The opinion of the court was delivered by: Sweet, District Judge.
Plaintiffs Poling Transportation Corp. and Motor Vessel Poling Bros.
No. 7, Inc. (the "Poling Entities") brought this limitation action under
the admiralty and maritime jurisdiction of this court pursuant to Rule
9(h) and Supplemental Rule F, Fed. R.Civ.P. The individual claimants
Antonio Coca, Sylvia Coca and David Theophilous (the "Individual
Claimants") made timely requests for a jury trial pursuant to Rule 38,
Fed.R.Civ.P, which the Poling Entities and claimants Long Island Railroad
Company ("LIRR") and the Metropolitan Transit Authority ("MTA") have
opposed. For the following reasons, the Individual Claimants' request that
a jury be empaneled is granted.
The Poling Entities are corporations organized and existing under the
laws of the State of New York. At all times relevant to this action, the
Poling Entities were the registered and pro hac vice owners of the Motor
Vessel Poling Bros. No. 7 (the "Vessel"). The Vessel is a United States
documented, diesel-driven steel tanker.
The MTA is a public benefit corporation organized and existing under
the laws of the State of New York.
The LIRR is a public benefit corporation organized and existing under
the laws of the State of New York. It is a subsidiary of the MTA with its
own corporate status.
On or about December 27, 1986, the Vessel delivered and discharged her
cargo of no-lead premium gasoline to the Ditmas Terminal at Newton Creek
in Long Island City, New York, which is owned and operated by Ditmas Oil
Associates, Inc. ("Ditmas"), a New York corporation. While the Vessel was
discharging her cargo, the shore tank receiving the gasoline overflowed
and a spill of approximately 12,000 gallons eventually seeped out into
the Ditmas Terminal and the adjacent properties. Shortly thereafter,
there was a fire and explosion. The source igniting this fire is
currently in dispute before this court.
The Individual Claimants were injured and the property of various other
claimants (the "Other Claimants")*fn1 was damaged as a result of the
explosion and fire. The Individual Claimants commenced actions against
the Poling Entities, the LIRR, the MTA, and the Other Claimants in New
York State Supreme Court, Bronx and Queens Counties, for injuries,
economic loss and loss of services allegedly sustained due to the fire.
The Other Claimants brought state court actions for property damage
against the Poling Entities, the LIRR, and the MTA.
Upon application by the vessel owner, see Supplemental Rule F(3),
Fed.R.Civ.P., the district court may conduct a proceeding to determine
whether exoneration or limitation is appropriate, pursuant to its
jurisdiction under § 1333. Section 1333 provides that:
The district court shall have original
jurisdiction, exclusive of the courts of the States
(1) Any civil case of admiralty or maritime
jurisdiction, saving to suitors in all cases all other
remedies to which they are otherwise entitled.
Once the complaint seeking limitation or exoneration is filed, the
district court "shall enjoin the further prosecution of any action or
proceeding against the plaintiff or the plaintiff's property with respect
to any claim subject to limitation in the action." Supplemental Rule
F(3), Fed.R.Civ.P. Thereafter, the district court notifies all potential
claimants to file their claims against the shipowner in the admiralty
court within a specified time period.
Sitting in admiralty without a jury, the district court then conducts a
proceeding, known as a "concursus," in which it determines whether
limitation or exoneration is appropriate. The court inquires as to
whether there was negligence and, if so, whether it was without the
privity or knowledge of the vessel owner. If the court finds no privity or
knowledge, limitation is granted, and the court must determine how the
limitation fund should be allocated, In re Complaint of Dammers &
Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d
Cir. 1988) (citing Universal Towing Co. v. Barrale, 595 F.2d 414, 417
(8th Cir. 1979)). If limitation is denied, the district court may
dissolve the injunction against other proceedings, thus permitting
claimants to pursue their claims outside the limitation proceeding. Red
Star Towing & Transp. Co. v. The "Ming Giant", 552 F. Supp. 367, 371
(S.D.N.Y. 1982) (hereinafter "Ming Giant").
The Limitation Act is "`directed at misfortunes at sea where the losses
incurred exceed the value of the vessel and the pending freight.'"
