F I L E D

United States Court of Appeals

Tenth Circuit

MAY 3 2004

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

MAGNOLIA MARINE TRANSPORT COMPANY,

as owner of the Robert Y. Love, its Engines,

Tackle, etc., in a cause of exoneration from or

limitation of liability,

Petitioner-Appellee,

_____________________________

STATE OF OKLAHOMA,

Movant-Appellant.

No. 03-7023

Appeal from the United States District Court

for the Eastern District of Oklahoma

(D.C. No. 02-CV-615-P)

Greg S. Eldridge, Assistant Attorney General (E. Clyde Kirk, Assistant Attorney

General, with him on the briefs), Litigation Section, State of Oklahoma, for

Movant-Appellant.

Michael Burrage of Burrage Law Firm, Durant, Oklahoma (Sean Burrage of

Taylor, Burrage, Foster, Mallett, Downs & Ramsey, Claremore, Oklahoma, with

him on the brief), for Petitioner-Appellee.

Before SEYMOUR, McKAY, and O’BRIEN, Circuit Judges.

SEYMOUR, Circuit Judge.
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This appeal arises out of a tragic accident in which a tugboat owned by

Magnolia Marine Transport Company (Magnolia) collided with the Interstate 40

bridge over the Arkansas River near Webbers Falls, Oklahoma. Magnolia filed a

petition in district court in Mississippi for limitation of liability under admiralty

law. Meanwhile, the State of Oklahoma filed a suit for damages against Magnolia

in Oklahoma state court, which Magnolia removed to federal district court. 

Thereafter, the Mississippi district court transferred Magnolia’s limitation petition

to the federal court in Oklahoma. The State filed a motion to dismiss the

limitation petition on Eleventh Amendment grounds, which the district court

denied. An order denying a motion to dismiss on the basis of state sovereign

immunity is immediately appealable under the collateral order doctrine. P.R.

Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146-47 (1993);

Innes v. Kan. State Univ. (In re Innes), 184 F.3d 1275, 1277 (10th Cir. 1999). 

The State appeals, and we affirm.

I.

On May 26, 2002, the “M/V ROBERT Y. LOVE,” a tugboat owned and

operated by Magnolia and piloted by Captain William Joe Dedmon, was pushing

two empty barges up the Arkansas River in Oklahoma. As the tugboat neared the

Interstate 40 bridge, Captain Dedmon suffered a form of cardiac arrhythmia that
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caused him to lose consciousness for several minutes. While Captain Dedmon

was unconscious, the tugboat pushed the barges into the bridge, causing the

bridge to collapse into the river. Several vehicles plunged off the damaged

overpass. Fourteen people died and five suffered injuries. The subsequent search

and rescue, repair, loss of use, and clean-up costs required the State of Oklahoma

to expend more than fifty-eight million dollars.

One week after the accident, Magnolia filed a petition in federal district

court in Mississippi invoking the procedures of the Limitation of Shipowners’

Liability Act, 46 U.S.C. §§ 181-189. The next day, the State filed suit for

damages in Oklahoma State court. After removal of the State’s suit and transfer

of Magnolia’s limitation petition, the parties’ legal actions were consolidated in

federal district court in Oklahoma. Positing “that under the United States

Constitution, the State of Oklahoma cannot be prohibited from pursing [sic] its

claim against Magnolia in the courts of Oklahoma, nor can the State be forced,

without its consent, to pursue its claims in federal court,” the State claimed it was

“entitled to sovereign immunity from this limitation proceeding and from the

Limitation Act.” Aplt. App. at 77. We now consider the State’s appeal from the

district court’s denial of the its motion to dismiss on immunity grounds.
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II.

The Limitation of Shipowners’ Liability Act is at the heart of this appeal. 

Because issues pertaining to it are somewhat unfamiliar in our landlocked circuit,

we begin with an explication of the Act’s central features and the procedures

employed to implement them. 

