No Appellate Jurisdiction in Limitation of Liability

Scf Waxler Marine v. Aris T M/V, No. 17-30805, 2018 U.S. App. LEXIS 24567, 2018 WL 4113799 (5^th Cir. Aug. 29, 2018)

By: Eric Whitehead

This is a proceeding for Limitation of Liability. Valero Refining – New Orleans (“Valero”), Shell Chemical, L.P. (“Shell”), and Motiva Enterprises (“Motiva”) become claimants in the limitation proceeding. The primary issue in this case was whether the court had admiralty jurisdiction pursuant to U.S.C. 28 §1292(a)(3) over an interlocutory order issued by the U.S. District Court, Eastern District of Louisiana. Litigation arose after the defendant’s vessel struck two towing vessels causing damage to both vessels along with the tank barges and facility docks owned by claimants. Valero, Shell, and Motiva appealed to the U.S. Fifth Circuit after the district court denied their partial motion for summary judgment. The motion concerned whether the defendant’s impleaded excess insurers (“Insurers”) were entitled to the same limitation of liability to that of the value of the vessel pursuant to Crown Zellerbach Corp. v. Ingram Industries, Inc. under a liability cap clause in the protection and indemnity (“P&I”) policy. 783 F.2d 1296 (5th Cir. 1986). The court dismissed the appeal holding that it lacked appellate jurisdiction under §1292(a)(3).Though §1292(a)(3) grants the court federal appellate jurisdiction over interlocutory decrees in admiralty cases, such jurisdiction is limited to determinations of the rights and liabilities of parties following a final decree. Here, the district court’s denial of partial summary judgment on the issue of limitation of liability was not a final judgment. Neither the extent of the defendant vessel owner’s liability nor the potential exoneration of liability was determined. The court ultimately agreed with defendant Insurers’ assertion that the 5^th Circuit decision in Bucher-Guyer AG v. M/V INCOTRANS SPIRIT controlled the court’s jurisdictional determination in this case. 868 F.2d 734 (5^th Cir. 1989).In Bucher-Guyer, the court held that it lacked jurisdiction under §1292(a)(3) to hear an appeal of a nearly identical interlocutory judgment limiting liability pursuant to a statutory right granted by the Carriage of Goods at Sea Act (“COGSA”). Claimants contended that this case was distinguishable from Bucher-Guyer on the grounds that the decision was predicated upon a statutory right granted under the COGSA as opposed to the liability cap clause in the P&I policy here. Rejecting this argument and choosing to follow Bucher-Guyer’s precedent, the court maintained and further clarified that interlocutory orders based on the issue of limitation of liability, be it from a statutorily created or contractual right, were not final judgments capable of creating appellate jurisdiction under §1292(a)(3).Bottom Line: A judgment limiting liability pursuant to a statutory right or contractual clause is not a final judgment from which the court may exercise appellate jurisdiction over an interlocutory order under U.S.C. 28 §1292(a)(3).