Supreme Court of the United States

Transcription

1 No In the Supreme Court of the United States FRANCIS & MARY MARION, CHARLES & MARY PINCKNEY, JOHN & ELIZABETH RUTLEGDE, JAMES S. THURMOND, AND ESSIE MAE WASHINGTON-WILLIAMS, v. Petitioners, SALLY S SEAFOOD SHACK, INC., On Writ Of Certiorari to the United States Court of Appeals for the Fourth Circuit Respondent. BRIEF OF THE PETITIONERS Team H Counsel for Petitioners

2 ii QUESTIONS PRESENTED 1. Whether the Limitation of Liability Act, 46 U.S.C , can serve as an independent basis for admiralty jurisdiction? 2. If the Limitation Act can serve as an independent basis for admiralty jurisdiction, then does the Act s scope have to be coextensive with the general principles for admiralty tort jurisdiction? 3. Is a judgment by a district court determining that a shipowner is entitled to limit its liability under the Limitation Act, but not determining whether the shipowner is liable to claimants, sufficient to allow appellate jurisdiction under 28 U.S.C. 1292(a)(3)?

3 iii TABLE OF CONTENTS QUESTIONS PRESENTED...ii TABLE OF CONTENTS... iii TABLE OF AUTHORITIES...vi OPINIONS BELOW...2 STATEMENT OF JURISDICTION...2 STATEMENT OF STATUTORY PROVISIONS INVOLVED...3 STATEMENT OF THE CASE...3 A. Statement of the Facts...3 B. Statement of the Proceedings...4 SUMMARY OF THE ARGUMENT...6 ARGUMENT & AUTHORITIES...9 I. THE LIMITATION OF LIABILITY ACT DOES NOT PROVIDE AN INDEPENDENT BASIS FOR ADMIRALTY JURISDICTION...9 A. Richardson v. Harmon should be read narrowly since has been implicitly overruled by the Admiralty Extension Act and this Court...10 B. Richardson should be limited to its facts as reflected by contemporary court decisions interpreting the scope of admiralty jurisdiction...12 II. IF THE LIMITATION ACT DOES SERVE AS AN INDEPENDENT BASIS OF ADMIRALTY JURISDICTION, THIS COURT SHOULD RESTORE THE REACH OF THE ACT TO BE COEXTENSIVE WITH ADMIRALTY TORT JURISDICTION...17 A. The Court has narrowed admiralty jurisdiction over time and allowing the Limitation Act to provide an independent basis of admiralty jurisdiction would undermine those developments...17

4 iv B. The locality requirement of admiralty jurisdiction would be nullified if the Limitation Act was capable of being used to independently confer admiralty jurisdiction...19 C. Expanding the scope of the Limitation Act beyond the parameters of modern admiralty jurisdiction would contort the purpose of the Act and undermine the concept of federalism Allowing the Limitation Act to confer admiralty jurisdiction would deprive the states of jurisdiction over purely state concerns The evolution of the shipping industry has weakened the rationale for liberal construction of the Limitation Act...24 III. AN INTERLOCUTORY APPEAL IS AVAILABLE UNDER 28 U.S.C. 1292(a)(3) FROM A JUDGMENT GRANTING A SHIPOWNER THE RIGHT TO LIMIT LIABILITY...27 A. A judgment that limits liability under the Limitation Act determines the rights of the parties and sustains an interlocutory appeal A broader interpretation of 28 U.S.C. 1292(a)(3) would be consistent with this Court s interpretation of the final judgment rule and Congressional intent The determination of a defendant s right to limit liability falls within the meaning of rights under 28 U.S.C. 1292(a)(3)...33 B. Similar to a decision granting a shipowner exoneration from liability, a decision to grant a right to limit liability to a trivial amount effectively determines liability and falls within the meaning 28 U.S.C. 1292(a)(3)...35 CONCLUSION...38 APPENDICES: Appendix A: Appendix to the Petition for Certiorari...a-1

5 v Appendix B: Appendix to the Statutory Provision Involved...b-1

6 vi TABLE OF AUTHORITES CASES Alford v. Appalachian Power Co., 951 F.2d 30, 1992 AMC 1123 (4th Cir. 1991)...20 Balt. Contractors v. Bodinger, 348 U.S 176 (1955)...32 Bucher-Guyer AG v. M/V Incotrans Spirit, 868 F.2d 734 (5th Cir. 1989)...31 Butler v. Boston & Savannah S.S. Co., 130 U.S. 527 (1889)...11, 14 Carman Tool & Abrasives, Inc. v. Evergreen Lines, 871 F.2d 897, 1989 AMC 913 (9th Cir. 1989)...28 City of Fort Madison, Iowa v. Emerald Lady, 990 F.2d 1086, 1993 AMC 2091 (8th Cir. 1993)...30 Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949)...31 Coleman v. Jahncke Serv., Inc., 341 F.2d 956, 1965 AMC 535 (5th Cir. 1965)...37 Complaint of Sisson, 867 F.2d 341, 1989 AMC 609 (7th Cir. 1989)...12,14 David Wright Charter Service of North Carolina, Inc. v. Wright, 925 F.2d 783, 1991 AMC 2927 (4th Cir. 1991)...12, 13, 14 Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994)...31 Evergreen Intern. (USA) Corp. v. Standard Warehouse, 33 F.3d 420, 1995 AMC 635 (4th Cir. 1994)...5, 30, 31 Ex parte Green, 286 U.S. 437, 1932 AMC 802 (1932)...27, 35

7 vii Ex parte Phenix Ins. Co., 118 U.S. 610, 2001 AMC 595 (1886)...10 Executive Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 1973 AMC 1 (1972)...Passim Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 1991 AMC 1817 (1991)...23 Farrel Lines Inc. v. Jones (The African Neptune), 530 F.2d 7, AMC 1639 (5th Cir. 1976)...36 Flame S.A. v. Indus. Carriers, Inc., No. 2:13 cv 658, 2014 WL , at *14 (E.D. Va. Dec. 16, 2014)...38 Foremost Ins. Co. v. Richardson, 457 U.S. 668, 1982 AMC 2253 (1982)...23 Guillory v. Outboard Motor Corp., 956 F.2d 114, 1993 AMC 605 (5th Cir. 1992)...13 Hercules Carriers, Inc. v. Claimant State of Florida (The Summit Venture), 768 F.2d 1558 (11th Cir. 1985)...36, 37 In re Aramark Sports and Ent. Services, LLC, 831 F.3d 1264, 2016 AMC 2138 (10th Cir. 2016)...30, 36, 37 In re Bankers Trust Co., 651 F.2d 160, 1981 AMC 1497 (3d Cir. 1981)...37 In Re Tidewater, Inc., 249 F.3d 342, 2001 AMC 1791 (5th Cir. 2001)...35 In re Wills Lines, Inc., 227 F.2d 509 (2d Cir. 1955)...34 Jerome B. Grubart, Inc. v. Great Lakes Dredge & Barge Co., 513 U.S. 527, 1995 AMC 913 (1995)...Passim Lake Tankers Corp. v. Henn, 354 U.S. 147, 1957 AMC 1165 (1957)...15, 35 Langes v. Green, 282 U.S. 531, 1931 AMC 511 (1931)...8, 34

8 viii Leblanc v. Cleveland, 198 F.3d 353, 2000 AMC 609 (2d Cir. 1999)...20 Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046, 1989 AMC 1521 (11th Cir. 1989)...Passim Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 2001 AMC 913 (2001)...15, 36 Lozman v. City of Riviera Beach, 568 U.S. 115, 2013 AMC 1 (2013)...28 Martha s Vineyard Scuba Headquarters, Inc. v. The Unidentified, Wrecked and Abandoned Steam Vessel, etc., et al., 833 F.2d 1059, 1988 AMC 1109 (1st Cir. 1987)...27 Maryland Casualty Co. v. Cushing, 347 U.S. 409, 1954 AMC 837 (1954)...25 Miskiewicz v. Goodman, 341 F.2d 828, 1965 AMC 648 (4th Cir. 1965)...34 Norwich & N.Y. Transp. Co. v. Wright, 80 U.S. 104 (1871)...14 Petition of Southern S.S. Co., 132 F. Supp. 316, 1955 AMC 2278 (D. Del. 1955)...34 Matter of International Properties Management, S.A., 604 F.2d 254, 1979 AMC 1680 (4th Cir. 1979)...28, 29, 37 Providence & New York S.S. Co. v. Hill Mfg. Co., 109 U.S. 578 (1883)...21, 22 Republic of France v. United States, 290 F.2d 395, 1961 AMC 1082 (5th Cir. 1961)...29, 37 Rice Growers Ass n of Cal. v. Rederiaktiebolaget Frode, 171 F.2d 662, 1949 AMC 316 (9th Cir. 1948)...28, 34 Richardson v. Harmon, 222 U.S. 96, 2001 AMC 1207 (1911)...5, 9, 11

