LEWIS v. LEWIS & CLARK MARINE
In 1998, James F. Lewis, a deckhand aboard the M/V Karen Michelle owned by Lewis & Clark Marine, Inc., claimed that he was injured when he tripped over a wire on the boat. Lewis then sued Lewis & Clark in Illinois County Court, for personal injuries claiming negligence under the Jones Act. Lewis & Clark had already filed a complaint for exoneration from, or limitation of, liability in the District Court under the Limitation of Liability Act (Act). Subsequently, the court approved a surety bond of $450,000, representing Lewis & Clark's interest in the vessel, ordered that any claim related to the incident be filed with the court within a specified period, and enjoined the filing or prosecution of any suits related to the incident. The injunction prevented Lewis from litigating his personal injury claims in state court and he moved to dissolve it. The District Court noted that federal courts have the exclusive jurisdiction to determine whether a vessel owner is entitled to limited liability, but also recognized that the statute conferring exclusive jurisdiction over admiralty and maritime suits to federal courts saves to suitors "all other remedies to which they are other wise entitled." Ultimately, the court dissolved the injunction. The Court of Appeals reversed.
Did a District Court abuse its discretion when it dissolved an injunction under the Limitation of Liability Act, which prevented a seaman from suing a vessel owner in state court for personal injuries sustained aboard the vessel?
Legal provision: 46 U.S.C. 181
No. In a unanimous opinion delivered by Justice Sandra Day O'Connor, the Court held that because state courts may adjudicate claims like Lewis' against vessel owners so long as the owner's right to seek limitation of liability is protected, the Court of Appeals erred in reversing the District Court's decision to dissolve the injunction. Writing for the Court, Justice O'Conner rejected the respondent's proposal to make "run of the mill personal injury actions involving vessels a matter of exclusive federal jurisdiction except where the claimant happens to seek a jury trial."
Argument of Roy C. Dripps, III
Chief Justice Rehnquist: We'll hear argument next in Number 1999... correction, 1331, James Lewis v. Lewis & Clark Marine.
Mr. Dripps: Mr. Chief Justice, and may it please the Court--
Both the Jones Act and the Limited Liability Act can and should be given effect in this single claimant case, yet respondent seeks to use the Limited Liability Act to destroy rights conferred by Congress on Lewis as a seaman.
The Jones Act incorporates the provisions of the Federal Employers Liability Act guaranteeing the employee a choice of a State or Federal forum.
In addition, it guarantees him the freedom from removal to Federal court in the event he chooses a State court forum.
Chief Justice Rehnquist: That's true of both the Jones Act and FELA, is it?
Mr. Dripps: Yes, sir, and that statutory remedy is saved to Lewis by the saving to suitors clause, yet it can only be preserved in this case by dissolving the injunction against State court proceedings.
This Court's decision in the 1931 Langnes case held that the injunction, even without stipulations, should be dissolved to allow the State court suit to proceed, and that the admiralty court would resume jurisdiction only in the event that the State court judgment exceeded the amount of the limitation fund.
Justice O'Connor: Well, under what circumstances could the district court exercise its discretion and not dissolve the injunction and require litigation of liability in Federal court?
Mr. Dripps: Justice O'Connor, it would be only in a multiple claimant excess fund situation, and even then under the Jones Act there might be a question with regard to preserving multiple suitors claims under the Jones Act, but generally in a non Jones Act multiple claimant excess fund situation the vessel owner does have the right to maintain the exclusive jurisdiction of the admiralty court.
Chief Justice Rehnquist: Well, what if you have excess funds, multiple, and the Jones Act?
Are you saying that the Jones Act would prevent a liability determination in all of those situations?
Mr. Dripps: Not necessarily.
I'm saying that it's a question that potentially could be raised, but it hasn't been.
That's, of course, not this case.
This is a single claimant case, and part of the court's discretion at the district court level certainly was finding that it could be a single claimant case, which the district court order did note in footnote 3.
Justice O'Connor: Do you think that the courts and rule (f) preclude a single claimant exception?
Mr. Dripps: Oh, absolutely not, Justice O'Connor.
I think that was made clear in the Langnes case, because in the Langnes case the district court in fact exonerated the vessel owner, and were that... were rule (f) to preclude dissolution of the injunction, certainly the court would have simply relied on the exoneration finding.
Justice O'Connor: But you think that rule (f) is invalid?
Mr. Dripps: I do.
However, and I want to make this clear, the Court need not reach that issue if it simply follows the Langnes analysis.
The Rules Enabling Act analysis only comes into play in this case if the respondent's position is adopted, in that they say that we have no right to go to State court.
At that point, I am forced to attack the rule which gives them the right to have a liability and damage determination made in the Federal court, which I do say is invalid as violation of the rulemaking powers of this Court.
Chief Justice Rehnquist: But it's possible to rule for you here without holding that rule (f) is invalid just as a matter of interpretation, isn't it?
Mr. Dripps: Mr. Chief Justice, I agree completely that if the Court simply follows the Langnes case and says that the Jones Act allows this case to be brought in State court, and that that statutory remedy is preserved by the saving to suitors clause, and that the injunction should be dissolved on that basis, the Court need not reach the issue of the invalidity of rule (f) in this case.
Justice Ginsburg: But it might not... but it might not go that far if you had a mass disaster and there were many sailors injured and the vessel wasn't worth enough to cover all the claims.
Mr. Dripps: Justice Ginsburg, I think that in that case the plain language of the limitation statute in anything other than fire requires the vessel owner to admit liability and cannot use the limitation statute as a method to shift the forum and then contest liability.
The shipowner has a choice of one or the other in that circumstance.
Justice Kennedy: How does it work in practice?
You have a single claimant, and there's adequate, adequate funds to cover the claim and it goes to the State court.
Then 6 weeks later somebody else has a slip and fall, and then there's another suit.
Does that make everything start all over again?
