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 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 BRIEF FOR PETITIONER Respondent. Team: V Counsel for Francis & Mary Marion, et. al.

2 i QUESTIONS PRESENTED Whether the Fourth Circuit erred when dismissing appellant s interlocutory appeal pursuant to 28 U.S.C. 1292(a)(3), as the substantive rights and liabilities of the parties were decided, satisfying the conditions of the interlocutory appeal. Whether the Fourth Circuit erred in deciding that the Limitation of Liability Act can independently confer admiralty jurisdiction in light of overwhelming history, statutory interpretation, and precedent from its sister circuits to the contrary.

3 ii TABLE OF CONTENTS QUESTIONS PRESENTED... i TABLE OF CONTENTS... ii TABLE OF AUTHORITIES... iv OPINIONS BELOW... 1 JURISDICTION... 1 STATUTORY PROVISIONS... 1 STATEMENT OF THE CASE... 1 I. The Explosion on the F/V Flamingo and The Injuring of Restaurant Patrons... 1 II. THE DISTRICT COURT S FINDINGS AND DECISIONS... 2 III. FOURTH CIRCUIT COURT OF APPEALS FINDINGS AND DECISIONS... 3 SUMMARY OF THE ARGUMENT... 4 ARGUMENT... 9 I. THE FOURTH CIRCUIT COURT OF APPEALS ERRED WHEN DISMISSING APPELLANT S INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. 1292(a)(3)... 9 A. The Fourth Circuit had jurisdiction to hear the interlocutory appeal pursuant to 28 U.S.C. 1292(a)(3) because this is a sufficiently maritime case B. This Court should adopt the Ninth Circuit s broader definition of 1292(a)(3), thus finding that the Fourth Circuit had jurisdiction to hear the interlocutory appeal The legislative intent behind 1292(a)(3) supports a broader application of the statute when determining whether a court has jurisdiction to hear an interlocutory appeal The Ninth Circuit s approach better effectuates Congress intent in enacting 1292(a)(3) The District Court conclusively established the rights and liabilities of the parties as required by 1292(a)(3) C. This Court should find that the lower court erred when applying Evergreen International as binding precedent to the case at bar II.THE LIMITATION OF LIABILITY ACT IS NOT A BASIS FOR INDEPENDENT ADMIRALTY JURISDICTION A. The history and proper statutory interpretation of the Limitation of Liability Act does not support the notion that the Limitation Act was meant to serve as an independent basis for admiralty jurisdiction The purpose of the Act to put American shipowners on par with European counterparts does not support extending the Act to grant admiralty jurisdiction independently and has become obsolete in modern industry

4 iii 2. The proper statutory interpretation of the Act and the application of the Act to prescient cases does not support the notion that the Act has the power to grant admiralty jurisdiction independently B. Overwhelming judicial precedent has repeatedly held that the Limitation Act is not a basis for independent admiralty jurisdiction Nine circuits have held that the Act is not an independent basis of admiralty jurisdiction Richardson is an outmoded, distinguishable, and misplaced precedent which bears no consequence in modern interpretation of the Act C. Since the Limitation Act does not confer independent admiralty jurisdiction, the traditional requirements of conferring admiralty jurisdiction apply, which Appellees failed to satisfy CONCLUSION... 31

5 iv TABLE OF AUTHORITIES Cases Austracan (U.S.A.) Inc. v. M/V LEMONCORE, 500 F.2d 237, 1974 AMC 1935 (5th Cir. 1974) Burgbacher v. University of Pittsburgh, 860 F.2d 87, 1989 A.M.C. 149 (3rd Cir. 1988) Carmen Tool & Abrasives, Inc. v. Evergreen Lines, 871 F.2d 897, 1989 A.M.C. 913 (9th Cir. 1989)... 5, 14 Carter v. Allstate Ins. Co. (In re Indigo Sky), 743 F. Supp. 2d 103, 2010 A.M.C (D. Conn., Sept. 30, 2010)... 23, 24 City Fort Madison v. Emerald Lady, 990 F.2d 1086, 1993 A.M.C (8th Cir. 1993)... 5, 6, 12, 16, 18 David Wright Charter Service, Inc. v. Wright, 925 F.2d 783, 1991 A.M.C (4th Cir. 1991)... 24, 25, 26 Deacon v. Metro-North R.R. Co., 2009 U.S. Dist. LEXIS (D. Conn. Sept. 22, 2009) Evergreen Int l Corp. v. Standard Warehouse, 33 F.3d 420, 1995 A.M.C. 635 (4th Cir 1994)... 6, 10, 17, 18 Guillory v. Outboard Motor Corp., 956 F.2d 114, 1993 A.M.C. 605 (5th Cir. 1992) Hickam v. Segars, 905 F. Supp. 2d 835 (M.D. Tenn., Nov. 27, 2012) Hollywood Marine v. M/V ARTIE JAMES, 755 F.2d 414 (5th Cir. 1985) In re Bernstein, 81 F. Supp. 2d 176, 2000 A.M.C. 760 (D. Mass., Dec. 28, 1999)... 8, 27 In re Sisson, 867 F.2d 341, 1989 A.M.C. 609 (7th Cir. 1989) Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 1995 A.M.C. 913 (1995)... 2, 30

