Aponte v. Caribbean Petroleum Corp.

• Decision Date: 02 November 2015
• Docket Number: Civil Nos. 09–2092 (FAB),10–1337(FAB).
• Citation: 141 F.Supp.3d 166
• Parties: Eliezer Cruz APONTE, et al., Plaintiffs, v. CARIBBEAN PETROLEUM CORP., et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

141 F.Supp.3d 166

Eliezer Cruz APONTE, et al., Plaintiffs,

v.CARIBBEAN PETROLEUM CORP., et al., Defendants.

Civil Nos. 09–2092 (FAB)

10–1337(FAB).

United States District Court, D. Puerto Rico.

Signed Nov. 2, 2015.

John F. Nevares, John F. Nevares & Assoc. PSC, San Juan, PR, for Plaintiffs.

Victoria D. Pierce–King, Fernando J. Fornaris–Fernandez, Cancio, Nadal, Rivera & Diaz, San Juan, PR, William F. Knowles, Thomas M. Jones, Cozen O'Connor, Seattle, WA, Kevin M. Haas, Cozen O'Connor, New York, NY, for Defendants.

MEMORANDUM AND ORDER

FRANCISCO A. BESOSA

, District Judge.

After consideration of the parties' briefs addressing the Rule 14(c)

tender in the Limitation of Liability ("LOL") action,¹ the LOL trial structure,² and the LOL claimants' right to a jury trial,³ the Court issues the following order.

I. BACKGROUND

A. Factual Background

On October 23, 2009, an explosion and fire occurred at the Gulf Oil Facility located in Bayamon, Puerto Rico. The facility was owned and operated by Caribbean Petroleum Corporation ("CAPECO"). The explosion occurred while a vessel named the M/T Cape Bruny—which was owned and chartered, respectively, by Cape Bruny Tankschiffarts GmbH and Co. KG and Cape Bruny Shipping Company Ltd. (collectively, "Cape Bruny")—was discharging its cargo of unleaded gasoline into storage tanks at the facility. One or more of the tanks overflowed, and the spilled fuel found a source of ignition, causing the explosion. The explosion and subsequent fire created a large plume of smoke and spread hazardous material over Bayamon, San Juan, and other neighboring municipalities.

B. The Consolidated Actions

In the immediate aftermath of the explosion, numerous lawsuits were filed in this Court: (1) nine putative class actions,⁴ (2) ten "non-class mass-joinder" actions,⁵ and (3) two "individual" actions.⁶

On April 22, 2010, Cape Bruny, which had been named as a defendant in several of the lawsuits, filed a complaint for exoneration from, or limitation of, liability pursuant to the LOL Act, 46 U.S.C. § 30501 et seq.

The LOL Act allows a vessel owner to limit its liability to the value of the vessel plus pending freight, provided that the circumstances causing the damage were outside the owner's privity and knowledge. 46 U.S.C. § 30505.

The twenty-one lawsuits and the LOL action have been consolidated before the Court for the purpose of docket management, and all filings and orders are entered on the docket of Civil Case No. 09–2092.

C. Stays

In accordance with Supplemental Rule for Admiralty or Maritime Claims F(3) (generally, "Rule F"), the Court stayed all claims against Cape Bruny outside the LOL action on May 10, 2010. (Docket No. 343; see Fed.R.Civ.P. Supplemental R. F(3).)

On August 16, 2010, the Court stayed all claims against CAPECO in the consolidated actions after CAPECO filed for bankruptcy. (Docket No. 501.) On October 25, 2010, the Court extended this stay to all litigation in the consolidated cases. (Docket No. 533.) The Court modified the stay for the limited purpose of determining whether it had subject matter jurisdiction over the LOL action. (Docket No. 585.) On June 21, 2012, the Court found that it had admiralty jurisdiction over the LOL action. (Docket No. 663.)

On January 15, 2014, the Court vacated the bankruptcy stay. (Docket No. 809.) The Rule F(3) stay for all claims against Cape Bruny outside the LOL action, (Docket No. 343), however, remained in place.

On July 14, 2014, the Court found that "proceeding with the LOL action first will best achieve the orderly and expeditious disposition of issues arising out of the October 23, 2009 explosion." (Docket No. 1114.) Accordingly, the Court stayed all of the consolidated cases outside the LOL action. Id.

D. Claims Filed in the LOL Action

Thousands of claims have been filed in the LOL action. Most claims are by individuals who allege that they suffered personal injury and property damage as a result of the explosion and fire.⁷ These claimants are also plaintiffs in the twenty-one consolidated lawsuits. Other claims are by entities seeking contribution and indemnity for any sums that they may be compelled to pay individuals that suffered damage as a result of the explosion and fire.⁸ Generally speaking, these claimants, along with Cape Bruny, are defendants in some or all of the twenty-one consolidated lawsuits.⁹

E. Cape Bruny's Third–Party Complaint and Rule 14(c)

Tender

On March 28, 2014, Cape Bruny, as the petitioner for exoneration from or limitation of liability, filed a third-party complaint in the LOL action pursuant to Federal Rule of Civil Procedure 14(c)

("Rule 14(c)"). (Docket No. 910.) The complaint is against seventeen third-party defendants.¹⁰ Ten of these third-party defendants also filed claims for contribution and indemnity in the LOL action.¹¹ Cape Bruny alleges that the explosion "may have been caused in whole or in part by the acts, omissions, or culpable conduct" of the third-party defendants. Id. at p. 12. Pursuant to Rule 14(c)(2)

, Cape Bruny demands judgment in the claimants' favor against the third-party defendants. Id. at p. 11.

