US Supreme Court Briefs

No. 99-1331

In The
Supreme Court of the United States


JAMES LEWIS,

Petitioner,
V.



LEWIS & CLARK MARINE, INC.,

Respondent.



On Writ Of Certiorari To The
United States Court Of Appeals
For The Eighth Circuit



REPLY BRIEF OF PETITIONER



THE LAKIN LAW FIRM, P.C.

Roy C. Dripps
Counsel of Record
GAIL RENSHAW
301 Evans Avenue
P.O. Box 229
Wood River, IL 62095
(618) 254-1127

Attorneys for Petitioner,
James F. Lewis







I~2i ~


I
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES iv
ARGUMENT 1

I. The District Court Properly Exercised Its Discretion In This Single Claimant Case Because Petitioner's Stipulations Extinguished The Purpose
Of The Injunction 1

A. Even Where A Saved Remedy Is Not Sought The Injunction Should Be Dissolved When The Right To Seek Limitation Has Been Pro
tected By Stipulation 1

1. Lan gnes Focused on Statutory Conflict Because No Stipulations Protected The Shipowner's Right To Seek Limited Liability in The Admiralty
Court 3

2. Once The Vessel Owner's Right To A Federal Determination of Limited Liability Has Been Secured By Stipulation The Purpose of The Injunction Is
Satisfied And Recourse To Statutory Conflict
Is Obviated 3

B. The Amended Saving To Suitors Clause Saves All Remedies, Not Only Those Result
ing From Jury Trials 5

1. Respondent Unduly Narrows The Scope
of The Saving Clause 6

C. Because The State Court Action Is Within The Saving To Suitors Clause The Statutory Conflict Resolved By Lan gnes Is Present.... 7


ii iii


TABLE OF CONTENTS - Continued
TABLE OF CONTENTS Continued
Page
II. Respondent's Rights Under the
Limitation of Liability Act In This
Case Are Restricted To Limitation
Page
5. A Right To Exoneration Is Not
Established By The Repeal Of The
Language In The Former Version
Of Section 185 Claimed To Create
Such A Right
9


A. Exoneration Is Not Statutory But Created By Rule
And Cannot Therefore Defeat A Claimant's Right To
Have The State Court Determine Liability And Damage
Issues


1. Section 182 Of The Act Expressly Provides
For Exoneration In Cases Of Fire But All
Other Sections Omit Similar Language
Evidencing Congress' Intent Not To Authorize
Exoneration In Any Case Except Fire


2. A Right To Exoneration Cannot Be
Implied Because Such A Right Does Not
Further The Purpose Of The Limitation
Act, Which Is To Encourage Investment
In Shipping By Imposing A Cap On
Recoverable Damages


3. Respondent's Conclusion That Norwich And
The Benefactor Construed The Limitation Act
To Include A Right Of Exoneration Is Based
On A Reading That Is Strained And
Unsupportable


4. Characterizing The Limitation Trial As A
"Two-Step" Proceeding Fails To Identify The
Source Of A Shipowner's Right To A Federal
Liability Determination
6. Lan gnes Impliedly Rejected Exoneration As A Basis
To Deny Dissolution Of The Injunction
9
B. Respondent Has Failed To Contest The Proposi-
tion That Rule F Is Invalid Under The Rules
Enabling Act If The Rule Is The Source Of
Respondent's Right To Seek Exoneration
18



19




20
CONCLUSION 20


10







13






14





17





iv


TABLE OF AUTHORITIES
Page

CASES

Beiswenger Enterprise Corp. v. Carletta, 86 F.3d 1032
(11th Cir. 1996) 8

Black Diamond Steamship Corp. v. Robert Stewart &
Sons, Ltd. 336 U.S. 386 (1949) 17

Consumer Prod. Safety Comm'n v. GTE Sylvania,
Inc., 447 U.S. 102 (1980) 10

Consumers Import Co., et a!. v. Kabushiki Kaisha Kawasaki
Zosenjo, et al., 320 U.S. 249 (1943) 11, 12

Curtis Bay Towing Co. v. Tug Kevin Moran, Inc., 159
F.2d 273 (2d Cir. 1947) 8, 14
Ex Parte Green, 286 U.S. 437 (1932) 3
Fecht v. Makowski, 406 F.2d 721 (5th Cir. 1969) 13

Gendron v. United States, 154 F.3d 672 (7th Cir.
1998) 11
Henderson v. United States, 517 U.S. 654 (1996) 20

Hoskyn & Co. v. Silver Line, 63 F.Supp. 452 (D.C.
N.Y. 1943) 11

In re Great Lakes Transit Corp., 63 F.2d 849 (6th Cir.
1933) 17

In re Port Arthur Towing Co., 42 F.3d 312 (5th Cir.
1995) 17
Joyce v. Joyce, 975 F.2d 379 (7th Cir. 1992) 13
V



