No. 18-266

FRANCIS & MARY MARION, CHARLES & MARY PINCKNEY,

JOHN & ELIZABETH RUTLEDGE, JAMES S. THURMOND, AND

ESSIE MAE WASHINGTON-WILLIAMS

Petitioners,

v.

SALLY’S SEAFOOD SHACK, INC.

Respondent.

On Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit

BRIEF FOR RESPONDENT

Team F

ii

QUESTIONS PRESENTED

1. In Richardson v. Harmon, this Court found that the Limitation Act, 46 U.S.C. §§30501-

30512, provides an independent basis for admiralty jurisdiction. Contrary to Supreme

Court precedent, a number of lower courts have recently held that the Act does not. Does

the Limitation Act provide an independent basis for admiralty jurisdiction?

2. 28 U.S.C. §1292(a)(3) allows for appellate courts to hear interlocutory appeals when the

rights and liabilities of the parties have been established. Though the district court

determined admiralty jurisdiction and the applicability of the Limitation Act, the court

did not address whether Sally’s Seafood Shack was liable nor did it address the extent of

its liability. Did the court of appeals have appellate jurisdiction under §1292(a)(3)?

iii

TABLE OF CONTENTS

Questions Presented ........................................................................................................................ ii

Table of Contents ........................................................................................................................... iii

Table of Authorities ....................................................................................................................... iv

Opinions Below .............................................................................................................................. 1

Statement of Jurisdiction................................................................................................................. 1

Constitutional and Statutory Provisions ......................................................................................... 1

Statement of the Case...................................................................................................................... 2

Summary of Arguments .................................................................................................................. 6

Arguments ....................................................................................................................................... 9

I. THE LIMITATION ACT PROVIDES SALLY’S SEAFOOD SHACK AN INDEPENDENT

BASIS FOR ADMIRALTY JURISDICTION. ........................................................................... 9

A. The Limitation Act Provides An Independent Basis For Admiralty Jurisdiction. ............. 9

3. The Locality-Nexus Tort Test Should Not Be Applied To The Limitation Act. .............. 11

B. Sally’s Seafood Shack Is Entitled To Protection Under the Limitation Act Because It Is

Both A Qualified Vessel And The Loss Arose From No Fault Of The Owner. ................... 13

II. THE FOURTH CIRCUIT DID NOT HAVE APPELLATE JURISDICTION UNDER 28

U.S.C. §1292(a)(3). ................................................................................................................... 16

A. An Interlocutory Appeal Would Frustrate The Purpose and Goal of §1292(a)(3) Since

The Question Of Liability Has Not Been Resolved .............................................................. 17

B. A Majority Of Circuits Agree That To Preserve Its Purpose, §1292(a)(3) Should Be

Construed Narrowly. ............................................................................................................. 19

C. The Plain Language of §1292(a)(3) Does Not Support Appellate Jurisdiction Because

The District Court Has Not Determined The Liabilities Of The Parties. .............................. 22

D. The Ninth Circuit’s Expansive Reading Of §1292(a)(3) Clashes With The Majority Of

Circuits And With Analysis from Within the Ninth Circuit. ................................................. 23

E. A Majority Of Circuit Courts Have Expressly Denied Following The Ninth Circuit’s

Reasoning Behind Expanding §1292(a)(3). .......................................................................... 24

Conclusion .................................................................................................................................... 28

iv

TABLE OF AUTHORITIES

CASES

Amnesty Int’l, USA v. Battle,

559 F.3d 1170 (11th Cir. 2009) ...................................................................................... 21

Blue Water Yacht Club Assoc. v. N.H. Ins. Co.,

355 F.3d 139, 2004 AMC 367 (2nd Cir. 2004) .............................................................. 25

Bucher-Guyer AG v. M/V Incontrans Spirit,

868 F.2d 734 (5th Cir. 1989). ............................................................................. 20, 21, 26

Burgbacher v. Univ. of Pittsburgh,

860 F.2d 87, 1989 A.M.C. 149 (3rd Cir. 1988) .............................................................. 19

Cont’l Cas. Co. v. Anderson Excavating & Wrecking Co.,

189 F.3d 512, 1999 A.M.C. 2714 (7th Cir. 1999) .......................................................... 18

Crews v. Arundel Corp.,

386 F.2d 528 (5th Cir. 1967) .......................................................................................... 23

Estate of Hager ex rel. Haver v. Laurelton Welding Serv., Inc.,

124 F.App’x 104, 2005 A.M.C. 906 (3rd Cir. 2005) .......................................... 20, 22, 26

Evergreen Int’l (USA) Corp. v. Standard Warehouse,

33 F.3d 420, 1995 A.M.C. 625 (4th Cir. 1994) ....................................... 16, 17, 18, 19, 26

Hartford Accident & Indemnity Co. v. Southern Pacific Co.,

273 U.S. 207 (1927) ........................................................................................................ 10

Hollywood Marine, Inc. v. M/V Artie James,

755 F.2d 414 (5th Cir. 1985) .............................................................................. 21, 22, 26

Iberto Petrochemical Indus. Ltd. v. M/T Beffen,

475 F.3d 56, 2007 AMC 213, (2nd Cir. 2007) ............................................................... 25

In re Sisson,

867 F. 2d 341 (7th Cir. 1989) .......................................................................................... 11

Jamaica Commodity Trading Co. v. Barge Hercules,

992 F.2d 1162, 1994 A.M.C. 601 (11th Cir. 1993) ........................................................ 26

Just v. Chambers,

312 U.S. 383, 386 (1941) ................................................................................................ 10

Kossick v. United Fruit Co.,

365 U.S. 731, 1961 AMC 833 (1961) ............................................................................... 9

Lewis v. Lewis & Clark Marine, Inc.,

531 U.S. 438, 452 (2001) .......................................................................................... 11, 15

Lozman v. Rivera Beach,

568 U.S. 115, 2013 AMC 1 (2013) ..................................................................... 13, 14, 15

Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd.,

543 U.S. 14 (2004) ............................................................................................................ 9

Norwich Co. v. Wright,

80 U.S. (13 Wall.) 104 (1872) .................................................................................... 9, 10

Richardson v. Harmon,

222 U.S. 96 (1911) .......................................................................................................... 10

