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The efforts of big business to push disputes into binding
arbitration took a surprising turn recently when the Ninth Circuit Court of
Appeals recently ruled that the federal courts do not have the power under
the Federal Arbitration Act to reduce or annul an arbitration panel's award
because the court feels that the award was too high. In the insurance bad
faith case of Lagstein v. Certain Underwriters at Lloyd's of London
, Case No. 07-16094 (9th Cir., June 10, 2010), an
arbitration panel awarded roughly $2 million in compensatory damages and $4
million in punitive damages to Dr. Lagstein for the wrongful denials of his
disability insurance claims. The Ninth Circuit ruled that a District Court
judge did not have the power to vacate the arbitration award.
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JONES ACT- TABLE OF CONTENTS
The Jones Act
V. DEFENSES -> E. Limitation of Liability
437. Generally
46 USCS Appx § 688 has not repealed 46 USCS Appx § § 181 et seq. regarding limitation of liability of shipowners so far as claims or suits based on personal injuries to or death of seamen are concerned. Re Petition of East River Towing Co. (1924) 266 US 355, 69 L Ed 324, 45 S Ct 114.
Limited Liability Act (46 USCS Appx § § 181 et seq.) is not abrogated as to injured seamen by 46 USCS Appx § 688, even where there is only one claim. The Clarence P. Howland (1925, CA2 NY) 6 F2d 791, 1925 AMC 1076.
46 USCS Appx § 688 has not impliedly repealed 46 USCS Appx § § 183-185, limiting owner's liability. Re Eastern Transp. Co. (1929, DC Md) 37 F2d 355, mod on other grounds (CA4 Md) 51 F2d 494.
Petition to limit liability under 46 USCS Appx § § 183 et seq. will not be dismissed, but claimant also need not stipulate that security bond given in lieu of physical transfer of ship is sufficient to cover limitation fund, where claimant is proceeding with 46 USCS Appx § 688 claim in state-court jury trial, because sufficiency of stipulation-of-value question must be decided in federal court limitation proceeding after state court trial, and state court's findings will not be accorded res judicata on any issue. Luhr Bros., Inc. v Gagnard (1991, WD La) 765 F Supp 1264.
438. Defense to action under 46 USCS Appx § 688
If yacht owner was entitled to exoneration from death by drowning of two seamen under 46 USCS Appx § 688, issue as to limitation of liability under 46 USCS Appx § § 183-189 is of no consequence. Petition of Atlass (1965, CA7 Ill) 350 F2d 592, cert den 382 US 988, 15 L Ed 2d 476, 86 S Ct 551, reh den 383 US 923, 15 L Ed 2d 679, 86 S Ct 884 and reh den 384 US 914, 16 L Ed 2d 368, 86 S Ct 1336 and cert den 382 US 988, 15 L Ed 2d 476, 86 S Ct 556, reh den 383 US 923, 15 L Ed 2d 679, 86 S Ct 884 and reh den 384 US 914, 16 L Ed 2d 368, 86 S Ct 1336.
Vessel owner is entitled to raise limitation of liability under 46 USCS Appx § § 181 et seq. in answer to employee's suit under 46 USCS Appx § 688 without being subject to 6 months limitation of § 185; and shipowner can claim limitation of liability either by petition or by answer. De Cruz v Hiering (1947, DC NJ) 69 F Supp 397.
Motion of shipowner to amend answer to raise defense of limitation of liability in action under 46 USCS Appx § 688 filed 11 years after original answer and 13 years after accident causing injury, and after appellate court had finally determined liability and ordered retrial on quantum of damages only will be denied as coming more than six months after notice of claim without showing of good cause for the delay. Yates v Dann (1958, DC Del) 167 F Supp 882, 1 FR Serv 2d 178.
