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

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
KANAWAY SEAFOODS, INC., et al.,
Plaintiffs,
v.
PACIFIC PREDATOR, et al.
Defendants.
Case No. 3:22-cv-00027-JMK-KFR
FINDINGS AND RECOMMENDATIONS ON
MOTIONS TO DISMISS UNDER 12(b)(1)
The Court recommends Defendants’ Motions to Dismiss at Dockets 66 and 76,
each seeking dismissal of portions of Plaintiffs’ Amended Complaint pursuant to
Federal Rule of Civil Procedure 12(b)(1) be denied. 	Plaintiffs’ Amended Complaint
contains allegations that on their face are sufficient to invoke federal jurisdiction.
Specifically, as it relates to money advanced by Plaintiffs for Defendants’ purchase
of three limited entry fishing permits, maritime jurisdiction under 46 U.S.C. § 31342
exists as these permits can properly be considered necessaries essential for the
operation of Defendants commercial fishing enterprise. 	In addition, Plaintiffs’
action for possession of the Pacific Predator is a proper basis for jurisdiction
pursuant to Supplemental Admiralty Rule D.
I. 	Relevant Proffered Facts and Allegations1
Starting in 2019, Defendants Dana and Bryan Howey entered into a series of
agreements with Plaintiffs Liberty Packing, LLC (“Liberty”), and Kanaway Seafoods
Inc. (“Kanaway”), doing business as Alaska General Seafoods (“AGS”). On or about
1 The Relevant Proffered Facts are limited to those facts necessary to decide the motions
before the Court. The Court does not intend for the Relevant Proffered Facts to constitute
binding findings of fact should this matter proceed to trial.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 1 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 2 of 22
April 17, 2019, Defendants Dana and Bryan Howey entered into a Loan and Security
Agreement with Liberty (“the Loan Agreement”).2 Under the Loan Agreement,
Liberty loaned Defendants $800,000 to pay off Defendants’ outstanding loan to a
third party.3 In exchange for this loan from Liberty, Defendants Bryan and Dana
Howey agreed to enter into a Fishing Agreement with AGS to deliver and sell seafood
products to AGS for a fixed period.4 The Liberty loan was further documented by a
Promissory Note dated April 17, 2019, reciting the applicable loan terms (“the
Liberty Note”).5
On or about June 30, 2019, Defendant Bryan Howey entered into a Promissory
Note with AGS for $23,949.32 (“the AGS Note”), documenting a loan from AGS to
Howey in that amount.6 On or about July 12, 2019, Howey purchased a limited entry
fishing permit for the 2019 season in the amount of the AGS Note.7 	Howey could
repay the loan personally no later than September 30, 2019, or repayment could be
made by that date through the “deliver[y of] sufficient product to [AGS].”8
In addition to the AGS Note, AGS loaned Defendant Bryan Howey additional
sums on an “open account” between 2019 and 2021 to be repaid under AGS’s
standard terms and conditions, which included interest on the open amounts at 10%
per annum (“AGS Open Account Loan”). These funds were loaned on the credit of
Defendant Howeys’ fishing vessel, the Pacific Predator (“the Vessel”), and some of
these funds were used by Defendants for necessaries for the Vessel, including vessel
permits for the 2020 and 2021 fishing seasons.9
2 Doc 64-1.
3 Doc. 64 at 3.
4 Id.
5 Id. at 4.
6 Id. at 5.
7 Doc. 64-3 at 1.
8 Id.
9 Doc. 64 at 5; see also Doc. 64-3 at 3 and 5.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 2 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 3 of 22
As 	to 	each 	of 	these 	loans, 	Plaintiffs’ 	Amended 	Complaint 	alleges 	that
Defendants 	have 	failed 	to 	comply 	with 	their 	terms. 	According 	to 	Plaintiffs,
Defendants Bryan and Dana Howey, individually and through their company AWE,
defaulted on the obligations in the Liberty Loan Agreement and Liberty Note by
failing to make agreed principal and interest payments, and failing to register the
Vessel in Washington and provide documentation of that registration to Liberty.10
Plaintiffs contend that these, and other acts and omissions of Defendants, constitute
default under both the Loan Agreement and Note.11 Plaintiffs state that as of January
14, 2022, the principal due on the Liberty Loan was $746,666.67 and the accrued
interest as of February 1, 2022, was $113,166.62, with interest continuing to accrue
at a rate of $368.22 per day.12
With regard to the AGS matters, Plaintiffs allege that Defendant Bryan Howey
never repaid the AGS Note nor fully repaid the AGS Open Account Loan. 	Plaintiffs
claim that Howey failed to repay the sums loaned to him under the AGS Note by
September 30, 2019, and that the $23,949.32 balance on the note remains unpaid
with interest continuing to accrue.13 	In addition, Plaintiffs state that by making
deliveries of fish to AGS, Howey repaid a total of $326,644.13 that had been advanced
to him by AGS.14 	The result Plaintiffs allege is that the unpaid balance on these two
AGS loans stood at $115,953.48, with interest accruing.15 Plaintiffs further state that
AGS advanced additional sums after 2021.16
10 Doc. 64 at 5.
11 Id.
12 Id.
13 Id.
14 Id. at 7. Plaintiffs state that “AGS applied these payments to interest first, then to
unsecured amounts advanced, and then to sums advanced for necessaries under both the
AGS Note and AGS Open Account Loan.” Defendants’ motion to dismiss at Docket 66
challenges how payments were applied by AGS. The Court views this issue as one for the
trier of fact to decide at trial, not an issue for this Court to decide in a motion to dismiss.