9 ix Rogers v. Alaska S. S. Co., 249 F.2d 646, 1958 AMC 460 (9th Cir. 1958)...34 Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 1995 AMC 2087 (9th Cir. 1995)...Passim Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990)...12, 22 Southwest Marine Inc. v. Danzig, 217 F.3d 1128, 2000 AMC 2088 (9th Cir. 2000)...29 The Admiral Peoples, 295 U.S. 649, 1935 AMC 875 (1935)...18 The Daniel Ball, 77 U.S. 557, 2000 AMC 2106 (1870)...20 The Hine v. Trevor, 71 U.S. 555, 2009 AMC 263 (1866)...23 The Plymouth, 70 U.S. 20, 1999 AMC 2403 (1865)...18 Three Buoys Houseboat Vacations U.S.A., Ltd. v. Morts, 921 F.2d 775, 1991 AMC 1356 (8th Cir. 1990)...Passim Univ. of Texas Medical Branch at Galveston v. United States, 557 F.2d 438, 1977 AMC 2607 (5th Cir. 1977)...25 Victory Carriers, Inc., v. Law, 404 U.S. 202, 1972 AMC 1 (1971)...24 Wallin v. Keegan, 426 F.2d 1313, 1970 AMC 2390 (5th Cir. 1970)...34 Wallis v. Princess Cruises, Inc., 306 F.3d 827 (9th Cir. 2002)...28, 31 Waterman S.S. Corp v. Gay Cottons, 414 F.2d 724, 1969 AMC 1682 (9th Cir. 1969)...37 Williamson v. Recovery Ltd. P ship, 731 F.3d 608, 2014 AMC 330 (6th Cir. 2013)...29

10 x CONSITUTIONAL PROVISIONS U.S. Const. art. III, 2, cls STATUTES 28 U.S.C , U.S.C. 1254(1) U.S.C. 2072(b) U.S.C. 1292(a)(3)...Passim 28. U.S.C , U.S.C U.S.C , U.S.C , 8 46 U.S.C , U.S.C FEDERAL RULES OF CIVIL PROCEDURE Fed. R. Civ. P. 9(h)...33 Fed. R. Civ. P. Supp. R. F(1)-(2)...14 LAW REVIEWS AND JOURNALS Arthur A. Crais, Jr., The Limitation of Shipowner s Liability Act as an Independent Basis for Federal Jurisdiction?, 17 Loy. Mar. L.J. 205 (2018)...Passim Craig H. Allen, Limitation of Liability, 31 J. Mar. L. & Com. 263 (2000)...36, 37

11 xi Robert Force, Deconstructing Jensen: Admiralty and Federalism in the Twenty-First Century, 32 J. Mar. L. & Com. 517 (2001)...13, 24 Stewart F. Peck & David B. Sharpe, What is a Vessel?: Implications For Marine Finance, Marine Insurance, and Admiralty Jurisdiction, 89 Tul. L. Rev. 1103, 1126 (2015)...28 BOOKS G. Gilmore & C. Black, The Law of Admiralty (1st ed. 1957) Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Fed. Prac. & Proc. Juris (3d ed & sup 2018)...34 OTHER SOURCES Brief on the Merits by Respondents Burton B. Ruby, Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990) (No ), 1990 WL , 25 Brief for the United States as Amicus Curiae, Three Buoys Houseboat Vacations U.S.A., Ltd. v. Morts, 921 F.2d 775, 1991 AMC 1356 (8th Cir. 1990) (No ), 1991 WL

12 1 No In The Supreme Court of the United States FRANCIS & MARY MARION, CHARLES & MARY PICKNEY, JOHN & ELIZABETH RUTLEDGE, JAMES S. THURMOND, AND ESSIE MAE WASHINGTON-WILLIAMS, Petitioners, v. SALLY S SEAFOOD SHACK, INC., On Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit Respondent. BRIEF OF THE PETITIONERS TO THE HONORABLE SUPREME COURT OF THE UNITED STATES: Petitioner-Claimants, Francis Marion, et. al., by counsel, respectfully submit this brief in support of their request that this Court find as a matter of law: (1) the Limitation of Liability Act does serve not as an independent basis for admiralty jurisdiction; or alternatively, (2) if the Limitation Act does independently confer admiralty jurisdiction, such jurisdiction is limited to the extent as necessary to ensure uniformity with the general principles of admiralty tort jurisdiction; and (3) if

13 2 admiralty jurisdiction exists, interlocutory appeal under 28 U.S.C. 1292(a)(3) is available when a district court grants a shipowner s petition to limit its liability under the Limitation Act. Accordingly, Petitioners asks this Court to reverse the judgment of the United States Court of Appeals for the Fourth Circuit. OPINIONS BELOW The opinion and judgment of the United States District Court for the District of South Carolina, granting Respondent s petition to limit liability, appears as In re Sally s Seafood Shack, Inc., 243 F. Supp. 3d 702 (D.S.C. 2017) and is contained in the Appendix to the Petition for Certiorari. (R. at 9a-14a). The opinion and judgment of the United States Court of Appeals for the Fourth Circuit, affirming the district court s decision regarding the existence of admiralty jurisdiction, but dismissing for lack of appellate jurisdiction, appears as In re Sally s Seafood Shack, Inc., 890 F.3d 1384, 2018 AMC 3333 (4th Cir. 2018) and is contained in the Appendix to the Petition for Certiorari. (R. at 1a-6a). The Order of the United States Court of Appeals for the Fourth Circuit, denying rehearing en banc, appears as In re Sally s Seafood Shack, Inc., No (June 22, 2018) and is contained in the Appendix to the Petition for Certiorari. (R. at 7a). See App. A. JURISDICTION The jurisdiction of this Court rests on 28 U.S.C. 1254(1), which provides that this Court may review cases in the courts of appeals, by writ of certiorari granted upon the petition of any party to the case, before or after rendition of judgment or

14 3 decree. Francis and Mary Marion, et al., ( Claimants ) filed a Petition for Writ of Certiorari on September 4, 2018, which this Court granted on December 3, Further, if admiralty jurisdiction is found, the Constitution grants this Court appellate jurisdiction over admiralty cases. U.S. Const. art. III, 2, cls STATUTORY PROVISIONS INVOLVED The following statutory provisions are pertinent to the determination of the present case: Interlocutory Decisions, 28 U.S.C. 1292(a)(3); Admiralty, maritime and prize cases, 28 U.S.C. 1333(1); Exoneration and Limitation of Liability ( Limitation Act ), 46 U.S.C See App. B. STATEMENT OF THE CASE I. Statement of the Facts This is an action by a restaurant-ship owner, Respondent Sally s Seafood Shack ( Seafood Shack ), seeking to limits its liability against multiple state-tort law claims filed by injured restaurant patrons, Petitioners Francis and Marion, et al., ( Claimants ). (R. at 2a.) This case arises from injuries suffered by Claimants while dining at a floating seafood restaurant owned by Seafood Shack. (R. at 2a). The restaurant was located in a converted fishing vessel, the F/V Flamingo, which was indefinitely moored in a cofferdam on the banks of the Cooper River in Charleston, South Carolina. (R. at 2a, 10a). Seafood Shack had purchased and converted the Flamingo into the restaurant in (R. at 10a).

15 4 The sinking of the Flamingo was the result of an explosion caused by the negligence of a Seafood Shack employee, Mr. Calhoun, who works in the galley of the restaurant. (R. 10a). On the evening of July 17, 2015, Mr. Calhoun was instructed to light the gas range and turned on the gas. (R. at 14a). However, instead of lighting the flame, Mr. Calhoun became distracted and allowed gas to accumulate in the galley until an explosion was triggered likely by another pilot light. (R. at 14a). The explosion ripped a hole in the Flamingo below the water line and the restaurant quickly sank in twelve feet of water. (R. at 10a). Consequently, Claimants sustained injuries while having dinner due to the explosion and sinking. (R. at 10a). II. Statement of the Proceedings Claimants filed state-law torts actions in state courts for injuries they suffered because of the sinking of the Flamingo. (R. at 2a). However, those actions were stayed pursuant to 46 U.S.C (c) when Seafood Shack filed a petition in the United States District Court for the District of South Carolina invoking the court s admiralty jurisdiction and asserting it was entitled to limit its liability under the Limitation Act, 46 U.S.C (R. at 9a). Seafood Shack argued that the Flamingo was a vessel, and as a vessel owner, it was entitled to limit liability to value of the Flamingo and her pending freight. Id. The district court then determined the value of the Flamingo and her pending freight was $1, for the purpose of 46 U.S.C (a). Id. Claimants accordingly filed claims on substantially similar terms with the district court. Id.

