Kanaway Seafoods, Inc., et al. vs. Pacific Predator, AK Registration No. AK3565AN, et al.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
KANAWAY SEAFOODS, INC., d/b/a
Alaska General Seafoods, a Delaware
corporation; and LIBERTY PACKING,
LLC, a Washington limited liability
company,
Plaintiffs,
vs.
PACIFIC PREDATOR, AK
Registration No. AK3565AN, its
engines, machinery, appurtenances,
etc., in rem; BRYAN HOWEY, in
personam; DANA HOWEY, in
personam; and ALASKA WILD
EXPORTS, LLC, in personam,
Defendants.
Case No. 3:22-cv-00027-JMK-KFR
ORDER ADOPTING IN PART AND
DECLINING TO ADOPT IN PART
REPORT AND
RECOMMENDATION
Before the Court are Defendants’ (1) Motion to Dismiss for Lack of
Jurisdiction in Admiralty Re: “Advances” for Temporary Limited Entry Permits at
Docket 66 and (2) Motion to Dismiss for Lack of Jurisdiction Re: Rule D “Petitory Action”
and Under Preferred Ship Mortgage Act at Docket 76 (together, the “Motions”). Plaintiffs
responded in opposition at Dockets 77 and 82. Defendants replied at Dockets 80 and 84.
The Motions were referred to the Honorable Magistrate Judge Kyle F. Reardon. 	At
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 1 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 2
Docket 87, the Magistrate Judge issued his Report and Recommendation, in which he
recommended that the Motions be denied. 	Defendants objected to the Report and
Recommendation at Docket 88, to which Plaintiffs replied at Docket 95.
The matter is now before this Court pursuant to 28 U.S.C. § 636(b)(1). That
statute provides that a district court “may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate judge.”1 	A court is to “make a de
novo determination of those portions of the [magistrate judge’s] report or specified
proposed findings or recommendations to which objection is made.”2 But as to those topics
on which no objections are filed, “[n]either the Constitution nor [28 U.S.C. § 636(b)(1)(C)]
requires a district judge to review, de novo, findings and recommendations that the parties
themselves accept as correct.”3
The Court has considered de novo Defendants’ objections and finds as
follows:
Objection #1 relates to the Magistrate Judge’s finding that Defendants’
arguments concerning state laws governing the possession and transfer of limited entry
permits are irrelevant to subject matter jurisdiction. 4 	Defendants assert that Alaska has
“exclusive jurisdiction over all legal issues related to limited entry permits,” and therefore
1 28 U.S.C. § 636(b)(1)(C).
2 Id.
3 United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003); see also Thomas v.
Arn, 474 U.S. 140, 150 (1985) (“It does not appear that Congress intended to require district court
review of a magistrate’s factual or legal conclusions, under a de novo or any other standard, when
neither party objects to those findings.”).
4 Docket 88 at 2; Docket 87 at 14.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 2 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 3
“Alaska individual limited entry permits fall outside federal maritime law.”5 Defendants’
objection is overruled. Federal jurisdiction over AGS’s lien claim hinges on whether the
funds loaned by AGS to the Howeys were used for “necessaries” under 46 U.S.C. § 31342,
such that a maritime lien exists against the P ACIFIC PREDATOR .6 	The Magistrate Judge
concluded, and this Court agrees, that maritime jurisdiction is proper over AGS’s claims
because 	AGS’s 	funds 	were 	advanced 	and 	used 	for 	“necessaries” 	for 	the 	PACIFIC
PREDATOR , including the limited entry permits. 	Defendants do not take issue with this
finding in Objection #1; instead, they object to the Magistrate Judge’s reasoning that
Alaska 	laws 	governing 	limited 	entry 	permits 	do 	not 	alter 	this 	Court’s 	maritime
jurisdiction.7 That finding is plainly correct. This case does not involve a conflict between
Alaska law and federal maritime law—AGS’s maritime lien is asserted against the Vessel,
not the limited entry permits themselves—therefore, Alaska laws imposing restrictions on
the possession and transfer of limited entry permits are inconsequential to the Court’s
jurisdictional analysis.8 Because the Amended Complaint adequately asserts that AGS has
a maritime lien under § 31342, jurisdiction is proper over AGS’s lien claim, and state laws
relating to limited entry permits do not alter this result.
Objections #2 and #3 are related to the Court’s jurisdiction over Plaintiff
Liberty Packing LLC’s (“Liberty”) lien claim and the Court considers them together.
5 Docket 88 at 2.
6 46 U.S.C. § 31342 (“[A] person providing necessaries to a vessel . . . has a maritime
lien on the vessel . . . [and] may being a civil action in rem to enforce the lien . . . .”).
