Finney v. Howey

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
BRANNON FINNEY,
Plaintiff,
v.
BRYAN R. HOWEY, and his marital
community,
Defendant.
Case No. 3:20-cv-00289-SLG-KFR
REPORT AND RECOMMENDATION TO DENY MOTION TO VACATE JUDGMENT
The Court recommends denial of Defendant’s Motion to Vacate Judgment
under Rule 60(b)(4) at Docket 17. 	The Court finds that Plaintiff pled a cognizable
claim in admiralty and that federal jurisdiction over the matter was proper. Federal
admiralty jurisdiction exists because the contract at issue was sufficiently maritime
in character and nature, and Defendant has not met his burden to prove otherwise.
I. 	Background
On November 16, 2020, Plaintiff, Brannon Finney, filed a Complaint in
admiralty against Defendant, Bryan R. Howey, and his marital community, seeking
damages for breach of contract.1 Plaintiff asserted subject matter jurisdiction under
28 U.S.C. § 1333, Admiralty, maritime, and prize cases; and 28 U.S.C. §1331, Federal
question, specifically 46 U.S.C. § 31343, Recording and discharging notice of claim
of maritime lien.2 Plaintiff further asserted the claim was an admiralty or maritime
claim within the meaning of Fed. R. Civ. P. 9(h), that the Court had personal
jurisdiction over the Defendant, and that venue was proper.3
//
1 Doc. 1.
2 Id.
3 Id.
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Specifically, the breach of contract claim related to a written Seine Permit
Contract permitting Defendant to use Plaintiff’s Southeast Alaska Salmon Seine
permit for the 2015 Southeast Alaska Salmon Seine Season (hereinafter “2015
Permit”).4 	The contract for the 2015 Permit, signed by both parties, named
Defendant as “skipper of the Pacific Predator ADFG.”5
Defendant was properly served the Complaint on December 4, 2020.6 	After
Defendant failed to answer, Plaintiff filed a Motion for Entry of Default on December
29, 2020.7 A Clerk’s Entry of Default issued, followed by Plaintiff’s Motion for
Default Judgment and supporting documents.8 On March 9, 2021, the Court granted
Plaintiff’s Motion for Default Judgment in the amount of $25,287.75, plus post
judgment interest pursuant to 28 U.S.C. § 1961.9 Plaintiff subsequently filed an
Application for Writ of Execution.10
Eighteen months and two weeks later, Defendant appeared for the first time
in the case seeking to vacate the judgment under Fed. R. Civ. P. 60(b)(4) for lack of
subject 	matter 	jurisdiction.11 	Defendant’s 	motion 	- 	without 	providing 	any
explanation for his failure to answer or otherwise appear in the case - makes both a
facial and factual challenge to the Court’s jurisdiction over this matter, arguing that
there 	is 	neither 	federal 	question 	nor 	admiralty 	jurisdiction. 	As 	to 	the 	facial
challenge, Defendant summarily argues that Plaintiff’s Complaint “fails on its face
4 Seine fishing involves encircling a school of fish with a vertically hanging that is held
down by weights and buoyed by floats. See https://en.Wikipedia.org/wiki/Seine_fishing.
In Southeast Alaska, commercial salmon fishing using purse seines and other techniques is
regulated by state and federal officials. See e.g.,
https://www.adfg.alaska.gov/index.cfm?adfg=commericalbyareassoutheast.main.
5 Doc. 1-1; The Pacific Predator is a 58-foot welded aluminum seiner/tender built in 1987
(See Kanaway Seafoods, Inc. et al., v. Pacific Predator, et al. 3:22-cv-00027-JKM-KFR, Doc.
36-1 at 3).
6 Doc. 4.
7 Doc. 5.
8 Docs. 7-11.
9 Docs. 12-13.
10 Doc. 14.
11 Doc. 17.
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to support federal court admiralty jurisdiction.”12
Defendant also contends that the Complaint contains insufficient facts to
support federal admiralty jurisdiction. 	Defendant argues that 46 U.S.C. § 31343
“authorizes and establishes the requirements for recording a Notice of Claim or Lien
with the United States Coast Guard National Vessel Documentation Center (NVDC),”
and is not a basis for admiralty jurisdiction.13 Defendant also argues that there is no
admiralty jurisdiction in this case because “the purchase of the right to be a
transferee of [the 2015 Permit,] a State created and controlled temporary use permit
is not a maritime contract, particularly given the absolute control the State of Alaska
maintains over the use and transfer of the right.”14 Defendant further states that a
motion to void a judgment for lack of subject matter jurisdiction may be brought at
any time.15
In 	response, 	Plaintiff 	concedes 	that 	her 	Complaint 	mistakenly 	included
reference to 46 U.S.C. § 31343 and that it is in fact not applicable to this case.16
However, Plaintiff argues that this mistake is irrelevant as the application of 46
U.S.C. § 31343 is not necessary to confer federal jurisdiction over this matter since
the contract at issue is a maritime contract and therefore within the scope of 28
