks subject matter
jurisdiction, the case shall be remanded. An order
remanding the case may require payment of just costs and
any actual expenses, including attorney fees, incurred as a
result of the removal. A certified copy of the order of remand
shall be mailed by the clerk to the clerk of the State court.
The State court may thereupon proceed with such case.
(d) Anorder remanding a case to the State court from
which it was removed is not reviewable on appeal or
otherwise, except that an order remanding a case to the State
court from which it was removed pursuant to section 1443 of
this title shall be reviewable by appeal or otherwise.
(e) If after removal the plaintiff seeks to join additional
defendants whose joinder would destroy subject matter
jurisdiction, the court may deny joinder, or permit joinder
and remand the action to the State court.
A-6.1
LIMITATION OF SHIPOWNER’S LIABILITY ACT
46 USCS § 181 (2002)
§ 181. Liability of masters as carriers
If any shipper of platina, gold, gold dust, silver, bullion, or
other precious metals, coins, jewelry, bills of any bank or
public body, diamonds, or other precious stones, or any gold
or silver in a manufactured or unmanufactured state,
watches, clocks, or timepieces of any description, trinkets,
orders, notes, or securities for payment of money, stamps,
maps, writings, title-deeds, printings, engravings, pictures,
gold or silver plate or plated articles, glass, china, silks in a
manufactured or unmanufactured state, and whether
wrought up or not wrought up with any other material, furs,
or lace, or any of them, contained in any parcel, or package,
or trunk, shall lade the same as freight or baggage, on any
vessel, without at the time of such lading giving to the
master, clerk, agent, or owner of such vessel receiving the
same a written notice of the true character and value thereof,
and having the same entered on the bill of lading therefor,
the master and owner of such vessel shall not be liable as
carriers thereof in any form or manner; nor shall any such
master or owner be liable for any such goods beyond the
value and according to the character thereof so notified and
entered.
46 USCS § 182 (2002)
§ 182. Loss by fire
No owner of any vessel shall be liable to answer for or make
good to any person any loss or damage, which may happen
to any merchandise whatsoever, which shall be shipped,
taken in, or put on board any such vessel, by reason or by
means of any fire happening to or on board the vessel, unless
such fire is caused by the design or neglect of such owner.
A-6.2
46 USCS § 183 (2002)
§ 183. Amount of liability
(a) Privity or knowledge of owner; limitation. The liability of
the owner of any vessel, whether American or foreign, for
any embezzlement, loss, or destruction by any person of any
property, goods, or merchandise shipped or put on board of
such vessel, or for any loss, damage, or injury by collision, or
for any act, matter, or thing, loss, damage, or forfeiture,
done, occasioned, or incurred, without the privity or
knowledge of such owner or owners, shall not, except in the
cases provided for in subsection (b) of this section, exceed
the amount or value of the interest of such owner in such
vessel, and her freight then pending.
(b) Seagoing vessels; losses not covered in full. In the case of
any seagoing vessel, if the amount of the owner's liability as
limited under subsection (a) is insufficient to pay all losses
in full, and the portion of such amount applicable to the
payment of losses in respect of loss of life or bodily injury is
less than $ 420 per ton of such vessel’s tonnage, such portion
shall be increased to an amount equal to $ 420 per ton, to be
available only for the payment of losses in respect of loss of
life or bodily injury. If such portion so increased is
insufficient to pay such losses in full, they shall be paid
therefrom in proportion to their respective amounts.
(c) Tonnage of seagoing vessels. For the purposes of this
section the tonnage of a seagoing steam or motor vessel shall
be her gross tonnage without deduction on account of engine
room, and the tonnage of a seagoing sailing vessel shall be
her registered tonnage: Provided, That there shall not be
included in such tonnage any space occupied by seamen or
apprentices and appropriated to their use.
A-6.3
(d) Loss of life or bodily injury arising on distinct occasions.
The owner of any such seagoing vessel shall be liable in
respect of loss of life or bodily injury arising on distinct
occasions to the same extent as if no other loss of life or
bodily injury had arisen.