7 Docket 87 at 14.
8 Docket 64 at 9.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 3 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 4
Objection #2 concerns whether “Plaintiffs need only assert the right to possess the Vessel”
to establish jurisdiction under Supplementary Admiralty Rule D.9 Objection #3 relates to
the Magistrate Judge’s declination to consider Defendants’ Motion to Dismiss under the
Preferred Ship Mortgage Act.10 Defendants argue that the Court must consider this basis
for jurisdiction “[i]f the other bases for asserting maritime jurisdiction are dismissed.”11
These objections are sustained in part and overruled in part.
The 	Amended 	Complaint 	seeks 	“petitory 	relief 	under 	Supplemental
Admiralty Rule D.”12 Plaintiffs argue that, despite the language in the Amended Complaint
they bring a possessory, rather than a petitory, action under Rule D.13 	“[A]dmiralty has
jurisdiction in a possessory suit by the legal owner of a vessel who has been wrongfully
deprived of possession.”14 	“A possessory action ‘is brought to reinstate an owner of a
vessel who alleges wrongful deprivation of property. 	This statement indicates that the
action is one to recover possession rather than to obtain original possession.’”15 	The
9 Docket 88 at 3–5; Docket 87 at 19.
10 Docket 88 at 5; Docket 87 at 21.
11 Docket 88 at 5.
12 Docket 64 at 2.
13 Docket 82 at 7 n.6, 8.
14 Gallagher v. Unenrolled Motor Vessel River Queen, 475 F.2d 117, 119 (5th Cir. 1973);
see also Schatek v. Tsui, No. 2:10-cv-1562-GEB-JFM (PS), 2010 WL 5169006, at *1 (E.D. Cal.
Dec. 14, 2010) (“It is well settled that the admiralty jurisdiction of federal courts extends to petitory
and possessory suits concerning vessels.”); N. Ins. Co. of New York v. 1996 Searay Model 370DA
Yacht, 453 F. Supp. 2d 905, 911 (D.S.C. 2006) (“A suit to try title to or possession of a vessel
wrongfully taken has long been considered within the jurisdiction of admiralty courts.”).
15 	Turner v. One 2019 76 Foot Sunseeker Sport Yacht, No. 19-62670-CIV-ALTONAGA,
2020 WL 13647721, at *4 (S.D. Fla. Feb. 13, 2020) (quoting Silver v. Sloop Silver Cloud, 259 F.
Supp. 187, 191 (S.D.N.Y. 1966)); see also Schatek, 2010 WL 5169006, at *1 (quoting Privilege
Yachting, Inc. v. Teed, 849 F. Supp. 298, 301 (D. Del. 1994) (“A possessory action permits a party
to adjudicate the right to possession of property that has been wrongfully taken.”); Tietjen & Lang
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 4 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 5
Magistrate Judge erred by finding that jurisdiction was proper under Rule D when Plaintiff
Liberty asserted the right to possess the Vessel without averring prior possession.16
Defendants’ Objection #2 is sustained to this effect. Plaintiff Liberty was never in physical
possession of the Vessel nor did it acquire legal title to the Vessel such that it constructively
possessed the Vessel.17 	Therefore, because Plaintiff Liberty’s claim is to obtain, rather
than recover, possession of the Vessel, there is no basis for a possessory action under
Rule D.18 Defendants’ Motion to Dismiss for Lack of Jurisdiction is therefore GRANTED
as to Liberty’s claims for petitory or possessory relief under Supplemental Rule D.19
The only other basis for admiralty jurisdiction over Liberty’s lien claim
identified in the Amended Complaint is the Preferred Ship Mortgage Act, 46 U.S.C.
§ 31322 and § 31325.20 Defendants “requested dismissal of those jurisdictional claims, as
all parties are aware that there is no Preferred Ship Mortgage at issue in this case.”21
Plaintiffs did not oppose Defendants’ dismissal request.22 Plaintiffs concede that there is
No. 2, 53 F. Supp. 459, 461 (D.N.J. 1944) (“Possessory suits may be brought in all cases to reinstate
the owners of ships who have been wrongfully deprived of their property.”).
16 Docket 87 at 19; Docket 64 at 9.
17 Barsom v. P/V AQUIDNECK FERRY, No. CA 12-808 S, 2013 WL 5447551, at *3 (D.R.I.
Sept. 30, 2013) (holding that “since Plaintiff alleges that he has both legal title and a claim to
possession,” plaintiff adequately established possessory jurisdiction under Rule D); Offshore Exp.,
Inc. v. Bergeron Boats, Inc., 1977 WL 6476159 (E.D. La. Oct. 5, 1977) (finding that right of
possession stemming from a transfer of legal title amounted to constructive possession, which the
Court “deem[ed] to be adequate for purposes of the requirement of prior possession”).
18 Silver, 259 F. Supp. at 191 (“The additional cases cited by plaintiff are no authority for
the proposition that one never in possession may bring a possessory action. 	It would therefore
seem that there is no basis for a possessory action.”).