How does this work in... it seems to me that there's great merit to your position, but that on the other hand there's going to be problems down the line when you have subsequent claims, or is that maybe not a problem?
Mr. Dripps: Justice Kennedy, I don't believe that's a problem, because normally when you have a case like this you have separate or serial funds.
Each time the vessel owner wishes to file a limitation case there's a separate valuation made, and it's a separate proceeding.
Now, the seaman's claims will become liens in priority of the time they arise, but that's a separate issue, and I--
Justice Kennedy: Okay, so the priority is what solves the problem, then.
Mr. Dripps: --Exactly.
There's a priority based on chronology.
Justice Ginsburg: And also--
Justice Kennedy: --A chronology of when the claim was filed, or when the injury occurred?
Mr. Dripps: I believe that it is of the time of the judgment, except for wages, when it's a... wages are a lien that accrue as of the time--
Justice Kennedy: Well, then I think there might be a problem with successive claims.
We need not get into it.
It's in the background, it seems to me, of the rule we must make, because if we ship it all off to the State court, and then there are going to be subsequent claims, you might have to start the... stop the State proceeding midway.
Mr. Dripps: --Well, Justice Kennedy, I believe that would only be a problem if the vessel owner tenders the vessel to a trustee rather than posting security for value, which is what was done in this case.
If, in fact, the vessel is turned over to a trustee, though, the likelihood is that it's not going to be employed by the owner, and so that owner won't be allowed to have a subsequent claim, and if they post security for value, I think that solves the problem, because there is a fund posted, and we won't be in a situation where we have competing claims for the same fund.
In other words, they will be different funds.
Justice Ginsburg: Do I understand the limitation correctly?
I mean, the typical use would be if you have a collision and lots of people are hurt, but this is a single... this is a tripping on wire, so we know it isn't... it isn't disputed in this case, is it, that we're dealing with a single sailor accident?
There was... he tripped over a wire on the deck.
Mr. Dripps: There is no dispute concerning that, Justice Ginsburg.
In the motion to dissolve the restraining order, which is in the joint appendix on page 70, and I believe it's at page 71, paragraph 6, Lewis made the specific claim that this was a single claimant accident.
That claim has never been rebutted or contradicted by the opposing side, by the vessel owner, so this is clearly a single claimant case.
Now, what your question suggests then, is why was this case filed, and it was filed simply as a forum shifting device.
Justice Ginsburg: But you sued later.
Oh, you think that they came in precipitously so that the forum would be where they wanted it, rather than where you chose to sue?
Mr. Dripps: Well, Justice Ginsburg, I wouldn't use the term precipitously, but the complaint was filed on March 24 of 1998.
Normally, in the case of a mass disaster, for example, there would be immediately a motion for an injunction and a notice to potential claimants that goes out.
That was not done in this case until May 11, 6 weeks or so after the initial complaint, and it was not done until after the State court case had been filed.
What they did was, they filed a limitation case in the Federal court and then sat on it, waited to see if Lewis was going to institute suit or not.
When he did, they obtained the injunction restraining prosecution of the suit, and--
Justice Ginsburg: And their limitation proceeding was filed in which court?
Mr. Dripps: --It was filed in the Eastern District of Missouri, United States District Court for the Eastern District of Missouri, across the river from Madison County, Illinois.
Justice Ginsburg: And--
Mr. Dripps: Rather than filing it in the Southern District of Illinois.
Justice Ginsburg: --There was... seemed to be a concession that if only you had asked for a jury trial you'd be home free, because you can't get a jury trial in admiralty and that's what the savings to suitors clause saved.
Mr. Dripps: And I think the Linton case from the Fifth Circuit in 1992 addresses that point specifically, Justice Ginsburg, and they say that the saving clause saves a nonjury Jones Act case because that's part of the seaman's remedy under the Jones Act.
The Jones Act's election language says the seaman has the right to maintain an action at law or... with or without a jury and, by incorporating the Federal Employees Liability Act, he can do it in State or Federal court.
Chief Justice Rehnquist: The defendant cannot ask for a jury trial in that situation?
Mr. Dripps: That's true, Chief Justice.
The... and I think the Linton case goes on at great length to discuss that, and the significance of that I think is perhaps made more clear by the antiremoval provision in 28 U.S.C. 1445(a).
The defendant cannot remove that case to Federal court where he would be able to trigger the Seventh Amendment and get a jury trial.
Chief Justice Rehnquist: Yes, but it's one thing to say, for Congress to say it can't be removed, but it seems to me it's quite another, a separate thing for Congress to say that the plaintiff can have a nonjury trial and the defendant cannot move for a jury.
Mr. Dripps: That is what the Linton case said, and that point wasn't specifically brought up in the briefs, although I believe this Court has addressed that issue.
I'd have to go outside the briefs to give you a case cite.
Chief Justice Rehnquist: Yes, well, it certainly isn't directly involved here, is it?
Mr. Dripps: No, sir.
No, sir, but this Court has addressed it.
Chief Justice Rehnquist: Well, we said in Singer, that Singer case, in the criminal case that the Government can move for a jury trial even though the defendant doesn't want one.
Mr. Dripps: And in this case Congress has specifically said that the injured employee has the option of determining whether or not it should be a jury or nonjury trial.
That's what this Court said in the Panama Railroad case v. Johnson, from 1920.
The Linton case simply followed that, and said that the fact that the seaman chooses the nonjury remedy in State court does not transform the case into something that is now removable because it's outside the scope of the saving to suitors clause.
And that ties in with this Court's decision in the Red Cross Lines case, where it concluded that statutory remedies are saved remedies, and in this case Mr. Lewis is a seaman invoking his rights under the Jones Act, which is a Federal statute.
Accordingly, that remedy is saved to him by the saving to suitors clause, and Congress' decision to confer the right to select the forum and the form of trial on the seaman is also saved by the saving to suitors clause.
In contrast, the vessel owner's rights in this case have been fully protected by Lewis' stipulations.