6 v Kingstate Oil v. M/V Green Star, 815 F.2d 918, 1987 A.M.C (3rd. Cir 1987) Lake Tankers Corp. v. Henn, 354 U.S. 147, 1957 A.M.C (1957)... 7, 21 Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046, 1989 A.M.C (11th Cir. 1989) Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 2001 A.M.C. 913 (2001)... 21, 22 Maryland Casualty Co. v. Cushing, 347 U.S. 409, 1954 A.M.C. 837 (1954)... 21, 24, 25 MLC Fishing, Inc. v. Velez, 667 F.3d 140, 2012 A.M.C. 485 (2nd Cir. 2011)... 26, 30 Norwich Co. v. Wright, 80 U.S. 104, 1998 A.M.C (1872) Olympic Towing Corp. v. Nebel Towing Co., 419 F.2d 230, 1969 A.M.C (5th Cir. 1969)... 8, 25 Richardson v. Harmon, 222 U.S. 96, 2001 A.M.C (1911)... 8, 25, 28 SCF Waxler Marine, L.L.C. v. Aris T, 902 F.3d 461, 2018 A.M.C (5th Cir. 2018) Seahorse Boat & Barge Corp. v. Jacksonville Shipyards, Inc., 617 F.2d 396, 1982 A.M.C. 301 (5th Cir. 1980) Seattle-First Nat l Bank v. Bluewater Partnership, 772 F.2d 565, 1986 A.M.C (9th Cir. 1985) Seven Resorts v. Cantlen, 57 F.3d 771, 1995 A.M.C (9th Cir. 1995)... 26, 29 THE MARIA, 67 F.2d 571 (2nd Cir. 1933)... 12, 18, 21, 22 Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 921 F.2d 775, 1991 A.M.C (8th Cir. 1990)... 26, 31

7 vi Todd Shipyards Corp. v. Auto Transportation, S.A., 763 F.2d 745, 1987 A.M.C (5th Cir. 1985) Wallis v. Princess Cruises, Inc., 306 F.3d 827, 2002 A.M.C (9th Cir 2002)... 6, 10, 13, 14 Williamson v. Recovery Ltd. P ship, 731 F.3d 608, 2014 A.M.C. 330 (6th Cir 2013)... 5, 10 Statutes 28 U.S.C. 1292(a)(3)... Passim 28 U.S.C. 1254(1) U.S.C. 1330, 1331 & U.S.C U.S.C U.S.C , 2, U.S.C (a)... 7, U.S.C.S Other Authorities Complaint of William Crutchfield, 2018 U.S. Dist. LEXIS , at *4 (N. D. Okla., July 26, 2018) Moore s Federal Practice [1] Grant Gilmore & Charles L. Black, The Law of Admiralty (2nd ed. 1975)... 20, 21 Thomas J. Schoenbaum, Admiralty and Maritime Law (5th ed. 2012)... 20, 21, 24, 25

8 1 OPINIONS BELOW The opinion of the Court of Appeals (Pet. App. 1a 6a) and Judge Solomon s concurring opinion (Pet. App. 7a 8a) are reported at 890 F.3d 1385, 2018 A.M.C (4th Cir. 2018). The order of the Court of Appeals denying petition for rehearing (Pet. App. 7a) is unreported. The opinion of the District Court (Pet. App. 9a-14a), which found independent admiralty jurisdiction under the Limitation of Liability Act and granted respondent s Limitation of Liability petition, is reported at 243 F. Supp. 3d 702 (D.S.C. 2017). JURISDICTION The judgment of the Court of Appeals was entered on May 7, Claimants timely filed a petition for rehearing on May 14, 2018; the petition was denied on June 26, Claimants petition for writ of certiorari was filed on September 4, 2018 and was granted on December 3, This Court s jurisdiction rests on 28 U.S.C. 1254(1). STATUTORY PROVISIONS The Limitation of Liability Act is set forth at 46 U.S.C et seq. The interlocutory appeal is set forth at 28 U.S.C. 1292(a)(3). STATEMENT OF THE CASE I. THE EXPLOSION ON THE F/V FLAMINGO AND THE INJURING OF RESTAURANT PATRONS Respondent, a South Carolina corporation and owner of F/V Flamingo, converted the Flamingo, a fishing vessel under its prior owner, into a floating restaurant in Pet. App. 10a. The Flamingo was indefinitely moored on a portion of the Cooper River in Charleston, South Carolina. Pet. App. 10a. The restaurant operating in the Flamingo, Sally s Seafood Shack, was in operation and serving customers on July 17, Pet. App. 10a. On the evening of July 17,

9 2 2015, an explosion in the galley of the Flamingo tore a hole in hull of the vessel and grievously injured eight individuals: three couples and a father and daughter, all of whom were dining at Sally s Seafood Shack. Pet. App. 10a. The Flamingo sank due to the explosion. Pet. App. 10a. The Flamingo s current worth is valued at less than $1,000; the sum of its worth is deposited with the District Court. Pet. App. 10a. The eight individuals injured in the gruesome explosion brought tort claims against the Flamingo s owner in state court for their injuries. Pet. App. 9a. The Flamingo s owner then petitioned under 46 U.S.C , et seq., seeking limitation of liability in the District Court of Charleston. Pet. App. 9a. In response, all eight Claimants filed identical claims to their state tort claims in federal court. Pet. App. 9a. II. THE DISTRICT COURT S FINDINGS AND DECISIONS The District Court, to determine whether jurisdiction was appropriate, first applied the traditional Grubart test, which requires that a tort must satisfy three factors to be included under admiralty jurisdiction of the federal courts. Pet. App. 11a; Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 1995 A.M.C. 913 (1995). The District Court determined that the case at hand failed all three factors. Pet. App. 11a. The Flamingo was on a portion of the Cooper River which was not navigable as it could not be used for interstate or foreign commerce. Pet. App. 11a. Further, the sinking of the Flamingo would not and did not have any impact on maritime commerce, especially because there was no maritime commerce which could take place on that portion of the Cooper River. Pet. App. 11a. Lastly, operating a restaurant is in no way a traditional maritime activity. Pet. App. 11a. Finding a complete absence of admiralty jurisdiction under the accepted and traditional Grubart test, the District Court analyzed whether the Limitation of Liability Act could