19 The Magistrate Judge correctly concluded that the Amended Complaint does not assert
a right to title against the Vessel to support petitory relief. Docket 87 at 18.
20 Docket 64 at 2.
21 Docket 84 at 3.
22 See Docket 82.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 5 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 6
no Preferred Ship Mortgage against the P ACIFIC PREDATOR and that they mistakenly cited
46 U.S.C. § 31322 in their Amended Complaint.23 The Magistrate Judge erred by ruling
on supplemental jurisdiction without first addressing each of Plaintiffs’ asserted bases for
original jurisdiction.24 	Defendants’ Objection #3 is sustained. 	Defendants’ Motion to
Dismiss is GRANTED as to Plaintiff Liberty’s claims under the Preferred Ship Mortgage
Act. 	The Court finds that admiralty jurisdiction is lacking over Plaintiff Liberty’s lien
claims.
Plaintiffs assert that Liberty is entitled to “foreclose on its lien rights against
the assets covered in the Loan Agreement, including the Vessel in rem, and to execute
upon, sell, or take possession of the vessel under Ch. RCW 62A.9A and Supplemental
Admiralty Rule D.”25 	The Court must therefore decide whether there is subject matter
jurisdiction over Liberty’s state law lien claim. 	The Magistrate Judge found that two
additional bases of federal jurisdiction exist over Liberty’s claims—diversity jurisdiction
pursuant to 28 U.S.C. § 1332 and supplemental jurisdiction under 28 U.S.C. § 1367.26
Although Plaintiffs conceded that they did not plead diversity jurisdiction in their Amended
Complaint, the Magistrate Judge found “ this fact is not dispositive so long as sufficient
facts are alleged upon which the Court may determine jurisdiction.”27 	The Magistrate
Judge then concluded that Plaintiffs had met their burden of establishing jurisdiction by
23 Docket 95 at 6.
24 City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 157 (1997) (“The whole point
of supplemental jurisdiction is to allow the district courts to exercise pendent jurisdiction over
claims as to which original jurisdiction is lacking.”).
25 Docket 64 at 9 (emphasis added).
26 Docket 87 at 20.
27 Id.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 6 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 7
alleging the essential elements of diversity in their Amended Complaint.28 	This Court
reaches the opposition conclusion.
The party seeking to invoke diversity jurisdiction has the burden of pleading
sufficient facts to establish diversity of citizenship.29 	“Absent unusual circumstances, a
party seeking to invoke diversity jurisdiction should be able to allege affirmatively the
actual citizenship of the relevant parties.30 To establish citizenship for diversity purposes,
a natural person must be a citizen of the United States and be domiciled in a particular
state.31 	A corporation is a citizen of its place of incorporation and the location of its
principal place of business.32 A limited liability company (“LLC”) “is a citizen of every
state of which its owners/members are citizens.”33 The Amended Complaint alleges that
AGS is a corporation “organized under the laws of the State of Delaware,” but does not
identify the location of AGS’s principal place of business.34 	The Amended Complaint
alleges that Liberty and Alaska Wild Exports LLC are LLCs “operating under the laws of”
Washington and Alaska, respectively, but includes no information regarding the citizenship
of the members of these LLCs.35 Finally, the Amended Complaint asserts that defendants
Bryan and Dana Howey are “residents” of Alaska.36 	The diversity jurisdiction statute
“speaks of citizenship, not of residency;” therefore, an allegation regarding an individual’s
28 Id. at 21.
29 NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 613 (9th Cir. 2016).
30 Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001).
31 Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088, 1090 (9th Cir. 1983).
32 28 U.S.C. § 1332(a)(1).
33 Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006).
34 Docket 64 at 2.
35 Id. at 2–3.
36 Id. at 3.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 7 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 8
residence is not sufficient to establish citizenship.37 Plaintiffs failed to carry their burden
of pleading diversity of citizenship and therefore the Court does not have diversity
jurisdiction over Plaintiff Liberty’s state law lien claim.
Notwithstanding, the Court concurs with the Magistrate Judge’s finding that
supplemental jurisdiction exists over Liberty’s state law lien claim because it arises from
the same set of facts as AGS’s lien claim, which invokes this Court’s original jurisdiction.38
The Court “shall have supplemental jurisdiction over all other claims that are so related to
claims in the action within such original jurisdiction that they form part of the same case
or controversy.”39 Claims form part of the same case or controversy if they arise from a
common nucleus of operative fact and if they would normally be tried together.40 	Here,
AGS’s maritime lien claims and Liberty’s state law lien claims derive from a common
nucleus of operative fact because they “arose out of the same transaction or occurrence”
and relate to the same Vessel.41 	Liberty entered into an agreement to loan the Howeys
$800,000 and, in exchange for this loan, the Howey entered into a Fishing Agreement with
AGS.42 The loan agreement granted Liberty a security interest in the Vessel.43 To comply