16 5 The district court bifurcated the trial. Id. In Phase One, the district court heard evidence regarding Seafood Shack s right to limitation of liability. Id. In Phase Two, which has not yet occurred, the district court will hear on issues of liability and damages. Id. Following Phase One, the district court granted Seafood Shack s petition and held that: (1) it had admiralty jurisdiction under the Limitation Act despite not having such jurisdiction under the general principles of admiralty tort jurisdiction; and (2) Seafood Shack was entitled to limit its liability under the Act because the Flamingo was a vessel within the meaning of 46 U.S.C and no privity or knowledge of Seafood Shack was responsible for the incident. 46 U.S.C (R. at 11a, 14a). Claimants filed a notice of appeal on March 22, 2017, asserting jurisdiction exists under 28 U.S.C. 1292(a)(3). (R. at 3a). On appeal, the United States Court of Appeals for the Fourth Circuit dismissed the appeal for lack of appellate jurisdiction under 28 U.S.C. 1292(a)(3). (R. at 1a). The Fourth Circuit first determined there was admiralty jurisdiction based on Richardson v. Harmon, 222 U.S. 96, 2001 AMC 1207 (1911). The Fourth Circuit then cited Evergreen International (USA) Corp. v. Standard Warehouse, 33 F.3d 420, 1995 AMC 635 (4th Cir. 1994), holding that under Fourth Circuit precedent, interlocutory appeal was not available because Seafood Shack s liability has not been determined as required by 28 U.S.C. 1292(a)(3). (R. at 5a-6a). Claimants filed a subsequent motion for rehearing with suggestion for rehearing en banc, which the Fourth Circuit denied.

17 6 (R. at 7a). Claimants timely appealed and filed a Petition for Writ of Certiorari, which this Court granted on December 3, SUMMARY OF THE ARGUMENT I. Admiralty Jurisdiction and the Limitation of Liability Act First, this case presents an issue between the nearly uniform approach of every circuit court regarding the scope of admiralty jurisdiction with respect to the Limitation Act and the recent outlier opinion by the Fourth Circuit. Specifically, this issue concerns whether the Limitation Act serves as an independent basis of admiralty jurisdiction. Both the Fourth Circuit and district court improperly held that a federal court can exercise admiralty jurisdiction under the Limitation Act free from the other requirements for admiralty jurisdiction established by Congress and by this Court through a long line of jurisprudence. To affirm the Fourth Circuit s decision would be expanding this Court s holding in Richardson v. Harmon beyond the facts of the case and create renewed conflict over the boundaries of admiralty jurisdiction. The Richardson decision should be limited to its facts because the jurisdictional question on the applicability of the Limitation Act to a non-maritime tort caused by a vessel in navigable waters has been addressed by Congress in the Admiralty Extension Act. However, if the Limitation Act is interpreted to provide an independent basis of admiralty jurisdiction, then this Court should limit the Act s scope to be coextensive with the parameters of admiralty jurisdiction set by its previous precedent. To hold

18 7 otherwise would be a broad overreach of admiralty jurisdiction beyond Congress s intended purpose and scope of the Act. Further, such an interpretation of the Act would undermine the notion of federalism by impermissibility enlarging admiralty jurisdiction into matters left to states. Therefore, Claimants respectfully request this Court hold the Limitation Act does not provide for an independent basis for admiralty jurisdiction. Alternatively, if the Limitation Act can serve as an independent basis for admiralty jurisdiction, Claimants respectfully request that its scope be limited to mirror that of 28 U.S.C in order to maintain the cohesiveness and uniformity of maritime jurisprudence. II. Interlocutory Appeals in Admiralty Case Should this Court reverse the Fourth Circuit and hold that the Limitation Act cannot be a separate source of admiralty jurisdiction, the issue on the scope of interlocutory appeals in admiralty cases would be rendered moot. However, if admiralty jurisdiction exists, then this case highlights the confused seas among the federal circuit court of appeals over what interlocutory decrees by district courts fit within meaning of 28 U.S.C. 1292(a)(3). The Fourth Circuit improperly dismissed Claimants interlocutory appeal even though the district court s order did determine the rights and liabilities of the parties. By its express language, 1292(a)(3) allows interlocutory appeals in admiralty cases on an order of a district court that determines the rights or liability of the parties. Though only a determination of either the rights or liabilities of the parties is required, both conditions have been met in this case.

19 8 This Court has long recognized the substantive right created by Congress to allow a shipowner to limit its liability under the Limitation Act. Starting with Langes v. Green, 282 U.S.531, 1931 AMC 511 (1931), this Court admonished lower courts to safeguard this right even in the face substantive conflicting rights by claimants. Here, the district court s decision that Seafood Shack was entitled to limit its liability is a determination of a substantive right of the parties vis-à-vis one another. Accordingly, the district court s decision falls meaning of rights and liabilities of 1292(a)(3) and within Congress s intended purpose behind permitting such interlocutory appeals. The second condition is satisfied because the district court s order effectively determined that Seafood Shack s lability, if any, is limited by the Limitation Act to such a minimal amount that is has been effectively exonerated. Allowing interlocutory appeals in cases where the issue of liability vel non has not been reached and the limit has been determined, would advance the policy of judicial efficiency by preventing unnecessary litigation undertaken solely as a means of preserving the right to appeal. Accordingly, this Court should reverse the Fourth Circuit and hold that it does have appellate jurisdiction once a shipowner s right to limit liability has been established.

20 9 ARGUMENT I. THE LIMITATION OF LIABILITY ACT DOES NOT PROIVDE AN INDEPENDENT BASIS FOR ADMIRALTY JURISDICITON The only prospective basis for admiralty jurisdiction over Seafood Shack s limitation proceeding, which otherwise fails to meet any other basis for admiralty jurisdiction, is the Limitation of Liability Act, 46 U.S.C , et seq. (R. at 11a). To reach this conclusion, the Fourth Circuit and district court misread this Court s decision in Richardson v. Harmon that only expanded admiralty jurisdiction to reach what was then considered to be a non-maritime tort: damage on land caused by a vessel in navigable waters. Richardson v. Harmon, 222 U.S. 96, 2001 AMC 1207, 1212 (1911). As later recognized, the Richardson court s decision was codified by Congress in the Extension of Admiralty Jurisdiction Act ( AEA ). 46 U.S.C (2006); see also Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046, 1054, 1989 AMC 1521, 1531 (11th Cir. 1989). To read Richardson more broadly would undermine this Court s later refinement of admiralty jurisdiction. Indeed, there are a considerable number of circuit courts that have considered the issue and all have found that the Limitation Act does not confer admiralty jurisdiction. See, e.g., Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 773, 1995 AMC 2087, 2089 (9th Cir. 1995) (collecting cases). The Fourth Circuit s holding in the present case is an outlier since it relies on Richardson to support the contention that the Limitation Act can independently confer admiralty jurisdiction. (R. at 4a). This is not supported by either the language or purpose of the Limitation Act, nor the precedent on the issue, and puts the Fourth Circuit in direct conflict with the other circuits. Additionally, allowing this holding to

21 10 stand would perpetuate an undesirable policy of allowing vessels on non-navigable waters to have their cases heard in federal court thereby undermining this Court s long history of carefully refining the scope of admiralty jurisdiction. To permit the Limitation Act to provide an independent basis of admiralty jurisdiction would disrupt the uniformity of maritime law and weaken the fundamental notions of federalism between federal government and the states. In light of questionable precedential value of Richardson and the underlying policy considerations, this Court should reverse the Fourth Circuit s decision recognizing that the Limitation Act can independently confer admiralty jurisdiction. A. Richardson v. Harmon should be read narrowly since it has been implicitly overruled by the Admiralty Extension Act and this Court The Fourth Circuit s expansive interpretation of Richardson that the Limitation Act can convey admiralty jurisdiction was improper in this case. The court misread Richardson s holding which primarily addressed the extent of admiralty jurisdiction to non-maritime torts committed by a vessel in navigable waters. This holding has been codified by the AEA and does not justify a further leap that the Limitation Act can convey admiralty jurisdiction independent of the traditional tests for admiralty tort jurisdiction. Richardson was decided at a time when admiralty jurisdiction was still exclusively based on locality. Seven Resorts, 57 F.3d at 772, 1995 AMC at Prior to Richardson, this Court had unequivocally stated in Ex parte Phenix Ins. Co., decided prior to the 1884 amendment of the Limitation Act, that the Limitation Act does not confer admiralty jurisdiction on a federal court. 118 U.S. 610,

22 11 617, 2001 AMC 595, 602 (1886). Several years later, in Butler v. Boston & Savannah S.S. Co., this Court again considered the issue and held that the law of limited liability is coextensive with general admiralty and maritime jurisdiction. 130 U.S. 527, 555 (1889). This rule of law has never been successfully challenged. Brief on the Merits by Respondents Burton B. Ruby, at 22, Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990) (No ), 1990 WL In Richardson, this Court interpreted the 1884 Amendment to the Limitation Act 1 to extend jurisdiction beyond where it stood at the time. Richardson, 222 U.S. at 101, 2001 AMC at Since damage occurring to a land-based structure, but caused by a vessel in navigable waters, was then considered to be a non-maritime tort, in this lone instance the Court expanded the jurisdictional reach beyond the thenexisting parameters of admiralty jurisdiction. Id. The liberal construction of the amendment, where the Court focused on the language and liabilities, was driven by desire to achieve the amendment s goal of improving the competitiveness of American shipping. Id. at 102, 104. The Court extended the benefit of limitation to vessel owners in situations where their vessel caused both maritime and non-maritime damage, allowing for consolidation of all related claims in a single proceeding and forum. Seven Resorts, 57 F.3d at 773, 1995 AMC at This construction furthered 1 Congress amended the 18th section of Limitation Act in 1884 to add the following language: That the individual liability of a shipowner shall be limited to the portion of any or all debts and liabilities that his individual share of the vessel bears to the whole... and made it clear that a claimant could join all vessel owners in one action. Act of June 26, 1884, ch. 121, 18, 23 Stat. 57 (codified at 46 U.S.C. 189 (1976) ( An act to remove Certain Burdens of the American Merchant Marine and Encourage the American Foreign Trade and for other Purposes )).

