Barry v. Shell Oil Company et al

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UNITED STATES DISTRICT COURT
DISTRICT OF ALASKA
BLANE BARRY, )
)
Plaintiff, ) 2:15-CV-00004 JWS
)
vs. ) ORDER AND OPINION
)
) [Re: Motion at docket 54]
SHELL OIL COMPANY, ARCTIA )
OFFSHORE, LTD., SHELL )
OFFSHORE INC., and SAFETY )
MANAGEMENT SYSTEMS, LLC, )
)
Defendants. )
)
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
Case 2:15-cv-00004-JWS Document 66 Filed 03/30/16 Page 1 of 9

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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 Plaintif f 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.
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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
1Fed. R. Civ. P. 39(a)(2) (“When a jury trial has been demanded under Rule 38 . . . [t]he
trial on all issues so demanded must be by jury unless: . . . the court, on motion or on its own,
finds that on some or all of those issues there is no federal right to a jury trial.”)
2S.E.C. v. Rind, 991 F.2d 1486, 1493 (9th Cir. 1993).
328 U.S.C. § 1333(1).
4Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054 (1997) (internal quotation marks
omitted).
5Id.
6Id.
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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.
7Id. at 1056.
8Id. at 1054.
9See Moreno v. Ross Island Sand & Gravel Co., No. 2:13-cv-00691, 2015 WL 5604443,
at *17 (E.D. Cal. Sept. 23, 2015) (discussing development of court of admiralty and the reason
for not providing a common law right to a jury trial in admiralty cases).
10374 U.S. 16 (1963).
11Id. at 18.
12Id. at 21.
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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
consolidated into one action under Federal Rule of Civil Procedure 42(a),5
we find no reason to penalize the Ghotras by ruling that the decision to
combine the two into one single action constituted an election to proceed in
admiralty alone without the right to jury trial.14
Similarly, in Luera v. M/V Alberta,15 the Fifth Circuit also expanded the use of jury
trials for in rem admiralty claims when they are combined with in personam diversity
claims, distinguishing its prior cases, T.N.T. Marine Service, Inc. v. Weaver Shipyards &
Dry Docks, Inc.16 and Durden v. Exxon Corp.,17 which had been interpreted to bar the
13113 F.3d 1050 (9th Cir. 1997).
14Id. at 1057.
15635 F.3d 181 (5th Cir. 2011).
16702 F.2d 585, 588 (5th Cir. 1983).
17803 F.2d 845 (5th Cir. 1986).
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use of jury trials in such situations.18 However, the Fifth Circuit’s position is necessarily
limited to situations were the admiralty claim is brought against a vessel given the Fifth
Circuit’s prior precedent in Powell v. Offshore Navigation, Inc.19 Powell was a mixed
admiralty-diversity case, but the admiralty claim was an in personam one, brought
against non-diverse defendants. That is, there was not complete diversity between the
defendants in the case, and so the plaintiff based jurisdiction on the non-diverse
defendants on admiralty and the diverse defendants on diversity and then requested a
jury trial. The court held that the existence of non-diverse defendants destroyed
complete diversity in the case and therefore prevented the plaintiff from obtaining a jury
trial. The court feared “the abolition of the complete diversity requirement in maritime
cases” were it to hold otherwise.20
The Fourth Circuit specifically rejected Powell in Vodusek v. Bayliner Marine
Corp.21 In that case, the wife of a boater who died from injuries sustained when a boat
exploded sued both the boat manufacturer, who had diverse citizenship, and the boat
retailer, who did not have diverse citizenship, for a variety of negligence and products
liability claims. She specifically stated that jurisdiction over the boat manufacturer was
premised on diversity jurisdiction and that jurisdiction over the retailer was premised on
admiralty jurisdiction because the explosion occurred on navigable waters. As
requested by the plaintiff, the district court submitted the entire case to the jury. On
appeal, the defendants argued that while there was diversity to support the claims at
law against the manufacturer, the court had to consider the citizenship of all the
defendants in the case and because the retailer was not diverse, there was no
complete diversity, and thus there was no basis for submitting the claim to the jury. The
18Luera, 635 F.3d at 190-91.
19644 F.2d 1063 (5th Cir. 1981).
20Id. at 1068-69.
