In October 2011, Lisa Lynch was allegedly injured on a 26-foot luxury vessel owned and maintained by Offshore of the Palm Beaches, Inc. (“Offshore”). Lynch’s attorney sent a letter of representation to Offshore and asked for its liability insurance information. Offshore subsequently sought exoneration or limitation of liability pursuant to the Limitation Act. All other causes of action against Offshore were enjoined by the district court.
Lynch answered the limitation complaint and asserted a claim for personal injury. She later moved to dismiss, stay or lift the injunction under the single claimant exception so she could pursue her claim in state court. Lynch stipulated that Offshore had the right to litigate its entitlement to limitation in the limitation proceeding, that the federal court would determine the limitation fund, that she would not seek determination of theses issues in state court and that she would not seek to enforce a judgment in excess of the limitation fund until these determinations were made. When it was apparent that Lynch was the lone claimant, the district court lifted the injunction. Offshore appealed.
Finding that it had jurisdiction under 28 U.S.C. § 1291(a)(1) to review the district court’s order modifying or dissolving an injunction, the United States Court of Appeals for the Eleventh Circuit considered whether the district court abused its discretion in lifting the injunction. The court went through the well-established limitation procedures and noted that the exclusivity of admiralty jurisdiction in this arena is at odds with the “saving to suitors” clause in 28 U.S.C. § 1333. The United States Supreme Court has eased this tension in some cases by crafting the single claimant exception. This exception recognizes that in single-claim scenarios, the specialized admiralty procedure is not necessary. A district court has discretion to stay the limitation case and allow the claim to proceed in another forum subject to stipulations that protect the vessel owner from judgments in excess of the limitation fund.
Offshore argued on appeal that it was the “suitor” under § 1333 and when it filed its limitation action, its choice of forum was secured. The court quickly rejected this argument, explaining that Lynch, the limitation claimant, was the suitor whose remedies were saved in § 1333, not the vessel owner. The court further reasoned that this first-to-file rule advocated by Offshore would expand the Limitation Act from a protection of the vessel owner’s right to limit its liability to a choice of forum to defend claims. The court also rejected Offshore’s argument that Lynch submitted to federal jurisdiction by filing a claim in the limitation. Lynch made no Rule 9(h) election and premised her claims on Florida common law. Accordingly, she was not precluded from having her claim heard in an alternate forum.
Offshore attempted to raise other arguments for the first time on appeal but these arguments were deemed waived by the court as they were not raised at the district court level. After disposing of the issues properly on appeal, the Eleventh Circuit affirmed the district court’s order lifting the limitation injunction.