April 2022 Longshore/Maritime Update (No. 275)
Notes from your Updater:
Following in the footsteps of Fane Lozman, who twice obtained Supreme Court review of his cases, Pamela and Stuart Kessler sued the City of Key West and many of its officials in federal court in Florida after the City terminated the Kesslers’ lease to a boat slip at a city-operated marina, asserting that the City violated their rights to procedural and substantive due process, denied them equal protection, and deprived them of property without just compensation. Agreeing with the recommendations of Magistrate Judge Otazo-Reyes, Judge Martinez dismissed the case, and the Kesslers appealed to the Eleventh Circuit. The Eleventh Circuit affirmed the dismissal of the Kesslers’ procedural due process, substantive due process, and equal protection claims, but the appellate court found sufficient credence to the claim that more than mere notice was required to terminate a lease at the marina and that the Kesslers’ property interest was grounded in more than just the lease agreement so that their takings claim was plausible and should not have been dismissed.
On February 28, 2022, Judge Morgan denied a challenge by charter boat captains and owners who take customers fishing in the Gulf of Mexico to the federal rule requiring submission of economic values (charter fee, fuel price and estimated amount of fuel used, number of paying passengers, and number of crew), holding the requirement was not arbitrary and capricious, and denied the challenge to the tracking requirement to provide GPS position data, concluding that the rule did not violate the Fourth Amendment protection against unreasonable searches and seizures. See Mexican Gulf Fishing Co. v. United States Department of Commerce, No. 20-2312, 2022 U.S. Dist. LEXIS 34176 (E.D. La. Feb. 28, 2022).
On March 11, 2022, Chief Administrative Law Judge Henley issued the following Administrative Notice about online e-filings and when the “last day” of a filing period ends:
The U.S. Department of Labor, Office of Administrative Law Judges also issued the following notice with respect to e-filing and e-service with the OALJ on March 11, 2022:
EFS to Resume E-service of ALJ-issued Documents Using Improved E-mail Notifications
In response to user feedback about the way the eFile and eServe system (EFS – efile.dol.gov) was serving ALJ-issued documents, OALJ has been serving ALJ-issued documents on EFS users using the OALJ e-mail system on an interim basis.
Effective Monday, March 14, 2022, EFS will resume serving ALJ-issued documents on EFS users using a much-improved process. OALJ will continue to e-serve those parties who have not registered in EFS.
The specific improvements include:
- For all e-mail notifications to EFS users, the subject line will now include the case name, case number, and date.
- For notices, orders, decisions, and other documents issued by the presiding ALJ, the e-mail notice to parties registered in EFS will include the issued document as a PDF attachment, and a link to the document on the EFS case dashboard. The e-mail body text will include additional identifying details about the case, such as names of parties, assigned district office, assigned ALJ, and a list of who was e-served. Similar information will be provided in e-mail notifications about notices of docketing, and status of user access to the case.
For filings by parties, the e-mail will include additional essential details such as filing status, filing party’s name, field date, and a list of who was e-served. These enhancements will include notices about receipt of a filing by EFS, when a filing is accepted or not accepted.
On March 18, 2022, Judge Barker of the Southern District of Indiana held that workers on river cruise ships who brought actions under the Fair Labor Standards Act were seamen and could not be compelled to arbitrate their claims under the Federal Arbitration Act, but the FAA exemption for seamen did not preclude a determination whether their claims were subject to arbitration under state law. See Rodgers-Rouzier v. American Queen Steamboat Operating Co., No. 4:20-cv-4, 2022 U.S. Dist. LEXIS 48418 (S.D. Ind. Mar. 18, 2022).
On March 21, 2022, Judge Bloom of the Southern District of Florida held that four cruise lines violated the Helms-Burton Act (unlawfully trafficking in property confiscated by the Cuban Government) when they used the Havana Cruise Port Terminal. Havana Docks Corp. v. Carnival Corp., Nos. 19-cv-21724, 19-cv-23588, 19-23590, 19-cv-23591 (S.D. Fla.).
On March 22, 2022, a jury returned a verdict in the trial of the claim brought by a 70-year old passenger on the EXPLORER OF THE SEAS who injured his back when an old sofa on which he was sitting collapsed while the passenger was waiting to disembark the vessel. The jury in Judge Graham’s court apportioned fault 85% to the cruise line and 15% to the passenger and awarded total damages of $2.2 million. Elardi v. Royal Caribbean Cruises, Ltd., No. 19-25035 (S.D. Fla.).
In our April 2021 Update we advised that the Supreme Court granted the petition for a writ of certiorari in Servotronics, Inc. v. Rolls-Royce PLC, No. 20-794, on the issue “whether the discretion granted to district courts in 28 U.S.C. § 1782(a) to render assistance in gathering evidence for use in ‘a foreign or international tribunal’ encompasses private commercial arbitral tribunals.” The issue was fully briefed and oral argument was scheduled for October 5, 2021. In our October 2021 Update we noted that, shortly before oral argument was to be presented, counsel for Servotronics advised the Court that Servotronics anticipated filing a dismissal motion, and the case was removed from the Court’s argument calendar. It did not take long before the Supreme Court agreed to take up the issue again. On December 10, 2021, the Court granted the petitions for a writ of certiorari in ZF Automotive US, Inc. v. Luxshare, Ltd and Alixpartners v. Fund for Protection of Investors’ Rights, Nos. 21-401, 21-518. See January 2022 Update. The Justices heard oral argument on the petitions on March 23, 2022.