15 Id.
16 Id.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 3 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 4 of 22
According to Plaintiffs’ Amended Complaint, Plaintiffs Kanaway and AGS are
affiliated corporations organized under the laws of the State of Delaware.17 Plaintiff
Liberty is a limited liability company operating under the laws of the State of
Washington.18 Defendants Bryan and Dana Howey are residents of the State of
Alaska.19 Defendant AWE is a limited liability company organized under the laws of
the State of Alaska, and Defendant Bryan Howey is the governing person and
authorized agent of AWE.20 At all times material herein, in rem Defendant Vessel was
registered in the State of Alaska and is within the District of Alaska during the
pendency of this action and subject to the jurisdiction of this Court.21 The Vessel is
owned by Defendant Bryan Howey and/or Defendant AWE.22
Plaintiffs’ Amended Complaint raises three causes of action. 	In their first
cause 	of 	action, 	Plaintiffs 	allege 	a 	breach 	of 	contract 	and 	promissory 	note.
Specifically, Plaintiffs allege that Defendants Bryan and Dana Howey breached the
terms of the Liberty Loan and Liberty Note by failing to make principal and interest
payments on the loan and note, and by failing to register the vessel in Washington
State and provide documentation of that registration.23 	Plaintiffs’ second cause of
action seeks to foreclose on their maritime and state lien rights as a result of
Defendants’ failure to repay money advanced to Defendants under the AGS Note and
AGS Open Account Loan for “the maintenance and operation of the [V]essel as
necessaries.”24 	Plaintiffs 	also 	seek 	to 	foreclose 	on 	the 	Vessel 	pursuant 	to
Supplemental Admiralty Rule D as a result of Defendants’ alleged default on the
17 Id. at 2.
18 Id.
19 Id. at 3.
20 Id.
21 Id. at 2-3.
22 Id.
23 Id. at 7-8.
24 Id. at 9.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 4 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 5 of 22
Liberty Loan.25 Plaintiffs’ third cause of action alleges corporate disregard, and seeks
to have the Court disregard AWE as an entity.26
Plaintiffs seek declaratory and monetary judgment against Defendants over
the $75,000 threshold for diversity jurisdiction.27 On the face of the amended
complaint, Plaintiffs assert jurisdiction under 46 U.S.C. § 31322, § 31325, and §
31342; under Supplemental Admiralty Rules C and D; and within the meaning of Fed.
R. Civ. P. 9(h). Plaintiffs further state that venue is proper because the Court has
personal jurisdiction over the parties to this matter since the Vessel is currently
located in this District, and Defendants are located and do business in the State of
Alaska.
II. 	Procedural History and Motions Presented
On February 23, 2022, Plaintiffs filed a complaint, in rem and in personam,
against Defendants for breach of contract and promissory note, corporate disregard,
to foreclose maritime liens, and for a warrant to arrest the Vessel, pursuant to Rule
C(3) 	of 	the 	Supplemental 	Rules 	for 	Certain 	Admiralty 	and 	Maritime 	Claims
(hereinafter “Admiralty Rule or Rules”).28
This Court issued a warrant for the arrest of the Vessel on March 16, 2022.29
Upon the execution of the arrest warrant, Defendants filed a motion for a hearing to
either vacate the arrest pursuant to Admiralty Rule E(4)(f), or set the amount of a
special bond to secure the release of the Vessel under Admiralty Rule E(4)-(5).30 The
Court heard argument on the motion on May 3, 202231 and directed additional
briefing on the matter, which the parties provided.
On July 29, 2022, the Court denied the motion to vacate the arrest, and granted
25 Id.
26 Id. at 10.
27 Id.
28 Docs. 1 and 3.
29 Doc. 7.
30 Doc. 15.
31 Doc. 28.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 5 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 6 of 22
the motion to set a special bond to secure the release of the Vessel in the amount of
$148,500. In that order, the Court found that maritime liens existed, thus creating
subject matter jurisdiction over Plaintiffs’ claims. 	The Court declined to issue a
ruling on the strength of Defendants’ argument that a “maritime lien cannot attach
to a limited entry permit,” and whether $46,964.32 of the unpaid balance, plus
interest, must be discounted from the bond amount.32
Plaintiffs filed an Amended Complaint on September 7, 2022.33
On September 25, 2022, Defendants filed a motion to dismiss a portion of the
Amended Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of
admiralty jurisdiction (hereinafter “Fed. R. Civ. P.” or “Rule”). 	The portion of the
Amended Complaint Defendants sought to have dismissed involved a claim relating
to money loaned by AGS to Defendants that was used by Defendants to pay for the
temporary emergency transfer of Alaska State limited entry fishing permits.34 The
motion also sought to reduce the Court’s previously-ordered special bond under
Admiralty Rule E(6) by the amount of the money advanced for the permits.35
Plaintiffs responded in opposition, and Defendants replied.36
Shortly after, Defendants filed a second motion to dismiss the Amended
Complaint under Rule 12(b)(6) for failure to state a claim regarding the AGS Note
and for an award of attorney’s fees and costs, along with another Admiralty Rule
E(6) motion to reduce security and costs, to which Plaintiffs responded in opposition
and Defendants replied.37
Defendants then filed a third motion to dismiss the Amended Complaint under
Rule 12(b)(1) for lack of admiralty jurisdiction regarding Rule D “Petitory Action”
32 Doc. 52.
33 Doc. 64. The amended complaint included an itemized accounting of the losses alleged by
Plaintiffs. All of the original claims remained unchanged.
34 Doc. 66.
35 Id.
36 Docs. 77 and 80.
37 Docs. 71, 78, 81.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 6 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 7 of 22
and under the Preferred Ship Mortgage Act. 	Plaintiffs opposed the motion to
dismiss.38
In this Order, the Court considers all filings related to both motions to dismiss
the Amended Complaint under Rule 12(b)(1). 	Defendants’ motion to dismiss the
Amended Complaint pursuant to Rule 12(b)(6) will be addressed in a separate order.
