In re Lockheed Martin Corp., 06-1344.

• Citation: 503 F.3d 351
• Decision Date: 27 September 2007
• Docket Number: No. 06-1344.,06-1344.
• Parties: In re LOCKHEED MARTIN CORPORATION, Petitioner.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

503 F.3d 351

In re LOCKHEED MARTIN CORPORATION, Petitioner.

No. 06-1344.

United States Court of Appeals, Fourth Circuit.

Argued January 31, 2007.

Decided September 27, 2007.

Stanley McDermott, III, DLA Piper US, L.L.P., New York, New York, for Petitioner. James Wilson Bartlett, III, Semmes, Bowen & Semmes, Baltimore, Maryland, for Respondent.

Before TRAXLER and GREGORY, Circuit Judges, and WIDENER,¹ Senior Circuit Judge.

Petition granted by published opinion. Judge TRAXLER wrote the opinion, in which Judge GREGORY joined.

OPINION

TRAXLER, Circuit Judge:

At issue in this case is the right to a jury trial in an admiralty case. Lockheed Martin owns a ship that was damaged at sea, and a dispute over insurance coverage arose between Lockheed and its insurer, National Casualty Company. National filed a declaratory judgment action in district court, designating the action as one proceeding under the court's admiralty jurisdiction and thus without a jury. Lockheed asserted compulsory counterclaims and requested a jury trial. The district court struck Lockheed's request for a jury trial, and Lockheed filed this petition for writ of mandamus, arguing that it has a Seventh Amendment right to a jury trial. We grant the petition, issue the writ, and remand with directions that the district court grant Lockheed's jury demand.

I.

The relevant facts of this case are fairly simple. Lockheed owned a ship that was damaged at sea in June 2001. The ship was insured by National Casualty Company. In April 2005, Lockheed submitted a claim for more than $2,600,000 in damages. Lockheed informed National that it intended to file suit by July 29, 2005, unless National acknowledged that the policy established a six-year statute of limitations.

On July 22, 2005, National preemptively filed a declaratory judgment action seeking a declaration that Lockheed's claims were time-barred under the policy. In accordance with the rules governing admiralty claims, National designated its action as a non-jury admiralty claim. National later amended its complaint, seeking in the alternative a declaration of Lockheed's amount of loss. Lockheed filed an answer and asserted a counterclaim seeking payment for the damage to the ship. Lockheed requested a jury trial on its counterclaim.

Lockheed later filed a motion for judgment on the pleadings. Lockheed asserted that National's first request for declaratory relief (that the claims were untimely) should be dismissed because Lockheed's claim was timely under the policy. Lockheed then argued that the district court should exercise its discretion and dismiss National's second request for declaratory relief (for a determination of the amount of loss), so that Lockheed's counterclaim (which raised the same issue) could be tried by a jury.

The district court concluded that the policy established a six-year limitations period, and the court therefore dismissed National's first request for declaratory relief. The district court, however, concluded that Lockheed did not have a right to a jury trial. The court therefore declined to dismiss National's second request for declaratory relief, and the court struck Lockheed's jury demand. Lockheed then filed this petition for a writ of mandamus, arguing that the district court's ruling improperly deprived it of its right to a jury trial.

II.

Before considering the merits of Lockheed's claims, we pause to address a threshold issue raised by National. It is well established that mandamus is a drastic remedy that should only be used in extraordinary circumstances and may not be used as a substitute for appeal. See, e.g., Kerr v. United States Dist. Court, 426 U.S. 394, 402, 96 S.Ct. 2119, 48 L.Ed.2d 725 (1976); In re Catawba Indian Tribe of South Carolina, 973 F.2d 1133, 1136 (4th Cir.1992). National contends that Lockheed could raise the jury trial issue on appeal from a final judgment, see First Nat'l Bank of Waukesha v. Warren, 796 F.2d 999, 1006 (7th Cir.1986), and that Lockheed's resort to mandamus is therefore improper. We disagree.

In this circuit, a petition for a writ of mandamus is the proper way to challenge the denial of a jury trial. See General Tire & Rubber Co. v. Watkins, 331 F.2d 192, 194 (4th Cir.1964) ("We are inclined to the view that General's petition for Writ of Mandamus is properly before us for consideration since the question presented pertains to a denial of the constitutional right to trial by jury."); see also Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 511, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959) ("[T]he right to grant mandamus to require jury trial where it has been improperly denied is settled."). Because Lockheed's petition for a writ of mandamus is a proper vehicle for challenging the district court's decision, we now turn to the merits of Lockheed's claims.

III.