On March 23, 2022, Judge Gayles in the federal district court for the Southern District of Florida declined to dismiss for lack of standing the claims of United States nationals against freight transporting defendants who allegedly profited from the use of the container terminal in Cuba that was owned by the plaintiffs before the Cuban revolution. See De Fernandez v. Crowley Holdings, Inc., No. 21-cv-20443, 2022 U.S. Dist. LEXIS 52401 (S.D. Fla.).
On March 24, 2022, a panel of the Fifth Circuit held that the federal tax on crude oil that is “used in or exported from the United States (used to fund the Oil Spill Liability Trust Fund for the Oil Pollution Act of 1990) violated the Export Clause of the United States Constitution (“No Tax or Duty shall be laid on Articles exported from any State.”). Judge Ho’s opinion discusses the history of the clause and the enactment of the Constitution at length, and there is a dissent from Judge Graves. Trafigura Trading LLC v. United States, No. 21-20127 (5th Cir.).
On March 25, 2022, a federal jury in Houston in a case tried before Judge Hughes issued a verdict in excess of $22 million in favor of the Port of Houston for leaving leased property of the Port in poor condition. See Port of Houston Authority of Harris County Texas v. Louis Dreyfus Company Houston Export Elevator LLC, No. 4:19-cv-746 (S.D. Tex.).
On March 25, 2022, the Eleventh Circuit held that the Department of Labor’s definition of a “vessel owned by a citizen of the United States” for the Seaman’s Protection Act was not retroactive. Gummala v. U.S. Department of Labor, No. 20-12839, 2022 U.S. App. LEXIS 7845 (11th Cir.).
On the LHWCA Front . . .
From the federal appellate courts:
The litigation over Christopher Francis’s LHWCA claim against Jones Stevedoring Co. began when he injured his right knee while working as a casual longshore worker in Portland, Oregon on February 28, 2011. He underwent several knee surgeries and allegedly injured both shoulders in September 2012 while performing wall squats prescribed by his physical therapist for treatment of his knee. In his initial decision in 2017, Administrative Law Judge Clark found that Francis had not established that his shoulder injuries were related to his knee injury and treatment. Judge Clark found that Francis’s average weekly wage was $94.84 without considering Francis’s belatedly-filed federal and state tax returns containing additional earnings from yard work and car detailing (for which Francis paid the tax and penalties). The Benefits Review Board vacated Judge Clark’s calculation of the average weekly wage for failing to consider the tax returns but affirmed Judge Clark’s decision in all other respects. On remand, Judge Clark determined that the information in the tax returns was not credible for the yardwork and car detailing and declined to change his ruling on the average weekly wage. The Benefits Review Board held that it was within Judge Clark’s discretion to decide whether the underlying basis for the income declared on the tax filings was accurate and credible and affirmed the decision. Francis appealed to the Ninth Circuit, which agreed that that Judge Clark’s decision on the average weekly wage was legally correct. Having determined that the testimony on the additional income was not credible, Judge Clark permissibly discredited the tax documents that provided the same evidence. The Ninth Circuit also affirmed Judge Clark’s decision that Francis did not meet his burden to show that his shoulder injuries were work-related, holding that Judge Clark reasonably discounted Francis’s testimony and permissibly weighed the medical evidence in finding that the injuries were not a natural or unavoidable result of, or related to, Francis’ knee injury and treatment.
Ricky Guidry was working a temporary assignment with Tampa Pipe & Welding, moving scaffolding at a port terminal in Tampa, when he felt a pain in his back and dropped the scaffolding onto his head, neck, and back. Guidry suffered from pre-existing medical conditions from a 2010 vehicular accident and a 2013 work-related electrocution. Guidry treated with the Tampa VA Hospital when Tampa Pipe declined to authorized medical treatment. Guidry was diagnosed with a chronic disc problem and discharged with instructions to return to work but not to lift over 20 pounds or operate heavy machinery. Tampa Pipe had Guidry examined by an occupational medicine specialist, who believed that the scaffolding incident aggravated his prior back injury. Guidry was later evaluated by orthopedic surgeons, one of whom concluded that the pain was likely a continuation of ongoing symptoms unrelated to the scaffolding incident. A radiologist reviewed MRIs and concluded that there was never any objective evidence of injury in the spine related to the scaffolding incident. The claim for LHWCA benefits was tried to Administrative Law Judge Rosenow, who held that Guidry presented a prima facie case of a work-related injury but that he failed to prove by a preponderance of the evidence that the incident caused or aggravated his problems. Guidry appealed the denial of his claim to the Benefits Review Board, which affirmed ALJ Rosenow’s decision, and Guidry then appealed to the Fifth Circuit. The panel of the Fifth Circuit began by noting that a longshore claimant may receive LHWCA benefits when a workplace incident aggravates a pre-existing condition, but that there is no aggravation when the disability results only from the natural progression of the pre-existing condition. The appellate court then evaluated the three steps in the determination, agreeing that Guidry had established a prima facie case by showing an accident that could have caused or aggravated the harm. This created the presumption, under Section 20(a) of the LHWCA, that the condition was work related. Tampa Bay then had the burden to rebut the presumption by presenting substantial evidence that the workplace did not cause or aggravate the injury. If rebutted, the burden would then shift back to the claimant to show by a preponderance of the evidence that the incident caused or aggravated his injury. Guidry challenged ALJ Rosenow’s conclusion that Tampa Pipe rebutted the presumption based on the radiologist’s testimony analyzing pre- and post-incident MRIs and X-rays, arguing that the radiologist’s opinion was insufficient because it was based on select scans. The Fifth Circuit disagreed, noting that substantial evidence is a “minimal requirement” that is less demanding than a preponderance of the evidence. The court explained that the employer need only provide “factual doubt” that the symptoms are work related and need not rule out that the injury was work-related. The opinion of the radiologist was sufficient to generate sufficient “factual doubt” to satisfy the employer’s “minimal burden.” Guidry also challenged ALJ Rosenow’s conclusion that Guidry failed to meet his burden to show that the scaffolding incident caused or aggravated his injury, arguing that ALJ Rosenow incorrectly found him not to be credible and improperly weighed the evidence by conferring lesser weight to treating physicians. The appellate court rejected the arguments as they asked the court to reweigh the facts and draw different inferences than ALJ Rosenow, which was not the role of an appellate court. Although there was evidence pointing both ways, the appellate court affirmed Judge Rosenow’s decision to give greater weight to evidence that the scaffolding incident did not aggravate Guidry’s pre-existing condition.
