Roen Salvage Company, as owner of Crew Boat Monark 2 v. Julie Sarter

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 20-3433
ROEN SALVAGE COMPANY, as owner of Crew Boat Monark #2,
Petitioner-Appellant,
v.
JULIE SARTER,
Claimant-Appellee.
____________________
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 20-C-915 — William C. Griesbach, Judge.
____________________
ARGUED SEPTEMBER 24, 2021 — DECIDED NOVEMBER 10, 2021
____________________
Before EASTERBROOK, ROVNER, and KIRSCH, Circuit Judges.
EASTERBROOK, Circuit Judge. Donald Sarter drowned after
the vessel Monark #2 capsized in Lake Superior. His employer
Roen Salvage, which owned Monark #2, filed this federal ac-
tion under 46 U.S.C. §30505(a), asking the court to limit its li-
ability to $25,000, which it says is the amount of its interest in
the vessel. It also asked for exoneration from all liability, a
possibility missing from §30505(a) (commonly called the Lim-
itation Act) but mentioned in Rule F(2) of the Supplemental

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2 No. 20-3433
Rules for Admiralty or Maritime Claims and Asset Forfeiture
Actions, an appendix to the Federal Rules of Civil Procedure.
A federal court has exclusive jurisdiction of claims under
the Limitation Act, see 28 U.S.C. §1333(1), “saving to suitors
in all cases all other remedies to which they are otherwise en-
titled.” The district court initially entered an injunction for-
bidding Julie Sarter, the decedent’s spouse, from litigating in
any other forum, but she asked the judge to vacate that injunc-
tion so that she could proceed under the language we have
quoted, commonly known as the Saving-to-Suitors Clause.
The judge granted that motion, 2020 U.S. Dist. LEXIS 227813
(E.D. Wis. Dec. 4, 2020), and declined to reinstate the injunc-
tion pending appeal, 2021 U.S. Dist. LEXIS 6359 (Jan. 13, 2021).
Roen immediately appealed. Our jurisdiction comes from 28
U.S.C. §1292(a)(1) and (a)(3). See Fed. R. Civ. P. 9(h)(2).
After a vessel’s owner seeks protection under the Limita-
tion Act, a would-be plaintiff often files a concession (some-
times, though inaccurately, called a stipulation) that the fed-
eral court’s decision about the owner’s maximum liability will
control even if a state court sets a higher figure in a Saving-to-
Suitors action. Julie Sarter made such a concession, in the form
of a promise to waive any claim of res judicata should Roen
return to federal court seeking a cap on its outlay under the
Limitation Act. But she declined to make a similar concession
about the possibility of exoneration from all liability. She con-
tended that a state court is competent to decide whether the
vessel’s owner bears any liability at all. The district court
agreed with her about that point. Roen contends that this de-
cision conflicts with Lewis v. Lewis & Clark Marine, Inc., 531
U.S. 438 (2001).

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No. 20-3433 3
The first question for us is whether any federal statute en-
titles a vessel owner to have a federal judge determine exon-
eration. The answer is no. Certainly §30505(a) does not do so.
It reads: “Except as provided in section 30506 of this title, the
liability of the owner of a vessel for any claim, debt, or liability
described in subsection (b) shall not exceed the value of the
vessel and pending freight. If the vessel has more than one
owner, the proportionate share of the liability of any one
owner shall not exceed that owner’s proportionate interest in
the vessel and pending freight.” And §30506, to which the
Limitation Act refers, likewise does not mention exoneration.
Thus any entitlement to exoneration lies in the common law
of admiralty. That’s how the Justices understood Rule F in
Lewis—as a restatement of old admiralty decisions. It would
be hard to see Rule F as a free-standing limit of liability or a
reservation of exclusive federal jurisdiction, given the lan-
guage in the Rules Enabling Act that the federal rules are not
supposed to abridge substantive rights. 28 U.S.C. §2072(b).
And Fed. R. Civ. P. 82 proclaims that the Rules of Civil Proce-
dure do not affect subject-maker jurisdiction either.
Lewis summarizes the common-law developments that led
to the current form of Rule F. 531 U.S. at 446–50. We need not
repeat them. The Court summed up by writing that, when
there is only one claimant, or when the total demanded by
multiple claimants does not exceed the value set by the Limi-
tation Act, a federal court may permit the substantive claim
or claims to proceed in state court under the Saving-to-Suitors
Clause. When multiple claims pressed in state court exceed
the likely value of the vessel it is appropriate for the federal
judge to retain all aspects of the litigation and decide whether
the vessel’s owner is entitled to exoneration. In all other situ-
ations, the Justices stated, it is enough for the federal court to

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4 No. 20-3433
set the maximum amount of recovery that a state court may
allow. Thus “the scope of exclusive federal jurisdiction is pro-
portional to the federal interest in protecting the vessel
owner’s right to seek limitation of liability.” 531 U.S. at 453.
To put this otherwise, there is not an independent federal right
to exoneration, which is derivative from a potential need to
control multi-party litigation that may threaten the cap set by
the Limitation Act. “[W]here … the District Court satisfies it-
self that a vessel owner’s right to seek limitation will be pro-
tected, the decision to dissolve the injunction [and permit suit
in state court] is well within the court’s discretion.” Id. at 454.
Julie Sarter is the only person seeking a remedy against
Roen Salvage because of Monark #2’s capsizing. The district
court can set a maximum level of liability based on the criteria
in §30505(a), which will fully protect Roen’s federal statutory
rights. It was therefore “well within the court’s discretion” to
permit the substantive claim to proceed in state court.
The parties have spent many pages discussing exactly
what concessions (by the would-be plaintiff) or stipulations
(by the litigants jointly) are necessary to protect the vessel
owner’s rights. Our answer is: None. True, the tort claimant
in Lewis made several concessions, which the Supreme Court
deemed sufficient to protect the vessel owner. 531 U.S. at 451–
52. But it did not hold that they were necessary. Protection also
comes from statutes and judicial orders. When lifting or mod-
ifying an injunction to permit litigation in state court, a federal
district judge should make any provisos that are essential to
safeguard the federal right under §30505(a). The judge could
provide, for example, that, if the state court awards damages
exceeding the owner’s estimate of the vessel’s worth, then the
federal court will determine that value without regard to the

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No. 20-3433 5
state judge’s conclusion. Litigants do not need to concede or
stipulate that federal statutes will be observed, and a state
court’s akempt to decide an issue that is within the scope of
exclusive federal jurisdiction under §1333(a) will not be hon-
ored when the vessel owner stands on its right to a federal
decision.
Because Julie Sarter has promised that she will not plead
res judicata should Roen Salvage return to federal court under
§30505(a), and because Roen does not possess a right to have
a federal court determine its claim to exoneration from liabil-
ity, we need not remand for the district court to make these
makers explicit in its order allowing state litigation. In the fu-
ture, district judges should choose appropriate language that
will obviate the sort of dispute the parties to this case have
had about exactly what words a would-be state-court plaintiff
must use in order to protect the vessel owner’s rights.
AFFIRMED

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