U.S.C. § 1333.17
//
//
//
//
//
//
12 Id. at 7.
13 Id. at 10.
14 Id. at 20.
15 Id. at 6.
16 Doc. 19 at 10, FN 13.
17 Id.
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II. 	Legal Standard
A district court may set aside a default judgment “in accordance with” Fed. R.
Civ. P. 60(b)(4), which provides that a Court may relieve a party from a final
judgment if the judgment is void.18 A final judgment is void “only if the court that
considered it lacked jurisdiction ... over the parties to be bound.”19 “The list of such
[set aside] judgments is exceedingly short, and Rule 60(b)(4) applies only in the
rare instance where a judgment is premised either on a certain type of jurisdictional
error or on a violation of due process that deprives a party of notice or the
opportunity to be heard.”20 	“Federal courts considering [whether] a judgment is
void because of a jurisdictional defect generally have reserved relief only for the
exceptional case in which the court that rendered judgment lacked even an arguable
basis for jurisdiction.”21
The 	standard 	for 	determining 	whether 	a 	plaintiff 	has 	asserted 	a 	valid
admiralty claim is the “prima facie standard,” rather than the more demanding “fair
probability” or “reasonable grounds” standards.22 The “inquiry focuses on whether
the plaintiff has [pled] a claim cognizable in admiralty.”23
It is well settled that the plaintiff bears the initial in burden of pleading in her
complaint 	the 	appropriate 	jurisdictional 	facts 	to 	establish 	both 	the 	court's
jurisdiction over the subject matter of the action and over the parties to the action,
18 Fed. R. Civ. P. 55(c).
19 United States v. Berke, 170 F.3d 882, 883 (9th Cir. 1999).
20 United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 271 (2010) (citing for
comparison Chicot Cty. Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376
(1940) and Stoll v. Gottlieb, 305 U.S. 165, 171–72 (1938)).
21 Espinosa, 559 U.S. at 270; see, e.g., Reardon v. Reardon, 421 Fed. Appx. 141, 142 (3d Cir.
2011) (“Reardon alleges that the District Court erred in applying the doctrine of absolute
immunity ..., but this is an allegation of legal error only; it is not an allegation that the
federal court lacked jurisdiction over his section 1983 action such that the judgment
rendered is void.”) (n.1 omitted).
22 Padre Shipping, Inc. v. Yong He Shipping, 553 F.Supp.2d 328, 331-32 (S.D.N.Y. 2008).
23 Ronda Ship Mgmt. v. Doha Asian Games Org. Comm., 511 F.Supp.2d 399, 404 (S.D.N.Y.
2007).
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including proper service of process.24 However, if a party who has been served in
the underlying action permits the entry of a default judgment, the burden of proof
in a later Rule 60(b)(4) motion rests with the defaulted party.25 	“Motions to set
aside a judgment as void under Rule 60(b)(4) may be brought at any time.”26
III. 	Maritime Jurisdiction Stemming from Maritime Contract
Federal courts may exercise their maritime jurisdiction granted by 28 U.S.C.
§ 1333 if an action is based on a maritime contract.27 When a contract is maritime,
and 	the 	dispute 	is 	not 	inherently 	local, 	federal 	law 	controls 	the 	contract
interpretation.28 There are few “clean lines between maritime and non-maritime
contracts.”29 The true criterion of exercising jurisdiction over a maritime contract is
whether the contract’s nature and character make reference to maritime services or
maritime transactions.30
The examination of the maritime character of a contract is “conceptual rather
than spatial, and defined by the purpose of the jurisdictional grant - to protect
24 102 A.L.R. Fed. 811 (Originally published in 1991).
25 See Burda Media Inc. v. Viertel, 417 F.3d 292, 298 (2nd Cir.2005) (holding on a motion to
vacate a default judgment when the defaulting defendant had actual notice of the original
proceeding but delayed in bringing the motion, defendant bears the burden of proof); see
also Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 401 (7th Cir.1986) (when defendant
ignored process and challenged default judgment on a Rule 60(b)(4) motion, defendant
bears the burden of proving an absence of personal jurisdiction); CSC Holdings, Inc. v.
Fung, 349 F.Supp.2d 613, 616 (E.D.N.Y.2004) (“[a] defendant with notice of the
proceedings bears the burden of establishing the claim that service was not properly
effected”).