(e) Privity imputed to owner. In respect of loss of life or
bodily injury the privity or knowledge of the master of a
seagoing vessel or of the superintendent or managing agent
of the owner thereof, at or prior to the commencement of
each voyage, shall be deemed conclusively the privity or
knowledge of the owner of such vessel.
(f) "Seagoing vessel" defined. As used in subsections (b), (c),
(d), and (e) of this section and in section 4283A [46 USCS
Appx §§ 183b], the term "seagoing vessel" shall not include
pleasure yachts, tugs, towboats, towing vessels, tank vessels,
fishing vessels or their tenders, self-propelled lighters,
nondescript self-propelled vessels, canal boats, scows, car
floats, barges, lighters, or nondescript non-self-propelled
vessels, even though the same may be seagoing vessels
within the meaning of such term as used in section 4289 of
this chapter, as amended [46 USCS Appx §§ 188].
(g) Vicarious medical malpractice liability; statutory
limitations. In a suit by any person in which the operator or
owner of a vessel or employer of a crewmember is claimed
-to have vicarious liability for medical malpractice with
regard to a crewmember occurring at a shoreside facility,
and to the extent the damages resulted from the conduct of
any shoreside doctor, hospital, medical facility, or other
health care provider, such operator, owner, or employer
shall be entitled to rely upon any and all statutory
limitations of liability applicable to the doctor, hospital,
medical facility, or other health care provider in the State of
A-6.4
the United States in which the shoreside medical care was
provided.
46 USCS Appx § 184 (2002)
§ 184. Apportionment of compensation
Whenever any such embezzlement, loss, or destruction is
suffered by several freighters or owners of goods, wares,
merchandise, or any property whatever, on the same voyage,
and the whole value of the vessel, and her freight for the
voyage, is not sufficient to make compensation to each of
them, they shall receive compensation from the owner of the
vessel in proportion to their respective losses; and for that
purpose the freighters and owners of the property, and the
owner of the vessel, or any of them, may take the
appropriate proceedings in any court, for the purpose of
apportioning the sum for which the owner of the vessel may
be liable among the parties entitled thereto.
46 USCS § 185 (2002)
§ 185. Petition for limitation of liability; deposit of value of
interest in court; transfer of interest to trustee
The vessel owner, within six months after a claimant shall
have given to or filed with such owner written notice of
claim, may petition a district court of the United States of
competent jurisdiction for limitation of liability within the
provisions of this chapter, as amended, and the owner (a)
shall deposit with the court, for the benefit of claimants, a
sum equal to the amount or value of the interest of such
owner in the vessel and freight, or approved security
therefor, and in addition such sums, or approved security
therefor, as the court may from time to time fix as necessary
to carry out the provisions of section 4283, as amended [46
USCS Appx §§ 183], or (b) at his option shall transfer, for the
benefit of claimants, to a trustee to be appointed by the court
his interest in the vessel and freight, together with such
A-6.5
sums, or approved security therefor, as the court may from
time to time fix as necessary to carry out the provisions of
section 4283, as amended [46 USCS Appx §§ 183]. Upon
compliance with the requirements of this section all claims
and proceedings against the owner with respect to the
matter in question shall cease.
46 USCS § 186 (2002)
§ 186. Charterer may be deemed over
The charterer of any vessel, in case he shall man, victual, and
navigate such vessel at his own expense, or by his own
procurement, shall be deemed the owner of such vessel
within the meaning of the provisions of this Title relating to
the limitation of the liability of the owners of vessels; and
such vessel, when so chartered, shall be liable in the same
manner as if navigated by the owner thereof.
46 USCS § 187 (2002)
§ 187. Remedies reserved
Nothing in the five preceding sections [46 USCS Appx §§§§
182, 183, 184-186] shall be construed to take away or affect
the remedy to which any party may be entitled, against the
master, officers, or seamen, for or on account of any
embezzlement, injury, loss, or destruction of merchandise, or
property, put on board any vessel, or an account of any
negligence, fraud, or other malversation of such master,
officers, or seamen, respectively, nor to lessen or take away
any responsibility to which any master or seaman of any
vessel may by law be liable, notwithstanding such master or
seaman may be an owner or part owner of the vessel.
