Williams Sports Rentals Inc. v. Willis ( 2020 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 IN RE: COMPLAINT AND PETITION No. 2:17-cv-00653-JAM-EFB OF WILLIAMS SPORTS RENTALS, 10 INC., AS OWNER OF A CERTAIN 2004 YAMAHA WAVERUNNER FX 140 11 FOR EXONERATION FROM OR ORDER GRANTING WILLIS’ MOTION TO LIMITATION OF LIABILITY LIFT THE ANTI-SUIT INJUNCTION 12 AND STAY FURTHER PROCEEDINGS IN ADMIRALTY 13 MARIAN LATASHA WILLIS, on behalf of the Estate of 14 RAESHON WILLIAMS, 15 Respondent/Counter Claimant 16 v. 17 WILLIAMS SPORTS RENTALS, INC. 18 Petitioner/Counter Defendant 19 WILLIAMS SPORTS RENTALS, INC. 20 Petitioner, Counter 21 Defendant, and Third-party Plaintiff, 22 v. 23 THOMAS SMITH, KAI PETRICH, 24 BERKELY EXECUTIVES, INC., ZIP, INC., and DOES 1-10 25 Third-party Defendants. 26 Following a jet ski accident that claimed the life of 27 Raeshon Willis, Williams Sports Rentals, Inc. (“WSR”) filed an 28 1 admiralty action under the Limitation of Liability Act 2 (“Limitation Act”), 46 U.S.C. § 30501 et seq., and Rule F of the 3 Federal Rules of Civil Procedure, Supplemental Rules for 4 Admiralty or Maritime Claims. ECF No. 1. As required, the Court 5 enjoined all other proceedings “arising out of, consequent upon, 6 or in connection with” the accident. Order Approving Stipulation 7 of Value, ECF No. 11; see also 46 U.S.C. § 30511(c). 8 Willis then requested the Court dissolve its injunction so 9 she could join WSR in a suit pending in Alameda County Superior 10 Court—a request this Court twice denied. ECF Nos. 56, 77. 11 Ultimately, the Court dismissed Willis’ counterclaims against 12 WSR. Dec. 15, 2017 Order, ECF No. 61. Finding nothing left to 13 adjudicate, the Court granted WSR’s motion for exoneration. ECF 14 Nos. 76, 77; see also Tr. of 7/30/19 Proceedings, ECF No. 83. 15 See Nov. 26, 2020 USCA Memo. At 3, ECF No. 88; see also Dec. 18, 16 2020 USCA Mandate, ECF No. 89. 17 WSR’s victory was short-lived. Granting Willis’ writ of 18 mandamus, the Ninth Circuit revived Willis’ negligent entrustment 19 claim and remanded the case with instructions. Nov. 26, 2020 20 USCA Memo. at 3-4. The Court of Appeals directed this Court to 21 dissolve the anti-suit injunction and advised that the Court “may 22 wish to reconsider whether to stay the proceedings until Willis’ 23 liability claim against WSR is adjudicated in state court.” Id. 24 at 3 (citing Newton v. Shipman, 718 F.2d 959, 961 (9th Cir. 25 1983)). On remand, Willis filed a motion to lift the anti-suit 26 injunction and stay further proceedings, likewise urging the 27 Court to stay this action pending resolution of the state court 28 1 proceedings.1 ECF No. 90. WSR opposed Willis’ motion. ECF No. 2 101. Willis then filed a reply. ECF No. 107. 3 For the reasons discussed below, the Court grants Willis’ 4 motion. 5 I. BACKGROUND 6 The parties are familiar with the facts of this case. The 7 Court need not recite them here, except as is useful in reaching 8 the disposition. 9 II. OPINION 10 A. Judicial Notice 11 WSR requests judicial notice of: (1) Willis’ admission that 12 her claims against WSR do not arise under California law, and 13 (2) Sentinel Insurance Company’s motion to intervene in this 14 proceeding. Request for Judicial Notice by WSR, ECF No. 108. 15 Federal Rule of Evidence 201 permits a court to “judicially 16 notice a fact that is not subject to reasonable dispute because 17 it (1) is generally known within the trial court’s territorial 18 jurisdiction; or (2) can be accurately and readily determined 19 from sources whose accuracy cannot reasonably be questioned.” 20 FRE 201(b). To this end, a court may take judicial notice of 21 “court filings and other matters of public record.” Reyn’s 22 Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th 23 Cir. 2006). 24 Willis’ admission and Sentinel’s motion to intervene, ECF 25 No. 104, are both proper subjects of judicial notice. The Court 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for June 16, 2020. 1 therefore GRANTS WSR’s request. 2 B. Subject-matter Jurisdiction 3 WSR’s opposition brief raises questions about whether 4 admiralty jurisdiction exists in this case. Opp’n at 8. To 5 clarify: it does. 6 A party invoking admiralty tort jurisdiction must prove 7 that: (1) the alleged tort occurred upon navigable waters; (2) 8 the alleged tort had the potential to disrupt maritime commerce; 9 and (3) the general character of the activity giving rise to the 10 tort had a substantial relationship to traditional maritime 11 activity. Grubart v. Great Lakes Dredge & Dock Co., 513 U.S. 12 527, 534, 538-40 (1995). As Willis argues, “the situs of a tort 13 for the purpose of determining admiralty jurisdiction is the 14 place where the injury occurs.” Reply at 3 (quoting Taghadomi 15 v. U.S., 401 F.3d 1080, 1084 (9th Cir. 2004)). Although WSR 16 rented its jet skis on the shore, Willis’ death occurred on the 17 waters of Lake Tahoe. Sec. Am. Compl. (“SAC”), ECF No. 46. The 18 alleged tort therefore occurred upon navigable waters. Davis v. 19 U.S., 185 F.2d 938, 943 (9th Cir. 1950) (“[T]he waters of Lake 20 Tahoe are navigable waters of the United States.”) 