10 3 independently confer admiralty jurisdiction. Pet. App. 11a-12a. Working backwards, the District Court determined that because maritime jurisdiction gave rise to the Limitation of Liability Act, the Limitation of Liability Act could then confer its own admiralty jurisdiction upon cases. Pet. App. 12a-13a. The District Court then determined that the Limitation of Liability Act could confer admiralty jurisdiction in cases of non-maritime torts involving a vessel. Pet. App. 12a. Because the court found that the Flamingo remains a vessel though it is an indefinitely moored restaurant, the Limitation Act applied to Respondent s situation. Pet. App. 13a. Once the Limitation of Liability Act was found to be procedurally applicable, the District Court concluded that the explosion which led to Claimants injuries was solely the result of a Sally s Seafood Shack employee and the employee s negligence. Pet. App. 14a. Since Respondent, as the owner, was not found to be negligent, the District Court allowed Respondent to limit his liability whatever that liability may be and leave Claimants with paltry compensation for their injuries. Pet. App. 14a. III. FOURTH CIRCUIT COURT OF APPEALS FINDINGS AND DECISIONS After the District Court determined that regardless of any finding of liability, the Limitation Act would apply, Claimants petitioned for an interlocutory appeal under 28 U.S.C. 1292(a)(3). Pet. App. 3a. This provision allows interlocutory appeals from decrees which determine the rights and liabilities of the parties in admiralty cases. 28 U.S.C. 1292(a)(3). On appeal, the Fourth Circuit first adopted the District Court s reasoning that the case s admiralty jurisdiction arose only and specifically from the Limitation of Liability Act. Pet. App. 4a. The Court of Appeals was persuaded by Supreme Court precedent from more than one hundred years ago Richardson v. Harmon in determining the Liability Act could independently confer admiralty jurisdiction. Pet. App. 4a.

11 4 However, the Fourth Circuit declined to find jurisdiction over the interlocutory appeal. Pet. App. 6a. In its analysis, the Fourth Circuit identified a circuit split between the Fifth Circuit and the Ninth Circuit. Pet. App. 5a. The Fourth Circuit followed the Fifth Circuit s approach, and decided that the rights and liabilities of the parties were not determined pursuant to 1292(a)(3) when the court below decided that the shipowner s liability may be limited without determining first whether the shipowner was liable. Pet. App. 5a. Even though the Fourth Circuit identified that, it is abundantly clear that the district court has determined that Seafood Shack will not bear any real liability, the court held to the contrary because of a single precedent: Evergreen International. Pet. App. 5a-6a. Though the Fourth Circuit identified that, we would probably agree with the Ninth Circuit, the Fourth Circuit felt bound by Evergreen International and dismissed the appeal. Pet. App. 6a. In a concurring opinion, Judge Solomon parted ways with the rest of the bench and stated that he would have permitted the appeal under 1292(a)(3) if the case were, in fact, an admiralty case, because of how easily Evergreen International can be distinguished from the instant facts. Pet. App. 6a. In dissenting from the order, however, Judge Solomon admonished his fellow judges for concluding in direct conflict with many sister circuits that the Limitation of Liability Act is an independent basis for admiralty jurisdiction. Pet. App. 7a-8a. SUMMARY OF THE ARGUMENT The Fourth Circuit s dismissal of Claimants appeal was erroneous. The District Court effectively determined the substantive rights and liabilities of the parties when it allowed Respondent to limit liability in accordance with the act. As an initial matter, the Court of Appeals had procedural jurisdiction to hear the appeal under 1292(a)(3) because the case was distinctly maritime in air and was determined to be an admiralty case under the Limitation of Liability Act.

12 5 See Williamson v. Recovery Ltd. P ship, 731 F.3d 608, 618, 2014 A.M.C. 330, 342 (6th Cir. 2013) (holding that the term admiralty cases in 1292(a)(3) appears to cover any claim presented in a case in which admiralty jurisdiction has been invoked). Even though Claimants urge the court to reverse the Fourth Circuit and the District Court in holding that admiralty jurisdiction was invoked by the Limitation of Liability Act, it still remains that both lower courts invoked admiralty jurisdiction. Therefore, until the determination on admiralty jurisdiction is reversed, this remains an admiralty case where 1292(a)(3) applies. The legislative intent behind 1292(a)(3) supports and urges courts to hear appeals in exactly this scenario. The legislative intent was to codify common admiralty practice when addressing cases of limited liability. In admiralty cases, where liability and damages often run into the hundreds of thousands of dollars, providing for an appeal between the determination of liability and determining damages is paramount in the event that the liability determination is reversed. City Fort Madison v. Emerald Lady, 990 F.2d 1086, 1089, 1993 A.M.C. 2091, (8th Cir. 1993). In the instant case, if the Fourth Circuit denies to hear the interlocutory appeal, there will be a lengthy, costly, and burdensome process back through the lower courts. To effectuate the intent of the statute, 1292(a)(3) should be interpreted broadly. This is properly accomplished by the Ninth Circuit s interpretation and application of the statue. The Ninth Circuit, in both Carmen Tool & Abrasives and Princess Cruises, exercised jurisdiction to hear an interlocutory appeal when the district court allowed Respondent to limit liability but did not reach the question of actual liability. See Carmen Tool & Abrasives, Inc. v. Evergreen Lines, 871 F.2d 897, 1989 A.M.C. 913 (9th Cir. 1989) (hearing an interlocutory appeal pursuant to 1292(a)(3) where the district court limited defendants liability to $500 per package, but did not find whether the defendant was liable); Wallis v. Princess Cruises, Inc., 306 F.3d 827, 830, 2002

