     Case: 19-30918      Document: 00515440761         Page: 1    Date Filed: 06/04/2020




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT   United States Court of Appeals
                                                     Fifth Circuit

                                                                              FILED
                                                                            June 4, 2020
                                      No. 19-30918
                                                                           Lyle W. Cayce
                                                                                Clerk
In re: In the Matter of the Complaint of PROSPER OPERATORS,
INCORPORATED as Operators of the M/V Amber, for Exoneration From or
Limitation of Liability

PROSPER OPERATORS, INCORPORATED, as operator of the M/V Amber,

               Petitioner - Appellant

v.

MITCHELL NAVARRE,

               Claimant - Appellee




                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 2:16-CV-1363


Before WIENER, ENGELHARDT, and OLDHAM, Circuit Judges.
PER CURIAM:*
       Prosper Operators, Inc. (Prosper) appeals the district court’s order
dismissing its complaint for failure to comply with Supplemental Rule of Civil
Procedure Rule F(4). Prosper also seeks review of its motion for summary


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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judgment, which the district court denied. Because we find that Prosper’s
noncompliance with Rule F(4) was proper grounds for dismissal, we affirm the
order dismissing Prosper’s complaint and do not reach arguments regarding
summary judgment.
                                             I.
      On June 14, 2015, Mitchell Navarre was working at his assigned post for
Prosper Operators, Inc. at the Sweet Lake oil production field in Cameron
Parish, Louisiana. As a Class C Operator, Navarre traveled by boat to the
wells on the lake to, among other things, perform maintenance and operate
some of the surface production equipment. He performed these tasks from
stationary platforms that are affixed to the wells. On that particular day,
Navarre’s boat, the “Amber,” began to float away from the well 1 platform that
he was working from, and he was injured attempting to jump from the well
platform back onto the Amber. Navarre alleges that the defective condition of
the platform and the unseaworthy condition of the vessel were the causes of
his injuries.
      The procedural history of this case is more convoluted. Navarre filed suit
against Prosper in the Cameron Parish Louisiana state court on April 7, 2016,
asserting, inter alia, personal injury claims under the Jones Act, 46 U.S.C. §
30104. Prosper initiated a second action in the United States District Court
for the Western District of Louisiana on September 28, 2016, seeking to limit
its liability under the Limitation Act, 46 U.S.C. App. § 181 et seq. The district
court issued an order approving Prosper’s action and directing Prosper, in
accordance with Supplemental Rule of Civil Procedure F(4), to send direct
notice of its action to known claimants and to publish notice of its action in the
Lake Charles American Press for four weeks prior to April 14, 2017.


      1   Texas Petroleum Investment Company (“TPIC”) is the owner of this particular well.

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      Navarre was first notified of this latter action by two letters from
Prosper’s counsel dated January 18 and January 25, 2017. Upon receipt of the
letters, Navarre moved to dismiss Prosper’s claim under Federal Rule of Civil
Procedure 12(b)(5), arguing that the letters were insufficient service under
Rule 4(m). Prosper, for its part, responded that its neglect should be excused
because it believed the court would send out notice of its limitation action. 2 In
an order dated August 14, 2017, the court explained that it was Prosper’s duty
to publish notice in the newspaper and to mail notice to claimants. Still, it
denied the motion to dismiss because Navarre had received actual notice of the
Limitation Action by way of the January 25, 2017 letter.
      Two years later, on February 20, 2019, Prosper filed a motion seeking an
extension of time to publish notice in the newspaper. Navarre opposed the
motion and filed a second motion to dismiss, arguing this time that Prosper
had not fulfilled its obligations under Supplemental Rule F(4). While those
competing motions were pending, Prosper filed a motion for summary
judgment. On July 26, 2019, the magistrate judge granted Prosper’s motion to
extend, and on August 23, 2019, the district judge denied Prosper summary
judgment. Then, on September 5, 2019, after Navarre objected to the order
granting the extension, the district judge vacated the magistrate’s order,
denied the motion to extend, and granted Navarre’s motion to dismiss. Prosper
appeals both the order dismissing its limitation action and the order denying
it summary judgment, but we need only reach the 12(b) dismissal.
                                          II.
      A district court’s order of dismissal for insufficiency of service of process
is reviewed for abuse of discretion. Fox v. Mississippi, 551 F. App’x 772, 774



      2 Before Navarre’s motion could be decided, the case was listed as unassigned and
then reassigned to Judge James T. Trimble on August 11, 2017.