37 Warner-Lambert, 265 F.3d at 857.
38 Sentry Select Ins. Co. v. Royal Ins. Co. of Am., 481 F.3d 1208, 1220 (9th Cir. 2007)
(affirming exercise of supplemental jurisdiction over claims related to admiralty claims); Cooper
v. Bozinoff, No. 3:18-cv-00283-SLG, 2019 WL 13211823, at *3 (D. Alaska Nov. 27, 2019)
(exercising supplemental jurisdiction over state law claims connected to admiralty claims and
noting, “Because jurisdiction in rem in admiralty is exclusive to the federal courts, this Court may
be better situated to hear all of Mr. Cooper’s claims.”).
39 28 U.S.C. § 1367(a).
40 United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966).
41 Mar. v. Mortg. Elec. Registration Sys., Inc., 659 F. App’x 383, 385 (9th Cir. 2016).
42 Docket 64 at 3.
43 Id.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 8 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 9
with the terms of the Fishing Agreement, Defendants needed to obtain certain “necessaries”
for the Vessel, including limited entry fishing permits.44 	AGS advanced funds to
Defendants on the credit of the Vessel for these “necessaries,” giving rise to a maritime
lien under 46 U.S.C. § 31342.45 	Accordingly, the Court finds that AGS’s maritime lien
and Liberty’s state law lien are so related that they form part of the same and, as such, the
Court will exercise supplemental jurisdiction over Liberty’s lien claim.46 	Defendants’
Motion to Dismiss for Lack of Jurisdiction is therefore DENIED as to Liberty’s state law
lien claim.
Objection #4 relates to Judge Reardon’s finding that the limited entry permits
were “necessaries” even though they were provided to Mr. Howey rather than to the
Vessel.47 Defendants argue that, in Bradford Marine, Inc. v. M/V Sea Falcon, which the
Magistrate Judge cited in his Report and Recommendation, the Eleventh Circuit found that
attorneys’ fees were not “necessaries” because “the legal services were not provided to the
[Vessel]; rather, they were provided to [the Vessel’s owner] to aid it in pursuing is claim.”48
Defendants’ objection is overruled. The Court in Bradford Marine ruled that the attorney’s
services “did not help the [Vessel] perform her function . . . [t]hus, it is clear that the legal
44 Docket 66 at 4; Docket 64 at 5–6.
45 Docket 64 at 5–6.
46 28 U.S.C. § 1367(c) provides that a district court may decline to exercise supplemental
jurisdiction over a claim if “(1) the claim raises a novel or complex issue of State law; (2) the claim
substantially predominates over the claim or claims over which the district court has original
jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction,
or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.”
The Court finds that none of these circumstances are present here and Defendants do not argue
otherwise. See Docket 76; Docket 83.
47 Docket 88 at 6; Docket 87 at 13.
48 64 F.3d 589 (11th Cir. 1996).
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 9 of 10

Kanaway Seafoods, Inc., et al. vs. Pacific Predator, et al. 	Case No. 3:22-cv-00027-JMK
Order Adopting in Part and Declining to Adopt in Part Report and Recommendation 	Page 10
services, which were provided to [the Vessel’s owner] to help it pursue its case, are not
‘necessaries.’”49 By contrast, the limited entry permits at issue here were required for the
PACIFIC 	PREDATOR 	to 	perform 	its 	function 	of 	catching 	fish 	and, 	as 	such, 	are
“necessaries.”50 Contrary to Defendants’ assertions, although the Bradford Marine Court
noted that the attorney’s services were provided to the Vessel owner and not the Vessel, it
did not hold that this fact was determinative in the “necessaries” analysis.51 	Therefore,
while the limited entry permits may have been in Mr. Howey’s name, the Magistrate Judge
adequately explained why they meet the definition of a “necessary.”52
The Magistrate Judge recommended that the Court deny the Motions at
Dockets 66 and 76. The Court has reviewed the Report and Recommendation and adopts
it in part and declines to adopt it in part in accordance with this Order. Accordingly, IT IS
ORDERED that the Motion at Docket 66 is DENIED. 	The Motion at Docket 76 is
GRANTED IN PART AND DENIED IN PART. Plaintiff Liberty’s claims under Rule D
and under the Preferred Ship Mortgage Act are dismissed for lack of jurisdiction. 	The
Court has supplemental jurisdiction over Plaintiff Liberty’s state law lien claim.
IT IS SO ORDERED this 30th day of May, 2023, at Anchorage, Alaska.
/s/ Joshua M. Kindred
JOSHUA M. KINDRED
United States District Judge
49 Id.
50 Id.
51 Id.
52 Docket 87 at 10–14.
Case 3:22-cv-00027-SLG-KFR Document 110 Filed 05/30/23 Page 10 of 10