                                  United States Court of Appeals,

                                            Fifth Circuit.

                                           No. 92-2021.

       Lawrence WILLIAMS, Robert Masters, and Celestine Williams, Plaintiffs-Appellants,

            Signal Mutual Insurance Association, Ltd., Intervenor/Plaintiff-Appellant,

                                                  v.

                                M/V SONORA, et al., Defendants,

Atlas Shipping, Ltd., and Transportacion Maritima Mexicana, S.A., et al., Defendants-Appellees.

                                          March 12, 1993.

Appeal from the United States District Court For the Southern District of Texas.

Before REYNALDO G. GARZA, HIGGINBOTHAM, and EMILIO M. GARZA, Circuit Judges.

        REYNALDO G. GARZA, Circuit Judge:

        The plaintiffs-appellants appeal from an adverse summary judgment entered by the district

court. First, they argue that the district court should have remanded the case to state court.

Alternatively, they argue that the summary judgment in favor of the defendant vessel owners was

improvidently granted. We find that the case was properly retained by the district court. Further, the

courts below properly granted summary judgment to the defendant vessel owners. Therefore, WE

AFFIRM.

                                              FACTS

        The plaintiffs were injured while loading pipe on board the M/V Sonora ("Sonora"). The

Sonora is owned by Transportacion Maritima Mexicana ("TMM"), which is a wholly owned

subsidiary of Atlas Shipping Ltd. ("Atlas"). Petroleos Mexicanos ("Pemex") wished to ship the pipe

on the Sonora and Fairway was hired to provide the stevedore operations of loading the Sonora. The

load should have been stripped1 according to everyone's agreement. However, due to inadvertence


   1
    When a load of pipe is stripped there is a contoured piece of wood between each layer of pipe
that compartmentalizes the pipe and steadies the load. It is apparently possible to load unstripped
pipe on a vessel; however, this is normally attempted only with a piece of heavy equipment called
a "Big John."
or oversight, Pemex delivered some of the cargo in unstripped fashion.

          When the load arrived, the TMM representative, Joe Baroody, said that he would not accept

the pipe in unstripped form.2 The Pemex representative apparently threatened to withdraw from the

deal if TMM did not accept the unstripped pipe. Soon thereafter, Baroody had a change of heart and

accepted the load.

          Fairway was unprepared to handle unstripped pipe because it did not have a Big John on hand.

Fairway attempted to load the pipe with the ship's winch. The Pemex representative, Chapa,

apparently protested to Baroody, but Baroody said "leave it to the experts." The first load of pipe

was put on the ship without incident. 3 The second load of pipe fell on the plaintiffs, Williams and

Masters, and they were injured.

                                             PROCEDURE

          Williams and Masters filed suit in state court at the 127th Judicial District Court of Harris

County, Texas, on February 7, 1990. On March 2, 1990, defendant, Pemex, removed the case to the

Southern District of Texas. Pemex removed under the Federal Sovereign Immunities Act ("FSIA")

removal provisions, which are codified at 28 U.S.C. § 1441(d).4

          Once in federal court, Pemex asserted the FSIA as a bar to subject matter jurisdiction. On

June 4, 1991, the Magistrate found t hat all claims against Pemex should be dismissed for lack of

subject matter jurisdiction. Prior to the district court's ruling, the part ies filed a joint motion to

voluntarily dismiss Pemex. On August 27, 1991, the district court dismissed Pemex in accord with

the joint motion.

          After Pemex was dismissed, on September 12, 1991, the district court adopted the

magistrate's June 4th ruling and recommendation. Pursuant to the magistrate's proposed disposition,


   2
     Baroody knew that it was dangerous to load unstripped pipe and this is precisely why he
initially refused to accept the load.
   3
    The appellees contend that the first load was unstripped; however, the Appellants' contend
that the first load was stripped. Therefore, according to the appellants the first attempt to load
unstripped pipe resulted in the accident.
   4
       It is undisputed that Pemex is a federal sovereign.
TMM and Atlas, the Sonora's owners, were granted summary judgment. The court concluded that

the vessel's owners were entitled to judgment as a matter of law.

          Magistrate Pecht noted that Scindia Steam Nav. Co., Ltd. v. De Los Santos, 451 U.S. 156,

101 S.Ct. 1614, 68 L.Ed.2d 1 (1981) established three exceptions to the general rule that a vessel

owner owes no duty to the stevedore. The third prong of Scindia, as articulated by our circuit,

imposes a duty upon the vessel owner to intervene in the stevedore's operation and eliminate any

hazard when the stevedore is obviously acting improvidently. See Helaire v. Mobil Oil, 709 F.2d

1031, 1036 (5th Cir.1983) (citing Scindia, 451 U.S. at 175, 101 S.Ct. at 1626).

