Am. River Transp. Co. v. United States, Corps of Eng'rs (In re Am. River Transp. Co.)

• Decision Date: 30 August 2013
• Docket Number: No. 12–1720.,12–1720.
• Citation: 728 F.3d 839
• Parties: In re AMERICAN RIVER TRANSPORTATION COMPANY, for Exoneration from, or Limitation of, Liability, Plaintiff–In re. American River Transportation Company, Plaintiff–Appellant v. United States of America, Corps of Engineers, Defendant–Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

728 F.3d 839

In re AMERICAN RIVER TRANSPORTATION COMPANY, for Exoneration from, or Limitation of, Liability, Plaintiff–In re.American River Transportation Company, Plaintiff–Appellant

v.United States of America, Corps of Engineers, Defendant–Appellee.

No. 12–1720.

United States Court of Appeals, Eighth Circuit.

Submitted: Nov. 14, 2012.

Filed: Aug. 30, 2013.

Douglas Gossow, argued, Neal W. Settergren, on the brief, Saint Louis, MO, for Plaintiff–Appellant.

Michael Anthony DiLauro, argued, David J. Pfeffer, on the brief, USDOJ, Civil Division, Aviation & Admiralty Litigation Torts Branch, Washington, DC, for Defendant–Appellee.

Before RILEY, Chief Judge, WOLLMAN and MELLOY, Circuit Judges.

WOLLMAN, Circuit Judge.

American River Transportation Company (Artco) appeals from the district court's order dismissing its limitation complaint. We reverse and remand.

I.

On March 6, 2011, the M/V Julie White, a towboat owned by Artco, was pushing four barges southbound on the Mississippi River in the vicinity of Lock and Dam 25. The barges became separated from the M/V Julie White, allided with structures appurtenant to Lock and Dam 25, and then sank. The United States advised Artco that the barges had caused damage to Lock and Dam 25 and/or the structures appurtenant to it.

Artco salvaged and removed the sunken barges from the Mississippi River. Artco then filed a complaint seeking exoneration from, or limitation of liability for, claims arising from the allision pursuant to the Limitation of Shipowners' Liability Act, 46 U.S.C. §§ 30501–12 (the Limitation Act). In accordance with the Limitation Act, Artco sought to limit its liability to the value of the M/V Julie White, the four barges, and their freight, which Artco alleged had a total value of $1,322,837.85. The district court entered an order approving Artco's posted security, enjoining the prosecution of any suits related to the allision, and requiring Artco to provide notice to potential claimants advising them of the limitation action.

Artco provided notice to the United States of the limitation action. This notice mirrored the requirements of Federal Rule of Civil Procedure Supplemental Rule F(5). It informed the United States that as a potential claimant, if it wished to contest Artco's right to exoneration or limitation, it was required to file a proof of claim and answer to the limitation complaint by June 15, 2011. The United States did not file a proof of claim or answer. Instead, it appeared in the limitation action and filed a motion to dismiss the complaint under Rule 12(b)(6), arguing that its claims under the Rivers and Harbors Act, 33 U.S.C. §§ 401–76, were not subject to limitation under the Limitation Act.

The district court agreed, holding that the government could seek an implied in personam cause of action under § 408 of the Rivers and Harbors Act and that such an action was not subject to the Limitation Act. See D. Ct. Order of Mar. 12, 2012, at 11. Because the government was the only potential claimant to Artco's limitation action, the district court dismissed the limitation complaint.

II.

Artco contends that the district court erred by entertaining the motion to dismiss the limitation complaint because the government lacked standing and by concluding that § 408 of the Rivers and Harbors Act provided an implied in personam cause of action.

The Limitation Act, formerly 46 U.S.C. § 183, permits a vessel owner to file a complaint to limit its liability in the case of an accident and states that “the liability of the owner of a vessel for any claim, debt, or liability described in subsection (b) shall not exceed the value of the vessel and pending freight” when the loss or damage occurs “without the privity or knowledge of the owner.” 46 U.S.C. § 30505(a), (b). For an explanation of the history and purpose of the Limitation Act, see Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 446–48, 121 S.Ct. 993, 148 L.Ed.2d 931 (2001).

When first passed, the Limitation Act “did not establish a procedure to implement the limitations on liability that it established.” Am. Milling Co. v. Brennan Marine, Inc., 623 F.3d 1221, 1224 (8th Cir.2010). “[T]he Supreme Court enacted rules to establish a uniform judicial procedure by which a vessel owner could seek to limit its liability under the Limitation Act. Over time, these rules were amended and relabeled, and Rule F was eventually adopted as part of the Federal Rules of Civil Procedure.” Id. (internal citations omitted). “As other courts have explained, ‘Rule F evolved as a procedural device to implement the [Limitation Act].’ ” Id. (quoting Bouchard Transp. Co., Inc. v. Updegraff, 147 F.3d 1344, 1347 (11th Cir.1998) (alteration in original)). Under Rule F(5), any claimant who wishes to contest a vessel owner's “right to exoneration from or the right to limitation of liability” must file a proof of claim and an answer to the complaint, unless the claim has included an answer.