III. 	Applicable Law
a. Subject Matter Jurisdiction
“Federal courts are courts of limited jurisdiction, possessing only that power
authorized by Constitution and statute.”39 Congress has statutorily implemented the
federal 	courts' 	original 	subject 	matter 	jurisdiction 	under 	Article 	III 	of 	the
Constitution by categorizing all cases arising under the Constitution, laws, or
treaties of the United States under 28 U.S.C. § 1331; and cases involving citizens of
diverse states under 28 U.S.C. § 1332. 	In addition, 28 U.S.C. § 1333 grants federal
district courts the power to entertain “[a]ny civil case of admiralty or maritime
jurisdiction.” 	Supplemental jurisdiction over state claims pursuant to 28 U.S.C. §
1367 may also exist when those claims are “so related to claims in the action within
[the district court's] original jurisdiction that they form part of the same case or
controversy under Article III[.]”40 “It is to be presumed that a cause lies outside of
federal courts’ limited jurisdiction, and the burden of establishing the contrary rests
upon the party asserting jurisdiction.”41
The standard for determining whether a plaintiff has asserted a valid basis for
admiralty jurisdiction is the “prima facie standard,” rather than the more demanding
38 Docs. 76, 82, 83.
39 Gunn v. Minton, 568 U.S. 251 (2013) (citing Kokkonen v. Guardian Life Ins. Co. of America,
511 U.S. 375, 377 (1994) (internal quotation marks omitted)).
40 D'Onofrio v. Vacation Publications, Inc., 888 F.3d 197, 206 (5th Cir. 2018) (internal
citations omitted).
41 Columbia Riverkeeper v. U.S. Coast Guard, 761 F.3d 1084, 1091 (9th Cir. 2014) (citing
Kokkonen, 511 U.S. at 377).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 7 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 8 of 22
“fair probability” or “reasonable grounds” standards.42 	The “inquiry focuses on
whether the plaintiff has [pled] a claim cognizable in admiralty.”43 	It is well settled
that the plaintiff bears the initial burden of pleading in his 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, including proper service of process.44
b. Facial Challenges to Motion to Dismiss under 12(b)(1)
A court's subject matter jurisdiction may be challenged under Fed. R. Civ. P.
12(b)(1). Such challenges may be either “facial” or “factual.”45 	In a facial attack,
“the challenger asserts that the allegations contained in a complaint are insufficient
on their face to invoke federal jurisdiction.”46 	When opposing a facial attack on
subject matter jurisdiction, the nonmoving party is not required to provide evidence
outside the pleadings.47 	In deciding a facial Rule 12(b)(1) motion, the court must
assume the plaintiff's allegations in the complaint to be true and draw all reasonable
inferences in his favor.48 By contrast, in a factual attack, “the challenger disputes
the truth of the allegations that, by themselves, would otherwise invoke federal
jurisdiction.”49
IV. 	Analysis
a. Motion to Dismiss for Lack of Subject Matter Jurisdiction Money
Advanced by AGS for Acquisition of Limited Entry Permits and for
Reduction in Bond at Docket 66
42 Padre Shipping, Inc. v. Yong He Shipping, 553 F.Supp.2d 328, 331-32 (S.D.N.Y. 2008).
43 Ronda Ship Mgmt. v. Doha Asian Games Org. Comm., 511 F.Supp.2d 399, 404 (S.D.N.Y.
2007).
44 102 A.L.R. Fed. 811 (originally published in 1991).
45 Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004).
46 Id. (quoting Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)).
47 Wolfe, 392 F.3d at 362; see Doe v. Holy See, 557 F.3d 1066, 1073 (9th Cir. 2009) (treating
defendant's challenge to subject matter jurisdiction as facial because defendant “introduced
no evidence contesting any of the allegations” of the complaint).
48 Wolfe, 392 F.3d at 362 (citations omitted).
49 Id. at 362 (quoting Safe Air, 373 F.3d at 1039).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 8 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 9 of 22
Defendants make a facial challenge to a portion of Plaintiffs’ Amended
Complaint, claiming that the money advanced by AGS that was used by Defendants
to obtain three limited entry salmon seining permits cannot form a basis for federal
jurisdiction, 	because 	such 	transactions 	do 	not 	give 	rise 	to 	maritime 	liens.50
Defendants argue that such transactions are precluded by Alaska law,51 and that
limited entry permits are not “necessaries” as required for a maritime lien under
maritime law.52 	In addition to dismissal for lack of subject matter jurisdiction of
those portions of Plaintiffs’ Amended Complaint relating to the monies advanced to
purchase the limited entry permits, which Defendants claim totaled approximately
$46,964.32, Plaintiffs also seek a reduction in the Vessel’s bond by that amount.53
In their opposition Plaintiffs raise several arguments. 	First, Plaintiffs state
that Defendants’ motion to dismiss improperly seeks reconsideration of this Court’s
prior decision in which the Court ruled that items purchased by Defendants with
money advanced by AGS, which included the limited entry fishing permits, were
properly considered “necessaries.”54 Second, Plaintiffs argue that AGS’ debt and lien
claims against the Vessel do not implicate Alaska law or regulations regarding
fishing permits. 	Moreover, Plaintiffs argue that Alaska law cannot alter federal
jurisdiction, which is properly found in this case given that the permits fall within
the 	“’broad 	meaning’ 	of 	necessaries” 	under 	federal 	law 	for 	which 	maritime
jurisdiction properly exists.55
Finally, Plaintiffs submit that because admiralty jurisdiction is proper over all
claims within their Amended Complaint, including those related to money used to
purchase the limited entry permit, there is no justification to reduce the bond
50 Doc. 66 at 2.
51 Id. at 10-13.
52 Id. at 13-14.
53 Id. at 2, 16-18.
54 Doc. 77 at 5-6 (citing to Court’s Order Denying Motion to Vacate at Doc. 52).
55 Id. at 7-11 (quoting at pages 7 and 8 Farwest Steel Corp. v. Barge Sea-Span, 769 F.2d 620,
623 (9th Cir. 1985).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 9 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 10 of 22
amount set by the Court.56 Furthermore, even if the amounts used to purchase the
limited entry permits was improperly included, reduction of the bond amount is
unwarranted as the currently set bond amount is reasonable because it is still less
than what would be permitted under a recalculated total.