13 6 A.M.C. 2270, 2271 (9th Cir. 2002) (reasoning that 1292(a)(3) properly applies when the court decides to limit liability and the actual liability question does not need to be answered). The Ninth Circuit s application of 1292(a)(3) avoids costly and unnecessary trials, and aligns with the Congressional intent in enacting the statute. Moreover, an interlocutory appeal pursuant to 1292(a)(3) is appropriate at this stage in litigation because substantively the rights and liabilities of the parties were determined. The order from the district court conclusively determined the merits of the case when it determined that Respondent was not negligent and was entitled to limit his liability. The District Court effectively denied Claimants any prospect of substantial recovery. This denial effectively and practically determined Claimant s right to recover. Due to this determination, the application of 1292(a)(3) is more than proper in the instant case. See City Fort Madison, 990 F.2d at 1089, 1993 A.M.C. at 2094 (finding that cases that held that a 1292(a)(3) interlocutory appeal in a case where for all practical purposes a party could not recover was not a retreat from the requirement of a dispositive decision on the underlying merits of the claim). In addition, the Fourth Circuit s reliance on Evergreen International was woefully misguided because it is easily distinguishable on the facts of the case. Evergreen International s outcome may have been the same outcome the Fourth Circuit adopted, but the rationale and basis was entirely different and inapplicable to the case at hand. Evergreen Int l Corp. v. Standard Warehouse, 33 F.3d 420, 425, 1995 A.M.C. 635, 642 (4th Cir. 1994). Evergreen International wrestled solely with whether the facts of the case were sufficiently maritime to apply a 1292(a)(3) interlocutory appeal, something which is not at issue here. The Evergreen International Court s conclusion to read 1292(a)(3) more narrowly is clearly distinguishable.

14 7 Therefore, reliance upon Evergreen International as the sole precedent to guide the instant case is erroneous. The lower courts also erred when determining that the Limitation of Liability Act independently conferred admiralty jurisdiction. The intent behind the Limitation of Liability Act was to protect and bolster the American shipping industry to the same extent that the European shipping industry was protected. Lake Tankers Corp. v. Henn, 354 U.S. 147, 150, 1957 A.M.C. 1165, 1168 (1957). Congress wanted to persuade investors to enter the shipping industry by offering them a level of insurance against the perils of the high sea at a time when insurance was not commonly available. Id. The Limitation of Liability Act was meant to provide a procedural remedy within existing admiralty jurisdiction and was not an effort to expand general maritime jurisdiction. It would be egregious to extend the Limitation of Liability Act s reach in today s modern climate where multiple forms of insurance are available to the burgeoning American shipping industry. It would be further remiss to extend the Limitation of Liability Act in the instant case where there is absolutely no connection between the tort and the American shipping industry. A proper statutory interpretation of the Limitation of Liability Act reveals that Congress did not intend for the Limitation of Liability Act to be a source of independent admiralty jurisdiction. First, Congress chose language which indicates that the Limitation of Liability Act is not a right under maritime law but a possibility as long as petitioner falls within the established boundaries of admiralty jurisdiction. 46 U.S.C (a). Further, when Congress intended to use a statute to expand the federal courts jurisdiction, it did so explicitly in clear, unambiguous language. Congress did not do so here indicating that the Limitation of Liability Act was never intended to be an independent grant of jurisdiction. Additionally, jurisprudence

15 8 has consistently interpreted the Limitation of Liability Act as an act that operates well within, and not in addition to, existing admiralty jurisdiction. For example, the Supreme Court has routinely held that limiting one s liability is only a remedy available to the shipowner and not to parties outside traditional admiralty jurisdiction like insurers. See Olympic Towing Corp. v. Nebel Towing Co., 419 F.2d 230, AMC 1571, 1581 (5th Cir. 1969) (holding that a limitation of liability defense is personal to the shipowner). There is overwhelming precedent from nine circuit courts, including the Fourth Circuit, that the Limitation of Liability Act does not serve as an independent basis for admiralty jurisdiction. These nine circuits have repeatedly and explicitly rejected the idea that the Limitation of Liability Act could ever serve as an independent grant of jurisdiction. One of the only remaining circuits to hold otherwise did so solely on the basis of stare decisis, following what it believed to be the Supreme Court s holding in Richardson. See In re Bernstein, 81 F. Supp. 2d 176, 2000 A.M.C. 760 (D. Mass., Dec. 28, 1999) (identifying numerous rationales for holding that the Limitation of Liability Act could not and did not engender admiralty jurisdiction but nonetheless holding to the contrary in light of Supreme Court precedent). The Supreme Court s holding in Richardson, however, was that the petitioner could exercise limitation of liability and the federal courts could assume admiralty jurisdiction in light of a recent congressional amendment explicitly granting jurisdiction. Richardson v. Harmon, 222 U.S. 96, 100, 2001 A.M.C. 1207, 1208 (1911). Richardson was decided shortly after Congress, in efforts to bolster the American shipping industry even further, passed an act which provided for limitation of liability over land-based torts produced by a vessel on navigable waters. Richardson was in response to, and a vehicle through which to give effect to, the extended jurisdictional grant in the statute. This readily distinguishes Richardson from both the context

16 9 and facts in the instant case. In light of the historical intention, overwhelming judicial precedent, and inapplicability of Richardson, it is clear that the Fourth Circuit erred in holding that the Limitation of Liability Act confers independent admiralty jurisdiction. ARGUMENT I. THE FOURTH CIRCUIT COURT OF APPEALS ERRED WHEN DISMISSING APPELLANT S INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. 1292(a)(3). The Fourth Circuit Court of Appeals incorrectly dismissed Appellant s interlocutory appeal pursuant to 28 U.S.C. 1292(a)(3) for lack of jurisdiction. The court improperly found that the District Court had yet to conclusively determine the rights and liabilities of the parties, thus requiring them to dismiss the appeal. However, 1292(a)(3) did in fact confer jurisdiction onto the court. This case is maritime in flavor, qualifying the use of 1292(a)(3). Further, when the District Court determined that Appellants may limit their liability, it effectively determined the outcome of the case. The District Court s decision assured only two possible outcomes: $1,000 in damages, or no damages whatsoever. A subsequent determination of liability will not substantially affect the outcome of the case or the parties ability to recover monetary damages. Because the District Court s decision was effectively outcome determinative, the parties rights and liabilities were decided. Appellants respectfully submit that this Court should find that the Court of Appeals had jurisdiction to hear the appeal pursuant to 1292(a)(3). In order to assure conformity among the circuits, this Court should adopt the Ninth Circuit s broader definition of 1292(a)(3) when determining whether jurisdiction is appropriate.

