V. DEFENDANTS' MOTION TO DEPOSIT FUNDS.
Under 46 U.S.C. § 10313(g), where a ship owner or operator withholds wages from seamen without sufficient cause, "the master or owner shall pay the seamen 2 days' wages for each day payment is delayed." If plaintiff's prevail on their claim for back wages here, then defendants face the possibility that penalties will be imposed upon them under section 10313(g).
In response to this potential liability, defendants seek leave of the Court under Rule 67 to deposit an amount equal to the amount of plaintiffs' wage claim with the Court. The purpose of this deposit is to toll the penalty provisions of § 10313(g).
Defendants' motion will be granted. In the Ninth Circuit it is an abuse of discretion for the trial court to deny defendants the opportunity to toll the penalty provisions of § 10313(g) by depositing an amount equal to the wage claim with the Court. Raby v. M/V Pine Forest, 918 F.2d 80, 81 (9th Cir. 1990) ("Here we find an abuse of discretion because the district court erred when it failed to allow for the payment of the back wages into the court, an event that would stop the running of penalties.") Moreover, the amount defendants need to deposit in order to toll the penalty is the amount of the underlying wage claim, not the wage claim plus any additional potential penalties. Id., ("We emphasize that penalty wages found to have accrued up to the date of tender of back wages need not themselves be tendered in order to preclude the accrual of further penalties.")
In opposing defendants' motion to toll the penalty provisions of § 10313(g) through the deposit of funds, plaintiff challenge the authority of Raby in a number of ways. Plaintiffs point out that certain circuits have criticized and rejected the Ninth Circuit rule reflected Raby. Chung, Yong Il v. Overseas Navigation Ltd., 774 F.2d 1043 (11th Cir. 1985).
Additionally, plaintiffs argue that Raby is inconsistent with prior Ninth Circuit rulings, and, therefore, may be considered void or without authority as an improper attempt to overrule Ninth Circuit precedent without an en banc hearing. Nichols v. McCormick, 929 F.2d 507 (9th Cir. 1991). Plaintiffs also note that Raby may conflict with the Supreme Court's reasoning in Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 102 S. Ct. 3245 (1982). In an opinion by Justice Rehnquist, the Griffin Court ruled that the District Court retained no authority to reduce the amount of the wage penalty by limiting the time period over which the penalty was calculated. Id. at 3252-3253. The Court explained that the wage penalty is punitive, not just compensatory, and noted that the anticipated award on remand of $ 300,000.00 was not at odds with the statutory purpose of section 10313, even where the wages originally withheld amounted to only $ 412.00. Id.
Finally, plaintiffs argue that the rule reflected in Raby eviscerates the penalty provisions of § 10313(g) by allowing defendants to toll these provisions by, in essence, posting a bond. As a practical matter, most shipowners sued in a seamen's wage claim suit post a bond at the outset of litigation to prevent the seamen from arresting the vessel connected with the litigation. In fact, this has occurred here. The penalty provisions of § 10313(g) operate not to give seamen further security in the event of a favorable judgment, but to place financial pressure on ship owners to evaluate and resolve seamen's claims fairly, expeditiously, and without resort to costly litigation. An interpretation of § 10313(g) which allows defendants to avoid penalties by, in essence, posting a small additional security bond, defeats this purpose.
Despite the appeal of plaintiff's arguments, this Court is controlled by the Ninth Circuit's ruling in Raby. Defendants' motion to deposit funds will be granted.
For the reasons set out above, plaintiffs' motion for summary adjudication of the contractual terms governing plaintiffs' employment relationship is GRANTED, and the Court finds that plaintiffs' employment relationship is governed by the terms of the 1989 CBA.
All remaining motions for summary judgment are DENIED, subject to the terms and findings expressed in the Analysis portion of this Order.
Plaintiffs' motion for class certification is DENIED and defendants' motion for the dismissal of class allegations is GRANTED. Plaintiffs' class allegations are DISMISSED WITHOUT LEAVE TO AMEND.
Defendants' motion to dismiss paragraph 15 of the complaint is DENIED.
Finally, defendants' motion to toll the penalty provisions of section 10313 by depositing funds into the Court is GRANTED.
IT SO ORDERED.
Dated: August 13, 1991.
D. Lowell Jensen
United States District Judge