          The magistrate concluded that the duty to intervene is not triggered unless "a defective

appurtenance of the vessel caused or contributed to the injury." See Carpenter v. Universal Star

Shipping, S.A., 924 F.2d 1539 (9th Cir.1991), cert. denied, --- U.S. ----, 113 S.Ct. 413, 121 L.Ed.2d

337 (1992). The magistrate, relying on the previously cited Ninth Circuit authority, noted that the

plaintiffs sought to impose liability on the basis of inaction on the part of TMM and that there were

no allegations regarding a defective appurtenance. See id. Therefore, the magistrate granted

summary judgment to the defendant vessel owners TMM and Atlas. The plaintiffs now appeal.

                                             DISCUSSION

          There are two issues that need to be confronted on appeal: (i) did the district court abuse its

discretion in retaining the case after the federal sovereign was dismissed;5 and (ii) if not, then did the

district court properly find that the vessel owner was not liable for the stevedore's injuries that

resulted from a hazardous condition known to both the vessel owners' representative and the

stevedore? We find that the district court did not abuse its discretion in retaining the case because

there was an independent basis of federal jurisdiction, and the case was near culmination. Further,

the court properly granted summary judgment on the merits; therefore, WE AFFIRM.

                       i. Subject Matter Jurisdiction versus Removal Jurisdiction.

           Appellants assert two arguments to support their contention that this case belongs in state



   5
       Counsel for the appellants raised this argument for the first time at oral argument.
court.6 First, once Pemex was dismissed, the federal court lost its jurisdiction because in FSIA cases

the federal court has jurisdiction only to determine jurisdiction. If the federal court determines that

it does not have jurisdiction over the foreign sovereign, it never acquires jurisdiction at all.

Alternatively, the appellants argue that once Pemex was dismissed the original basis for removal

jurisdiction disappeared, and the court abused its discretion by retaining the otherwise unremovable

case.

          In support of their position that once Pemex was dismissed the district court lacked subject

matter jurisdiction, appellants rely principally on Security Pac. Nat'l Bank v. Derderian, 872 F.2d 281

(9th Cir.1989). In Derderian, the plaintiffs sued in state court to recover for the illegal conversion

and forgery of an $852,000 check. See id. at 281. One of the defendants, Banco BCH, a bank

owned by the government of Mexico, removed the case to federal district court pursuant to the

removal provisions in the FSIA. See 28 U.S.C. § 1441(d).

          Once in federal court, Banco BCH made a motion to dismiss based on the FSIA. See 28

U.S.C. § 1330, 1362 et seq. Prior to a decision on the motion to dismiss, Banco BCH was dismissed

pursuant to a stipulation that was approved by the district court. The district court then allowed the

case to proceed to trial on the merits against the remaining defendants without determining its

jurisdiction over the pending claims. After the court awarded a judgment for the plaintiff Security

Pacific against the defendants, an appeal was waged in the Ninth Circuit.

          The Nint h Circuit noted the necessity of the district court to determine whether it has

jurisdiction over the sovereign following FSIA removal. This necessity stems from the reality that

in most instances subject matter jurisdiction over all of the parties hinges on that determination. See

id. at 283-84. The Derderian panel had previously noted that after removal:

                 [When] a case is tried on the merits without objection and the federal court enters
          judgment, the issue in subsequent proceedings on appeal is not whether the case was properly
          removed, but whether the federal district court would have had original jurisdiction over the
          case had it been filed in that court.

Id. at 283 (emphasis added) (quoting Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 702, 92


   6
       It is undisputed that without Pemex the case could not have been removed to federal court.
S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972).

        The primary distinction between our case and Derderian stems from the fact that we have an

alternative basis for federal jurisdiction. In Derderian, the plaintiff sued on state law claims and had

no independent basis of subject matter jurisdiction. Therefore, once the foreign sovereign was

dismissed, subject matter jurisdiction was entirely absent. However, in our case, upon removal, the

court had two distinct grounds upon which to base subject matter jurisdiction: (i) the FSIA; and (ii)

admiralty law. Consequently, when Pemex was dismissed, the FSIA dropped out of the picture, but

admiralty law provided an independent basis of subject matter jurisdiction.

