Court Opinion

ID: 3000774
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:09:03.953241+00
Date Added: 2024-06-11T11:45:42.715424
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 06-2104
IN THE MATTER OF THE COMPLAINT OF:
    ILLINOIS MARINE TOWING, INCORPORATED
    A CORPORATION, FOR EXONERATION FROM,
    OR LIMITATION OF LIABILITY
                     ____________
          Appeal from the United States District Court
                for the Central District of Illinois.
           No. 05 C 1057—Michael M. Mihm, Judge.
                        ____________
    ARGUED APRIL 11, 2007—DECIDED AUGUST 20, 2007
                     ____________

  Before CUDAHY, KANNE, and WOOD, Circuit Judges.
  CUDAHY, Circuit Judge. Illinois Marine Towing, Inc.
(“IMT”) was involved in a marine collision which resulted
in injuries and one death. After the injured parties com-
menced lawsuits in state court, IMT filed a petition in the
federal district court to limit liability pursuant to the
Limitation of Shipowners’ Liability Act, 46 U.S.C. § 30505.
On the basis of this petition, the district court enjoined
the state court proceedings. The claimants filed a motion
to modify the stay of their state court actions, attaching
stipulations which conceded the district court’s exclusive
jurisdiction over all limitation of liability issues and
waived any claim of res judicata. The district court
found that these stipulations adequately protected IMT’s
interest in limiting its liability and therefore granted the
2                                               No. 06-2104

claimants’ motion to modify the stay and allow them to
litigate in state court. At the same time, the district court
maintained jurisdiction to decide whether IMT’s liability
should be limited. IMT appeals the district court’s deci-
sion. We affirm.

                      I. Background
  This case involves personal injuries and a death that
resulted from a drunken boating collision on May 21, 2004.
Joshua Broughton, Tim Flemming, Stephen Turner and
Eric Allen were passengers in a 17-foot pleasure boat
driven by Casey Barnick. Barnick, who was allegedly
intoxicated, crashed the boat into a 200-foot barge, Barge
RMT 315, owned by Inland Marine Services, Inc. The
barge was being towed by a tug boat, the M/V Herman
Crown, owned by IMT. Billy Joe Thomas, an employee of
IMT, was piloting the tug and barge across the Illinois
River. As a result of the crash, Broughton, Flemming and
Turner were injured and Allen died. On July 2, 2004,
claimants Broughton and Flemming filed suit in state
court against Barnick and Inland Marine Services, Inc.
Thereafter, claimant Turner was added as a plaintiff and
IMT and Thomas were added as defendants.
  On February 23, 2005, IMT filed a Complaint for Exoner-
ation from, or Limitation of, Liability in district court
pursuant to the Limitation Act, 42 U.S.C. § 30505, and
Rule F of the Supplemental Rules of Certain Admiralty
and Maritime Claims of the Federal Rules of Civil Proce-
dure (“Rule F”). In accordance with Rule F, the district
court enjoined the institution or prosecution of other
lawsuits regarding the casualty. Five parties—Broughton,
Flemming, Barnick, Turner and the Estate of Eric Allen
(“the claimants”)—filed claims in the district court
against IMT.
No. 06-2104                                                 3

  On January 25, 2006, the claimants filed a “Joint Motion
to Modify Stay” seeking to resume litigation of their
claims in state court. The claimants attached the follow-
ing stipulations to the motion:
   1. Claimants concede and agree that The United States
   District Court for the Central District of Illinois has
   exclusive jurisdiction over all limitation of liability
   issues which arose out of a collision occurring on or
   about May 21, 2004 between a pleasure vessel oper-
   ated by Casey A. Barnick and the M/V Herman Crown
   and Barge RMT 315;
   2. Claimants concede and agree to waive any claim of
   res judicata respecting any limitation of liability issues
   as might arise in the event of entry of judgment in any
   state court or other proceeding based upon the facts
   of the above-mentioned collision . . . ;
   3. Claimants concede and agree that should a judg-
   ment be obtained in any state court or other proceed-
   ing on behalf of any one of more of the Claimants, and
   should this United States District Court for the
   Central District of Illinois determine that limitation
   of liability is appropriate, Claimants will only seek
   their respective pro-rata proportional share of the
   limitation fund as measured by their respective
   proportions of any judgment obtained in the state
   court or other proceeding;
   4. Claimants concede and agree that if a judgment is
   obtained in any state court or other proceeding on
   behalf of any one or more of the Claimants, and should
   this United States District Court for the Central
   District of Illinois determine that limitation of liability
   is appropriate, Claimants will in no event seek any
   amount beyond the value of the limitation fund as
   determined by the United States District Court for
   the Central District of Illinois; and
4                                                No. 06-2104