SCF Waxler Marine LLC v. Aris T M/V,

902 F.3d 461, 2018 A.M.C. 2420 (5th Cir. 2018) .................................. 20, 21, 22, 23, 26

Sea Lane Bah. Ltd. v. Europa Cruises Corp.,

188 F.3d 1317, 2000 AMC 66 (11th Cir. 1999) ............................................................. 27

v

Seattle First Nat’l Bank v. Bluewater P’ship,

772 F.2d 565, 1986 AMC 1296 (9th Cir. 1985) .............................................................. 24

Stewart v. Dutra Constr. Co.,

543 U.S. 481, 2005 AMC 609 (2005) ............................................................................. 14

Sw. Marine Inc. v. Danzig,

217 F.3d 1128, 2000 AMC 2088 (9th Cir. 2000) ............................................................ 24

Wajnstat v. Oceania Cruises, Inc.,

684 F.3d 1153, 2012 A.M.C. 1805 (11th Cir. 2012) .......................................... 20, 21, 23

Wallis v. Princess Cruises, Inc.,

306 F.3d 827, 2002 A.M.C. 2270 (2002).................................................................. 23, 24

Wingerter v. Chester Quarry Co.,

185 F.3d 657, 2000 AMC 1596 (7th Cir. 1999) ............................................................. 26

CONSTITUTIONS AND STATUTES

1 U.S.C. 3 (1947)………………..……………………………………………………………….13

28 U.S.C. §1291 (1948)………………………………………………………………………….16

28 U.S.C. §1292(a)(3) (1948)……………………………………………………………….passim

46 U.S.C. 30501 (2006)…………..…………………………………………………….6, 9, 12, 13

46 U.S.C. 30502 (2006)…………….…………………………………………………. 6, 9, 12, 13

46 U.S.C. 30503 (2006)……………...……………………………………………………. 6, 9, 12

46 U.S.C. 30504 (2006)………………...…………………………………………………. 6, 9, 12

46 U.S.C. 30505 (2006)…………………...………………………………………. 6, 9, 12, 13, 16

46 U.S.C. 30506 (2006)……………………...……………………………………………. 6, 9, 12

46 U.S.C. 30507 (2006)………………………...…………………………………………..6, 9, 12

46 U.S.C. 30508 (2006)…………………………...………………………………………. 6, 9, 12

46 U.S.C. 30509 (2006)……………………………...……………………………………. 6, 9, 12

46 U.S.C. 30510 (2006)………………………………...…………………………………. 6, 9, 12

46 U.S.C. 30511 (2006)…………………………………...………………………………. 6, 9, 12

46 U.S.C. 30512 (2006)……………………………………...……………………………. 6, 9, 12

46 U.S.C. app. 740 (2006)……………………………………………………………………….12

OTHER

15 Cong. Rec. 3427-31 (1884)………………………………………..……………….……7, 9, 10

Cong. Globe, 31st Cong., 2d Sess. 331-32 (1851)………………..…………………………7, 9, 11

Medley, Amanda, Note: A Sea of Confusion: The Shipowner’s Limitation of Liability Act as an

Independent Basis for Admiralty Jurisdiction, 108 Mich. L. Rev. 229, 234 (Nov.

2009)…………………………………………………………………………………………11, 12

1

OPINIONS BELOW

The opinion of the United States Court of Appeals for the Fourth Circuit denying rehearing

(Pet. App. 7a-8a) is unreported. The opinion of the court of appeals (Pet. App. 1a-6a) is reported

at In re Sally’s Seafood Shack, Inc., 890 F.3d 1384, 2018 AMC 3333 (4th Cir. 2018). The opinion

of the United States District Court for the District of South Carolina (Pet. App. 9a-14a) is reported

at In re Sally’s Seafood Shack, Inc., 243 F. Supp. 3d 702 (D.S.C. 2017).

STATEMENT OF JURISDICTION

The United States Court of Appeals for the Fourth Circuit entered its judgment on May 7,

2018. A petition for rehearing was denied on June 26, 2018. The petition for a writ of certiorari

was filed on September 4, 2018, and was granted on December 3, 2018. The jurisdiction of this

Court rests on 28 U.S.C. 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

U.S. CONST. art. III, § 2, cl. 1.

Issue 1:

1 U.S.C. § 3 (1947)

46 U.S.C. 30502 (2006)

46 U.S.C. 30505 (2006)

Issue 2:

28 U.S.C. § 1292(a)(3) (1948)

2

STATEMENT OF THE CASE

A. Factual Background

From 1988 until 2008, the F/V Flamingo operated as a fishing vessel, making hundreds

of ocean voyages in the North Atlantic pursuing its catch. Pet. App. at 10a. In 2008, Sally’s

Seafood Shack, Inc. (“Sally’s”) purchased the fishing vessel and converted it to house a floating

seafood restaurant named Sally’s Seafood Shack. Id at 9a-10a. The vessel was anchored on the

banks of the Cooper River in Charleston, South Carolina, surrounded by a cofferdam. Id. at 10a.

In July of 2015, the F/V Flamingo sank in the Cooper River due to an explosion in the

galley of the vessel. Id. As a result, eight people having dinner on the F/V Flamingo, Petitioners,

were injured. Id. The explosion was caused by John Calhoun, who worked primarily in the galley

washing dishes, cleaning the space, and assisting the chef as needed. Id.

The night of the incident, Calhoun was instructed to light the gas range. Id. at 14a.

Though he was trained in how to properly light the gas range and the vessel was adequately

equipped for the task, he got distracted by a call on his mobile phone after turning on the gas. Id.

Forgetting to light the flame, Calhoun stepped out of the galley to take the call. Id. While he was

talking on the phone, the gas accumulated in the galley until something, most likely the pilot

light on the other range, triggered the explosion. Id.

B. Proceedings Below

1. Proceedings Leading Up to the District Court Limitation Proceeding

Subsequently, all eight Petitioners filed state-law tort suits in state courts. Id. at 2a. In

response, Sally’s filed a petition in district court to limit its liability under the Limitation Act. Id.

As the post-incident value of the F/V Flamingo was conceded to be less than a thousand dollars

and as the vessel was not carrying pending freight, Sally’s deposited $1,000 with the district

3

court under 46 U.S.C. § 30511(b)(1). Id. The deposit stayed the state-court tort actions against

Sally’s, given 46 U.S.C. § 30511(c), and Petitioners filed claims in the limitation proceeding. Id.

2. District Court

The district court bifurcated the trial and, in Phase One, heard evidence regarding

Petitioner’s entitlement to protection under the Limitation Act. Id. at 9a. The court postponed

“determination on issues of liability and damages until the phase two trial.” Id. In Phase One, the

court held both that the Limitation Act provides an independent basis for admiralty jurisdiction

and that Sally’s was entitled to protection under the Act. Id. at 11a-14a.

1. The court asserted that, to answer whether the Limitation Act provides an independent

basis for admiralty jurisdiction, it must examine whether limitation is a sufficiently maritime

subject. Id. at 12a. The court held that it is. Id. at 11a-13a. The court observed that the Limitation

Act applies only to “‘seagoing vessel[s] and vessel[s] used on lakes or rivers or in inland

navigation’”, which implies that limitation is a sufficiently maritime subject. Id. at 12a. The court

further maintained that the legislative history of the Act confirms that Congress viewed the Act

as a maritime statute. Id. Additionally, the court stated that it makes sense to extend admiralty

jurisdiction to all limitation proceedings as the overwhelming majority of claims will be

maritime. Id. at 12a-13a.

Finally, the court concluded that its holding was more consistent with Supreme Court

precedent, Richardson v. Harmon, and with first principles. Id. Stating that Richardson’s holding

was that the Limitation Act gave the district court sitting in admiralty the jurisdiction to

determine a non-maritime tort claim as part of the limitation proceeding, the court maintained

that the decision of Richardson was on all fours with the case at hand. Id. at 13a. The court also

4

asserted that it is illogical to address the issue through the lens of tort jurisdiction since the

category of claims subject to limitation is broader than tort claims. Id. at 12a.