17 10 A. The Fourth Circuit had jurisdiction to hear the interlocutory appeal pursuant to 28 U.S.C. 1292(a)(3) because this is a sufficiently maritime case. The Fourth Circuit has jurisdiction over interlocutory appeals pursuant to 1292(a)(3) in cases that are maritime in flavor. Therefore, in cases where admiralty jurisdiction has been invoked, the court also invokes jurisdiction over the interlocutory appeal described in 1292(a)(3). See Williamson v. Recovery Ltd. P ship, 731 F.3d 608, 618, 2014 A.M.C. 330, 342 (6th Cir. 2013) (holding that the term admiralty cases in 1292(a)(3) appears to cover any claim presented in a case in which admiralty jurisdiction has been invoked). Other courts have further interpreted the statutory language to hold that there must be a distinctly maritime air for an admiralty case to procedurally benefit from 1292(a)(3). See Evergreen Int l Corp. v. Standard Warehouse, 33 F.3d 420, 425, 1995 A.M.C. 635, 642 (4th Cir. 1994) (finding that a dispute between a shipping vessel and an exporter did not have enough of a maritime air to make it a candidate for 1292(a)(3) because the argument-in-chief only involved a question of general contract interpretation); Wallis v. Princess Cruises, Inc., 306 F.3d 827, 830, 2002 A.M.C. 2270, 2271 (9th Cir. 2002) (finding 1292(a)(3) applied to an action brought by a spouse against a cruise line on behalf of her husband, who drowned after falling off a cruise ship). The District Court s findings of law firmly allow the invocation of admiralty procedure in this case. The District Court found that admiralty jurisdiction was proper under the Limitation Act and, further, that Appellee was able to limit its liability. Pet. App. 10a-11a. The Court of Appeals then affirmed the District Court s findings of law that the Limitations Act confers an independent basis for admiralty jurisdiction upon this case. Pet. App. 4a. The question of whether the Limitation Act can independently confer admiralty jurisdiction is a distinct issue. However, because until this point this case has been decided under admiralty jurisdiction,

18 11 procedural questions must be answered under the umbrella of admiralty jurisdiction until the findings of the Court of Appeals and the District Court are overturned by this Court. Therefore, admiralty procedure is appropriate here, allowing Appellants to invoke the procedural benefits of 1292(a)(3). Even so, this case has a sufficiently maritime air as to qualify as a maritime case under 1292(a)(3). Sally s Seafood Shack is a floating restaurant on a converted vessel. Pet. App. 9a. Whether admiralty jurisdiction is applicable, the case concerns broad admiralty principles. The fact that this incident happened on a converted vessel, coupled with the District Court s finding that the Limitation Act confers independent admiralty jurisdiction (affirmed by the Court of Appeals) gives this case a sufficiently maritime air. B. This Court should adopt the Ninth Circuit s broader definition of 1292(a)(3), thus finding that the Fourth Circuit had jurisdiction to hear the interlocutory appeal. The special benefit found in 1292(a)(3) allows appeals from [i]nterlocutory decrees of such district courts or the judges thereof determining the rights and liabilities of the parties to admiralty cases in which appeals from final decrees are allowed. 28 U.S.C. 1292(a)(3) (2018). The purpose of this provision is to allow an immediate appeal after a party has been found liable and before a determination of damages is made. This allows parties to avoid a costly and arduous damages trial if the Court of Appeals eventually overturns the liability determination. To determine whether there is jurisdiction pursuant to 1292(a)(3), courts are tasked with deciding whether the District Court decided the rights and liabilities of the parties. The main disagreement between the circuits is what constitutes the rights and liabilities determined at the time of appeal. This disagreement has led to a circuit split. The Fifth Circuit has narrowly interpreted the statute, permitting interlocutory appeals only when a district court has determined

19 12 the liability issue. However, the Ninth Circuit has taken a more expansive view consistent with the intent of the statute. The Ninth Circuit has held that an interlocutory appeal from an order limiting the amount of recoverable damages is appropriate even when the question of liability is pending. Moore s Federal Practice [1]. This Court should adopt the broader definition of 1292(a)(3) in order to stay consistent with the intent of the statute. 1. The legislative intent behind 1292(a)(3) supports a broader application of the statute when determining whether a court has jurisdiction to hear an interlocutory appeal. The purpose in codifying 1292(a)(3) was to provide a statutory interlocutory appeal in order to follow the existing common practice in admiralty cases. THE MARIA, 67 F.2d 571, 571 (2nd Cir. 1933). In admiralty cases, common procedure was that first, courts would determine liability, and if liability was found, courts would next determine damages. The legislative intent behind 1292(a)(3) was to facilitate this procedure and allow an appeal from the determination of liability before the parties go through the tedious process of determining damages. This, in turn, allows the parties to avoid a protracted and expensive trial on the issue of damages if the liability determination is reversed. City Fort Madison v. Emerald Lady, 990 F.2d 1086, 1089, 1993 A.M.C. 2091, (8th Cir. 1993). The rationale which prompted the enactment of 1292(a)(3) perfectly aligns with the facts of the present case. Denying the interlocutory appeal would force an expensive and protracted trial over a modicum amount of money. The purpose of the statute was to ease the burden on the litigation. Finding no jurisdiction over this interlocutory appeal would