TABLE OF AUTHORITIES - Continued
Page

Knapp, Stout & Co. v. McCaffrey, 177 U.S. 638 (1900) ... 6, 7

Kreta Shipping, S.A. v. Preussag Intercontinental Steel Corp.,
192 F.3d 41 (2d Cir. 1999) 2, 3, 4

Lake Tankers Corp. v. Henn, 354 U.S. 147 (1957) 4

Langnes v. Green, 282 U.S. 531 (1931) 1, 3, 7, 19
Larsen v. Northland Transportation Co., 292 U.S. 20
(1934) 17

Linton v. Great Lakes Dock & Dredge Co., 964 F.2d
1480 (5th Cir. 1992) 5, 6, 7

Madruga v. Superior Court, 346 U.S. 556 (1954) 5
Miles v. Illinois Central Railroad Co., 315 U.S. 698
(1942) 8

North Pacific Steamship Co. v. Industrial Accident Commission
of California, 174 Cal. 346, 163 P. 199
(1917) 7

Norwich Co. v. Wright, 80 U.S. 104 (1871)
13, 14, 15, 16, 17

Odeco v. Oil and Gas Co. v. Bonnette, 4 F.3d 401 (5th Cir.
1993), cert. denied, 511 U.S. 1004, 114 S.Ct.
1370 (1994) 8

Petition of Lan gnes, 32 F.2d 284 (W.D.Wash. 1929) .... 19
Petition of Moran Transportation, Corp.. 185 F.2d 386
(2d Cir. 1950) 13

Petition of Skibs A/S Jolund, 250 F.2d 777 (2d Cir.
1957) 11

Providence and N.Y. Steamship Co. v. Hill Mfg. Co.,
109 U.S. 578 (1883) 17





vi vii


TABLE OF AUTHORITIES - Continued
Page
Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109
(1924) 5. 6

Republic of France v. United States, 290 F.3d 395 (5th
Cir. 1961) 11

Russello v. United States, 464 U.S. 16 (1983)
1
1 Texaco, Inc. v. Williams, 47 F.3d 765 (5th Cir.
1995) 9. 10, 17

The Aloha (Green v. Lan gnes), 35 F.2d 447 (9th Cir.
1929) 19
The Aquitania, 14 F.2d 456 (S.D.N.Y. 1926) 13

The Benefactor Steamship Co. v. Mount, 103 U.S. 239
(1880)
passim

Universal Towing Co. v. Barrale, 595 F.2d 414 (8th
Cir. 1979) 17

White v. lsland Transportation Co., 233 U.S. 346
(1914) 16, 17

Wright v. Norwich & N.Y. Trans p. Co., 30 F.Cas. 685
(Conn.Cir. 1870) 15
STATUTES

28 U.S.C.A.

28 U.S.C.A.

28 U.S.C.A.

45 U.S.C.A.

46 U.S.C.A.

46 U.S.C.A.
TABLE OF AUTHORITIES - Continued
Page
46 U.S.C.A. 184 12
46 U.S.C.A. 185 18


RULES
Admiralty Rule 53 17

Fed.R.Civ.P. Supplemental Admiralty & Maritime
Claims Rule F(3) 9
1333(1) 5
1445(a) 8
2072(b) 9
56 8
182 10, 11, 12, 13, 18, 20
183 11, 12, 13





1

ARGUMENT

I. The District Court Properly Exercised Its Discretion
In This Single Claimant Case Because Petitioner's
Stipulations Extinguished The Purpose Of The
Injunction

Respondent's argument that the injunction against the state court action should be maintained despite Petitioner's stipulations is flawed in three significant
respects. (Respondent's Brief at p. 24). First, it completely ignores the purpose of the injunction under the Act which is to protect the shipowner's right to a
determination of limited liability in the admiralty court. Second, Respondent then fails to recognize that the injunction should be dissolved, even in the absence of
a saved remedy, when the vessel owner's limitation rights have been protected by stipulation. Third, Respondent unduly restricts the saving to suitors clause by
ignoring the amendments to that statute and limiting "remedy" to a jury trial.

These flaws undermine the validity of Respondent's argument and will be discussed in turn.


A. Even Where A Saved Remedy Is Not Sought
The Injunction Should Be Dissolved When The
Right To Seek Limitation Has Been Protected
By Stipulation

Respondent claims that the "first step of the analysis . . . is determining whether a statutory conflict exists" and then characterizes Petitioner's argument as "an
unwarranted expansion of Langnes v. Green, 282 U.S. 531 (1931) . . . " (Respondent's Brief at pp. 13-14). This argument ignores the stipulation procedure developed
by the Courts of Appeals over the last half century.