46 USCS § 188 (2002)
§ 188. Limitation of liability of owners applied to all.vessels
Except as otherwise specifically provided therein, the
A-6.6
provisions of the nine preceding sections and of section
eighteen of the act entitled "An act to remove certain burdens
on the American merchant marine and encourage the
American foreign carrying trade and for other purposes,"
approved June twenty-sixth eighteen hundred and eighty-
four (23 Stat. 57) [46 USCS Appx §§ 189], shall apply to all
seagoing vessels, and also to all vessels used on lakes or
rivers or in inland navigation, including canal boats, barges,
and lighters.
46 USCS § 189 (2002)
§ 189. Limitation of liability of owners of vessels for debts
The individual liability of a ship-owner, shall be limited to
the proportion of any or all debts and liabilities that his
individual share of the vessel bears to the whole; and the
aggregate liabilities of all the owners of a vessel on account
of the same shall not exceed the value of such vessels and
freight pending: Provided, That this provision shall not
affect the liability of any owner incurred previous to the
passage of this act [enacted June 26, 1884], nor prevent any
claimant from joining all the owners in one action; nor shall
the same apply to wages due to persons employed by said
ship-owners.
46 USCS § 190 (2002)
§ 190. Stipulations relieving from liability for negligence
It shall not be lawful for the manager, agent, master, or
owner of any vessel transporting merchandise or property
from or between ports of the United States and foreign ports
to insert in any bill of lading or shipping document any
clause, covenant, or agreement whereby it, he, or they shall
be relieved from liability for loss or damage arising from
negligence, fault, or failure in proper loading, stowage,
custody, care, or proper delivery of any and all lawful
merchandise or property committed to its or their charge.
A-6.7
Any and all words or clauses of such import inserted in bills
of lading or shipping receipts shall be null and void and of
no effect. |
46 USCS § 191 (2002)
§ 191. Stipulations relieving from exercise of due diligence in
equipping vessels
It shall not be lawful for any vessel transporting
merchandise or property from or between ports of the
United States of America and foreign ports, her owner,
master, agent, or manager, to insert in any bill of lading or
shipping document any covenant or agreement whereby the
obligations of the owner or owners of said vessel to exercise
due diligence [to] properly equip, man, provision, and outfit
said vessel, and to make said vessel seaworthy and capable
of performing her intended voyage, or whereby the
obligations of the master, officers, agents, or servants to
carefully handle and stow her cargo and to care for and
properly deliver same, shall in any wise be lessened,
weakened, or avoided.
46 USCS § 192 (2002)
§ 192. Limitation of liability for errors of navigation, dangers
of the sea and acts of God
If the owner of any vessel transporting merchandise or
property to or from any port in the United States of America
shall exercise due diligence to make the said vessel in all
respects seaworthy and properly manned, equipped, and
supplied, neither the vessel, her owner or owners, agent, or
charterers, shall become or be held responsible for damage
or loss resulting from faults or errors in navigation or in the
management of said vessel nor shall the vessel, her owner or
owners, charterers, agent, or master be held liable for losses
arising from dangers of the sea or other navigable waters,
acts of God, or public enemies, or the inherent defect,
A-6.8
quality, or vice of the thing carried, or from insufficiency of
package, or seizure under legal process, or for loss resulting
from any act or omission of the shipper or owner of the
goods, his agent or representative, or from saving or
attempting to save life or property at sea, or from any
deviation in rendering such service.
46 USCS § 193 (2002)
§ 193. Bills of lading to be issued; contents
It shall be the duty of the owner or owners, masters, or agent
of any vessel transporting merchandise or property from or
between ports of the United States and foreign ports to issue
to shippers of any lawful merchandise a bill of lading, or
shipping document, stating, among other things, the marks
necessary for identification, number of packages, or quantity,
stating whether it be carrier's or shipper's weight, and
apparent order or condition of such merchandise or property
delivered to and received by the owner, master, or agent of
the vessel for transportation, and such document shall be
prima facie evidence of the receipt of the merchandise
therein described.