The Court views the issues Defendants raise of whether subject matter and
admiralty jurisdiction exist in this case, whether the limited entry permits give rise
to admiralty jurisdiction, and whether the limited entry permits give rise to a
maritime lien as three related, but distinct issues. Ultimately, consistent with the
Court’s previous order at Docket 52 and the District Court’s order regarding a similar
limited entry permit in Finney v. Howey,57 the Court finds that subject matter and
admiralty jurisdiction exist over all claims as it relates to the allegations in Plaintiffs’
Amended Complaint relating to money provided by AGS that was used by Defendants
to purchase limited entry permits. 	The Court recommends denial of Defendants’
Rule 12(b)(1) motion at Docket 66.
i. 	A Maritime Lien Exists Giving the Court Jurisdiction.
Federal courts may exercise their maritime jurisdiction granted by 28 U.S.C.
§ 1333 if an action is based on a maritime lien pursuant to the Commercial
Instruments and Maritime Liens Act (“CIMLA”), 46 U.S.C. § 31342, or if an action is
based on a maritime contract.58 	As stated in the Court’s order at Docket 52, for
purposes of determining when a maritime lien exists, and therefore federal maritime
jurisdiction, the relevant portion of the statute reads:
[A] person providing necessaries to a vessel on the order of the owner
or a person authorized by the owner, (1) has a maritime lien on the
vessel; (2) may bring a civil action in rem to enforce the lien; and (3) is
not required to allege or prove in the action that credit was given to the
56 Id. at 11-13.
57 Finney v. Howey, 3:20-cv-00289-SLG-FKR, Doc. 31 (D. Alaska, Dec. 19, 2022).
58 See Farwest Steel Corp., 769 F.2d at 620 (A maritime contract may be enforced in federal
court without any other basis of subject matter jurisdiction). 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.”).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 10 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 11 of 22
vessel.59
A necessary is “any item which is reasonably needed for a venture in which the ship
is engaged”60 and should be given “broad meaning.”61 	Necessaries can include
amounts paid for “goods, services and intangibles that a careful and provident owner
would provide to enable a vessel to continue to perform well the functions for which
she has been designed and engaged.”62
In Ventura Packers, Inc. v. Kathleen, the Ninth Circuit explained that CIMLA
supplied a basis for maritime jurisdiction, and that the Plaintiff may show that it has
a maritime necessaries lien under certain conditions.
We, 	therefore, 	follow 	the 	Supreme 	Court's 	lead 	in 	Tallentire 	and
conclude 	that 	[CIMLA] 	supplies 	a 	basis 	for 	admiralty 	jurisdiction
independent 	from 	those 	bases 	available 	at 	common 	law. 	In 	so
interpreting [CIMLA], we neither add nor subtract from what Congress
passed into law. Specifically, we hold [the plaintiff] must demonstrate
that: (1) it provided necessaries; (2) to a vessel; (3) by order of the
owner or a person authorized by the owner. … If [the Plaintiff]
demonstrates these elements, it may invoke the admiralty jurisdiction
of the federal courts to enforce a necessaries lien in rem.”63
In this case, the Court finds that the Amended Complaint does allege sufficient
facts establishing maritime jurisdiction. As stated in the Amended Complaint, whose
allegations the Court must consider true in light of the facial attack on jurisdiction
made by Defendants in their motion to dismiss, “[t]he funds loaned to [Defendant]
Howey as documented by the AGS Note were loaned on the credit of the Vessel and
intended to be used for necessaries for the Vessel, including but not limited to a
vessel permit lease.”64 Furthermore, as it relates to amounts advanced by AGS under
59 46 U.S.C. § 31342(a).
60 Foss Launch & Tug Co. v. Char Ching Shipping U.S.A., Ltd., 808 F.2d 697, 699 (9th Cir.
1987); see also Equilease Corp. v. M/V Sampson, 793 F.2d 598, 603 (5th Cir. 1986)
(interpreting necessaries as anything that facilitates or enables a vessel to perform its
mission or occupation).
61 Farwest Steel, 769 F.2d at 623.
62 Zitano v. F/V Diamond Girl, 963 F.Supp. 109, 112 (D.R.I. 1997) (citing Farrell Ocean
Services, Inc. v. United States, 681 F.2d 91, 92–93 (1st Cir. 1982); Payne v. S.S. Tropic Breeze,
423 F.2d 236, 241 (1st Cir. 1970)).
63 Ventura Packers, 305 F.3d at 919.
64 Doc. 64 at 5.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 11 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 12 of 22
the AGS Open Account Loan, Plaintiffs’ amended complaint similarly alleges that
some 	of this money was used 	for 	the purchase of 	“necessaries.”65 Plaintiffs’
accounting of funds advanced under the AGS Open Account loan documents the
acquisition of the permit acquired with the AGS Note,66 as well as two additional
limited entry permits using the AGS Open Account Loan.67
Alaska limited entry permits are 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.68 Alaska’s
LEA was developed to “keep fishing rights in the hands of Alaskans dependent on
fisheries, especially rural residents with limited economic opportunity.”69 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.”70
In its Order Denying Motion to Vacate Arrest and Setting Bond, this Court
previously analyzed the standards and elements required to determine that Plaintiffs
65 Id. at 6-7.
66 See Doc. 64-4 at 1 (“ET SE Seine Permit Lease – Anthony -George” in the amount of
$23,949.32).
