Court Opinion

ID: 6986524
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:17:14.604115+00
Date Added: 2024-06-11T16:09:28.556030
License: Public Domain

D.W. NELSON, Circuit Judge,
Concurring:
I believe the rule in Newton v. Shipman, 718 F.2d 959 (1983) (per curiam), as it affects single-claimant cases stipulating to the value of the vessel, is bad law and should be reconsidered.
Newton’s requirement of stipulating to the value of the vessel and its cargo — in order to lift an injunction under the single claimant exception — does not have any statutory basis. Neither 46 U.S.C. § 183(a) nor Fed.R.Civ.P. Supp. R. F requires this stipulation. In following the Eighth Circuit’s precedents, Newton conflicts with and made no attempt to distinguish prior Ninth Circuit precedent. Indeed, Anderson v. Nadon, 360 F.2d 53 (1966) noted that stipulating to the value of the vessel is not required in order to maintain a state court action:
Appellants have conceded the exclusive jurisdiction of the district court to determine this issue, but have not agreed to appellee’s valuation figure.... It is also true that it has apparently become a common practice to concede valuation when requesting dissolution of such an injunction. However, these authorities do not support the proposition that such a concession is a necessary prerequisite to the maintenance of a state court action. We do not deem a concession of this nature essential to the protection of appellees’ right to a federal limitation proceeding. The fact that appellants have reserved the right to contest the adequacy of the stipulation for value in the limitation proceeding does not bar them from initiating a state court action.
Id. at 58 n. 8 (citations omitted). If Newton truly established a new Ninth Circuit rule, it should have addressed Anderson. An intracircuit conflict is grounds for en banc review. See Atonio v. Wards Cove Packing Company, 810 F.2d 1477, 1478-9 (9th Cir.1987)(en banc) (“the appropriate mechanism for resolving an irreconcilable conflict is an en banc decision. A panel faced with such a conflict must call for en *1019banc review, which the court will normally grant unless the prior decisions can be distinguished.”).
Newton may have failed to address Anderson because Newton’s stipulation requirement appears to be dicta. In Newton, the appellant “did not object to the ■sufficiency of the fund or the method of computing it.” Newton, 718 F.2d at 959. Thus, Newton’s requiring a stipulation of the value of the vessel was unnecessary to the holding in that case. Indeed, Newton found that the district court erred in failing to lift the injunction. Newton’s failure to address Anderson suggests that the court did not intend to create a new rule and that Newton is factually distinguishable from this case.
Furthermore, the standard of review in Newton places the burden on Ross Island to show prejudice. Newton says: “Where, however, a single claim is involved ... ‘the court’s discretion is ' narrowly circumscribed’ and the injunction must be dissolved ‘unless the owner can demonstrate that his right to limit liability will be prejudiced.’ ” Newton, 718 F.2d at 961 (citations omitted). Ross Island contends that it will be prejudiced by allowing Matson to “proceed to state court with the hope of returning to the admiralty court with a large jury verdict in hand as leverage in the limitation action. That leverage would be used not only to challenge the owner’s entitlement to limitation but also to attempt to influence the court as to the amount of the fund.” This argument is flawed because it assumes: (1) that the state jury’s verdict will exceed the value of the vessel and cargo; and (2) that a federal district court will be unable to assess the value of the vessel and cargo in an objective fashion. This argument has little faith in the Article III power of federal judges to remain objective and does not illustrate any prejudice to Ross Island. Given that Matson has stipulated that the federal court has the ultimate authority in limiting liability, it is inconceivable how Ross Island could be prejudiced by lifting the injunction.
As a matter of policy, these stipulations are intended to protect vessel owners such as Ross Island from enormous liability stemming from multiple claimants who prey off the res judicata effect of a single claimant’s judgment. Therefore, in some multiple claimant cases, the courts have required claimants to stipulate to the maximum amount of liability based on the value of the vessel and its cargo. This a single claimant case. Matson has stipulated that the state court judgment has no res judicata effect and that the federal court has final authority over limiting liability (including the valuation of the vessel and its cargo). In a single claimant case, there is no need to determine the value of the vessel and its cargo before the culmination of a state court lawsuit. In fact, Matson argues that no court has ever found in a single claimant case that the failure to stipulate to the value of the vessel and its cargo prevents lifting a federal injunction.
As a practical matter, arguments about efficiency are relative. Matson has a statutory right to a jury trial under the Jones Act. See 46 U.S.C. § 688(a). Ross Island has a statutory right to limit its liability in federal court. Neither right trumps the other. If our goal is to conserve federal resources, however, then efficiency compels us to reverse the district court. Why force a federal court to determine the value of the vessel and its cargo under Supp. R. F(7) in the absence of a" state court judgment? If a state jury awards Matson less than $20,000, then this valuation would have been totally unnecessary. Thus, if we are trying to conserve federal resources, we should allow Matson to proceed in state court and then determine if federal intervention is ultimately necessary.
By relying on Ninth Circuit dicta and by following Newton, we will be making it more difficult for single claimants to file in state court. This was not the intent of the rule. Our decision is not compelled by statute, is not supported by a showing of *1020actual prejudice to Ross Island, does not respond to policy concerns about enormous judgments by multiple claimants, and wastes federal resources. I think Newton is overly broad and should be reevaluated.