2 3


Although Petitioner filed stipulations protecting
Respondent's right to seek limited liability in the admiralty court
(J.A.72, pars. 6-8), Respondent insists on examining the instant
case as though the stipulations had never been made. This crucial
analytical error undermines the "not otherwise available" test
proposed by Respondent: that a statutory conflict is a sine qua
non to dissolution of the injunction.'

The stipulations approved by the Courts of Appeals protect
the shipowner's right to seek limited liability in the federal forum.
They eliminate the need to balance competing statutory interests
because the purpose of the injunction (federal determination of
limited liability) is retained while the claimant is permitted to
proceed in state court.

The "first step" therefore is not whether a statutory conflict
exists but whether the shipowner's right to seek a federal
determination of limited liability has been protected by the
claimant's stipulations. Kreta Shipping, SA.
v. Preussag Intercontinental Steel Corp., 192 F.3d 41, 49 (2d
Cir. 1999).






I The logical extreme of the "not otherwise available" test is
that, even when the injured seaman demands a state court jury
trial, the admiralty court can defeat the seaman's heretofore
unquestioned right to proceed in state court by the simple
expedient of impaneling a jury. See In the Matter of Complaint of
Riverway St. Louis Harbor Service, No. 4:99CV0860 ERW
(E.D.Mo. filed Dec. 29, 1999).
1. Laugnes Focused On Statutory Conflict Because
No Stipulations Protected The Shipowner's Right
To Seek Limited Liability In The Admiralty Court

In Langnes, the injured claimant did not stipulate to waive
res judicata effects of a state court judgment with regard to
limited liability nor did he agree to the exclusive right of the
admiralty court to determine issues of limited liability. Indeed,
Langnes eventually put the vessel owner's privity and knowledge
into issue in the state court suit and the injunction was reinstated.
See Ex Parte Green, 286 U.S. 437, 440 (1932).
The Lan gnes balancing of competing concerns is
unnecessary where the shipowner's federal right has been protected
by stipulation because the claimant's right to proceed in state court
cannot compromise the ship-owner's interest in seeking limitation.
Kreta Shipping, S.A.
v. Preussag Intercontinental Steel Corp., 192 F.3d 41, 49 (2d
Cir. 1999).

2. Once The Vessel Owner's Right To A Federal
Determination of Limited Liability Has Been
Secured By Stipulation The Purpose of The
Injunction Is Satisfied And Recourse To Statutory
Conflict Is Obviated

Respondent claims that Kreta is inapplicable to the instant
case "because the Second Circuit declined to decide whether the
non-common law action that the insurer sought to institute abroad
was saved under the saving to suitors clause." (Respondent's Brief
at p. 30). This reflects a fundamental misunderstanding of Kreta's
analysis. The Court of Appeals declined to consider whether the
saving clause applied because "the result in this case would in
either event be the same" (192 F.3d 41,





4 5


49 n.7): once the shipowner's limitation rights were protected by
stipulation there was no basis to maintain the concursus
injunction. Kreta, 192 F.3d 41. 49. Because petitioner in the
instant case similarly stipulated to the Respondent's right to seek
limitation, (J.A. 72, pars. 6-8; J.A. 102)2, Kreta's analysis is
fully applicable to this case.

Respondent then attacks Kreta as "wrongly decided" in
failing to recognize that "the limitation forum will prevail, unless
resort to another forum is necessary to secure a remedy not
available in federal court." (Respondent's Brief at p. 30). Kreta's
analysis is soundly grounded in this Court's holding that when
"[tihe state court proceeding could have no possible effect on the
petitioner's claim for limited liability in the admiralty court . . . the
provisions of the Act, therefore, do not control." Lake Tankers
Corp. v. Henn, 354 U.S. 147, 150 (1957). Petitioner's
stipulations guarantee that the state court proceeding can have "no
possible effect" on the Respondent's right to seek limited liability
in the federal forum. As in Lake Tankers, the statute therefore
does not control the outcome.
Kreta is not, therefore, "wrongly decided." Its analysis is
based on the fundamental precept that once the vessel owner's
right to seek limited liability in the federal forum has been
protected by stipulation, in either the single claimant or the excess
fund case, the injunction becomes an unjustifiable vestige.





2 Notably, respondent does not contend that the stipulations
are insufficient to protect its right to seek limitation.
B. The Amended Saving To Suitors Clause Saves
All Remedies, Not Only Those Resulting From
Jury Trials

Respondent remarkably fails to acknowledge that Congress
amended the saving to suitors clause to replace the phrase "a
common law remedy where the common law is competent to give
it" with the phrase "in all cases all other remedies to which they
are otherwise entitled." 28 U.S.C.A. 1333(1) (emphasis
added). This sweeping guarantee is not limited by any reference to
jury trials. "[Tihere is no bar in the 'saving to suitors' clause to a
non-jury trial at law." Lin ton v. Great Lakes Dock & Dredge
Co., 964 F.2d 1480, 1490 (5th Cir. 1992). The embrace of the
statute is universal: all remedies in all cases are protected.
Respondent's reliance on judicial references to the former
"common law" phrasing is therefore without basis in the current
statute3.