Lockheed contends that it has a Seventh Amendment right to a jury trial of its breach of contract claims asserted against National. Before we consider the specifics of Lockheed's claims, it is helpful to outline the legal framework under which the claims must be analyzed.

A.

The Seventh Amendment preserves the right to a jury trial "[i]n suits at common law." U.S. Const. amend. VII. The Seventh Amendment's guarantee of a jury trial, however, applies only to cases at law, a category that does not include maritime cases. See Waring v. Clarke, 46 U.S. (5 How.) 441, 460, 12 L.Ed. 226 (1847). Thus, in general terms, the Seventh Amendment creates no constitutional right to a jury trial of maritime claims.² See Fitzgerald v. United States Lines Co., 374 U.S. 16, 20, 83 S.Ct. 1646, 10 L.Ed.2d 720 (1963); see also Vodusek v. Bayliner Marine Corp., 71 F.3d 148, 152-53 (4th Cir. 1995) ("While the Seventh Amendment guarantees a jury trial in cases `at common law,' no constitutional provision guarantees, or indeed prohibits, jury trials for cases tried in equity or in admiralty.").

The role of a jury trial in admiralty cases, however, is complicated by the "saving to suitors" clause of 28 U.S.C.A. § 1333 (West 2006). Section 1333 states that "district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." 28 U.S.C.A. § 1333(1) (emphasis added).

The Supreme Court has explained that the saving-to-suitors clause preserves a plaintiff's right to a common law remedy "in all cases where the common law is competent to give it." Leon v. Galceran, 78 U.S. (11 Wall.) 185, 191, 20 L.Ed. 74 (1870) (internal quotation marks omitted). The common law is "competent" in cases proceeding in personam, but not those proceeding in rem. See id.; Madruga v. Superior Court of California, 346 U.S. 556, 560-61, 74 S.Ct. 298, 98 L.Ed. 290 (1954). Accordingly, while "federal courts have exclusive jurisdiction over in rem actions, federal and state courts have concurrent jurisdiction over in personam actions, and the effect of the clause is to give an in personam plaintiff the choice of proceeding in an ordinary civil action, rather than bringing a libel in admiralty." In re: Chimenti, 79 F.3d 534, 537 (6th Cir.1996) (citation and internal quotation marks omitted).

The effect of the saving-to-suitors clause as interpreted by the Supreme Court is to give a maritime plaintiff several options when bringing suit:

First, the claimant may invoke federal admiralty jurisdiction under the grant of original subject matter jurisdiction over admiralty, maritime, and prize cases set out in Section 1333. Neither diversity of citizenship nor a minimum amount in controversy need be shown under the statute. On the other hand, most plaintiffs have no right to a trial by jury if they invoke the federal court's general admiralty jurisdiction. Second, by virtue of the "saving clause," plaintiff also may sue at law in a state court or in a United States district court. However, to pursue the latter choice, the requirements of diversity of citizenship and jurisdictional amount must be satisfied.

Id. (quoting 14 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: Jurisdiction § 3672, at 431-33 (1985)); see also Concordia Co. v. Panek, 115 F.3d 67, 70 (1st Cir.1997); Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054 (9th Cir.1997).

Perhaps the most important aspect of an admiralty plaintiff's right to proceed "at law" in state or federal court is the right to demand a jury trial. See Ghotra, 113 F.3d at 1054 ("The difference between [proceeding in admiralty or at law in state or federal court] is mostly procedural; of greatest significance is that there is no right to jury trial if general admiralty jurisdiction is invoked, while it is preserved for claims based in diversity or brought in state court."). An admiralty plaintiff who chooses to proceed "at law," whether in state or federal court, thus has the right under the saving-to-suitors clause to demand a jury trial.

The procedures for invoking the federal court's admiralty jurisdiction are governed by Rule 9(h) of the Federal Rules of Civil Procedure. Rule 9(h) provides that:

A pleading or count setting forth a claim for relief within the admiralty and maritime jurisdiction that is also within the jurisdiction of the district court on some other ground may contain a statement identifying the claim as an admiralty or maritime claim for the purposes of Rules 14(c), 38(e), 82, and the Supplemental Rules for Certain Admiralty and Maritime Claims. If the claim is cognizable only in admiralty, it is an admiralty or maritime claim for those purposes whether so identified or not....

Fed.R.Civ.P. 9(h). In this case, National designated its declaratory judgment action as one proceeding in admiralty.

B.

We turn now to Lockheed's claim that it is entitled to a jury trial. Lockheed argues that because it asserted an in personam counterclaim against National, the...