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COMPLAINT OF POLING TRANSPORTATION CORP.

October 13, 1991

IN THE MATTER OF THE COMPLAINT OF POLING TRANSPORTATION CORPORATION, AS OWNER PRO HAC VICE OF THE MOTOR VESSEL, "POLING BROS. NO. 7," AND MOTOR VESSEL POLING BROS. NO. 7, INC., AS OWNER OF THE MOTOR VESSEL "POLING BROS. NO. 7," PLAINTIFFS, FOR EXONERATION FROM OR LIMITATION OF LIABILITY.


The opinion of the court was delivered by: Sweet, District Judge.

OPINION

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 Parties

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.

Background

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.

On December 2, 1987, Poling brought this exoneration or limitation of liability action in this court pursuant to Supplemental Rule F, Fed.R.Civ.P. Notice of the complaint and of the time to file claims in the limitation action was filed on January 13, 1988. On December 4, 1987, this court entered a stay enjoining the commencement or prosecution of any actions or proceedings against the Poling Entities or their property for any loss or damage resulting from the fire and explosion pending the resolution of the limitation proceeding.

The Individual Claimants have filed claims in the limitation proceeding against the Poling Entities in the aggregate amount of $56,500,000 and cross-claims against the LIRR, the MTA, and the Other Claimants and have requested a jury trial. In addition, the LIRR, the MTA, and the Other Claimants have filed claims for damages and for contribution and/or indemnification against the Poling Entities. The Poling Entities have filed counterclaims or, in the alternative, claims for contribution and/or indemnification against the LIRR, the MTA, Individual Claimant David Theophilous and the Other Claimants.

Discussion

The Individual Claimants maintain that this court should try the issues raised by the Poling Entities' petition for limitation of liability without a jury, following which the court should lift the stay so that the remaining issues can be decided in state court, presumably with a jury. The Individual Claimants argue that this approach is proper because the state claims are not properly within the pendent jurisdiction of this court.

Alternatively, the Individual Claimants urge that if the court concludes that it does have pendent jurisdiction over the state claims, it must adjudicate this case in a manner that preserves their right to jury trial on the common law claims, that is, that it must empanel a jury in the limitation proceedings.

The Poling Entities counter that this matter must proceed as a bench trial because there is no right to a jury trial in admiralty absent a claim carrying a statutory right to jury trial, such as one under the Jones Act, or an independent basis of federal jurisdiction, such as diversity, both of which are lacking here. Unlike the Individual Claimants, the Poling Entities maintain that pendent jurisdiction over the state law claims in the limitation proceeding is wholly proper and that therefore they may be adjudicated before this court without a jury.

This court concludes that pendent jurisdiction over the common law claims does exist. The limitation issue is a substantial federal claim, see Ford Motor Co. v. Wallenius Lines, 476 F. Supp. 1362, 1368 (E.D.Va. 1979) (admiralty constitutes federal basis for pendent jurisdiction), and the common law claims for personal injury, property damage, and indemnification and/or contribution arise from a "common nucleus of operative fact," namely, the fire and explosion. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). The question thus presented is whether the court may empanel a jury in this limitation proceeding based on the presence of pendent state law claims for which there is no independent basis of federal jurisdiction. This question naturally divides itself into two sub-questions:*fn2 (1) must the limitation and common law issues be tried to the court sitting without a jury or (2) may the limitation issues be tried to the court and the common law issues tried to a jury?

I.  Jurisdiction over Limitation Proceeding

This matter is before this court pursuant to 28 U.S.C. § 1333 ("§ 1333") and 46 U.S.C.App. § 183(a) ("§ 183(a)" or the "Limitation ...


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