Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MYRNA ADAME, et al., Lead Case No.: 24-cv-00297-AJB-VET Plaintiffs, Consolidated with: 12 Case No. 24-cv-00306-AJB-VET 13 v. Case No. 24-cv-00346-AJB-VET Case No. 24-cv-00350-AJB-VET 14 NATIONAL STEEL AND 15 SHIPBUILDING COMPANY, INC., ORDER GRANTING MOTION FOR et al., CERTIFICATION OF 16 Defendants. INTERLOCUTORY APPEAL AND 17 STAY (Doc. No. 44) 18 19 20 21 Before the Court is a motion for certification of interlocutory appeal filed by 22 Defendant National Steel and Shipbuilding Company (“NASSCO”). (Doc. No. 44.) 23 Plaintiffs filed an opposition (Doc. No. 51), to which NASSCO replied (Doc. No. 53). For 24 the reasons set forth herein, the Court GRANTS NASSCO’s motion and STAYS the 25 instant action. 26 I. Background 27 Plaintiffs’ complaint arises from injuries caused by toxic smoke that emanated from 28 a July 2020 fire (the “Incident”) on the United States Navy’s amphibious assault ship, the 1 USS Bonhomme Richard (“BHR”). (First Amended Complaint (“FAC”), Doc. No. 27, ¶¶ 2 1–4; see also id. ¶¶ 35–41 (detailing the extent of Plaintiffs’ alleged injuries).)1 The federal 3 government contracted with Defendants in 2018 to service the BHR. (Id. ¶ 20.) NASSCO 4 was charged with maintenance and repairs, which it was conducting while the BHR was 5 pier side at the Naval Base San Diego (the “Naval Base”) at the time of the Incident. (Id. 6 ¶¶ 20–23.) According to the FAC, NASSCO, acting as an independent contractor, 7 “maintained control and custody” of “portions” of the BHR while performing repairs but 8 “deviat[ed from] the requirements of both reasonable acceptable standards in the industry 9 and the terms of its contract in storing and maintaining its supplies on board,” which 10 “caused the fire and directly contributed to its uncontrolled spread across the ship.” (Id. ¶¶ 11 22–23, 25.) 12 “The US Navy concluded in its own investigation that the five-day fire and 13 destruction of the ship was preventable if ship building and maintenance personnel and 14 contractors avoided clutter, followed fire safety measures, enabled unrestricted access to 15 firefighting and damage control equipment, and enforced fire safety training.” (Id. ¶ 27.) 16 Plaintiffs allege Defendants’ negligent acts and omissions caused the fire and directly 17 contributed to its uncontrolled spread across the ship. (Id. ¶ 23.) After the Court denied 18 Plaintiffs’ motion to remand (Doc. No. 19), Defendants filed motions to dismiss (see Doc. 19 Nos. 20; 23). In response, Plaintiffs filed the FAC. As relevant here, NASSCO then moved 20 to dismiss the FAC, asserting inter alia that the Court lacked subject matter jurisdiction 21 because NASSCO was acting as an agent of the United States Navy and, thus, immune 22 from suit pursuant to the exclusivity provision of the Suits in Admiralty Act (“SIAA”). 23 (Doc. No. 31.) 24 On March 30, 2026, the Court denied in part NASSCO’s motion to dismiss, holding 25 26 1 This case results from the consolidation of four actions filed against Defendants: (1) the instant lead case Adame et al. v. Nat’l Steel and Shipbuilding Co. et al., 23-cv-00297-AJB-VET; (2) Garland et 27 al. v. Nat’l Steel and Shipbuilding Co. et al., 24-cv-00306-AJB-VET; (3) Adame et al. v. Nat’l Steel and Shipbuilding Co. et al., 24-cv-00346-AJB-VET; and (4) Garland et al. v. Barrera et al., 24-cv-00350- 28 1 inter alia that (1) Defendants lodged a factual attack on jurisdiction, (2) the party invoking 2 protection of the SIAA’s exclusivity clause bears the burden of proving it applies, (3) a 3 genuine and extensive factual dispute existed as to the issue of agency, (4) resolution of 4 the factual issues necessary to determine agency are the same factual issues that will likely 5 be proffered to demonstrate breach or lack of breach, and (5) it would be inappropriate for 6 the Court on the limited record before it to resolve those factual issues for the purpose of 7 resolving whether the SIAA’s exclusivity provision applies. (Doc. No. 43, “the Order”.) 