Court Opinion

ID: 8942869
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:05:56.439647+00
Date Added: 2024-06-11T17:09:46.745949
License: Public Domain

FERGUSON, Circuit Judge,
concurring in part and dissenting in part:
I agree that admiralty jurisdiction exists in this action. I would vacate the district court’s stay of the state court action, however, because the stay vitiates the purposes of 46 U.S.C. § 187. Furthermore, the equities in this case weigh against creating an exception to the Act.
I.
The Shipowners Limitation of Liability Act of 1851, 46 U.S.C. §§ 181-196 (“Act”), applies when a shipowner receives notice of claims against it based on tortious acts of the ship’s crew of which the owner did not know and should not have known. In such a case, the owner may petition the federal court to limit the amount of its liability to the value of the vessel involved. The statute does not address the merits of any action establishing liability; it only limits the amount of the owner’s liability and allows the court to stay further proceed*764ings against the owner with respect to any claims subject to the limitation statute.
The Act contemplates only stays of litigation against the owner. This stay is not within the scope of the Act because it stays an action against the vessel’s captain. Because the Act’s language refers only to litigation against the owner, and not to actions against the captain, I would vacate it.
The majority admits that this argument has “considerable literal appeal.” Maj. op. at 762. The majority also admits that Rule F(3) states only that it permits enjoining proceedings against the owner. Maj. op. at 761. Thus, I fail to see how the majority reaches the conclusion that the stay does not violate the statute. The majority applies rules of statutory construction that are appropriate only if a statute is ambiguous. Mountain States Telephone & Telegraph Co. v. Pueblo of Santa Ana, — U.S. —, 105 S.Ct. 2587, 2595, 86 L.Ed.2d 168 (1985). Because the Act is clear and unambiguous, the majority should follow its terms.
II.
I also disagree with the majority’s conclusion that this stay furthers the Act’s underlying purposes. The circumstances here do not affect the first three purposes cited by the majority: to encourage shipbuilding, to promote investment in and use of ships, and to place American shipping interests on an equal footing with other maritime nations, Maj. op. at 761. Investing in and using ships rather than other modes of transportation are not affected by a tour, boat in Pearl Harbor. Further, a small tour boat used only in Pearl Harbor does not affect international shipping. Finally, if a stay of litigation involving a small tour boat can be said to further the Act’s purposes, I am not sure where to draw the line. At a touring sailboat? An outrigger canoe rented from the Hilton Hotel on Waikiki Beach?
The other purpose cited by the majority, protection of the owner’s insurance, Maj. op. at 761-62, does not exist for any state except Louisiana, which allows actions directly against insurance companies. The majority’s reliance on Maryland Casualty Co. v. Cushing, 347 U.S. 409, 74 S.Ct. 608, 98 L.Ed. 806 (1954), and circuit court cases involving Louisiana law, Maj. op. at 762-63, is therefore unpersuasive. The only reason for the anomalous result in Louisiana cases is that, in that state, a plaintiff directly sues the insurer, so that there will never be a lawsuit against an insured owner. The Limitation Act did not contemplate the direct-action situation, so that such an exception is justified for that narrow purpose. That is not the case here. See In re Brent Towing Co., 414 F.Supp. 131, 133 (N.D.Fla.1975) (“The claimants need no permission of the court to proceed against [the masters, officers, and crew].”).
Further, even if insurance protection were a géneral purpose of the Act, the stay here would not further such a purpose. If a judgment against the captain deprives the owner of some insurance protection, any ensuing dispute should be between the owner and the captain. The owner chose to share an insurance policy with the captain; the plaintiff should not have to pay for such a decision. Also, the existence or amount of insurance is irrelevant to the specific issues on this appeal; we do not even know if insurance covers this occu-rence, or what the policy limits are. Finally, it is odd that the wish to protect an underinsured owner controls our decision. I have never heard of too little insurance being the basis for a court decision.
III.
Even if I agreed with the majority that some cases might justify exceptions to the statute, no such equities exist here. In fact, the equities involved weigh against the stay.
First, the principles of federalism caution against prohibiting this type of case from proceeding in state court before any liability has been established. Section 187, which instructs federal courts not to enjoin state court actions against parties other than the owner, seems to me to “reflect the *765fundamental principle of comity between federal courts and state governments that is essential to ‘Our Federalism.’ ” Fair Assessment in Real Estate Association v. McNary, 454 U.S. 100, 103, 102 S.Ct. 177, 179, 70 L.Ed.2d 271 (1981). Although McNary dealt with state taxes,
[t]he principle of comity has been recognized and relied upon by this Court in several recent cases dealing with matters other than state taxes. Its fullest articulation was given in the now familiar language of Younger v. Harris, 401 U.S. 37 [91 S.Ct. 746, 27 L.Ed.2d 669] (1971)....
“[T]he concept [of comity] [represents] a system in which there is sensitivity to the legitimate interests of both State and National Governments, and in which the National Government, anxious though it may be to vindicate and protect federal rights and federal interests, always endeavors to do so in ways that will not unduly interfere with the legitimate activities of the States. It should never be forgotten that this slogan, ‘Our Federalism,’ born in the early struggling days of our Union of States, occupies a highly important place in our Nation’s history and its future.” Id. [401 U.S.] at 44-45 [91 S.Ct. at 750-51].
454 U.S. at 111-12, 102 S.Ct. at 183-84.
Second, the majority declares that the stay merely “delays” the state action. However, mere “delay” can have substantial effects on the state litigation. In this case, for example, the captain of the vessel died after the stay issued. Given the breadth of this stay, the plaintiffs would have been unable to depose the captain had they known of his failing health: such “proceeding” with the case would violate the stay. As a result of the “mere delay,” the plaintiff lost valuable testimony.
IV.
The Act prohibits the district court’s stay and no equities exist to find an exception to the Act. I would vacate the stay.