Clausen v. M/V New Carissa

• Decision Date: 14 February 2001
• Docket Number: No. Civ. 00-6078-TC.,Civ. 00-6078-TC.
• Citation: 171 F.Supp.2d 1127
• Parties: Max & Lilli CLAUSEN, dba Clausen Oysters, Plaintiffs, v. M/V NEW CARISSA, in rem, Taiheiyo Kaiun Co., Ltd., Green Atlas Shipping, S.A., TMM Co., Ltd., Benjamin Morgado, The Britannia Steam Ship Insurance Association Limited, William Milwee, Gallagher Marine Systems, Inc., and Does 1 through 50, Defendants.
• Court: U.S. District Court — District of Oregon

171 F.Supp.2d 1127

Max & Lilli CLAUSEN, dba Clausen Oysters, Plaintiffs, v. M/V NEW CARISSA, in rem, Taiheiyo Kaiun Co., Ltd., Green Atlas Shipping, S.A., TMM Co., Ltd., Benjamin Morgado, The Britannia Steam Ship Insurance Association Limited, William Milwee, Gallagher Marine Systems, Inc., and Does 1 through 50, Defendants.

No. Civ. 00-6078-TC.

United States District Court, D. Oregon.

February 14, 2001.

COPYRIGHT MATERIAL OMITTED

David C. Tarshes, Davis Wright Tremaine, Seattle, WA, Eric L. Dahlin, Everett W. Jack, Jr., Davis Wright Tremaine, LLP, Portland, OR, James P. Walsh, David Wright Tremaine LLP, San Francisco, CA, for plaintiffs.

Craig C. Murphy, Wood Tatum Sanders & Murphy, Portland, OR, for M/V New Carissa.

Craig C. Murphy, Robert I. Sanders, Todd A. Zilbert, Wood Tatum Sanders & Murphy, Portland, OR, for Taiheiyo Kaiun Co., Ltd.

Robert I. Sanders, Todd A. Zilbert, Wood Tatum Sanders & Murphy, Portland, OR, for Green Atlas Shipping, SA, TMM Co., Ltd.

ORDER

COFFIN, United States Magistrate Judge.

Presently before the court are plaintiffs' motion (# 98) for leave to file an amended complaint, defendant Morgado's motion (# 63) for summary judgment on plaintiffs' fifth cause of action, defendants' motion (# 68) to bifurcate the trial, defendants' motion (# 94) to strike plaintiffs' demand for a jury trial, defendant Morgado's motion (# 90) to dismiss general maritime claims and strike plaintiffs' prayer for punitive damages, defendants' motion (# 91) for reconsideration and to strike prayer for punitive damages, and defendants' motion (# 96) for partial summary judgment on claims under ORS 468B.300 et. seq. (Oregon Oil Spillage Act).

1. MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

Plaintiffs have moved to amend their complaint to delete the M/V New Carissa as a defendant and thereby remove the in rem claim, to delete the reference to Fed. R.Civ.P. 9(h) to avoid admiralty jurisdiction, and to add Oregon common law claims of nuisance, negligence and trespass.

Plaintiffs argue that leave to amend "should be freely given when justice so requires." The purpose of these amendments is, according to plaintiffs, to "preserve its right to a jury trial". (# 99, page 3).

Defendants argue that plaintiffs' motion to amend should be denied because plaintiffs have already elected to proceed in admiralty and have thereby foreclosed their right to a jury trial. Also, defendants contend that the proposed amended complaint does not comply with Oregon pleading rules for punitive damages, and will unnecessarily complicate the trial.

The general policy under the federal rules is that leave to amend a pleading "shall be freely given when justice so requires," Fed.R.Civ.P. 15(a), and the policy is to be applied liberally. Morongo Band of Mission Indians v. Rose, 893 F.2d 1074 (9th Cir. 1990). Amendments "seeking to add claims are to be granted more freely than amendments adding parties", Union Pacific Railroad Co. v. Nevada Power Company, 950 F.2d 1429, 1432 (9th Cir. 1991), and the court's discretion to deny leave to amend is more broad where plaintiff has previously filed an amended complaint. Simon v. Value Behavioral Health, Inc., 208 F.3d 1073 (9th Cir. 2000).

Over time, courts have identified the following factors that may, either alone or in combination, justify denying leave to amend a pleading. Those factors include (1) futility of amendment; (2) prejudice to the opposing party; (3) undue delay; (4) bad faith or dilatory motive; and (5) repeated failure to cure deficiencies by previous amendment. Price v. Pinnacle Brands, Inc., 138 F.3d 602, 608 (5th Cir. 1998); Moore v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir. 1989). The granting or denial of leave to amend rests in the sound discretion of the trial court. Swanson v. United States Forest Service, 87 F.3d 339, 343 (9th Cir. 1996).

a. Futility of Amendment

Leave to amend may be denied if the proposed amendment is futile or would be subject to dismissal. Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991).