46 USCS § 194 (2002)
§ 194. Penalties; liens; recovery
For a violation of any of the provisions of this act [46 USCS
Appx §§§§ 190 et seq.] the agent, owner, or master of the
vessel guilty of such violation, and who refuses to issue on
demand the bill of lading herein provided for, shall be liable
to a fine not exceeding two thousand dollars. The amount of
the fine and costs for such violation shall be a lien upon the
vessel, whose agent, owner, or master is guilty of such
violation, and such vessel may be libeled therefor in any
district court of the United States, within whose jurisdiction
the vessel may be found. One-half of such penalty shall go to
the party injured by such violation and the remainder to the
A-6.9
Government of the United States.
46 USCS § 195 (2002)
§ 195. Certain provisions inapplicable to transportation of
live animals
Sections one and four [46 USCS Appx §§8§ 190, 193] shall not
apply to the transportation of live animals.
46 USCS § 196 (2002)
§ 196. Certain laws unaffected
This act [46 USCS Appx §§§§ 190 et seq.] shall not be held to
modify or repeal sections 4281, 4282 and 4283 of the Revised
Statutes of the United States [46 USCS Appx $986 181, 182,
and 183], or any other statute defining the liability of vessels,
their owners, or representatives.
8-1
APPENDIX &
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOLESIANA
LAFAYETTE/OPELOUSAS DIVisaom
ee
RUSSELL } GOULAS, & CTV. ACT®
“I WREE OF are
VERSUS Ute (xeeeTy
DENBURY MANAGEMENT.
INC MACESTRATY
AT TYNES
MEMOS ANIA M BLA Dw
Thre smasener ciommere Berfore he (curt ome Miomen uo
Rermarad fiked om Bacfhalf of piaemmt®: Baal) and tere
Cmomphare amades wcharady seted we the mdterertectmener of fer moe
cbakd Hdebe (eonaden argrmg plement 2 homes Sir lem pe
wart t 46 USC § GR, & eet ereeiie perce & Ge
“Sevengs to Severs Cleese” 46 U SC § TTD
[he femademe [Romina Wlarnagermrcier Cte: more
ote geeertaces of lammamgmeor of breftedies we 6 aeflemas of ne
are wer Ww phlgmnmfPe omane coms pemrion prom eds tor eee. we
atpemng, “Waat Be ces heeeee Keer ed minds mem mae ened
ee Oe ee
bommmtetaom of tnefedety ameter wt mutter Sled sender the
ee
court.” Defiemdiest’s Meme.» 2
B-2
Procedural History
On April 23, 1999, plaintiffs, Russell J. Goulas, Jr. and
hes wife, filed suit against Denbury, C.F. Bean Corp.
(“Bean”) and Gulf Island Contractors, Inc. (“Gulf Island”)
pursuant to the Jones Act, 46 U.S.C. § 688 and the general
maritime laws of the United States. Plaintiffs alleged back
iyurtes allegedly sustained in an accident on April 25, 1998,
were the result of Goulas’s employment as a Jones Act sea-
man with Denbury. Plaintiffs also asserted the M/V CRAY-
FISH, this Court nresumes, vessel owned by Denbury, was
umecaworthy
On April 26, 1999, Goulas filed an amending and sup-
plomental complaint to add an additional defendant, BLR
Construction, Inc. On May 7, 1999, Denbury filed an
Exception of No Right of Action and supporting memoran-
dum im the 16th Judicial District Court, Parish of St. Martin,
Lowtsana. On June 2, 1999, Judge Forter granted Denbury’s
Excepnon of No Right of Acton and judgment was entered
on August 11, 1999. On August 4, 1999, Goulas filed a
Nowoe cf Appeal which was signed on October 7, 1999
On December 6, 2000, the Louisiana Third Circuit Court
of Appeals reversed the trial court's order granting
Denbery’s Exception of No Right/Cause of Action without
hoarmg and remanded the matter to the district court to be
rounetatod
On March 16, 2001, Denbury filed its re-urged
Excepoom. Answer and Defenses In thes pleading, Denbury
awserted mts night to seck cxoneration from or limstation of
lability persuant to 46 U.S.C. § 183. Additionally, on March
16. 2001. Denbury propounded Requests for Admissions to
B-3
plaintiff, to determine whether plaintiff contested Denbury’s
right to limit its liability to the value of the vessel in this lit-
igation, the M/V CRAYFISH.