Respondent supposes that the absence of a jury trial changes
a Jones Act case into something other than a proceeding "at law."
However, "the Jones Act allows the injured seaman to elect a non-
jury trial in an action 'at law' in a state court, and such election
does not, without more, convert the action into one in admiralty."
Lin ton, 964 F.2d 1480, 1490. This is consistent with this
Court's holding that a remedy within the saving clause "include(s]
all means other than proceedings in admiralty which may be
employed to enforce the right or to redress the injury involved."
Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 124 (1924)
(emphasis added). Thus, even


~ Madruga v. Superior Court, 346 U.S. 556, 560 n.12
(1954) holds only that the amendments "in no way narrowed the
jurisdiction of the state courts under the original 1789 Act."





6 7


under the former language of the saving clause Respondent's
theory that a non-jury state court Jones Act case does not provide
a "common law remedy" is simply wrong.

Respondent's attempt to distinguish Lin ton and Red Cross
as not involving limitation (Respondent's Brief at pp. 28-29)
misses the mark because the scope of the saving to suitors clause
does not depend on whether the issue is raised in a limitation
case, in the context of removal, or as an objection to the exercise
of state court subject matter jurisdiction. Respondent's objection
is therefore a distinction without a difference.

1. Respondent Unduly Narrows The Scope Of The
Saving Clause

Respondent mistakenly equates the former "common law
remedy" provision of the saving clause with a jury trial. See
Respondent's Brief at pp. 24-25. This Court's decision in Knapp,
Stout & Co. v. McCaffrey, 177 U.S. 638 (1900) held that
remedies within the saving clause are not limited to those
obtainable through jury trial or even through suit. Such remedies
include, among others, detention of possession by a bailee. 177
U.S. 638, 644. This Court noted that "[ut was certainly not
a common-law action, but a suit in equity. But it will be noticed
that the reservation is not of an action at common law, but of a
common-law remedy; and a remedy does not necessarily imply an
action."4 Id.


~ Just as a trial is not a remedy, a fishing trip is not dinner.
"But a strike rolled in cracker Crumbs and fried would be mighty
poor eating for a hungry man." J. LUCAS, LUCAS ON BASS
FISHING 44 (Dodd, Mead & Co. 1962).
The California Supreme Court, relying on Knapp, reasoned
that if the saving clause includes remedies obtainable without
institution of suit, then the mode of trial does not dictate whether
the remedy is within the statute. "The substance of these
decisions seems to be that a common-law remedy as employed in
the judiciary act means any remedy, with or without action or
jury, which is a substitute for a suit at law, whereby a liability is
imposed after due process of law." North Pacific Steamship Co.
v. Industrial Accident Commission of California, 174 Cal. 346,
163 P. 199, 202 (1917) (emphasis added). Thus, petitioner's
statutory Jones Act suit is not outside the saving clause simply
because it will be tried to a judge rather than a jury.

C. Because The State Court Action Is Within The Saving
To Suitors Clause The Statutory Conflict Resolved By
Langnes Is Present

Respondent argues that unless petitioner exercises his right
to a jury trial in state court there is no conflict between the saving
clause and the limitation act. (Respondent's Brief at pp. 24-25).
Although a statutory conflict is not required to dissolve the
injunction (Kreta, 192 F.3d 41, 49), one is present in this case
because the admiralty court's injunction forbids petitioner from
pursuing a remedy guaranteed to him by statute. Lin ton, 964
F.2d 1480, 1490; see generally Langnes v. Green, 282 U.S. 531
(1930). Respondent's argument, predicated on the opposite
assumption, should be rejected.
Moreover, contrary to Respondent's argument, Petitioner is
guaranteed a choice of forum. "However, every claimant has a
legally protected interest in choosing his forum, even though the
method of trial be not changed if





8

he is moved elsewhere." Curtis Bay Towing Co. v. Tug Kevin
Moran, Inc., 159 F.2d 273, 276 (2d Cir. 1947). The limitation
statute cannot be used as a forum-shifting device.

This is particularly true in this case because the Jones Act
incorporates the Federal Employers Liability Act granting to
injured employees the right to select a state court as forum. 45
U.S.C.A. 56; and see 28 U.S.C.A. 1445(a) (F.E.L.A. cases
not removeable); see also Miles v. Illinois Central Railroad Co.,
315 U.S. 698, 704 (1942) (noting legislative history of section 6
of the F.E.L.A. that purpose of section is to allow plaintiff to
choose either federal or state court). That provision of the
F.E.L.A., is part of Petitioner's statutory Jones Act remedy
within the saving to suitors clause. Thus, Petitioner has a
statutory right to select the forum.