23 12 the purpose of the Limitation Act in that instance. Complaint of Sisson, 867 F.2d 341, 350, 1989 AMC 609 (7th Cir. 1989), rev d on other grounds sub nom. Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990) However, by passing the AEA, 46 U.S.C (2006), Congress subsumed this singular expansion of the Limitation Act within the greater body of admiralty jurisdiction. Admiralty jurisdiction now includes all cases of damage or injury, to person or property, caused by a vessel on navigable water, notwithstanding that such damage or injury be done or consummated on land. Id. This is the precise holding of Richardson; thus, depriving it of further precedential value. B. Richardson should be limited to its facts as reflected by contemporary court decisions interpreting the scope of admiralty jurisdiction Following passage of the AEA, the reach of the Limitation Act and admiralty jurisdiction were once more co-extensive and Congress has clearly obviated the rationale behind Richardson s expansion of the Act. Seven Resorts, 57 F.3d at 773, 1995 AMC at At no point, however, did either Richardson nor the AEA, purport to provide admiralty jurisdiction for torts involving vessels that occurred on nonnavigable waters. David Wright Charter Service of North Carolina, Inc. v. Wright, 925 F.2d 783, 785, 1991 AMC 2927 (4th Cir. 1991). Departing from its own precedent in David Wright, the Fourth Circuit improperly relied on Richardson to support a finding that the Limitation Act creates its own form of admiralty jurisdiction, independent of any of the traditional principles of admiralty jurisdiction. (R. at 4a). This is too large of a leap from the actual holding of Richardson. Neither this Court nor the majority of the circuit courts have interpreted Richardson so broadly. Seven

24 13 Resorts, 57 F.3d at 775, 1995 AMC at Presumably, this is because a further extension of the Act to encompass torts that have no relation to commercial shipping and occur on non-navigable waterways does little to further the Act s purpose. Id. Nevertheless, in Sisson v. Ruby, this Court expressly left the question of whether the Act independently confers jurisdiction unanswered. Sisson v. Ruby, 497 U.S. at 358 n.1, 1990 AMC at 1801 n.1. Additionally, in Jerome B. Grubart, Inc. v. Great Lakes Dredge & Barge Co., 513 U.S. 527, 543 n.5, 1995 AMC 913 (1995), this Court reasoned it need not consider respondent s argument that the [Act] provides an independent basis of federal jurisdiction over the complaint. Failing to mention Richardson in contemporary decisions and referring to this as an open issue, coupled with the passage of the AEA which superseded the exact holding, casts doubt on the value of Richardson. Here, the Fourth Circuit read Richardson too broadly by finding that the Limitation Act insulates actions from being subject to the enumerated requirements of general admiralty jurisdiction, such as locality. 2 In addition, with the exception of the Fourth Circuit in the present case, every circuit court to have considered the issue has categorically rejected the contention that the Limitation Act independently confers admiralty jurisdiction over a claim. See, e.g., Seven Resorts, 57 F.3d at 773, 1995 AMC at 2089; Guillory v. Outboard Motor Corp., 956 F.2d 114, 115, 1993 AMC 605 (5th Cir. 1992) (per curiam); David 2 In fact, it would likely undermine Congressional intent behind the AEA as well. See Robert Force, Deconstructing Jensen: Admiralty and Federalism in the Twenty-First Century, 32 J. Mar. L. & Com. 517, 562 (2001) ( The purpose of the AEA was to provide remedies for land-based parties, not to diminish what they already had. ).

25 14 Wright, 925 F.2d at 785, 1991 AMC at 2929; Three Buoys, 921 F.2d at 780, 1991 AMC at 1356; Lewis Charters, 871 F.2d at , 1989 AMC at 1533; Complaint of Sisson, 867 F.2d at , 1989 AMC at Instead, a party s right to limit liability can be invoked only after general admiralty jurisdiction is established. David Wright, 925 F.2d at 785, 1991 AMC at This is supported by this Court s observations that the law of limited liability of shipowners is a part of [U.S. maritime code... [i]t is necessarily coextensive with that of general admiralty and maritime jurisdiction, and that by the settled law of this country extends wherever public navigation extends on the sea and the great inland lakes, and the navigable waters connecting therewith. Butler, 130 U.S. at 557. Further, the Limitation Act is an affirmative defense and right available to shipowners, but only in admiralty cases. Three Buoys, 921 F.2d at 780, 1991 AMC at 2924; see also Arthur A. Crais, Jr., The Limitation of Shipowner s Liability Act as an Independent Basis for Federal Jurisdiction?, 17 Loy. Mar. L.J. 205, 236 (2018). This is inherent in the nature of the proceeding and the rules codified in Rule F of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Action, originally established by this Court. See Norwich & N.Y. Transp. Co. v. Wright, 80 U.S. 104, 1998 AMC 2061 (1871); Fed. R. Civ. P. Supp. R. F(1)-(2). The only natural order for the proceeding is to have the party who filed the claim against the vessel owner prove liability first, rather than the vessel owner attempt to show limitation and lack of privity or knowledge as a preliminary matter before liability is even established. Crais, supra, at 236. Instead, the liability of the vessel owner should be

26 15 considered first, requiring the court to apply substantive maritime law. Id. Then, the burden of proof shifts to the vessel owner to prove lack of fault or knowledge. Id. By overlooking that the Limitation Act is an affirmative defense, the Fourth Circuit ran afoul of this courts warning that expanding the scope of exclusive jurisdiction to prevent state court actions would transform the Act from a protective instrument to an offensive weapon by which the shipowner could deprive suitors of their commonlaw rights. 3 Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, , 2001 AMC 913 (2001) (quoting Lake Tankers Corp. v. Henn, 354 U.S. 147, , 1957 AMC 1165 (1957). Allowing the Limitation Act to independently convey admiralty jurisdiction would blatantly ignore this warning and grossly contort the manner in which the Limitation Act is designed to be used. In the present case, Seafood Shack owned a floating restaurant which sank in nonnavigable waters on the bank of the Cooper River and injured Claimants. (R. at 2a, 10a). Since Seafood Shack meets neither the locality or the nexus requirement for admiralty tort jurisdiction, it relies solely on the Limitation Act to support its assertion that admiralty jurisdiction exists in this case. (R. at 4a). A finding of admiralty jurisdiction based solely on the Limitation Act would allow Seafood Shack to effectively avoid liability in state court for the negligence of its employee, Mr. 3 This Court s warning in Lewis & Clark was in the context of a defendant using the exclusive jurisdiction of the Limitation Act to prevent state courts actions by claimants; however, it is just as apt here where a defendant attempts to escape the full potential of its liability under state law by invoking admiralty jurisdiction on a non-navigable waterway for a non-maritime, state-law tort claims.

27 16 Calhoun. (R. at 5a). This would deny any meaningful relief to Claimants, all whom were injured while innocently dining in the restaurant on the evening of the explosion and sinking. (R. at 10a). Affirming the Fourth Circuit s decision would allow Seafood Shack and countless other tortfeasors to rely solely on a defense that should be invoked following the determination that admiralty jurisdiction exists. 4 Additionally, nothing about this incident has any connection to the stated purpose of the Limitation Act to promote commercial shipping, nor did this tort occur on navigable waters, in stark contrast to the situation in Richardson upon which Seafood Shack relies. (R. at 4a, 10a). Richardson is not applicable to this case, and this Court should formally restrict it to the facts. This would prevent an overbroad application of the Limitation Act to situations, which are well outside the purview of what the Act was designed to address. Accordingly, this Court should reverse Fourth Circuit and hold that the Limitation Act does not serve as an independent basis of admiralty jurisdiction and direct that Seafood Shack s petition for limitation of liability be denied for want of jurisdiction. 4 Additionally, affirming the independent nature of admiralty jurisdiction under the Limitation Act will likely create serious implications over the extent of admiralty jurisdiction in tort cases and whether Seafood Shack s employees may be considered seaman under Jones Act.