On March 31, 2001, plaintiff responded to the Request
for Admissions and contested Denbury’s right to exoneration
from liability, as well as Denbury’s right to limit its liability
to the value of the vessel at issue.
On April 19, 2001, Denbury filed its removal petition in
United States District Court for the Western District of
Louisiana and on May 1|7, 2001, plaintiffs’ filed the instant
Motion to Remand.
Analysis
Defendant concedes in its memorandum at page 10 that “an
admiralty action filed in state court under the “Savings to
Suitor’s Clause” is not removable solely because it may
have been filed in federal court.” Calmer S.S. Corp. v.
Taylor, 303 U.S. 525, 527-28, 82 L.Ed. 993, 58 S.Ct. 651
(1938). Defendant asserts, however, “removal of such an
action is possible if federal jurisdiction is based on some-
thing other than admiralty, such as a federal statute.”
Tennessee Gas Pipeline v. Houston Casualty Ins. Co., 87 F.
3d 150, 153 (Sth Cir. 1996). Defendant’s Memo., P. 10.
Defendant further asserts that the Limitation of Liability
Act of 1851 (“the Act”) , 46 U.S. C. § 181, et seq. , is such
a federal statute, i.c., one “that protects the right of vessel
owners to seck limitation of their liability to the value of the
vessel. The Act gives exclusive Jurisdiction over the vessel
owner's right to limit liability to federal district courts. State
courts do not have concurrent jurisdiction over actions for
B-4
limitation of liability.” Id. at 11.
This Court agrees an admiralty action filed in state court
under the “Savings to Suitor’s Clause” is not removable
unless the removal of the action is based on something other
than admiralty jurisdiction, i.e., another “federal statue.”
Additionally, this Court agrees the Act, 46 U.S.C. § 181,
provides federal district courts with exclusive jurisdiction
over the vessel owner’s right to limit its liability and that
state courts do not have concurrent jurisdiction over actions
for limitation of liability. However, it is at this juncture that
defendant’s argument fails.
46 U.S.C. § 181, et seq.
The Fifth Circuit in ‘The-Matter of the Complaint of
Vatican Shrimp Co., Inc., 820 F.2d 674 (Sth Cir. 1987) pro-
vides the methods by which a vessel owner may seek to limit
his liability under the Act and states:
That is, we recognize that shipowners may choose to
set up the defense of limitation of liability under
either method: by pleading the substantive provi-
sions of section 183 in a properly filed answer in any
court, or by filing a section 185 petition in a federal
district court. However, if a shipowner is sued in
state court, the owner’s failure to file a section 185
petition in a federal district court within six months
after receiving written notice of the claim will result
in forfeiture of the right to limit liability should the
claimant contest the limitation defense. This is so
because solely filing in the state court an answer in
which limitation is pled obviously does not provide
a federal court with jurisdiction to act. In contrast,
B-5
defensive pleading under section 183 in a federal
district court answer does not present the same
Jurisdictional problems. The district court, having
jurisdiction to hear the entire case initially filed with
it, can adjudicate and rule an a limited liability issue
that is raised in a properly filed answer.
The Fifth Circuit further states in footnote 4:
A shipowner who files a section 185 petition must
also post a bond with the court in the amount of the
shipowner’s interest in the vessel and its pending
freight, or transfer his interest, in the vessel and its
freight to a court appointed trustee. 46 U.S.C. § 185
(1982); Supp. R. Admir. & Maritime F(1)(a), (b). We
realize that these requirements will prove burden-
some to a shipowner who must file a section 185
petition before the claimant has even filed suit.