        The appellants next argue that even if the court had subject matter jurisdiction, the court

erred by failing to remand the case to state court. The appellants focus on the fact that the case could

not have been removed, but for the FSIA. This is so because admiralty claims are subject to the

"savings to suitors" clause,7 which provides that they are non-removable. Therefore, although

admiralty claims do provide subject matter jurisdiction, plaintiffs have the option to choose a state

forum. In essence, the appellants argue that the spirit of the savings to suitors clause was violated

because the district court retained jurisdiction over the case that now lacks removal jurisdiction.

        To be sure, this case would not have been in federal court if Pemex was not made a party.

While we are mindful that Pemex was ultimately dismissed, both parties concede that it was a valid

party and, thus, provided a proper basis fo r removal. Further, once in federal court, extensive

discovery took place culminating in the magistrate's ruling and recommendation. The appellants note

that the case was properly removed, but in turn rely on Arango v. Guzman Travel Advisors Corp.,

621 F.2d 1371 (5th Cir.1980), which stated as follows:

                [W]hen the foreign sovereign is found to be immune and the source of federal removal
        jurisdiction is thereby withdrawn from the case, the district court is free to exercise its
        discretion to remand the remaining defendants to state court, and in most instances will no
        doubt do so.


   7
    The savings to suitors clause provides that state courts may exercise concurrent jurisdiction
over maritime claims. See Linton v. Great Lakes Dredge & Dock Co., 964 F.2d 1480, 1484-85
(5th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 467, 121 L.Ed.2d 375 (1992). In fact, federal
courts cannot exercise removal jurisdiction over claims subject to the savings to suitors clause.
See In re Dutile, 935 F.2d 61, 63 (5th Cir.1991).
Id. at 1377 n. 6 (emphasis added).

        This sets up the standard against which the district court's actions must be measured. Surely,

when measuring a district court's actions in terms of discretion, reversal is only appropriate in

instances of abuse. It is difficult to find an abuse in this case. Prior to dismissing the sovereign, the

case had been pending for over sixteen months and the magistrate had issued a ruling and

recommendation. The court rationally decided not to remand the case because it was ripe for

decision.

        There is overwhelming support for the proposition that the district court, sitting in diversity,

in its discretion may retain jurisdiction over pendent state law claims even after all federal claims have

been disposed of. See Rosado v. Wyman, 397 U.S. 397, 403-05, 90 S.Ct. 1207, 1213-14, 25 L.Ed.2d

442 (1970); United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d

218 (1966); Kelly v. City of Leesville, 897 F.2d 172, 174-75 (5th Cir.1990); Grinter v. Petroleum

Operation Support Serv., Inc., 846 F.2d 1006, 1008 (5th Cir.), cert. denied, 488 U.S. 969, 109 S.Ct.

498, 102 L.Ed.2d 534 (1988).

        While in the current context the court was not exercising pendent jurisdiction we note this line

of authority as extremely persuasive. Surely, where as here, when the court has an independent basis

of jurisdiction it should be granted even greater leeway. The rationale behind deference in this regard

is to avoid relitigation, and needless waste of precious judicial resources. The retention of jurisdiction

in this case forwarded these noble goals. Moreover, the court in this case did have subject matter

jurisdiction because of the maritime claims. Therefore, the court below did not abuse its discretion

by refusing to remand the case.

 ii. Liability for a Stevedore's Injuries that Resulted from a Hazardous Condition Known to Both
the Vessel's Owners and the Stevedore.

        The district court held that the vessel owner cannot be held liable for a failure to intervene

unless a defective appurtenance of the vessel caused or contributed to the injury. This is simply not

the law in our Circuit. However, in most if not all of our cases, liability is normally premised on

defects or dangerous conditions that are within the owner's control. These cases can be contrasted

with situations that are exclusively within the control of the stevedore—such as loading. Liability in
our case, hinges upon whether or not the owners had a duty to intervene.

          In Gay v. Barge 266, 915 F.2d 1007 (5th Cir.1990), the court stated: "[t]he vessel owner has

a duty to intervene in the stevedore's operations when he has actual knowledge both of the hazardous

condition and that the stevedore, in the exercise of "obviously improvident' judgment, intends to

continue work in spite of that condition."8 The Gay court reversed the summary judgment for the

vessel owner because "[t he vessel owner] was chargeable with knowledge that there was no safe

means of access to the barge, and accordingly had a duty to remedy that situation before turning the

vessel over to the stevedore." Id. Therefore, owner liability in Gay emanated from its failure to

remedy a dangerous appurtenance of its ship.