2. The court held that the Limitation Act applied to the circumstances of the case after

examining the two issues in dispute upon the matter. Id. at 13a-14a. The court found that the F/V

Flamingo was a qualified vessel under the Act after considering whether the F/V Flamingo was a

“‘seagoing vessel’” or a “‘vessel used on lakes or rivers or in inland navigation’” at the time of

the incident. Id. at 13a. It clarified that there is no dispute that the F/V Flamingo was a seagoing

vessel prior to being converted to house a floating restaurant. Id. The court also rejected

Petitioners’ argument that the F/V Flamingo lost its vessel status when it was anchored to the

shore in order to house the restaurant. Id. The court asserted that this Court in Lozman v. City of

Riviera Beach explicitly rejected the argument that the owner’s subjective intent not to sail again

was relevant to vessel status. Id. The court of appeals applied the test for vessel status presented

by this Court, which examines whether “‘a reasonable observer, looking to the [Flamingo’s]

physical characteristics and activities, would . . . consider it to be designed to any practical

degree for carrying people or things on water.’” Id. The court maintained that it had “no doubt

that the [F/V] Flamingo satisfie[d] that test.” Id.

The court also found that the Sally’s satisfied the no fault requirement. Id. at 14a. The

court observed that the explosion that sank the F/V Flamingo was caused solely by the

negligence of Calhoun. Id. The court maintained that Calhoun was adequately trained in how to

properly light the gas range and that the vessel was adequately equipped to enable him to carry

out the task. Id. The court asserted that no “design or neglect of the owner” nor any “privity or

knowledge of the owner” was responsible for the incident. Id. The court ultimately held that

Sally’s was entitled to limit its liability. Id.

5

3. Court of Appeals

Although the Phase Two trial, which would determine whether Sally’s is liable and the

extent of the liability, had not yet been set, Petitioners appealed under 28 U.S.C. § 1292(a)(3),

which grants appellate jurisdiction from “‘interlocutory decrees . . . of district courts determining

the rights and liabilities of the parties to admiralty cases in which appeals from final decrees are

allowed.’” Id. at 1a. The court of appeals held that it lacked appellate jurisdiction under 28

U.S.C. § 1292(a)(3) and dismissed the appeal. Id. at 6a.

1. As § 1292(a)(3) applies only to admiralty cases, the court first determined whether the

case fell within the district court’s admiralty jurisdiction. The court found that it did. Id. at 4a.

The court asserted that the case was governed by Richardson v. Harmon, in which this Court

upheld the admiralty jurisdiction of a district court over a petition to limit liability for what was

then a non-maritime tort. Id. Confirming the holding of the district court, the court of appeals

found that the Limitation Act provides an independent basis for admiralty jurisdiction. Id.

2. After finding that the case fell within the district court’s admiralty jurisdiction, the

court of appeals examined whether the district court had “‘determine[d] the rights and liabilities

of the parties’” when it granted Sally’s the right to limit its liability without deciding whether it

had any liability to be limited. Id. Though the court conceded that were it to hear the appeal and

affirm the district court’s decision to grant limitation, this would ultimately end the case as the

cost of trial would exceed any possible recovery and both parties would be incentivized to settle,

the court followed its circuit precedent in Evergreen International (USA) Corp. v. Standard

Warehouse. Id. at 6a. The court held that it lacked appellate jurisdiction and dismissed the

appeal. Id.

6

3. Judge Solomon concurred with the majority opinion, stating that the appeal should be

dismissed because the case does not fall under admiralty jurisdiction. Id. The judge asserted that

he would follow the authority laid out in various circuit court decisions to hold that the

Limitation Act does not provide an independent basis for admiralty jurisdiction. Id. He also

maintained that, were this an admiralty case, he would permit Petitioners’ appeal under

§1292(a)(3) as he agreed with the majority that, as a practical matter, the district court has

determined that Sally’s will not bear any real liability for Petitioners’ injuries. Id. Judge Solomon

went further to contend that Evergreen International (USA) Corp. v. Standard Warehouse was

distinguishable from the case at hand, which would leave the court free to make its own decision

upon policy considerations. Id.

4. Petitioners then filed a petition for rehearing, which the court of appeals denied. Id. at

7a. Judge Solomon dissented, stating that he would grant the petition for rehearing and set the

case for argument en banc. Id. He contended that the majority’s holding that the Limitation Act

provides an independent basis for admiralty jurisdiction puts the court in direct conflict with its

sister circuits. Id. The judge further maintained that the majority’s conclusion that §1292(a)(3)

does not provide appellate jurisdiction in this case deepens the existing circuit conflict on this

issue. Id. at 8a. The judge ultimately asserted that the court should address both issues en banc.

Id.

SUMMARY OF ARGUMENTS

ISSUE 1:

The district court and court of appeals were correct in finding that the Limitation Act

provided Sally’s an independent basis for admiralty jurisdiction. The Limitation Act allows the

owner of a vessel to limit its liability to the value of the vessel, provided that it had no

knowledge or participation in the event giving rise to the claims. 46 U.S.C. §§30501-12 (2006).

7

Congress intended the Act to apply broadly to protect ship owners and to encourage the shipping

and shipbuilding industry. Cong. Globe, 31st Cong., 2d Sess. 331-32 (1851); 15 Cong. Rec.

3427-31 (1884).

The Limitation Act provides an independent basis for admiralty jurisdiction. Richardson

v. Harmon established this rule and several Supreme Court cases confirm it. Furthermore, the

nature of the Limitation Act is sufficiently maritime to provide its own basis for admiralty

jurisdiction.

Sally’s is also entitled to protection under the Limitation Act. The Limitation Act has

three requirements that must be fulfilled and Sally’s qualifies each one. First, Sally’s is the

owner of the F/V Flamingo. Second, the F/V Flamingo is both a seagoing vessel and a vessel

used on a river. Third, the Sally’s was in no way responsible for the incident as it was caused

solely by the negligence of John Calhoun. As such, the Limitation Act provides Sally with an

independent basis for admiralty jurisdiction.

ISSUE 2: The court of appeals was correct in finding an absence of appellate jurisdiction. Appellate

courts traditionally have jurisdiction over the final decisions of the district courts. Interlocutory

appeals serve as a narrow exception to this rule. While the final decision rule is key in maintaining

judicial efficiency, a special set of circumstances may require different treatment. Those

circumstances are not present in the case at hand. Petitioner seeks to establish appellate jurisdiction

through 28 U.S.C. §1292(a)(3) (1948). This section allows for an interlocutory appeal in admiralty

cases when the district court has “determine [ed] the rights and liabilities of the parties.” Because

the district court has not determined the liabilities between the parties, appellate jurisdiction must

fail.

8

History and modern application alike reflect the proper narrow construction of an exception

to the general rule like is §1292(a)(3). Congress enacted this avenue for interlocutory appeal in

order to circumvent the need to calculate damages before an appeal on the liability was available.

Admiralty cases have been traditionally bifurcated, a part one to determine liability and a part two

to solely calculate damages. Judicial efficiency was served in those cases in which damages were

calculated but later on appeal, liability was found to be misplaced. Those are the cases to which

§1292(a)(3) grants appellate jurisdiction and not the present case. Here, the district court has

grouped together the question of liability and damages in phase two of the trial. Pet. App. at 9a. In

phase one, the court merely tackled and resolved procedural issues not substantive rights and

liabilities.