67 Id. at 3 (“Copper River Boats/Permit S01E-56824E/B. Howey” in the amount of $9,965),
and 5 (“ACH to Dock Street Brocker/SE Permit Lease/B Howey” in the amount of $13,050).
In determining whether a complaint states a claim for relief, a court may consider facts
contained in documents attached to the complaint. See Nat'l Ass'n for the Advancement of
Psychoanalysis v. Cal. Bd. of Psychology, 228 F.3d 1043, 1049 (9th Cir. 2000). Defendants’
motion to dismiss states that “each year [Defendants] fished for AGS under the Fishing
Agreement, AGS would advance the owner/transferor the purchase price of the [permit].”
68 	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.
69 Id.
70 AK ST § 16.43.010(a).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 12 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 13 of 22
adequately showed a fair or reasonable probability that it has a maritime lien against
the Vessel and that, in accordance with the Rule of Advances, necessaries were
advanced.71 There is no basis to disturb the Court’s prior findings on this issue, nor
its conclusion that the money advanced by AGS to Defendants was for the purpose
of acquiring necessaries for the successful operation of the Vessel. 	Among those
necessary items were the three limited entry permits at issue in this motion, items
not only “reasonably needed” for the activities in which the Vessel was engaged, but
essential to its success. 72
Defendants write in their own motion to dismiss that to engage in the
Southeast Alaska fishery, the location Defendants sought to fish in order to meet
their obligations to Plaintiffs, “required a salmon seine limited entry permit issued
by 	the 	Alaska 	Commercial 	Fisheries 	Entry 	Commission.”73 	Because 	of 	this
requirement, AGS’s advancement of money to purchase the permits was no less
necessary to the success of the fishing operation at issue in this case than money
advanced to purchase fuel to power the Vessel’s run to the fishery, or nets with which
to catch fish upon its arrival at its intended location. Like other intangibles such as
insurance, the permit was “an asset that [kept] the vessel ‘active’ and [was]
necessary to the ‘continued operation’ of the vessel.”74 	By alleging facts in the
amended complaint that the funds from the AGS Note and AGS Open Account Loan
were provided to Defendants for the purpose of acquiring necessaries, which
71 Doc. 52; Doc. 77 at 4-5.
72 See Bradford Marine, Inc. v. M/V Sea Falcon, 64 F.3d 585, (11th Cir. 1996) (“Necessaries
are the things that a prudent owner would provide to enable a ship to perform well the
functions for which she has been engaged.”)
73 Doc. 66 at 4 (emphasis added).
74 Zitano, 963 F.Supp at 112; see also First Bank v. Exodus, 598 F.Supp.3d 1077 (W.D. Wash.
April 8, 2022) (noting there is “no general objection to treating an intangible as an
appurtenance,” 	and 	when 	considering 	whether 	a 	fishing 	permit 	qualified 	as 	an
appurtenance, noting that it was “the rights themselves” rather than the physical permit
itself that determined the market value and creditworthiness of the vessel, as much as its
engine, physical dimensions, and navigation equipment) (quoting Gowen, Inc. v. F/V Quality
One, 244 F.3d 64, 67-68 (1st Cir. 2001)).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 13 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 14 of 22
included the limited entry permits, Plaintiffs have met their burden and established
a cognizable claim in admiralty under 46 U.S.C. § 31342. 75 	Subject matter
jurisdiction on that basis is proper.
Defendants’ 	reliance 	on 	Alaska 	state 	law 	and 	regulation 	governing 	the
possession and transfer of limited entry permits is unavailing. As Plaintiffs correctly
argue, the issue at hand is not the assertion of a lien against the permits themselves,
but rather, against the Vessel based upon the advancement of funds to the Vessel’s
owners that were then used to acquire the permits. The Court does not believe that
Defendants’ arguments based upon state-imposed limitations on the attachment of
these permits or whether or not they can be the subject of a maritime lien under
Alaska laws are relevant to the issue of subject matter jurisdiction.
Moreover, Defendants’ arguments relating to Alaska state law ignore federal
supremacy when the issues concern federal substantive rights under admiralty law.
While “[s]tate law may supplement maritime law, [] it must yield when it interferes
with 	harmony 	and 	uniformity, 	or 	where 	it 	would 	defeat 	reasonably 	settled
expectations of maritime actors.”76 	Even if the Court were to assume a conflict
between Alaska law and regulation and federal maritime law, federal admiralty
jurisdiction would remain.
ii. 	The Court’s Reasoning in Finney v. Howey Is Not Inconsistent
with Its Findings and Recommendation in this Case.
Defendants reference Finney v. Howey, in which this Court recommended
denying a motion to vacate judgment for lack of admiralty jurisdiction regarding a
contract for the transfer of a similar limited entry permit.77 However, the outcome
in that case is not directly applicable to the issues in this motion to dismiss given the
75 Padre Shipping, 553 F.Supp.2d at 331-32; Ronda Ship Mgmt., 511 F.Supp.2d at 404.
76 Bank of Pacific v. F/V ZOEA, 2017 WL 823298 at *2 (W.D. Wash. March 2, 2017) (citing
Am. Dredging Co. v. Miller, 510 U.S. 443, 447 (1994) and Persson v. Scotia Prince Cruises,
Ltd., 330 F.3d 28, 32 (1st Cir. 2003)).