8 After the deadline for Plaintiffs’ filing of an amended complaint expired (see id. at 9 23), NASSCO filed the instant motion (Doc. No. 44). NASSCO asserts that the Order raises 10 the following questions appropriate for interlocutory appeal: 11 1. “[W]hen [does] a government contractor qualif[y] as a SIAA agent under the 12 framework set by Dearborn v. Mar Ship Operations, Inc., 113 F.3d 995 (9th Cir. 1997)[;]” 13 2. “[W]ho bears the burden of proof for SIAA agency[;]” 14 3. “[W]hether a non-charterer contractor is a SIAA agent where the Navy sets 15 the contractor’s overall mission[;]” and 16 4. “[W]hether the Navy’s right to control NASSCO’s day-to-day work 17 establishes NASSCO’s SIAA agency now and is not intertwined with the merits.” (Id.) 18 II. Legal Standard 19 A district court may certify an otherwise non-appealable order for review by an 20 appellate court when three conditions are met: (1) the “order involves a controlling question 21 of law”, (2) “there is substantial ground for difference of opinion,” and (3) “an immediate 22 appeal from the order may materially advance the ultimate termination of the litigation[.]” 23 28 U.S.C. § 1292(b); see also Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010) 24 (“Certification under § 1292(b) requires the district court to expressly find in writing that 25 all three § 1292(b) requirements are met.”). “Section 1292(b) is a departure from the normal 26 rule that only final judgments are appealable, and therefore must be construed narrowly.” 27 James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1068 n.6 (9th Cir. 2002); see also United 28 States v. Woodbury, 263 F.2d 784, 788 (9th Cir. 1959) (“[Section] 1292(b) is to be applied 1 sparingly and only in exceptional cases[.]”). “[T]he party pursuing the interlocutory appeal 2 bears the burden of so demonstrating.” Couch, 611 F.3d at 633. 3 III. Discussion 4 NASSCO argues that all the SIAA agency questions identified are “substantial[,] 5 leave ample room for differences of opinion among fair-minded jurists[,]” and are 6 “potentially dispositive,” such that resolution of the appeal “could eliminate the need for 7 protracted, complicated, and highly resource-intensive litigation.” (Doc. No. 44-1 at 3.) In 8 opposition, Plaintiffs argue NASSCO fails to meet the high burden for certification of 9 interlocutory appeal because the Order presents factual—not legal—questions, the law is 10 settled or, if not, a matter of first impression is not sufficient to demonstrate a reasonable 11 difference of opinion, and resolution of the appeal will prolong litigation, prejudice 12 Plaintiffs, and not materially advance litigation. (Doc. No. 51.) 13 A. Controlling Questions of Law 14 “A controlling question of law must be one of law—not fact—and its resolution must 15 ‘materially affect the outcome of litigation in the district court.’” ICTSI Oregon, Inc. v. 16 Int’l Longshore & Warehouse Union, 22 F.4th 1125, 1130 (9th Cir. 2022) (quoting In re 17 Cement Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1026 (9th Cir. 1981)). 18 NASSCO argues that the questions raised are all legal in nature and could be 19 potentially dispositive. Specifically, NASSCO asserts that a Ninth Circuit ruling on who 20 carries the burden which legal standard applies to determining SIAA agency of a non- 21 charter government contractor and who carries the burden could terminate the litigation. 22 (Id. at 5, 8.) If the Ninth Circuit were to find Plaintiffs carry the burden of demonstrating 23 the SIAA exclusivity provision does not apply, then immunity would be granted on the 24 record because Plaintiffs failed to proffer any evidence on this issue. (Id. at 5.) If the Ninth 25 Circuit were to hold that a “right to control” standard applied to determining SIAA agency, 26 then “there would be no factual dispute to resolve or entwinement with the merits” (id. at 27 8) because “there is no serious dispute that the Navy had the right to control NASSCO’s 28 activities” (Doc. No. 53 at 6). (See also id. at 5 (“[I]t is the governing legal standard that 1 determines which facts matter.”).) 2 In opposition, Plaintiffs argue that the questions NASSCO raises are not “‘pure’ 3 legal questions” because they are “deeply . . . embedded in disputed facts,” “cannot be 4 answered without resolving those underlying factual disputes,” and “cannot be resolved on 5 the current record.” (Doc. No. 51 at 10–13.) 