20 13 substantially increase the burden on both parties. Court fees and attorney fees would continue to climb throughout the damages phase of the trial and subsequent appeals. 2. The Ninth Circuit s approach better effectuates Congress intent in enacting 1292(a)(3). The intent behind Congress enactment of 1292(a)(3) was to provide an appeal at an appropriate juncture in order to prevent needless litigation which may be subsequently overturned. The appropriate juncture to which 1292(a)(3) is meant to apply is when the court has determined the rights and liabilities of the parties. Therefore, the contentious part of this litigation is whether the court reached the determination of the parties rights and liabilities when they determined that liability may be limited. The Fifth Circuit applies a strict reading of 1292(a)(3), disallowing the use of the interlocutory appeal when a determination of liability has yet to be reached. See SCF Waxler Marine, L.L.C. v. Aris T, 902 F.3d 461, 2018 A.M.C (5th Cir. 2018) (dismissing an appeal brought under 1292(a)(3) because the district court did not determine the rights and liabilities of the parties when it denied partial summary judgment). The Ninth Circuit rightly applies a broader definition, exercising jurisdiction to hear interlocutory appeals under 1292(a)(3) when the district court has upheld the validity of a clause limiting the amount of liability but has not reached the question of whether the defendant was actually liable. Princess Cruises, 306 F.3d at 832, 2002 A.M.C. at The court applied a practical rationale to the issue: If a district court holds that a limitation of liability clause is valid and applicable, that determination will, as a practical matter, usually end the case. Id. at 834, The Ninth Circuit recognized that Congress adopted the statute to be economically and procedurally rational. To interpret the statute any other way would circumvent the legislature s intent. The Ninth Circuit s statutory

21 14 interpretation offers a solution for how courts should rule when liability has essentially been determined. It would offer judges consistency in an area of ambiguous statutory interpretation. The Ninth Circuit s approach is delineated in Wallis v. Princess Cruises and Carmen Tool & Abrasives, Inc. v. Evergreen Lines. Carmen Tool & Abrasives, similar on the facts to the present case, applied 1292(a)(3) to hear an appeal when the district court upheld the validity of a clause limiting the amount of liability but had not reached the question of whether the defendant was actually liable. See Carmen Tool & Abrasives, Inc. v. Evergreen Lines, 871 F.2d 897, 1989 A.M.C. 913 (9th Cir. 1989) (hearing an interlocutory appeal pursuant to 1292(a)(3) where the district court limited defendants liability to $500 per package, but did not find whether the defendant was liable). Using the facts of Carmen Tool & Abrasives, the Princess Cruises court reasoned that actual liability does not need to be established for an interlocutory appeal as long as liability is limited. Princess Cruises, 306 F.3d at 833, 2002 A.M.C. at More to the point, finding that this court does not have jurisdiction to hear the appeal will create a less effective statute. It would become almost impossible to meet the requirements for an interlocutory appeal to be heard in admiralty, completely negating the statute s purpose. Finding that the District Court s order is appealable under the statute does not create a piecemeal system of interlocutory appeals. Rather, it allows the statute to function as intended. The Ninth Circuit effectively draws the line to determine what is a final determination of the rights and liabilities for the purpose of an interlocutory appeal. Not only does the Ninth Circuit s approach make clear that a broader application of the statute in general makes rational sense, it also makes clear that the application of the statute is necessary in the instant facts of this case. Even though Princess Cruises reads a much broader meaning into the statutory language of 1292(a)(3), the rationale holds firm for cases with facts

22 15 similar to Carmen Tool & Abrasives. There are a number of practical reasons an appeal at this stage should be allowed. An interlocutory appeal at this juncture provides the only meaningful avenue for relief. A determination that the defense can limit its liability constrains the adequacy of relief a plaintiff may gain from the litigation. No economically rational plaintiff would pursue a case to judgment with a maximum of $1,000 in recovery. This is precisely the sort of case in which an interlocutory appeal is needed. 3. The District Court conclusively established the rights and liabilities of the parties as required by 1292(a)(3). Appellees mistakenly argue that Appellant s interlocutory appeal should be dismissed under 1292(a)(3) for lack of jurisdiction. However, the rights and liabilities of the parties were decided with the district court s order granting Appellees the right to limit their liability. To determine whether the rights and liabilities have been decided, the order appealed from must conclusively determine the merits of a claim or defense. See Todd Shipyards Corp. v. Auto Transportation, S.A., 763 F.2d 745, 751, 1987 A.M.C. 1831, 1840 (5th Cir. 1985) (finding the interlocutory appeal under 1292(a)(3) appropriate when the rights and liabilities of the parties were determined except for attorney s fees and costs). The District Court found that Mr. Calhoun alone was negligent and entitled Appellees to limit their liability. Pet. App. 14a. It is unrealistic to think that this finding of law was not equivalent to the District Court determining liability. Any further determination would be a reiteration of the District Court s initial findings. If the District Court s determination constitutes a very real and final determination of their rights, an interlocutory appeal under 1292(a)(3) may proceed. See Kingstate Oil v. M/V Green Star, 815 F.2d 918, 921, 1987 A.M.C. 1521, 1523 (3rd. Cir. 1987) (finding that the court s denial of the application to treat the expenses of unloading the steel as an administrative cost was determinative of their rights sufficient for interlocutory appeal under 1292(a)(3)). Because the