A majority of circuits interpret §1292(a)(3) narrowly in order to follow its original purpose.

The Ninth Circuit is alone in attempting to impermissibly broaden the section’s scope. The plain

text of the statute does not support the Ninth Circuit's interpretation, leading various circuits to

decline in following that circuit’s analysis. An interlocutory appeal at this stage in the present case

would frustrate the purpose and the goal of §1292(a)(3). The Fourth Circuit properly found no

appellate jurisdiction in the current case.

9

ARGUMENTS

I. THE LIMITATION ACT PROVIDES SALLY’S SEAFOOD SHACK AN

INDEPENDENT BASIS FOR ADMIRALTY JURISDICTION.

The Limitation Act permits the owner of a vessel to limit its liability, provided that it had

no knowledge or participation in the event giving rise to the claims. 46 U.S.C. §§30501-12

(2006). Congress intended the Act to apply broadly to protect ship owners. Cong. Globe, 31st

Cong., 2d Sess. 331-32 (1851); 15 Cong. Rec. 3427-31 (1884). As such, the Act should be

interpreted broadly to achieve that purpose.

A. The Limitation Act Provides An Independent Basis For Admiralty Jurisdiction.

1. The Limitation Act Is A Sufficiently Maritime Subject By Itself

The nature of the Limitation Act is sufficiently maritime to provide an independent basis

for admiralty jurisdiction. The Act has various, exclusively maritime qualities that justify such

admiralty jurisdiction. First, the Act is limited only to “seagoing vessels and vessels used on

lakes or rivers or in inland navigation” 46 U.S.C. §30502 (2006). As a result, the Act has a

“‘genuinely salty flavor.’” Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd., 543 U.S.

14, 22, 2004 AMC 2705, 2710 (2004) (quoting Kossick v. United Fruit Co., 365 U.S. 731, 742,

1961 AMC 833, 842 (1961)). Second, the Act resembles a maritime lien, a mechanism specific

to maritime law which merits admiralty jurisdiction on its own. Norwich Co. v. Wright, 80 U.S.

(13 Wall.) 104, 116 (1872). Just like a maritime lien secures the claim of a creditor who suffered

an injury due to the usage of the vessel, the Limitation Act also secures the claim of a party who

suffered an injury due to the usage of the vessel with the value of the vessel and freight. Given

the similar nature of the two mechanisms, the Act should also merit admiralty jurisdiction on its

own. Third, Congress’s purpose for the Act was to protect ship owners by limiting their liability

to their interest in their vessel and freight as Congress wanted to encourage shipbuilding and

10

shipping. Cong. Globe, 31st Cong., 2d Sess. 331-32 (1851); 15 Cong. Rec. 3427-31 (1884);

Norwich, 80 U.S. at 119. Given the Act’s limitation to qualified vessels, similarity to maritime

liens, and reflection of Congress’s purpose, the Limitation Act is a sufficiently maritime subject

to qualify for its own independent basis for admiralty jurisdiction.

2. Starting with Richardson v. Harmon, The Supreme Court Has Consistently Found

That The Limitation Act Provides An Independent Basis For Admiralty

Jurisdiction.

This Court in Richardson v. Harmon held that the Limitation Act applied “whether the

liability be strictly maritime or from a tort non-maritime,” deciding that the Limitation Act

worked broadly to grant federal admiralty jurisdiction even in the absence of other bases for such

jurisdiction. Richardson v. Harmon, 222 U.S. 96, 106 (1911). This Court further asserted that

construing the Limitation Act to extend to non-maritime torts harmonized the statute with

Congress’s intent to protect the investment interests of vessel owners. Richardson, 222 U.S. at

104. Given such a purpose, the meaning that would harmonize the application of the Limitation

Act with its purpose is that the Act provides a jurisdictional basis in and of itself. As such, it

should not matter if the vessel is at sea, in a river, or tied to a dock when a loss occurs. For nearly

seven decades, Richardson’s holding has been understood as establishing the Limitation Act as

an independent basis for jurisdiction, and numerous Supreme Court cases have confirmed this

interpretation, even as recently as 2001. See Hartford Accident & Indemnity Co. v. Southern

Pacific Co., 273 U.S. 207, 217 (1927) (“The jurisdiction of the admiralty court attaches in rem

and in personam by reason of the custody of the res put by the petitioner into its hands.”); Just v.

Chambers, 312 U.S. 383, 386 (1941) (“When the jurisdiction of the court in admiralty has

attached through a petition for limitation, the jurisdiction to determine claims is not lost merely

11

because the ship owner fails to establish his right to limitation.”); Lewis v. Lewis & Clark

Marine, Inc., 531 U.S. 438, 452 (2001) (“The Limitation Act granted the federal court

jurisdiction over that action”).

The recent controversy over the precedential authority of Richardson began in 1989 when

the Supreme Court heard an appeal from a Seventh Circuit decision, Sisson v. Ruby, that held

that the Limitation Act was not an independent basis for admiralty jurisdiction. In re Sisson, 867

F. 2d 341 (7th Cir. 1989). The Supreme Court granted certiori and reversed on other grounds,

finding jurisdiction under the traditional two-part locality-nexus test for establishing admiralty

jurisdiction over tort claims. In the briefing stage, this Court asked the parties to brief the Court

on the issue of whether it should reconsider Richardson. Note: A Sea of Confusion at 243. The

Court then decided in footnote 1 that there was no need to revisit Richardson and stated that it

was not reaching the question of whether, if the traditional test were not met, the Limitation Act

would offer an independent basis for jurisdiction. Sisson at n.1.

Many lower courts interpreted this as the Supreme Court turning the issue of the Act

being an independent grant for jurisdiction into an open question, instead of a previously decided

question this Court had specifically declined to revisit. However, explicitly deciding not to hear

the question does not re-open a closed and well-settled question. This decision did not allow for

lower courts to go against the controlling precedent of Richardson in violation of the principles

of stare decisis. This Court should clarify that the Limitation Act provides an independent basis

for admiralty jurisdiction and provide explicit direction for the lower courts to follow.

3. The Locality-Nexus Tort Test Should Not Be Applied To The Limitation Act.

The locality-nexus tort test is traditionally applied to establish admiralty jurisdiction over

tort claims. Sisson at 361-62. The test requires that the incident occurred on navigable waters and

had some nexus to maritime activity. Id. After the controversy caused by Sisson, several circuits,

12

including the Seventh, Fourth, Ninth, and Eleventh Circuits have applied the locality-nexus test

to determine whether admiralty jurisdiction is available for vessel owners petitioning to limit

liability. Note: A Sea of Confusion at 247. But, that test is not applicable here.

First, as stated above, the Limitation Act is sufficiently maritime in nature and deserves

its own independent basis for admiralty jurisdiction. Second, the Limitation Act involves a

broader array of claims than just tort claims. The Act allows an owner to limit his liability not

only when facing tort claims but also claims arising from “embezzlement, loss, or destruction of

any property, goods, or merchandise shipped or put on board the vessel.” 46 U.S.C. 30505

(2006). Third, the language of the Limitation Act makes no mention of locality-nexus

requirements, even withstanding numerous amendments. See 46 U.S.C. 30501-30512 (2006).