We've guaranteed their right to seek the exclusive jurisdiction of the Federal admiralty court, and in that case their Federal statutory rights are fully protected, but by precluding us from being able to preclude in State court, they are destroying the rights that Congress has conferred upon us in the Jones Act and preserved from the exclusive Federal jurisdiction through the savings clause.
Justice Ginsburg: Well, what have you conceded with respect to the limitation forum, because there'll be nothing... there'll be nothing... the only... this is the only lawsuit, this Jones... this is the only claim, so they have a shell of an action, but there's nothing to fill the shell because this case will go on in the State court, there'll be a decision, there's more than enough money in the till to pay the judgment, so what have you conceded by letting them keep the limitation action?
Mr. Dripps: Justice Ginsburg, what we've done is guaranteed that their limitation action will be successful.
They have limited their liability.
They've capped their liability.
Justice Ginsburg: That your... that's your concession, that your claim is for less than the--
Mr. Dripps: Absolutely, although... and I don't think that's necessary, though, to a resolution of the case.
If we look back at the Langnes case, which was a Jones Act case, the Court's decision simply hinged on applying the saving to suitors clause so that both statutory doctrines could be implemented, which is what I'm asking this Court to do now, rather than to pick one in an effort to destroy the other, and that is the goal, I think, of this case.
Justice Souter: --Well, your... what's left of the... what's in the shell, I guess, is a kind of interrorum jurisdiction to, in effect to guarantee the concessions, and it may never have to be... presumably it will never have to be exercised, but you're conceding that it could be.
Mr. Dripps: Justice Souter, that's right.
The... in the event that a State court judgment would be entered in excess of the limitation fund I think they have an absolute right to go back into the Federal court and say, wait a minute, Lewis agreed that in order to get to State court his... our liability would be capped, and at that point the Federal judge would have the right to enter an order limiting their liability.
I don't think there's any dispute about that.
Justice Souter: All right.
To keep it simple, on res judicata they could simply enjoin collection beyond the conceded limitation.
Mr. Dripps: Sure.
Justice Souter: Yes.
Mr. Dripps: But they don't have the right to go beyond capping their liability, which is what they're seeking to do.
They're seeking to shift the forum from the State court, which has been guaranteed to us by Congress, into the Federal court so that the liability and damage determination can be made there, and that's what we say is improper.
Justice Ginsburg: Do I correctly understand the picture on this exoneration that would go on if you... say you did have a collision, would go on in the admiralty forum, that the function is served by the defense that the shipowner can put into the Jones Act claim that is, there was no negligence here, and that is effectively what the exoneration plea would do?
Mr. Dripps: In some ways, Justice Ginsburg.
Now, if I understand the question correctly, I don't believe that the exoneration rule is an incorporation of Congress' allowing them a defense under the Jones Act.
I think that defense has to be taken in the context of the statute, and they can choose to defend and require us to put on our proof of negligence, but only in the context of the forum grant that is given to the employee by Congress.
Justice Ginsburg: From the shipowner's point of view, it's one thing to say the shipowner itself had no involvement in the negligence, it was the other deck hands.
It's a respondeat superior situation.
That's one thing.
Another thing is, there was no negligence by anybody at all, and I thought that that was the equivalent of the exoneration plea, that nobody was negligent at all, as distinguished from, maybe we have respondeat superior liability, but we should be allowed to limit that.
Mr. Dripps: That's true, that is the essence of the exoneration claim, and that's what they want the Federal court to decide.
The two responses to that are, first of all, the Langnes case from this Court essentially held that the exoneration claim was not sufficient to preclude dissolution of the injunction because, as I noted earlier, in Langnes the district court had, in fact, exonerated the vessel owner.
This Court nonetheless required the injunction to be dissolved and the case to go back to State court.
Justice Ginsburg: Well, that I don't follow, because if there was a determination of exoneration, that is, no liability at all, not limited but no liability at all, why wouldn't that have been preclusive in State court?
Mr. Dripps: If it had not been reversed by this Court it would have been preclusive.
Justice Ginsburg: Ah.
Mr. Dripps: But this Court said that determination has to be made in State court and not in Federal court.
Justice Ginsburg: What determination?
Mr. Dripps: The determination of liability and damage, and once it's made in State court, it is preclusive of the exoneration claim in Federal court under the rule of the Benefactor, which this Court decided in 1880.
Justice Ginsburg: But if the Federal court had made the determination first, and that... and hadn't been reversed, then that would be preclusive.
Mr. Dripps: Yes, it would, but the Court reversed it because the determination should have been made by the State court in the first instance rather than the Federal court, and that's the essence of the Langnes holding, that we're implementing the Jones Act's grant to the seamen, preserved through the saving to suitors clause, of the right to proceed in State court, rather than be forced into Federal court by the shipowner, and that holding was made without the presence of any stipulations regarding res judicata, and this Court said that the case will go back to State court for that determination.
Justice Ginsburg: Well, that sounds like, entirely in sync with my suggestion that the defense of no negligence at all, which can be put into the Jones Act proceeding, is the equivalent of getting, in the Federal court, exoneration.
Mr. Dripps: --That's absolutely true, Justice Ginsburg.
They have the right in State court to defend, require the plaintiff to prove negligence, causation, and damage.
They will be getting in the State court the benefit of that defense that they seek to assert in Federal court.
They are not being deprived of any rights by proceeding in State court, and their Federal right of limitation will be guaranteed to them by the stipulations that we filed waiving res judicata with regard to the issue of limited liability and stipulating to the exclusive jurisdiction of the district court to decide the limitation issues.
Those protect their Federal rights, and their right to defend and require proof of negligence and the other elements of the plaintiff's case are all things they can assert in the State court.
The other reason that the exoneration rule should not be permitted to control disposition of this case and we're required to be brought into Federal court is because at that point we do get into the rules enabling analysis and I simply wanted to mention the Henderson case that this Court decided in 1996, which set forth four factors that the Court considers in determining whether or not a provision is substantive or procedural.