Shipowner may not plead limitation of liability under 46 USCS Appx § § 181 et seq. as defense in action under 46 USCS Appx § 688 where he has been guilty of laches or unreasonable delay in asserting such defense. Odegard v E. Quist, Inc. (1961, ED NY) 199 F Supp 449.
Shipowner can raise defense of limitation of liability under 46 USCS Appx § § 181 et seq. in suit by seaman under 46 USCS Appx § 688; owner can do this even when it carries liability insurance on vessel in amount in excess of value of vessel. Pettus v Jones & Laughlin Steel Corp. (1971, WD Pa) 322 F Supp 1078.
439. Enjoining Jones Act proceeding
46 USCS Appx § 688 does not preclude injunction or stay to enable defendant to proceed under 46 USCS Appx § 185 for limitation of liability; although seaman's right to proceed at law before jury and shipowner's right to proceed under maritime law to limit liability are independent and in some respects concurrent, with respect to final decree limiting liability of shipowner, that law is paramount. Charles Nelson Co. v Curtis (1924, CA9 Cal) 1 F2d 774.
Action for personal injuries under 46 USCS Appx § 688 can be enjoined in limitation proceedings brought pursuant to 46 USCS Appx § § 181 et seq., notwithstanding resulting loss to seaman of trial by jury. Re Crosby Fisheries, Inc. (1928, DC Wash) 24 F2d 555.
Claim under 46 USCS Appx § 688 will be dismissed when filed after institution of limitation of liability proceeding under 46 USCS Appx § § 183 et seq. where court had entered order enjoining institution of any suits against vessels or owners; complainants will be permitted to reinstate their claims under 46 USCS Appx § 688, if court determines either that vessel owners may not limit liability under 46 USCS Appx § § 183 et seq., or that claims filed in limitation action do not exceed vessel owner's liability. Gregory v Mucho K, Inc. (1977, SD Fla) 438 F Supp 1117.
440. State court proceedings
Limitation of liability under 46 USCS Appx § § 181 et seq. can be pleaded by shipowner in action by injured seaman in state court under 46 USCS Appx § 688, and, although state court is not competent to decide right to limitation of liability if such right is questioned, value of vessel can be as appropriately determined in state court as in federal court in limitation proceedings, question to be determined in state court being whether shipowner was liable and, if so, value of vessel and her freight, which was limit of owner's liability. Langnes v Green (1931) 282 US 531, 75 L Ed 520, 51 S Ct 243.
Seaman was required to file in District Court, in which limitation of liability proceeding under 46 USCS Appx § § 181 et seq. was pending, statement that he waives any claim of res judicata relevant to issue of limited liability and based on any judgment which he might obtain in pending action in state court under 46 USCS Appx § 688. Great Lakes Dredge & Dock Co. v Lynch (1949, CA6 Ohio) 173 F2d 281.
Sole claimant in limitation proceeding brought under 46 USCS Appx § § 181 et seq., was required only to consent to reserve issue of vessel owner's right to limit liability to admiralty court in order to litigate his claim under 46 USCS Appx § 688 in state court jury action. Petition of Spearin, Preston & Burrows, Inc. (1951, CA2 NY) 190 F2d 684.
Fact that injured seaman had elected to bring common law action in state court did not affect jurisdiction of admiralty court in limitation proceedings where he thereafter presents merits of case. Pile Driver No. 2 (1931, DC NY) 1931 AMC 1791.
Seaman must file written consent to shipowner's right to limitation of liability under 46 USCS Appx § § 181 et seq. before he may make motion to permit prosecution in state court of his action for personal injuries under 46 USCS Appx § 688. The Kearny (1933, DC NY) 3 F Supp 718.
Seaman could prosecute action under 46 USCS Appx § 688 in state court upon filing in admiralty court waiver of claim to res judicata as to question of limitation. Re Trawler Gudrun, Inc. (1951, DC Mass) 101 F Supp 586.
JONES ACT- TABLE OF CONTENTS
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1999-2005 by William H. Lawson.