From the federal district courts:
George N. Gindo brought a claim for LHWCA benefits under the Defense Base Act for psychiatric injuries (post-traumatic stress disorder and major depressive disorder) he claimed to have suffered during his employment with AECOM as an advisor to the United States Army in Iraq. AECOM conceded that Gindo suffered work-related psychiatric harm and that he had been temporarily totally disabled but disputed benefits for failure to provide timely notice and disagreement over Gindo’s average weekly wage. The claim was submitted to Administrative Law Judge Berlin based on stipulations of fact and exhibits, and Judge Berlin denied the claim as premature, implicitly rejecting the stipulation that Gindo was temporarily totally disabled and finding that he was statutorily limited to permanent partial disability because he was a voluntary retiree with an occupational disease. The Benefits Review Board affirmed, and Gindo appealed to the federal district court in Houston. Gindo argued that ALJ Berlin erred in reaching a conclusion that was contradicted by the parties’ stipulation that he was temporarily totally disabled without giving notice to the parties. Gindo argued that the retirement issue was raised for the first time in the employer’s closing brief and that Gindo had no opportunity to respond to it. Rejecting the employer’s argument that there was no stipulation that Gindo was temporarily totally disabled, Magistrate Judge Palermo held that ALJ Berlin committed an error of law by implicitly rejecting the stipulation without giving notice and an opportunity to submit further evidence. Therefore, she recommended that the case be remanded to the ALJ to conduct new fact findings. On March 23, 2022, Judge Ellison adopted the recommendations in full and ordered the case remanded to the ALJ.
This is the first of two cases in this month’s Update involving the duty owed by the time charterer to an injured longshore worker. Michael Grogan was employed by Labor Finders as a longshore worker on the EMS TRADER in Pasadena, Texas. He slipped on an unknown substance and fell to the lower deck, claiming that there was no safety rope, guard railing, or other safety device to prevent his fall. He brought this suit in federal court in Houston against the owner and time charterer of the vessel under Section 5(b) of the LHWCA, and the charterer moved for summary judgment, arguing that it owed no duty to Grogan. Judge Hughes noted that under a time charter the owner keeps control of the ship, including hiring of the crew and maintenance of the vessel, and that clear and express language is needed in the charter party to shift responsibility for negligence and unseaworthiness to the charterer. Although Grogan cited cases under which time charterers could be liable for independent negligent acts, those cases involved actions taken directly related to cargo activities in which the charterer had control. In this case, Grogan did not allege that he was injured by a condition related to the cargo operation but because of a condition of the vessel (the substance on the deck and lack of a safety device to stop his fall). As Grogan did not allege that the charterer had control over his work or the conditions causing his injury, Judge Hughes granted judgment to the charterer.
Melvin Dortch was killed while employed by Tri-State Maritime Services as a longshore worker on the AAL GENOA in the Port of Panama City, Florida. His mother brought this suit against the owner of the vessel on behalf of the decedent’s children, two of whom were adults at the time of the accident and one of whom reached the age of majority during the pendency of the suit. The parties reached an agreement to settle the suit for $750,000, and moved for the court to approve the settlement with the division of proceeds in accordance with the Alabama statute of distributions (as all of the claimants are domiciled in Alabama and the decedent was domiciled in Alabama at the time of his death). Concluding that the equal distribution under Alabama law appeared reasonable (the decedent had a close relationship with his two adult children and the youngest child was near the age of majority at the time of the accident), Magistrate Judge Toomey recommended that the settlement be approved and distributed equally to the children as set forth in the Alabama statute.
