Background:
National Maintenance and Repair, filed an Amended Complaint for exoneration from or limitation of liability pursuant to 46 U.S.C. §181 seeking to limit its liability to $30,000 the alleged value of their interest in the vessel.

The Complaint alleged that the M/V Hanford Beaver sank, which may have resulted in damages or injury to Vincent Ray Deering (the plaintiff in the underlying cause of action) and other members aboard the M/V Hartford who were employees of National Maintenance.

On the same day, the Court entered a Restraining Order enjoining any and all suits, actions or legal proceedings against the Hartford arising out of the alleged incident.

Deering filed suit under the Jones Act and general maritime law for personal injuries he sustained during the incident involving the sinking of the M/V Harford.

Deering filed his answer to this Amended Complaint, pursuant to Rule F of the Supplemental Rules for Admiralty and Maritime Claims and National Maintenance filed its answer to Deering's claim.

National Maintenance filed a counterclaim for negligence against Deering seeking in excess of $800,000 in damages for the replacement value and salvage costs of the M/V Hartford. Subsequently, Deering filed a motion to dismiss the counterclaim.

Issue:
Did this Court grant Deering's motion to dismiss National Maintenance's counterclaim for gross negligence and costs of salvaging the M/V Hartford?

Held:
Rule 12(b)(6), the Court must look to the complaint to determine whether it satisfies the threshold pleading under Federal Rule of Civil Procedure 8, stating that a complaint need only contain a "short plain statement of the claim showing that the pleader is entitled to relief.

Deering argued that the Court should dismiss the Counterclaim because Rule F does not provide a counterclaim cause of action for negligent property damage by ship-owner-employers against their seaman-employees. That Deering did not owe a duty to National Maintenance & Repair, that the Counterclaim is contrary to public policy reflected in the Jones Act and FELA and allowing the Counterclaim will turn the limitation proceeding into an offensive weapon in dereliction of Congressional intent.

National Maintenance countered that negligence property suits are permitted under general maritime law, the Jones Act, and FELA and that the counterclaim is not precluded by the Limitation of Liability and that Deering did owe National Maintenance a reasonable care of duty.

This Court found that Rule F of the supplemental rules for Admiralty does not provide for, nor does general maritime law provide a counterclaim cause of action for negligent property damage by ship-owner-employers against their seamen-employees.

This Court reasoned that allowing the counterclaim would chill the filing of Jones Act claims and the voluntary furnishing of information regarding such claims.

Accordingly, this Court granted Deering's motion to dismiss.

Comment:
This Case illustrated a split in the 5^th and 9^th Circuits regarding this issue.

In the Ninth Circuit, California Home Brands, Inc. v. Ferreira, 871 F.2d 830 (9^th Cir. 1989), the Ninth Circuit affirmed the dismissal of a cause of action by a ship-owner against its employee for contribution for causing another employee's injuries.  This Court extended this principal to property damage claims brought by the shipowners against their seaman-employees.

However the 5^th Circuit, in Withhart v. Otto Candies, L.L.C., 431 F.3d 840 (2005), reasoned that permitting a shipowner-employer to sue its seaman-employee for property damages, arising out of the seaman-employee's negligence, would not narrow the remedies available to the seaman under the Jones Act.

This Court sided with the 9^th Circuit and held allowing counterclaims, against employees who file Jones Act cases, for property damages was contrary to Jones Act policy.

Steve Gordon