This section contains the nature of the case and procedural background.

D, is the owner and operator of the M/V Sebring. P is the owner and operator of petroleum refinery and dock facilities located on the Mississippi River. The M/V Sebring was pushing a 3-barge tow toward one of P's dock facilities for the purpose of mooring at the dock for the night. A barge being towed struck and damaged P's dock. P sued D in Shelby County claiming that the damage to its dock was attributable to the negligence of D. D asserted an affirmative defense under 46 U.S.C. § 183, seeking to limit its liability to $353,515.58, the value of the M/V Sebring and its freight. P moved to strike the affirmative defense, claiming that the court lacked subject matter jurisdiction to consider it. The trial court agreed. The parties stipulated that P was entitled to recover damages in the amount of $690,000.00 exclusive of pre-judgment interest. The trial court entered judgment in accordance with this stipulation, plus interest, for a total judgment of $ 905,915.02. D appealed. The Court of Appeals held that 'state courts lack jurisdiction to determine if a vessel owner is entitled to limited liability if the shipowner's right to limit liability is challenged.' The Court remanded the case for a determination of whether P had a non-frivolous basis for challenging the defense on the merits. Both parties appealed.

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