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August 2013

In Vessel Owner’s Limitation of Liability Act Case in Federal Court, Injured Claimant Need Not Stipulate to Owner’s Right to Seek Exoneration

In two unrelated Vessel Owner’s Limitation of Liability Act (46 U.S.C. § 30501, et. seq.) cases decided the same day, a Wheeling, West Virginia-based federal judge ruled in Complaint of: Bellaire Harbor Service, LLC, 2013 U.S. Dist. LEXIS 117991 (N.D. W. Va. Aug. 20, 2013) and In re Campbell Transportation Co., 2013 U.S. Dist. LEXIS 117992 (N.D. W. Va. Aug. 20, 2013), that the vessel owners were seeking more than the general maritime law entitled them to in attempting to require the injured claimants–both Jones Act seamen–to stipulate, in order to resume their West Virginia state court lawsuits, that the vessel owners were entitled to litigate the issue of exoneration from liability, in addition to the issue of limitation of liability, in federal court.  The Court wrote:

“If courts required an exoneration stipulation prior to lifting the stay on a case, courts would be ‘enlarg[ing] shipowners’ rights under the Limitation Act and abridg[ing] claimants’ rights under the savings to suitor clause’….This Court agrees with the Fifth Circuit’s explanation and analysis of the issue. Thus, again this Court finds that the claimants need not stipulate to the plaintiffs’ right to litigate the exoneration issue in this Court. The claimants’ stipulation to the plaintiffs’ right to litigate all issues related to the limitation of liability, along with the claimants’ other stipulations, is sufficient for this Court to lift the injunction on the state court action and grant the motion to stay this action.”

The Court also held in the cases:

  1. The husband and wife claimants’ stipulation that the claims of the injured husband will have irrevocable priority over the claims for damages of the wife transformed the case into the functional  equivalent of a single claimant case, protecting the vessel owner while allowing the claimants to pursue their state court action;
  2. The claimants are not required to agree to limit damages to the value of the vessel and its attending freight, nor are they required to stipulate to the precise amount of the limitation fund, or rather the precise amount of the vessel owners’ interest in the vessel and freight; and
  3. It was improper to determine [at this early stage] whether the claimants’ maintenance and cure claim was subject to the Vessel Owners’ Limitation of Liability Act.


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