Unlike the Limitation Act, other statutes that act as a basis for admiralty jurisdiction specifically

include a requirement of navigation. See 46 U.S.C. app. 740 (2006). Fourth, the application of

the test would render the inclusion of “lakes and rivers” in the Limitation Act meaningless. 46

U.S.C. 30502 (2006).

Finally, the test would be in direct opposition to Congress’s intent and purpose to protect

all vessel owners. Though Petitioners may argue that circumstances have changed, the continual

amendments reflect broadening the scope of the statute indicate that Congress’s intent has

remained the same. Furthermore, the proper remedy is legislative, and the courts should continue

to rule in line with Congress’s purpose in enacting the Limitations Act.

13

B. Sally’s Seafood Shack Is Entitled To Protection Under the Limitation Act

Because It Is Both A Qualified Vessel And The Loss Arose From No Fault Of The

Owner.

The Limitation Act allows owners to limit their liability to the value of the vessel and

freight if three factors are present: (1) the owner is the one to motion for limitation; (2) the

incident involves a seagoing vessel or a vessel used on lakes or rivers or inland navigation; and

(3) the loss has arisen without the owner’s privity or knowledge. See 46 U.S.C. §§30501, 30502,

and 30505. In the current case, Sally’s is attempting to limit its liability in regard to the F/V

Flamingo, a vessel sinking at its anchorage due to negligence on the part of the dishwasher

without Sally’s privity or knowledge. It is undisputed that Sally’s is the owner of the fishing

vessel. Therefore, the first factor for limitation of liability has been met.

The vessel in question is undoubtedly a seagoing vessel and a vessel used on lakes or

rivers. The vessel was anchored in a cofferdam on a river. App. at 10a. The term vessel has

historically been held to be “every description of watercraft or other artificial contrivance used,

or capable of being used, as a means of transportation on water. 1 U.S.C. 3 (1947). Courts have

left the rule of construction intact so far, as recently as 2013. See Lozman v. Rivera Beach, 568

U.S. 115, 128, 2013 AMC 1 (2013).

But the Court in Lozman clarified the rule by adding a test to determine if a vessel falls

within the definition in §3. Lozman at 123. The Court stated:

“A structure does not fall within the scope of this statutory phrase

unless a reasonable observer, looking to the structure’s physical

14

characteristics and activities, would consider it designed to a

practical degree for carrying people or things over water.”

Id. The Court then went on to hold that the structure in question, a vessel that had been converted

to a home with no real ability to generate or store electricity and had to be towed in order to

“travel on water,” was not a vessel under §3. Lozman at 130. Unlike Lozman the current case

deals with a vessel that would have the general appearance of being designed to a practical

degree for carrying people or things over water to a reasonable person. There is nothing in the

record to indicate that a reasonable person when looking at the vessel would have assumed

otherwise.

In a separate case, the Supreme Court stated that, under 1 U.S.C. §3, a vessel is any

watercraft practically capable of maritime transportation regardless of its primary purpose or

state of transit at a particular moment. Stewart v. Dutra Constr. Co., 543 U.S. 481, 497, 125 S.

Ct. 1118, 1129, 2005 AMC 609 (2005). The Court then went on to state that a watercraft is not

capable of being used for maritime transport in any meaningful sense if it has been permanently

moored or otherwise rendered practically incapable of transportation or movement. Stewart at

494, 1127. However, the F/V Flamingo is not permanently moored or practically incapable of

transportation or movement. The cofferdam is there to protect the vessel should it come

unmoored, indicating that the owners planned for potential transportation and the vessel is was

only indefinitely moored. App. at 10a. The owners could have moved the vessel anytime, the

vessel was still practically capable of transportation and movement. This combined with the fact

that a reasonable observer would believe when looking at the vessel that it had the general

15

appearance of being designed to a practical degree for carrying people or things over water

indicate that Sally’s was well within the statutory definition of a vessel under 1 U.S.C. §3.

Furthermore, the F/V Flamingo was operating as a fishing vessel for twenty years prior to

Sally’s taking over in 2008. App. at 10a. During those twenty years it made hundreds ocean

voyages in the North Atlantic pursuing its catch. Id. Sally’s was indefinitely moored in a river

behind a cofferdam. Id. However, the cofferdam served as protection for the vessel in case it

became unmoored at any time. Id. This fact alone indicates that Sally’s more than likely has the

general appearance of being designed to a practical degree for carrying people or things over

water. However, Sally’s qualifies for vessel status under the Act because it is both a seagoing

vessel and a vessel used on a river. A reasonable observer looking to the structure’s physical

characteristics and activities, would consider it designed to a practical degree for carrying

people.

Petitioners may assert that the F/V Flamingo lost its vessel status when it was

“permanently” moored in order to become a restaurant. However, the vessel at no time has been

“permanently” moored. The vessel is simply indefinitely moored. While indefinitely is not a

specific amount of time, it does imply that there is some time in the future when the vessel will

not be moored. Even if the vessel was considered “permanently” moored, the subjective intent

not to embark again is not relevant to vessel status. See Lozman.

The third factor is that the owner had no knowledge or privity of. The Act was designed

to encourage investment and protect vessel owners from unlimited exposure to liability. Lewis v.

Lewis & Clark Marine, Inc., 531 U.S. 438, 453, 121 S. Ct. 993, 1003, 2001 AMC 913 (2001).

The Court went on to state the scope of exclusive federal jurisdiction is proportional to the

federal interest in protecting the vessel owner’s right to seek limitation of liability. Id. To ensure

16

that their intent was properly applied, Congress ensured that an owner’s liability can be limited if

they had no privity or knowledge of the events leading to the resulting loss. 46 U.S.C. §30505.

Previous courts have emphasized that a challenge to limit liability hinges on the knowledge of

the owner. Congress had this particular intent in mind when passing the act because ship owners

often were not there to see or help perform the day-to-day tasks onboard the ship and the crew

members were responsible for such activities. Note: A Sea of Confusion at 234-235. This meant

that any liability arising from a loss was often not due to the negligence of the owner and often

the owner had no idea what the events leading up to that loss were. If owners, therefore, had

unlimited liability, businessmen would be discouraged from investing in the shipping industry

due to the risk of personal liability. Id.

The events in the present case are similar. Without the knowledge of the owner, Calhoun

created the situation that caused the sinking of the vessel. The loss of the vessel and the

claimants injuries are a result of Calhoun’s negligence alone. App. at 10a. Therefore, the events

of that night are aligned with the exact intent of Congress in wanting to protect vessel owners.

Meeting the third factor means that the owner of Sally’s is entitled to limit their liability because

they are (1) an owner filing a claim for a limitation of liability to (2) the value of their vessel for

(3) a loss due to negligence of no privity or knowledge to the owner.

II. THE FOURTH CIRCUIT DID NOT HAVE APPELLATE JURISDICTION UNDER 28

U.S.C. §1292(a)(3).

