Nyon Technical Commercial, Inc. v. Equitable Equip. Co.
| Decision Date | 09 May 1972 |
| Docket Number | Civ. A. No. 71-1975. |
| Citation | 341 F. Supp. 777 |
| Parties | NYON TECHNICAL COMMERCIAL, INC. and Howard C. Riley v. EQUITABLE EQUIPMENT COMPANY, Inc. |
| Court | U.S. District Court — Eastern District of Louisiana |
Alfred M. Farrell, Jr., and M. D. Yager, Terriberry, Carroll, Yancey & Farrell, New Orleans, La., for plaintiffs.
Charles E. Lugenbuhl, and Maurice C. Hebert, Jr., Lemle, Kelleher, Kohlmeyer, Matthews & Schumacher, Robert E. Winn, Sessions, Fishman, Rosenson, Snellings & Boisfontaine, New Orleans, La., for defendant.
This matter came before the Court on the Motion of Equitable Equipment Company, Inc., defendant-counterclaimant (hereinafter referred to as "Equipment"), for the issuance of a preliminary mandatory injunction. By agreement of the parties the Court ordered consolidation of the hearing on the motion for a preliminary injunction with the trial on the merits of the permanent injunction, and the issue has been presented for adjudication in that posture.
In July of 1971 Nyon Technical Commercial, Inc., co-plaintiff (hereinafter referred to as "Nyon"), through its agent, Howard C. Riley, co-plaintiff (hereinafter referred to as "Riley"), contracted with Equipment to have certain repairs made on Nyon's vessel, the M/V PUERTO DEL SOL (hereinafter referred to as "The Puerto"). A fire broke out in the vessel while it was alongside Equipment's wharf. The vessel was sunk and then raised by Nyon and its agent, Riley, with the assistance of Equipment. All that remained, however, was a burned out hulk which has been tied alongside Equipment's wharf ever since.
Nyon instituted this action against Equipment for damages attributable to the destruction of the vessel, alleging that Equipment was responsible for the fire. In its answer Equipment denied these allegations and advanced the affirmative defense that the cause of the fire was the unseaworthiness of The Puerto. In addition, Equipment counterclaimed, demanding payment on its contract of repair, payment for the services it performed in raising The Puerto, and monetary damages for the loss of wharf space as a result of the burned out hulk remaining alongside the wharf. Equipment subsequently filed a motion for a mandatory injunction seeking an order compelling Nyon and its Agent, Riley, to remove the hulk of The Puerto.
There is a threshold question which must be resolved before the merits of the motion for a mandatory injunction can be determined. That question is whether the Court, where jurisdiction is solely in admiralty, has the power to issue such an injunction.
In this regard Equipment asserts that there are two bases for the Court's jurisdiction over its claim for injunctive relief; (i) pendent jurisdiction, and (ii) ancillary jurisdiction. It first argues that the Court's pendent jurisdiction should be invoked over the equitable injunctive demand because it arises out of the same operative facts as the maritime claims. Secondly, it is urged that the Court has ancillary jurisdiction over the claim for equitable relief as a result of the merger of admiralty and civil rules of procedure in 1966, because Rule 13 extended the right to counterclaim to admiralty cases.
Nyon, on the other hand, argues that admiralty law does not provide for equitable injunctive relief, and that since the Court's jurisdiction here rests solely in admiralty, the Court does not have the power to grant the equitable relief sought.
It is the opinion of this Court that it does not have the power to grant the injunction sought by Equipment.
The cause of action which gives rise to the circumstances which are sought to be remedied by injunctive relief, that is, the claim that Nyon's vessel is trespassing on Equipment's wharf, is a maritime tort. Sound Marine & Machine Corporation v. Westchester County, 100 F.2d 360 (2nd Cir. 1938), cert. denied, 306 U.S. 642, 59 S.Ct. 582, 83 L. Ed. 1042 (1939); Admiralty Jurisdiction Extension Act, 46 U.S.C. § 740 (1948); Empire Seafoods, Inc. v. Anderson, 398 F.2d 204 (5th Cir. 1968), cert. denied, 393 U.S. 983, 89 S.Ct. 449, 21 L.Ed.2d 444 (1968). The burned out ship is in navigable waters alongside Equipment's wharf, and, as such, is preventing Equipment from the use of the navigable water alongside its wharf. The cause of action, being a maritime tort, is cognizable in this Court by means of the Court's admiralty jurisdiction. The other claims raised by the pleadings are also maritime in nature inasmuch as they arise out of maritime contracts.