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(5th Cir. 2014) (citing Sys. Signs Supplies v. U.S. Dep’t of Justice, 903 F.2d
1011, 1013 (5th Cir. 1990)). “[A]n abuse of discretion standard does not mean
a mistake of law is beyond appellate correction, because a district court by
definition abuses its discretion when it makes an error of law.” In re Superior
Crewboats, Inc., 374 F.3d 330, 334 (5th Cir. 2004) (internal citations omitted).
                                         III.
      Among the many special rights, duties, rules, and procedures of
maritime law is a vessel owner’s right to file under the Limitation Act. Lewis
v. Lewis & Clark Marine, Inc., 531 U.S. 438, 446 (2001); 46 U.S.C. App. § 181 et
seq. The Act allows “a vessel owner to limit liability for damage or injury,
occasioned without the owner’s privity or knowledge, to the value of the vessel
or the owner’s interest in the vessel.” 3 Lewis, 531 U.S. at 446. To invoke the
Act’s protections, a vessel owner must bring an action in district court “within
6 months after a claimant gives the owner written notice of a claim.” In re The
Complaint of RLB Contracting, Inc., as Owner of the Dredge Jonathan King
Boyd its Engine, Tackle, Gear for Exoneration or Limitation of Liab., 773 F.3d
596, 602 (5th Cir. 2014) (citing 46 U.S.C. § 30511(a) (2012)).
      After the complaint is filed, Supplemental Rule F(4) of the Federal Rules
of Civil Procedure mandates that notice of the vessel owner’s action shall be
issued to “all persons asserting claims with respect to which the complaint
seeks limitation, admonishing them to file their respective claims with the
clerk of the court and to serve on the attorneys for the plaintiff a copy thereof.”
FED. SUPP. R. CIV. P. F(4). And it further requires that “[t]he notice shall be
published in such newspaper or newspapers as the court may direct once a
week for four successive weeks prior to the date fixed for the filing of claims.”



      3  Congress passed the Limitation Act in 1851 “to encourage ship-building and to
induce capitalists to invest money in this branch of industry.” Id.

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Id. But the rule does provide that “[f]or cause shown, the court may enlarge
the time within which claims may be filed.” 4 Id.
       Here, the district court found that Prosper failed to show cause and that
granting such an extension would prejudice known and potential claimants. It
therefore vacated the magistrate judge’s order granting the motion for an
extension. And, because Prosper’s time to comply with Supplemental Rule F(4)
had expired, the court concluded that its limitation action should be dismissed
under Rule 12(b)(5). 5 In so holding, the court considered first, that Prosper
failed to “give notice to potential claimants, even after learning through the
first motion to dismiss (over two years ago) that it―rather than the court―was
required to do so”; second, Prosper “had not excused two years of inaction”; and,
third, Prosper did not dispute “that it could obtain the same relief in the state
court proceeding.” 6
       The rules of admiralty are “administered with equitable liberality and a
simultaneous freedom from restraints or frustrations occasioned by

       4  In practice, this provision is almost exclusively cited by potential claimants who did
not receive actual notice of the vessel owner’s limitation action until after the window for
filing claims passed. Caselaw dealing with the circumstances, here, where the vessel owner
seeks an extension is scarce. See In re Complaint of Marine Crewboats, Inc., No. CIV. A. 90-
2714, 1991 WL 55852, at *2 (E.D. La. Apr. 5, 1991) (explaining that “[a] careful review of the
law has revealed no judicial precedent in this matter” and dismissing the limitation action
because the vessel owner failed to publish notice in a newspaper).
        5 We note that because Rule 4’s service requirements differ from Supplemental Rule

F(4)’s notice requirements, dismissal might be more appropriate under Rule 41(b) for failure
to comply with a court order. See In re The Complaint of RLB Contracting, Inc., 773 F.3d at
601 n.4 (“[S]ervice under the state and federal rules of civil procedure with notice under
the Limitation Act” cannot be conflated); see also Marine Crewboats, Inc., 1991 WL 55852, at
*2. The distinction is ultimately irrelevant, however, because we review both for an abuse of
discretion, Bechuck v. Home Depot U.S.A., Inc., 814 F.3d 287, 297 (5th Cir. 2016), and we can
affirm on any grounds supported by the record, Sojourner T v. Edwards, 974 F.2d 27, 30 (5th
Cir. 1992). Prosper undoubtedly failed to comply with the court’s order directing notice.
        6 The court also clarified that it would not revisit Judge Trimble’s finding that Navarre

was given actual notice through the January 2017 letters. We note that, even if Prosper had
raised it, there are no collateral estoppel or res judicata issues here, because Judge Trimble
did not determine whether Prosper complied with its obligations to publish notice; he only
held that Navarre was properly served.