Rule (f) meets each and every one of those.
The Henderson Court indicated that the factors are, who may sue, which is answered by rule (f)(1), which says any vessel owner, on what claims, the amount of all demands in conflict, tort or otherwise, rule (f)(2), for what relief, exoneration, or limitation from liability under rule (f)(2), and within what limitations period, not later than 6 months after receipt of a written notice of--
Chief Justice Rehnquist: When you say it meets every test.
It meets every test for being procedural, is that what you're saying?
Mr. Dripps: --For being substantive.
Chief Justice Rehnquist: For being substantive?
Mr. Dripps: Yes, Your Honor, and that's why I say that if the Court adopts the analysis that the respondent has offered, then we need to grapple with the Rules Enabling Act analysis, and in that case the provision of conferring a substantive right to sue by rule violates the Rules Enabling Act because it conflicts with the congressional statutory scheme of the Jones Act by abridging or modifying Lewis' right to sue in State court and enlarges the vessel owner's right to seek limited liability in Federal court.
Justice Ginsburg: I'm not following your argument to this extent.
I thought all this came up originally not because of statutes, but because of court made doctrine in admiralty, and then that doctrine gets reflected eventually into rule (f).
It's not a like a rule in place of a statute, where I would follow your argument very well, but it is taking what was, indeed, substantive law, but substantive law originally made up by courts.
Mr. Dripps: Well, normally, Justice Ginsburg, I would agree with you that that is what the rules do.
In this particular case, however, this Court's decision in the Benefactor specifically said that the fifty sixth rule in admiralty, which was the predecessor of current rule (f), was designed to circumvent the prevailing English rule requiring the vessel owner to admit liability.
So in fact the rule has done the opposite of what you suggest.
It has created a substantive right to sue for a determination of liability and damage, where in fact the common law, or the prevailing admiralty law, required the opposite, that the vessel owner admit liability, and that was the decision specifically of this Court.
If there are no further questions, Mr. Chief Justice, I'd like to reserve the balance of my time.
Argument of James V. O'Brien
Chief Justice Rehnquist: Very well, Mr. Dripps.
Mr. O'Brien, we'll hear from you.
Mr. O'Brien: Mr. Chief Justice, and may it please the Court--
The issue that is presented on certiorari grant from this Court in this case is whether the district court in this case abused its discretion in lifting the injunction that was imposed upon the filing of the limitation of liability case and allowing the claimant to proceed with a nonjury case in Illinois State court, where he was a single claimant in the limitation and where the fund was, at least after the initial filing, deemed adequate.
The Eighth Circuit answered this question in the affirmative, and held that since the remedy sought by the claimant, a nonjury trial, was already available in the limitation of liability court, that there was no saved remedy.
In other words, there was no statutory right of the claimant implicated, and therefore the Federal district court in the limitation case was bound by its grant of jurisdiction under Article 3, section 2--
Chief Justice Rehnquist: Well, do you think the district court's view would have been different had the right to jury trial not been given up?
Mr. O'Brien: --Mr. Chief Justice, our position in the case, and I believe the position of the Eighth Circuit was that if a jury trial had been requested, then a remedy that was not available in the district court would have been sought and therefore a saved remedy would have been sought, and therefore the stay, assuming the single claimant exception and the adequate fund exceptions were met, would have been allowed to proceed in Illinois State court.
Chief Justice Rehnquist: So this case hinges, in your view at any rate, on the fact that the plaintiff had waived the right to a jury trial.
Mr. O'Brien: To a large extent it does.
If I may--
Justice Ginsburg: You say that because you say, well then he doesn't need the State forum because he can get a nonjury trial in admiralty, but wouldn't one say equally, once the Jones Act plaintiff stipulates that he's not going to seek more than X amount of damages, you don't need the limitation proceeding?
Mr. O'Brien: --Our position takes a step back, and our position looks back at the original origin of the single claimant exception that was set forth by this Court in Langnes v. Green, and what we say is that we know a number of things about what this Court... what the district courts have to do under the Limitation of Liability Act.
Unlike some of the cases cited by the petitioner, where there is no limitation case, we know that when there's a limitation case on file there is exclusive Federal jurisdiction, and we know that the district courts are therefore bound to... exclusively to administer the rights of the limitation claimant and all... the limitation petitioner, excuse me, and all those claimants who make claim.
The only way for any given claimant to exit from the limitation case is if they can, for lack of a better word, trump the limitation petitioner's rights to an exclusive determination in the Federal court with some statutory right, and in this case that would be... the source of that right would be 28 U.S.C. section 1333, the saving to suitors clause.
Justice Ginsburg: I'd like to back up a little bit, because I don't think I followed you that far down the trail.
That is, as I understand it, the whole reason for being of a limitation action is so that the shipowner will be able to limit the extent of his economic loss to the value of the ship.
Now, once it is certain that that will in fact be the case, that there is no exposure beyond the value of the ship, what function does a limitation proceeding save... serve, other than to block what would ordinarily be a garden variety Jones Act case from proceeding in whatever forum the sailor chooses to sue in?
Mr. O'Brien: --Because the Limitation of Liability Act has more than just to limit liability.
It also has the purpose of allowing an exoneration to be pursued by the shipowner and, indeed, in Langnes v. Green, the seminal case that started this exception, the Court was very clear, this Court was very clear that the limitation court had both the power to decide exoneration and limitation.
Chief Justice Rehnquist: What provision of the limitation act gives you the right to have an exoneration proceeding?
Mr. O'Brien: --Mr. Chief Justice, we believe that the entire act construed by this Court in the Norwich v. Wright case provides that right.
Specifically, section 183, but also read in conjunction with section 185 and the entire statute.
Chief Justice Rehnquist: And where is that in the appendix?