“Limitation of liability is an important theme of admiralty law.” 2 THOMAS

J. SCHOENBAUM, ADMIRALTY & MARITIME LAW § 15-1, p. 136 (2d ed. 1994). A

feature of continental European sea codes since medieval times, it came to

English admiralty law in the eighteenth century and to this country in 1851 as the

Limitation of Shipowners’ Liability Act. Id. at § 15-1, p. 136-37. The Act

provides for the enjoining of pending suits against shipowners and their

consolidation in a single federal court “so that liability may be determined and

limited to the value of the shipowner’s vessel and freight pending.” Id. at § 15-1,

p. 137. The apparent purpose of the Act was to encourage shipbuilding in this

country and to place the U.S. shipping industry on equal footing with foreign

competitors who enjoyed such limitation procedures at home. Id. 

Because the Act was “badly drafted even by the standards of the time,” the

Supreme Court codified a procedure for its implementation in Rule F of the

Admiralty Rules. Id. at § 15-1, p. 137; § 15-4, p. 144. Rule F provides a single

forum for the determination of “(1) whether the vessel and its owner are liable at
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all; (2) whether the owner may in fact limit liability to the value of the vessel and

pending freight; (3) the amount of just claims; and (4) how the fund should be

distributed to the claimants.” Id. at § 15-5, p. 144. While a shipowner may only

file a petition for limitation in admiralty jurisdiction in federal district court, he

or she may plead limitation as a defense to an action seeking damages in federal

or state court. Id. at § 15-5, p. 144-45 & n.6.

As a condition of limitation, the shipowner

shall deposit with the court, for the benefit of claimants, a sum equal

to the amount or value of the owner’s interest in the vessel and

pending freight, or approved security therefor, and in addition such

sums, or approved security therefor, as the court from time to time

may fix as necessary . . . .

FED. R. CIV. P. Supp. Rule F(1). In addition, the security posting must include six

percent yearly interest. 2 SCHOENBAUM, § 15-5, p. 147. Once a shipowner

deposits this sum, the court will stay all other proceedings against the shipowner

relating to the incident at issue and compel claimants to file for recovery in the

limitation court under penalty of default. Id. at § 15-5, p. 147-49.

The burden of proof in a limitation proceeding parallels that in a standard

suit for damages. Claimants against the shipowner must prove the vessel’s

negligence or unseaworthiness caused their losses. If they so prove, the burden

shifts to the shipowner to prove there was no “design, neglect, privity or

knowledge” on his or her part. Id. at § 15-5, p. 150. “If the shipowner is not
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exonerated,” but the court finds he or she is entitled to limitation of liability,

“payment to claimants is made on a pro-rata basis,” generally out of the “security

deposited with the court.” Id. at § 15-7, p. 155.

III.

The State of Oklahoma insists its constitutional sovereign immunity from

suit prevents Magnolia from invoking the procedures of the Limitation of

Shipowners’ Liability Act as to the State’s claim for damages. The logical

starting point for our analysis of this proposition is the text of the Eleventh

Amendment to the United States Constitution.

The Eleventh Amendment mandates that “[t]he Judicial power of the United

States shall not be construed to extend to any suit in law or equity, commenced or

prosecuted against one of the United States by Citizens of another State, or by

Citizens or Subjects of any Foreign State.” U.S. CONST. amend. XI. The question

we must first answer, therefore, is whether Magnolia’s limitation petition

constitutes a suit “commenced or prosecuted against” the State of Oklahoma. For

reasons we explore below, the answer to that question is no.

The State advocates a different starting point for our analysis. Oklahoma

would have us begin with “the two-prong test enunciated by the United States

Supreme Court” in College Savings Bank v. Florida Prepaid Postsecondary
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Education Expense Board, 527 U.S. 666 (1999). Aplt. Br. at 2. In that case, the

Court “recognized only two circumstances in which an individual may sue a

State”: (1) where Congress has authorized the suit pursuant to its enforcement

power under the Fourteenth Amendment, and (2) where the State has waived its

sovereign immunity. Florida Prepaid, 527 U.S. at 670. In urging these two

exceptions to sovereign immunity as this court’s analytical starting point, the

State misses a crucial distinction between Florida Prepaid and the case before us. 