28 17 II. IF THE LIMITTATION ACT DOES SERVE AS AN INDEPENDENT BASIS OF ADMIRALTY JURISDICTION IN RICHARDSON, THIS COURT SHOULD RESTORE THE REACH OF THE ACT TO BE COEXTENSIVE WITH ADMIRALTY TORT JURISDICTION If this Court finds that Richardson retained its precedential value after the passage of the Admiralty Extension Act and therefore the Limitation Act is capable of conveying admiralty jurisdiction, then Richardson should be overturned. This Court has significantly refined the test for admiralty tort jurisdiction in a trilogy of cases, beginning with Executive Jet in See Executive Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 1973 AMC 1 (1972). This Court s intent to narrow the requirements for satisfying admiralty jurisdiction to include only those cases requiring application of uniform substantive law would be undermined by allowing the Limitation Act, completely unbounded, to independently convey admiralty jurisdiction. Additionally, the locality requirement, a fundamental component of admiralty jurisdiction, would be nullified and torts occurring on non-navigable waters would, for the first time, be capable of being heard in federal courts sitting in admiralty. Furthermore, this would set a deeply flawed precedent that would be inconsistent with the concepts of federalism and the Congressional purpose of the Limitation Act. A. The Court has narrowed admiralty jurisdiction over time and allowing the Limitation Act to provide an independent basis of jurisdiction would undermine those developments Even if this Court reads Richardson broadly as expanding the scope of federal jurisdiction, then the Court should reconsider the Richardson decision due to

29 18 significant changes in society and admiralty jurisdiction since Richardson was decided when this Court was still using the pure locality test for admiralty tort jurisdiction. See The Plymouth, 70 U.S. 20, 1999 AMC 2403 (1865). However, The Plymouth and its progeny, 5 spawned confusion in the lower courts due to the arbitrary distinction between hybrid water and land-based torts, or concurrent vessel and land negligence, where the injury was caused by a vessel on navigable waters. Crais, supra, at 224. Congress addressed the confusion by passing the AEA, which eliminated location as the sole defining characteristic of admiralty tort jurisdiction. Id. at 225. As transportation developed, and especially after the increased utilization of aircraft post World War II, this Court recognized that the strict locality rule was not appropriate to cover aircraft accidents, even though the tort occurred over and ultimately on navigable waters. See Executive Jet, 409 U.S. at 249, 1973 AMC at 1. Abandoning the pure locality test, this Court added the maritime nexus test, which requires the satisfaction of two additional criteria before admiralty jurisdiction may be applied. Grubart, 513 U.S. at 534, 1995 AMC at First, an incident must have a potentially disruptive impact on maritime commerce. Id. Second, the general character of the activity giving rise to the incident must show a substantial relationship to traditional maritime activity. Id. Thus, through these of deliberate modifications, this Court has developed a tailored judicial standard for applying admiralty jurisdiction. 5 See, e.g., The Admiral Peoples, 295 U.S. 649, 1935 AMC 875 (1935).

30 19 Expanding jurisdiction under the Limitation Act beyond the current scope of admiralty jurisdiction would unnecessarily undermine this Court s post-richardson cases defining the precise reach of maritime jurisdiction. Seven Resorts, 57 F.3d at 773, 1995 AMC at As the Ninth Circuit observed, there is little point in limiting maritime jurisdiction on the one hand to incidents substantially related to traditional maritime activities, while freely conferring such jurisdiction on the other hand to incidents utterly unrelated to traditional maritime activities merely because a party wishes to limit his liability under the Act. Id. By applying traditional admiralty jurisdiction requirements to this case and others invoking the Limitation Act, only those cases which have a demonstrated relationship with maritime activity and fall within the purview of what Congress originally intended would be able to limit their liability. See Three Buoys, 921 F.2d at 780, 1991 AMC at Limitation of liability should not be available to generic tortfeasors, such as Seafood Shack, who are not involved in traditional maritime activities and are merely fortunate enough for the tort to occur on a waterway, regardless of navigability. (R. at 11a). To hold otherwise would require this Court to revisit many of its prior decisions regarding the scope of admiralty jurisdiction and likely sow confusion among lower federal courts. B. The locality requirement of admiralty jurisdiction would be nullified if the Limitation Act was capable of being used to independently confer admiralty jurisdiction Since the The Genesee Chief and The Daniel Ball, this Court has firmly upheld that for admiralty jurisdiction to exist a waterway must be considered navigable waters of the United States. Crais, supra, at In effect, navigable waters are

31 20 those used, or capable of being used, for either international or interstate commerce. See The Daniel Ball, 77 U.S. 557, 2000 AMC 2106 (1870). If the Limitation Act is interpreted to independently confer admiralty jurisdiction, the navigable waters requirement will also be circumvented. Courts have consistently held that torts committed on purely intrastate bodies of water, including those blocked by artificial obstructions otherwise preventing vessels from conducting interstate commerce, do not fall within federal admiralty jurisdiction. See Three Buoys, 921 F.2d at 775, 1991 AMC at 1359 (tort committed on Lake of the Ozarks could not sustain federal admiralty jurisdiction because it was used purely for intra-state shipping); Leblanc v. Cleveland, 198 F.3d 353, 2000 AMC 609 (2d Cir. 1999) (portion of Hudson River blocked by nine dams and three waterfalls is not navigable in fact because it cannot be used for interstate commerce); Alford v. Appalachian Power Co., 951 F.2d 30, 33-34, 1992 AMC 1123 (4th Cir. 1991) (tort committed on Smith Mountain Lake not subject to admiralty jurisdiction because the lake was located solely in Virginia did not form a highway of commerce with other states or nations). As the Eighth Circuit observed, [w]hile the [Limitation] Act was amended to include vessels on inland lakes and streams, the clear intent was to include only those in navigation... [and] [w]here admiralty jurisdiction fails for want of a navigable waterway, so does the reach of the Act. Three Buoys, 921 F.2d at 780, 1991 AMC at Allowing for the Limitation Act to independently confer admiralty jurisdiction would eviscerate the navigability requirement in limitation cases. This would

32 21 overwhelm federal admiralty courts with cases which occur on man-made lakes and other exclusively intra-state waters, such as those within the F/V Flamingo s cofferdam in the present case. (R. at 10a). To put this in perspective, since 1900, modern engineering and technology have resulted in the development of an extensive series of dams in the United States. Crais, supra, at 227. Presently, there are over 90,000 public and private dams in the United states, with 25,000 of them creating reservoirs used for recreational purposes. Id. This explosion of man-made lakes has resulted in an exponential increase in recreational boating since the early twentieth century when Richardson was decided. Id. Moreover, many of these lakes are solely within individual states. Id. Allowing purely intra-state cases to be heard in a federal forum, which would be the natural result if the Limitation Act is found to convey admiralty jurisdiction, would undermine the long standing aim of this Court to confine admiralty jurisdiction only to navigable waters. Instead of a freestanding provision of independent scope, the Limitation Act is best understood as a statutory addition to the established body of admiralty and maritime law that incorporates the preexisting limitations of that system. Brief for the United States as Amicus Curiae, at 15, Three Buoys Houseboat Vacations U.S.A., Ltd. v. Morts, 921 F.2d 775, 780, 1991 AMC 1356 (8th Cir. 1990) (No ), 1991 WL This would be consistent with the views expressed by this Court in Providence & New York S.S. Co. v. Hill Mfg. Co., reasoning that limited liability is nothing more than the old maritime rule administered in courts of admiralty in all

33 22 countries except England and the subject-matter itself is one that belongs to the department of maritime law. 109 U.S. 578, (1883). If this Court reads Richardson broadly as being an independent source of admiralty jurisdiction, the Court should limit its scope to the confines of general admiralty tort jurisdiction. Otherwise, there would be little point in maintaining a strict test for admiralty jurisdiction to narrow the numbers of claims to only those requiring the application of uniform substantive maritime law, while simultaneously allowing a tortious row boat in the lake in Central Park to apply for Limitation and have their case heard in federal court. See Crais, supra, at 210. This Court should hold that the Limitation Act is not a freestanding source of admiralty jurisdiction but instead is subject to the requirements of general admiralty jurisdiction. This would ensure that tortfeasors like Seafood Shack would be required to show that they meet the basic requirements for traditional admiralty jurisdiction before being able to avail themselves of substantive maritime law. C. Expanding the scope of the Limitation Act beyond the parameters of modern admiralty jurisdiction would contort the purpose of the Act and undermine the concept of federalism. 1. Allowing the Limitation Act to confer admiralty jurisdiction would deprive the states of jurisdiction over purely state concerns If affirmed, the Fourth Circuit holding that the Limitation Act independently confers admiralty jurisdiction would set a deeply flawed precedent that is inconsistent with the underlying policy behind the Act and objective of admiralty jurisdiction in general. This Court has consistently held that protection of maritime

