In re Complaint Energetic Tank, Inc.

• Decision Date: 28 February 2023
• Docket Number: 18-cv-1359 (PAC) (RWL)
• Parties: In the Matter of the Complaint of ENERGETIC TANK, INC., as Owner of the M/V ALNIC MC, for Exoneration from or Limitation of Liability
• Court: U.S. District Court — Southern District of New York

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In the Matter of the Complaint of ENERGETIC TANK, INC., as Owner of the M/V ALNIC MC, for Exoneration from or Limitation of Liability

No. 18-cv-1359 (PAC) (RWL)

United States District Court, S.D. New York

February 28, 2023

OPINION & ORDER

HONORABLE PAUL A. CROTTY United States District Judge.

This case concerns a collision that occurred on August 21, 2017 in the Singapore Strait between a United States Navy warship and an oil tanker. Petitioner Energetic Tank, Inc. filed the instant action seeking either exoneration or limitation of its liability from the collision. The United States and dozens of injured or deceased sailors (the “Personal Injury Claimants” and “Wrongful Death Claimants,” respectively) then brought claims against Petitioner, seeking damages sounding in tort. The Court divided proceedings into two discrete phases: liability for the collision (“Phase I”), and determination of damages owed to the Claimants (“Phase II”).^[1] Before issuing the final Judgment from Phase I, the Court solicited additional briefing on inter alia, whether any of the Claimants were entitled to a jury trial in Phase II. See ECF No 386. The Court now determines that both groups of Claimants will proceed before a jury in Phase II.

The Court assumes familiarity with the record as set forth in its previous Opinion and therefore only briefly summarizes it here. See generally Matter of Energetic Tank, Inc., No. 18CV1359, 2022 WL 2159786 (S.D.N.Y. June 15, 2022) (the “Phase I Opinion”). Petitioner initiated this action by filing a complaint seeking relief under the Limitation of Liability Act. See 46 U.S.C. §§ 30501 et seq.^[2]In Phase I, following a bench trial, the Court determined Petitioner was 20% at fault for the collision and the United States was 80% at fault and awarded each side damages. The Court also denied Petitioner exoneration or limitation of its liability. See Phase I Opinion at *34-35^[3]

The Court previously issued a choice-of-law decision, holding that Singapore law applies in this case to substantive issues of liability and damages. See Matter of Energetic Tank, Inc., No. 118CV1359PACRWL, 2020 WL 114517, at *7 (S.D.N.Y. Jan. 10, 2020) (“Choice of Law Opinion”), reconsideration denied, No. 118CV1359PACRWL, 2020 WL 978257 (S.D.N.Y. Feb. 28, 2020). The Court reiterates that Singapore law governs the substantive aspects of Phase II. However, the parties agree that the right to a jury trial in federal court is a matter of federal law, see McGuire v. Russell Miller, Inc., 1 F.3d 1306, 1314 (2d Cir. 1993), and thus, United States law governs the availability of a jury trial.

I. UNDER THE “SAVING TO SUITORS CLAUSE,” THE PERSONAL INJURY CLAIMANTS MAY TRY THEIR CLAIMS BEFORE A JURY

While “the Seventh Amendment does not require jury trials in admiralty cases, neither that Amendment nor any other provision of the Constitution forbids them. Nor does any statute of Congress or Rule of Procedure, Civil or Admiralty, forbid jury trials in maritime cases.” Fitzgerald v. U.S. Lines Co., 374 U.S. 16, 20 (1963) (citations omitted). Further, under 28 U.S.C. § 1333(1) (known as the “saving to suitors” clause), admiralty and maritime cases reserve “to suitors ‘in all cases all other remedies to which they are otherwise entitled”', including the right to a jury trial. See Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 444, 455 (2001) (quoting 28 U.S.C. § 1333(1)). Because a claimant is otherwise enjoined from proceeding in other fora during a limitation action, there is a ‘“recurring and inherent conflict in admiralty law' between the nonjury admiralty tradition and a claimant's right to jury trial.” Complaint of Poling Trans. Corp., 776 F.Supp. 779, 782 (S.D.N.Y. 1991) (quoting Complaint of Dammers & Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 754 (2d Cir. 1988)). “(A]dmiralty courts must strive whenever possible to promote the policies underlying both provisions.” Dammers, 836 F.2d at 760. After all, the Limitation of Liability Act was not designed to “enabl[e] a vessel owner to take a tort victim's case away from a jury” but rather “was fashioned by Congress as a shield rather than a sword.” Poling Trans. Corp., 776 F.Supp. 779 at 786 (quotations and citations omitted).