Artco contends that the district court erred by allowing the government to file its motion to dismiss the limitation complaint without first filing a proof of claim and answer in accordance with Federal Rule of Civil Procedure Supplemental Rule F(5). The government argues that its claim under the Rivers and Harbors Act is not subject to the Limitation Act and that it is therefore not required to follow the procedural steps established in Rule F(5). The district court held that the government's claim was not subject to the Limitation Act, and implicitly rejected Artco's argument that the government was nevertheless required to comply with the procedural steps outlined in Rule F(5) prior to filing its motion to dismiss. See D. Ct. Order of Mar. 12, 2012, at 11. Rule F(5) is part of the Federal Rules of Civil Procedure, and we review the district court's interpretation of the rule de novo. Am. Milling, 623 F.3d at 1224.

“Admiralty and maritime law includes a host of special rights, duties, rules, and procedures.” Lewis, 531 U.S. at 446, 121 S.Ct. 993. As discussed above, Rule F was created to implement the Limitation Act. See Am. Milling, 623 F.3d at 1224. After notice of a limitation complaint is issued either by publication or directly by mail, Rule F(5) provides the process by which potential claimants must proceed.

Claims shall be filed and served on or before the date specified in the notice provided for in subdivision (4) of this rule. Each claim shall specify the facts upon which the claimant relies in support of the claim, the items thereof, and the dates on which the same accrued. If a claimant desires to contest either the right to exoneration from or the right to limitation of liability the claimant shall file and serve an answer to the complaint unless the claim has included an answer.

Fed.R.Civ.P. Supp. R. F(5).

Artco contends that a party does not have standing to appear in a limitation proceeding and file a motion to dismiss the limitation complaint unless it first complies with the requirements of Rule F(5). The government contends that it has Article III standing, which is all that is required. Although Article III establishes the “irreducible constitutional minimum of standing,” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), a party may also be subject to prudential and statutory standing requirements, see Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 933–34 (8th Cir.2012).

The Federal Rules of Civil Procedure Supplemental Rules C and G have been deemed to create statutory standing requirements for challenging forfeiture actions. See, e.g., United States v. 8 Gilcrease Lane, 638 F.3d 297, 298 n. 1 (D.C.Cir.2011) (stating that a verified claim under Supplemental Rule C(6) is essential to conferring statutory standing upon a claimant in a forfeiture action); United States v. $22,050.00, 595 F.3d 318, 323 n. 5 (6th Cir.2010) (stating that strict compliance with Supplemental Rule G is a prerequisite for statutory standing to challenge a forfeiture action); United States v. $148,840.00, 521 F.3d 1268, 1273 n. 3 (10th Cir.2008) (stating that Supplemental Rule C(6) serves as the requirement for statutory standing in a forfeiture action); United States v. $487,825.00, 484 F.3d 662, 664 (3d Cir.2007) (“In order to stand before a court and contest a forfeiture, a claimant must meet both Article III and statutory standing requirements. To establish statutory standing in a forfeiture case, the claimant must comply with the procedural requirements set forth in Rule C(6)(a) and § 983(a)(4)(A).” (internal citation omitted)); United States v. $103,387.27, 863 F.2d 555, 560–61 n. 10 (7th Cir.1988) (noting that forfeiture actions require Article III and statutory standing and that statutory standing is satisfied by meeting the requirements of Supplemental Rule C(6)); United States v. $38,000.00, 816 F.2d 1538, 1545 (11th Cir.1987) (“The Supplemental Rules govern judicial forfeiture proceedings and establish the statutory standing requirements for these actions.”); see also United States v. Lot 65 Pine Meadow, 976 F.2d 1155, 1157 (8th Cir.1992) (although not invoking the term “statutory standing,” holding that a party “lacked standing to contest the forfeiture” because he had failed to file a timely claim in accordance with Rule C(6)).

Similarly, we conclude that Rule F(5) creates statutory standing requirements for challenging limitation actions. The purpose of Rule F(5), much like that of Rules C(6) and G(5), is to bring all potentially interested parties into one proceeding to address competing claims to certain property. Compare United States v. Three Parcels of Real Property, 43 F.3d 388, 392 (8th Cir.1994) (“The purpose of Rule C(6) is to inform the court that there is a claimant to the property who wants it back and intends to defend it.” (internal quotation marks omitted)), withWhite v. Sabatino, 415 F.Supp.2d 1163, 1180 (D.Haw.2006) (“The purpose of [Rule F(5) ]...