Longshore worker Robert Holmes claimed that he was exposed to caustic fumes resulting from the improper storage of cow hides in the hold of the M/V MSC KINGSTON at the Wando Welch Container Terminal in Charleston Harbor, South Carolina. He brought this suit against Maersk, the time charterer of the vessel, in state court in Charleston County, based on negligence and gross negligence under Section 5(b) of the LHWCA, and Maersk removed the suit to the federal court in South Carolina based on diversity. Maersk filed a motion for summary judgment, arguing that, as a time charter, it did not owe any duty to Holmes as a longshore worker. Holmes did not argue in response that Maersk owed him a duty under the general maritime law. Instead, Holmes contended that Maersk had contractually assumed liability for Holmes’s injuries under the charter party, resulting in a duty to Holmes as a third-party beneficiary of the charter party. Holmes cited the provision by which Maersk contractually assumed liability for claims arising in connection with the goods carried on the vessel and supported the argument with South Carolina law that when a contract is made for the benefit of a third person, that person may enforce the contract. Maersk responded with maritime authority that charters do not create a contractual duty to longshore workers as third-party beneficiaries, and Judge Norton agreed that Holmes did not qualify as a third-party beneficiary under federal law. Although the charterer was responsible for securing cargo, the charter did not provide for the safety of longshore workers during cargo operations. Finding no duty to Holmes, Judge Norton dismissed the claims against Maersk. Maersk also moved for summary judgment on causation based on the testimony of Holmes’s treating physician that Holmes’s exposure to the cowhides caused his reactive airway dysfunction syndrome because the doctor’s opinion was not based on a reasonable degree of medical certainty and the doctor was not disclosed as an expert witness. Excluding the opinion based on the failure to timely disclose the expert, Judge Norton also granted summary judgment based on the absence of evidence of causation.
Frederick Louis Gethers died from mesothelioma that his beneficiaries alleged was the result of exposure to asbestos while Gethers was employed as a longshore worker for Ports America Gulfport. His beneficiaries brought suit in Louisiana state court against Ports America Gulfport, and the case was set for trial on March 21, 2022. Ports America Gulfport moved for summary judgment on the ground that the LHWCA was the exclusive remedy of Gethers’ beneficiaries against Ports America Gulfport, but Judge Johnson denied their motion. Ports America Gulfport then brought this suit against Judge Johnson in federal court in Louisiana seeking an injunction and declaratory relief that the state tort remedies sought by the beneficiaries were preempted and supplanted by the LHWCA. In her first opinion, Judge Vance declined to issue a preliminary injunction for several reasons. She did not find a likelihood of success on the merits as the relief was likely precluded by the Anti-Injunction Act and was not expressly authorized by Congress (under TEIA v. Jackson’s holding that even an unmistakably clear claim of federal preemption does not authorize an injunction of state court proceedings). Additionally, Judge Vance reasoned that enjoining enforcement of an adverse judgment against Ports America Gulfport would fall within the abstention doctrine of Younger v. Harris and that Ports America Gulfport had not demonstrated a substantial threat of irreparable harm if an injunction were not issued (noting that Ports America Gulfport could appeal an adverse judgment and request certiorari from the Supreme Court). Finally, Judge Vance found a public interest in the correct application of the law, but she held that this interest could be protected by continuing to litigate the legal point in state court. In the second opinion, Judge Vance addressed Ports America Gulfport’s request for a prospective declaratory judgment that Gethers’ beneficiaries’ state tort claims are preempted by the LHWCA. Concluding that the declaratory judgment claim was also precluded by the Fifth Circuit’s decision in TEIA v. Jackson, Judge Vance dismissed the claim for prospective declaratory relief.
Wilfredo Vargo was injured while working as a lasher on the MV APL PEARL while it was berthed at Maher Terminals terminal in Elizabeth, New Jersey. Maher Terminals contracted with the owner and operator of the vessel to provide stevedoring and terminal services, but Maher subcontracted the lashing work to American Maritime Services, which employed Vargas. Vargas was directed by a mate on the vessel to lash the most forward, outboard container, which was located on top of a pedestal. Vargas asked how he was to reach the container, and the mate obtained a ladder. Vargas did not inspect the ladder or ask for assistance with the ladder. Instead, he leaned the ladder against a wall and began climbing it. The ladder slipped out from under him, causing Vargas to fall. Vargas brought suit against the owner and operator of the vessel under Section 5(b) of the LHWCA, arguing that the vessel interests were negligent for providing the ladder without supervision or assistance and without properly securing it. The vessel interests filed a third-party claim for indemnity and contribution against Maher pursuant to Rule 14(c), and Maher moved for summary judgment. Judge Glasser first reviewed the contract to provide stevedoring and terminal services and held that it was a maritime contract. The contract contained a provision that the parties agreed to use reasonable efforts to give prompt notice to each other of claims for damage or injury, but that failure to give notice did not bar a claim for damages, indemnity, or contribution. Judge Glasser held that the provision did not provide a right of indemnification of the vessel interests and instead only provided that the failure to provide notice would not result in a waiver of the right to indemnification “should such a right exist.” The vessel interests sought contribution from Maher pursuant to Rule 14(c), but Rule 14(c) is only available in suits with a Rule 9(h) admiralty designation. Vargas brought this suit based on admiralty and diversity jurisdiction and included “an undefined in rem cause of action” against the vessel. However, Judge Glasser did not believe that Vargas intended to designate Rule 9(h) because no claims were designated as admiralty claims and he demanded a jury that was not available with a Rule 9(h) designation. Concluding that the complaint was not brought pursuant to Rule 9(h), Judge Glasser held that the vessel interests could not invoke Rule 14(c) against Maher.