          In a footnote the Gay opinion cites to four decisions on the vessel owner's duty to intervene.9

Randolph, not unlike Gay, involved whether or not the vessel was negligent in failing to take a

gangway out of service. See Randolph, 896 F.2d at 971. Therefore, the liability in both Randolph

and Gay was premised on an appurtenance of the ship.

          Similarly, Masinter can also be distinguished on its facts. The Masinter court noted:

                   In applying both Scindia's general rule and its exceptions we are persuaded that it is
          beyond peradventure that Marlin [the vessel owner] owed to Masinter [the stevedore] a duty
          of care to take precautions necessary to avoid exposing Masinter to the hazardous conditions
          created by the placement of the stairway. We reach this conclusion by noting that the present
          case does not involve a vessel owner "turning over" the control of the vessel to a stevedore
          or independent contractor. Rather, Marlin was contractually bound to conduct the drilling
          operations and remained in control of the vessel to effectuate this obligation.

Masinter, 867 F.2d at 897.

          Masinter is therefore distinguishable on two grounds: (i) the vessel owner was in control of

the vessel; and more importantly (ii) the dangerous condition was the placement of the stairway—an

appurtenance of the ship.

          In Helaire, the plaintiff was injured attempting to unload cargo during rough seas. He


   8
       Gay, 915 F.2d at 1012 (citing Randolph v. Laeisz, 896 F.2d 964, 970 (5th Cir.1990)).
   9
    Gay, 915 F.2d at 1012 n. 15 (citing Randolph v. Laeisz, 896 F.2d 964, 970 (5th Cir.1990);
Masinter v. Tenneco Oil Co., 867 F.2d 892, 897 (5th Cir.1989); Helaire v. Mobil Oil Co., 709
F.2d 1031, 1038-39 (5th Cir.1983); Turner v. Costa Line Cargo Services, Inc., 744 F.2d 505,
512 (5th Cir.1984 (Gee, J., dissenting)).
ineffectually complained to his immediate boss, the crane operator, that the conditions were too

dangerous. The vessel owner was supervising the stevedore operations during the time of the injury.

The facts in Helaire are similar to ours because neither the stevedore nor the owner were responsible

for the danger. However, in the present case the vessel owner assumed no supervisory role.

        In Helaire, the trial court had initially charged the jury on general tort principles of landowner

liability. The Fifth Circuit remanded with the guidance that the owner could be held liable only if it

knew of the condition; and that the stevedore was not adequately protecting the employee. This

unmistakably contrasts with the magistrate's opinion.10 The Helaire court reasoned:

                Once the loading operat ions have begun, the vessel owner can be held liable for
        injuries to employees of the stevedore resulting from open and obvious dangers only in the
        event of actual knowledge of the danger and actual knowledge that he cannot rely on the
        stevedore to remedy the situation.

Helaire, 709 F.2d at 1038-39 (emphasis in original).

        Perhaps the seminal case in this area is Futo v. Lykes Bros. S.S. Co., 742 F.2d 209 (5th

Cir.1984). In Futo, Judge Garwood noted "this case concerns a failure to act on the part of the

[vessel owner's employees] ... rather than any active negligence on their part." Id. at 214. The court

reasoned that one cannot be liable for a failure to act unless one has an affirmative duty to act. The

court then distinguished between those cases where the danger created involved the ship or its gear

from those cases where the danger created was within the area of the stevedore's operations. In so

noting Futo stated:

                To impose a duty to intervene on the shipowner, respecting dangers not created by
        it which are obvious to the stevedore's employees and arise during and in the area of the
        stevedore's operations, something more is required than the mere shipboard location of the
        dangerous situation and the shipowner's knowledge of it.

Id. at 215 (emphasis in original).

        Ultimately, the Futo court found that the owner had no duty to intervene in the stevedore's

operations despite the fact that it knew they were using a scaffold without a guardrail. The Futo facts

are identical to ours in many respects: (i) no appurtenance of the ship was involved; (ii) in the danger


   10
    The magistrate erroneously required that some appurtenance of the ship had to be involved in
order to hold the vessel owner liable.
was not subsumed within stevedore expertise—a layman could have just as easily perceived the

danger; (iii) it was the owner's inaction that was the alleged basis of liability; and (iv) the scaffold

was a part of the stevedore's operations.

       Casaceli v. Martech Int'l, Inc., 774 F.2d 1322 (5th Cir.1985), cert. denied, 475 U.S. 1108,

106 S.Ct. 1516, 89 L.Ed.2d 914 (1986), formulated a six factor inquiry to be used when determining

the vessel owner's duty to intervene. See id. at 1328 (eliciting six factors from the Futo opinion).