Nonetheless, absent proper removal of the case to
federal court, defensive pleading in a state court
answer cannot provide a district court with juris-
diction to hear the claim. As Gilmore and Black
have noted:
To save himself the expense of filing a limitation
complaint and posting security, a shipowner
might be tempted to wait until some claimant has
instituted an action and then plead the Limitation
Act in his answer. However, if he is competent-
ly advised, he will always proceed by filing §
185 complaint except in a single claim situation
where he is sure the single claimant. will bring
his action in federal court. Gilmore & Blank,
supra, § 10-15 at 858-59.
(emphasis added).
B-6
The Fifth Circuit further states:
In sum, once written notice of a claim is received,
unless that notice is a complaint filed in federal court,
the prudent shipowner would file a timely section
185 petition in district court and move to stay the fed-
eral proceedings on the limitation petition until such
time as limited liability is contested. This practice
will ensure that a federal court may exercise its exclu-
sive jurisdiction to hear the limitation issue even if
the claimant eventually files suit in a state court and
contests limitation more than six months after giving
written notice of the claim. Defendant, argues the fil-
ing of the defense of limitation of
liability in its answer in the state court proceeding, now enti-
tles the defendant to remove plaintiff’s Jones Act claim and
have Denbury’s limitation defense heard in this Court.
Vatican Shrimp, supra, contrary to Denbury’s assertions,
does not support this position.
The same facts as are before this Court were also pres-
ent in the Vatican Shrimp case, as:
In its state court answer, Vatican Shrimp raised the
defense of exoneration or limitation of liability to the
value of the F/V VATICAN and its extending freight,
which Vatican Shrimp assessed at $200,331.83. On
April 17, 1986, one and one-half years after the suit
was filed, Vatican Shrimp petitioned the federal dis-
trict court for ‘Limitation of liability under 46 U.S.C.
§ 185 and for restraint of the state court trial.
The district court denied Vatican Shrimp’s § 185 petition
B-7
as untimely and:
On May 15, 1986, Vatican Shrimp removed the case
from state to federal court under 28 U.S.C. § 1441.
Because it had previously ruled that Vatican Shrimp
could not limit its liability in the federal courts, the
district court, on the plaintiff's motion, entered an
order remandirig the case to state court.
Vatican Shrimp subsequently appealed dismissal of
its § 185 petition. The Fifth Circuit states:
This court has not previously addressed the first ques-
tion that Vatican Shrimp raises, that is, under what
circumstances does a federal court have jurisdiction
to adjudicate a contested claim for limitation of lia-
bility when the shipowner has pled limitation defen-
sively in a properly filed state court answer.
We hold that on the facts of the case now before us,
Vatican Shrimp’s section 185 petition was untimely,
and Vatican Shrimp’s defensive pleading in the state
court answer did not provide the federal court with
jurisdiction to hear the shipowner’s limitation claim.
Accordingly, as the relevant facts of this case are within
the relevant facts in the Fifth Circuit holding of Vatican
Shrimp, the outcome will be the same. Plaintiff’s Motion to
Remand must be GRANTED on the basis this Court now
lacks jurisdiction to hear the limitation action as six months
B-8
has passed and a limitation proceeding filed would be
untimely. !
Accordingly, based on the foregoing, plaintiffs’ Motion
to Remand [doc. #10] is hereby GRANTED, REMANDING
this matter to the 16th Judicial District Court for the Parish
of St. Martin, Louisiana.
THUS DONE AND SIGNED this 13 day of July, 2001.