Bosit Bommarito, III, was injured while working as a welder’s helper on the crane barge OC160, assisting in the movement of gangway segments. He brought this action as a seaman under the Jones Act and pursuant to Section 5(b) of the LHWCA, and his beneficiaries continued the action after he died from an overdose of pain medication. Bommarito’s employer, Belle Chasse Marine, moved for summary judgment on the seaman claims, arguing that his work as a welder’s helper was mostly land-based and his role on the crane barge did not involve traditional crew member duties. Judge Fallon believed that there were ambiguities and fact questions whether Bommarito satisfied the duration requirement of the test for seaman status, but he held that Belle Chasse had established that the work was land-based and not sea-based and failed the nature element of the seaman status test. When Bommarito’s work took him onto the vessel, Bommarito simply stepped aboard the vessel while it was secured to the dock. His work on the vessel was largely limited to discrete tasks, and he overwhelmingly did not sail with the vessel from location to location. As in the Fifth Circuit’s en banc Sanchez case, Bommarito’s work on the barge was almost always while it was moored at the dock, and, accordingly, he failed the nature element. With respect to the vessel negligence claim under Section 5(b) of the LHWCA, Belle Chasse argued that claim against it was in the capacity as employer and not as vessel owner. However, Judge Fallon found that there were different views of the nature of Bommarito’s work, which specific piece of equipment caused his injuries, and even which entity was the vessel owner and which entity was his employer. Considering it premature to determine whether the case involved liability in the capacity as owner or employer, Judge Fallon declined to grant summary judgment on the claim under Section 5(b) of the LHWCA.
Dana A. Webb, Sr. was injured when he fell on a steel walkway that was part of an off-loader barge at Kanawha’s terminal facility in Ceredo, West Virginia. Kanawha’s insurer paid LHWCA benefits, and Webb brought a dual capacity suit in federal court in West Virginia against Kanawha under Section 5(b) of the LHWCA for Kanawha’s negligence in the capacity as owner of the barge. Kanawha purchased the barge to serve as an offloading dock, and the barge was extensively modified with a hydraulic excavator anchored to it, a landside hopper and belt structure secured to it, a 4,000-gallon fuel tank mounted to it to provide fuel for the excavator, a walkway from the land, a break room building, a greasing station, and fixed lights fed by electrical cables from the land. The barge/dock had specialized moorings that allowed it to rise and lower with the tide, and it could be detached and moved with the assistance of a tug, but there was a dispute whether the detachment was relatively easy or arduous and expensive. The federal court in West Virginia had previously considered whether an off-loader barge owned by Kanawha was a vessel and had held that it was a vessel even though it had no living quarters, had no means of self-propulsion, was accessed by a steel-framed walkway, and was powered by onshore connections (reasoning that the barge was floating and could be removed without great difficulty for maintenance).Addressing Kanawha’s motion for summary judgment in which Kanawha contended that the barge/dock was not a vessel to permit a dual capacity suit, Judge Chambers noted that the facts related in the prior decision had not substantially changed, but he believed the Supreme Court’s decision in Lozman was an intervening change in the law that required reconsideration in conjunction with the development of additional facts. Under Lozman, Judge Chambers considered the physical attributes and behavior of the structure. Reasoning that the primary purpose of the barge was to serve as a dock and considering the extensive modifications to allow it to serve as a dock, Judge Chambers held that “no reasonable observer would consider the off-loader barge to be designed to a practical degree for carrying people or things over water.” As he held that the barge/dock was not a vessel, Judge Chambers dismissed Webb’s dual capacity suit.
Omni Air International is an airline that specializes in passenger charter flights. Its biggest contract is with the Department of Defense that includes both domestic and international flights. Cecilia Coon was employed as a flight attendant for Omni Air and was assigned to 83 flights during her employment, of which 44 were international flights for the DOD. During a “reserve day” (she was required to be available for work and within 2 hours of her base), Coon was directed to present herself at a facility in Arlington, Texas for a random drug test (required by the FAA for flight attendants). Another flight attendant drove her to/from the test, and Coon was injured in an auto accident during the return from the test. Coon filed a claim for Texas workers’ compensation benefits and was awarded compensation. She also filed a claim under the Defense Base Act, and she was awarded benefits by Administrative Law Judge Berlin. ALJ Berlin reasoned that Coon was not scheduled on a DOD flight at the time of her injury, but, given her work history, her next assignment “more likely than not would have been on a DOD international flight” and her testing was a step to allow her to continue her work on DBA-covered DOD international flights. ALJ Berlin thus found that Coon was engaged in employer-related travel, one of the purposes of which was to further her employer’s work under the DBA. A majority of the panel of the Benefits Review Board affirmed the decision, and Omni Air appealed to the federal court for the Southern District of Texas. Omni Air conceded that the work in furtherance of its contract with the DOD to transport personnel outside the United States was “public work” within the coverage of the DBA; however, Omni argued that Coon was not injured while actually performing public work. Judge Ellison agreed with Omni Air that Coon was in the course of her employment at the time of the accident but that she was not covered by the DBA because she was not engaged in employment under the contract with the DOD. He reasoned that Coon was not assigned to any flight at the time of her accident and it was a matter of speculation to assert that she would soon have been assigned to a DOD flight. Judge Ellison concluded that “Coon’s previous work assignments and likely future work assignments did not transform her drug testing compliance into public work.” ALJ Berlin also supported his finding of DBA coverage by holding that the contract between Omni Air and the DOD for both domestic and international flights was an “overseas public works contract” that required Omni Air to comply with FAA regulations on drug and alcohol testing. ALJ Berlin held that Omni Air failed to sever the connection with international flights for the drug testing that was required for both domestic and international flights. The majority of the BRB panel agreed, reasoning that Coon was engaged in employment under an overseas public works contract by traveling to/from a drug test mandated by the overseas public works contract. Judge Ellison rejected that the contract was an overseas work contract, reasoning that it applied to both international and domestic flights. Therefore, when “Coon submitted to FAA testing requirements, she was not, by so submitting, inherently engaged in DBA-covered public work.” Accordingly, Judge Ellison held that Coon’s injury was not covered by the DBA.
