Sea-Land Service, Inc. v. Powertex, Inc.

948 F. Supp. 13, 1996 U.S. Dist. LEXIS 18125, 1996 WL 705921
CourtDistrict Court, N.D. New York
DecidedNovember 25, 1996
DocketNo. 95-CV-1224
StatusPublished

This text of 948 F. Supp. 13 (Sea-Land Service, Inc. v. Powertex, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sea-Land Service, Inc. v. Powertex, Inc., 948 F. Supp. 13, 1996 U.S. Dist. LEXIS 18125, 1996 WL 705921 (N.D.N.Y. 1996).

Opinion

MEMORANDUM-DECISION AND ORDER

McAVOY, Chief Judge.

I. BACKGROUND

The present case is an in personam action brought by the plaintiff, SEA-LAND, against the defendant POWERTEX, pursuant to admiralty and maritime law, seeking the payment of a certain sum relating to the transport of goods. In the present motions, the plaintiff seeks an Order of this Court dismissing the action or staying further proceedings to await determination of related claims currently pending in New Jersey state court. The Court notes that although the claims set forth in each case are not identical, they may require the resolution of certain common factual issues.

The plaintiff argues that this Court and the state court have concurrent jurisdiction over the claims, that this Court cannot obtain personal jurisdiction over all necessary parties, that dismissal is mandated to avoid piecemeal litigation, and that the state case has advanced nearly to the point of completed discovery while the instant action is still at the pleading stage, and that all of the above supports dismissal or a stay of the instant action. The defendant counters that this Court has exclusive jurisdiction over admiralty and maritime cases, that both cases are engaged in the discovery phase, that the federal forum is not inconvenient, that the federal forum was chosen by the plaintiff and prior to filing an action in state court, that the source of law to resolve the issues raised in the federal action is federal, and that dismissal or a stay would promote forum shopping. The defendant has cross-moved for an extension of time for discovery.

, An extensive recitation of the facts is not necessary. It is undisputed that a federal action, grounded upon admiralty and maritime law was filed in this’ Court relating to [15]*15charges allegedly incurred in connection with a trademark license agreement. Subsequent to the commencement of this action, the same plaintiff filed a state court action in New Jersey alleging fraud and bribery and other charges against Powertex and certain officers or former officers of Powertex and Sea-Land relating to the aforementioned agreement. Although the claims are different, it is quite clear that certain factual issues relating to the claims filed in each forum are identical, e.g., issues relating to the validity of the agreement. It is also undisputed that there has been more discovery in the state court action to date than in the federal action.

The 00104; will now turn to the following issues:

1. Whether this Court has exclusive jurisdiction over Sea Land’s admiralty and maritime claim.
2. If jurisdiction is found to be concurrent, whether dismissal of the Complaint or a stay of the instant action is appropriate under the law of this Circuit.
8. If not, whether an extension of the discovery period is appropriate.

II. DISCUSSION

A. Admiralty And Maritime Law: Subject Matter Jurisdiction

The parties disagree as to whether the Court has exclusive or concurrent jurisdiction -with the New Jersey state court over claims asserted pursuant to admiralty and maritime law. The plaintiff argues that jurisdiction is concurrent, and thus not a bar to the relief requested. The defendant argues that this Court’s jurisdiction is exclusive, and thus, the plaintiff’s request for relief is merely a delay tactic, as the claims asserted must be determined in federal court.

“The Constitution provides that the federal judicial power ‘shall extend ... to all Cases of admiralty and maritime Jurisdiction.’ U.S. Const.Art. III, § 2, cl. 1. Federal-court [sic] jurisdiction over such cases, however, has never been entirely exclusive.” American Dredging Co. v. Miller, 510 U.S. 443, 446, 114 S.Ct. 981, 984, 127 L.Ed.2d 285 (1994). The so-called “saving to suitors” clause has been interpreted to grant exclusive jurisdiction to federal courts in in rem actions, but concurrent jurisdiction with the state courts in in personam actions. See generally Id. As has been explained by the Supreme Court

“Admiralty’s jurisdiction is ‘exclusive’ only as to those maritime causes of action begun and carried on as proceedings in rem, that is, where a vessel or thing is itself treated as the offender and made the defendant by name or description in order to enforce a lien, (citation omitted). It is this kind of in rem proceeding which state courts cannot entertain. But the jurisdictional act does leave state courts ‘competent’ to adjudicate maritime .causes of action in proceedings ‘in personam,’ that is, where the defendant is a person, not a ship or some other instrument of navigation.”

Madruga v. Superior Court, 346 U.S. 556, 560-61, 74 S.Ct. 298, 300-01, 98 L.Ed. 290 (1954).

The instant action is one characterized as in personam. The action seeks recovery from a corporate person, Powertex, for alleged failure to pay certain accrued, charges.. This is not a case where the state court, if deciding, the case and adopting remedies, would' “make changes in the ‘substantive maritime law.’ ” Id., quoting Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 124, 44 S.Ct. 274, 277, 68 L.Ed. 582 (1924). Accordingly, the Court has concurrent jurisdiction over the admiralty and maritime claim asserted in the plaintiff’s Complaint with the New Jersey state court. Therefore, the Court is not precluded from considering the issue of dismissal or stay of this action in favor of determination by the state court.

B. Dismissal Or Stay Of The Instant Case

As set forth above, the parties to this action have set forth multi-factored arguments for and against the dismissal and/or stay of the instant case. Both the plaintiff and defendant have relied on the standards that germinated from Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). In es[16]*16senee, the plaintiff asks that this Court abstain from exercising its jurisdiction over a claim in favor of state court determination.

As stated in Colorado River, “[abstention from the exercise of federal jurisdiction is the exception, not the rule.” Id. at 813, 96 S.Ct. at 1244. Moreover, the Court stated that “a federal court should [not] exercise its judicial discretion to dismiss a suit merely because a State court could entertain it.” Id. (citation omitted). The Court then identified the three situations in which abstention would be appropriate: First, “‘in cases presenting a federal constitutional issue which might be mooted or presented in a different posture by a state court determination of pertinent state law.’ ” Id., quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189, 79 S.Ct. 1060, 1063, 3 L.Ed.2d 1163 (1959).

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Related

Red Cross Line v. Atlantic Fruit Co.
264 U.S. 109 (Supreme Court, 1924)
County of Allegheny v. Frank Mashuda Co.
360 U.S. 185 (Supreme Court, 1959)
American Dredging Co. v. Miller
510 U.S. 443 (Supreme Court, 1994)
Bethlehem Contracting Co. v. Lehrer/McGovern, Inc.
800 F.2d 325 (Second Circuit, 1986)

Cite This Page — Counsel Stack

Bluebook (online)
948 F. Supp. 13, 1996 U.S. Dist. LEXIS 18125, 1996 WL 705921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sea-land-service-inc-v-powertex-inc-nynd-1996.