Dammers, 836 F.2d at 754-55 (quoting Lake Tankers Corp. v. Henn,
354 U.S. 147, 150-51, 77 S.Ct. 1269, 1271-72, 1 L.Ed.2d 1246 (1957)). The
concursus, and concomitant stay of all other proceedings against the
owner of a vessel, is the means by which the admiralty court can achieve
the "primary purpose of the Act," namely, "`to provide a marshalling of
assets [and] the distribution pro rata of an inadequate fund among
claimants, none of whom can be paid in full.'" Id. at 755 (quoting In re
Moran Transp. Corp., 185 F.2d 386, 389 (2d Cir. 1950), cert. denied
340 U.S. 953, 71 S.Ct. 573, 95 L.Ed. 687 (1951)).
II. Conflict between Admiralty and "Saving to Suitors" Clause of
Because there is no right to a jury trial in actions instituted in
admiralty, Fitzgerald v. United States Lines Co.,
, 20, 83
S.Ct. 1646, 1650, 10 L.Ed, 2d 720 (1963); Waring v. Clarke, 46 U.S. (5
How.) 441, 458-60, 12 L.Ed. 226 (1847); In re Complaint of Berkley Curtis
Bay Co., 569 F. Supp. 1491, 1493 (S.D.N.Y.), aff'd sub nom., Berkley
Curtis Bay Co. v. American Dredging Co.,
(2d Cir. 1983),
, 80 L.Ed.2d 184 (1984); see
also Rule 38(e), Fed.R.Civ.P. ("These rules shall not be construed to
create a right to trial by jury of the issues in an admiralty or maritime
claim. . . ."), and because the claimants are enjoined from proceeding in
other forums once a limitation proceeding is commenced, this procedure
necessarily denies claimants their right to pursue common law claims
before a jury. See Dammers, 836 F.2d at 755. When considered alongside
the "saving to suitors" clause of § 1333, which provides that the
exercise of admiralty jurisdiction will not deny suitors the right to
common law remedies "to which they are otherwise entitled," this result
gives rise to the "recurring and inherent conflict in admiralty law"
between the nonjury admiralty tradition and a claimant's right to jury
trial. Id. at 754; see Berkley Curtis, 569 F. Supp. at 1494.
A. Exceptional Circumstances Obviating Need for Concursus
There are two situations in which a concursus will not be necessary,
and in which the exclusive jurisdiction of the admiralty court hence must
yield and allow a claimant to pursue his claim outside the limitation
proceeding. First, if the value of the vessel and her cargo (i.e., the
limitation fund) exceeds the value of all claims against it, no concursus
is necessary and the claimants may proceed in other forums. Lake Tankers
Corp. v. Henn, 354 U.S. 147, 77 S.Ct. 1269, 1 L.Ed.2d 1246 (1957);
Dammers, 836 F.2d at 755; see also In re Complaint of Falkiner,
716 F. Supp. 895, 901 (E.D.Va. 1988). Second, where there is a "lone
claimant" seeking to recover in excess of the limitation fund, the
admiralty court must lift the stay, providing that the claimant concedes
the admiralty court's exclusive jurisdiction to determine all issues
relating to the limitation of liability. Dammers, 836 F.2d at 755.
To qualify for the latter exception, the claimant must file certain
protective stipulations to safeguard the shipowner against exposure to
liability in excess of the vessel and its cargo if limitation ultimately
is found appropriate. The claimant must stipulate that the value of the
limitation fund is the value of the vessel and its cargo; that the state
court judgment will not be given res judicata effect; and that the
district court has exclusive jurisdiction to determine all issues
concerning the right of the shipowner to limit liability. Id. at 757-58;
see G. Gilmore & C. Black, Jr., The Law of Admiralty § 10-19, at 871
(2d ed. 1975); T. Schoenbaum, Admiralty and Maritime Law § 14-5, at
The Second Circuit has held that the "lone claimant" exception also
encompasses a technically "multiple claimant" situation, such as one in
which there is a "reasonable prospect of claims for indemnification,"
where adequate stipulations are filed to ensure that the shipowner in no
event will face liability in excess of the limitation fund if limitation
is granted. Dammers, 836 F.2d at 759. In that case, the court "must take
all steps necessary to assure that claimants are allowed to pursue their
common law remedies in accordance with the `saving to suitors' clause."
Id. "The shipowner, so long as his claim of limited liability is not
jeopardized, is subject to all common law remedies available against
other parties in damage actions." Lake Tankers, 354 U.S. at 152-53, 77
S.Ct. at 1272-73.