In Casaceli, the plaintiff was a diver's tender and employee of the stevedore. He drowned while

attempting to repair a propeller on the defendant's vessel. The court made a noteworthy statement,

which it garnered from Futo:

               The Futo court found that the Scindia exception does not extend to an open and
       obvious transitory condition created and controlled by the independent contractor, and wholly
       related to the contractor's gear and operations. The missing guardrail was such a condition.

Casaceli, 774 F.2d at 1327 (citations omitted).

       The Casaceli court went on to note:

               A distinction between defects in the ship itself and its gear, and defects not directly
       related to the ship, is logical since the owner is primarily responsible for the ship, gains the
       most from its proper maintenance, and can usually best comprehend the danger from a defect
       in the ship, its gear or equipment.

               Scindia, therefore, requires the existence of two basic conditions for the imposition
       of the shipowner's duty to intervene—the shipowner's actual knowledge of a danger to a
       longshoreman, and the shipowner's knowledge that the longshoreman's employer is not acting
       reasonably to protect its employees from that danger. The Futo court outlined considerations
       that pertain to the existence of these basic conditions: [1] whether the danger was open and
       obvious; [2] whether the danger was located within the ship or ship's gear; [3] which party
       created the danger or used the defective item and was therefore in a better position to correct
       it; [4] which party owned and controlled the defective item; [5] whether an affirmative act
       of negligence or acquiescence in the use of a dangerous item occurred; and [6] whether the
       shipowner assumed any duty with regard to the dangerous item.

Casaceli, 774 F.2d at 1328 (citing Futo, 742 F.2d at 218, 221).

       Applying the Casaceli/Futo test to our situation leads to the conclusion that the owner did

not have a duty to intervene. Surely, in each of the previous cases that found owner liability there

was either: (i) some element of control; or (ii) an appurtenance of the ship involved. True, Helaire,

comes close to the mark; however, even in Helaire, the owner was supervising the stevedore's

actions. Significantly, that supervisory role satisfies the "something more" requirement alluded to in
Futo.

        In this case there is simply nothing upon which to hold the owners liable—spare their

knowledge. The cases are unanimous in stating the knowledge alone is not enough. We must be

extremely careful, lest we open the floodgates to a new class of claims premised on every conceivable

shred of owner knowledge. The "something more" requirement pro vides a useful and helpful

threshold below which owners are not liable.

        The vessel owners point to Hunter v. Intreprinderea de Explore Flott Maritime Navrom, 868

F.2d 1386 (5th Cir.1989) (per curiam) as their be-all and end-all savior. True, the Fifth Circuit

affirmed a summary judgment in favor of the vessel owner on facts very similar to ours. In Hunter,

the stevedore's employees were loading rice into the hold. The employees were loading the rice in

part by hand. Further, they were cutting the slings in an open and obviously dangerous manner. The

owner knew just as well as the stevedore that the practice was dangerous.

        The Hunter court assumed that the stevedore's operations were dangerous and that the owner

knew they were dangerous. The court tersely applied the Casaceli test and found the owner was not

liable. The court stated: "the dangerous condition had nothing to do with the ship's gear; that the

vessel did not own the defective item; that there was no allegation of an affirmative act of negligence

by the vessel; and that the shipowner had not assumed any duty with regard to the dangerous

condition." Hunter, 868 F.2d at 1388. The Hunter panel could just have easily stated that it did not

find "something more" than knowledge.

        Applying the Casaceli test to our situation also leads to the conclusion that the owners are

not liable. The danger was open and obvious to both parties. There was no appurtenance of the ship

involved. Neither party created the problem, and they both became aware of it simultaneously. There

was no defective item; however, the loading process could properly be classified as within the

stevedore's operations. Further, owner inaction rather than an affirmative act of negligence is at issue

here. Finally, the owners did not assume any supervisory role or other duty. In short, the owners

knew that the stevedore was attempting a dangerous method of loading the ship. However, not one

of the Casaceli indicators points to owner liability.
                                           CONCLUSION

       The court below properly retained jurisdiction over the case even after Pemex was dismissed.

The absence of removal jurisdiction after the fact is irrelevant to subject matter jurisdiction once the

case has been properly removed. The court did not abuse its discretion in retaining the case when

it was so near resolution. Moreover, the court properly granted the owners summary judgment on

the merits. Owner knowledge without "something more" is insufficient to confer liability in the

stevedore context. Therefore, the judgment of the district court is AFFIRMED.