23 16 District Court determined that Appellees may limit their liability, it made a final determination to the extent of recovery. In cases where the decision at issue determined effectively and for all practical purposes, if not technically, a party s right to recover, jurisdiction may be exercised. See City Fort Madison, 990 F.2d at 1089, 1993 A.M.C. at 2094 (finding that cases that held that a 1292(a)(3) interlocutory appeal in a case where for all practical purposes a party could not recover was not a retreat from the requirement of a dispositive decision on the underlying merits of the claim). In the case at bar, the District Court essentially determined the liabilities of the parties by finding that Appellees may limit their liability. Final liability is irrelevant to further litigation, as that determination will only decide whether Appellants receive $1,000 in damages, or zero. Thus, the District Court s decision set the bounds from which Appellants could recover. Any further litigation is a fruitless gesture. This Court should find that the determination of the extent of recovery is enough to proceed with the interlocutory appeal. If the Court finds otherwise, the natural progression of this case will then lead to an extensive trial on liability. After the costly and arduous trial to determine liability, the parties will inevitably once again petition for an interlocutory appeal, putting them back in the exact position they currently are in with no material change to justify the time and resources spent to get there. The Fourth Circuit s opinion acknowledged that the district court determined for practical purposes the rights and liabilities of the parties. Judge Hammurabi in his opinion wrote, As a practical matter, it is abundantly clear that the district court has determined that Seafood Shack will not bear any real liability for the claimants injuries. Pet. App. 5a. The court s sole rationale for denying the interlocutory appeal was premised on one case, Evergreen International, which is distinguishable from the present case on its facts.

24 17 C. This Court should find that the lower court erred when applying Evergreen International as binding precedent to the case at bar. The Fourth Circuit erred when applying Evergreen International as precedent. Evergreen International concerned an appeal from the District Court s grant of summary judgment. The court held that because the case did not have a distinctly maritime air, the court must dismiss the appeal for lack of jurisdiction. See Evergreen International, 33 F.3d at 425, 1995 A.M.C. at 642 (dismissing an appeal from the granting of summary judgment because the case was not a sufficiently maritime case in order to apply 1292(a)(3)). Appellants submit that this Court should overturn the lower court s finding of lack of jurisdiction partly because Evergreen International is distinguishable on its facts. Evergreen International did not consider whether the District Court s grant of summary judgment determined the rights and liabilities of the parties. The analysis solely concerned whether or not the facts presented a sufficiently maritime case for an interlocutory appeal pursuant to 1292(a)(3). The court never reached the issue of whether the rights and liabilities of the parties were decided. The lower court here only considered the end result of Evergreen International in barring the appeal. There was no mention of the rationale or the basis for the Evergreen International court s finding. Therefore, the lower court s decision to apply Evergreen International to the present case is clearly mistaken. The Evergreen International court did explore the logical justification for a broader application of the interlocutory appeal rule. The Evergreen court came to the conclusion that a narrow reading of 1292(a)(3) was more appropriate. Id. at 424, 640. However, the court cited no cases supporting a narrow reading of 1292(a)(3) that concerned a limitation of liability proceeding. Instead, the court cited cases that were decided on entirely different bases. These cases often concerned court decisions that required continued litigation, such as summary

25 18 judgment proceedings and denial of insurance coverage. See Evergreen international, 33 F.3d at 424, 1995 A.M.C.at 640 fn.1 (citing City Fort Madison, 990 F.2d 1086, 1993 A.M.C (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from the denial of a maritime lien for lack of jurisdiction); Burgbacher v. University of Pittsburgh, 860 F.2d 87, 1989 A.M.C. 149 (3rd Cir. 1988) (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from the denial of summary judgment); Seattle-First Nat l Bank v. Bluewater Partnership, 772 F.2d 565, 1986 A.M.C (9th Cir. 1985) (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from a finding of partial summary judgment); Hollywood Marine v. M/V ARTIE JAMES, 755 F.2d 414 (5th Cir. 1985) (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from a finding denying insurance coverage); Seahorse Boat & Barge Corp. v. Jacksonville Shipyards, Inc., 617 F.2d 396, 1982 A.M.C. 301 (5th Cir. 1980) (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from a finding of lack of personal jurisdiction); Austracan (U.S.A.) Inc. v. M/V LEMONCORE, 500 F.2d 237, 1974 AMC 1935 (5th Cir. 1974) (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from the trial court s dismissal of the plaintiff s amended complaints); THE MARIA, 67 F.2d 571 (2d Cir. 1933) (dismissing for lack of jurisdiction under 1292(a)(3) the appeal from a denial of a motion to dismiss). In sum, even though the Evergreen International court did not reach the issue of the rights and liabilities of the parties, and cited to no cases that concerned a similar set of facts, the lower court still decided to apply this precedent. The case at bar is fundamentally different from every single case the Evergreen International court cited in support of a narrow reading of 1292(a)(3). In the present case, the decision of the lower court ended any real ability of the appellants to further their interests. The maximum monetary recovery was capped, thus restricting appellant s ability to continue the litigation. In the cases cited by Evergreen

26 19 International, further litigation was needed to reach the same stage that is presented here. Therefore, Appellants submit that this Court should disregard the Fourth Circuit precedent in its application to this case as it is readily distinguishable on its fact from the case on appeal. This Court should find that the Fourth Circuit erred when determining that 1292(a)(3) barred this interlocutory appeal because the rights and liabilities of the parties has not been decided. Because the District Court effectively determined the rights and liabilities, the Fourth Circuit did have jurisdiction to hear the appeal. Furthermore, this Court should find that the Ninth Circuit s definition of 1292(a)(3) is consistent with the statute s intent, and so should be adopted. II. THE LIMITATION OF LIABILITY ACT IS NOT A BASIS FOR INDEPENDENT ADMIRALTY JURISDICTION. The Fourth Circuit erred when it determined that the Limitation of Liability Act, 46 U.S.C (hereinafter Limitation Act ), serves as an independent basis for admiralty jurisdiction. Proper statutory interpretation reveals that the Limitation Act was never intended to serve as a separate basis for admiralty jurisdiction. The language of the Limitation Act, its placement in the United States Code, and judicial application indicate that the Limitation Act did not intend and cannot operate as an independent source of admiralty jurisdiction. Moreover, extending admiralty jurisdiction under the Limitation Act alone is incongruent to the Limitation Act s purpose: to protect and bolster the American shipping industry. Overwhelming precedent from the circuit courts indicates that this rationale is properly understood. Nine circuits, including a prior Fourth Circuit case, have explicitly rejected the Limitation Act as an independent basis for admiralty jurisdiction. When the Fourth Circuit erroneously held that the Limitation of Liability Act provided an independent basis for admiralty jurisdiction, the court