6 The Court agrees to an extent with Plaintiffs’ assertions that, as framed, some of the 7 questions NASSCO raises are factually mired. (See, e.g., Doc. No. 51 at 9.) In particular, 8 NASSCO’s question of “whether the Navy’s right to control NASSCO’s day-to-day work 9 establishes NASSCO’s SIAA agency now and is not intertwined with the merits,” appears 10 based on assumed facts that Plaintiffs dispute and would likely require factual analysis to 11 resolve. However, removing the trappings and argumentation of NASSCO’s framing, the 12 Court finds that who bears the burden with regard to the SIAA’s exclusivity clause and 13 what is the appropriate standard to apply for determining SIAA agency of a non-charterer 14 government contractor (i.e., does the Dearborn standard apply to a non-charterer 15 government contractor) are purely legal questions that would “materially affect the 16 outcome” of this litigation. Accordingly, the Court finds that NASSCO has demonstrated 17 that the Order meets the first requirement of § 1292(b).2 18 B. Substantial Ground for Difference of Opinion 19 “To determine if a ‘substantial ground for difference of opinion’ exists under 20 § 1292(b), courts must examine to what extent the controlling law is unclear.” Couch, 611 21 F.3d at 633. “The ‘substantial grounds’ prong is satisfied when ‘novel legal issues are 22 presented, on which fair-minded jurists might reach contradictory conclusions.’” ICTSI 23 Oregon, Inc., 22 F.4th at 1130 (quoting Reese v. BP Expl. (Alaska) Inc., 643 F.3d 681, 688 24 (9th Cir. 2011)). “[T]he district court need not ‘await development of contradictory 25 26 2 Once certified for interlocutory appeal, the Ninth Circuit has “jurisdiction over any question within 27 the four corners of the certified order—not just the identified controlling question.” ICTSI Oregon, Inc., 22 F.4th at 1132. As such, a finding that only some of the questions presented are controlling questions of 28 1 precedent’ before concluding that the question presents a ‘substantial ground for difference 2 of opinion.’” Id. at 1130–31 (quoting Reese, 643 F.3d at 688). However, that “a party[] 3 strong[ly] disagree[s] with the Court’s ruling” or “[t]hat settled law might be applied 4 differently does not establish a substantial ground for difference of opinion.” Couch, 611 5 F.3d at 633. 6 As noted by Plaintiffs, “NASSCO points to no circuit split, no conflicting authority 7 from several courts, and no case reaching a contrary conclusion on comparable facts” to 8 demonstrate substantial ground for difference of opinion. (Doc. No. 51 at 8–9.) Rather, 9 NASSCO relies on the Court’s identification that the burden issue appears “unaddressed” 10 and that the circuit-level case law on these issues has predominantly arisen in the context 11 of charter contracts,” which the Court distinguished in the Order. (Doc. No. 44-1 at 4–5, 12 6.) Plaintiffs argue that this Court “be[ing] among the first to address SIAA agency for a 13 non-charterer repair contractor” or “the precise burden question . . . does not establish 14 substantial ground for difference of opinion where existing authority points clearly in one 15 direction.” (Doc. No. 51 at 8, 11 (relying on Couch v. Telescope Inc., 611 F.3d 629, 633 16 (9th Cir. 2010)).) 17 There is a dearth of authority on both the burden issue and the non-charterer 18 government contractor issue. Although standing alone, the absence of authority on these 19 issues is insufficient to fulfill this requirement,” see Couch, 611 F.3d at 634, these novel 20 issues arose in an unusual posture where the party asserting that federal question subject 21 matter jurisdiction exists is also the party asserting that a provision grants them sovereign 22 immunity. The Court agrees with Plaintiffs that the existing authority on the discretionary 23 function exception of the Federal Tort Claims Act—both placing the burden of proof on 24 the United States as the benefiting party and transferring the exception from the FTCA to 25 the SIAA—points toward the Court’s reasoned conclusion regarding the burden of 26 demonstrating the SIAA’s exclusivity provision applies. However, the non-charterer 27 government contractor issue does not have a similar weight of authority. Rather, the 28 Court’s reading of Dearborn to apply a more expansive rule to charterers than would be 1 applicable to non-charterer government contractors is an issue on which fair-minded jurists 2 may reach contrary conclusions. As such, the Court finds that the Order meets the second 3 requirement of § 1292(b). 