    5. Claimants concede and agree that this United
    States District Court for the Central District of Illinois
    has exclusive jurisdiction to determine the value of
    the limitation fund, and so long as the Claimants
    have an opportunity to obtain an independent ap-
    praisal or related valuation, will stipulate to the value
    as determined by this United States District Court
    for the Central District of Illinois.
(R. 84-2.) Additionally, on March 21, 2006, Billy Thomas
filed a “Waiver of Claim,” which stated in pertinent part:
    Billy Joe Thomas . . . hereby waives any claim for
    indemnity, contribution, or any other relief that he
    now has or may have in the future against Illinois
    Marine Towing, Inc. for any legal liabilities he may
    incur as a result of the collision which is the subject
    matter of the Complaint of Illinois Marine Towing, Inc.
    for Exoneration From or Limitation of Liability.
    Further, Billy Joe Thomas warrants that in the event
    any judgment is entered against him in favor of any
    party, he will not enter into any agreement which
    purports to assign any right of Billy Joe Thomas
    against Illinois Marine Towing, Inc.
(R. 104 at 1.) Thomas’s waiver contained a “Reservation of
Counterclaim,” stating: “Nothing in this Waiver of Claim
is to be construed as a waiver of any counterclaim which
Billy Joe Thomas may have in the event that Illinois
Marine Towing should sue Billy Joe Thomas for contribu-
tion or indemnity for liabilities arising out of the subject
collision.” (Id.) Over IMT’s objections, and on the basis of
the claimants’ stipulations and Thomas’s waiver, the
district court granted the claimants’ motion and modified
the injunction to permit the claimants to pursue their
actions in state court, while reserving the question
whether IMT is entitled to limitation of liability for its own
consideration. IMT appeals the district court’s decision,
No. 06-2104                                                  5

arguing that the claimants’ stipulations are not a suffi-
cient basis for the modification of the injunction.1

                       II. Discussion
  Before turning to the merits of this appeal, we must first
determine the appropriate standard of review. IMT
contends that we should review the district court’s order
de novo; the claimants contend we should review for abuse
of discretion. Generally, we review a district court’s rul-
ing on an injunction under the Limitation Act for abuse
of discretion. See Lewis v. Lewis & Clark Marine, Inc.,
531 U.S. 438, 451 (2001); In re Holly Marine Towing, Inc.,
270 F.3d 1086, 1090 (7th Cir. 2001); In re McCarthy
Brothers Co., 83 F.3d 821, 832 (7th Cir. 1996). Here, the
district court considered a legal question—whether stipu-
lations can transform multiple claims into a single claim
within a Limitation Act proceeding—as part of its deci-
sion to lift the injunction. We review the district court’s
legal conclusions de novo. Doe v. Smith, 470 F.3d 331, 338
(7th Cir. 2006); see also Odeco Oil & Gas Co. v. Bonnette
(Odeco II), 74 F.3d 671, 674 (5th Cir. 1996). We review for
abuse of discretion the district court’s finding that the
stipulations in the present case adequately protect IMT’s
interests and specific decision to lift the injunction. See
Lewis, 531 U.S. at 451; Holly Marine, 270 F.3d at 1090;
McCarthy Brothers Co., 83 F.3d at 832.
  Congress passed the Limitation Act in 1851 “to encour-
age ship-building and to induce capitalists to invest in this
branch of industry” by limiting shipowners’ potential