Even the cases relied upon by Respondent state that the
saving clause provides the claimant with the right to choose the
forum. Odeco Oil and Gas Co. v. Bonnette, 4 F.3d 401, 404-405
(5th Cir. 1993), cert. denied, 511 U.S. 1004, 114 S.Ct. 1370
(1994) (claimants' interest in litigating in the forum of their
choice is substantial); Beiswenger Enterprise Corp. v. Carl etta,
86 F.3d 1032, 1037 (11th Cir. 1996) ("This 'saving to suitors'
clause of 1333 embodies a presumption in favor of jury trials
and common law remedies in the forum of the claimant's
choice.")

Accordingly, Respondent's claim that the absence of a jury
trial in the state court places Petitioner's case outside the scope of
the saving to suitors clause is incorrect and the statutory conflict
is present.
9

IL RESPONDENT'S RIGHTS UNDER THE LIMITA-
TION OF LIABILITY ACT IN THIS CASE ARE
RESTRICTED TO LIMITATION

Respondent's argument presumes the source of its right to
seek exoneration is the Limitation of Liability Act, yet fails to
demonstrate any plausible basis for the presumption. Respondent
admits that the source of the right to seek exoneration was the
predecessor to current Rule F of the Supplemental Rules for
Certain Admiralty and Maritime Claims. (Respondent's Brief at
p. 16). The adoption of the Rule does not imply a right exists in
the statute when the statute itself says otherwise. Because a
substantive right to exoneration has been created by a Rule in
conflict with statutes, the Rules Enabling Act forbids execution
of the Rule.

A. Exoneration Is Not Statutory But Created By Rule
And Cannot, Therefore, Defeat A Claimant's Right
To Have The State Court Determine Liability And
Damage Issues

Respondent admits that the source of its right to exoneration
is the Supplemental Admiralty Rule: "In his Complaint, the
vessel owner may seek exoneration from as well as limitation of
liability." See Fed.R.Civ.P. Supplemental Admiralty & Maritime
Claims Rule F(3) (hereinafter "Supp. AMC Rule"); Texaco, Inc.
v. Williams, 47 F.3d 765. 769 n.19 (5th Cir. 1995)."
(Respondent's Brief at p.
16.) This is a critical admission the authority respondent cites for
the vessel owner's right to seek exoneration is the rule rather than
the statute. Even the cited case agrees that the source of the right
to seek exoneration is the rule. "Rule F of the Supplemental
Rules for Certain Admiralty and Maritime Claims provides that
'the complaint may





10 11


demand exoneration from as well as limitation of liability.'
Therefore, Texaco may assert its exoneration claim along with its
limitation claim." Texaco, Inc., 47 F.3d 765, 769 n.19 (5th Cir.
1995) (emphasis added).
Despite this admission, Respondent asserts without
citation to authority that "Congress must have intended for
federal courts to first make such a determination when a vessel
owner proceeds under the Limitation Act." (Respondent's Brief at
p. 35). This assertion is fundamentally flawed and unsupportable
because it conflicts with the statute's language and purpose, and
because the Limitation Act has been judicially construed in
exactly the opposite manner.

1. Section 182 Of The Act Expressly Provides For
Exoneration In Cases Of Fire But All Other
Sections Omit Similar Language Evidencing
Congress' Intent Not To Authorize Exoneration
In Any Case Except Fire.

Interpretation of a statute begins with the statute's
language. Consumer Prod. Safety Comm'n v. GTE Sylvania,
Inc., 447 U.S. 102, 108 (1980). Although Respondent claims
that "there is no provision in the Limitation Act expressly
calling for a determination of liability separate from limitation,"
(Respondent's Brief at p. 35), Section 182 specifically authorizes
exoneration in cases of fire. "The Fire Statute," 46 U.S.C.A.
182 states:

No owner of any vessel shall be liable to answer for or
make good to any person any loss or damage, which may
happen to any merchandise whatsoever, which shall be
shipped, taken in or put on board any such vessel, by reason
or by means of any fire happening to or on board the vessel,
unless such fire is caused by the design or
neglect of such owner. 46 U.S.C.A. 182
(emphasis added).

This section is not a limitation of liability; it is a specific
exoneration provision. Hoskyn & Co. v. Silver Line, 63 F.Supp.
452 (D.C. N.Y. 1943). The phrase "[nlo owner of any vessel
shall be liable... " unmistakeably creates a right to contest liability
that is conspicuously absent from all other sections of the statute.

Section 183, in contrast, provides that the owner's liability
"shall not . . . exceed" the value of the vessel and freight. 46
U.S.C.A. 183. "Shall not exceed" is language of limitation
and not of exoneration from liability. The right to exoneration
was therefore specifically authorized by Congress in those cases
covered by Section 182 involving loss by fire, and omitted from
all other cases in Section 183.