4 C. Materially Advance Ultimate Termination of Litigation 5 Finally, with regard to the “materially advance” prong, if “‘resolution of the question 6 may appreciably shorten the time, effort, or expense of conducting the district court 7 proceedings,’ interlocutory review materially advances the litigation.” Sterling v. Feek, 150 8 F.4th 1235, 1247 (9th Cir. 2025) (quoting ICTSI Oregon, Inc., 22 F.4th at 1131). “[N]either 9 § 1292(b)’s literal text nor controlling precedent requires that the interlocutory appeal have 10 a final, dispositive effect on the litigation[.]” Reese, 643 F.3d at 688. 11 NASSCO argues that resolution of the controlling questions of law would potentially 12 “resolve Plaintiffs’ claims in NASSCO’s favor,” or “greatly narrow the scope of relevant 13 discovery.” (Doc. Nos. 44-1 at 8–9; 53 at 8.) NASSCO details its expected “voluminous,” 14 “extensive discovery,” in light of the number of Plaintiffs, the location of the incident, the 15 duration of its contract with the Navy, and the “technical nature of the claims.” (Doc. No. 16 44-1 at 8.) However, “[i]f, for example, right to control is the relevant standard, then that 17 would greatly narrow the scope of relevant discovery because evidence about a supposed 18 lack of actual control would not be relevant to the agency inquiry.” (Doc. No. 53 at 8.) 19 Additionally, “if NASSCO is a SIAA agent, Plaintiffs’ claims against NASSCO will be 20 dismissed and NASSCO will have no need to seek contribution.” (Id. at 2, 8–9 (“If the 21 SIAA bars Plaintiffs’ suit against NASSCO—as it should—Plaintiffs’ remedy lies against 22 the United States under the SIAA, and the contribution claim falls away.”).) 23 In opposition, Plaintiffs assert that determination of these questions will not resolve 24 the action but rather result in “remand for further proceedings, which is not the kind of 25 clean resolution § 1292(b) is designed to facilitate.” (Doc. No. 51 at 14.) Plaintiffs point 26 specifically to determinations on the contract, which Plaintiffs assert the Court found 27 “unresolvable on the current record,” and to NASSCO’s contribution claims. (Id.) With 28 regard to the latter, Plaintiffs argue that “[i]f NASSCO prevails on the SIAA agency 1 question, Plaintiffs’ claims against NASSCO would be barred, but Plaintiffs would redirect 2 their claims against the United States under the SIAA and the same facts would be litigated 3 in a different configuration.” (Id. at 15.) Because the controlling questions of law “does not 4 resolve all the questions raise and would merely needlessly delay progress on the remaining 5 claims,” the resolution of an interlocutory appeal would not materially advance the 6 litigation. (Id.) Additionally, Plaintiffs argue that “the prospect of expensive discovery” 7 cannot be “sufficient to warrant interlocutory appeal,” otherwise “§ 1292(b) would 8 swallow the final judgment rule.” (Id. at 17.) 9 Determination of who bears the burden with regard to the SIAA’s exclusivity clause 10 and what is the appropriate standard to apply for determining SIAA agency of a non- 11 charterer government contractor may result in resolution of NASSCO’s agency status in 12 its favor without further need for factual development. If so, the parties agree that claims 13 against NASSCO would be barred by the SIAA exclusivity provision and thus would be 14 subject to dismissal. This alone would materially advance the instant litigation. Reese, 643 15 F.3d at 688 (finding this requirement met where the Ninth Circuit’s “reversal ‘may’ take 16 BPXA, as a defendant, and Reese’s control claims against all remaining defendants out of 17 the case”). That Plaintiffs assert they would “redirect their claims” and “the same facts 18 would be litigated in a different configuration” does not undermine this finding considering 19 that, if such repleading were found possible, it would still advance litigation by bringing 20 the claims against the proper defendant at a relatively early stage.3 As such, the Court finds 21 that the Order meets the third requirement of § 1292(b). 22 D. Stay 23 An “application for an [interlocutory] appeal . . . shall not stay proceedings in the 24 district court unless the district judge or the Court of Appeals or a judge thereof shall so 25 26 3 Plaintiffs’ argument regarding “§ 1292(b) would swallow the final judgment rule” is unavailing because it ignores that all three §1292(b) requirements must be met for an interlocutory appeal to certified, 27 not just the materially advances prong. Moreover, the standard for the materially advances prong requires contemplation of the cost of litigation, see, e.g.¸ Sterling, 150 F.4th at 1247, because the purpose of 28 1 order.” 