27 20 failed to properly interpret the statute and legislative history and disregarded extensive precedent. A. The history and proper statutory interpretation of the Limitation of Liability Act does not support the notion that the Limitation Act was meant to serve as an independent basis for admiralty jurisdiction. The Limitation of Liability Act was enacted to help American shipping compete with international shipping powers and was not meant to expand or provide an independent basis for admiralty jurisdiction. Proper statutory interpretation and the plain language of the Limitation of Liability Act contains no indication that Congress intended for the statute to provide an independent basis for admiralty jurisdiction. 1. The purpose of the Act to put American shipowners on par with European counterparts does not support extending the Act to grant admiralty jurisdiction independently and has become obsolete in modern industry. The Limitation of Liability Act was enacted in 1851 and first codified at 46 U.S.C.S. 181 et. seq. Thomas J. Schoenbaum, Admiralty and Maritime Law 811 (5th ed. 2012). The Act was passed following a case in which an American shipowner was subjected to a heavy burden of liability which competitors in other countries did not have to contend with. Grant Gilmore & Charles L. Black, The Law of Admiralty 819 n.5 (2nd ed. 1975). The Limitation Act s purpose was to provide American shipowners the same level of protection as their counterparts from other countries and to put American ship owning interests on a competitive equality with British interests, so far as limitation of liability was concerned. Id. at 820. Congress intention was primarily to encourage the development of American merchant shipping and to induce capitalists to invest money in this branch of industry. Lake Tankers Corp. v. Henn, 354 U.S. 147, 150, 1957 A.M.C. 1165, 1168 (1957); Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 441, 2001 A.M.C. 913, 918 (2001) (quoting Norwich Co. v. Wright, 80 U.S. 104, 1998 A.M.C.

28 , 2071 (1872). The clear intent behind the Limitation Act was to provide a mechanism which would drive investors towards ship owning and shipping with less worry about the disasters which might await them on the open seas. The Limitation Act was, therefore, created to function entirely within the existing admiralty framework. It was created to apply specifically to existing admiralty perils and to provide an after-the-fact quasi-insurance during the time where insurance was not prevalent. In the century following the Limitation Act s enactment, however, the Limitation Act s purpose faded into obsolescence and, with it, judicial support diminished. As explained by Gilmore and Black, [t]he intended beneficiary of the Act is, it might be said, the prudent shipowner... in the early days of limited insurance coverage who could not protect himself or herself from expensive maritime disasters. Gilmore & Black, supra, at 951. Justice Black identified in 1954 that, [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. Maryland Casualty Co. v. Cushing, 347 U.S. 409, 437, 1954 A.M.C. 837, 847 (1954). Shipowners in the industry today enjoy the protections of insurance, have the ability to use bills of lading statutes which impose limits on liability for cargo, and the ability to use contracts to limit claims, none of which were widely available when the Limitation Act was passed. Schoenbaum, supra, at 810. In the modern era, it would be remiss to expand the reach of the Limitation of Liability Act far beyond its original purview and apply it to scenarios which do not include a vessel nor navigable waters. The perils which the Limitation Act was enacted to cover such as traditional seafaring disasters in the shipping industry have no relation to the instant facts of the case. The owner of the F/V Flamingo did not need encouragement or monetary protection to turn the

29 22 former vessel into a permanently moored seafood restaurant. There was no expectation of encountering any perils of the sea while remaining indefinitely moored within a non-navigable waterway. There was no risk that, due to this nevertheless unfortunate accident, the American shipping industry would suffer irreparable harm, encounter a mass exodus of investors, and become second-place to its European counterparts. There is no conceivable way that the original purpose of the Limitation Act can be squared to encompass a non-vessel sinking on a nonnavigable waterway. Further, as stated in Lewis v. Lewis & Clark Marine, Inc., the scope of exclusive federal jurisdiction is proportional to the federal interest in protecting the vessel owner s right to seek limitation of liability. See Lewis, 531 U.S. at 453, 2001 A.M.C. at 923 (holding that state courts may adjudicate claims against vessel owners as long as the vessel owner s right to seek limitation of liability is protected and admonishing the vessel owner who aimed to mak[e] run of the mill injury actions involving vessels a matter of exclusive federal jurisdiction. ). Extending the scope of the Limitation of Liability Act to confer independent admiralty jurisdiction in this scenario would be entirely improper and foreign in light of the Limitation Act s outmoded purposes which are unworkable in the modern world. 2. The proper statutory interpretation of the Act and the application of the Act to prescient cases does not support the notion that the Act has the power to grant admiralty jurisdiction independently. Determining whether the Limitation of Liability Act can confer independent admiralty jurisdiction upon cases is, in part, a question of statutory interpretation. As stated in Carter v. Allstate Ins. Co., [a]s with all questions of statutory interpretation, the Court begins with the language of the statute. Carter v. Allstate Ins. Co. (In re Indigo Sky), 743 F. Supp. 2d 103, 112, 2010 A.M.C. 2574, 2586 (D. Conn., Sept. 30, 2010) (quoting Deacon v. Metro-North R.R. Co.,