Sections 182 and 183 are separate and distinct provisions.
Republic of France v. United States, 290 F.3d 395 (5th Cir.
1961); Petition of Skibs A/S Jolund, 250 F.2d 777 (2d Cir.
1957). In this circumstance, the inclusion of exoneration in
Section 182 and its absence from Section 183 must be taken as a
conscious legislative choice.

Where Congress includes particular language in one section
of a statute, "but omits it in another section of the same act, it is
presumed that Congress intended to exclude the language and the
language will not be implied where it has been excluded."
Gendron v. United States, 154 F.3d 672, 674 (7th Cir. 1998),
citing Russello v. United States, 464 U.S. 16, 23 (1983).

This Court distinguished Section 182 from what is now
Section 183 in Consumers Import Co. et a!. v. Kabushiki Kaisha
Kawasaki Zosenjo et al., 320 U.S. 249 (1943). Holding that
Section 182 extinguished claims against the vessel as





12 13


well as claims against the owner, the Court stated that to hold
otherwise would improperly convert the Fire Statute into a
limitation of liability to the value of the ship. This Court noted
that Congress had used different language in this section "because
it had a different purpose to accomplish." 320 U.S. 249, 253.

Respondent also claims, again without citation to authority,
that Section 184, the apportionment statute, provides a right to
exoneration. But the "shall not be liable" language is also absent
from Section 184. Section 184 provides that in a multiple-
claimant inadequate fund case, the claimants "shall receive
compensation from the owner of the vessel in proportion to their
respective losses 46 U.S.C.A. 184. The mandatory "shall
receive" comports with the requirement that the owner admit
liability as noted by this Court in The Benefactor Steamship Co.
v. Mount, 103 U.S. 239, 243 (1880). Section 184 further
provides that "for that purpose", i.e., distribution of
compensation, the owners or claimants may take "appropriate
proceedings." This does not authorize exoneration.

The "may be liable" phrase relied upon by Respondent to
establish a right to exoneration must be viewed in context with
the rest of the statute. Under Section 182, the owner may be
found liable;5 under Section 183, the owner's liability may be
limited to the value of the vessel. Section 184 simply provides a
mechanism for pro rata


~ Once liability has been established under section 182, there
is no occasion to limit that liability since the same standard for
182 liability (owner's "design or neglect") will preclude 183
limitation ("knowledge or privity").
distribution of the owner's liability as determined pursuant to
Section 182 or 183.

The purpose of Section 184 is not to afford a liability
determination but to provide a pro rata distribution of a limited
fund once liability has been determined. Petition of Moran
Transportation, Corp., 185 F.2d 386, 388-389 (2d Cir. 1950);
and see Norwich Co. v. Wright, 80 U.S. 104, 126 (1871). The
Second Circuit concluded that Section 184 does not compel a
claimant "to liquidate the face amount of her claim in a forum she
did not choose." Petition of Moran, 185 F.2d 386, 389.

Respondent fails even to mention Section 182. Instead,
Respondent struggles to find an implied right to exoneration in
the statute.

2. A Right To Exoneration Cannot Be Implied
Because Such A Right Does Not Further
The Purpose Of The Limitation Act Which
Is To Encourage Investment In Shipping By
Imposing A Cap On Recoverable Damages

Respondent's argument fails to explain how implication
of a right to exoneration furthers the statutory purpose "to
exempt the investor from loss in excess of the value of the
investment in the vessel and freight." Petition of Moran
Transportation Corp., 185 F.2d 386, 388-389 (2d Cir. 1950).
Once the vessel owner has succeeded in limiting its liability, the
statutory purpose is fulfilled. Id.; see The Aquitania, 14 F.2d
456, 458 (S.D.N.Y. 1926); see also Joyce v. Joyce, 975 F.2d 379
(7th Cir. 1992) (affirming dismissal of limitation suit where
pleadings show owner's privity or knowledge); Fecht v.
Makowski, 406 F.2d 721 (5th Cir. 1969) (reversing finding of
exoneration as unauthorized where claim for limitation was
voluntarily





14 15


dismissed). That purpose is not advanced by requiring liability
issues to be determined in the admiralty, rather than the state,
court because limitation presupposes a liability to be limited.

The purpose of the limitation statute does not include
forum-shifting. "The privilege of limiting liability is not part of
any doctrine of forum non conveniens; a ship-owner, sued in
several places by several persons, has no advantage over other
persons in the same position. If he would consolidate the several
suits against him, he must fulfill those conditions which govern
the consolidation of actions; if he would move them for trial
elsewhere, he must fulfill those which govern the removal of
causes." Curtis Bay Towing Co. v. Tug Kevin Moran, Inc., 159
F.2d 273, 276 (2d Cir. 1947).