F. Discovery and Scheduling Order

The parties in all consolidated actions submitted a proposed scheduling order that would govern "the determination of the liability of all defendants as to all of the plaintiffs' claims in all cases filed in relation to the explosion." (Docket No. 838.) The Court approved a modified version of that schedule on February 21, 2014. (Docket No. 858.) Pursuant to that order, discovery commenced on March 1, 2014, and concluded on May 15, 2015. Id. at pp. 2–3. Trial is set for February 1, 2016. Id. at p. 3.

II. CAPE BRUNY'S RULE 14(c)

TENDER

Certain claimants in the LOL action challenge Cape Bruny's Rule 14(c)

tender. These claimants are also plaintiffs in the nine putative class actions and ten "non-class mass-joinder" actions that have been stayed during the LOL proceeding. They contend that Cape Bruny's Rule 14(c) tender improperly forces them to prosecute claims against other parties within the LOL action. (Docket No. 1199 at pp. 5–8.) Rule 14(c)(1) provides as follows:

If a plaintiff asserts an admiralty or maritime claim under Rule 9(h), the defendant ... may, as a third-party plaintiff, bring in a third-party defendant who may be wholly or partly liable—either to the plaintiff or to the third-party plaintiff—for remedy over, contribution, or otherwise on account of the same transaction, occurrence, or series of transactions or occurrences.

Fed.R.Civ.P. 14(c)(1)

. Claimants insist that Cape Bruny is the plaintiff in the LOL action because it initiated the action by filing the complaint for exoneration from, or limitation of, liability. (Docket No. 1199 at pp. 7–8.) Because Rule 14(c)(1) allows only defendants to implead third parties, claimants argue that Rule 14(c)(1) does not authorize plaintiff Cape Bruny to implead third parties in the LOL action. Id.

The Court agrees with claimants that Cape Bruny is the plaintiff in the LOL action and that, accordingly, Rule 14(c)(1)

does not expressly allow Cape Bruny to implead third parties. Nonetheless, courts routinely allow a party that initiated a LOL action to bring in additional parties that it asserts may be liable for the claims against it. 6 Charles Alan Wright, et al., Federal Practice and Procedure § 1465 (3d ed.2015) ; accord 3–14 Richard D. Freer, Moore's Federal Practice § 14.52 (3d ed. 2015) ("[W]hen a petitioner files for exoneration or limitation of liability, after one claimant has answered and has made its claim for full recovery, the petitioner may implead a third-party defendant to the claim."); see, e.g., In re Motor Ship Pac. Carrier, 489 F.2d 152, 153–57 (5th Cir.1974) ; In re Oil Spill by Oil Rig "Deepwater Horizon" in Gulf of Mexico, on Apr. 20, 2010,

21 F.Supp.3d 657, 668 (E.D.La.2014) ; Williamson Towing Co. v. Illinois, 396 F.Supp. 431, 433 (E.D.Ill.1975) ("The right of a petitioner under the [LOL Act] to implead third parties in the course of litigation is clear."); In re McAninch, 392 F.Supp. 96, 97 (S.D.Tex.1975) (permitting vessel party that initiated LOL action to use Rule 14(c) to implead third party that it alleged caused the maritime disaster, reasoning that this is "a very common-sense approach" that "expedite[s] matters by getting all the parties concerned involved in a single proceeding").

Claimants retreat in their response and reply briefs on this issue, arguing that Rule 14(c)(1)

"could possibly be read" to allow Cape Bruny to implead third parties, but that Cape Bruny's Rule 14(c)(2) tender of the third parties to claimants is "clearly improper." (Docket No. 1206 at p. 3; see Docket No. 1212 at p. 2.)

Rule 14(c)(2)

provides as follows:

The third-party plaintiff may demand judgment in the plaintiff's favor against the third-party defendant. In that event, the third-party defendant must defend under Rule 12 against the plaintiff's claim as well as the third-party plaintiff's claim; and the action proceeds as if the plaintiff had sued both the third-party defendant and the third-party plaintiff.

Fed.R.Civ.P. 14(c)(2)

. Claimants fail to present a developed argument (or any legal authority) that explains why Rule 14(c)(2) is unavailable in LOL proceedings.

The purposes of Rule 14(c)

's "unique liberal joinder policy" are to "expedite and consolidate admiralty actions by permitting a third-party plaintiff to demand judgment against a third-party defendant in favor of the plaintiff," to "reduce the possibility of inconsistent results in separate actions, [to] eliminate redundant litigation, and [to] prevent a third party's disappearing if jurisdiction and control over the party and his assets [are] not immediately established." Texaco Exploration & Prod. Co. v. AmClyde Engineered Products Co., 243 F.3d 906, 910 (5th Cir.2001). All of these purposes are served by allowing Rule 14(c)(2) tenders in LOL actions.

Here, claimants allege in the various consolidated cases that multiple parties are liable for causing the...