Traditionally, federal appellate jurisdiction has been limited to “final decisions of the

District Courts of the United States.” 28 U.S.C. §1291. The finality requirement is an important

component of the judicial structure, because it prevents entanglement of the District and Appellate

Courts in each other’s adjudications in an unruly and ultimately inefficient way. Evergreen Int’l

17

(USA) Corp. v. Standard Warehouse, 33 F.3d 420, 423, 1995 A.M.C. 625, 639 (4th Cir. 1994). Not

only is the finality requirement important to prevent entanglement of the courts, the complexity

and protracted nature of some lawsuits with numerous issues can often only be addressed by the

District Courts seriatim. Evergreen, 33 F.3d at 423. However, Congress recognized that in some

circumstances blind adherence to finality as the ultimate arbiter of efficiency or the proper

administration of justice would be displaced and passed §1292 to address which interlocutory

decisions would be reviewable by the appellate courts. Id. Admiralty cases are addressed in

§1292(a)(3), which provides that: “Interlocutory decrees of such district courts or the judges

thereof determining the rights and liabilities of the parties to admiralty cases in which appeals from

final decrees are allowed.” shall have jurisdiction of to appeal. 28 U.S.C. §1292(a)(3). It is through

this special provision that Petitioner seeks to establish appellate jurisdiction. Because Petitioner’s

case falls outside the narrow exception Congress has carved out, appellate jurisdiction must fail.

A. An Interlocutory Appeal Would Frustrate The Purpose and Goal of §1292(a)(3)

Since The Question Of Liability Has Not Been Resolved

Congress intended §1292(a)(3) to permit parties to appeal the finding of liability on the

merits before undergoing the long, burdensome, and perhaps unnecessary damages proceedings.

Evergreen, 33 F.3d at 424. This arose out of the admiralty tradition to bifurcate trials. Phase One

of the trial would be on the issue of liability, where an actor would be determined to be liable or

not. Once, and if there was a finding of liability, Phase Two of the trial would take place. During

Phase Two the amount of damages would be determined. These damages hearings were often both

length and costly. Evergreen, 33 F.3d at 424.

The case at hand, is also a bifurcated admiralty trial, however, the phases were structured

differently than what was traditional. During Phase One, the District Court addressed procedural

issues and granted Sally’s petition to limit liability. The District Court then instructed that the issue

18

of who was liable and what damages arise from that would be postponed to Phase Two of the trial.

Pet. App. at 2a.Thus, in the present case the bifurcation prevents an interlocutory appeal because

the rights and liabilities of the parties have not yet been determined.

Congress additionally intended that the statute would ensure that relevant parties avoided

the expense and delay of a reference to compute damages, since it is always possible that the

libelant may later turn out to have no right to recover at all. Evergreen, 33 F.3d at 424; citing

Medomsley Steam Shipping Co. 317 F.2d at 742. In the current situation, the Fourth Circuit was

correct in their assumption that they lacked jurisdiction because it is impossible to know whether

the claimants can recover at all without first determining the liability of various other parties,

including the owner of the vessel. All the District Court has determined in this case is that the

owner of the vessel is entitled to limit their liability, no questions of vicarious liability of John

Calhoun have been addressed.

Congress’ reasoning in enacting §1292(a)(3) was, in fact, to serve as a narrow exception

to the rule of finality by limiting “the right of appeal to interlocutory orders that finally determine

substantive rights” and liabilities, “as distinct from merely procedural, managerial, preliminary, or

tentative orders.” Cont’l Cas. Co. v. Anderson Excavating & Wrecking Co., 189 F.3d 512, 517,

1999 A.M.C. 2714, 2717 (7th Cir. 1999). Congress relied on this reasoning because admiralty

trials were traditionally bifurcated and District Courts would make a finding of liability first before

then proceeding onto the damages proceeding. Congress’ intent was to permit interlocutory

appeals on the finding of liability and prevent lengthy and inefficient damages proceedings if the

finding of liability was incorrect. Evergreen, 33 F.3d at 424. Congress’ intent and purpose for

enacting the exception would not be met if an interlocutory appeal be allowed at this cases’s

premature stage.

19

B. A Majority Of Circuits Agree That To Preserve Its Purpose, §1292(a)(3) Should

Be Construed Narrowly.

Since the passage of the statute, multiple courts have evaluated how to construe

§1292(a)(3) due to the large number of attempted interlocutory appeals in admiralty jurisdiction.

However, this provision has repeatedly been held to be a narrow exception to the finality rule for

certain admiralty cases. Courts have consistently ruled that the statute should be construed

narrowly as an exception, permitting interlocutory appeals only in situations where the rights and

liabilities of the parties have been determined.

Nearly all circuits are in agreement that an expansive view of the provision would subvert

the point of §1292(a)(3). Such a reading would allow the exception to swallow the rule, flooding

the courts with interlocutory admiralty appeals. Courts have stated their hesitance to allow such an

expansion and follow a narrow interpretation more in-line with the intent the statute was written

with:

“the case law construing the statute does not take a particularly

expansive view of the subsection because the traditional interpretation

of the statute was that it permitted an appeal in admiralty after a

determination of liability but before the assessment of damages.”

Burgbacher v. Univ. of Pittsburgh, 860 F.2d 87, 88, 1989 A.M.C. 149, 150 (3rd Cir. 1988). A

majority of circuits is in agreement that as an exception to the final judgement rule §1292(a)(3)

should be construed narrowly to allow interlocutory appeals only after liability has been

determined, but before the damages phase. See Evergreen Int’l (USA) Corp. v. Standard

Warehouse, 33 F.3d 420, 1995 A.M.C. 635 (4th Cir. 1994); Wajnstat v. Oceania Cruises, Inc., 684

20

F.3d 1153, 2012 A.M.C. 1805 (11th Cir. 2012); SCF Waxler Marine LLC v. Aris T M/V, 902 F.3d

461, 2018 A.M.C. 2420 (5th Cir. 2018); Estate of Hager ex rel. Haver v. Laurelton Welding Serv.,

Inc., 124 F.App’x 104, 2005 A.M.C. 906 (3rd Cir. 2005); Bucher-Guyer AG v. M/V Incontrans

Spirit, 868 F.2d 734 (5th Cir. 1989).

Not only has the Fourth Circuit previously read §1292(a)(3) narrowly, as they did in the

present case below, other circuits agree that the subsection should be read narrowly to maintain its

purpose. The Third Circuit has said that §1292(a)(3) is an exception to the final judgement rule

and has therefore, traditionally been narrowly construed to allow interlocutory appeals only after

liability has been determined but before the damages phase. Hager, 124 F.App’x at 106; quoting

United States v. The Lake George, 224 F.2d 117 (3rd Cir. 1955). The Third Circuit has consistently

held that §1292(a)(3) should be narrowly construed to allow interlocutory appeals only after

liability has been determined.

In addition to the Third Circuit, the Fifth Circuit has consistently held that the statute should

be read and applied narrowly, even as recently as last year. The Fifth Circuit first stated that “the

decision whether the…limitation on damages applies in this case is not a decision determining the

rights and liabilities of the parties,” going on to hold that they did not have appellate jurisdiction

over the appeal. Bucher-Guyer at 734. Then last year, the Fifth Circuit again stated that where the

court is permitted by statute it may hear interlocutory appeals satisfying certain requirements. SCF

Waxler, 902 F.3d at 464. The Fifth Circuit has construed the grant from §1292(a)(3) narrowly,

hewing closely to the statute’s original purpose of permitting appeals from orders finally

determining one party’s liability to another and referring the action for a computation of damages.