In Florida Prepaid, College Savings Bank sued Florida Prepaid Postsecondary

Education Expense Board, an arm of the State of Florida, for violations of the

Lanham Act. Id. at 671. Clearly, the Bank’s suit was a “suit against a state,”

which the Court presupposed in recognizing “only two circumstances in which an

individual may sue a State.” Id. at 670 (emphasis added). 

Here, to the contrary, the State of Oklahoma has sued Magnolia for

damages. Magnolia neither named the State as a defendant in its limitation

proceeding nor served process upon the State. The limitation proceeding merely

provides a forum for establishing a shipowner’s right to limitation of liability and

managing disbursement of a limitation fund to claimants who prove Magnolia is

liable to them. The limitation proceeding thus lacks the traditional characteristics

of a suit against the State.

The State argues that whether Magnolia’s limitation proceeding is a suit
1Ex Parte Young, 209 U.S. 123 (1908).

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against a state is irrelevant to Eleventh Amendment analysis. According to the

State, the Supreme Court “has repeatedly held that even though a state is not

named a party to an action, the suit may nonetheless be barred by the Eleventh

Amendment.” Aplt. Rep. Br. at 2. In support of this argument, the State cites

Edelman v. Jordan, 415 U.S. 651 (1974), and Ford Motor Co. v. Department of

Treasury, 323 U.S. 459 (1945). The State is correct that plaintiffs in neither case

named a state as a party. Edelman and Ford Motor, however, were both suits

against state officers. See Edelman, 415 U.S. at 653; Ford Motor Co., 323 U.S. at

460. Any language in either case implying that a state need not be a party in

order for its sovereign immunity to bar the suit served only to explain that the

legal fiction of the “officer suit” under Ex parte Young1

 would not be allowed to

circumvent sovereign immunity when the monetary relief ordered by the court

required payment from the public treasury. See Edelman, 415 U.S. at 664 (officer

suit “does not extend so far as to permit a suit which seeks the award of an

accrued monetary liability which must be met from the general revenues of a

State”); Ford Motor Co., 323 U.S. at 462 (“Where relief is sought under general

law from wrongful acts of state officials, the sovereign’s immunity under the

Eleventh Amendment does not extend to wrongful individual action . . . . Where,

however, an action is authorized by statute against a state officer in his official
2

See Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 754 (2002)

(citing the cases the State relies on as holding Eleventh Amendment immunity

applies to suits by Indian Tribes, foreign nations, and federal corporations, as well

as to suits by private parties in state court, in admiralty proceedings, and by a

state’s own citizens under federal question jurisdiction).

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capacity . . . the Eleventh Amendment operates to bar suit.”). These cases are

inapposite to a case such as this one where neither the state, nor its agency, nor its

officer is a defendant.

The State derides as mere “semantics” any emphasis on the Eleventh

Amendment’s application only to suits “commenced or prosecuted against” a

state, and insists the Supreme Court has carried state sovereign immunity beyond

the “literal wording of the Eleventh Amendment.” Aplt. Rep. Br. at 7-8. The

Supreme Court has undeniably extended the protections of state sovereign

immunity beyond the text of the Eleventh Amendment. See Alden v. Maine, 527

U.S. 706, 713 (1999) (holding that “the sovereign immunity of the States . . . is

[not] limited by[] the terms of the Eleventh Amendment”). The State cites eight

cases in which the Supreme Court has arguably broadened the Eleventh

Amendment’s reach and urges us to broaden it yet again in the case before us. 

The cases the State cites are unhelpful, however. Although the cases involved

new parties or fora beyond the literal language of the Eleventh Amendment,2

 each

case is unquestionably a suit against a state. See Fed. Mar. Comm’n v. S.C. State

Ports Auth., 535 U.S. 743, 747-48 (2002) (cruise ship company sued state agency
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for violation of the Shipping Act); Alden, 527 U.S. at 711 (probation officers sued

state for violation of overtime provisions of the Fair Labor Standards Act);

Blatchford v. Native Village of Noatak, 501 U.S. 775, 778 (1991) (village brought

equal protection challenge to state commission’s denial of funds allegedly due

and sought payment of those funds); Ford Motor Co., 323 U.S. at 460

(manufacturing corporation sued state officer for tax refund); Monaco v.

