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In re Complaint of F/V Mary B II LLC

United States District Court, D. Oregon, Eugene Division

March 27, 2019

In the Matter of the Complaint of F/V Mary B II LLC as owner of MARY B II No. 274604, Petition for Exoneration from or Limitation of Liability.

          OPINION AND ORDER

          MICHAEL J. MCSHANE UNITED STATES DISTRICT JUDGE

         This action arises from the sinking of the MARY II B on January 8, 2019. Shortly after its sinking, F/V Mary B II LLC, as owner of the MARY B II, filed a complaint in this Court seeking exoneration from or limitation of liability for all claims arising out of or in connection with the sinking.[1] F/V Mary B II LLC now moves the Court for an order (1) authorizing the Clerk of Court to deposit $500 into the registry as security for costs, (2) enjoining further prosecution of any other action or proceeding against the F/V Mary B II LLC or its property arising out of or in connection with the sinking of the MARY B II, and (3) directing issuance of a notice to all potential claimants that their claims must be filed in this Court within forty-five days. Because F/V Mary B II LLC filed its Complaint within the six-month statute of limitations, and because it has already deposited $500 with the Court as security for costs, F/V Mary B II LLC's Motion for Order Authorizing Clerk to Deposit Funds, Granting an Injunction Restraining Prosecution of Any Claims Arising Out of or in Connection with Voyage that Concluded with the January 8, 2019 Sinking of MARY B II, and Directing Issuance of Notice and Publication Thereof (“Motion”) is GRANTED in part.[2]

         BACKGROUND

         The MARY B II was a forty-two-foot wood hulled commercial fishing vessel. Compl. ¶ 4, ECF No. 1. The vessel began a voyage on January 7, 2019 with three crew members onboard. Compl. ¶ 6. On January 8, the MARY B II capsized, broke apart, and sank adjacent to the north jetty at Yaquina Bay, Oregon. Compl. ¶ 6. All three crew members died. Compl. ¶ 6.

         On February 15, F/V Mary B II LLC, as owner of the MARY B II, filed a complaint pursuant to the Limitation of Liability Act (“LLA”), 46 U.S.C. §§ 30501-30512. Compl. ¶ 1. At the same time, Mary B II LLC filed the instant Motion pursuant to 46 U.S.C. § 30511, Rule F of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure (“SRA”), and Fed.R.Civ.P. 67(a). Motion 2-3, ECF No. 3.

         In its Motion, F/V Mary B II LLC seeks an order (1) authorizing the Clerk of Court to deposit $500 into the registry as security for costs, (2) enjoining further prosecution of any other action or proceeding against F/V Mary B II LLC or its property arising out of or in connection with the sinking of the MARY B II, and (3) directing issuance of a notice to all potential claimants that their claims must be filed in this Court within forty-five days. Motion 1-2. F/V Mary B II LLC does not seek, nor could it seek at this juncture, a determination on the merits of its prayer for exoneration or limitation of liability.

         DISCUSSION

         F/V Mary B II LLC is entitled to the requested injunction and notice. The LLA “allows a vessel owner to limit liability for damage or injury, occasioned without the owner's privity or knowledge, to the value of the vessel or the owner's interest in the vessel.” Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 439 (2001). In doing so, the statute “alters the normal rules of vicarious liability.” In re Aloha Jetski, LLC, 920 F.Supp.2d 1143, 1146 (D. Haw. 2013). Instead of being “vicariously liable for the full extent of any injuries caused by the negligence of the captain or crew employed to operate the ship, the owner's liability is limited to the value of the ship unless the owner himself had ‘privity or knowledge' of the negligent acts.” In re City of New York, 522 F.3d 279, 283 (2d Cir. 2008); see also Otel Invs., Ltd. v. M/T Clary, 673 F.3d 108, 115 (2d Cir. 2012) (holding that privity or knowledge may be “actual or constructive, ” but in either case must involve some “culpable participation or neglect of duty” by an owner).

         Initially, the LLA allows the owner of a vessel to deposit with a district court, for the benefit of all claimants, “an amount that is the equivalent of their interest in the vessel.” In re Complaint of Ross Island Sand & Gravel, 226 F.3d 1015, 1017 (9th Cir. 2000). Once such a fund is established, the district court is the exclusive forum within which victims may litigate claims. 46 U.S.C. § 30511(c). All other “claims and proceedings against the owner related to the matter in question shall cease, ” id., and the district court must “enjoin the further prosecution of any action or proceeding against the plaintiff or [her] property with respect to any claim subject to limitation in the action, ” SRA F(3). Ultimately, the district court determines “liability, the privity [or] knowledge of the shipowner, and if necessary, the distribution of the limitation fund” among claimants. In re Complaint of S.F. Bar Pilots, No. C05-02975 MJJ, 2006 WL 16879, at *1 (N.D. Cal. Jan. 3, 2006) (internal citations and quotations omitted).

         A vessel owner is entitled to the LLA's far-reaching injunction and corresponding notice if she satisfies three requirements. First, a vessel owner must file her complaint not later than six months after receipt of a written claim. 46 U.S.C. § 305011; SRA F(1). Second, the owner must deposit with the district court “an amount equal to the value of the owner's interest in the vessel and pending freight, or approved security.” 46 U.S.C. § 305011; SRA F(1). The value of the vessel is determined “at the conclusion of its voyage.” Complaint of Caribbean Sea Transp., Ltd., 748 F.2d 622, 626 (11th Cir. 1984) (citation omitted). As such, if a vessel is a total loss, then the value of the owner's interest is zero. Id.; see also 2 Thomas J. Schoenbaum, Admiralty and Maritime Law § 15:9 (6th ed. 2018). Finally, a vessel owner must deposit with the district court “security for costs.” SRA F(1). In the District of Oregon, the Local Rules of Admiralty Procedure (“LRA”) fix the required security at $500. LRA 1020-2.

         Here, F/V Mary B II LLC satisfies all three requirements. First, F/V Mary B II LLC has yet to receive written notice of any claims. Compl. ¶ 9. Its Complaint is therefore timely. See In re Aramark Sports & Entm't Servs., LLC, No. 2:09-CV-637-TC, 2010 WL 770065, at *1 (D. Utah Mar. 5, 2010) (holding that an action for limitation may be brought before a vessel owner receives written notice of any claims). Second, F/V Mary B II LLC represents that the MARY B II is a total loss and that the value of its interest in the vessel and pending freight is zero. Schones Decl. ¶¶ 3-5, ECF No. 4; Ad Interim Stipulation for Value, ECF No. 2. As such, F/V Mary B II LLC is not required to deposit with the Court any funds as security for its interest in the MARY B II or the vessel's pending freight.[3] Finally, because F/V Mary B II LLC deposited $500 with the Court, it has furnished adequate security for costs. Notice of Payment, ECF No. 8. F/V Mary B II LLC is therefore entitled to the injunction and notice requested in its Motion.

         CONCLUSION

         For the foregoing reasons, F/V Mary B II LLC's Motion, ECF No. 3, is GRANTED in part. The Court orders the following actions and relief.

         • Pursuant to 46 U.S.C. § 30511 and SRA F(3), the prosecution of any and all suits, actions, or proceedings of any nature or description whatsoever against F/V Mary B II LLC, its agents, servants, or employees, or against the vessel MARY B II (NO. 274604), except in the instant proceeding, with respect to any claim arising out of or in connection with the voyage that concluded with the January 8, 2019 sinking of the ...


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