Brandon Dupre was employed by Shell Exploration as a mechanic on the Auger platform, a tension-leg platform on the outer Continental Shelf in the Gulf of Mexico off the Louisiana coast. Shell was conducting a quarterly test of the lifeboats on the platform, and a lifeboat containing Dupre was lowered into the ocean, disconnected, and operated by its crew. The lifeboat was then reconnected and hoisted back to the platform but fell to the ocean. Dupre was killed, and his widow brought this suit against Shell, under Section 5(b) of the LHWCA, and against Palfinger Marine, alleging it was responsible as the owner and manufacturer of the control release cables and release handle to the hooks for the lifeboat. Shell moved for summary judgment, arguing that the claim under Section 5(b) was only available for a maritime tort and that maritime law did not apply. Before addressing the issue of admiralty jurisdiction, Judge Summerhays concluded that Dupre’s death occurred on an OCSLA situs, that his employment furthered mineral development on the OCS, and that his death would not have occurred but for his employment on the platform. Therefore, the OCSLA provided jurisdiction over the accident. He then addressed whether admiralty law applied and held that, although the accident involved a lifeboat that fell to the ocean, the accident was inextricably linked to the operation of the platform. It was a test of the hook, cable, and davit system on the platform in which the platform equipment failed. Judge Summerhays disagreed with two district court decisions holding that maritime law applied to accidents involving lifeboats, reasoning that the lifeboats were not used in connection with traditional maritime activities. As he held there was no maritime jurisdiction over the claim against Shell, Judge Summerhays dismissed the Section 5(b) claim.
From the state courts:
Matthew Williams was injured while working in a lashing gang on the ZIM ROTTERDAM while it was berthed in Garden City, Georgia. He claimed that he was injured when a crane operator employed by the Georgia Ports Authority, Joshua Miller, was lifting the crane’s spreader bar from a container but lifted the spreader bar and attached containers, resulting in the injury to Williams. Williams brought this suit against both the Georgia Ports Authority and its employee Miller. Miller’s motion to dismiss based on sovereign immunity was granted, and Williams appealed. The court of appeals noted that the Ports Authority was entitled to immunity under the Eleventh Amendment, but that the Eleventh Amendment does not bar actions for damages against state officials in their individual capacities when the actions seek recovery from the officials’ personal funds. Writing for the appellate court, Judge Mercier looked to the complaint to determine whether Miller was sued in his official capacity or in his individual capacity. She did not find any allegation that Miller was an official of the Ports Authority who would serve as an appropriate Ports Authority representative in the suit, and she noted that if Williams had intended to recover only from the Ports Authority he would not have had to name both the Ports Authority and Miller. Accordingly, she concluded that Miller was sued in his individual capacity and was not entitled to Eleventh Amendment immunity.
And on the maritime front . . .
From the federal appellate courts:
Michelle Newbauer, a passenger on Carnival’s MAGIC, slipped and fell near the Red Frog Bar on the Lido Deck of the vessel. She brought this suit against the cruise line in federal court in Florida for negligent failure to maintain and negligent failure to warn. The cruise line moved to dismiss the complaint for insufficient pleading of notice of the specific dangerous condition and for failure to sufficiently allege that the hazard was not open and obvious. Judge Scola held that Newbauer had failed to allege prior accidents where she fell so as to give notice to the cruise line and that she had not sufficiently pleaded that the high-trafficked area near the bar gave the cruise line constructive notice of the wet substance on the deck. Judge Scola also held that it was impossible to tell from Newbauer’s pleading if the condition was present for a sufficient time to give notice to the cruise line. Newbauer appealed the dismissal of her suit to the Eleventh Circuit, and the appellate court was presented with the issue whether Newbauer alleged a facially plausible claim that the cruise line should have known of the hazardous wet surface that caused her to slip. Writing for the court, Judge Lagoa agreed with Judge Scola that Newbauer failed to provide any factual allegations supporting the argument that high traffic in the area gave the cruise line notice of the condition. Although Newbauer contended that crewmembers were staffing the bar and dining areas and had a clear view of the area where she fell, Judge Lagoa noted that Newwbauer did not allege that the substance was on the deck for a sufficient period of time to be observed and for the crew to take corrective action. Judge Lagoa also disagreed with Newbauer’s reliance on the Eleventh Circuit’s Yusko decision, stating that where the passenger is proceeding on a theory of direct liability against the shipowner for negligent maintenance of the premises, the passenger must establish notice as part of her negligence claim. Consequently, the Eleventh Circuit affirmed the dismissal of the complaint and the decision of the district court not to give leave to amend (when the passenger did not request leave to amend before the district court).