/s/ Rebecca F. Doherty
REBECCA F. DOHERTY
UNITED STATES DISTRICT JUDGE
IThis Court further notes that the Fifth Circuit did not decide the
question of “whether the Savings to Suitor’s Clause or the non-remov-
ability provision of the Jones Act, 28 U.S.C. § 1445(a) would preclude
the removal of a shipowner’s suit to limit liability, an exclusively feder-
al claim,” as resolution of the issue was unnecessary to decide the
Vatican Shrimp case. However, the Fifth Circuit did note:
.. . that the “well-pleaded complaint” rule and the ‘derivative
jurisdiction” doctrine may be relevant to the resolution of this
issue. See Franchise Tax Bd. v. Const. Laborers Vac. Trust,
463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (for pur-
poses of removal under 28 U.S.C. § 1441, federal jurisdiction
must be established in the plaintiff’s complaint, not in the
defendant’s answer); (exclusively federal claim cannot be
removed from state court); Azzopardi v. Ocean Drilling and
Exploration Co., 742 F.2d 890, 892 n. 2 (Sth Cir. 1984) (deriv-
ative jurisdiction doctrine would preclude removal of a state
action under the Jones Act and the Death on the High. Seas
Act).
B-9
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE/OPELOUSAS DIVISION
Filed 7-16-2001
RUSSELL J. GOULAS, JR. CIVIL ACTION
NUMBER: 01-0710
VERSUS JUDGE DOHERTY
DENBURY MANAGEMENT,
INC. MAGISTRATE
JUDGE TYNES
ORDER
Considering the foregoing Memorandum Ruling;
IT IS HEREBY ORDERED, ADJUDGED AND
DECREED that plaintiffs’ Motion to Remand [doc. #10],
filed on behalf of plaintiffs, Russell and Arlene Goulas, indi-
vidually, and as the administrator of their minor child, Blake
Goulas, is GRANTED, REMANDING this matter to the
16th Judicial District Court for the Parish of St. Martin,
Louisiana.
Lafayette, Louisiana this 13 day of July , 2001
/s/ Rebecca F. Doherty
REBECCA F. DOHERTY
UNITED STATES DISTRICT JUDGE
C-]
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
NO. 01-30963
Summary Calendar
ARLENE GOULAS; RUSSELL J. GOULAS, JR.,
Individually and on behalf of Blake Goulas,
Plaintiffs-Appellees,
V.
DENBURY MANAGEMENT, INC., et al.
Defendants,
DENBURY MANAGEMENT, INC.
Defendant-Appellant.
On Appeal from the United States District Court,
Western District of Louisiana
USDC No. 01-CV-710
Before REYNALDO G. GARZA, JOLLY., and WIENER,
Circuit Judges
REYNALDO G. GARZA, Circuit Judge:!
| Pursuant to Sth Cir. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under the
limited circumstances set forth in 5th Cir. R. 47.5.4.
——
C-2
3
Russell Goulas filed a Jones Act complaint against
Denbury Management and others in Louisiana state court on
April 23, 1999, alleging that he suffered a back injury while
employed on Denbury’s vessel, the M/V CRAWFISH,
Denbury’s answer asserted a limitation-of-liability defense
under 46 U.S.C. § 183. Denbury did not file a federal peti-
tion for limitation of liability. When Goulas responded to
requests for admissions in a manner indicating that he con-
tested the limitation-of-liability defense, Denbury removed
the action to federal court.
Goulas submitted a motion to remand the case to state
court that was granted by the district court. The court stated
that it lacked jurisdiction because a defense of limitation of
liability does “‘not provide the federal court with jurisdiction
to hear the shipowner’s limitation claim.” See R. 251 (quot-
ing Vatican Shrimp Co., Inc. v. Solis, 820 F.2d 674, 677 (Sth
Cir. 1987)). The court noted as well that a limitation-of-lia-
bility proceeding under 46 U.S.C. § 185 would be untimely
as more than six months had passed since Denbury received
written notice of Goulas’s claim. Denbury appealed.
II.
