An interesting decision was issued from the Federal Middle District of Florida involving a yacht captain’s personal injury lawsuit. In this case, the captain filed a lawsuit in Florida state court asserting claims against his employers for Jones Act negligence, failure to provide him with a seaworthy vessel and failure to providing him with maintenance and cure benefits. As part of the complaint, the seaman also demanded that a jury decide all factual issues. Not wanting to have a state court judge and jury decide the case, the employers filed a declaratory judgment action in Federal court seeking a Federal judge, without a jury, decide whether the seaman waived his right to bring a Jones Act and maintenance and cure claim by signing an employment contract which contains a Marshall Islands law provision. The yacht captain moved to dismiss the Federal declaratory judgment action arguing that the court should not accept jurisdiction and allow the action to proceed in state court.
The Declaratory Judgement Act
The Declaratory Judgment Act gives Federal District Courts discretionary jurisdiction to accept a claim to declare the rights and obligations between parties in cases of which it would have original jurisdiction. Since a seaman’s contract is considered a maritime contract, a Federal court would have original jurisdiction to hear the case. A Court considers several factors in determining whether it should exercise its discretion when there is a pending parallel litigation. These factors include: (1) the strength of the state’s interest in having the issues raised in the federal declaratory action decided in the state courts; (2) whether the judgment in the federal declaratory action would settle the controversy; (3) whether the federal declaratory action would serve a useful purpose in clarifying the legal relations at issue; (4) whether the declaratory remedy is being used merely for the purpose of “procedural fencing”—that is, to provide an arena for a race for res judicata or to achieve a federal hearing in a case otherwise not removable; (5) whether the use of a declaratory action would increase the friction between our federal and state courts and improperly encroach on state jurisdiction; (6) whether there is an alternative remedy that is better or more effective; (7) whether the underlying factual issues are important to an informed resolution of the case; (8) whether the state trial court is in a better position to evaluate those factual issues than is the federal court; and (9) whether there is a close nexus between the underlying factual and legal issues and state law and/or public policy, or whether federal common or statutory law dictates a resolution of the declaratory judgment action. In addressing eight of the nine factors, the Federal Court determined that it should not accept jurisdiction.
The Court’s Analysis
The first factor considered is the strength of Florida’s interest in having the issues raised in this case decided in state court. The Court found that this is the only factor considered that does not weigh in favor of dismissing the action. While recognizing that the case involves a Florida resident whose job location is in Florida, the claim involved principles of federal maritime law or Marshall Islands law are against foreign companies. The Court noted that “[w]hile Florida courts are ‘regularly required to apply principles of federal maritime law,’ Florida does not necessarily have an interest in having these issues decided in state court.”
The Court found that the second factor, whether a judgment in the federal lawsuit would settle the controversy, weighs in favor of dismissal. Assuming Marshall Islands law applies and that the seaman waived his Jones Act and maintenance and cure claims, his claim for unseaworthiness, which is recognized under Marshall Island law, would have to be resolved in the state court. As such, the Court reasoned, the federal action would not resolve all issues and, therefore, does not support accepting jurisdiction.
The third factor, whether the federal action would serve a useful purpose in clarifying the legal relations, also was determined to weighs in favor of dismissal. The Court reasoned that the complaints filed in both the State and Federal courts involve similar facts with overlapping parties. However, the state court litigation has a complete set of parties before it and even if this case resolves some of the claims the remaining claims would likely be litigated in State Court. As such, accepting jurisdiction would needlessly result in duplicitous litigation.
The Court also found that the fourth factor, procedural fencing, favors dismissal. On June 28, 2016, the yacht captain’s attorney sent a demand letter to the employers providing a July 28, 2016 deadline to respond. On July 26, 2016, two days before the deadline expired, the employers filed the Federal declaratory judgment action. The Court concluded that the timing suggests that the declaratory judgment action was an anticipatory filing, essentially utilized for procedural fencing i.e., having a federal judge decide the action without a jury thereby depriving the yacht captain of his right to have a State Court with a jury decide the claim.
The fifth and sixth factors, which address judicial efficiency, weigh in favor of dismissal. The Federal court determined that the state court is well equipped to deal with the issues presented in the declaratory judgment action. Moreover, all the issues between the parties are before the state court and no matter how the declaratory judgment action is decided there will be undecided issues that the state court litigation must resolve. As such, there would be duplicative litigation should the Federal Court accept jurisdiction.
The seventh and eighth factors, whether the underlying factual issues are important to an informed resolution of the case and whether the state trial court is in a better position to evaluate those issues, also weigh in favor of dismissal. The Court found that the factual issues regarding the relationship of the parties, the relationship of the parties in the state court action, and the nature of the yacht captain’s employment at the time of his injuries, are important for an informed resolution of the case. The state court, with a complete set of parties, can consider these factual issues in resolving the case.
This case represents an attempt of a maritime employer to deprive a seaman of his right to select the court where his case should proceed and his right to a jury trial. As shown, the attempt was thwarted and the injured yacht captain and have his day in state court with a jury.