The instant case falls under neither of these exceptions. Here, the
potential claims far exceed the purported limitation fund of approximately
$384,000. Moreover, the various claimants have not provided adequate
stipulations to bring the case within the "lone claimant" exception as
interpreted in Dammers. Nevertheless, the policy driving the two
exceptions is instructive in analyzing the issue posed today. That
policy, of course, is to protect the vessel owner against the enforcement
of potential claims in excess of the limitation fund, if limitation is
granted, by assuring that all claims against the fund are frozen until
the limitation question is resolved.
B. Jury Trial Within Concursus: Non-Admiralty Claims with
Independent Basis of Federal Jurisdiction
Because concursus is necessary here, the question becomes, is there a
way to preserve a claimant's right to its common law remedies within the
Despite some division on the question of whether the limitation issues
should go to the jury or remain for the court, compare, e.g., Ming Giant
(all questions potentially for jury) with Newton v. Shipman, 718 F.2d 959,
964 n. 5 (9th Cir. 1983) (Jones Act claim to be tried by jury at same
time as limitation issue tried by court) and Weeks v. Reliance Inc. Co.
of New York, 81 Civ. 3479 (CSH) (1985 WL 462) (S.D.N.Y. Mar. 28, 1985)
(questioning propriety of Ming Giant decision to commit limitation
aspects of case to jury), courts within and without this circuit have
held that where a claim with independent jurisdictional basis normally
carrying a jury right is joined with admiralty claims arising out of the
same transaction or occurrence, at least the nonadmiralty claim may be
tried to the jury.
See, e.g., Fitzgerald v. United States Lines Co, 374 U.S. 16, 20-21, 83
S.Ct. 1646, 1650, 10 L.Ed.2d 720 (1963) (Jones Act); Ming Giant, 552 F.
Supp. at 371 (citations omitted) (emphasis added) (Jones Act and Death on
the High Seas Act); Zrncevich v. Blue Hawaii Enters., Inc.,
738 F. Supp. 350, 358 (D.Hawaii 1990) (Jones Act); Berkley Curtis, 569
F. Supp. at 1493-94 (Jones Act and diversity).
This result appears to be motivated by two considerations. The first of
these is the importance of accommodating both the admiralty tradition and
the right to jury trial of common law claims where possible. See, e.g.,
Dammers, 836 F.2d at 760 ("admiralty courts must strive whenever possible
to promote the policies underlying both provisions"); cf. Berkley
Curtis, 569 F. Supp. at 1494 ("Where the nonjury admiralty tradition and
a plaintiff's jury right conflict, the jury right must prevail."). The
second consideration is judicial economy. Noting that no constitutional
provision, statute, or federal rule forbids jury trials in admiralty, one
court has reasoned that where the claimant is entitled to a jury trial on
its non-admiralty claim, "[o]nly one trier of fact should be used for the
trial of what is essentially one lawsuit to settle one claim split
conceptually into separate parts because of historical developments" in
the interest of putting an end to "such an unfortunate, outdated, and
wasteful manner of trying these cases." Fitzgerald, 374 U.S. at 20-21, 83
S.Ct. at 1650. This is especially true where the liability and damage
claims involve an apportionment of liability among various parties so
that "they could not [be] conveniently severed for trial to separate
factfinders or tried simultaneously to two factfinders with likelihood of
different verdicts." Berkley Curtis, 569 F. Supp. at 1494-95; see also
Ming Giant, 552 F. Supp. at 374.
C. Jury Trial Within Concursus: Pendent Claims with No Independent
Basis of Federal Jurisdiction
As Poling makes abundantly clear, those cases are factually
distinguishable because the non-admiralty claims here have no
"independent jurisdictional basis normally carrying a jury right."
A similar situation arose in In re Complaint of Sheen, 709 F. Supp. 1123
(S.D.Fla. 1989). There, the plaintiff boatowner, Sheen, filed a complaint
seeking exoneration from or limitation of liability pursuant to §
183. Simpkin, who had suffered personal injuries on the boat, filed a
claim praying for the denial of limitation and damages. Because Simpkin's
claim exceeded the purported limitation fund and no stipulations were
filed to cover potential contribution claims, neither of the two
exceptions obtained. Furthermore, although not discussed explicitly by
the court, it appears that the non-admiralty claims carried no
independent basis of federal jurisdiction. See id. at 1126 & n. 2.