(1). Punitive Damages Under State Law

The defendants contest the addition of claims which can support a prayer for punitive damages under state law. The main arguments have addressed procedure, that is, does a plaintiff need to plead punitive damages in a law state claim in accordance with ORS 18.535 or under only the general notice pleading required of the federal rules.

Since the viability of plaintiffs' prayer for punitive damages is part of the decision whether to allow amendment, and in order to meet the directive of Fed.R.Civ.P. 1, the court has directed the plaintiffs, pursuant to the court's authority under Fed.R.Civ.P. 16, to provide the court with a clear statement of the evidence that would be offered at trial to support any claim for punitive damages. Plaintiffs have complied with the court's order, and defendants have responded as authorized by that same order.

The standard of proof for punitive damages under Oregon law is set forth in ORS 18.537(1):

Punitive damages are not recoverable in a civil action unless it is proven by clear and convincing evidence that the party against whom punitive damages are sought has acted with malice or has shown a reckless and outrageous indifference to a highly unreasonable risk of harm and has acted with a conscious indifference to the health, safety and welfare of others.

Plaintiffs' evidence includes the fact that Morgado anchored the New Carissa off a lee shore when he was aware of warnings of hazardous weather conditions; that he did not take on additional ballast even though he was advised "to have the vessel in full ballast to improve its handling inbound" by the pilot who was to board her in the morning and pilot her in to port; that he should have used more anchor chain; that his drag circle drawing was in error by being too small, thus failing to alert the crew that the anchor was dragging; that he opened the cargo hatches in spite of high winds and thus increased the sail effect on the vessel; and that he gave a hard right rudder command when attempting to weigh anchor and regain control of the vessel, which resulted in additional wind resistance.

Defendants have offered evidence that the ship's Master, Captain Morgado, attempted to contact experienced local pilots at least four times immediately after anchoring in order to notify them of his arrival and position, but that they did not respond. When he finally spoke with one, he received no caution or warning about his anchorage. Also, there is testimony from experienced pilots that ships frequently anchored at the location where the New Carissa anchored, and that it was marked as a place to anchor on area navigational charts. Further, two Coast Guardsman on lookout duty saw the New Carissa at anchor and were not alarmed by her location.

Defendants have also offered evidence that the weather condition on the morning of February 4, 1999, that drove the vessel to shore was not forecast and did occur suddenly. Further, defendants have offered evidence from treatises on seamanship that state that the length of anchor chain was adequate, and the two experienced pilots concur. There is no evidence that the anchor was dragging prior at any time throughout the night, or prior to the actions taken in the morning to prepare the ship for entry into port. There is evidence that the dragging anchor was noticed almost immediately and that attempted corrective measures were undertaken in a timely fashion.

Defendants' evidence shows that the act of opening the hatches to prepare for entering port was carried out as part of the plan initiated by the pilot rather than the captain, and that the pilot did not notify the ship of any change in plans until after the hatches had been opened.

While evidence must be considered in the light most favorable to plaintiffs, the court must engage in some balancing to determine whether the evidence presents a genuine issue of material fact sufficient to meet the heightened burden for punitive damages. Under Oregon law, the plaintiff must offer proof of reckless and outrageous indifference to a highly unreasonable risk of harm, and that defendant acted with a conscious indifference to the health, safety and welfare of others. Further, the evidence must be such that a reasonable jury could find that it is "clear and convincing" evidence of such conduct.

In this case, plaintiffs have failed to offer any credible proof of reckless or outrageous indifference. Further, the evidence shows that the hatches were open because of the expected arrival of the pilot, and it was only after pursuing the course of action dictated by the pilot did the captain receive a call from the pilot announcing that his arrival would be delayed. That, coupled with the unexpected weather, could not support a finding of reckless or outrageous indifference to a highly unreasonable risk of harm, or conscious indifference to the health, safety and welfare of others.

As to whether Morgado issued the order for hard right rudder, there is no direct evidence that he did so. While plaintiffs cite circumstantial evidence that the ship was initially facing into the wind (heading southwest) and ultimately was headed north, defendants counter that the shift was caused by action of the wind against the ship, coupled with unexpected swells resulting in the propellers lifting out of the water. Certainly this evidence cannot meet the clear and convincing standard, or support a finding of reckless or outrageous indifference. The same must be said of failing to take on more ballast. The ship was already carrying a great deal of ballast, and the evidence strongly suggests that it would not have been wise to add to what was already in place.

Nothing that plaintiffs have offered gives this court reason to believe that any reasonable factfinder could find that Captain Morgado acted with the requisite indifference that would support a claim...