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In re Complaint of Spirit Cruises, LLC

United States District Court, D. Maryland

May 25, 2017

In the Matter of the Complaint of Spirit Cruises, LLC as Owner of the M/V SPIRIT OF BALTIMORE for Exoneration from or Limitation of Liability

          MEMORANDUM

          ELLEN LIPTON HOLLANDER UNITED STATES DISTRICT JUDGE.

         On December 29, 2016, Spirit Cruises, LLC (“Spirit”), the owner of the M/V SPIRIT OF BALTIMORE (the “Vessel”), filed its “Verified Complaint For Exoneration From Or Limitation Of Liability”, pursuant to the Limitation of Liability Act of 1851, as amended, 46 U.S.C. §§ 30501, et seq.[1] ECF 1.[2] The M/V SPIRIT OF BALTIMORE is a 119-foot passenger vessel (id. ¶ 3), which plaintiff estimates to have a current value of $1.85 million. Id. ¶ 15; see ECF 1-2 (Condition and Valuation Survey) at 13.

         The Complaint arises out of the events during the early morning hours of August 28, 2016, when the Vessel was under charter and “allided with a floating dock located at Henderson's Wharf in the Fells Point area of Baltimore City.” Id. ¶¶ 5-6. According to the Complaint, the Vessel was traveling at approximately three knots at the time of the incident. Id. ¶ 7.

         After Spirit filed suit, the Court issued an Order enjoining the commencement or further prosecution of actions and proceedings against plaintiff in connection with the voyage of the Vessel on August 28, 2016. ECF 3, ¶ 6. The Court set the limitation fund at $1, 850, 000. Id., ¶ 1. Furthermore, the Court instructed the Clerk to issue a notice to potential claimants, consistent with Fed.R.Civ.P. Supp. R. F(4) (id. ¶ 5; see ECF 4 (notice)), and directed that the notice be published in the Baltimore Sun, a daily newspaper, once per week for four weeks. ECF 3, ¶ 7. The notice provided information to potential claimants concerning the filing of claims, and set a deadline of February 15, 2017, for the filing of claims. See ECF 4.

         Thereafter, twenty-eight people filed claims (collectively, “Claimants”) with the Court, seeking an aggregate of more than $2.8 million. See docket; ECF 49; see also ECF 43-1 at 2. Seventeen Claimants filed a demand for jury trial or otherwise pleaded such a request. See, e.g., ECF 8; see also ECF 43-1 at 3, n. 2 (collecting jury demands). Some of the Claimants also counterclaimed. See, e.g., ECF 11.

         Spirit then filed a motion to strike the Claimants' jury demands (ECF 43), along with a memorandum of law. ECF 43-1 (collectively, “Motion”). Spirit argues that the Claimants “do not have the ability to request a jury trial in this proceeding . . . .” ECF 43 at 2. The Claimants filed a consolidated opposition to the Motion (ECF 59) (“Opposition”) and Spirit replied. ECF 65 (“Reply”).

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion and strike Claimants' jury demands.

         I. The Limitation of Liability Act

         The Limitation of Liability Act finds its origin in a 1734 act of the Parliament of Great Britain, which “relieved shipowners from liability for acts of their master and crew done without the ‘privity or knowledge' of the owner, to the extent of the value of the ship, its equipment, and the freight to be earned on its particular voyage.” Thomas J. Schoenbaum, Admiralty and Maritime Law, § 15-1 (5th ed.) (“Schoenbaum”). As observed by Chief Justice Taft in Hartford Acc. & Indem. Co. of Hartford v. Southern Pac. Co., 273 U.S. 207, 214 (1927):

[T]he great object of the statute was to encourage shipbuilding and to induce the investment of money in this branch of industry by limiting the venture of those who build the ships to the loss of the ship itself or her freight then pending, in cases of damage or wrong happening, without the privity, or knowledge of the shipowner, and by the fault or neglect of the master or other persons on board . . . .

         And, as stated more recently by the Fourth Circuit in Norfolk Dredging Co v. Wiley, 439 F.3d 205, 209 (4th Cir. 2006): “Congress passed the Limitation of Liability Act ‘to assist shipowners by placing them in parity with European (and particularly English) shipowners who had long enjoyed the benefits of limiting their liability for marine disasters.'” (Quoting Pickle v. Char Lee Seafood, Inc., 174 F.3d 444, 448 (4th Cir. 1999)).

         Section 30505 of Tile 46 of the U.S. Code is titled “General limit of liability.” It provides:

(a) In general.-Except as provided in section 30506 of this title, the liability of the owner of a vessel for any claim, debt, or liability described in subsection (b) shall not exceed the value of the vessel and pending freight. If the vessel has more than one owner, the proportionate share of the liability of any one owner shall not exceed that owner's proportionate interest in the vessel and pending freight.
(b) Claims subject to limitation.-Unless otherwise excluded by law, claims, debts, and liabilities subject to limitation under subsection (a) are those arising from any embezzlement, loss, or destruction of any property, goods, or merchandise shipped or put on board the vessel, any loss, damage, or injury by collision, or any act, matter, or thing, loss, damage, or ...

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