Mr. O'Brien: Well, the--
Chief Justice Rehnquist: I see it's at pages 1 and 2 of the petition for certiorari.
Mr. O'Brien: --Yes, Your Honor.
Well, the statute itself, of course, is in the United States Code, and under section 183 of title 46 the vessel owner is entitled to pursue the limitation of liability, and is--
Chief Justice Rehnquist: But pursuing the limitation of liability is one thing.
Getting an exoneration determination is another.
Mr. O'Brien: --Yes, sir.
Your Honor, going back to Norwich v. Wright, this Court on at least a dozen occasions since 1871 has decided that exoneration is a fundamental right under the statute and is part and parcel of the limitation proceeding.
Justice Ginsburg: Were any of those cases single claimant cases where the fund was adequate to cover the injury, or were they all what one thinks of as limitation case, a rather larger disaster?
Mr. O'Brien: The early cases, Justice Ginsburg, typically involved a petitioner limit after a judgment had already been obtained in a district court.
Indeed, the Norwich case that is the case cited in both briefs, and the original seminal case in limitation liability, involved such a proceeding, and the Benefactor, the second case after Norwich, also involved a shipowner that came in after a finding of liability in the district court.
But when those early decisions came out construing the Limitation of Liability Act, for the first time... it had been passed in 1851... they had to decide what it meant, and there is an extended discussion in Norwich v. Wright about it, and in that case this Court stated that the American Limitation of Liability Act represented a departure from English law, because the English chancery courts, which had earlier heard limitation cases in England, lacked the power to investigate claims in admiralty, and therefore under English admiralty law the shipowner was required to admit liability.
In the American courts, and under the limitation act as construed by this Court in Norwich v. Wright, a determination not only of limitation was undertaken, but also exoneration, and from that time forward--
Justice Stevens: But wasn't that only on the assumption that there was jurisdiction under... just to seek limitation?
As part of the proceeding they could seek exoneration, but was there any case where the only issue was exoneration versus liability?
Mr. O'Brien: --Not per se, Your Honor.
Not per se.
Justice Stevens: And the word exoneration is not in the statute itself, is it?
Mr. O'Brien: It is not found in the statute, although it does state... the statute does state that the vessel owner's liability shall not exceed the value of the vessel--
Justice Scalia: Right, but that's quite different from saying it shall not exist.
Mr. O'Brien: --Well, it also does not deny the district court... the same statute that gives the jurisdiction to decide limitation of liability does not deny to the district court the ability to decide exoneration.
Justice Stevens: But wouldn't all these cases fit together if we simply held that in an appropriate case where the limitation of liability proceeding involves multiple claimants and an original intent to get more than the gross value of the ship, that in such a case, the... among the things the shipowner can do is seek a complete defense of a nonliability?
Wouldn't all the cases fit together if we just held that's where the exoneration is appropriate?
Mr. O'Brien: Well, certainly that's one option.
Justice Stevens: Yes.
Mr. O'Brien: And I... we would certainly urge that on the Court, and I believe it's part of the limitation act that the shipowner should be entitled to seek exoneration in any case in which it seeks a limitation as well.
Chief Justice Rehnquist: The Norwich, for example, under the Norwich was decided long before the Jones act was passed.
Mr. O'Brien: Yes, Your Honor.
Chief Justice Rehnquist: Do you think the Jones Act affects the holding in Norwich in any way?
Mr. O'Brien: We do not.
It's clear that the rights that the seaman has under the Jones Act are subordinate to... in general to the rights of the shipowner to limit liability.
In other words--
Chief Justice Rehnquist: Now, why do you say that?
Mr. O'Brien: --Because... for the reason that it's clear that if it had been a limitation proceeding with multiple claimants in a case where the claims asserted exceeded the value of the vessel--
Chief Justice Rehnquist: Yes, but Langnes says the single claimant is different, does it not?
Mr. O'Brien: --Well, what... Langnes really rests upon three distinct factors.
Langnes says, first you have to have a limitation of liability case.
Langnes says second, you have to have a single claimant, and third you have to have a request for a jury trial.
Those, in our view, are the three pillars upon which that case was decided, and--
Chief Justice Rehnquist: Do you think the request for a jury trial was essential to the holding in Langnes?
Mr. O'Brien: --Your Honor, I do, and the reason is because it's the request for a jury trial that implicates a saved remedy.
The request for a jury trial is what implicates a right under the saving to suitors clause, which in that situation exceeds the interest of the vessel owner in staying in Federal court.
Justice Breyer: As I read it, you're trying... you seem to be trying to make the tail wag the dog.
These early cases say, well, you know, if you're in Federal court, shipowner, trying to limit your liability, because we've had a collision and there are 42,000 plaintiffs and you've got to deal with this and just limit it to the vessel, well, as long as you're there, we'll try out whether you're liable at all.
We'll try out exoneration.
The only reason we're doing that... they didn't do it in England, but the Court says... we say, from time immemorial it was done in every other country, right?
Mr. O'Brien: Yes.
Justice Breyer: --So we'll do it.
But if you're not here, what's the point of doing it, and you're not here if there's a single plaintiff or if there's an adequate fund.
I mean, the reasoning of it would seem to me to be, if you're not here, and you can't get here because there's an adequate fund, for example, there's no reason for us to snatch the issue of liability away from the State court.
Mr. O'Brien: Justice Breyer, I think it's key to look at Langnes v. Green and see in that case that this Court stated emphatically that the procedure under the Limitation of Liability Act was to first look at exoneration and then, if liability was found, to look at limitation issues.
Justice Breyer: Of course that's true, provided that you are properly in the Federal court limiting your liability.
My point is, suppose you're not, as is true here, for the reason that you already have an adequate fund.
You have no basis to get into the Federal court if there's an adequate fund.
Your only basis could be that we want to exonerate, but exoneration is there in case you're in anyway.