1
   During the pendency of this appeal, the Estate of Eric Allen
filed a separate lawsuit in state court against IMT, Thomas and
Barnick. The state court consolidated this lawsuit with that
of Broughton, Turner and Flemming.
6                                                   No. 06-2104

liability for maritime disasters. Lewis, 531 U.S. at 446
(quoting Norwich Co. v. Wright, 80 U.S. 104, 121 (1871))
(internal quotation marks omitted). The central provision
of the Limitation Act provides in relevant part: “[T]he
liability of the owner of a vessel for any claim, debt, or
liability . . . shall not exceed the value of the vessel and
pending freight . . . [so long as] any loss, damage, or injury
by collision . . . [occurs] without the privity or knowledge
of the owner.” 46 U.S.C. § 30505.2 The procedure for a
limitation action is defined in the Federal Rules of Civil
Procedure, Supplemental Admiralty and Maritime Claims
Rule F (“Rule F”), which sets forth the following process:
    The district court secures the value of the vessel or
    owner’s interest, marshals claims, and enjoins the
    prosecution of other actions with respect to the claims.
    In these proceedings, the court, sitting without a jury,
    adjudicates the claims. The court determines whether
    the vessel owner is liable and whether the owner
    may limit liability. The court then determines the
    validity of the claims, and if liability is limited, distrib-
    utes the limited fund among the claimants.
Lewis, 531 U.S. at 448.
  Some tension exists between the Limitation Act and the
saving to suitors clause, 28 U.S.C. § 1333(1). See id.
Specifically, the requirement of the Limitation Act that
the federal district court adjudicate (for multiple claim-
ants) both the question of liability and whether limitation
is appropriate—commonly referred to as the concursus3
requirement—deprives claimants of their right to pursue

2
  The Limitation Act was re-codified in October 2006. It was
previously codified as 46 U.S.C. App. § 183 et seq.
3
  Concursus is defined as “[a] proceeding in which two or more
creditors claim, usu[ally] adversely to each other, an interest in
a fund or estate so that they can sort out and adjudicate all the
claims on the fund.” Black’s Law Dictionary 286 (7th ed. 1999).
No. 06-2104                                                   7

their actions in state court, and importantly, deprives
them of the right to a jury trial, which is not provided in
admiralty law (and specifically not an option under Rule
F). Conversely, the saving to suitors clause states that
“district courts shall have original jurisdiction, exclusive of
the courts of the States, of . . . [a]ny civil case of admiralty
or maritime jurisdiction, saving to suitors in all cases all
other remedies to which they are otherwise entitled.” 28
U.S.C. § 1333(1). In Lewis, the Supreme Court found that
this arrangement “preserves remedies and the concurrent
jurisdiction of state courts over some admiralty and
maritime claims.” Lewis, 531 U.S. at 445. Additionally, the
saving to suitors clause “evinces a preference for common
law remedies in the forum of the claimant’s choice” (see
Odeco II, 74 F.3d at 674), and trial by jury is an example
of a remedy available to suitors (see Lewis, 531 U.S. at
454-55). The Supreme Court determined that in light of
this potential conflict, district courts should have discre-
tion to retain a limitation action or allow the case to
proceed in state court. Id. at 449.
  In order to alleviate this tension and assist district
courts in exercising their discretion, the Supreme Court
has recognized two situations in which a district court
should abstain from invoking its jurisdiction to determine
liability and allow claimants to litigate in state court. In
Langnes v. Green, 282 U.S. 531, 541 (1931), the Court
articulated a “single claimant” exception to the concursus.
The Court stated that when a single claim is asserted
against a shipowner there is no need for the “peculiar and
exclusive jurisdiction of an admiralty court,” and therefore
a district court should allow the action to proceed in state
court, while retaining exclusive jurisdiction over the
question of limitation of liability. Id. at 541-42. When a
state court is competent to afford relief, for a district court
“[t]o retain the cause would be to preserve the right of the
shipowner, but to destroy the right of the suitor in the
8                                                 No. 06-2104

