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Griffith v. Santillan

United States District Court, S.D. Texas, Galveston Division

June 20, 2019

MICHAEL DOUGLAS GRIFFITH, as owner of the M/V Wellcraft Center Console, ET AL. Plaintiffs,
v.
PAUL SANTILLAN, ET AL. Defendants.

          ORDER

          ANDREW M. EDISON UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court is Claimant Paul Santillan's Motion to Lift Stay of Limitation of Liability Proceeding (“Motion to Lift Stay”). See Dkt. 17. This motion was referred to this Court by United States District Judge George C. Hanks, Jr. See Dkt. 25. After careful consideration of the Motion to Lift Stay, the response, the reply, and the applicable law, the Court DENIES the Motion to Lift Stay.[1]

         BACKGROUND

         On July 25, 2017, Claimant Paul Santillan (“Santillan”) took part in a chartered fishing trip aboard the 2005 M/V Wellcraft Center Console Charter Boat (the “Vessel”). Santillan alleges that Michael Coleton Griffith operated the Vessel

at a high rate of speed and in a negligent manner, causing Claimant Paul Santillan to fly upward several feet and off the boat seat. When Claimant came back down, he struck his back on his seat with the impact. Mr. Griffith then continued to operate the vessel in a negligent manner and at a high rate of speed, causing Claimant to fly upward a second time. As a result of Mr. Griffith's negligence, Claimant sustained severe personal injuries, including a compression fracture of his second lumbar vertebra.

Dkt. 17 at 1-2.

         Petitioners Michael Douglas, Jr. and Lori Griffith, as owners of the Vessel, and Michael Coleton Griffith, individually and d/b/a Get Fishy Charters, as owner pro hac vice of the Vessel (collectively “Petitioners”), filed a Complaint and Petition for Exoneration From or Limitation of Liability in this Court. Petitioners also filed a Marine Surveyor's Certification Value that indicated that their interest in the Vessel amounted to $49, 975.00. See Dkt. 1-3.

         On March 14, 2019, this Court entered an Initial Order on Complaint for Exoneration From or Limitation of Liability which, among other things, stayed other actions pending the outcome of this limitation proceeding. See Dkt. 9. Santillan now asks the Court to lift the stay and allow him to litigate the liability and damage issues before a jury in a Texas state court. Santillan indicates that he wants to “file suit in state court against Galveston Fishing Charter Company, Galveston Fishing Charter, LLC and Island Mode, LLC.” Dkt. 17 at 4. In connection with his request to dissolve the stay, Santillan filed a number of stipulations which he contends justify allowing him to proceed in state court.

         ANALYSIS

         A shipowner facing potential liability for a maritime accident may file suit in federal court seeking protection under the Limitation Act, a statute that permits a shipowner to limit his/her liability for damages or injuries arising from a maritime accident to “the value of the vessel and pending freight.” 46 U.S.C. § 30505(a). See also In re Port Arthur Towing Co., 42 F.3d 312, 315 (5th Cir. 1995). “When a limitation action is filed by a vessel owner ‘the federal district court stays all related claims against the shipowner pending in any forum, and requires all claimants to assert their claims in the limitation court.'” Matter of Am. Commercial Barge Line LLC, No. H-17-3841, 2019 WL 1202459, at *1 (S.D. Tex. Mar. 14, 2019) (quoting In re Port Arthur Towing Co., 42 F.3d at 315).

         “Thereafter, in a proceeding known as a concursus, the district court, sitting in admiralty without a jury, determines whether there was negligence; if there was negligence, whether it was without the privity and knowledge of the owner; and if limitation is granted, how the limitation fund should be distributed.” In re Complaint of Dammers & Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d Cir. 1988) (internal quotation marks, brackets, and citation omitted). In this way the court can supervise the “marshalling of assets and the distribution pro rata of an inadequate fund among claimants, none of whom can be paid in full.” Id. (internal quotation marks, brackets, and citation omitted).

         Although “[f]ederal courts have exclusive admiralty jurisdiction of [limitation of liability] suits brought under the [Limitation] Act, ” the Savings to Suitors Clause found in 28 U.S.C. § 1333(1) provides claimants a choice of remedies and forums. Magnolia Marine Transport Co., Inc. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992). Specifically, Section 1333(1) gives federal district courts exclusive jurisdiction over “[a]ny civil case of admiralty or maritime jurisdiction, ” but “saving to suitors in all cases all other remedies to which they are otherwise entitled.” 28 U.S.C. § 1333(1). Clearly, there is a natural tension between the Limitation Act's exclusive federal remedy and the Savings to Suitors Clause's “preference for jury trials and common law remedies in the forum of the claimant's choice.” Odeco Oil & Gas Co., Drilling Div. v. Bonnette, 74 F.3d 671, 674 (5th Cir. 1996) (citation omitted) (emphasis added).

         Courts across the country have struggled with how to reconcile the right of shipowners to limit their liability in federal court with the rights of claimants to sue in the forum of their choice. The Fifth Circuit has observed that “when a shipowner is not exposed to potential liability in excess of [the value of the vessel and its freight], the shipowner's absolute right to limit its liability is not implicated and ‘the saving-to-suitors clause dictates that the admiralty court must allow suits pending against the shipowner in a common law forum, in this case the state court, to proceed.'” In re Port Arthur Towing Co., 42 F.3d at 316 (quoting Magnolia Marine Transport, 964 F.2d at 1575).

         To that end, there are two instances where a federal court must allow ...


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