Mr. O'Brien: Well, let me state that initially... the initial claim filed in this case did exceed the limitation fund, and so that at the time the vessel owner instituted the proceeding, that was certainly in play and, indeed, when the initial claim was filed--
Justice Ginsburg: How did you know that, because the Federal suit was filed second.
You had your limitation... if I remember the chronology right, you sought limitation, and then a week later the Jones Act case was started.
Mr. O'Brien: --The short answer is that we know in this jurisdiction, where the State court suit could have been brought, that tripping over a wire could lead to a judgment in excess of the value of the vessel, and so therefore the--
Justice Ginsburg: But this plaintiff--
Mr. O'Brien: --vessel owner had a good faith reason for pursuing limitation.
Justice Ginsburg: --This plaintiff hadn't made any such claim then.
You're basing it on other claims that were made against this shipowner?
Mr. O'Brien: No.
I believe the vessel owner, based on its experience, and based on its knowledge of the situation, felt that an accident had occurred during this voyage which might make its vindication under the Limitation of Liability Act a realistic legal possibility, and so a petition was filed.
There's no rule that prevents a vessel owner from coming in before the claims are filed, just as there's no rule that prevents a vessel owner from coming in while claims are being filed or after they're filed, so the timing of the filing of the limitation of liability proceeding is really--
Justice Ginsburg: I brought it up in answer to your assertion, we knew that he originally had a claim in excess of the value of the vessel.
You didn't know that specifically with respect to this plaintiff.
Mr. O'Brien: --Well, knowing, I think, and having a good faith belief that the proceeding might be in the vessel owner's interest are too different things.
I don't think there was any way to predict the future at the time the petition was filed, but certainly--
Justice Ginsburg: But you didn't have to make any prediction a week later.
Mr. O'Brien: --That's true, because we shortly thereafter had a claim in excess of the value of the vessel.
Justice Ginsburg: And the prayer for relief was for in excess of 450,000 dollars?
Mr. O'Brien: Yes.
By stipulation, I think in the joint appendix at 69 the record reflects that the initial claim was in excess of the value of the vessel, and by stipulation--
Justice Stevens: The question really is whether that did not satisfy the purposes of the limitation of liability proceeding.
Mr. O'Brien: --Well, Justice Stevens, our position is that once the jurisdiction of the limitation code is validly invoked, which it was in this case, that jurisdiction attaches, and under the Constitution and laws the district court is obligated to decide all those issues, and the only way to escape... for the claimant in this case to escape that jurisdiction is to point to a definite statutory right that allows him to defeat Federal jurisdiction.
Now, in this case it would be--
Justice Stevens: But the statutory right that he's talking about, there's two ways to define it.
One is the savings to suitors clause itself is a statutory right.
He's entitled to invoke that, and it doesn't really say, only if he's seeking a jury trial.
Mr. O'Brien: --That's true, and... but we know a number of things about the saving to suitors clause.
We know that the rights under it are not absolute, and we know that because, number 1, a Jones Act claimant can have his case... excuse me.
A limitation claimant, not a Jones Act claimant, can have his case removed to Federal court.
We know that the saving to suitors clause doesn't protect the right of a bank, say, to sue a lender or a debtor on a first preferred ship mortgage.
We know those kinds of cases are committed to the Federal court and can't be brought in a State court.
Chief Justice Rehnquist: Well, what about the practical advantage of a plaintiff who thinks he's going to get a better verdict in Madison County, Illinois, than he will in the Federal District Court for the Eastern District of Missouri?
Mr. O'Brien: Well, that is his right, to sue where he thinks he can obtain the best verdict, unless there's some kind of illegal forum shopping going on, but that really is what this case is all about.
Chief Justice Rehnquist: I thought so.
Mr. O'Brien: The vessel owner is entitled to pursue limitation where it believes the purposes of the act will be furthered, in other words, where it sees that it has an opportunity to invoke exclusive Federal jurisdiction to adjudicate the rights from some accident occurring... occurring during some voyage.
And if I may address a point from--
Justice Ginsburg: Do I understand you, then, that the vessel owner in every case where the sailor chooses to sue in State court and not ask for a jury trial the vessel owner can always pick the forum instead by filing a limitation proceeding?
Mr. O'Brien: --Unless he pursues a right, the claimant pursues a right that is preserved under the saving to suitors clause I would agree with that.
Justice Ginsburg: Well, what... you told me that the only thing that's preserved is jury trial, not the Jones Act claim, which is what I would have thought that... I would have thought, apart from entertaining your position that it's not the Jones Act claim, and the choice of forum that Congress has provided, but it's only the device of jury trial.
Mr. O'Brien: Well, it's really... what it is is... let me refine my comment.
What I'm really saying is that if the remedy is already available in the Federal court, and what the Eighth Circuit decided was that if the remedy's already available in the Federal court in the limitation proceeding, there is no saved remedy to pursue elsewhere, and so the... I think the issue for this Court is not so much jury versus nonjury in the abstract sense.
The question is whether or not the specific remedy requested is available in the Federal court where exclusive jurisdiction is found.
Justice Ginsburg: Well, why isn't the remedy the courthouse that's closest to my home that's most convenient for me?
Why isn't that the remedy that is saved, the ability to choose, irremovably, the venue?
Mr. O'Brien: Well, the answer to that is that the rights under the saving to suitors clause are not absolute, and they never have been by this... held so by this Court or by any other Federal court.
They're always going to be subject--
Justice Ginsburg: But your position was that that wasn't saved at all, because you could get a nonjury trial in the admiralty forum.
Mr. O'Brien: --Well, I don't think the decision whether or not the nonjury trial is saved or not is necessary to this Court's decision, nor was it addressed specifically... in fact, it was reserved specifically by the Eighth Circuit.