77 Finney v. Howey, 3:20-cv-00289-SLG-FKR, Doc. 28 (D. Alaska, Nov. 14, 2022) (hereinafter
“Finney”).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 14 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 15 of 22
arguments raised by the parties in each respective matter. 	In Finney v. Howey,
Defendant Bryan Howey argued that his agreement to purchase a seasonal limited
use permit from Plaintiff in exchange for $27,500 did not give rise to maritime
jurisdiction because, among other arguments, Plaintiff did not and could not assert
a maritime lien, nor was the transfer a maritime contract.78 	In their response,
Plaintiffs did not argue that a maritime lien existed, asserting instead that admiralty
jurisdiction was proper because the agreement to transfer the permit was a maritime
contract.79
The District Court disagreed with Defendants’ arguments, adopting this
court’s Report and Recommendation finding that the transaction at issue – the
transfer of a fishing permit – was a maritime contract, and that therefore federal
maritime jurisdiction was proper.80 As Plaintiff did not argue that a maritime lien
existed, neither the District Court nor the Magistrate Court addressed this issue. In
addition, the Court dismissed Defendants’ reliance on case law asserting that
Alaska’s regulation of fishing permits placed the transaction outside of admiralty
jurisdiction, noting that the contract at issue did not involve any state actors, but
rather, was between two private parties, and that it conflicted “neither with the
admiralty jurisdiction of any court of the United States conferred by Congress, nor
with any law of congress whatsoever.”81
In this case, however, the entirety of both parties’ arguments are based on
whether or not an agreement to advance money to Defendants to be used for the
purchase of limited entry permits from a third party was sufficient to establish a
maritime lien, and therefore maritime jurisdiction. The parties do not raise, and the
Court is not making any findings or recommendations as to whether or not the AGS
78 Finney at Doc. 17.
79 Finney at Doc. 19. 	In their opposition, Plaintiffs stated that they mistakenly asserted a
maritime lien in their complaint, but did not seek to enforce any lien rights, thereby making
“the factual and legal discussion on this point…irrelevant.”
80 Finney Doc. 31 at 2-3.
81 Finney at 3-4 (D. Alaska, Dec. 19, 2022).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 15 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 16 of 22
Note and AGS Open Account Loan were maritime contracts, and whether or not
maritime jurisdiction exists on that alternative basis.
The Court believes its reasoning in both cases to be consistent and that
depending upon the facts of each particular case, agreements for the purchase of
fishing permits can involve both necessaries, and be a contract whose “nature and
subject matter” is central to the business of maritime commerce.82 Moreover,
jurisdiction on this basis is not an either or proposition as “[s]ome maritime liens
[may be] based on an underlying breach of contract[.]”83
iii. 	There Is No Basis to Reduce the Previously-Ordered Security
Under Rule E(6) at Docket 66
As detailed above, the Court finds Plaintiffs’ Amended Complaint properly
establishes admiralty 	jurisdiction 	pursuant 	to 	46 U.S.C. 	§ 31342. 	The Court
previously set a bond amount of $148,500, and in making that determination
considered, but did not expressly determine as it does here, Defendants’ argument
that monies used for limited entry permits cannot give rise to a maritime lien.84
However, the Court did state that even if it were to accept this argument, a bond of
$148,500 would still be reasonable given that it was significantly less than the bond
amount authorized under the law.85 This fact remains true and the Court’s findings
and 	recommendations 	herein 	provides 	no 	basis 	to 	disturb 	its 	prior 	ruling.
Accordingly, as it relates to the advances for the three limited entry permits, the
Court recommends that Defendants’ request to reduce its security for lack of
jurisdiction be denied.
//
//
//
82 Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 608 (1991).
83 Ventura Packers, 305 F.3d at 920-21 (citing Farwest Steel Corp., 769 F.2d at 621)).
84 Doc. 52 at 14.
85 Id. at 13-14 (citing Supplemental Admiralty & Maritime Claims Rule E(5)(a)).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 16 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 17 of 22
b. Motion to Dismiss for Lack of Admiralty Jurisdiction re Rule D
“Petitory Action” and Under Preferred Ship Mortgage Act at Docket
76
Defendants move to dismiss for lack of subject matter jurisdiction claims
made in Plaintiffs’ Amended Complaint relating to petitory relief, as well as claims
invoking the Preferred Ship Mortgage Act under 46 U.S.C. §§ 31322 and 31325.86
Defendants claim that Plaintiffs lack legal title to the vessel, and thus lack admiralty
jurisdiction 	to 	support 	a 	claim 	of 	petitory 	relief 	under 	Admiralty 	Rule 	D.87
Defendants also argue that because the Vessel is not a United States documented
vessel, it does not meet the requirements under 46 U.S.C. § 31322 necessary to create
admiralty jurisdiction. Similarly, Defendants argue that no admiralty jurisdiction
exists under 46 U.S.C. § 31325 because there is no preferred mortgage.88 Finally,
Defendants claim that Plaintiffs failed to assert supplemental jurisdiction in their
Amended Complaint.89
Plaintiffs respond that Admiralty Rule D applies to Plaintiff Liberty’s claims,
creating admiralty jurisdiction, that supplemental jurisdiction exists because the
claims 	derive 	from 	a 	common 	nucleus 	of 	operative 	facts, 	and 	that 	diversity
jurisdiction also exists, which although not plead in its amended complaint, the
Court may infer on its own.90
For the reasons stated below, the Court recommends that Defendants’ motion
to dismiss for lack of admiralty jurisdiction regarding the Rule D “Petitory Action”
be denied. 	In light of its findings on this issue, the Court declines to consider
Defendants’ request to dismiss under the Preferred Ship Mortgage Act.