state court to a commonlaw remedy; [whereas,] to remit
the cause to the state court would be to preserve the
rights of both parties.” Id. at 541.
  Additionally, in Lake Tankers Corp. v. Henn, 354 U.S.
147, 154 (1957), the Court articulated the “adequate fund
exception.” In Lake Tankers, the value of the vessel and
the pending freight—in other words, the possible amount
of liability limited under the Act—exceeded the total
claims made against the vessel owner. Id. at 152. Finding
that “[t]he state proceeding could have no possible effect
on the petitioner’s claim for limited liability,” the Court
held the provisions of the Act, namely the concursus
requirement, did not apply. Id. at 153.
  In the present case, the claimants argue that their
stipulations transform their multiple claims into a single
claim, and therefore, the district court did not err in
allowing them to proceed in state court. There is signifi-
cant support for this contention. In Holly Marine, 270
F.3d at 1090, we held:
    [I]f all the claimants stipulate that their claims will
    not subject [the vessel owner] to liability beyond th[e]
    amount [of the limitation fund], then [the vessel
    owner] is fully protected, and even if there are multi-
    ple claimants, the suits can continue in state court
    without endangering any interest that the Act pro-
    tects.4
Moreover, in Lewis, the Supreme Court discussed a
hypothetical which is similar to the present case and

4
   As will be discussed later, we reversed the district court’s
decision in Holly Marine to grant the claimants partial dissolu-
tion of the injunction because the stipulations were not signed
by one of the claimants and thus did not adequately protect
the vessel owner.
No. 06-2104                                                9

implicitly concluded that abstention would be appropri-
ate in certain multiple claimants’ situations:
    If the district court concludes that the vessel owner’s
    right to limitation will not be adequately protected—
    where for example a group of claimants cannot agree
    on appropriate stipulations or there is uncertainty
    concerning the adequacy of the fund or the number
    of claims—the court may proceed to adjudicate the
    merits, deciding issues of liability and limitation.
Lewis, 531 U.S. at 454 (emphasis added). This statement,
albeit dicta, supports by negative implication allowing
claimants to proceed in state court so long as the vessel
owner’s right to limitation of liability is adequately
protected through appropriate stipulations.
  Extending the “single claimant” exception to instances
like the present has also been endorsed by a number of our
sister circuits. Specifically, the Second, Fifth and Eighth
Circuits have all allowed multiple claimants to proceed
in state court where the claimants have stipulated to
certain conditions, namely concerning the exclusive
jurisdiction of the federal district court to decide the
limitation of the vessel owner’s liability and the claimants’
waiver of any res judicata assertion. See Odeco Oil & Gas
Co. v. Bonnette (Odeco I), 4 F.3d 401, 404-05 (5th Cir.
1993) (holding that claimants’ stipulations, which fully
protected the shipowner’s right to seek limited liability,
and claimants’ agreement to abide by an admiralty court
determination of the right to limit were adequate to lift
an injunction of state court proceedings); In re Dammers
& Vanderheide & Scheepvaarts Maats Christina B.V., 836
F.2d 750, 756 (2d. Cir. 1988) (holding that claimants’
stipulations conceding the admiralty court’s exclusive
jurisdiction to determine all issues relating to limitation
of liability and prioritization of their claims allowed them
to proceed with common law actions in other forums);
10                                              No. 06-2104

Jefferson Barracks Marine Serv. Inc. v. Casey, 763 F.2d
1007, 1011 (8th Cir. 1985) (holding that claimants’ waiver
of any claim of res judicata relevant to the issue of limited
liability based on any judgment obtained in state court
and claimants’ concession of the shipowner’s right to
litigate all limitation of liability issues in federal court
enabled their actions to proceed in state court). Cf. In re
S & E Shipping Corp., 678 F.2d 636, 641, 644 (6th Cir.
1982) (holding that a single claimant’s stipulations and
prioritization of her multiple claims created a single claim
situation).
  IMT makes much of Justice Frankfurter’s plurality
opinion in Maryland Cas. Co. v. Cushing, 347 U.S. 409,
415 (1954) which states that the concursus is the “heart”
of the Limitation Act, explaining that the concursus fosters
judicial efficiency by bringing together all potential
claimants in a maritime accident and resolving their
claims in one trial. Subsequent Supreme Court cases,
however, have diminished the value of the concursus’s
contribution to judicial efficiency and maintained that
the primary purpose of the Act is limitation of liability.
Lewis, 531 U.S. at 453 (noting that the Act was designed
to “protect vessel owners from unlimited exposure to
liability”); Lake Tankers Corp., 354 U.S. at 153 (noting
that the Act was adopted to limit liability and that if
the concursus is not necessary to protect this statutory
right, it is not required). Moreover, IMT relies on Justice
Frankfurter’s language about the concursus’s being the
“heart” of the Act without articulating its relationship to
the present case. In contrast, the claimants ground their
request to return to state court in their interest in a jury
trial.
  Additionally, IMT claims that allowing claimants to
proceed in state court will render Rule F meaningless, by
depriving shipowners of their right to seek exoneration
from and limitation of liability. Specifically, IMT argues
No. 06-2104                                                    11