A vessel owner can “restrict its liability, resulting from
any occurrence for which the vessel is liable, to the value of
the vessel and its impending freight.” Vatican Shrimp, 820
F.2d at 677; 46 U.S.C. § 183. This limitation of liability can
arise from either 46 U.S.C. § 185, which permits an owner
to file a petition in federal court seeking to limit liability, or
an owner may plead limitation as an affirmative defense. See
Vatican, 820 F.2d at 677-78. If an owner opts for the former
C-3
route, the § 185 petition must be filed in federal court with-
in six months of written notice of the claim. If, however, an
owner is sued in state court and does not file a § 185 petition
in federal court within six months of receiving written notice
of the claim, the owner forfeits the right to limit liability
should the claimant contest the limitation defense. See id. at
678. The driving rationale is that merely filing in state court
an answer in which limitation is pled in no way provides a
federal court with jurisdiction to act. See id.
Remand of a case followed by removal is governed by 28
U.S.C. § 1447(c).2 Under 28 U.S.C. § 1443, remand orders
made pursuant to § 1447(c) remand orders “are not review-
able on appeal, by mandamus, or otherwise, except in civil
rights cases.” Tillman v. CSX Transp., Inc., 929 F.2d 1023,
1026 (Sth Cir. 1991). Restrictions on review of a remand
order apply only to remands based on a ground specified in
§ 1447(c). See Things Remembered, Inc. v. Petrarca, 516
U.S. 124, 127-28 (1996); McDermott Intl, Inc., v. Lloyds
Underwriters of London, 944 F.2d 1199, 1201 (Sth Cir.
1991). The district court need not explicitly state that it is
remanding the case pursuant to § 1447(c); it need only utter
the “magic words” that it believes it “lacks subject matter
jurisdiction” for the remand to be “totally unreviewable.”
Tillman, 92 F.2d at 1026-27. Because the district court’s
remand order explicitly stated that it “lacks jurisdiction to
hear [Denbury’s] remand action,” the remand is not review-
able by way of appeal or writ of mandamus.
2 Section 1447(c) states that a “motion to remand the case on
the basis of any defect other than lack of subject matter jurisdiction must
be made within 30 days after filing of the notice of removal under sec-
tion 1446(a). If at any time before final judgment it appears that the dis-
trict court lacks subject matter jurisdiction, the case shall be remanded
..” 28 U.S.C. § 1447(c).
C4
Ht.
Denbury next asserts that the lower court's ruling i an
appealable collateral order. If an issue undertying « remand
order has “independent relevance in adyudging the nghts of
the parties (1.¢., relevance beyond determuning the cxmtence
of federal subyect matter surtedscthon), the dectson m separe-
ble” and may be reviewed “even if it also happens to hawe an
incidental effect on the court's jurisdiction.” Dolewr ex ref
Doleac v. Michalson, 264 F_34 470, 486 (Sth Ce. 2001). The
issue must precede the remand “im logx and im fact.” and the
ruling must be “conclusive” in that & @ fenctionally eare-
viewable by the state court. Linton » Airtas Indecorie,
F.3d 592, 597 (Sth Cir, 1994)
Once 4 court determines thal an ewe & separable, «
must then decide whether it ss rewnewalbhe wrader thee codlener.
al orders doctrine. See Doleac, 264 F.3d at 499-91. To be
reviewable, “the order must combuwely determmeme Gee die
puted question. resolve an important meme commphenely sep
rate from the merits of the acthon, and be effectively enre-
viewable on appeal from « final jedgment™” Coapers 4
Lybrand v. Livesay, 437 U.S. 463, 468 (1978), Doleac, 264
F.3d at 490. Denbury's argument: address only he eopare
bility prong. See Appellant's Brief, at 8-15
Denbury argues that the dretract court foumd Ge § 18)
limutatron deferme to tee siabpext to tar came ect cmcme® tame
lemstatoom as ce a § 18S peetetacm Wiehe Gee Geemract comet dirt
mentson the ost cmcnth terme beret ot dad wo omby om setieremce
to the unawailabelity of 2 § 185 petition As Deenteery had ane
attempted to file a lemetetaomof lastulsty pertetucm ameter §
TAS. thee eteterment wae om adiencel
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CEGASESGE TD
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.