Grecian company Tango Marine chartered one of its vessels to Elephant Group to deliver cargo to Lagos, Nigeria. Tango alleged that the vessel was detained in Lagos for two and a half years as a result of Elephant Group’s failure to obtain proper permissions for the cargo and brought this Rule B attachment action in the federal court for the Northern District of Texas. Tango had difficulty serving Elephant Group and a default was entered after the court permitted service by email or mail. Elephant Group then filed a motion for an extension of time to file an answer and a notice of appearance. It also sought to have the default set aside, claiming that it was entering a restricted appearance under Supplemental Rule E(8) (appearing to contest the merits of the attachment). Judge McBryde set aside the initial default, and Elephant Group filed a motion to dismiss under Rule 12(b), arguing that the court lacked personal and subject matter jurisdiction and that the allegations in the complaint were insufficient. Tango filed an amended complaint and a response to the motion to dismiss (arguing that the amended complaint cured the defects in the motion to dismiss). Elephant Group did not, however, file an answer to the amended complaint. Tango then requested the clerk enter a second default for failure to answer the amended complaint, and Elephant Group objected. After the clerk entered the second default, Elephant Group moved to have the second default set aside. Judge McBryde concluded that the failure to answer was willful, which was sufficient to allow the default, but he also ruled that Elephant Group failed to establish a meritorious defense. Accordingly, he entered a final judgment for $4,491,784.17. On appeal to the Fifth Circuit, Elephant Group argued that a default was inappropriate and that the district court never acquired personal jurisdiction over it. Tango argued that Elephant Group waived the personal-jurisdiction argument by not making the argument in its first filing and that the pleadings did establish personal jurisdiction. Writing for the Fifth Circuit, Judge Southwick noted that Elephant Group replied to the response to the motion to dismiss, but never filed an answer to the amended complaint. Although Judge McBryde considered the failure to answer to be willful, Judge Southwick doubted that was the proper description, choosing instead to label it as “[i]nadvertence” or “clumsiness.” He therefore considered whether Elephant Group had established a meritorious defense sufficient to set aside the default. Tango argued that Elephant Group waived its argument that the court lacked personal jurisdiction by failing to present that argument in its first responsive pleading. Judge Southwick reviewed Elephant Group’s initial motion to set aside the default and found language in the final pages that he considered sufficient to constitute a restricted appearance under Rule E(8), even though Elephant Group did “not drape its entire motion in the protection of a restricted appearance.” However, before filing the motion, Elephant Group’s counsel filed an application for admission pro hac vice and a motion for extension of time and entered a “joint Notice of Appearance.” Reasoning that these filings were insufficient to constitute a general appearance, Judge Southwick held that Elephant Group had made a restricted appearance that did not waive its challenge to the court’s personal jurisdiction. Judge Southwick then discussed whether there was personal jurisdiction over Elephant Group. Pursuant to Supplemental Rule B, Tango pleaded that Elephant Group was not present within the district in order to permit the attachment of property. Judge Southwick then cited the principle that it is the good-faith allegation that the attached property is present within the district that gives the court jurisdiction—not the successful attachment of the property. As there were good-faith allegations of assets owed to Elephant Group within the district, there was in personam jurisdiction over Elephant Group under Rule B and the default judgment was affirmed. See January 2022 Update.
Elephant Group sought rehearing en banc, but no active members of the full court requested a poll. Instead, the panel withdrew its previous opinion and specifically withdrew its interpretation of Great Prize, S.A. v. Mariner Shipping Party, Ltd., 967 F.2d 157 (5th Cir. 1992), about which the original panel stated: “Importantly, it is the ‘good-faith allegation in the complaint that the res is present within the geographical jurisdiction of the court” – not the successful attachment of the res – that is “the jurisdictional fact which gives the court in personam jurisdiction over the defendant purported to own the res.” The panel stated that the meaning of the Great Prize case would be left to an appeal in which its meaning matters (it did not in this case). The panel noted that the amended complained asserted that the defendant was not within the district, identified several garnishees in the district, and sought an attachment of the defendant’s property in the hands of the garnishees. As the relief granted in the judgment was within the jurisdiction defined in Rule B, the panel affirmed the judgment.