The court decided to determine the limitation issues first while
keeping the stay in effect. Following the resolution of the limitation
proceeding, the court would lift the stay. The court reasoned that:
This mechanism satisfies the purposes behind both
legislative directives [i.e., of the Limitation Act
and the "saving to suitors" clause]. In essence, the
federal court necessarily determines both the
existence of negligence and limitation, a decision
that satisfies the Limitation Act's requirements.
Because the claimant is then free to have a state
court, even a state jury, determine relative degrees
of fault and damages, the congressional purposes
behind the "saving to suitors" clause are somewhat
fulfilled. Little, if any, judicial inefficiency
results, for the determination of the existence of
negligence would not have to be made twice because
this court's finding must be entitled to res judicata
effect. The subsequent court need only find if
additional parties not joined in the federal action
are at fault . . ., the relative degrees of fault
amongst the tort feasors, and damages.
Id. at 1126 n. 2.
The Ninth Circuit adopted a different approach in Churchill v. The F/V
Fjord, 892 F.2d 763 (9th Cir. 1988), cert. denied, ___ U.S. ___, 110
S.Ct. 3273, 111
L.Ed.2d 783 (1990). Plaintiffs there brought claims in district court for
wrongful death and personal injury arising from the navigation of three
skiffs, two of which collided. Id. at 766. The district court had subject
matter jurisdiction under § 1333 and exercised pendent jurisdiction
over plaintiffs' state law claim. The court conducted a bench trial,
after which it entered judgment in the liability phase of the trial in
favor of defendants.
Asserting that the pendent state law claim entitled them to a jury
trial, the plaintiffs appealed, in part because the district court had
stricken their demand for a jury trial. The Ninth Circuit acknowledged
the district court's rejection of that argument, which was grounded in
the rule that where a state law claim is in federal court solely by
virtue of admiralty jurisdiction, plaintiffs are not entitled to a jury
trial. Id. at 769 (citing Tallentire v. Offshore Logistics, Inc.,
754 F.2d 1274, 1287 (5th Cir. 1985), rev'd on other grounds, 477 U.S. 207,
106 S.Ct. 2485, 91 L.Ed.2d 174 (1986); Ashland Oil v. National Bank of
Ashland, Ky., 557 F. Supp. 862, 872 (E.D.Ky. 1983)).
The appellants argued, nevertheless, that the general rule of no jury
trials in admiralty cases should be disregarded when a plaintiff is
forced into federal court by defendant's limitation action, particularly
in light of the injunction against related state court proceedings during
the pendency of the limitation action. Id. The Ninth Circuit rejected
this argument, but found that:
Appellants' arguments might have force if, having
chosen a forum or pled claims on which a jury trial
was available, they were forced into a court of
admiralty by appellees. This was not such a case. The
appellants here selected the federal forum in the
first instance, and repeatedly designated their
complaint as arising in admiralty.
Id. (emphasis added).
III. Application of Principles to the Present Case
There is no dispute that the Individual Claimants will be entitled to
act on their claims in state court, presumably before a jury, if this
court denies limitation or exoneration. Technically, then, the serial
bifurcation alternative adopted by the court in Sheen presents a viable
approach. Indeed, this appears to be the approach preferred by the
Individual Claimants. The Poling Entities, on the other hand, maintain
that both the limitation and common law claims should be tried by the
Neither of these approaches satisfactorily accounts for all of the
interests implicated here, which are: (1) the admiralty tradition
disfavoring the use of a jury in limitation proceedings; (2) the
preservation of the Individual Claimants' right to a jury trial of their
common law claims, as embodied in the "saving to suitors" clause of
§ 1333; and (3) judicial economy.
The Poling Entities attempt to remove the "saving to suitors"
consideration from the calculus by asserting that, since no independent
basis of federal jurisdiction exists for the pendent state law claims,
jury trial is not a remedy to which the Individual Claimants are
"otherwise entitled." Indeed, the very question of whether there is a
right to jury trial on a pendent claim was elided by the Supreme Court in
Fitzgerald. See 5 J. Moore, J. Lucas & J. Wicker, Moore's Federal
Practice ¶ 38.35, at 38-320 (2d ed. 1991).
