News 16 Jul, 2013

USA - Procedural Changes Expand the Prospects of Escaping State Court in U.S. Maritime Litigation

The Club is grateful to Peter Sloss at Murphy, Rogers, Sloss & Gambel, New Orleans for the following article:

Most admiralty and maritime claims in the United States can be brought either in federal court or state court. The majority of maritime claims, particularly commercial claims, are filed in federal courts, where the judges are more familiar with admiralty and maritime law and procedure, and cases tend to move more quickly toward resolution.  But over the past several decades, more and more maritime personal injury and death claimants have filed suit in state courts, where the judges tend to be more accessible to plaintiffs' counsel (state court judges in many states, including Louisiana, are elected and receive significant political support from plaintiffs' attorneys) and the vessel owner defendants are more susceptible to being "home-towned."  State courts in Louisiana, Texas and a few other jurisdictions have become particularly notorious for rendering extremely high awards in maritime injury and death suits. So if a vessel owner is defending a suit in state court, the owner’s first thought will often be: "How do I get out of this place?!"

U.S. federal procedural law allows defendants in certain limited cases to remove, or transfer, a case from state court to federal court.  But it had long been the law that most maritime claims filed in state court could not be removed to federal court.  Fortunately, that appears to have changed due to a recent amendment of the federal removal statute, 28 U.S.C. §1441.

In Ryan v. Hercules Offshore, Inc., 2013 WL 1967315 (S.D. Tex. May 13, 2013), and Wells v. Abe’s Boat Rentals Inc., 2013 WL 3110322 (S.D. Tex. June 18, 2013), the United States District Court for the Southern District of Texas held that recent amendments to the federal removal statute now permit removal to federal court of many state court maritime claims that were not previously removable.  Prior to 2012, the federal removal statute allowed removal only of claims filed in state court that arose “under the Constitution, treaties or laws of the United States,” or claims in which there was complete diversity of citizenship (i.e., each plaintiff was from a different state than each defendant), none of the defendants was a citizen of the state in which the plaintiff had filed suit, and the amount in controversy exceeded $75,000.  In Re Dutile, 935 F.2d 61 (5th Cir. 1991). Historically, admiralty and maritime claims were not considered to arise under “the Constitution, treaties or laws of the United States.”  As a result, the courts had held that removal of maritime cases was prohibited unless there was complete diversity of citizenship.

But Congress amended 28 U.S.C. §1441 with effect from January 2012, and deleted the language courts had cited as prohibiting removal of state court maritime claims absent diversity of citizenship.  In both Ryan and Wells, the federal court for the Southern District of Texas held that with the deletion of the relevant language from §1441, there is no longer any prohibition against removal of maritime claims, even when there is no diversity of citizenship.  As a result, under Ryan and Wells, more maritime claims filed in state court can now be removed to federal court.

There is one very notable exception.  An injured seaman's claim against his employer under the Jones Act remains non-removable based on a federal statute that specifically prohibits removal of Jones Act claims filed in state court.  28 U.S.C. §1445(a).  But if a Jones Act suit is joined with maritime claims against other defendants, the case can still be removed to federal court, and although the Jones Act claim could be severed from the other claims and sent back to state court, claims against the remaining defendants would remain in federal court.  Faced with the prospect of having related claims arising from the same circumstances proceeding in both state court and federal court, some Jones Act plaintiffs who might otherwise file suit in state court may opt for a single proceeding against all defendants in federal court. 

In short, Ryan and Wells significantly increase the opportunities to remove state court maritime claims to federal court, particularly longshoremen and passenger personal injury and wrongful death cases.  The decisions in Ryan and/or Wells are likely to be appealed, so the district court’s decisions in those cases are probably not the final word on this issue.  For now, however, the Ryan and Wells decisions represent a significant and favorable development for vessel interests and could significantly impact the handling of maritime claims, particularly personal injury and death claims, in United States courts.