//
86 Doc. 76.
87 Id. at 2.
88 Id. at 7.
89 Id. at 4.
90 Doc. 82 at 10. See Mir v. Fosburg, 646 F.2d 342, 346-347 (9th Cir. 1980); Merricks-
Barragan v. Maidenform, Inc., 2011 WL 5173653 (C.D. Cal. Oct. 31, 2011).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 17 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 18 of 22
i. 	Jurisdiction under Admiralty Rule D
Admiralty Rule D provides a basis to bring in federal court “all actions for
possession, partition, and to try title maintainable according to the course of the
admiralty practice with respect to a vessel.” 	In the Amended Complaint, Plaintiff
states that this action has been brought “in personam arising from maritime
contracts, as well as in rem against the Vessel for provision of necessaries and for
petitory relief under Supplemental Admiralty Rule D.”91 A petitory suit seeks to try
title to a vessel and “is to some extent akin to the terrestrial suit to quiet title,
although, as opposed to a quiet title suit in which title is perfected against the world,
the admiralty procedure to try title afforded by a petitory action can only be utilized
with a specific adversary in mind.”92 	A petitory action to try title under Rule D
“requires [a] plaintiff to assert a legal title to the vessel; mere assertion of an
equitable interest is insufficient.”93
Plaintiff Liberty’s Amended Complaint references petitory relief and goes on
to specifically assert as a basis for federal jurisdiction CIMLA and Supplemental Rule
C and D.94 	Defendants are correct that the Amended Complaint does not assert a
right to title against the Vessel sufficient to support petitory relief. 	However,
Defendants are incorrect that this is a basis upon which to grant their motion to
dismiss.
What 	Defendants 	call 	a 	“petitory 	action” 	does 	not 	accurately 	state 	the
substance of the allegation contained within the Amended Complaint. 	A reading of
the Amended Complaint shows that Plaintiff Liberty is not seeking to try title to the
Vessel. 	Rather, Plaintiff Liberty seeks to execute its lien rights, sell, or possess the
91 Doc. 64 at 2.
92 Kawa Leasing, Ltd. V. Yacht Sequoia, 544 F.Supp. 1050, 1063 (D. Md. July 9, 1982) (citing
7A Moore's Federal Practice P D.03, at D-25).
93 Gulf Coast Shell and Aggregate LP v. Newlin, 623 F.3d 235, 239 (5th Cir. 2010) (citing Silver
v. Sloop Silver Cloud, 259 F.Supp. 187, 191 (S.D.N.Y. 1966).
94 Doc. 64 at 2.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 18 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 19 of 22
Vessel.95 	As 	stated 	in 	its 	Amended 	Complaint 	and 	exhibits 	filed 	therewith,
Defendants entered into a Loan and Security Agreement that gave Plaintiff Liberty a
security interest in the Vessel.96 That agreement explicitly granted Plaintiff Liberty
the right of “seizure and sale” of the Vessel if default occurred, and though disputed,
Plaintiffs’ 	Amended 	Complaint 	presents 	sufficient 	facts 	alleging 	Defendants
defaulted under the agreement.97
Plaintiff Liberty’s “legal claim to possession” of the Vessel is a proper basis
under Rule D to proceed in an admiralty claim.98 “It does not appear, either from
Rule D or from other court opinions, that dispute of legal title is required for a Rule
D possessory action. Rule D makes note both of actions for possession and of actions
to quiet title.”99 Accordingly, Plaintiffs need only assert the right to possess the
Vessel to maintain a Rule D action in federal court, which Plaintiff Liberty did in its
Amended Complaint.100
95 Doc. 64 at 9.
96 Docs. 64 and 64-1.
97 See Gallagher v. Unenrolled Motor Vessel River Queen, 475 F.2d 117 (5th Cir. 1973)
(recognizing that suits for possession based on the claimant's right to title are properly
within the admiralty jurisdiction of the federal judiciary (citing Ward v. Peck, 59 U.S. 267
(1855)).
98 Cary Marine, Inc. v. M/V Papillon, 701 F.Supp. 604, 606 (N.D. Ohio 1988), aff'd, 872 F.2d
751 (6th Cir. 1989); see also Newlin, 623 F.Supp. at 1063.
99 FED. R. CIV. P. SUPP. D; Warhurst v. One Twenty Foot Bertran, Civil Action No. 14-00245-
N, 2015 U.S. Dist. LEXIS 31008, at *5-7 (S.D. Ala. Mar. 13, 2015); see also The Tietjen & Lang
No. 2, 53 Supp. 459, 1944 A.M.C. 518 (D.N.J. 1944) (finding jurisdiction since “[p]ossessory
actions are actions to recover ships or other property to which a party is of right entitled,”
which are analogous to suits for replevin).
100 Doc. 82 at 7-8 FN 6; see also Jones v. One Fifty Foot Gulfstar Motor Sailing Yacht, Hull No.
01, 625 F. 44, 47 (5th Cir. 1980) (jurisdiction is proper in a Rule D possessory suit where
the Plaintiff alleges “ownership, right to immediate possession, [and] an unlawful ...
detention by defendant ...”); Ward v. Peck, 59 U.S. 267, 267 (1855); Gallagher v. Unenrolled
Motor Vessel River Queen, 475 F.2d 117, 119 (5th Cir. 1973); Matsuda v. Wada, 128 F.Supp.2d
659 (D. Hawaii, 2000); Ogner v. M/V KILOHANA, O.N. 1208577, 2017 WL 5892196, at *2 (D.
