Court Opinion

ID: 4564878
Source: CourtListenerOpinion
Date Created: 2020-09-11 18:00:20.357379+00
Date Added: 2024-06-11T12:35:34.548954
License: Public Domain

Case: 19-30920   Document: 00515561047       Page: 1    Date Filed: 09/11/2020

          United States Court of Appeals
               for the Fifth Circuit
                                                                   United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                 September 11, 2020
                              No. 19-30920                           Lyle W. Cayce
                                                                          Clerk

   In re: In the Matter of the Complaint of Devall Towing
   & Boat Service of Hackberry, L.L.C., as Owner and
   Operator of the M/V Kenneth J. Devall, for
   Exoneration from or Limitation of Liability

   Devall Towing & Boat Service of Hackberry, L.L.C., as
   Owner and Operator of the M/V Kenneth J. Devall,

                                                       Plaintiff—Appellant,

                                 versus

   Jason Charles Lanclos,

                                                       Defendant—Appellee,

   -----------------------------------------------------------
   In re: In the Matter of the Complaint of Deloach
   Marine Services, L.L.C., as owner pro hac vice and
   operator of M/V Zeland M. Deloach, Jr., for
   Exoneration from or Limitation of Liability

   Deloach Marine Services, L.L.C., as owner pro hac vice
   and operator of M/V Zeland M. Deloach, Jr.,

                                                       Plaintiff—Appellant,

                                 versus
Case: 19-30920      Document: 00515561047          Page: 2    Date Filed: 09/11/2020

                                    No. 19-30920

   Devall Towing & Boat Service of Hackberry, L.L.C., as
   Owner and Operator of the M/V Kenneth J. Devall,

                                                           Defendant—Appellant,

                                       versus

   Jason Charles Lanclos,

                                                             Defendant—Appellee.

                  Appeals from the United States District Court
                     for the Western District of Louisiana
                   USDC No. 6:18-CV-752 c/w 6:19-CV-535

   Before Barksdale, Elrod, and Ho, Circuit Judges.
   Per Curiam:*
          In this interlocutory appeal, Devall Towing & Boat Service of
   Hackberry, L.L.C. and Deloach Marine Service, L.L.C. challenge the district
   court’s revised order partially lifting its stay of Jason Lanclos’s suit against
   them in Louisiana state court.
          Lanclos worked as a deckhand aboard the M/V KENNETH J.
   DEVALL, a vessel owned by Devall Towing. While assisting the M/V
   ZELAND M. DELOACH, JR. break its tow, Lanclos was injured by a falling
   pipe. After receiving notice of Lanclos’s intent to sue, both Lanclos’s
   employer, Devall Towing, and the owner of the vessel where the injury
   occurred, Deloach Marine, filed complaints in federal district court to limit
   their liability to the value of their vessels under the Limitation Act,

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

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                                    No. 19-30920

   46 U.S.C. § 30501 et seq. Devall Towing responded to Deloach Marine’s
   complaint with claims of contribution, indemnification, and reimbursement.
   Between the time Devall Towing and Deloach Marine filed complaints to
   limit their liability, Lanclos sued both companies in Louisiana state court.
          The district court entered an order pursuant to Supplemental Rule of
   Civil Procedure F(3) restraining prosecution of all claims against Devall
   Towing and Deloach Marine—thus putting a stop to Lanclos’s state court
   suit. Lanclos moved to lift the stay, stipulating that he would not seek to
   enforce any judgment in excess of the value of the limitation fund or assert
   res judicata. Devall Towing, however, did not agree to any protective
   stipulations and opposed Lanclos’s motion. The district court granted a
   hearing on Lanclos’s motion.
          At the hearing, the district court was initially inclined to deny
   Lanclos’s motion. Under our precedent, when one or more claimants do not
   agree to a protective stipulation, a stay must be kept in place to protect the
   shipowner’s right to have limitation of liability adjudicated in federal court.
   But the district court saw two legal principles in apparent conflict: First, “a
   vessel owner is entitled to have a federal judge, not a jury, but a judge in
   federal court determine the limitation issues.” Second, under the “saving to
   suitors” clause, 28 U.S.C. § 1333(1), “the plaintiff himself should be able to
   pursue his claim in the venue of his choice, whether that be state court or
   federal court.”
          To resolve this apparent conflict, the district court adopted an
   admittedly novel approach, noting, “I understand what I’m suggesting has
   not been done, I think.” The district court entered a Revised Order
   Restraining Prosecution of Claims, explaining that it intended to
   “accomplish what would be accomplished by a stipulation, and I would
   accomplish it by just my injunction.” The Revised Order enjoined all parties