One court has answered in the negative. In Weeks v. Reliance Insurance
Co. of New York, 81 Civ. 3479 (CSH) (1985 WL 462) (S.D.N.Y. Mar. 28,
1985), the plaintiffs/yachtowners sued their insurance company in federal
court on their marine insurance policy, a claim within the court's
admiralty jurisdiction. They also stated a pendent claim against their
insurance broker for negligent failure to procure insurance. The latter
claim was outside the admiralty jurisdiction, and thus was retained only
as a pendent claim. The insurance broker demanded a jury trial, but the
court held that although it was "quite prepared to retain pendent
jurisdiction. . . . this admiralty action on a policy of marine
insurance, coupled with a pendent common law claim of no independent
jurisdictional basis, carries with it no right to trial by jury." Id. at
Regardless of the undisputed truth of the statement that there is no
right to jury trial in admiralty, and the ambiguity as to whether such a
right exists on a pendent common law claim, "neither [the Seventh]
Amendment nor any other provision of the Constitution forbids them [jury
trials]. Nor does any statute of Congress or Rule of Procedure, Civil or
Admiralty, forbid jury trials in maritime cases." Fitzgerald, 374 U.S. at
20, 83 S.Ct. at 1650. There is no reason to believe that the purposes of
the Limitation Act include enabling a vessel owner to take a tort
victim's case away from a jury. As one court has noted, "[t]he Limitation
Act was fashioned by Congress as a shield rather than a sword." In re
Complaint of Cameron Boat Rental, Inc., 683 F. Supp. 577, 582 a. 6
(W.D.La. 1988). "As long as the admiralty court can effectively ensure
that a shipowner will not face liability in excess of the limitation
fund," Dammers, 836 F.2d at 759, no compelling reason can be presented
for denying the Individual Claimants a jury on their common law claims
and forcing them, as in Sheen, to cross the street to obtain that
The Individual Claimants here were forced into federal court, having
already brought their claims in state court, where they are entitled to a
jury. This situation is analogous to, though concededly different from,
one in which a defendant in an equity action files a legal counterclaim
for which there is an independent basis of federal jurisdiction, such as
diversity, demanding a jury trial of the legal issues. In that
situation, the Supreme Court has held that a jury right may not be
preempted through procedural tactics. See Dairy Queen, Inc. v. Wood,
369 U.S. 469, 473, 479-80, 82 S.Ct. 894, 900-01, 8 L.Ed.2d 44 (1962).
Indeed, the Ninth Circuit in Churchill seemed to acknowledge the
applicability of this analogy in a case such as this one in allowing that
the request of appellants there for a jury trial might have had force
if, "having chosen a forum or pled claims on which a jury trial was
available, they were forced into a court of admiralty by appellees."
Churchill, 892 F.2d at 769.
Moreover, embarking on this proceeding without a jury in the interest
of maintaining aesthetic purity, makes no sense. Due to the multi-party
nature of this action and complicated questions involving, among other
things, causation, a full-blown trial will be necessary simply to resolve
the limitation issues of negligence and privity or knowledge — a
trial that would necessarily be duplicated in state court if limitation
is denied thus freeing the Individual Claimants to proceed there. This
consideration distinguishes this case from Weeks, in which the "pendent"
claim against the insurance broker for negligent failure to procure
insurance would certainly not have required the very same proof as the
claim against the insurance agency.
Since virtually the entire case must be presented just on the
limitation issues, even if the court denies limitation, it would be
consistent with the purposes of pendent jurisdiction to retain the state
issues. Enercomp, Inc. v. McCorhill Pub., Inc., 873 F.2d 536, 545-46 (2d
Cir. 1989) (if "substantial resources" have been committed, appropriate
to retain pendent jurisdiction over pendent claims even if federal claim
is dismissed). The proper approach here is to empanel a jury at the
outset and allow trial to proceed on issues pertaining both to limitation
and the common law claims.
At the close of the evidence, the court will determine the admiralty
issues, including any preclusive effect to be given to that resolution.
The remaining issues on the state law claims, if any, will be submitted
to the jury.
For the foregoing reasons, the Individual Claimants' request for the
empaneling of a jury is granted. The court shall determine whether
exoneration or limitation should be
granted. The jury shall determine the remaining issues.
It is so ordered.