Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-01074/USCOURTS-cand-3_05-cv-01074-7/pdf.json

Nature of Suit Code: 340
Nature of Suit: Marine Personal Injury
Cause of Action: 28:1331 Fed. Question

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

In the matter of the Complaint of

KRISTRA INVESTMENTS, INC., et al.,

Petitioners,

for exoneration from or limitation of liability.

 /

No. C 05-01074 SI

ORDER DENYING CLAIMANTS’

MOTION TO LIFT STAY AND ALLOW

ACTION TO PROCEED IN STATE

COURT AND TO PREVENT

LIMITATION OF ACTION BASED ON

ANY LONGSHORE CLAIM; AND

GRANTING CLAIMANTS’ MOTION TO

INCREASE SECURITY GIVEN BY

PLAINTIFFS

Now before the Court is a motion brought by claimantsin this matter. Claimants request that the Court:

1) lift its injunction and allow their state court lawsuit to proceed; 2) rule that plaintiffs are not entitled to

exoneration from or limitationofliability under 46 U.S.C. § 184; and 3) order an appraisal of barge 004, the

vessel on which claimants were allegedly injured. For the following reasons, the Court GRANTS claimants’

request for appraisal of the barge, and DENIES the remainder of their motion.

BACKGROUND

Claimants are JeffSchelbyand Dennis Dougherty. According to the pleadings, on April 23, 2004, both

Schelby and Dougherty were working on a barge in San Francisco Bay. Schelby and Dougherty were working

inside a man basket that was suspended by a crane attached to the barge. At some point, the crane allowed

the man basket to drop 15 to 30 feet, injuring both Schelby and Dougherty.

Schelby, Dougherty, and their spouses brought suit in state court against the owners of the barge,

seeking compensation for their injuries. Petitioners, the defendants in the state-court action, subsequently filed

Case 3:05-cv-01074-SI Document 50 Filed 11/08/05 Page 1 of 4
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

146 U.S.C. App. § 184 is part of the Limitation Act, which Congress passed in 1851 “to encourage

ship-building and to induce capitalists to invest money in this branch of industry.” Lewis v. Lewis & Clark

Marine, Inc., 531 U.S. 438, 446, 121 S. Ct. 993, 1000 (2001)(internalquotationmarks omitted). To achieve

this goal, the Act “allows a vesselowner to limit liability for damage or injury, occasioned without the owner’s

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

2When a maritime worker is injured due to “negligence of a vessel,” 33 U.S.C. § 905(b) allows an

injured maritime worker to bring an action against the vesselas a third-party defendant under 33 U.S.C. § 933.

3Claimants originally requested that the Court lift its injunction and allow their state-court action to

proceed against petitioners. In their reply brief, however, plaintiffs concede that this Court may not do so

because a number of potential interested parties are not included in this action.

2

this action, seeking to limit their liability to the value ofthe barge pursuant to 46 U.S.C. § 184.1 On March 23,

2005, this Court issued an injunction, which prevented the continued prosecution of claimant’s state court

action. Claimants then filed an answer, asserting a number of claims against petitioners, including one claim for

negligence under 33 U.S.C. § 905(b).2

DISCUSSION

Claimantsraise two issuesin their motion.3 First, they argue that their claim under 33 U.S.C. § 905(b)

is exempt from the limitation on liability established by 46 U.S.C. App. § 184. Second, claimants request that

the Court order an appraisal of the barge, its equipment, and cargo at the time of the incident to determine a

proper valuation for the limitation action.

Claimants’ first argument is based upon 33 U.S.C. § 948, which states: “Nothing in sections 183, 184

to 186, 188, or 189 of Title 46, Appendix, shall be held to limit the amount for which recovery may be had .

. . (2) in anyproceeding forcompensation, any addition to compensation, or any civil penalty.” Claimants argue

that their section 905(b) claim is both an “addition to compensation” and a “civil penalty.”

33 U.S.C. § 948 was enacted as part of the Longshore and Harbor Workers’ Compensation Act

(“LHWCA”), which created a comprehensive system of workers’ compensation insurance for maritime

workers. The LHWCA does not define “addition to compensation” or “civil penalty.” It does, however, define

“compensation” as “the money allowance payable to an employee or to his dependents as provided for in this

chapter, and includes funeral benefits provided therein.” 33 U.S.C. § 902(12).

Neither the parties northe Court have uncovered a single case that has considered whether an action

Case 3:05-cv-01074-SI Document 50 Filed 11/08/05 Page 2 of 4
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

under section 905(b) constitutes an action for “addition to compensation” or a “civil penalty.” Some courts,

however, have considered 905(b) claims in the context of limitation actions without considering whether 33

U.S.C. § 948 applies. See, e.g., Ray v. Lykes Bros. S.S. Co., 805 F.2d 552 (5th Cir. 1986).

The Court believes there is good reason for this dearth of authority. Calling a civil negligence action

an “addition to compensation” or a “civil penalty” is strained at best. Indeed, it would be illogical to refer to

a 905(b) action as an “addition to compensation” when an employee’s “compensation” is reduced by any

amount recovered through such an action. See 33 U.S.C. 933(f) (providing that, where employee recovers

from a third party, amount of compensation is reduced by the amount of recovery). In addition, referring to

a civil action for negligence as a “civil penalty” is clearly at odds with the common meaning of that term. The

far more likely explanation of Congress’s intent was that both phrases refer to 33 U.S.C. § 914, which

authorizes both additions to compensation and civil penalties in language that parallels the language ofsection

948. See 33 U.S.C. § 914(e) (“. . . an amount equal to 10 per centum [of an installment payment of

compensation] shall be paid atthe same time as, but in addition to, such installment”) (emphasis added); 33

U.S.C. § 914(f) (where compensation payment made under terms of award is more than ten days late, 20%

of payment shall be added and “shall be paid at the same time as, but in addition to, such compensation”)

(emphasis added); 33 U.S.C. § 914(g) (creating “civil penalty” in the amount of $100 when employer fails to

notify Secretary of Labor that payment of compensation has been completed). Thus, the Court rejects

claimants’ argument that 33 U.S.C. § 948 bars petitioners’ limitation action.

The second issue raised in claimants’ motion concerns the value of the barge on which they were

injured. Claimants dispute petitioners’ contention that the value of the barge is $700,000. They have requested

that the Court order an appraisal of the vessel, its equipment, and its cargo at the time of the incident.

Petitioners have not objected to this request. Thus, the Court will direct the Clerk to enter an order for

appraisal pursuant to Admir. L.R. 7-2.

CONCLUSION

For the foregoing reasons, claimants’ motion to lift the injunction and to prevent limitation of action is

Case 3:05-cv-01074-SI Document 50 Filed 11/08/05 Page 3 of 4
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

DENIED, while claimants’ motion to increase security is GRANTED (Docket No. 16). The Clerk is directed

to enter an order for appraisal pursuant to Admir. L.R. 7-2.

IT IS SO ORDERED.

Dated: November 7, 2005

 

SUSAN ILLSTON

United States District Judge

Case 3:05-cv-01074-SI Document 50 Filed 11/08/05 Page 4 of 4