34 23 commerce is the fundamental purpose of federal admiralty jurisdiction. See Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 611, 1991 AMC 1817 (1991); Sisson v. Ruby, 497 U.S. at 367, 1990 AMC at 1808; Foremost Ins. Co., 457 U.S. at 674, 1982 AMC at Admiralty jurisdiction is invoked to ensure that a federal forum, applying a uniform body of federal admiralty law, resolves disputes which affect interstate or foreign maritime commerce. See Sisson, 497 U.S. at 367, 1990 AMC at If a dispute involves activity that occurred on waters falling outside the grant of admiralty jurisdiction, then the need for applying uniform admiralty law is substantially reduced and states have long prescribed laws governing those waters. See The Hine v. Trevor, 71 U.S. 555, 561, 2009 AMC 263 (1866). The importance of maintaining the balance of federal and state interests in the context of maritime disputes cannot be overstated. Since the founding of the United States, federalism has occupied a highly important place in our Nation s history and its future. Younger v. Harris, 401 U.S. 37, 44 (1971). As this Court observed, Federalism demands 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. Id. Absent a need for uniformity to promote maritime commerce, there is no sound reason to displace state law applicable to bodies of water that are not included within the purview of admiralty jurisdiction. See Executive Jet, 409 U.S. at , 1973

35 24 AMC at 19; Victory Carriers, Inc., v. Law, 404 U.S. 202, , 1972 AMC 1 (1971). Indeed, unless some exercise of control is exerted over the extension of admiralty law to local matters, courts run the risk of undermin[ing] the utility of maritime law for national interests." Force, supra, at 565. As this Court has previously reasoned, a state court can plainly exercise jurisdiction over the suit, and could plainly apply familiar concepts of [state] tort law without any effect on maritime endeavors. Executive Jet, 409 U.S. at 273, 1973 AMC at 19. Additionally, this Court s objective of the elimination of admiralty jurisdiction where the rationale for the jurisdiction does not support it has been made clear through the more recent development of further requirements for general admiralty jurisdiction. See Grubart, 513 U.S. at 528, 1995 AMC at 914. This objective would be significantly undercut by allowing state tort law preempted in cases such as this one, where the cause of action bears no relation to traditional maritime activity, lacks the potential to disrupt maritime commerce, and fails to meet locality. (R. at 4a, 10a). South Carolina law is available to resolve the Claimants suits and is the natural forum to hear this dispute. The situs of Claimants injuries fails the locality requirement because the Flamingo was not on a navigable waterway. (R. at 10a). Nor can Seafood Shack plausibly argue that its operations fit within maritime commerce because dining in a restaurant, though a floating one, unquestionably bears little relationship to traditional maritime activity or the Limitation Act s stated purpose of promoting U.S. shipping. (R. at 10a). Holding that the Limitation Act independently confers jurisdiction in this case would impede upon traditional concepts of federalism

36 25 and undercut the test for general admiralty jurisdiction by opening federal courts to a tremendous number of claims fortuitously occurring on water but lacking any requisite connection to a need for application of uniform substantive admiralty law. 2. The evolution of the shipping industry over time have weakened the rationale for liberal construction of the Limitation Act. Congress s aim to lessen economic burdens on American shipowners to make them competitive internationally caused the Limitation Act to more liberally construed in the past, as evidenced in this Court s decision in Richardson. Lewis Charters, 871 F.2d at 1053, 1989 AMC at However, the conditions of the shipping industry have drastically changed since The Limitation Act was originally enacted by Congress to prevent investment capital from fleeing to England. Id. Today, the owners of recreational boats, floating restaurants, and other similar entities operating in state waters are neither encouraged nor discouraged by the Act. See Brief on the Merits by Respondents Burton B. Ruby, at 30, Sisson v. Ruby, 497 U.S. 358, 1990 AMC 1801 (1990) (No ), 1990 WL As Justice Black noted in his dissent in Maryland Casualty Co. v. Cushing, 347 U.S. 409, 437, 1954 AMC 837 (1954) (Black, J., dissenting), [j]udicial expansion of the Limited Liability Act at this date seems especially inappropriate. Many of the conditions in the shipping industry which induced the 1851 Congress to pass the Act no longer prevail. Furthermore, the Limitation Act has been largely criticized as outdated in recent years and been described as hopelessly anachronistic. Univ. of Texas Medical Branch at Galveston v. United States, 557 F.2d 438, 441, 1977 AMC 2607 (5th Cir. 1977). Even admiralty law scholars have commented that [t]he Limitation Act,

37 26 originally passed to afford a measure of relief to a hard-pressed and highly competitive industry, has become a charter of irresponsibility for a few wealthy individuals[.] and has been due for a general overhaul for the past seventy-five years. G. Gilmore & C. Black, The Law of Admiralty 677, 700 (1st ed. 1957). The reasons for this Court s liberal construction of the Act in 1911 are simply no longer relevant. See Lewis Charters, 871 F.2d at 1053, 1989 AMC at In the present case, Seafood Shack s argument that the Limitation Act independently confers admiralty jurisdiction is what the Eighth Circuit referred to as attempting to misuse the Act to defeat what could be liability coupled with substantial damages, without the redeeming feature of encouraging maritime commerce on the high seas and navigable waterways. Three Buoys, 921 F.2d at 780, 1991 AMC at South Carolina has a much greater interest in adjudicating this dispute than a federal court sitting in admiralty; allowing the restaurant to avoid liability for personal injuries to customers caused by a kitchen explosion would be an unconscionable result and certainly impact the state s interest in regulating and enforcing safety laws targeted at businesses which serve the public. Absent an ability to otherwise satisfy admiralty jurisdiction, tortfeasors like Seafood Shack should not be allowed to avoid liability in state court solely based on the Limitation Act. Accordingly, if the Limitation Act can serve as an independent basis of admiralty jurisdiction, this Court should hold that such jurisdiction must conform with the general principles of admiralty tort jurisdiction and 28 U.S.C As the incident on the Flamingo does not meet either the maritime locus or nexus

38 27 requirements in Grubart as found by the district court, 6 this Court should direct that Seafood Shack s petition for limitation of liability be denied for want of admiralty jurisdiction. III. AN INTERLOCUTORY APPEAL IS AVAILABLE UNDER 28 U.S.C. 1292(a)(3) FROM A JUDGMENT GRANTING A SHIPOWNER THE RIGHT TO LIMIT LIABILITY Claimants maintain that the Limitation Act does not independently add a distinctively salty flavor to this litigation thereby rendering the issue of interlocutory appeals in admiralty cases moot. Martha's Vineyard Scuba Headquarters, Inc. v. Unidentified, Wrecked & Abandoned Steam Vessel, 833 F.2d 1059, 1064, 1988 AMC 1109, 1116 (1st Cir. 1987). However, should admiralty jurisdiction exist because the Act s provenance is nautical, then this appeal, albeit interlocutory, is not a fish out of water. Id. Thus, the United States Court of Appeals for the Fourth Circuit incorrectly denied Claimants interlocutory appeal. This Court has long recognized shipowners well-established statutory right to limit liability even against the competing rights of claimants. See Langnes v. Green, 82 U.S. 531, 1931 AMC 511 (1931); Ex parte Green, 286 U.S. 437, 1932 AMC 802 (1932). Thus, a judgment on the right of a shipowner to limit his liability is a determination of a substantial right in admiralty that affects both parties. Further, the recognition of a shipowner s right to limit liability fits within the meaning of Title (a)(3) permitting interlocutory appeals in admiralty cases where the rights and liability of 6 See (R. at 11a) ( The [district court] does not have admiralty jurisdiction over this matter under the general principles for admiralty tort jurisdiction.... ).

39 28 the parties have been determined. In the instant case, the district court s finding that Seafood Shack is entitled to limit its liability to the value of the M/V Flamingo 7 is a determination of a substantial right that sustains an interlocutory appeal. In addition to permitting an appeal from a determination of a shipowner s right, 1292(a)(3) allows interlocutory appeals of a district court order limiting damages under the Limitation Act and analogous maritime limitation provisions. Rice Growers Ass n of Cal. v. Rederiaktiebolaget Frode, 171 F.2d 662, 663, 1949 AMC 316, 317 (9th Cir. 1948); Wallis v. Princess Cruises, Inc., 306 F.3d 827, 834, 2002 AMC 2270, 2276 (9th Cir. 2002). In many instances, such an order practically determines the liability of a party and will effectively end the case due to economic infeasibility. Wallis, 306 F.3d at 834, 2002 AMC at 2276; Carman Tool & Abrasives, Inc. v. Evergreen Lines, 871 F.2d 897, 899, 1989 AMC 913, 914 (9th Cir. 1989). This determination is akin to when the party s liability is settled because exoneration is granted or limitation is denied. See Matter of International Properties Management, S.A., 604 F.2d 254, Though not within the scope of this appeal, Claimants find the district court s determination that the Flamingo is a vessel within the meaning 46 U.S.C concerning in light of this Court s decision in Lozman. See Lozman v. City of Riviera Beach, 568 U.S. 115, 129, 2013 AMC 1, 12 (2013) ( For example, an owner might take a structure that is otherwise a vessel (even the Queen Mary) and connect it permanently to the land for use, say, as a hotel. ). Like the Queen Mary, the Flamingo was likely no longer a vessel when it was indefinitely moored, placed in cofferdam, and connected to land for use as restaurant, albeit a floating one. (R. at 10a); see also Stewart F. Peck & David B. Sharpe, What is a Vessel?: Implications For Marine Finance, Marine Insurance, and Admiralty Jurisdiction, 89 Tul. L. Rev. 1103, 1126 (2015) ( A craft that has been permanently moored or otherwise rendered practically incapable of transportation is deemed not a vessel. ).