Mississippi, 292 U.S. 313, 317 (1934) (Monaco sued Mississippi to recover on

bonds issued by the state); In re State of New York, 256 U.S. 490, 495 (1921)

(canal boat owners sued state officer for damages caused by vessels chartered by

the state); Smith v. Reeves, 178 U.S. 436, 437 (1900) (railroad company sued state

treasurer to recover overpaid taxes); Hans v. Louisiana, 134 U.S. 1, 1 (1890)

(citizen sued state to recover on bonds issued by State). Oklahoma points to no

case in which the Supreme Court has extended Eleventh Amendment immunity

beyond suits against a state, and we decline to do so in this case.

We return, therefore, to the question of whether Magnolia’s limitation

petition constitutes a suit against the State of Oklahoma. We agree with every

court that has addressed this issue: the limitation proceeding is not a suit against

the state. See Bouchard Transp. Co., Inc. v. Updegraff, 147 F.3d 1344, 1349

(11th Cir. 1998); In re Abaco Treasure Ltd., 1993 A.M.C. 1976, 1977 (S.D. Fla.

1993); In re Sand Bar I, Inc., 1992 WL 84277, at *1 (E.D. La. 1992). The
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Limitation of Shipowners’ Liability Act creates a defense which, as noted above,

may be pled in a limitation petition invoking the procedures established in Rule F

or in a shipowner’s answer to a suit brought in state or federal court. 2

SCHOENBAUM, § 15-5, p. 144-45. If a shipowner chooses to file a petition for

limitation under the federal court’s admiralty jurisdiction, any claimant (including

a state) must file its claim against the shipowner in the same court or risk taking

none of the limitation fund as damages. Id. at § 15-5, p. 147-49. But this federal

proceeding for administering a limited fund does not transform the shipowner’s

defensive position under the Act into an offensive one.

Citing the Eleventh Circuit’s decision in Bouchard Transport Co., the

district court in this case analogized the limitation proceeding to an “in rem

admiralty action where the state does not have possession of the res.” Aplt. App.

at 256-57. As in such an in rem proceeding, no specific entity is named as a

defendant or formally served with process. Id. at 257. In addition, the court

administering the limitation proceeding controls the res at issue–the limitation

fund–and the vessel remains under the control of the shipowner. Id. In

California v. Deep Sea Research, 523 U.S. 491, 507-08 (1998), the Supreme

Court held, “[b]ased on longstanding precedent respecting the federal courts’

assumption of in rem admiralty jurisdiction over vessels that are not in the

possession of a sovereign, . . . the Eleventh Amendment” poses no bar to a federal
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court’s in rem jurisdiction where the res is not in the possession of the State. The

district court found the similarities between the action in Deep Sea Research and

this case militated against dismissal on sovereign immunity grounds. Aplt. App.

at 257-58.

The State maintains the better analogy is between the limitation proceeding

and a federal interpleader action naming state defendants, held barred by the

Supreme Court in Cory v. White, 457 U.S. 85, 90-91 (1982). But in Cory, the

Controller of the State of California and the Attorney General of the State of

Texas were the named parties. Id. at 85. And as noted by the court in Sand Bar I,

“[u]nlike interpleader . . . cases, this limitation proceeding is not an attempt to

resolve competing claims to a res. It is a statutory procedure to determine the

amount of recovery potentially to be split among claimants.” Sand Bar I, 1992

WL 84277, at *2 (emphasis in original). In contrast to an interpleader action,

“recovery [in a limitation proceeding] is only possible if those claimants succeed

in proving the Petitioner’s liability . . . .” Id. (emphasis in original).