The right to exoneration urged by Respondent as implied by
the statute is nothing more than an improper forum-shifting
device that is without basis in the purpose of the statute. Such a
right should not be implied under these circumstances.

3. Respondent's Conclusion That Norwich and
The Benefactor Construed The Limitation Act
To Include A Right Of Exoneration Is Based
On A Reading That Is Strained and
Unsupportable

Respondent's interpretation of this Court's decisions in
Norwich Co. v. Wright, 80 U.S. 104 (1871) and The Benefactor
Steamship Co. v. Mount, 103 U.S. 239 (1880) relies on isolated
language from those cases in a strained and unsupportable effort
to find a statutory basis for
exoneration. (See Respondent's Brief at pp. 38-40). Neither
Norwich or The Benefactor have construed the Limitation of
Liability Act as including a right to exoneration.

Respondent's misreading of Norwich is rooted in the
failure to recognize that Norwich was not a limitation case but
a libel for damages. The district court found the Norwich &
New York Transportation Company (hereinafter "Norwich")
liable for the collision; only afterward did Norwich seek to raise
the limitation statute as a defense to the full amount of the
judgment. Wright v. Norwich & N.Y. Trans p. Co., 30 F.Cas.
685. 685-686 (Conn.Cir. 1870).
This Court's first holding in Norwich was that the evidence
sustained the liability findings of the Connecticut federal court.
80 U.S. 104, 115. Respondent's analysis omits this crucial fact.
The Court's subsequent reference to "apportionment" is not,
therefore, authority that apportionment is a statutory liability
proceeding.

This is made clear by the Court's analysis:
"The difficulty with the respondents in this case is, that they
have not taken the proper steps, in the proper court, to
enable them to avail themselves of the benefit of the act. . . . If
proceedings are still pending in the Eastern District of New
York it is not yet too late to initiate proper proceedings
there for making an apportionment in the case." 80 U.S.
104. 126.

This strongly suggests that determining liability is different from
apportionment. The Court made that express conclusion in the
next sentence. "Meantime the decree already made must be
allowed to stand at least for the purpose of showing the
respondents' liability to the libellants, and the actual amount of
damage which the latter have sustained, as the basis of an
apportionment." 80 U.S. 104, 126 (emphases added). Thus,
apportionment is a





17
16
pro rata distribution of the limitation fund among the damage
claimants and not, as Respondent claims, a determination of the
vessel owner's liability.

Respondent's analysis of The Benefactor, supra, 103 U.S.
239, is likewise flawed by its failure to acknowledge the Court's
actual language. Instead, Respondent baldly denies "that the right
to exoneration was based entirely on the Fifty-Sixth admiralty
rule." (Respondent's Brief at p. 39). This ignores the Court's
statement that the rule was intended to relieve shipowners from
the English rule requiring them to admit liability in seeking
limitation.
103 U.S. 239, 243.

Even more significantly, Justice Bradley's opinion for the
Court6 explicitly stated that the Court perceived requiring the
vessel owner to admit liability to be too onerous. "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." 103 U.S. 239, 243.
This is not a statement of statutory construction as claimed by
Respondent, but a substantive policy determination in the form of
a rule that, regardless of its nineteenth century validity, is for-
bidden by the modern Rules Enabling Act. See discussion infra at
Section B.

Subsequent decisions of this Court have noted that the source
of the shipowner's right to contest liability is the rule. White v.
Island Transportation Co., 233 U.S. 346, 348 (1914) ("The
petition, while insisting upon the right

6 Justice Bradley authored the opinions of the Court in both
Norwich and The Benefactor; thus, The Benefactor's recounting
of the purpose for the development of the rules should be given
great weight.
of the owner, under admiralty rule 56. .. . "); and see Black
Diamond Steamship Corp. v. Robert Stewart & Sons, Ltd. 336
U.S. 386, 400-401 (1949) (Jackson, J., dissenting) (Rule is
source of right to contest liability); see also In re Great Lakes
Transit Corp., 63 F.2d 849, 850-851 (6th Cir. 1933) ("Under
Admiralty Rule 53, it was still open to the respondents 'to contest
the right of the owner or owners of said ship or vessel, either to
an exemption from liability or to a limitation of liability.' ")

A proper reading of Norwich and The Benefactor estab-
lishes that exoneration is not a creation of statute but of rule.

4. Characterizing The Limitation Trial As A
"Two-Step" Proceeding Fails To Identify The
Source Of A Shipowner's Right To A Federal
Liability Determination

Although Respondent relies heavily on judicial char-
acterization of the limitation trial as a "two-step proceeding"
(Respondent's Brief at pp. 32-33), that description begs the
question. Other than the opinion of the Eighth Circuit below,
none of the cases cited by Respondent even alludes to the source
of the right to seek exoneration, much less holds that the right
inheres in the statute. See Universal Towing Co. v. Barrale, 595
F.2d 414, 417 (8th Cir. 1979); In re Port Arthur Towing Co., 42
F.3d 312, 317 (5th Cir. 1995); see also Providence and N.Y.
Steamship Co. v. Hill Mfg. Co., 109 U.S. 578, 595 (1883).

