Opinion ID: 697257
Heading Depth: 2
Heading Rank: 2

Heading: Can Central Hudson Bring This In Personam Action?

Text: 12
13 Empresa next asserts that since the prior judgment was entered against the Vessel in rem, that judgment bars any subsequent in personam claim. Empresa bases this argument on the distinction between in rem and in personam jurisdiction in admiralty law. Central Hudson argued below, and the district court agreed, that the 1966 Amendments to the Admiralty Rules specifically permit separate in rem and in personam actions. We concur. 14 Empresa relies on three prior decisions in this Circuit to support its argument that a litigant cannot pursue separate in rem and in personam claims regarding the same injury in sequential suits: Burns Bros. v. Central Railroad, 202 F.2d 910 (2d Cir.1953); Sullivan v. Nitrate Producers' S.S. Co., 262 F. 371 (2d Cir.1919); and Bailey v. Sundberg, 49 F. 583 (2d Cir.1892), cert. denied, 154 U.S. 494, 14 S.Ct. 1142, 38 L.Ed. 1078 (1894). Burns Bros. involved a plaintiff who lost a previous decision in personam against the owner of a carfloat (although the plaintiff won against the co-defendant carfloat operator) following a collision between the carfloat and the plaintiff's barge, and who subsequently filed an action in rem against the carfloat. Judge Learned Hand, after reviewing the Sullivan and Bailey decisions, concluded that a decree in rem is a bar to a suit in personam, and we cannot see why the rule should not work both ways. Burns Bros., 202 F.2d at 913. The Court then found: 15 When the plaintiff has two alternative remedies available to him upon the same cause of action, he may not reserve one and sue upon the other, and a judgment for the defendant upon one will be a bar to a later suit upon the other; but obviously this rule ought not to apply when at the time of the first action only one of the two remedies was available to the plaintiff.... If we regard the cause of action at bar as the same as that in the first suit, as we must, the present libel in rem was an alternative remedy to the libel in personam, so that this appeal comes down to whether a libel in rem was available to Burns Bros. in the first suit, since, if it was, it could have been joined with the libel in personam under the 14th Admiralty Rule [now Rule C(1)(b) of the Supplemental Rules]. 16 Id. 17 Judge Hand's discussion raises several points pertinent to the instant appeal. We note initially that Burns Bros. did not concern a suit filed to collect damages established by a prior judgment, but involved a suit to establish liability and damages anew. Burns Bros. thus does not govern a suit essentially seeking collection of an unpaid portion of a judgment against a joint tortfeasor. See generally Grant Gilmore & Charles L. Black, Jr., The Law of Admiralty Sec. 9-17, at 614 n. 73 (2d ed. 1975) (A plaintiff who has recovered a judgment in an in rem action which remains in part unsatisfied may proceed against the owner in personam to recover the deficiency.). 18 Second, as the district court in the instant case noted, the Supplemental Rules do not require a party to bring in rem and in personam claims in the same action. Rule C(1)(b) of the Supplemental Rules specifically provides that a party who may proceed in rem may also, or in the alternative, proceed in personam against any person who may be liable. (emphasis added). Thus Central Hudson is barred from bringing its in personam claim against Empresa, if at all, by the doctrine of res judicata and not by the Admiralty Rules, a conclusion supported by Judge Hand's holding in Burns Bros. See 202 F.2d at 912-13. Indeed, while Central Hudson and the district court both read Rule C(1)(b) to abrogate the prior doctrine set forth in Burns Bros., we decline to do so. Instead, Burns Bros. and its predecessors should be read simply to apply res judicata principles to successive in rem and in personam actions, a holding with which Rule C(1)(b) is not inconsistent. 2 19 Finally, the 1966 Amendments to the Admiralty Rules did not affect the previously existing right of plaintiffs to file separate or successive in rem and in personam actions. As reflected in the Advisory Committee Notes to the 1966 Amendments, the Amendments were not intended to change prior law: 20 The main concern of Admiralty Rules 13-18 [now Supplemental Rule E] was with the question whether certain actions might be brought in rem or also, or in the alternative, in personam. Essentially, therefore, these rules deal with questions of substantive law, for in general an action in rem may be brought to enforce any maritime lien, and no action in personam may be brought when the substantive law imposes no personal liability. 21 Supplemental Rule C(1) advisory committee's note (emphasis added). The fact that the 1966 Amendments did not affect in rem and in personam filings is further reflected in the case law. Compare United States v. Matson Nav. Co., 201 F.2d 610, 618 (9th Cir.1953) (pre-Amendment case holding that where causes of action arose from single collision, claimant could proceed in rem against ship and in personam against owners and masters), with Belcher Co. v. M/V MARATHA MARINER, 724 F.2d 1161, 1163 (5th Cir.1984) (post-Amendment case holding that [u]nder the admiralty law of the United States, in personam and in rem actions may arise from the same claim, and may be brought separately or in the same suit). Accordingly, we find that this in personam action is barred by the in rem judgment, if at all, only by the doctrine of res judicata, to which we now turn.