Hawaii, 2017); Schatek v. Tsui, 2010 WL 5169006, at *1 (E.D. Cal. Dec. 14, 2010); Offshore
Express, Inc. v. Begeron Boats, Inc. 1978 A.M.C. 1504 (E.D. La 1977); Hunt v. A Cargo of
Petroleum Prods. Laden on the Steam Tanker Hilda, 378 F. Supp. 701, 703-04 (E.D. Pa. 1974).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 19 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 20 of 22
Ultimately, whether Defendants defaulted or not is up to the trier of fact to
decide, not this Court in the present motion to dismiss. Since this Court must assume
Plaintiffs’ proffered facts as true, Plaintiff Liberty has the right under Rule D to an
action to determine possession in federal court and jurisdiction exists for the Court
to hear those claims.
ii. 	Additional Bases for Jurisdiction
Two additional bases of federal jurisdiction exist in this case - supplemental
jurisdiction under 28 U.S.C. § 1367 and diversity jurisdiction pursuant to 28 U.S.C.
§ 1332. 	The Court finds that supplemental jurisdiction is proper because Plaintiff
Liberty’s claims derive from the same nucleus of operative facts as Plaintiff AGS’
maritime lien claims.101 As stated in the Amended Complaint and accompanying
exhibits, Plaintiff AGS entered into a Fishing Agreement with Defendants in 2019,
whereby Defendants agreed to fish the Vessel for Plaintiff AGS for a 15-year term
under certain terms and conditions. The Fishing Agreement was simultaneously
made with the $800,000 rescue loan from Plaintiff Liberty, which also had a 15-year
repayment term.102 	All of the loans by both companies involved the same debtors
and the same vessel, and Liberty’s claims can fairly be considered part of the same
case or controversy as those presented by AGS.103
Additionally, diversity jurisdiction exists in this case. Plaintiffs concede that
they did not plead diversity jurisdiction in their Amended Complaint.104 	However,
this fact is not dispositive so long as sufficient facts are alleged upon which the Court
may determine jurisdiction.105 Federal Rule of Civil Procedure 12(h)(3) provides that
a court may raise the question of subject matter jurisdiction, sua sponte, at any time
101 Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966).
102 Doc. 78 at 2.
103 Doc. 82 at 9.
104 Doc. 82 at 10.
105 See Mir v. Fosburg, 646 F.2d at 346-347; see also Arbaugh v. Y&H Corp., 546 U.S. 500, 513
(2006).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 20 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 21 of 22
during the pendency of the action.”106 	“[W]hile a complaint must present certain
quite particular allegations of diversity jurisdiction in order to be adequate, the
actual 	existence 	of 	diversity 	jurisdiction, 	ab 	initio, 	does 	not 	depend 	on 	the
complaint's 	compliance 	with 	these 	procedural 	requirements.” 	The 	“essential
elements of diversity jurisdiction” must be “affirmatively allege[d],” and “the
burden of proving” diversity jurisdiction “is on the party asserting” it.
Plaintiffs have met their burden in this case. 	Although Plaintiffs did not
specifically allege diversity jurisdiction in their Amended Complaint, they did plead
the essential elements of diversity jurisdiction for the Court to find that such
jurisdiction exists. 	As stated in the Amended Complaint, Plaintiff Liberty is a
Washington company doing business in Washington, and Plaintiff AGS is a Delaware
company doing business in Washington. Defendants Bryan and Dana Howey are both
citizens of Alaska, the Vessel is registered in Alaska, and Defendant AWE is
incorporated in Alaska. Finally, the jurisdictional threshold amount of over $75,000
is met for suit in federal court. Accepting Plaintiffs’ allegations as true, considering
the facts alleged, and drawing all reasonable inferences in favor of Plaintiffs,107 the
Court finds that Plaintiffs’ claims, on their face, sufficiently invoke federal diversity
jurisdiction under the Rule 12(b)(1) standard.
iii. 	Motion to Dismiss Under Preferred Ship Mortgage Act at
Docket 76
Plaintiffs do not specifically address whether there is jurisdiction under either
46 U.S.C. § 31322, and § 31325, Preferred Ship Mortgage Act. Since jurisdiction exists
on multiple other grounds, the Court declines to consider this issue at this time.
//
//
106 See Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002); see also Qingdao Youli
Century Guarantee Co., Ltd. v. Shaoqiang Chen, 2018 WL 6264971, at *1 (C.D. Cal., 2018).
107 See Safe Air, 373 F.3d at 1039.
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 21 of 22

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Order on 12(b)(1) Motions to Dismiss
Kanaway Seafoods, Inc., et al. v. Pacific Predator, et al.
3:22-cv-00027-JMK-KFR 	Page 22 of 22
V. 	Conclusion
Plaintiffs’ Amended Complaint alleges sufficient facts to support federal
jurisdiction over monies advanced by AGS to Plaintiffs for the acquisition of
necessary limited entry permits. Similarly, admiralty jurisdiction exists as it relates
to Plaintiff Liberty’s action for possession of the Vessel pursuant to Supplemental
Admiralty Rule D, as does supplemental and diversity jurisdiction. For the reasons
stated above, the Court recommends that Defendants’ Motions to Dismiss at Dockets
66 and 76 be DENIED.
DATED this 24th day of January, 2023 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.108 A district court judge may accept, reject, or modify,
in whole or in part, the magistrate judge’s order.109
A party may file written objections to the magistrate judge’s order within
fourteen (14) days.110 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.111
108 28 U.S.C. § 636(b)(1)(B).
109 28 U.S.C. § 636(b)(1)(C).
110 Id.
111 See Hilliard v. Kincheloe, 796 F.2d 308 (9th Cir. 1986).
Case 3:22-cv-00027-SLG-KFR Document 87 Filed 01/25/23 Page 22 of 22