26 Million (Far East), Ltd. v. Lincoln Provisions, Inc. USA, 581 Fed. Appx. 679, 682 (9th Cir.
2014) (citing Meadows v. Dominican Republic, 817 F.2d 517, 521 (9th Cir. 1987)); see
also Lee v. AFT–Yakima, 2011 WL 4703106, *2 (E.D. Wash. Oct. 4, 2011) (“[M]otions
for relief from judgment on the basis that the judgment was void are not subject to the
one-year limitation period in Rule 60(c)(1).”); United States v. Boch Oldsmobile, Inc., 909
F.2d 657, 661 (1st Cir. 1990) (because “[a] void judgment is from its inception a legal
nullity,” “relief from a void judgment has no time limitations”).
27 See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 23 (2004) (a federal action can “be sustained
under the admiralty jurisdiction by virtue of the maritime contracts involved.”).
28 Kossick v. United Fruit Co., 365 U.S. 731, 735 (1961).
29 Id.
30 Kirby, 543 U.S. at 24.
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maritime 	commerce.”31 	The 	“fundamental 	interest 	giving 	rise 	to 	maritime
jurisdiction is the protection of maritime commerce.”32 As such, “[a] contract that
relates to a ship, to commerce or navigation on navigable waters, or to maritime
employment is a maritime contract.”33
“The contract’s subject matter must be [the] focal point.”34 Accordingly,
courts may not examine potential maritime contracts by “depend[ing] solely on
geography.”35 A dispute will not give rise to maritime jurisdiction if “the subject
matter of the dispute is so attenuated from the business of maritime commerce that
it does not implicate the concerns underlying admiralty and maritime jurisdiction.”36
In this case, there are multiple bases upon which to conclude that the 2015
Permit involves a maritime contract and that this matter was properly brought by
Plaintiff’s in admiralty. Defendant does not dispute that there was a contract in this
case,37 only whether it is a maritime contract.38 Moreover, the Court finds that there
can also be no reasonable dispute that the contract relates to maritime commerce.
“Maritime” means of, relating to, or bordering on the sea; of, or relating to,
navigation or commerce on the sea39; and “commerce” is the exchanging, buying, or
selling of things having economic value between two or more entities, for example
goods, services, and money.40 The 2015 Permit in this case gave Defendant the right
31 Folksamerica Reinsurance Co. v. Clean Water of N.Y., Inc., 413 F.3d 307, 311 (2d
Cir.2005) (citations omitted); 28 U.S.C.A. § 1333(1).
32 Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 608 (1991) (emphasis added).
33 Brusco Tug & Barge, Inc. v. St. Paul Fire and Marine Ins. Co., 897 F.Supp.2d 1048, 1052
(W.D. Wash., 2012); see also Sundance Cruises Corp. v. American Bureau of Shipping, 7 F.3d
1077, 1080 (2d Cir. 1993).
34 Id. at 312.
35 Kirby, 543 U.S. at 27.
36 Id.; see also Union Fish Co. v. Kirby, 248 U.S. 308, 312 (1912).
37 Doc. 17 at 3.
38 Id. at 19.
39 Merriam-Webster Dictionary, https://www.merriam-
webster.com/dictionary/maritime#:~:text=1%20%3A%20of%2C%20relating%20to%2C,t
he%20characteristics%20of%20a%20mariner.
40 15 U.S.C. §1127.
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to seine for salmon in Alaskan and federal waters in Southeast Alaska during a
specified period of time and to sell his catch for profit.41 	This activity is both
occurring on the sea and something “having economic value.” As such, it undeniably
involved “maritime commerce.”
The contract resembles the character and nature of the maritime contract in
Union Fish Co. v. Erikson. 42 In Erikson, the parties contracted for the services of the
master (skipper)43 of a vessel, whose duties were to be performed in the waters of
Alaska, mainly upon the sea.44 The Court held that maritime law controlled that
contract.
The same analysis applies in this case. 	Defendant, the skipper of a vessel,
contracted with Plaintiff for a permit to be able to perform maritime services -
commercial fishing for salmon - in Alaskan and federal waters. 	The 	“maritime
character” of the contract for the 2015 Permit is readily apparent.
Additional factors support the Court’s finding that this contract involves
maritime commerce and that therefore admiralty jurisdiction was proper. First and
foremost, Defendant’s own pleading makes multiple references to the commercial
nature of this contract.45 In addition, the contract relates to participation in the 2015
salmon fishing season, an activity is regulated and limited to commercial fishermen
who are designated by the Alaska Commercial Fisheries Entry Commission.46
//
41 Doc. 1-1.
42 Union Erikson, 248 U.S. at 308.
43 Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/skipper.
