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In re Prosper Operators, Inc.

United States District Court, W.D. Louisiana, Lake Charles Division

September 5, 2019





         Before the court are a Motion to Dismiss [doc. 35] and Appeal of Magistrate Judge Decision [doc. 56] filed by claimant Mitchell Navarre. Prosper Operators, Inc. ("Prosper"), the plaintiff in this limitation of liability proceeding, opposes both motions. Docs. 41, 64.



         This suit arises from injuries allegedly suffered by Navarre during his employment with Prosper. Doc. 1, ¶ 6. Navarre contends that he was injured aboard the M/V Amber on June 14, 2015. Doc. 7, att. 4. He filed a petition for damages against Prosper in the 38th Judicial District Court, Cameron Parish, Louisiana. Id. As operator of the M/V Amber, Prosper then filed a complaint in this court for exoneration from or limitation of liability in this court. Doc. 1. The court issued notice of the suit on October 19, 2016, and provided that any person having a claim relating to the accident that occurred on June 14, 2015, must file his claim in this action on or before April 14, 2017. Doc. 6.

         Prosper did not mail this notice to Navarre or publish it in a local newspaper, as required under Federal Rules of Civil Procedure, Supplemental Rule F and set forth in the court's Order Directing Issuance of Notice, issued the same date as the notice. See doc. 5. Navarre appeared on April 6, 2017, asserting that he had only received notice when Prosper's counsel faxed him a letter referencing the pending action on January 18, 2017, and then mailed him another letter with a copy of the docket attached on January 25, 2017. Doc. 7; see doc. 7, atts. 7 & 8. He moved to dismiss the suit for lack of jurisdiction, alleging that the suit had not been timely filed, and insufficient service of process. Doc. 7. He also timely asserted an admiralty claim on April 13, 2017. Doc. 10.

         In the January 25 letter and in his opposition to the motion to dismiss, Prosper's attorney asserted that he thought the clerk of court was supposed to issue notice to claimants. Judge James T. Trimble, Jr., to whom the case was then assigned, found that the matter was timely filed and that the January 25 letter constituted adequate notice to Navarre, as a known claimant, under Supplemental Rule F(4). Accordingly, he denied the motion to dismiss. Doc. 14.

         On February 20, 2019, Prosper moved for an extension of time to publish notice to potential claimants. Doc. 28. The magistrate judge granted the motion, over Navarre's opposition. Navarre now appeals that ruling. Doc. 56. He also moves to dismiss the case for insufficient service. Doc. 35.


         Law & Application

         A. Appeal of Magistrate Judge Decision

         As Magistrate Judge Kay noted, the Federal Rules of Civil Procedure apply to limitation actions except to the extent that they are inconsistent with the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. Doc. 50, p. 3; see Fed. R. Civ. P. Supp. AMC A(2). Supplemental Rule F provides that notice in a limitation proceeding is given, as described above, by mailing a copy of the court-issued notice any known claimants and publishing that notice in the newspaper "once a week for four successive weeks prior to the date fixed [by the court] for the filing of claims." Id. at F(4). The court may enlarge the time for claims to be filed "[f]or cause shown." Additionally, as the Fifth Circuit has repeatedly noted, the rules of admiralty are to be "administered with equitable liberality and a simultaneous freedom from restraints or frustrations occasioned by technicalities or formal imperfections." Texas Gulf Sulphur Co. v. Blue Stack Towing Co., 313 F.2d 359, 362 (5th Cir. 1963).

         The district court has authority to review a magistrate judge's decision on a non-dispositive pre-trial motion and to reverse that decision if it is clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A); Castillo v. Frank,70 F.3d 382, 385 (5th Cir. 1995). The magistrate judge granted the motion for extension, reasoning that the extension would not prejudice Navarre as "the only possible or potential claimant to this matter." Doc. 50, p. 3. This court disagrees, however, and notes Navarre's intention to bring claims against Texas Petroleum Investment Company ("TPIC") in the state court suit, making TPIC a potential claimant in this matter. Doc. 50; see British Transp. Comm'n v. United States,354 U.S. 129 (1957) (liberal rules of joinder apply in limitation proceeding, permitting court to adjudicate the claims and cross-claims of all interests). Furthermore, Prosper's determination that Navarre was the sole claimant in this matter - even if well-founded -did not outweigh Prosper's failure to comply with clear notice procedures or timely rectify its mistake. The notice procedures, particularly as to potential claimants, are far from a "technicality" or mere "restraint or frustration" for the vessel owner. The principles of equitable liberality must be balanced against the interest of the claimant, whose state court suit has been stayed for nearly three ...

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