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                                     No. 19-30920

   from prosecuting claims, yet allowed the parties “to proceed with discovery,
   pretrial matters, and trial on the merits in the matter filed in Cameron Parish
   [Louisiana state court].” Additionally, the Revised Order enjoined the
   parties from enforcing any judgment rendered by the state court—either in
   federal or state court—and from asserting res judicata or issue preclusion.
   As the district court put it, the effect of the injunction is that “whatever
   happens in Cameron Parish is not binding on the court here.” Devall Towing
   and Deloach Marine appealed.
          We review a district court’s decision to lift a stay in a maritime
   limitation of liability action for abuse of discretion. Odeco Oil & Gas Co.,
   Drilling Div. v. Bonnette, 74 F.3d 671, 674 (5th Cir. 1996).
          The Limitation Act allows a vessel owner to limit liability for damage
   or injury, occasioned without the owner’s privity or knowledge, to the value
   of the vessel and its pending freight or the owner’s interest in the vessel and
   its pending freight. 46 U.S.C. § 30505. Federal courts have exclusive
   jurisdiction over suits brought under the Limitation Act, “saving to suitors
   in all cases all other remedies to which they are otherwise entitled.”
   28 U.S.C. § 1333(1). There is tension between the “saving to suitors” clause
   and the Limitation Act: “[T]he former affords suitors a choice of remedies,
   while the latter gives shipowners the right to seek limitation of their liability
   exclusively in federal court.” In re Tetra Applied Techs., L.P., 362 F.3d 338,
   340 (5th Cir. 2004). While “[t]he court’s primary concern is to protect the
   shipowner’s absolute right to claim the Act’s liability cap, and to reserve the
   adjudication of that right in the federal forum,” Magnolia Marine Transp. Co.
   v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992), there are two
   instances in which a district court has discretion to lift a stay and allow claims
   to proceed outside the limitation action: “(1) [W]hen the total amount of the
   claims does not exceed the shipowner’s declared value of the vessel and its
   freight, and (2) when all claimants stipulate that the federal court has

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                                    No. 19-30920

   exclusive jurisdiction over the limitation proceeding, and that the claimants
   will not seek to enforce a damage award greater than the value of the ship and
   its freight until the shipowner’s right to limitation has been determined by
   the federal court.” Odeco, 74 F.3d at 674.
          Devall Towing is a claimant against Deloach Marine. See id. at 675
   (“[P]arties seeking indemnification and contribution from a shipowner must
   be considered claimants within the meaning of the Limitation Act.”). But
   Devall Towing never agreed to any protective stipulations. So this case does
   not satisfy either of the exceptions mentioned above. Thus, there is no
   exception to the Limitation Act’s command that “all claims and proceedings
   against the owner related to the matter in question shall cease.” 46 U.S.C.
   § 30511(c); see also Fed. Supp. R. Civ. P. F(3) (providing that upon
   proper application, “the court shall enjoin the further prosecution of any
   action or proceeding against the plaintiff or the plaintiff’s property with
   respect to any claim subject to limitation in the action”).
          Yet the Revised Order did not enjoin all claims. Rather, it made an
   exception to its general injunction of all claims that specifically authorized
   the Louisiana state court action—in which Devall Towing and Deloach
   Marine are parties—to proceed. It also enjoins the parties from asserting res
   judicata, issue preclusion, or enforcing any state court judgment—
   contradicting the Limitation Act’s mandatory all-or-nothing approach to
   enjoining prosecution of claims. See 46 U.S.C. § 30511(c) (requiring that “all
   claims and proceedings” be enjoined) (emphasis added).
          Lanclos unsuccessfully looks elsewhere to justify the Revised Order.
   Other than the two narrow instances in which a district court may properly
   lift a stay, he argues, “the district court still retains broad discretion to
   terminate or modify an injunction in a limitation proceeding.” He locates the
   source of this broad discretion in Lewis v. Lewis & Clark Marine, Inc., 531 U.S.

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                                    No. 19-30920

   438 (2001). Under Lewis, a district court may dissolve an injunction in a
   limitation proceeding when it “satisfies itself that a vessel owner’s right to
   seek limitation will be protected.” Id. at 454. But Lewis never held that a
   district court has broad discretion to force parties into the position they
   would be in if they had stipulated. To the contrary, our precedent is clear
   that “[a] district court abuse[s] its discretion in allowing the state court
   action to proceed in the absence of a stipulation, agreed to by all claimants,
   protecting [the shipowner’s] right to limitation.” Odeco, 74 F.3d at 675; see
   also In re Port Arthur Towing Co., 42 F.3d 312, 317 (5th Cir. 1995) (“Clearly,
   then, the trial court would have abused its discretion had it lifted its earlier
   order staying [a claimant’s] state court proceeding.”).
          Discretion to lift a stay when all claimants submit the necessary
   stipulations does not mean discretion to impose those stipulations by
   injunction.   When neither of the two narrow exceptions apply, “[t]he
   shipowner’s right to limitation takes precedence over the claimant’s rights to
   proceed in the forum of their choice” and the district court is bound by the
   Limitation Act’s mandate to stay all proceedings. Odeco, 74 F.3d at 675.
          We VACATE the district court’s Revised Order and REMAND for
   further proceedings.

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