Id. (quoting Hollywood Marine, Inc. v. M/V Artie James, 755 F.2d 414, 416 (5th Cir. 1985)).

21

In SCF Waxler, the court stated that interlocutory decrees determining the rights and

liabilities of the parties to admiralty cases are the only interlocutory appeals they may entertain. In

both the Fifth Circuit cases, the Court was hearing arguments regarding trials which had reached

the conclusion that someone could limit their liability but not reached the conclusion of whether

they had liability at all. See SCF Waxler; Bucher-Guyer. The Eleventh Circuit then agreed with

both the Fifth and the Third Circuits and offered up perhaps the clearest rule.

The Eleventh Circuit first stated that Courts of Appeals must inquire into their own

jurisdiction if it is possible that jurisdiction does not exist. Wajnstat, 684 F.3d at 1155 (citing

Amnesty Int’l, USA v. Battle, 559 F.3d 1170, 1176 (11th Cir. 2009)). The Eleventh Circuit then

came to the conclusion that:

“a district court does not determine the ‘rights and liabilities of the

parties’ when it decides the applicability of a statutory limitation of

liability, it also does not determine the ‘rights and liabilities of the

parties’ when it determines the applicability of a contractual limitation

of liability.”

Wajnstat, 684 F.3d at 1155. Therefore, further clarifying the types of interlocutory appeals

the court can hear. The Eleventh Circuit made it clear that the provision should be construed

narrowly and that determining the application of a statutory or contractual limitation of liability is

not a determination of liability. The Wajnstat court went on to decide the court only has jurisdiction

over interlocutory appeals that have “determin[ed] the rights and liabilities of the parties.” Id. The

Eleventh Circuit’s agreement with other circuit courts verifies that most courts have traditionally

22

read §1292(a)(3) extremely narrowly, permitting only appeals from final orders determining the

rights and liabilities of the parties to give effect to the original purpose and goal of §1292(a)(3).

C. The Plain Language of §1292(a)(3) Does Not Support Appellate Jurisdiction

Because The District Court Has Not Determined The Liabilities Of The Parties.

§1292(a)(3) is meant to deal with substantive rights and liabilities, not procedural

findings. Looking to the plain language of the statute, §1292(a)(3) states that interlocutory appeals

may only be brought on interlocutory decrees from the District Court “determining the rights and

liabilities of the parties to admiralty cases.” 28 U.S.C. §1292. For a District Court to have

determined the rights and liabilities of a party is a substantive decision, while the decision to limit

liability of a party whether or not liability has been determined is procedural.

In Hager the court determined that the Death on the High Seas Act (DOHSA) governed

the action brought by estates of seamen, who died as a result of a clamming vessel that sunk, did

not determine the parties’ rights and liabilities within the meaning of the statute even though the

order precluded the estates’ recovery of non-pecuniary damages. Hager, 124 F.App’x at 104. The

Court then went on to find that appellate jurisdiction was lacking for an interlocutory appeal

challenging the determination that DOSHA applied based on the plain language of the statute.

Additionally, in SCF Waxler, the Fifth Circuit cited to Hollywood, stating that §1292(a)(3)

offers no appellate jurisdiction where the district court’s order “does not conclusively determine

[a party’s] ‘rights and liabilities’ as to the claim asserted.” SCF Waxler, 902 F 3d at 465 (quoting

Hollywood Marine, Inc. at 416). The Court of Appeals then went on to find that the determination

that the excess insurers’ ability to limit their liability without a determination of the excess insurers

liability did not completely “cut off” a party’s ability to pursue a claim. See SCF Waxler; Crews

v. Arundel Corp., 386 F.2d 528, 530 (5th Cir. 1967).

23

Finally, in Wajnstat, the Eleventh Circuit found that the application of the limitation-of-

liability provision was not an immediately appealable order under 28 U.S.C. §1292(a)(3).

Wajnstat, 684 F.3d at 1155. The circuit relied on an earlier case from the Fifth Circuit to decide

that application of the limitation of liability provisions is not an immediately appealable order.

Wajnstat, 684 F.3d at 1155 (citing Ford Motor Co. v. S.S. Santa Irene, 341 F.2d 564 (5th Cir.

1965)). The same rule applies here. The rights and liabilities of the parties have not yet been

determined, all that has been determined is that the Limitation Act applies to the owner of the F/V

Flamingo, whether or not that owner has liability remains to be determined and therefore, the Court

of Appeals lacked jurisdiction to hear this interlocutory appeal.

D. The Ninth Circuit’s Expansive Reading Of §1292(a)(3) Clashes With The

Majority Of Circuits And With Analysis from Within the Ninth Circuit.

The Ninth Circuit has previously chosen to read §1292(a)(3) more expansively than the

majority of other circuits, leading to the current split in authority. The Ninth Circuit has ruled that

§1292(a)(3) grants jurisdiction to hear interlocutory appeals when the District Court has upheld

the validity of a clause limiting the amount of liability but has not reached the question of whether

the defendant was actually liable. Wallis v. Princess Cruises, Inc., 306 F.3d 827, 832, 2002 A.M.C.

(2002). The Court then went on to state that they believed the other circuits had read §1292(a)(3)

too narrowly. Wallis, at 306 F.3d at 833. However, this holding goes directly against the majority

of other circuits, as argued above, and goes against prior Ninth Circuit precedent.

The Ninth Circuit previously heard a case in which the District Court had granted a partial

summary judgement against some lien claimants, releasing a brief order that a different lien is prior

and superior to the defendant’s liens. Seattle First Nat’l Bank v. Bluewater P’ship, 772 F.2d 565,

568-69, 1986 AMC 1296, 1300 (9th Cir. 1985). The Court then denied the appeal of the partial

summary judgement under §1292(a)(3) because it read §1292(a)(3) narrowly to include only

24

interlocutory appeals determining the rights and liabilities of parties to an admiralty case. Id.

Seattle First National Bank evidences the fact that §1292(a)(3) has much more consistently been

held to apply narrowly to only one sort of interlocutory appeal.

Even more compelling, just two years before Wallis, the Ninth Circuit had decided that

§1292(a)(3) is to be construed narrowly. Sw. Marine Inc. v. Danzig, 217 F.3d 1128, 1136, 2000

AMC 2088, 2095-96 (9th Cir. 2000), cert, denied 532 U.S. 1007, 2001 AMC 2999 (2001). In

Danzig, the court stated they have previously held that §1292(a)(3) is an exception to the final rule

and, therefore, is construed narrowly and that §1292(a)(3) permits appeals only when the order

appealed from determines the rights and liabilities of the parties. Danzig, 217 F.3d at 1136 (citing

Seattle First Nat’l Bank and Akin v. White Cloud Charter Boat Co., Inc., 813 F.2d 1513, 1515 (9th

Cir. 1987)). Although the court went on to uphold jurisdiction in Danzig, the were able to uphold

jurisdiction because the district court’s order did determine the rights and liabilities of the parties.