You don't need to get that far, and the reason is because under the rubric adopted by the Eighth Circuit, if the remedy sought is available already in the limitation court, the claimant's not allowed to go back, and it was already available, i.e. a nonjury trial, so the court below never needed to address whether a nonjury trial was specifically a saved remedy or not, nor does this Court need to decide that for--
Justice Ginsburg: So practically what the position you're urging on us comes down to is that the Jones Act plaintiff can get his choice of forum as long as he insists on having a trial by jury.
If he doesn't insist on having a trial by jury, he doesn't preserve his right to choose the forum.
Mr. O'Brien: --That's correct.
Justice Ginsburg: That's your position?
Mr. O'Brien: That's correct.
Justice Breyer: Why would that be?
I mean, let's suppose that a Jones Act plaintiff does... could go... he could get into Federal admiralty court.
He could get in, or he could do what he'd prefer to do, which is to file in the State.
Why shouldn't he be able to file in the State unless there's some Federal reason that prefers the Federal tribunal?
Mr. O'Brien: Well, the Federal reason that prefers the Federal--
Justice Breyer: No, no, I mean, you're making both arguments.
One argument is that there is a Federal reason and the Federal reason is the exoneration, and that's countered with the argument that there is no Federal reason where there isn't an independent reason for being in the limitation action, all right, so I'm taking the other part.
Let's assume there is no Federal reason.
If there is no Federal reason... he has the right come in the door, but there's no Federal preference.
Why shouldn't he be able to go to the State court?
Mr. O'Brien: --Well, Justice Breyer, I... number 1... my first response is, I don't believe that's our case.
Justice Breyer: All right, yes.
Mr. O'Brien: We do have a Federal reason for being here.
Justice Breyer: Okay.
Mr. O'Brien: And the second response--
Justice Breyer: But if you didn't, if there were no reason favoring the Federal court, then would you say, give him his choice?
Mr. O'Brien: --Well, I suppose that would be true, except that Congress has spoken to the situation when they've committed limitation of liability acts to the exclusive jurisdiction of the Federal courts.
Justice Breyer: Okay, but if you're prepared to go that far, then the case turns on whether there is a Federal reason, and the Federal reason you say is exoneration, so I understand that.
And then I'm back to the question I had before, which I'm not sure I had a satisfactory answer to totally, that really what this exoneration is is the tail and it follows the dog into the Federal court, and the only reason it's ever there was, historically in England they did this, what the courts thought were absurd, to force the shipowner to give up his right to exoneration in order to get in Federal court, and our court years ago said that's silly, no other country does that and we're not going to do it.
Mr. O'Brien: Well, I would prefer to think of exoneration not as the tail, perhaps the other set of legs of the same dog.
I think that the right to exonerate is half of what you have under the statute.
The right to limit is the other half of what you have under the statute, and one can't be divorced from the other.
Justice Scalia: You have the statute, but it doesn't appear in the statute, and what is your response to the fact that if the only reference to it is in the Federal rules, that's ultra vires?
Mr. O'Brien: --Well, my response, Justice Scalia, is 130 years of decisions from this Court and others, at least a half dozen cases from this Court holding that in a proceeding under the Limitation of Liability Act itself now the court determines exoneration as well as limitation.
It would be almost impossible for this Court to write exoneration out unless it were prepared to overrule all those cases.
Chief Justice Rehnquist: Well now, are you saying that in the single claimant, stipulated claim less than the value of the vessel, we would have to overrule cases in order to rule against you here?
Mr. O'Brien: No.
Chief Justice Rehnquist: Well, I thought that's what you just did say.
Mr. O'Brien: No.
What I'm saying is, what Langnes v. Green tells us, and what Lake... which is the single claimant exception case, and what Lake Tankers v. Henn tells us, which is the multiple claimant case, or, excuse me, the adequate fund case, what those cases tell us is that when the claimant seeks a jury trial that it has been deprived of him in the limitation court, that under those circumstances there is enough of a... there's enough rights there for that claimant to trump the shipowner's right to be in Federal court, and they will then allow him to go back to State court assuming that on the one hand there's a single claimant, or on the other hand there's an adequate fund.
But you can't look back at Lake Tankers v. Henn or at Langnes v. Green and write out of the Court's decisions the references to a jury trial being requested by the plaintiff.
That is what in my view was the, really the moving force in those decisions that allowed those plaintiffs to go back.
Justice Stevens: Well, of course, can't you just read that as the... this is a particularly strong reason for vindicating the plaintiff's right to choose his own forum, that in one forum he gets a jury and in the other he doesn't?
That makes it a very appealing case, but I don't think you can necessarily deduce from that the conclusion that he wouldn't also have a right to pick the forum of his own choice without that feature.
Mr. O'Brien: Justice Stevens, I don't think we'd be here if the courts had routinely held that you got a right to a forum.
What the courts have held, this Court and the Federal courts, and what the commentators have talked about for decades, is the right to a remedy, and the right to a remedy does not necessarily entitle him to go to a State court.
It entitles him to a remedy.
Justice Stevens: Well, he gets the same remedy whether it's a jury trial or a bench trial.
He's seeking damages.
That's the remedy.
Mr. O'Brien: Well, the remedy, as the Court stated in Shilendez v. Luckenbach, the remedy is the means employed to seek the redress and in our view, and I think the cases bear this out, a jury trial is a specific form of remedy, a nonjury trial is another form of remedy.
It's the means employed, and I think that there's really no question under the case law that a jury trial is in a class separate from a nonjury trial as far as the saving to suitors clause goes.
They're different remedies.
Now, they both seek judgments, but in a different way.
If I may briefly address the rule (f) argument, the position urged by petitioner that rule (f) should be declared invalid is in our view extreme and not warranted by the case law.
This Court in the Henderson case did not announce a general test for the determination of when a Rules Enabling Act rule would be ultra vires.
It instead decided that rule 4 trumped the Suits in Admiralty Act provision requiring forthwith service of process on the basis that the rule was purely procedural.