that the claimants’ stipulation that they will only seek
their pro rata share of any state court judgment in the
event the district court determines limitation is appropri-
ate is nothing more than an acknowledgment that they
will comply with what Rule F already requires. IMT
further contends that the single claimant exception
will thereby swallow entirely a shipowner’s right to a
concursus of claims in federal court. But, IMT’s argument
fails because the claimants have not only stipulated to a
potential pro rata distribution,5 they have also: conceded
that the district court has exclusive jurisdiction over
all limitation of liability issues, agreed to waive any
claims of res judicata respecting any limitation of liabil-
ity issues, promised not to seek any amount in excess of
the fund in the event that limitation is held appropriate
and conceded that the district court has exclusive jurisdic-
tion to determine the value of the limitation fund. (R. 84-
2.) As such, we agree with IMT that a simple stipulation to
pro rata distribution is not enough, but here the stipula-
tions go farther. When multiple claimants form adequate
stipulations that ensure that all limitation issues will
be decided in federal court, as they have done in the
instant case, then a vessel owner’s rights are preserved
and a concursus is unnecessary.
  Finally, IMT contends that the claimants’ stipulations
do not prioritize their claims, and therefore they do not
fall within the “single claimant” exception. IMT also
asserts that five separate claimants cannot possibly
determine how their claims will be paid from the fund
in the event limitation occurs. IMT’s argument lacks
merit, however, because the claimants’ stipulation to seek

5
  We question whether the pro rata distribution stipulation is
even necessary since Rule F(8) already requires pro rata dis-
tribution if the district court limits liability. Fed. R. Civ. P.,
Supplemental Admiralty & Maritime Claims R. F(8).
12                                               No. 06-2104

only their respective pro rata shares of any judgment
obtained in state court (provided limitation is deemed
appropriate) accomplishes the same thing as prioritization.
In the event of a judgment against IMT, all IMT will have
to do is write a check. It is of no interest to IMT how that
money is subsequently apportioned.
  The primary purpose of the Limitation Act is to limit
shipowners’ liability for maritime accidents that occur
“without the[ir] privity or knowledge.” 46 U.S.C. § 30505;
Lewis, 531 U.S. at 453; Lake Tankers Corp., 354 U.S. at
153. True, the concursus may be more efficient, but the
interest of judicial efficiency should not trump the right
of claimants to choose their respective fora and the
corresponding right to a jury trial that a state proceeding
may provide. See Odeco I, 4 F.3d at 404-05. Indeed, to
allow shipowners to manipulate the Limitation Act to
deprive claimants of the ability to proceed in state court
when they have consented to adequate stipulations “would
transform the Act from a protective instrument [in]to an
offensive weapon by which the shipowner could deprive
suitors of their common-law rights.” Lake Tankers Corp.,
354 U.S. at 152. The right to limit liability is not so “bound-
less.” Id. Therefore, the district court correctly concluded
that proper stipulations can transform multiple claims into
a single claim for purposes of determining liability in state
court.
  We now turn to whether the stipulations in the present
case adequately protect IMT’s interests under the Limita-
tion Act. Here, the claimants’ stipulations, previously
quoted in full, are similar to those of the injured parties in
Jefferson Barracks, 763 F.2d at 1010, Dammers &
Vanderheide, 836 F.2d at 756, and In re Garvey Marine,
Inc., 909 F. Supp. 560, 562-63 (N.D. Ill. 1995). Each of
these cases involved multiple claimants whose state court
claims were enjoined in limitation proceedings. The
claimants, in turn, consented to stipulations in an at-
No. 06-2104                                               13