The traditional rule in admiralty has been that there is no power to grant equitable relief in a direct proceeding for that purpose. Schoenamsgruber v. Hamburg American Line, 294 U.S. 454, 55 S.Ct. 475, 79 L.Ed. 989 (1935). There is, however, language to the effect that admiralty applies equitable principles. Watts v. Camors, 115 U.S. 353, 6 S.Ct. 91, 29 L.Ed. 406 (1885). Notwithstanding such language, the distinction between the application of equitable principles and the power to afford equitable relief has long been recognized. The Supreme Court in The Eclipse, 135 U.S. 599, 10 S.Ct. 873, 34 L.Ed. 269 (1890) said that: "While the court of admiralty exercises its jurisdiction upon equitable principles, it has not the characteristic powers of a court of equity." 135 U.S. at 608. See also, United States v. Cornell Steamboat Company, 202 U.S. 184, 26 S.Ct. 648, 50 L. Ed. 987 (1906) and G. H. Robinson, Handbook of Admiralty Law in the United States, 193 (1939).
Equipment, while conceding that the injunction may not lie as an independent admiralty action, suggests that the posture of this case causes the Court to have pendent jurisdiction. In particular, Equipment argues that the Court should treat the claim for equitable relief as a state claim, and exercise jurisdiction over it because it is pendent to the admiralty claims in that all the claims arise out of the same operative facts. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).
In Swift & Co. Packers v. Compania Colombiana Del Caribe, 339 U.S. 684, 70 S.Ct. 861, 94 L.Ed. 1206 (1950), the Supreme Court held that the admiralty court could grant equitable relief as an incident to an admiralty claim in order to secure the defendant's appearance, and to insure the fruits of a judgment in the plaintiff's favor. The maritime claim was for lost cargo. An attachment was sought against The Caribe, but the ship had been fraudulently transferred so as to prevent the attachment. The admiralty court was allowed equitable power to examine the fraudulent transfer as an incident to its admiralty jurisdiction.
The considerations in this case are different from those found by the Supreme Court in The Caribe, supra. The fraudulent transfer in The Caribe, supra, was referred to by the Supreme Court as a subsidiary or derivative issue. The injunctive relief sought here by Equipment is not a subsidiary or derivative issue. Rather, the claim of trespass is the most significant element of Equipment's counterclaim. More importantly, in The Caribe, supra, the failure to grant equitable relief would have deprived the admiralty court of the ability to administer justice; that is, to insure a money judgment in the event the owners of the vessel were found to be liable for the loss of Swift & Company's cargo. The Court, by not granting the equitable relief sought herein, will not be prevented from adjudicating Equipment's claim for monetary damages arising out of the lost wharf space.
In Beverly Hills National Bank & Trust Co. v. Compania de Navegacione Almirante S. A. Panama, 437 F.2d 301 (9th Cir. 1971), the court relied on The Caribe, supra, as authority for the assertion of pendent jurisdiction over an equitable claim for relief. A shipowner was suing for freight charges due to him. He urged two bases for recovery; an admiralty claim, and an equitable claim. The shipowner sought to have the court find that a constructive trust existed over certain receipts held by a bank. The admiralty claim was dismissed, but the court maintained its jurisdiction because the equitable claim was found to be pendent to the admiralty claim. In Beverly Hills, supra, as was the case in The Caribe, supra, the court was faced with a situation where the plaintiff could not obtain a judgment if jurisdiction over the non-maritime claim was not retained. That is not the situation before this Court.
The doctrine of pendent jurisdiction was applied by the Supreme Court to maritime claims in "very limited circumstances" in Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S. Ct. 468, 3 L.Ed.2d 368 (1959). Before the Supreme Court considered the application of the doctrine which it denominated as pendent jurisdiction, it held that general maritime claims, although rooted in federal law, could not be brought before a federal court as a "federal" question under 28 U.S.C. § 1331 (1958).
The Second Circuit interpreting the Supreme Court's holding on federal question jurisdiction in Romero, supra, stated:
The rationale of that case, as we read it, is that when a seaman suing in federal court for personal injury alleges a substantial claim only under the general maritime law as distinguished from a federal statute, he may have only such remedies as the maritime law affords. Khedivial Line, S. A. E. v. Seafarers' International Union, 278 F.2d 49, 53 (2nd Cir. 1960).
The Second Circuit held that maritime law does not afford the remedy of injunction where the complaint alleges a maritime tort. Khedivial, supra at 52-53. This Court is of the opinion, as was the Second Circuit in Khedivial, supra at 53, that the comment in 73 Harv.L. Rev. 128 at 141 (1959) is correct when it states that "properly interpreted, Romero makes unavailable an equitable action in a federal court to enjoin the commission of a maritime tort."
The plaintiff's claims under the general maritime law in Romero, supra, were found to be pendent to...
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...59 S.Ct. 582, 83 L.Ed. 1042; Streckfus Steamers v. Mayor and Aldermen, 5 Cir. 1936, 81 F.2d 298; Nyon Technical Commercial, Inc. v. Equitable Equipment Co., E.D.La.1972, 341 F.Supp. 777. But this dogma has been strenuously criticized as irrational, Morrison, The Remedial Powers of the Admir......