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IN RE HEALING & SON

July 29, 1954

Petition of HEALING & SON, Inc. and 56 Other Cases. *


The opinion of the court was delivered by: FORMAN

3,00,20,20 *3*Petitions Based on Limitation of Liability *3*--- Civil Actions Nos. 914-50, 915-50, 916-50, 917-50 4 *3*Libel Against Kilgore Mfg. Co. *3*--- Civil Action No. 387-52 1 *3*Suits Against Pennsylvania R. R. Co. and Others *3*--- Civil Action Nos. 471-51, 472-51, 75-52, 353-52, 367-52, 440-52, 447-52, 477-52 8 *3*Suits Against United States and Other Defendants *3*--- Civil Action Nos. 385-52, 465-52, 466-52, 467-52, 468-52, 469-52, 470-52 7 *3*Suits Against United States Solely *3*--- Civil Action Nos. 973-50, 974-50, 975-50, 976-50, 985-50, 299-51, 418-51, 432-51, 620-51, 621-51, 622-51, 623-51, 624-51, 625-51, 720-51, 730-51, 349-52, 372-52, 373-52, 445-52, 448-52, 449-52, 452-52, 453-52, 454-52, 457-52, 458-52, 459-52, 463-52, 471-52, 472-52, 473-52, 474-52, 475-52, 476-52, 479-52, 36 --- 56

Pennsylvania Railroad Company moved for an order pursuant to Rule 42(a) *fn1" of the Federal Rules of Civil Procedure, 28 U.S.C., to consolidate fifty-six other pending suits *fn2" arising out of the South Amboy explosion of May 19, 1950 *fn3" for the purpose of trial to the end that they should be heard in admiralty in the limitation of liability action entitled In the Matter of Petition of Healing & Son, Inc., et al., Civil Action 554-50, upon the ground that all of said actions present common questions of law and fact.

 The Baltimore and Ohio Railroad Company supported the motion of the Pennsylvania Railroad Company. The United States expressed no opposition.

 The main opposition was expressed by counsel for A. & M. Trading Corp., et al., and many other plaintiffs in other cases. These comprised approximately 8600 plaintiffs in some twenty suits pending in the Superior Court of New Jersey, Law Division, Mercer County. *fn4" With the exception of certain suits against the Healing Companies, stayed by this court, they constitute all the cases arising out of the South Amboy explosion pending in the Superior Court of New Jersey. Thirteen defendants *fn5" have been served in the state actions. All are defendants in sixteen of the suits. There are nine defendants common to all of the twenty cases. Eleven firms of lawyers represent all of the plaintiffs in the state court suits.

 There can be no question that if all the cases in all of the various jurisdictions arising out of the catastrophe could be concentrated in a single court in one proceeding economy of expense and efficiency would be best served. To this end the movant and those joining it now propose that the admiralty court of this district can best serve that purpose and can encompass all or nearly all of the litigation. They point to the scope of the limitation of liability proceeding asserting that in that area admiralty exercises broader power than in the course of its ordinary jurisdiction, pointing to the case of Hartford Accident & Indemnity Co. v. Southern Pacific Co., 1927, 273 U.S. 207, 47 S. Ct. 357, 71 L. Ed. 612.

 In that case the owner of a wooden oil tank barge filed a libel in the United States District Court for the Southern District of Texas alleging that an explosion took place in one of its tanks causing fire; that a steamer was damaged by the fire and that death and injuries were caused to persons on its barge; that the damage to the steamer was due not to its barge but to the steamer's negligent handling; liability was contested by it and that of its barge, but in any event, it sought to limit its statutory liability to the value of the barge ($ 250) and its freight ($ 11,076.85). The claims amounted to a much larger sum than the value of the barge and freight. The claimants came in and the petition for limitation was denied, although the claims were allowed in whole or in part. The court ordered the stipulated value of the barge and freight to be applied in payment of the costs of court and the remainder pro rated among the claimants unless the decree was appealed or satisfied.

 
'It is quite evident from these cases that this Court has by its rules and decisions given the statute a very broad and equitable construction for the purpose of carrying out its purpose, and for facilitating a settlement of the whole controversy over such losses as are comprehended within it, and that all the ease with which rights can be adjusted in equity is intended to be given to the proceeding. It is the administration of equity in an admiralty court. Dowdell v. United States District Court, 9 Cir., 139 F. 444, 445. The proceeding partakes in a way of the features of a bill to enjoin a multiplicity of suits, a bill in the nature of an interpleader, and a creditor's bill. It looks to a complete and just disposition of many-cornered controversy, and is applicable to proceedings in rem against the ship, as well as to proceedings in personam against the owner, the limitation extending to the owner's property as well as to his person. The City of Norwich, 118 U.S. 468, 503, 6 S. Ct. 1150, 30 L. Ed. 134.' 273 U.S. at pages 215-216, 47 S. Ct. at page 359.

 The judgment of the Court of Appeals was affirmed.

 It is largely upon this case that the movants believe their efforts to achieve the maximum concentration of this litigation should be realized. They urge that the determination of issues in the limitation action would be res adjudicata, thus assuring to all persons claiming a final and conclusive adjudication both as to amount of damages against and liability upon the part of, the Healings. Furthermore, they urge that under Admiralty Rule 52, 28 U.S.C.A., final and conclusive adjudication of disputes between the claimants themselves would also be permitted. Consolidation of the law actions for trial with the limitation proceedings would further eliminate multiple actions in both the Federal and state courts, they assert, and work a complete unification of the litigation, or at least substantially so. Failure of consolidation, on the other hand, they contend, will work hardship and injustice involving them in repetitious litigation and even more 'subtle' prejudice. This would manifest itself in that the state court plaintiffs would have a separate opportunity to try the Healings and United States claims in the Federal courts and would be afforded an opportunity to take the inconsistent position of asserting that the absent Healings and United States, defendants, in the state courts, are not responsible and that the only culpable ones are the state court defendants, while in the Federal court they would be free to insist that the absent state court defendants are innocent and that the United States and Healings, as the case may be, are the guilty parties. Since the Healings and the United States were at the center of the disaster they say it would be unfair and unfortunate if the litigation went forward first in the forum into which they could not be brought.

 The burden of the opposition of the objecting plaintiffs was that the limitation proceedings in the Healing admiralty actions in this court are no substitute for the state court actions and will not adjudicate the issues therein and the present motions for consolidation will not avoid costs unduly or be in furtherance of convenience.

 It would appear that while the pronouncements of the Supreme Court in the Hartford case gave broad power to the admiralty court in the limitation proceeding it was not the claimants who contested the court's jurisdiction, but rather the vessel owner or its stipulator. The theory of the Court in that case is manifest when it says:

 
'The jurisdiction of the admiralty court attaches in rem and in personam by reason of the custody of the res put by the petitioner into its hands. The court of admiralty, in working out its jurisdiction, acquires the right to marshal all claims, whether of strictly admiralty origin or not, and to give effect to them by the apportionment of the res and by judgment in personam against the owners, so far as the court may decree. It would be most inequitable if parties and claimants brought in against their will, and prevented from establishing their claims in other courts, should be unable to perfect a remedy in this proceeding promptly, and should be delayed, until after the possible insolvency of the petitioner, to seek a complete remedy in another court, solely because the owner cannot make his case of personal immunity. Benedict's Admiralty, 5th Ed., 488. If Congress has constitutional power to gather into the admiralty court all claimants against the vessel and its owner, whether their claims are strictly in admiralty or not, as this court has clearly held, it necessarily follows, as ...

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