To promote both the non-jury admiralty tradition and a claimant's right to a jury trial, a non-admiralty claim “with independent jurisdictional basis normally carrying a jury right.. . may be tried to the jury.” Poling, 776 F.Supp. at 783 (internal quotations omitted); see also Terracciano v. McAlinden Const. Co., 485 F.2d 304, 309 n.16 (2d Cir. 1973). One such independent jurisdictional basis is diversity jurisdiction based on common law tort claims, provided there are independent grounds for diversity of citizenship. Ghotra by Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054 (9th Cir. 1997); see also Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 360-61 (1962).

Consistent with the jury right preserved in the “saving to suitors clause,” the Personal Injury Claimants may try their claims before a jury. Although Petitioner's limitation proceeding is quintessentially an admiralty action, the Court already adjudicated the Petitioner's limitation claims and liability for the crash in Phase I. See the Phase I Opinion. What remains in Phase II are the Personal Injury Claimants claims sounding in tort-claims that provide an independent basis for granting a jury trial within this proceeding. See Ghotra 113 F.3d at 1054-56 (“[N]egligence ... [is an] in personam maritime claim[] that could have been brought ‘at common law.'”).

The Court now must determine whether “the requirements of diversity of citizenship and amount in controversy are met.” Ghotra by Ghotra, 113 F.3d at 1054. The Court finds they are. “Consolidated cases do not lose their separate identity, and thus diversity is evaluated in terms of each individual case.” Aetna Cas. and Sur. Co. v. Aniero Concrete Co., Inc., 404 F.3d 566, 569 (2d Cir. 2005) (internal citation omitted). The parties agree that Petitioner is a foreign entity and that all Claimants meet the amount in controversy threshold. See ECF Nos. 1, 486, 499. On January 23, 2023, the Court ordered the Claimants to submit sworn evidence attesting to the facts they contend support diversity jurisdiction. See ECF No. 444.^[4] The remaining Claimants submitted declarations, drivers' licenses, and/or United States tax returns attesting to their U.S. citizenship and domicile. See ECF Nos 449-97. Military personnel are presumed to retain their domicile upon entry into the military and assignment to another state or country absent “clear and unequivocal evidence” demonstrating an intent to abandon their original domicile and adopt one abroad. In re Ski Train Fire In Kaprun, Austria on Nov. 11, 2000, 251 F.Supp.2d 717, 725-26 (S.D.N.Y. 2003). The Personal Injury Claimants have thus properly evoked the Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332 and timely demanded a jury trial. This invocation places their claims squarely within the protections of the “saving to suitors” clause and preserves their jury rights.

Allowing the Personal Injury Claimants to proceed to a jury trial is also consistent with the policy underlying the “saving to suitors” clause. After all, “[t]he limitation device was not intended to be an offensive weapon for vessel owners,” and denying the Personal Injury Claimants a jury trial in Phase II would allow Petitioner to use the limitation proceeding “to strip the claimants of a jury trial” to which they “would otherwise be entitled under the saving to suitors clause.” Complaint of Great Lakes Dredge & Dock Co., 895 F.Supp. 604,612 (S.D.N.Y. 1995). The Court in Phase I “ensure[d] that [Petitioner] will not face liability in excess of the limitation fund” and thus must now “take all steps necessary to assure that claimants are allowed to pursue their common law remedies in accordance with the ‘saving to suitors' clause.” Dammers, 836 F.2d at 759. These steps include allowing the Personal Injury Claimants to try their claims before a jury during Phase II.^[5] Arguing for the propriety of a bench trial, Petitioner suggests the Court has discretion and should balance three factors: “(1) the admiralty tradition disfavoring the use of a jury in limitation proceedings; (2) the preservation of the claimants' rights under the savings to suitors clause; and (3) judicial economy.” Pet'r's Br. 17, ECF No. 395 (citing In re Petition of Atlantis Fishing Fleet Corp., No. CV-01-8263(SJF)(ASC) 2004 WL 3704912, at *3-4 (Mar. 22, 2004, E.D.N.Y.)). The Court notes that this three-factor test was initially used to determine whether a court could exercise supplemental jurisdiction and send non-diverse claims to a jury, see Great Lakes, 895 F.Supp. at 612-13; Poling, 776 F.Supp. at 785-86, unlike here where the Personal Injury Claimants properly invoked diversity. Even assuming, however, that this is the correct analytical framework, the Court disagrees that the balance tips in favor of a bench trial.

For one, there are weaker admiralty interests at play in Phase II. Although there is a tradition of bench trials in limitation proceedings, the Court has already honored that tradition by bifurcating proceedings, holding a bench trial and denying Petitioner limitation in Phase I. See generally Phase I Opinion, 2022 WL 2159786. What remains in Phase II is a determination of the Personal Injury Claimants' damages and “courts are demonstrably more willing to circumscribe the admiralty tradition of non-jury trials where parties seek to put claims based on . . . personal injury before a jury.” Great Lakes, 895 F.Supp. at 614. To the extent Petitioner alleges that Singapore substantive law favors a...