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Barry v. Shell Oil Co.

United States District Court, D. Alaska

March 30, 2016

BLANE BARRY, Plaintiff,
v.
SHELL OIL COMPANY, ARCTIA OFFSHORE, LTD., SHELL OFFSHORE INC., and SAFETY MANAGEMENT SYSTEMS, LLC, Defendants.

ORDER AND OPINION [RE: MOTION AT DOCKET 54]

JOHN W. SEDWICK SENIOR UNITED STATES DISTRICT JUDGE

I. MOTION PRESENTED

At docket 54, Defendants Shell Oil Company (“Shell”), Shell Offshore, Inc. (“Shell Offshore”), and Arctia Offshore, Ltd. (“Arctia”; collectively referred to as “Defendants”) filed a motion to strike the jury demand made by Plaintiff Blane Barry (“Plaintiff”). Plaintiff responds at docket 56, and Defendants reply at docket 57.

II. BACKGROUND

On August 17, 2012, Plaintiff was a crew member aboard the MSV NORDICA, which was in navigable waters in Alaska, when he sustained serious injuries while lifting heavy cables on the vessel. He thereafter filed a series of lawsuits seeking damages. In December 2012 he filed a negligence claim in Harris County, Texas, against Shell and Arctia, but he later voluntarily dismissed the suit after Arctia challenged the court’s personal jurisdiction over it. Plaintiff then filed suit in Orleans Parish, Louisiana, naming Shell, Shell Offshore, Arctia, and the other defendant in this case, Safety Management Systems, LLC (“SMS”), as defendants. After the defendants successfully challenged venue, the case was transferred to East Baton Rouge Parish. Arctia was later dismissed from the case for lack of personal jurisdiction. The state court action is currently pending but only against Shell, Shell Offshore, and SMS.

Plaintiff filed the current action in federal court on July 20, 2015, against Shell and Arctia. The complaint specifically premised the court’s jurisdiction on diversity jurisdiction under 28 U.S.C. § 1332. The complaint contained claims against Shell and Arctia for negligence, negligence per se, and unseaworthiness “under the general maritime law of the United States.” On August 10, 2015, Plaintiff filed an amended complaint that adds Shell Offshore and SMS as defendants to the action. The amended complaint maintains that subject matter jurisdiction is premised on diversity jurisdiction and keeps the claims for negligence, negligence per se, and unseaworthiness “under the general maritime law of the United States” against all Defendants, including SMS.

Defendants argue that with the addition of SMS to the action, there is no longer complete diversity of the parties-the parties do not dispute that Plaintiff and SMS are both citizens of Louisiana. Defendants argue that without complete diversity, the only basis for the court’s subject matter jurisdiction is based on admiralty pursuant to 28 U.S.C. § 1333, and they point out that there is no right to a jury trial in admiralty cases. Plaintiff argues that his right to a jury trial should be preserved. Alternatively, he argues that he intends to file a motion to dismiss SMS without prejudice to remedy the complete diversity problem. Defendants reply that SMS cannot or should not be dismissed from the case.

III. STANDARD OF REVIEW

Rule 39 allows a court, on motion or on its own, to find that there is no federal right to a jury trial on some or all issues present in a case.[1] Whether a party is entitled to a jury trial in federal court is a question of law.[2]

IV. DISCUSSION

Under 28 U.S.C. § 1333 federal courts have exclusive jurisdiction over “[a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.”[3] The latter clause allows state courts to “adjudicate maritime causes of action in proceedings ‘in personam’” and also “permits the plaintiff to bring an action ‘at law’ in the federal district court, provided the requirements of diversity of citizenship and amount in controversy are met.”[4] Therefore, a plaintiff with in personam maritime claims can file suit 1) in federal court under the federal court’s admiralty jurisdiction; 2) in federal court under diversity jurisdiction provided the parties are diverse and the amount in controversy is satisfied; or 3) in state court.[5] Given that the same substantive law applies to the claim regardless of the forum, the primary difference is procedural, with the biggest factor being whether there is a right to a jury trial.[6] “The Seventh Amendment guarantees a jury trial in cases at common law. In admiralty cases, however, the Seventh Amendment neither requires jury trials nor forbids them.”[7] That is, there is no right to a jury trial in admiralty cases, [8]and historically admiralty cases are tried without juries.[9]

Disputes over the right to a jury trial arise when a complaint includes some claims that must be tried to a jury and other admiralty claims that would ordinarily not be tried to a jury. In Fitzgerald v. United States Lines Co., [10] the plaintiff alleged a negligence claim under the Jones Act, which provides for a statutory right to a jury trial, and two claims under general maritime law-one for unseaworthiness and one for maintenance and cure-which are traditionally tried without a jury. Rather than split the trials on the claims so that the Jones Act claim would be determined by a jury and the maritime claims would be determined by a judge, the Supreme Court held that all claims must be submitted to a jury. The Court reasoned that trying the Jones Act claim with a jury and separate from the maritime claims would be confusing and inefficient given that all the claims “serve the same purpose of indemnifying a seaman for damages caused by injury, depend in large part upon the same evidence, and involve some identical elements of recovery.”[11] It concluded that “[o]nly one trier of fact should be used for the trial of what is essentially one lawsuit to settle one claim split conceptually into separate parts because of procedural developments.”[12]

The Ninth Circuit has expanded the rationale in Fitzgerald to situations where admiralty in rem claims are combined with diversity in personam claims. In Ghotra v. Bandila Shipping, Inc., [13] a marine surveyor was killed while inspecting a vessel’s cargo hold. The surveyor’s surviving family filed a lawsuit, alleging common law negligence and gross negligence and a statutory negligence scheme premised on diversity jurisdiction against the owner and charterer of the ship. The complaint also raised an in rem claim against the ship itself for negligence under admiralty jurisdiction. The plaintiffs then demanded a jury trial for all claims, including the in rem claim. The district court struck the demand for a jury trial. The Ninth Circuit reversed:

The Ghotras invoked the jurisdiction of two historically separate departments in a single action, combining claims at law under diversity jurisdiction with an in rem claim under admiralty jurisdiction. Under the Seventh Amendment, the Ghotras were entitled to a jury trial on the claims brought under the court's diversity jurisdiction. We find nothing inherently incongruous about bringing an in rem and an in personam claim together before the jury when the claims arise out of a single occurrence. Although the right to jury trial in the instant case derives from the savings to suitors clause rather than a statutory grant such as the Jones Act, the reasoning of Fitzgerald is equally persuasive and justifies a jury trial over all four claims, where the in rem claim arises out of the same factual circumstances as the other three claims. . . . In light of the fact that the Ghotras could have brought two separate actions, one consisting of the in personam claims brought under diversity and one consisting solely of the in rem claim, which could then have been ...

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