In our judgment, neither Deep Sea Research nor Cory provides the closest

analogy to limitation proceedings. Rather, decisions examining the role of

sovereign immunity in bankruptcy are more on point and instruct us to affirm the

district court’s refusal to dismiss this limitation proceeding on sovereign

immunity grounds.
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As explained by the Fifth Circuit,

[i]n a bankruptcy case, in its simplest terms, a debtor turns over his

assets, which constitute the estate, for liquidation by a trustee for the

benefit of creditors according to their statutory priorities. 

Bankruptcy law modifies the state’s collection rights with respect to

its claims against the debtor, but it also affords the state an

opportunity to share in the collective recovery.

Texas v. Walker, 142 F.3d 813, 822 (5th Cir. 1998). Just as the court assumes

jurisdiction over the estate in bankruptcy, a shipowner in a limitation proceeding

turns over to the court a sum equal to his or her interest in a vessel and pending

freight. FED. R. CIV. P. Supp. Rule F(1). The court administering a limitation

proceeding stays other suits seeking collection from the shipowner, 2

SCHOENBAUM, § 15-5, p. 147-49, much as a bankruptcy petition acts as a stay of

further actions against the debtor pursuant to 11 U.S.C. § 362. While a creditor’s

ability to collect upon a debt and a claimant’s ability to collect against a

shipowner are altered by these administrative schemes, their consolidation of

claims is meant to ensure equitable distribution and prevent premature extinction

of a limited estate or fund.

In Walker, the Fifth Circuit addressed an objection to bankruptcy

proceedings styled much like Oklahoma’s objection to Magnolia’s limitation

action. See Walker, 142 F.3d at 820. Recognizing that the state’s contentions

regarding immunity were “not specious,” id., the court characterized the immunity

argument as follows:
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The argument for an Eleventh Amendment bar would assert that

although the State was not a named defendant in Walker’s

bankruptcy case, it was an indirect party because its legal rights were

adjudicated and altered . . . when the bankruptcy court discharged

Walker’s debt . . . .

. . . [D]ischarging the debt owed to the state either restrains the

state from acting by enjoining it from collecting the debt, or compels

the state to act by forcing it to file a proof of claim in bankruptcy

court to collect the debt. The state is thus presented with a Hobson’s

choice: either subject yourself to federal court jurisdiction or take

nothing . . . . If the state does nothing, it is permanently barred from

collecting its debt and receiving a pro rata share of the debtor’s

estate.

Id. at 821-22 (footnotes omitted). The court, nevertheless, rejected the state’s

Eleventh Amendment argument, noting the state’s “key assumption is the equation

of a bankruptcy case with a suit against the state, but this assumption is flawed.” 

Id. at 822 (emphasis in original). While that same court had previously held that

Congress’s abrogation of sovereign immunity as to adversary actions brought

against a state under the Bankruptcy Code was unconstitutional in light of the

Supreme Court’s recent sovereign immunity jurisprudence, In re Fernandez, 123

F.3d 241, 244 (5th Cir. 1997), in nonadversary bankruptcy suits such as those in

Walker, the court held the Eleventh Amendment presented no bar. Walker, 142

F.3d at 820, 822. 

We believe the similarities between bankruptcy and limitation proceedings

illustrate the inapplicability of the Eleventh Amendment to Magnolia’s petition in

the district court. As the Supreme Court noted in the bankruptcy case of Gardner
3We recognized the continuing vitality of this principle in Straight v. Wyo.

Dep’t of Transp., 143 F.3d 1387, 1392 (10th Cir. 1998).

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v. New Jersey, 329 U.S. 565, 573-74 (1947), “[i]f the claimant is a State, the

procedure of proof and allowance is not transmitted into a suit against the State

because the court entertains objections to the claim. The State is seeking

something from the debtor. No judgment is sought against the State.”3

 The same

is true in a limitation proceeding under admiralty law.

IV.

In sum, the State’s invocation of sovereign immunity stands the relationship

between the parties on its head: it is the State that seeks recovery from Magnolia

in this case. Because Magnolia’s limitation proceeding does not implicate the

State’s immunity from suit under the Eleventh Amendment, the district court

properly denied the State’s motion to dismiss. We AFFIRM.