40 29 n.2 (4th Cir. 1979) (granting exoneration); Republic of France v. United States, 290 F.2d 395, 397, 1961 AMC 1082, 1085 (5th Cir. 1961) (denying limitation). Here, the Fourth Circuit improperly dismissed Petitioner s admiralty interlocutory appeal for lack of jurisdiction because the district court s ruling limiting liability effectively decided Sally s Seafood liability and will virtually end the case. (R. at 4a). It would be economically futile for Claimants to continue with their suit after the order limiting liability. (R. at 4a). Since the district court decided the rights and liabilities of the parties when it granted Seafood Shack s petition to limit its liability under the Limitation Act, this case is ripe for an admiralty interlocutory appeal. A. A judgment that limits liability under the Limitation Act determines the rights of the parties and sustains an interlocutory appeal Interlocutory appeals are permitted when a court order in an admiralty case determines the rights and the liabilities of the parties. Southwest Marine Inc. v. Danzig, 217 F.3d 1128, 1136, 2000 AMC 2088, 2096 (quoting 28 U.S.C. 1292(a)(3)). While finality is typically mandated for appellate jurisdiction, Congress carved out several exceptions to the finality rule. One such exception is 28 U.S.C. 1292(a)(3) for appeals for interlocutory decrees of district courts determining the rights and liabilities of the parties to admiralty cases. Congress enacted 1292(a)(3) with the peculiarities of maritime litigation in mind. Williamson v. Recovery Ltd. P ship, 731 F.3d 608, 618, 2014 AMC 330, 342 (6th Cir. 2013).

41 30 Admiralty trials are commonly bifurcated into two phases. First, the court determines the liability of the parties on the merits. See City of Fort Madison, Iowa v. Emerald Lady, 990 F.2d 1086, 1089, 1993 AMC 2091, (8th Cir. 1993). Second, if liability is found, the court will conduct a hearing in front of a special master to determine damages. See Id. In enacting 1292(a)(3), Congress intended to allow parties to potentially avoid the cost of a damages hearing after liability had been determined. Id. Thus, saving the parties and the court the expense of holding a damages hearing that may be subsequently reversed on appeal. See In re Aramark Sports and Ent. Services, Inc, 831 F.3d 1264, 1277, 2016 AMC 2138, 2141 (10th Cir. 2016) ( 1292(a)(3) was designed to allow ship owners to seek an appeal to halt litigation at an early stage, in the hope of eliminating the need for further proceedings. ). By dismissing Claimants appeal because of its narrow interpretation of 1292(a)(3), the Fourth Circuit is virtually contravening the purpose of the statute. Thus, a broader interpretation within the narrow meaning of 1292(a)(3), such as the approach taken by the Ninth Circuit, would better effectuate its aim. 1. A broader interpretation of 28 U.S.C. 1292(a)(3) would be consistent with this Court s interpretation of the final judgment rule and Congressional intent This Court should adopt the Ninth Circuit s broader interpretation of 28 U.S.C. 1292(a)(3) as opposed to the overly narrow view taken by Fourth Circuit. 8 The Ninth 8 Despite its own reluctance to do so, the Fourth Circuit panel felt bound to follow its prior decision in Evergreen International (USA) Corp. v. Standard Warehouse which

42 31 Circuit s broader reading of 1292(a)(3) is consistent this Court s interpretation 28 U.S.C when it creation of the collateral order doctrine. Further, such an interpretation fits well within Congress s intent behind permitting 1292(a)(3) to make appeals available to otherwise unappealable decisions. Generally, a district court's judgment must be final to be appealed. See id Although final ordinarily means the district court has definitively ended the case, this Court has developed a practical construction of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)). By doing so, this Court developed the collateral order doctrine for interpreting the final judgment rule of The collateral order doctrine, requiring satisfaction of the Cohen test, 9 applies to a narrow class of decisions that do not terminate the litigation, but must, in the interest of achieving a healthy legal system, nonetheless be treated as final. Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994) (discussing Cohen). Similar to this Court s practical construction of 1291 in the collateral order doctrine, the Ninth Circuit s has properly developed a practical construction of 1292(a)(3) as well. In Wallis v. Princess Cruises, Inc., the Ninth Circuit found it had appellate jurisdiction over a district court s determination of the applicability of a contractual limitation of liability provision. Wallis v. Princess Cruises, Inc., 306 F.3d adopted the excessive narrow view of 1292(a)(3) from other circuits. See 33 F.3d 420, 424 n.1, 1995 AMC, 635, 639 n.1 (4th Cir. 1994); Bucher-Guyer AG v. M/V Incontrans Spirit, 868 F.2d 734 (5 th Cir. 1989). 9 As recognized by the Fourth Circuit, Claimants do not contend that 1291 applies. (R. at 3a). Nor do they contend the collateral order doctrine applies.

43 32 827, 834, 2002 AMC 2270, 2276 (9th Cir. 2002). The court read 1292(a)(3) [to] take[] into account the practical problem posed by limitations of liability given the prevalence such provisions, both contractual and statutory, in maritime cases. Id. That is, if 1292(a)(3) were construed to exclude a determination of limitations of liability from interlocutory decrees, then interlocutory appeals in many admiralty cases would be unavailable. Id. Moreover, appeals on liability determinations where is limitation amount is trivial would be nearly impossible because of the economic constraints and realities of pursuing further litigation. Id. Consequently, the correctness of a district court s ruling on limitation of liability will likely never be reviewed. It was these ramifications that prompted Congress to broaden the availability of interlocutory appeals, such as in the case of 1292(a)(3), because of the serious, perhaps irreparable consequences of interlocutory orders by district courts. See Balt. Contractors v. Bodinger, 348 U.S 176, (1955). The Fourth Circuit s narrow interpretation of 1292(a)(3) is inconsistent with Congressional intent for interlocutory appeals in admiralty cases. The Fourth Circuit s limited view renders 1292(a)(3) ineffectual in a majority of maritime cases. Further, the court s interpretation undermines Congress s intended purposes by forcing litigants to pursue additional costly litigation if they wish to appeal a judgment on a party s right to limit liability. As the majority recognized in this case, permitting the appeal and affirming the district court s decision to grant liability would effectively end the case. (R. at 5a) (emphasis added). The parties would have every incentive to settle as any possible recovery by Claimants would pale in

44 33 comparison to the cost of a trial on the full extent of Seafood Shack s liability and damages. (R. at 6a) (Solomon, J., dissent). Such a result would be more sensible and consistent with the policy goals that motivated Congress to enact 1292(a)(3). Further, the broader Ninth Circuit interpretation also conforms with this Court s own practical considerations in the final judgment rule. 10 Since decisions on limitation of liability would otherwise escape review, to allow such to be appealed under 1292(a)(3) would be in the best interest of a seaworthy legal system in admiralty cases. Thus, this Court should restore uniformity among the circuits by overruling the Fourth s Circuit excessively narrow interpretation which frustrates the purpose of 1292(a)(3). 2. The determination of a defendant s right to limit liability falls within the meaning of rights under 28 U.S.C. 1292(a)(3) A judgment granting a shipowner the right to limit his liability under the Limitation Act is a ruling on the merits of a defense and determines the rights of the parties. It is therefore afforded an interlocutory appeal by either party under 28 U.S.C. 1292(a)(3). To hold otherwise would go against the plain language of the statute. In admiralty cases, appeals for interlocutory decrees of district courts are permitted when the court has determin[ed] the rights and liabilities of the parties. 10 Even the Advisory Committee for the Federal Rules of Civil Procedure has commented that courts of appeal, when deciding jurisdiction under 1292(a)(3), should at times take a broader view in the context of non-admiralty and admiralty claims intermixed within an admiralty case See Fed. R. Civ. P. 9(h) advisory committee note (1997 amendment).