Danzig, 217 F.3d at 1136.

The Ninth Circuit has consistently found, along with other courts, that §1292(a)(3) is to be

construed narrowly. Yet in 2002 they read in a more expressive grant of jurisdiction, going against

all precedent, binding and persuasive. The majority of circuits are correct in their application of

§1292(a)(3) and the Ninth Circuit has mistaken the plain meaning of the statute to include

interlocutory appeals the statute does not grant the court jurisdiction over. This broad application

of §1292(a)(3) would, in effect, flood the federal circuits with interlocutory appeals the statute

never planned to give the circuits jurisdiction over.

E. A Majority Of Circuit Courts Have Expressly Denied Following The Ninth

Circuit’s Reasoning Behind Expanding §1292(a)(3).

Many circuits are in agreement about §1292(a)(3) being read narrowly, as mentioned

above, but even more circuits have denied the Ninth Circuit’s attempted expansion of §1292(a)(3).

25

The Second Circuit, for example, has ruled on the matter twice since the Ninth Circuit announced

their attempted expanding of §1292(a)(3). In the first case, defendant-appellant appealed from an

order of the District Court denying a Yacht Club’s motion to dismiss the second amended

complaint of plaintiff-appellee. Blue Water Yacht Club Assoc. v. N.H. Ins. Co., 355 F.3d 139, 2004

AMC 367 (2nd Cir. 2004). The Court of Appeals went on to find that the jurisdictional grant in

§1292(a)(3) should be construed narrowly as an exception to the rule of finality stated in §1291

because the exception is carved out in admiralty law to accommodate the once common practice

of referring to the determination of damages to a master or commissioner after resolving the

question of liability. Id.

Then later, the Second Circuit again found that the complaint lodged in the case invokes

admiralty jurisdiction but does not fit within the admiralty exception. Iberto Petrochemical Indus.

Ltd. v. M/T Beffen, 475 F.3d 56, 62 n.1, 2007 AMC 213, 218 n.1 (2nd Cir. 2007). The Court went

on to state that the exception applies only where the order determines the merits of the controversy

but leaves only the question of damages. Id. The Court then cited to Blue Water stating an order

staying an admiralty action in the District Court pending arbitration is not a final order and is not

appealable and therefore the Court lacked appellate jurisdiction under §1292(a)(3) in this case,

which is why they assessed jurisdiction under other statutes. Id.

As discussed above, the Third Circuit has since expressly held that the Ninth Circuit’s

approach was not persuasive and chose to hold that the statute should be construed narrowly and

therefore a determination to limit the liability was not an appealable decision granting the court

jurisdiction. Hager, 124 F.App’x at 107. Additionally, the Fourth Circuit found that there appears

to be little in the way of a consensus view among the courts concerning its current scope, we

believe that the better course is to hold the exception to hew closely to the procedural posture that

26

justified its inception and consequently dismissed the appeal they were deciding upon. Evergreen,

33 F.3d at 425.

Additionally, the Fifth Circuit has twice held that §1292(a)(3) should be construed

narrowly. In SCF Waxler, the court found that the statute should be hewed closely to the Statute’s

original purpose of permitting appeals from orders finally determining one part’s liability to

another and refereeing the action for a computation of damages. SCF Waxler at 464 citing

Hollywood Marine, Inc. v. M/V Artie James, 755 F.2d 414, 416 (5th Cir. 1985). In Bucher-Guyer

the Fifth Circuit also stated that the decision whether the limitation on damages applied in this case

is not a decision a decision determining the rights and liabilities of the parties. Bucher-Guyer at

735.

The Seventh Circuit has even stepped in and ruled that the context in which §1292(a)(3)

was enacted makes clear that this [strict and narrow] interpretation of the statute is correct.

Wingerter v. Chester Quarry Co., 185 F.3d 657, 670-71, 2000 AMC 1596 1612-1613 (7th Cir.

1999). The Court went on to say that §1292(a)(3) was not meant to clutter the federal docket with

interlocutory odds and ends. Id. The Seventh Circuit then went on to hold that they lacked appellate

jurisdiction because the granting of a motion resulting in a bench trial rather than a jury trial was

not a determination of rights and liabilities under the statute. Id.

Finally, the Eleventh Circuit has held that §1292(a)(3) should be construed narrowly too.

The Eleventh Circuit specifically stated that the Ninth Circuit reached a contrary conclusion and

the Court would follow precedent and keep with their narrow interpretation of §1292(a)(3).

Wajnstat, 684 F.3d at 1155. The Eleventh Circuit has also previously found that close scrutiny of

the issue reveals a preference for a narrow interpretation. Sea Lane Bah. Ltd. v. Europa Cruises

Corp., 188 F.3d 1317, 1322, 2000 AMC 66, 71 (11th Cir. 1999).The Circuit went on to decide that

27

the strict construction of §1292(a)(3) and that section’s purpose, a standard of interpretation of

§1292(a)(3) requires dismissal of the appeal of an order denying Sea Lane’s motions to reopen and

amend for want of jurisdiction.

Even prior to that the Eleventh Circuit had faced the issue when Burlington Northern

Worldwide appealed an order granting summary judgement. Jamaica Commodity Trading Co. v.

Barge Hercules, 992 F.2d 1162, 1163, 1994 A.M.C. 601, 602 (11th Cir. 1993). The Court then

went on to find that the Eleventh Circuit has only gone beyond the original purpose of the statute

only where the interlocutory order appealed has “the effect of ultimately determining the rights

and obligations of the parties.” Id. The Court held that because the order was not a final

determination of the rights and liabilities of the parties, they did not have jurisdiction to hear the

appeal under §1292(a)(3). Id.

The majority of the Circuit courts have clearly and consistently relied on one another and

applied §1292(a)(3) to a very narrow set of cases which they were granted jurisdiction over.

Interlocutory appeals of admiralty cases must have a determination of the rights and liabilities of

the parties to have jurisdiction to be heard by the Court of Appeals. §1292(a)(3) is the exception

to the rule of finality in §1291 and therefore, it should be narrowly construed. The Ninth Circuit

has not only gone against the majority of other circuits but has also ruled against their own

precedent to expand the grant of jurisdiction of §1292(a)(3). Their ruling leads to inconsistent

results in federal admiralty law and must be addressed. The plain language of §1292(a)(3) is clear

on its face, only determinations of the rights and liabilities of the parties in an admiralty case must

be decided and the damages portion must not have taken place, for a Court of Appeals to hear an

interlocutory appeal on the decision.

28

An interlocutory appeal at this stage in the present case would frustrate the purpose and the

goal of §1292(a)(3). The statute must be narrowly construed in order to ensure its purpose and goal

is carried out. If there should be an expansion of interlocutory appeals this is not the correct case

for the Court to carry out that expansion. To do so would go against the direct language of the

statute and the District Court and it would essentially create a new category of interlocutory

appeals completely outside of §1292(a)(3). The statute must be narrowly construed to prevent

overcrowding and inefficiency of appeals and the plain language compels this court to agree.

CONCLUSION

For the foregoing reasons, this Court should affirm the judgment of the court of appeals.