21 Moreover, the alleged tort had the potential to disrupt 22 maritime commerce. This inquiry focuses not “on what happened 23 in this particular case but on whether the general features of 24 the incident have a potentially disruptive effect.” In re 25 Mission Bay, 70 F.3d at 1129 (emphasis in original) (citing 26 Jerome B. Grubart, Inc., 513 U.S. 527, 533 (1995); Sisson v. 27 Ruby, 497 U.S. 358, 363 (1990); Foremost Ins. Co. v. Richardson, 28 457 U.S. 668, 675 (1982)). Similar to this case, In re Mission 1 Bay involved two women who suffered serious injuries after 2 falling off the back of a jet-propelled personal watercraft. 3 570 F.3d at 1125. In assessing the tort’s potential disruption 4 on maritime commerce, the Ninth Circuit found the incident was 5 “best described as harm by a vessel in navigable waters to a 6 passenger.” Id. at 1129. The Ninth Circuit held “an incident 7 of this class could have a potentially disruptive impact” on 8 maritime commerce. Id. “Among other things, a vessel from 9 which a passenger goes over board . . . would likely stop to 10 search and rescue, call for assistance from others . . . and 11 ensnarl maritime traffic in the lanes affected.” Id. Given the 12 similarity of Willis’s accident to the one in In re Mission Bay, 13 the Court finds this case satisfies the “potential to disrupt 14 maritime commerce” requirement. 15 Finally, the Court finds the general character of the 16 activity giving rise to the tort bears a substantial 17 relationship to traditional maritime activity. As WSR 18 implicitly acknowledges, this factor requires the Court to first 19 identify “the activity giving rise to the tort.” See Opp’n at 8 20 n.1; Reply at 3-4. WSR contends that, as a negligent 21 entrustment action, the activity giving rise to this tort was 22 WSR’s “shoreside rental of watersports equipment.” Opp’n at 8 23 n.1. Citing In re Complaint & Petition of Blue Water Boating 24 Inc. (“In re Blue Water Boating”), 786 Fed. Appx 703 (9th Cir. 25 Dec. 4, 2019), WSR argues shoreside rentals lack the requisite 26 “maritime flavor” to trigger a court’s admiralty jurisdiction. 27 Id. This argument oversimplifies the Ninth Circuit’s recent 28 unpublished decision. 1 In re Blue Water Boating involved a Santa Barbara company’s 2 rental of a standup paddle board. The company filed a 3 limitation action after a renter fell off a paddle board and 4 drowned. 786 Fed. Appx. at 703-04. The district court 5 dismissed the suit for lack of jurisdiction. See Complaint of 6 Blue Water Boating, Inc. v. Mubanda, No. CV 18-1231-JFW (ASx), 7 2018 WL 6075356, at *4 (C.D. Cal. Mar. 27, 2018). The Ninth 8 Circuit affirmed the district court, finding that standup- 9 paddle-board rentals lacked a “close[] relat[ion] to activity 10 traditionally subject to admiralty law.” Id. at 705 (quoting 11 Gruver v. Lesman Fisheries, Inc., 489 F.3d 978, 983 (9th Cir. 12 2007)) (modifications in original). 13 The district court decision provides an even more detailed 14 discussion of the issue. See Complaint of Blue Water Boating, 15 Inc., 2018 WL 6075356, at *4. This discussion focused, not on 16 the relationship between rental companies and traditional 17 maritime activity, but on the relationship between standup 18 paddle boards and traditional maritime activity. See id. 19 Comparing paddle board use to activities like swimming and 20 surfing, the court found that “the relationship between the 21 innocent operation of [stand-up paddle boards] and traditional 22 maritime activity [was] virtually non-existent.” Id.; see also 23 Exec. Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 24 249, (1972) (swimming-based torts lack a substantial 25 relationship to traditional maritime activity); Spencer v. 26 Lunada Bay Boys, No. CV 16-02129 SJO (RAOx), 2016 WL 6818757, at 27 * (C.D. Cal. July 22, 2016) (torts committed by individuals on 28 surfboards lack a substantial relationship to traditional 1 maritime activity). In doing so, the district court expressly 2 rejected the argument that the paddle used while paddle boarding 3 made it more like a vessel, i.e., “a kayak or a rowboat,” than a 4 surfboard. Id. 5 Like the Central District of California, this Court finds 6 that the pressing consideration in this analysis is what WSR was 7 renting, not that WSR was renting it. WSR rents jet skis— 8 personal watercrafts. The relationship between traditional 9 maritime activity and WSR’s rental of personal watercrafts for 10 use on navigable waters is undeniable. See Yamaha Motor Corp., 11 U.S.A. v. Calhoun, 516 U.S. 199, 201-02 (1996) (exercising 12 admiralty jurisdiction over suit involving a jet ski accident); 13 In re Mission Bay, (“Being a vessel, this jet ski has a maritime 14 connection.”); Rigsbee v. City and County of Honolulu, No. 17- 15 cv-00532 HG-KSC, 2018 WL 5017610, at *3 (D. Haw. Oct. 16, 2018) 16 (“Accidents involving jet skis are substantially related to 17 maritime activities.”). 18 The Court finds this suit falls within its admiralty 19 jurisdiction. 20 C. Anti-suit Injunction 21 The Ninth Circuit instructed this Court to dissolve its 22 previously issued anti-suit injunction. See Dec. 18, 2019 USCA 23 Mandate. WSR nonetheless continues to litigate the propriety of 24 allowing Willis’ state court suit to go forward, urging the 25 Court to place limitations on those proceedings. See Opp’n at 26 8-9. The question of whether Willis’ state court proceedings 27 will prejudice WSR’s limitation rights has become an unending 28 carousel. See Tr. of 8/29/17 Proceedings at 39: 6-40:16, ECF 1 No. 44; Apr. 25, 2018 USCA Memo. at 3, ECF No. 69; Tr. of 2 7/30/19 Proceedings at 24:6-9; Nov. 26, 2019 USCA Memo. at 2-3. 3 The Court declines WSR’s invitation to take another ride. 4 The Ninth Circuit’s instruction to dissolve the anti-suit 5 injunction was unequivocal. See Dec. 18, 2019 USCA Mandate. 6 This Court takes the Ninth Circuit’s mandate to mean what it 7 says; no more, no less. Moreover, the Court does not find that 8 any intervening changes in circumstance have, as WSR argues, 9 mooted the Ninth Circuit’s instructions. Contra Opp’n at 3-4. 10 The Court therefore dissolves its previously issued anti-suit 11 injunction. 12 D. Stay 13 In Limitation Actions, district courts may exercise their 14 discretion in deciding “whether the limitation question must 15 await trial of the liability issue.” Newton v. Shipman, 718 16 F.2d 959, 963 (9th Cir. 1983). Ultimately, “[t]he district 17 court should select the most efficient manner of proceeding.” 18 Id. Willis argues the Langnes rule of abstention prescribes the 19 most efficient course of action in single-claimant cases such as 20 this one. Mot. at 3-4 (citing Langnes v. Green, 282 U.S. 531, 21 541-42 (1931). Under this rule: 22 [T]he district court permits proceedings in state court to go forward on the question of liability and 23 retains jurisdiction over any question that might arise as to the shipowner's right to limit his 24 liability. If the shipowner either (1) wins in the state court or (2) loses, but only in an amount less 25 than the value of his ship and its cargo, then the need for further proceedings in federal court is 26 obviated. If the shipowner is found liable for more than the value of his ship and its cargo in the state 27 action, further proceedings in the federal limitation action may be necessary, but only where the claimant 28 contests the limitation. WwOAOe 6.4 FOUN YOY PAINE RYU OID Pee PAY VI 1 | See Mot. at 4 (quoting In re Complaint of McCarthy Bros., 83 F.3d 2 828 (7th Cir. 1996). 3 WSR disagrees that adhering to the Langnes rule would yield 4 maximum efficiency here—namely, because the matter would get to 5 trial more quickly if left in federal court. This argument rests 6 on the assumption that, absent a stay, this Court would hold a 7 pretrial conference hearing in this case on September 11, 2020 8 “with a bench trial shortly to follow.” Opp’n at 10. That 9 | assumption is no longer valid. The Sacramento federal courthouse 10 | is currently closed to the public until further notice. See 11 General Order 618 (May 13, 2020). When trials resume, criminal 12 cases will take priority. Given these unprecedented times, the 13 Court finds little value in speculating as to when this matter 14 would go to trial absent a stay. But suffice it to say, WSR’s 15 argument does not persuade the Court to depart from the practice 16 set forth in Langnes, 282 U.S. at 541-42. The Court therefore 17 stays further proceedings in admiralty pending the completion of 18 | Willis’ suit in state court. 19 Til. ORDER 20 For the reasons set forth above, the Court GRANTS Willis’s 21 motion to lift the anti-suit injunction and stay further 22 proceedings in admiralty. 23 IT IS SO ORDERED. 24 Dated: July 27, 2020 25 Me 26 Benlek, sunk 27 28