tempt to litigate their claims in state court. The courts in
all three cases imposed the requirement that for the
actions to proceed in state court, the claimants had to:
    (a) file [their] claim[s] in the limitation proceeding;
    (b) where a stipulation for value has been filed in lieu
    of the transfer of the ship to a trustee, concede the
    sufficiency in amount of the stipulation;
    (c) consent to waive any claim of res judicata relevant
    to the issue of limited liability based on any judg-
    ment obtained in the state court;
    (d) concede petitioner shipowner’s right to litigate all
    issues relating to limitation in the limitation proceed-
    ing.
Jefferson Barracks, 763 F.2d at 1010 (citing Gilmore &
Black, The Law of Admiralty 871, n.84 (2d ed. 1975)); see
also Dammers & Vanderheide, 836 F.2d at 758 (quoting
same language);6 In re Garvey Marine, Inc., 909 F. Supp.
at 566 (quoting same language). In each case, the court
determined that, because the claimants’ stipulations met
these requirements, they had transformed their multiple
claims into a single claim while still protecting the respec-
tive shipowners’ rights under the Limitation Act. Jefferson
Barracks Marine Service Inc., 763 F.2d at 1011; Dammers
& Vanderheide, 836 F.2d at 758; In re Garvey Marine, Inc.,
909 F. Supp. at 566.
  In the instant case, the claimants’ stipulations allow the
district court to retain jurisdiction over all limitation
issues, while also permitting the claimants to pursue the
question of liability in state court. The claimants’ state-

6
   The Second Circuit in Dammers & Vanderheide declined to
hold that the second requirement—a stipulation of the value
of the fund—was required. 836 F.2d at 758.
14                                                No. 06-2104

ment that the district court has exclusive jurisdiction to
decide all issues related to limitation of liability, their
waiver of any potential claims of res judicata, their
concession not to seek liability beyond the fund if the
district court determines that limitation is appropriate
and their agreement to seek only their respective pro rata
share of the fund in the event that limitation is deemed
proper ensure that IMT’s rights under the Limitation
Act are adequately protected.
  Next, we address IMT’s argument that the failure of
Billy Joe Thomas (IMT’s employee and the driver of the
barge owned by IMT) to sign the claimants’ stipulations
jeopardizes its rights under the Limitation Act. Although
not entirely clear, IMT appears to raise two concerns.
First, IMT contends that Thomas should be considered a
claimant because he can potentially bring an indemnifica-
tion or contribution action; therefore, his failure to sign the
stipulations could expose IMT to liability in excess of the
fund. Second, IMT raises a concern that findings in state
court concerning IMT’s failure to train Thomas could be
raised as res judicata in a subsequent federal limitation of
liability proceeding, thereby undermining IMT’s right to
have all limitation issues decided in federal court.7 IMT
maintains that Thomas has a strong motivation to assert
res judicata, because, if IMT obtains limitation, he alone
will be responsible for any judgment above the limitation
fund.
  With respect to the first concern—that Thomas is or
could be a claimant—, IMT cites Holly Marine, 270 F.3d

7
  Presumably IMT is concerned about a finding in the state court
that IMT failed to adequately train Thomas. This possible find-
ing might impact the question of “knowledge or privity” of IMT.
IMT must show that it was “without privity or knowledge” in
order to limit its liability. See 46 U.S.C. § 30505.
No. 06-2104                                                15