But if I may, under rule (f), three of the four items that petitioner urges are contained in rule (f) and that mandate that it's a substantive rule are found in the limitations statute itself, namely, who may sue, when they may sue, and the object of the suit and so therefore, even under the test that petitioner cites, rule (f) clearly does not meet the standard of a substantive rule that would be struck down under the Rules Enabling Act.
Indeed, the limitation act addresses those items.
And I turn again back to the original decisions by this Court in the Benefactor, in the Norwich v. Wright case, in which this Court had occasion to construe the act and, if you follow the language closely of those decisions the Court was not construing rules that it promulgated.
The Court was construing rules that it promulgated.
The Court was construing the act itself, and the original admiralty rules that were promulgated by this Court in the Norwich case, the original 50-some admiralty rules from 1871, were rules, but they were in themselves interpretations of the act as seen by this Court, and they included the right to exoneration.
Now, if the limitation petitioner can come into court, and if he can pursue a limit... exoneration as well as limitation, then by definition the Court has exclusive jurisdiction over both of those subject matters and the limitation claimant, in this case the Jones Act seaman, can return to State court only if he demonstrates that the remedy he wants is not available in the Federal court.
If there are no further questions--
Chief Justice Rehnquist: Thank you, Mr. O'Brien.
Mr. O'Brien: --Thank you, Your Honor.
Rebuttal of Roy C. Dripps, III
Chief Justice Rehnquist: Mr. Dripps, you have 6 minutes remaining.
Mr. Dripps: Thank you, Mr. Chief Justice.
Mr. O'Brien indicated that three of the four items that are in rule (f) are in the statute.
What he neglected to mention is, as what Justice Scalia asked earlier, the one that's not in the statute is the one that's critical to his analysis, which is the exoneration provision, and that's not in the statute.
Mr. O'Brien relies heavily on the Benefactor, and I would simply refer the Court to the quote from the Benefactor.
It's at 103 U.S. 241.
It's at page 16 of the reply brief, and the Court said that hence, this Court, in preparing the rules of procedure for a limitation of liability, deemed it proper to allow a party seeking such limitation to contest any liability whatever.
That is not the statement of statutory construction.
That is a statement of legislative intent.
We're adopting these rules so that the party can contest the liability.
Now, that is exactly what is forbidden by the Rules Enabling Act, yet that is what this Court said it was doing in 1880.
Justice Stevens and Justice Breyer both asked about, in essence, whether there would be a right to a pure exoneration claim in Federal court, and I do want to point out that both the Fifth Circuit in the Fect v. Murkowski case and the Seventh Circuit in the Joyce v. Joyce case have said no, that unless there is a viable claim for limitation you cannot come in and ask for exoneration, and I think that is the rule that this Court should adopt.
The Langnes decision, as Justice Stevens noted--
Justice Stevens: Well, I... go ahead.
That's all right.
Mr. Dripps: --as Justice Stevens noted does not require a jury trial, but it simply said that a jury trial is one aspect that makes the State court forum desirable, and that's part of the Jones Act remedy to allow the injured employee that option of choosing either State or Federal court, and whether or not to have a jury trial in either forum.
To get to the respondent's not otherwise available test, this Court is going to have to say that the saving clause does not protect statutory remedies, particularly the statutory remedy afforded by the Jones Act, which allows the employee to choose the forum that the case will be tried in.
That, however, is exactly what the saving clause was designed to do, and that is why this Court should reverse the Eighth Circuit's decision and reinstate the decision of the district court dissolving the injunction.
Chief Justice Rehnquist: Thank you, Mr. Dripps.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 99-1331, Lewis versus Lewis & Clark Marine Inc. will be announced by Justice O’Connor.
Argument of Justice O’connor
Mr. O’connor: This case is here on writ of certiorari to the United States Court of Appeals for the Eighth Circuit.
The petitioner James Lewis claims he was injured while on board the respondent Lewis & Clark ship while working as a deckhand.
The petitioner sued the respondent for his injuries in the Illinois State Court.
The petitioner did not ask for a jury trial.
In anticipation of petitioner’s lawsuit, the respondent ship owner filed a complaint in Federal District Court under the Limitation of Liability Act.
The Limitation Act grants vessel owners the right to seek limited liability in Federal Court for claims of damage aboard their vessels.
Another federal statute grants exclusive jurisdiction to Federal Courts over admiralty and maritime claims, but that statute also has a clause that saves the suitors like petitioners, their choice of remedies including remedies in the State Court.
The Federal District Court noted the potential tension between the Limitation Act and the saving to suitors clause.
The District Court eventually allowed the petitioner to proceed with his claims in State Court after the petitioner provided certain stipulations and waivers assuring the District Court that respondent’s right to seek limitation of liability in Federal Court would be protected.
The Court of Appeals for the Eighth Circuit reversed the District Court, concluding that litigation should have continued in the Federal Court.
The Court of Appeals held that respondent had a right to ask for exoneration from liability not just limitation of liability in Federal Court.
The Court of Appeals also held that because petitioner did not ask for a jury trial in State Court, he had not sought a saved remedy under the saving to suitors clause.
In an opinion filed with Clerk of the Court today, we reverse the judgment of the Eighth Circuit.
As the courts although recognized there is tension between the Limitation Act and the saving to suitors clause.
The Limitation Act allows vessel owners like respondent to seek limited liability in Federal Court.
The saving to suitors clause gives suitors like petitioner their choice of remedy including remedies in State Court.
The tension arises when the vessel owner wants to proceed in Federal Court and the injured suitor wants to proceed in State Court.
We believe that District Court properly resolved that tension in this case by allowing the petitioner to proceed with his claims in State Court after having protected respondent’s right to seek limited liability.
The Court of Appeals contrary conclusion had two defects we think: first, the Limitation Act does not give vessel owners the right to seek exoneration from liability where limitation of liability is not at issue; second, suitors like the petitioner have the right to their choice of remedies in State Court not just the choice of a jury trial.
The decision of the Court is unanimous.