22 The doctrine of res judicata, or claim preclusion, holds that following entry of a valid final judgment, the parties to the suit and their privies are thereafter bound 'not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose.'  C.I.R. v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948) (quoting Cromwell v. County of Sac, 94 U.S. 351, 352, 24 L.Ed. 195 (1876)); In re Teltronics Servs., 762 F.2d 185, 190 (2d Cir.1985). 3 3] Empresa contends that res judicata bars this action because Central Hudson could have sued Empresa in its in personam capacity during the in rem action, but failed to do so. In particular, Empresa asserts that Central Hudson knew of its status as the Vessel's bareboat charterparty as early as August 1988, from depositions taken of the Vessel's crew, and that it was amenable to the district court's jurisdiction because it maintained a shipping agent in New York. It is undisputed that Central Hudson knew of Empresa's relationship to the Vessel one month prior to trial, and did not move to amend its complaint to add an in personam claim. Central Hudson contends, however, that it did not have sufficient knowledge to name Empresa as a defendant because Empresa concealed its interests in the Vessel as part owner and bareboat charterparty, despite a discovery order by a magistrate judge. Central Hudson argues that Empresa should not now be rewarded by the barring of this action for this obstruction of discovery. 23 Such allegations may be considered by this Court in assessing the availability of a claim for res judicata purposes. See La Societe Anonyme des Parfums Le Galion v. Jean Patou, Inc., 495 F.2d 1265, 1276 (2d Cir.1974). While the district court noted that Empresa's specific interest in the Vessel was lurking in the background of the in rem action, however, the court did not address directly the issue of Empresa's availability. We need not do so either, as we find Central Hudson's claim would not be barred by res judicata even if Empresa had been available. 24 Notably, Central Hudson did not seek duplicative or additional damages in this action, and the essence of its claim was that Empresa, as the operator of the Vessel, was also liable as a joint tortfeasor for the damage to its cable pipeline. When a litigant files consecutive lawsuits against separate parties for the same injury, the entry of a judgment in the prior action does not bar the claims against other potentially liable parties. See United States v. Lacey, 982 F.2d 410, 412 (10th Cir.1992); White v. Kelsey, 935 F.2d 968, 970 (8th Cir.1991); Gill & Duffus Servs. v. A.M. Nural Islam, 675 F.2d 404, 406-07 (D.C.Cir.1982) (per curiam); McClelland v. Facteau, 610 F.2d 693, 695 n. 1 (10th Cir.1979); see generally Restatement (Second) of Judgments Sec. 49 cmt. a (1982) (For preclusion purposes, the claim against others who are liable for the same harm is regarded as separate.); 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure Sec. 4407, at 52-53 (A single plaintiff ... has as many causes of action as there are defendants to pursue.). Since Central Hudson's in personam claim against Empresa is distinct from its claim against the Vessel in rem, and since the in personam claim has not been adjudicated, res judicata does not bar this action. See Montana v. United States, 440 U.S. 147, 154, 99 S.Ct. 970, 974, 59 L.Ed.2d 210 (1979) (A cause of action which a non-party has vicariously asserted differs by definition from that which he subsequently seeks to litigate in his own right.); Gargiul v. Tompkins, 790 F.2d 265, 272-73 (2d Cir.1986). 25 This assumes, of course, that Empresa was not in privity with the Vessel, despite its assistance in the defense of the in rem action. Privity traditionally has denoted a successive relationship to the same rights of property. Bailey, 49 F. at 585. In its modern form, the principle of privity bars relitigation of the same cause of action against a new defendant known by a plaintiff at the time of the first suit where the new defendant has a sufficiently close relationship to the original defendant to justify preclusion. See Amalgamated Sugar Co. v. NL Indus., 825 F.2d 634, 640 (2d Cir.), cert. denied, 484 U.S. 992, 108 S.Ct. 511, 98 L.Ed.2d 511 (1987). This determination often requires a court to inquire whether a party control[led] or substantially participate[d] in the control of the presentation on behalf of a party to the prior action. National Fuel Gas Distribution Corp. v. TGX Corp., 950 F.2d 829, 839 (2d Cir.1991) (quotation omitted); see also Alpert's Newspaper Delivery v. New York Times Co., 876 F.2d 266, 270 (2d Cir.1989). 26 Undoubtedly, Empresa participated in and shared control of the defense of the Vessel in the in rem action. Empresa did so, however, in a representative capacity. Its interests in the Vessel therefore were not identical to the interests it defended in an action alleging in personam liability. Cf. United States v. International Bhd. of Teamsters, 964 F.2d 180, 184 (2d Cir.1992) (concluding privity requires coinciding interests to third parties). Because the res judicata effects of the in rem judgment affect Empresa only in its representative capacity, we find that Empresa was not in privity with the Vessel. See Hurt v. Pullman, Inc., 764 F.2d 1443, 1448 (11th Cir.1985); cf. Restatement (Second) of Judgments Sec. 39 cmt. e (1982) ([A] trustee who takes control of litigation involving another in order to protect the trust is not on that account bound in a subsequent action in which he appears in his individual capacity.). 27 Further, a finding of privity in this instance would negate the principle that representative capacities must be held separate in order to ensure vigorous pursuit of litigation without concern about the possible impact on other interests. 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure Sec. 4451, at 436. While the distinction between in rem and in personam jurisdiction in admiralty cases has its detractors, see, e.g., Law of Admiralty Sec. 9-18, at 615-16, it remains a bedrock principle of admiralty law. We see no reason to undermine that distinction here. Accordingly, we find that the in rem judgment does not bar this action.