44 Id.
45 Id. at 3, 14, 16. For instance at page 14 of his motion, Defendant writes “[i]n 1973,
commercial fisherman with the appropriate “gear license” and requisite amount of time in
the fishery were granted permits to continue to fish commercially in that fishery with that
gear. See, Suydam v. Alaska Commercial Fisheries Entry Commission, 957 P.2d 318, 219
(1988)” (emphasis added).
46 National Oceanic and Atmospheric Administration Fisheries, Funding and Financial
Services, “Southeast Alaska Purse Seine Salmon Fishery Buyback Program,”
https://www.fisheries.noaa.gov/alaska/funding-and-financial-services/southeast-alaska-
purse-seine-salmon-fishery-buyback-program.
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Finally, the 2015 Permit is informed by the Limited Entry Act (LEA), which
was enacted in 1973 after a rising crisis brought on by poor salmon returns, declining
fishing incomes, and a rising number of nonresident fishermen.47 Alaska’s LEA was
developed to “keep fishing rights in the hands of Alaskans dependent on fisheries,
especially rural residents with limited economic opportunity.”48 The LEA was
designed to “promote the conservation and the sustained yield management of
Alaska’s fishery resource and the economic health and stability of commercial fishing
in Alaska by regulating and controlling entry of participants and vessels into the
commercial fisheries in the public interest and without unjust discrimination.”49 The
permit’s, and thus the contract’s, primary objective relates to commercial fishing
activities and clearly falls within the scope of a maritime contract.
The Court does not factor in the use of a vessel in its evaluation of whether
the 2015 Permit contract constituted a maritime contract because it is aware of the
possibility that such a permit may be utilized without a vessel. 	Rather the
commercial nature of the subject matter of the contract, and the commercial fishing
services performed under the contract, are themselves maritime in nature.50 Even
without use of a vessel, the contract relates to commerce or navigation on navigable
waters, and the purpose of the 2015 Permit is to promote and protect maritime
commerce, the very definition of a maritime contract.51
//
//
47 Frank Homan, “30 Years of Limited Entry,” chrome-
extension://efaidnbmnnnibpcajpcglclefindmkaj/https://seagrant.uaf.edu/events/fish-
com2/ppts/homan-limitedentry.pdf; “A Bristol Bay Fisheries Policy Retrospective,” The
Nature Conservancy, September 11, 2021, https://www.nature.org/en-
us/newsroom/alaska-bristol-bay fisheries-righting-the-
hip/#:~:text=A%20key%20objective%20of%20Alaska's,residents%20with%20limited%2
0economic%20opportunity.
48 Id.
49 Doc. 17 at 14 (emphasis added).
50 28 U.S.C.A. § 1333(1); Kirby, 543 U.S. at 27.
51 St. Paul Fire, 897 F.Supp.2d 1052; see also American Bureau of Shipping, 7 F.3d 1080.
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IV. 	Conclusion
The Complaint involved a dispute over a maritime contract affecting maritime
commerce. 	Accordingly, the Court finds that Plaintiff properly pled a cognizable
claim in admiralty and that Defendant has not met his burden in proving otherwise.
The Court recommends that Defendant’s Motion to Vacate Judgment under Rule
60(b)(4) be DENIED.
DATED this 14th day of November, 2022 at Anchorage, Alaska.
s/ Kyle F. Reardon___________
KYLE F. REARDON
United States Magistrate Judge
District of Alaska
NOTICE OF RIGHT TO OBJECT
Under 28 U.S.C. § 636(b)(1), a district court may designate a magistrate judge
to hear and determine matters pending before the Court. For dispositive matters, a
magistrate judge reports findings of fact and provides recommendations to the
presiding district court judge.52 A district court judge may accept, reject, or modify,
in whole or in part, the magistrate judge’s order.53
A party may file written objections to the magistrate judge’s order within 14
fourteen days.54 Objections and responses are limited to five (5) pages in length and
should not merely reargue positions previously presented. 	Rather, objections and
responses should specifically identify the findings or recommendations objected to,
the basis of the objection, and any legal authority in support. 	Reports and
recommendations are not appealable orders. Any notice of appeal pursuant to Fed.
R. App. P. 4(a)(1) should not be filed until entry of the district court’s judgment.55
52 28 U.S.C. § 636(b)(1)(B).
53 28 U.S.C. § 636(b)(1)(C).
54 Id.
55 See Hilliard v. Kincheloe, 796 F.2d 308 (9th Cir. 1986).
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