Exoneration from Liability versus Saving to Suitors

The U.S. Court of Appeals for the Fifth Circuit ruled that a vessel owner filing a federal action for exoneration from or limitation of liability cannot prevent a state court action from going forward if the state claimant stipulates that: (1) federal jurisdiction controls limitation of liability; (2) he waives any claim of res judicata regarding a state court decision relating to limitation of liability; and (3) he would not seek any judgment or recovery in excess of the limitation fund. The vessel owner contended that, since the Limitation of Liability Act also addresses exoneration from liability, its action prevailed over any state court action regarding liability. The court dismissed the owner’s argument, noting that the Act is not a model of clarity and that such actions are controlled by Supplemental Admiralty and Maritime Claims Rule F, while preserving claimants’ rights under the Savings to Suitors Clause. Only limitation actions, not exoneration actions, are subject to exclusive federal court jurisdiction. In re Tetra Applied Technologies LP, No. 03-30719 (5th Cir., March 24, 2004). (HK Law)