When the "first step" is taken in federal court, it is only
done under authority of the rule. See White v. Island
Transportation Co., 233 U.S. 346, 348; Texaco, Inc. v. Wil-
liams, 47 F.3d 765, 769 n.19. Similarly, Larsen v. Northland
Transportation Co., 292 U.S. 20 (1934), cited by Respondent




18 19


(Respondent's Brief at p. 20), establishes that the "first step" may
be a liability determination in state court. See also The
Benefactor, 103 U.S. 239. If the "first step" may be taken in the
state court, the nature of the "two-step proceeding" hardly
supports Respondent's proposition that exoneration inheres in the
statute.

5. A Right To Exoneration Is Not Established
By The Repeal Of The Language In The
Former Version Of Section 185 Claimed To
Create Such A Right

Respondent's contention that language in the original
version of Section 185 of the Limitation Act supports its
contention that Congress intended exoneration to be included is
puzzling, as well as erroneous. Respondent asserts that by
providing in Section 4 of the original Act that "it shall be
deemed sufficient compliance ... if he or they shall transfer his or
their interest to a trustee to act as such trustee for person or
persons who may prove to be legally entitled thereto," Congress
was expressing an intent that the proceedings include a liability
phase. However, the italicized language was repealed in
subsequent amendments and does not appear in the current
version of Section 185 of the Act. The deletion by amendment
favors a construction completely opposite to that suggested by
respondent, i.e., that no right of exoneration is included within
the Act, except with respect to the Fire Statute, Section 182.


6. Langnes Impliedly Rejected Exoneration As A
Basis To Deny Dissolution Of The Injunction

When this Court decided Langnes v. Green, 282 U.S. 531
(1931), the rule of res judicata established by The Benefactor,
supra, 103 U.S. at 249, was settled law.7 The district court in
Lan gnes had refused to dissolve the injunction and had
exonerated the vessel owner. Petition of Lan gnes, 32 F.2d 284
(W.D.Wash. 1929); and see The Aloha (Green v. Langnes), 35
F.2d 447 (9th Cir. 1929). This Court permitted the claimant to
proceed in state court so long as the vessel owner's limitation
not exoneration rights were protected.

Had the Court in Lan gnes considered exoneration to be a
statutory right that precluded dissolution of the injunction, it
could simply have relied on the district court's exoneration
finding to affirm the refusal to dissolve the injunction. Instead,
the Court allowed the claimant to proceed in state court knowing
that any judgment favorable to the claimant would bar the vessel
owner's claim for exoneration. See The Benefactor, supra, 103
U.S. at
249. The Langnes case therefore impliedly rejected exoneration as
a basis to deprive the claimant of his right to proceed in state
court under the Saving To Suitors Clause. The Eighth Circuit
erred in holding to the contrary.


~ On rehearing, the Court clarified that a prior judgment
"would have the effect of res judicata on the question of the
liability of the steamship, and as to the amount of damage
sustained by the libellants; and that the amount of the decrees would
stand as the basis for determining the pro rata share of the
libellants in the common fund to be distributed on the termination of
the limited liability proceedings." 103 U.S. 239,
249.





20

B. Respondent Has Failed To Contest The Proposition That Rule F Is Invalid Under the Rules Enabling Act If The Rule Is The Source Of
Respondent's Right To Seek Exoneration

Respondent's Brief is devoid of any reference to this
Court's controlling decision in Henderson v. United States, 517 U.S. 654 (1996) and the majority of Respondent's Rules Enabling Act analysis stands unchallenged.
Respondent makes a vague assertion that this Court may by rule or decision establish a right to exoneration. (Respondent's Brief at pp. 42-43). But neither decision
nor rule may properly contravene a statute on matters of substance. As indicated above, the Limitation Act contains one grant of exoneration, limited to cases of
fire. 46 U.S.C.A. 182. The absence of any similar grant in the remainder of the statute is a conscious legislative decision that precludes establishment of
exoneration by rule or decision.

CONCLUSION

Wherefore, Petitioner James Lewis respectfully prays that this Honorable Court reverse the judgment of the Court of Appeals and reinstate the order of the
district court.
Respectfully submitted,
Roy C.
Counsel of Record
GAIL G. RENsHAw

THE LAKIN LAW FIRM, P.C.

301 Evans Avenue
P.O. Box 229
Wood River, IL 62095
(618) 254-1127

Attorneys for Petitioner,
James F. Lewis

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