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Coastal & Gulf Marine Transport, LLC v. Eastern Barge Services, Inc.

United States District Court, E.D. Louisiana

February 23, 2018

COSTAL & GULF MARINE TRANSPORT, LLC
v.
EASTERN BARGE SERVICES, INC., ET AL.

         SECTION: “J” (5)

          ORDER AND REASONS

          CARL J. BARBIER UNITED STATES DISTRICT JUDGE

         Before the Court is Eastern Barge Service's rule to show cause why the arrest of the M/V MISS ANN should not be vacated. The Court held a show cause hearing on February 23, 2018. Having considered the legal memoranda, the record, and the applicable law, the Court finds that the arrest should not be vacated.

         FACTS AND PROCEDURAL BACKGROUND

         This Supplemental Rule D action stems from a dispute regarding the ownership of the M/V MISS ANN. Plaintiff, Costal & Gulf Marine Transport, LLC (“CGMT”), alleges that it owns the M/V MISS ANN and entered into an oral bareboat charter with defendant, Eastern Barge Services, Inc. (“EBS”), for the M/V MISS ANN to trade in the vicinity of Houma, Louisiana. At the time of the bareboat charter, CGMT was composed of two 50% members: Linda Marra and Roy White. Roy White also owned defendant, EBS. Plaintiff alleges that the informal bareboat charter agreement was unilaterally terminated by John White, the administrator of Roy White's estate, after Roy White died intestate on January 5, 2017. Plaintiff also alleges that EBS has maintained possession and now claims ownership of the M/V MISS ANN.

         Linda Marra initiated the instant lawsuit on behalf of CGMT on January 2, 2018, alleging that CGMT is entitled to a decree that it is the true and lawful owner of the vessel. The Court issued a warrant of arrest of the vessel on January 3, 2018, and the vessel was subsequently arrested on January 10, 2018. (See Rec. Docs. 12, 17). Following the arrest, EBS filed a Motion to Set Hearing to Show Cause (Rec. Doc. 22) pursuant to Supplemental Rule E(4)(f).[1] CGMT opposes the motion. (Rec. Doc. 24). The Court held a show cause hearing on February 23, 2018.

         PARTIES' ARGUMENTS

         The sole issue before the Court is whether Ms. Marra, acting alone as a 50% member of CGMT, has the authority to file suit on CGMT's behalf.[2] EBS contends that the arrest should be vacated if CGMT cannot show that it validly approved the lawsuit and the arrest by a majority vote of its members. EBS offers three arguments in support of its position. First, EBS contends that any action by CGMT requires approval of a majority of CGMT's members. To this end, EBS argues that Ms. Marra lacked the authority to bring the instant lawsuit because she is simply a 50% member of CGMT and did not receive the consent of Roy White prior to his death nor the consent of his estate thereafter. Next, EBS asserts that there is no showing that any decision-making authority has been delegated to Ms. Marra whatsoever. Finally, EBS avers that even if day-to-day management is vested in Ms. Marra, the instant suit is an “extraordinary decision” which requires a majority vote of all members of the LLC.

         DISCUSSION

         I. Ms. Marra's Authority Under the LLC Agreement

         Louisiana LLC law gives an LLC a choice in structuring the management of its business. Absent a contrary provision in the articles of organization, management of an LLC's business is vested in its members. See La. Stat. Ann. § 12:1311 (“Except as otherwise provided in the articles of organization, the business of the [LLC] shall be managed by the members, subject to any provision in a written operating agreement restricting or enlarging the management rights and duties of any member or group or class of members.”); see also La. Stat. Ann. § 12:1318 (“Unless otherwise provided in the articles of organization or a written operating agreement, each member of an [LLC] shall be entitled to cast a single vote on all matters properly brought before the members, and all decisions of the members shall be made by majority vote of the members.”). The LLC's articles of organization, however, may provide instead that the LLC's business will be managed by managers. See La. Stat. Ann. § 12:1312 (“The articles of organization may provide that the business of the [LLC] shall be managed by or under the authority of one or more managers who may, but need not, be members.”).

         Under CGMT's Articles of Organization, CGMT elected to be managed by managers rather than by its members:

“The Company shall be managed by managers selected as provided in the operating agreement of the Company. Except as expressly limited in the operating agreement of the Company, each manager has full authority to act on behalf of the Company and is a mandatary for the Company in all matters whether or not in the ordinary course of business, this mandate includes, bit [sic] is not limited to, the authority to alienate, lease or encumber all or any portion of the immovable property of the Company whether or not within the ordinary course of business. No member other than the managers shall have authority to act as a mandatary of the Company.”

(Rec. Doc. 24-1 at 3) (emphasis added). CGMT's Operating Agreement names Linda Marra as the managing member of the LLC. ...


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