1086, in support of its assertion that the claimants’
stipulations inadequately protect its rights. Holly Marine
involved a crane accident that killed one person and
injured another. Id. at 1088. The injured parties filed suit
in Illinois state court against Holly Marine (the vessel
owner), JLG Industries (the manufacturer of the crane)
and BH&H (the construction company that employed the
plaintiffs). Id. Holly Marine filed a motion in federal court
for limitation of liability and to stay the state court action.
Id. Along with the injured parties, JLG filed a claim for
contribution from Holly Marine as a joint tortfeasor should
the injured parties obtain a judgment against JLG for its
role in the accident. Id. The injured parties, but not JLG,
filed a motion to modify the injunction and submitted
stipulations. Id. We held that JLG’s failure to agree to the
stipulations left Holly Marine inadequately protected, and
therefore, the district court abused its discretion in
granting the injured plaintiffs’ motion to amend the stay.
Id. at 1090. IMT’s reliance on Holly Marine is misguided,
however, because, unlike JLG Industries, Thomas is
neither a claimant in the federal court proceeding, nor has
he filed a lawsuit against IMT in state court. As such,
Holly Marine is distinguishable from the present case,
because Thomas is not asserting a claim that could expose
IMT to liability in excess of the limitation fund.
  Relying on Odeco II, 74 F.3d 671 (5th Cir. 1996) and In
re Port Arthur Towing Co., 42 F.3d 312 (5th Cir. 1995),
IMT further argues that a party that may potentially seek
indemnification or contribution from a shipowner must be
considered a claimant within the Limitation Act. IMT
argues that the possibility Thomas may seek indemnifica-
tion or contribution in the state court proceeding necessi-
tates Thomas’s signing of the stipulations in order for
IMT’s right to a limitation of liability proceeding to be
protected. However, IMT’s reasoning fails because
Thomas waived his right to seek indemnification or
16                                               No. 06-2104

contribution. Specifically, Thomas submitted a Waiver
of Claims with the district court which states:
     Thomas . . . hereby waives any claim for indemnity,
     contribution, or any other relief that he now has or
     may have in the future against Illinois Marine Towing,
     Inc. for any legal liabilities he may incur as a result of
     the collision which is the subject matter of the Com-
     plaint of Illinois Marine Towing, Inc. for Exoneration
     From or Limitation of Liability.
(R. 104 at 1 (emphasis added).) Although Thomas’s waiver
did reserve his ability to counterclaim if IMT sought
indemnity or contribution from him, IMT points to no
indication that it will do so, and further, the choice to
trigger this reservation is entirely within IMT’s control.
Therefore, Thomas is precluded from becoming a claimant
in either state court or federal court, and as such, his
failure to sign the stipulation is of no concern. At the very
least, the district court did not abuse its discretion in
relying on Thomas’s waiver to find that IMT’s right to a
limitation of liability proceeding in federal court was
adequately protected by the claimants’ stipulations.
  We also reject IMT’s second concern: that a state court
finding concerning IMT’s failure to adequately train
Thomas could somehow make its way into federal court,
thereby undermining IMT’s statutory right to have all
limitation issues decided in federal court. IMT has failed
to articulate how Thomas as a non-party to the federal
action could assert res judicata, and we cannot find any
possible avenue of his entry into the federal proceeding. In
short, only the claimants could potentially assert res
judicata principles on the basis of the state court proceed-
ing, and they have stipulated that they will not do so.
(R. 84-2 at ¶2.) Therefore, we hold that the district court
did not abuse its discretion in finding that the claimants’
stipulations, even without Thomas’s signature, adequately
protect IMT’s interests under the Limitation Act.
No. 06-2104                                               17

  In conclusion, the Limitation Act’s primary purpose is
to protect a shipowner’s right to limited liability for
maritime accidents occurring without its privity or knowl-
edge. Lewis, 531 U.S. at 451; Lake Tankers, 354 U.S. at
153. The saving to suitors clause of 28 U.S.C. § 1333(1)
and Supreme Court precedent affirm that as long as this
right is preserved, parties should be allowed to litigate
their claims stemming from such an accident in the forum
of their choice. See 28 U.S.C. 1333(1); see Lewis, 531 U.S.
at 454. In the present case, the claimants’ stipulations
adequately protect IMT’s right to seek limitation of
liability and have all limitation issues decided in federal
court. As such, the district court did not abuse its discre-
tion in lifting the stay of the claimants’ state court action.
We therefore affirm the ruling of the district court.

                      III. Conclusion
  For the foregoing reasons, we AFFIRM the district court’s
order granting the claimants Motion to Modify the Stay.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—8-20-07