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technicalities or formal imperfections.” Texas Gulf Sulphur Co. v. Blue Stack
Towing Co., 313 F.2d 359, 362 (5th Cir. 1963).                    The notice provisions
of Supplemental Rule F are designed to warn potential claimants that they
must file their claims within the monition period or lose them. Lloyd’s Leasing
Ltd. v. Bates, 902 F.2d 368, 370 (5th Cir. 1990). Because these provisions
determine whether a claimant can file a claim, they are not excusable
“technicalities” and requiring compliance with the notice provisions is not
discretionary. Texas Gulf, 313 F.2d at 362; see In re LeBeouf Bros. Towing,
LLC, No. 20-1314, 2020 U.S. Dist. LEXIS 84885, at *11 (E.D. La. May 14,
2020).
       With these principles in mind, we find that the district court’s ruling
does not, as Prosper contends, constitute an abuse of discretion. Prosper’s
main grievance is with the district court’s finding that TPIC, as a joint
tortfeasor, was also a “potential claimant” who might suffer prejudice if the
extension was granted. Prosper’s argument is misplaced. We have held that
“parties seeking indemnification and contribution from a shipowner must be
considered claimants within the meaning of the Limitation Act.” Odeco Oil &
Gas Co., Drilling Div. v. Bonnette, 74 F.3d 671, 675 (5th Cir. 1996). But even
if Prosper is correct that TPIC is not a potential claimant, Prosper has not
undermined the district court’s finding that Navarre, himself, would be
prejudiced by an extension. His underlying state action―which has already
been stayed for three years due to the pendency of this limitation action―could
be delayed, upsetting the trial schedule and resulting in an even lengthier
stay. 7 Thus, we cannot say that the district court abused its discretion in


       7  For this same reason, Navarre’s other contention―that the district court erred in
misapplying the standard of review to the magistrate judge’s order―lacks merit. Rather, the
district judge properly recited that a reversal of a non-dispositive order was proper only
where it was “clearly erroneous or contrary to law.” The district court proceeded to identify

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finding that the balance of the competing interests weighed in favor of
dismissing Prosper’s action. See Texas Gulf, 313 F.2d at 363 (“The instances
in which we can declare that the action is so lacking in reason as to constitute
an abuse of discretion will be, as they have been, rare indeed.”).
      We have sanctioned, and even encouraged, dismissing cases in the
pursuit of judicial economy when, for example, a vessel owner failed to
promptly post bond in accordance with Supplemental Rule F(1). Guey v. Gulf
Ins. Co., 46 F.3d 478, 481 (5th Cir. 1995) (“The district court surely may enforce
such orders with the proper sanctions, including dismissal of the limitations
proceedings in the appropriate case.”). Certainly, this is a case where dismissal
in favor of judicial economy is appropriate. Prosper has inexcusably failed to
comply with two orders of the court and has delayed Navarre’s state court
action by years in the process. Moreover, Prosper has not disputed that it could
still pursue limitation as a defense in one consolidated proceeding in state
court. Karim v. Finch Shipping Co., 265 F.3d 258, 263 (5th Cir. 2001) (“[A]
shipowner can set up [limitation] as a defense. . . in any court, including a state
court.”) (internal citations and quotations omitted). Disallowing Prosper to
reap the benefits of the Limitations Act in federal court under these
circumstances was well within “equitable latitude” vested in the district court
sitting in Admiralty. Cates v. United States, 451 F.2d 411, 415 (5th Cir. 1971).
      Though we find dismissal appropriate here, that is not to say dismissal
is always appropriate when a vessel owner fails to comply with Rule F(4). Our
holding today is limited to the facts presented herein.




a factual finding made by the magistrate judge that was clearly erroneous. Namely, that the
extension would not prejudice “Navarre, as the only possible claimant to this matter.”

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                                    IV.
     Because we affirm the district court’s dismissal of Prosper’s claim, we
need not reach the summary judgment order. For the reasons set forth above,
the judgment of the district court is AFFIRMED.




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