2171 F.3d 148 (4th Cir. 1995).
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court rejected defendants’ complete diversity argument “because it fails to recognize
that the federal rules enable district courts to exercise their power in the three
historically separate departments within a single case.”22 It reasoned that if the plaintiff
had filed separate suits, she would have had a jurisdictional basis to support each one,
and therefore the inclusion of the non-diverse defendant sued specifically under
admiralty jurisdiction did not destroy the existence of diversity jurisdiction over the other
defendants.23
The Ninth Circuit has not weighed in on the issue of whether complete diversity
is required in order to proceed with a jury trial in a mixed admiralty-diversity case. That
is, it has not ruled on whether a plaintiff can receive a jury trial in a mixed admiralty-
diversity case when admiralty is invoked to include a non-diverse defendant. As noted
above, Ghotra only held that the inclusion of an in rem admiralty claim against the
vessel in a case that also contains an in personam diversity claim does not preclude the
plaintiff’s right to a jury trial on those diversity claims. While on first glance the court in
Ghotra seemed to disapprove of the Fifth Circuit’s decision in Powell, closer
examination shows the court was actually disapproving of Powell’s progeny, TNT
Marine and Durden, which the Ninth Circuit interpreted as holding that a plaintiff does
not have a right to a jury trial where he alleges both in personam and in rem claims.24
Also, while it cited Vodusek, it did not specifically endorse it or otherwise address
whether inclusion of a non-diverse defendant pursuant to admiralty jurisdiction
nonetheless allows the plaintiff to receive a jury trial.
22Id. at 154.
23Id.
24As noted above, in Luera the Fifth Circuit later clarified the holdings of those two cases
and held that a plaintiff has a right to a jury where he alleges both an in personam and in rem
claim so long as the plaintiff properly stated that the in personam claims were being based
solely on diversity jurisdiction.
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Neither party specifically discussed the split between the Fourth and Fifth
Circuits on this issue that is directly related to the motion at hand. However, the court
notes that unlike the plaintiff in Vodusek, Plaintiff did not separate his claims against the
diverse defendants from his claims against the non-diverse defendants; nor did he
specify that the jurisdictional basis was different. Rather, he simply indicated that
jurisdiction was based on diversity without anticipating the complete diversity problem.
Even if Plaintiff could simply remedy that distinction through an amendment, the court
concludes that the Ninth Circuit’s opinion in Ghotra should not be extended to allow him
to do so given dicta in the case. The court noted that by allowing a jury trial on in rem
claims, when combined with in personam diversity claims, the court was not “open[ing]
the floodgates” to allow jury trials in all maritime cases.25 It reasoned that under
Rule 19 of the Federal Rules of Civil Procedure a plaintiff cannot artificially construct a
diversity action to avoid a bench trial on his admiralty claims by simply leaving out a
non-diverse defendant when that party is a necessary party.26 That is, it acknowledged
that it was not opening up all admiralty cases to jury trials because Rule 19 acts as a
limitation by requiring all necessary parties to be joined, which suggests that if a
necessary party is non-diverse then there would not be complete diversity, and
therefore no diversity jurisdiction, to support a jury trial on an in rem admiralty claim.
Therefore, it appears as if the Ninth Circuit court would not do away with the complete
diversity requirement in these mixed diversity-admiralty cases.
Plaintiff stated in his response brief that he would be filing a motion to dismiss
SMS from the complaint in order to fix the complete diversity requirement. No such
motion has yet been filed. Defendants argue in their reply that SMS is a required party
under Rule 19 and therefore cannot be dismissed. Without a motion and full briefing on
the issue from both sides, the court declines to rule on the issue of whether SMS can
25113 F.3d at 1057-58.
26Id.
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be dismissed or whether it is a required party. Therefore, given that SMS is still a party
to the complaint and its presence destroys complete diversity, Plaintiff’s demand for a
jury trial must be stricken at this time. However, the court notes that it could reassess
the issue of a jury trial if SMS is allowed to be dismissed or if the presence of the cross-
claim affects the issue of whether a jury trial is allowed.27
V. CONCLUSION
Based on the preceding discussion, Defendants’ motion to strike Plaintiff’s jury
demand at docket 54 is GRANTED.
DATED this 30th day of March 2016.
/s/ JOHN W. SEDWICK
SENIOR UNITED STATES DISTRICT JUDGE
27Cf. Wilmington Tr. v. U.S. Dist. Court, 934 F.2d 1026, 1031 (9th Cir. 1991) (holding
that the plaintiff’s election to proceed in admiralty did not deprive the defendant of the right to
jury trial on joined counterclaims and noted that such a holding may result in the entire case
being presented to a jury if all the claims are closely related).
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