28 U.S.C. §1292(b). “The District Court has broad discretion to stay proceedings 2 as an incident to its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 706 3 (1997). 4 NASSCO seeks the Court to stay the proceedings pending resolution of any 5 interlocutory appeal because (1) “Section 1292(b) expressly permits such stays, and 6 [(2)] the lion’s share of the efficiency that certification offers would be lost without one.” 7 (Doc. No. 53 at 10; see also Doc. No. 44-1 at 3, 9.) Specifically, NASSCO argues that, 8 “[i]f discovery proceeds under the current legal framework and the Ninth Circuit 9 announces a different one, the parties will incur substantial expense developing evidence 10 that may be irrelevant under the corrected standard. A stay protects both sides—and the 11 Court—from that risk.” (Doc. No. 53 at 10.) 12 Plaintiffs argue that they would be prejudiced by a stay because time will degrade 13 evidence, the stay would prevent Plaintiffs from seeking the evidence the Court identified 14 as necessary, and NASSCO has curated a one-sided evidentiary record that itself is 15 inherently prejudicial. (Doc. No. 51 at 5, 16–17.) 16 First, the Court appreciates Plaintiffs’ concerns about the degradation of evidence 17 over time, especially considering that there is not a strict timeline upon which Plaintiffs 18 can rely for appellate resolution. However, as identified by NASSCO, the bounds of 19 relevance in discovery will be determined by what the legal framework is. To permit 20 discovery to proceed, when NASSCO challenges the purely legal issues that would 21 materially impact the trajectory of litigation, would risk significant unnecessary expense 22 and undermine any potential efficiency gained from an interlocutory appeal. Despite 23 Plaintiffs’ arguments to the contrary, freezing the record with only the evidence this Court 24 had before it when resolving the Order based on each party’s strategic litigation decisions 25 up to that point is not in and of itself unfair. If the Ninth Circuit declines to accept the 26 appeal or resolves the issues in Plaintiffs’ favor, then Plaintiffs will have the opportunity 27 to continue to develop their evidentiary record as litigation proceeds. 28 Finally, Plaintiffs argue that “[t]he agency question will be fully available for review | || after final judgment, on a complete factual record. It is not at risk of being lost.” (Doc. No. 2 at 18.) However, this is not wholly accurate. At the heart of the “agency question” is the 3 || issue of sovereign immunity. If the Ninth Circuit were to, after completion of this litigation, 4 ||determine that the burden and standard applied should have been different such that 5 || NASSCO is immune from suit, then its entitlement to that immunity would have been lost. 6 || See Taylor v. Cnty. of Pima, 913 F.3d 930, 934 (9th Cir. 2019) (“[A]n interlocutory appeal 7 necessary to vindicate a[n]... entity’s entitlement to immunity from suit, which would 8 lost if a case were permitted to go to trial.”); see also SolarCity Corp. v. Salt River 9 || Project Agric. Improvement & Power Dist., 859 F.3d 720, 725 (9th Cir. 2017) (collecting 10 || cases of “interlocutory denials of certain particularly important immunities from suit’). As 11 ||such, the prejudice Plaintiffs may face by delaying discovery and potential recovery is 12 || overshadowed by NASSCO’s potential prejudice of loss of a right to immunity from suit. 13 Having considered and weighed the parties’ respective potential prejudice and 14 || hardships with regard to a stay, the Court finds a stay proper in light of the circumstances. 15 Conclusion 16 For the reasons set forth above, the Court GRANTS NASSCO’s motion for 17 || certification of an interlocutory appeal. The Court hereby CERTIFIES that its March 30, 18 2026 Order on NASSCO’s motion to dismiss (Doc. No. 43) involves a controlling question 19 ||of law as to which there is substantial ground for difference of opinion and that an 20 |/immediate appeal from which may materially advance the ultimate termination of the 21 || litigation. See 28 U.S.C. § 1292(b). NASSCO has ten days from the electronic docketing 22 this order to petition the Ninth Circuit for review. See id. If NASSCO timely files a 23 || petition with the Ninth Circuit, the case will be STAYED pending resolution of that 24 || petition. 25 IT IS SO ORDERED. 26 || Dated: July 6, 2026 © 27 Hon, Anthony J.Battaglia 28 United States District Judge 10