45 34 28 U.S.C. 1292(a)(3) The statute does not require that all rights and liabilities of the parties have been determined, but rather that any right or liability has been determined. Rice Growers Ass n of Cal. v. Rederiaktiebolaget Frode, 171 F.2d 662, 663, 1949 AMC 316, 317 (9th Cir. 1948) (emphasis added); see also 16 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Fed. Prac. & Proc. Juris (2012 & sup. 2018) ( to permit appeal, it need only be found that an order in some sense determines the rights and liabilities of the parties these words need not be limited to the traditional model of a determination of all liability issues that leaves only damages questions to be determined. ). Furthermore, the right and liabilities in the statute are interpreted as those being substantive in nature not adjective, tactical, or procedural. Rogers v. Alaska S. S. Co., 249 F.2d 646, 649, 1958 AMC 460, 546 (9th Cir. 1958) (citing In re Wills Lines, 227 F.2d 509, 510 (2d Cir. 1955) cert. denied Tankport Terminals v. Wills Lines, 351 U.S. 917 (1956)); see Wallin v. Keegan, 426 F.2d 1313, 1314, 1970 AMC 2390, 2391 (5th Cir. 1970); Miskiewicz v. Goodman, 341 F.2d 828, 830, 1965 AMC 648, 651 (4th Cir. 1965). This Court and many lower courts have recognized that a shipowner s right to limit liability is substantive rather than procedural in nature. When enacting the Limitation of Liability Act, Congress declared and defined the substantive right of shipowners to limit his liability, but left matters of procedures to be developed in the courts. Petition of Southern S.S. Co., 132 F. Supp. 316, 319, 1955 AMC 2278, 2281 (D. Del. 1955). The substantial nature of this right has been affirmed by this Court even in face of conflicting substantive rights by other parties.

46 35 See Langes, 282 U.S. at , 1931 AMC at ; Ex parte Green, 286 U.S AMC 802 (1932). Even so, a shipowner s right to limit liability is not... boundless. Lake Tankers Corp. v. Henn, 354 U.S. 147, AMC 1165, 1169 (1957). Because the rights conferred on shipowners by the Limitation Act are substantive, they cannot be enlarged by procedural rules. In Re Tidewater, Inc. 249 F.3d 342, 2001 AMC 1791, 1795 (5th Cir. 2001) (citing 28 U.S.C. 2072(b) (Procedural rules shall not abridge enlarge or modify any substantive right. )). The district court s decision that Seafood Shack, as shipowner, is entitled to limit its liability to the value of the Flamingo is a determination of a substantive right. 11 (R. at 14a). Because it is not necessary to determine all rights and liabilities of the parties, this determination sustains an interlocutory appeal under 1292(a)(3). B. Similar to a decision granting a defendant exoneration from liability, a decision to grant a right to limit liability to a trivial amount effectively determines liability and falls within the meaning 28 U.S.C. 1292(a)(3) If the district court had found Seafood Shack not liable thereby granting exoneration from liability, an interlocutory appeal would have been available under 1292(a)(3). However, when granting its petition to limit liability, the district court effectively determined that Seafood Shack would bear no real liability. (R. at 5a, 14a). Although the district court made a finding that some liability may exist with respect 11 While a shipowner s right to limit liability is a substantive one, it should not be interpreted by this Court as to diminish Claimants rights vis-à-vis those of Seafood Shack. There is a recurring and inherent conflict between the exclusive jurisdiction the Limitation Act vests in admiralty courts and the common law remedies embodied in the saving to suites clause of 28 U.S.C In Re Tidewater, Inc. 249 F.3d at 345, 2001 AMC at 1793.

47 36 to Seafood Shack through the negligence of its employee, the court capped Seafood Shack s liability at trivial amount compared to the injuries sustained by Claimants and the potential cost to fully litigate the issue of liability. (R. at 14a). In essence, the district court exonerated Seafood Shack from liability. (R. at 14a). Therefore, Claimants right to appeal the district court s judgment under 1292(a)(3) is proper. Under the Limitation Act, there are three possible outcomes to a limitation petition: exoneration, limitation, or no limitation. In re Aramark Sports and Ent. Services, Inc, 831 F.3d at 1273, 2016 AMC at 2137 (10th Cir. 2016). This Court has stated that a shipowner need not stipulate or confess to liability to avail himself to his right under the Act. Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 453, 2001 AMC 928. Nevertheless, a determination of liability itself is an integral part of the limitation proceeding. Craig H. Allen, Limitation of Liability, 31 J. Mar. L. & Com. 263, 266 (2000). In evaluating a shipowner s right to limit liability, courts have implemented a two-step inquiry. See Hercules Carriers, Inc. v. Claimant State of Florida (The Summit Venture), 768 F.2d 1558, (11th Cir. 1985); Farrel Lines Inc. v. Jones (The African Neptune), 530 F.2d 7, AMC 1639 (5th Cir. 1976). First, courts conduct an exoneration inquiry to determine whether the shipowner seeking exoneration or limitation or those for whom the owner may be vicariously liable, committed actionable fault that caused the injury or loss giving rise to the claims for which limitation is sought. Id. If any of the claimants prove causative fault, liability for those claims has been established and courts advance to the second step of the

48 37 inquiry. Allen, supra, at 266 (emphasis added). If there is no proof of fault, then the shipowner is exonerated of liability. Id. At the second step, courts determine whether the owner is entitled to limit its liability for the claims because the causative fault was not within his privity of knowledge. Hercules, 768 F.2d at In light of this analysis, courts have reasoned that appeals of interlocutory decrees granting exoneration fit within 1292(a)(3) because the shipowner has been found not liable. See Properties Management, 604 F.2d at 258 n.2, 1979 AMC at 1684 n.2 (4th Cir. 1979). Likewise, appeals of denials of exoneration and limitation have been granted under 1292(a)(3) based on the same rationale. See, e.g., In re Aramark, 831 F.3d at 1276, 2016 AMC at 2150 (10th Cir. 2016); In re Bankers Trust Co., 651 F.2d 160, , 1981 AMC 1497, (3d Cir. 1981) (reversing denial of limitation); Waterman S. S. Corp. v. Gay Cottons, 414 F.2d 724, 727 (9th Cir. 1969) (affirming denial); Coleman v. Jahncke Serv., Inc., 341 F.2d 956, 957, 1965 AMC 535, 537 (5th Cir. 1965) (affirming denial); Republic of France, 290 F.2d at 397, 1961 AMC at 1085 (5th Cir. 1961) (reversing denial). In these instances, courts have reasoned that interlocutory appeals are permissible because there has been a determination of liability. See In re Aramark, 831 F.3d at 1276, 2016 AMC at However, a decision of extent of liability is not required for appealability. See id.; Republic of France, 290 F.2d at 397, 1961 AMC at Here, even though Seafood Shack s petition was one for limitation, it was in essence an exoneration from liability because of the negligible amount of damages (i.e., $1,000) that would be available to Claimants. (R. at 5a, 10a). Despite the district

49 38 court s finding of causative fault because of the negligence of Seafood Shack s employee, the cost to litigate Seafood Shack s liability would far outstrip the potential recoverable cost. 12 (R. at 5a, 14a). Thus, because there has been a determination of some liability or practically lack thereof, an interlocutory appeal to review the district court s determination is available under 1292(a)(3). To permit defendants the right to interlocutory appeal in instances of exoneration of liability, but deny claimants the same right when the effect is same would yield an inequitable result. Further, it would force Claimants to litigate the issue of liability through a costly and expensive trial which is precisely what Congress intended parties to avoid by enacting 1292(a)(3) in admiralty cases. A final determination by the Fourth Circuit on the amount of liability would effectively end the case and permit the parties to avoid a trial on the extent Seafood Shack s liability. Thus, this Court should hold that such interlocutory appeals are available under (a)(3) when a district court s judgment limits liability to trivial amount. CONCLUSION For these reasons, Petitioner-Claimants, Francis and Mary Marion, et al., respectfully requests this Court reverse the decision of the United States Court of Appeals for the Fourth Circuit and hold that the Limitation of Liability Act does not 12 Excluding other associated costs, the legal fee alone would likely make further litigation impracticable. See, e.g., Flame S.A. v. Indus. Carriers, Inc., No. 2:13 cv 658, 2014 WL , at *14 (E.D. Va. Dec. 16, 2014) (approving an award of attorney s fees in an admiralty action where the top billable rate was $520 per hour and the paralegal rate was $125 per hour).

50 39 serve as an independent basis for admiralty jurisdiction or that the Act s independent grant of admiralty jurisdiction is confined to scope this Court s interpretation general principles of admiralty tort jurisdiction and Title 28 U.S.C Alternatively, if this case does fall within admiralty jurisdiction, Claimants respectfully requests this Court reverse the Fourth Circuit s decision and hold that Claimants are afforded an interlocutory appeal under Title 28 U.S.C. 1292(a)(3) from an order granting Respondent s right to limit liability and remand its case to the Fourth Circuit for further proceedings consistent with this Court s opinion.

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