The owners of several liquid petroleum gas carrier vessels entered into bareboat charters with B-Gas Ltd. (now Bepalo LPG Shipping). Bepalo suffered financial difficulties from the COVID-19 pandemic and wound up its business and redelivered the vessels to their owners. The owners brought this action seeking the attachment of the M/T BERGITTA, owned by Bergshav Shipping (which the plaintiffs argued was an alter ego of Bepalo). The vessel was arrested on behalf of each of the plaintiffs, and Bergshav Shipping made a restrictive appearance under Rule E(8) and argued that the attachment should be vacated because the complaints were not properly verified. The plaintiffs attached a verification from a broker of their managing agent who negotiated the bareboat charters and participated in follow-up discussions. His verification for each of the complaints provided information on himself and concluded by stating that he had read the foregoing complaint and exhibits, knew the contents thereof, and that he declared under penalty of perjury that the foregoing was true and correct. The district court held a hearing on the motion to vacate, and the broker testified that when he signed the verifications he did not verify the truth of the allegations set forth in the complaints. Magistrate Judge Edison recommended that the motion to vacate be granted, and Judge Brown adopted the recommendation (determining that a verified complaint was a jurisdictional prerequisite, that the verifications were insufficient, and that the court lacked jurisdiction). The plaintiffs appealed the vacating of the attachments and dismissal of the complaints, and the Fifth Circuit affirmed the decision. The appellate court agreed that the language of the verifications was insufficient because it only affirmed that the broker had read and understood the contents of the complaints and did not affirm that he believed the factual allegations in the complaints were true and correct. The court rejected the plaintiffs’ argument that the interpretation was an improper “syntactical and grammatical analysis of the text” of the verifications, noting that this conclusion was supported by the broker’s statement that he did not verify the truth of the allegations in the complaints. The Fifth Circuit then addressed whether the failure to satisfy the requirements of Rule B deprived the court of jurisdiction—whether the verified-complaint requirement was a claim-processing rule or a jurisdictional mandate. The court did not have to decide that issue because, even if the requirement was only a claim-processing obligation, it was still mandatory so that the attachment was not proper and the district court properly dismissed the action. The final question was whether the district court should have permitted the plaintiffs to cure their verification by an amendment, but the plaintiffs waited until the magistrate judge issued his recommendation before raising the issue of amendment for the first time. As issues raised for the first time in objections to the magistrate judge’s recommendations are deemed not properly before the district court, they cannot be raised on appeal. Accordingly, the Fifth Circuit rejected the untimely request for leave to amend. Thanks to Professor Michael Sturley of the University of Texas School of Law for bringing this case to our attention.
From the federal district courts:
Walter Jackson was employed as a rigger by DLS on an oil and gas production platform owned and operated by Talos on the outer Continental Shelf of the Gulf of Mexico off the Louisiana coast. Jackson and other DLS workers were attempting to lower sections of pipe when one of the sections came loose and struck Jackson, resulting in his death. Jackson’s wife brought suits against Talos and Diverse Safety and Scaffolding, which provided the scaffolding from which the pipe was being lowered, and the suits were consolidated. Diverse Safety and Scaffolding moved for summary judgment that its scaffolding had no causal connection to the accident, despite not having toe boards in violation of OSHA regulations. Jackson’s beneficiaries argued that the toe board is designed to prevent something from falling or rolling off the scaffold, but Diverse Safety and Scaffolding responded that the toe boards were purposefully left off the scaffolding so that the pipe could be more easily lowered to the deck of the platform (the sections of pipe were pushed over the side of the scaffold deck). It was after the pipe was pushed over the side of the scaffold deck (where the toe board would have been) that the pipe disconnected from its rope. That disconnection was unrelated to the condition of the scaffolding, and the duty of Diverse Safety and Scaffolding did not extend to the risk of the pipe disconnecting from its rope while being lowered. Accordingly, Judge Cain dismissed the suit against Diverse Safety and Scaffolding with prejudice. See March 2022 Update.
Platform owner/operator Talos also moved for summary judgment on the ground that it was not liable under Louisiana law (applicable via the Outer Continental Shelf Lands Act) for the death of an employee of a contractor. Jackson’s beneficiaries argued that Talos did not truly have an independent contractor relationship with DLS and should be held vicariously liable for DLS’s actions or that Talos exercised sufficient operational control to be subject to liability. The beneficiaries contended that Talos required DLS to follow certain rules and regulations and report to Talos; the contract could be terminated at will by either party; and Talos provided a list of step-by-step tasks that DLS was required to follow. Finding that the factors over which there is no dispute were insufficient to support a finding of independent contractor status, Judge Cain denied Talos’s motion for summary judgment.
Jeremiah Womack purchased a 2019 Skeeter fishing boat and took it out on Caney Lake in Jackson Parish, Louisiana for a break-in drive. He noticed a little bit of a skip in the steering and called the dealer. There was a dispute about what he was told in this call, but Womack took the boat out again and was injured when the boat suddenly turned sharply to the right and hooked around. Three days later, Womack took the boat to a local dealer and the dealer sent the boat to the manufacturer, Skeeter. Skeeter did not find any fault in the steering system and sent the original steering system component parts to the steering manufacturer, Dometic, which found nothing wrong but sent new component parts to Skeeter. Skeeter replaced the parts on the boat with those that Dometic sent and returned the boat, with the new system, to Womack. There were no problems with the steering thereafter, and Dometic disposed of the original parts in accordance with its policy to dispose of the item after testing it and finding no defect. Womack brought this suit in federal court in Louisiana seeking to recover for the injuries he suffered against Skeeter and Dometic and argued that Dometic was guilty of spoliation for destroying the steering system. As Dometic was not on notice of any injury claim by Womack, Judge Doughty held that Womack had not established that Dometic had any obligation to preserve the steering system at the time it was destroyed. Therefore, Judge Doughty denied any sanction for spoliation. Judge Doughty also dismissed the claims based on a manufacturing defect as Womack could not develop evidence that the steering system deviated from the specifications or performance standards, and he held that the doctrine of res ipsa loquitor did not apply because the defendants were not in control of the boat when the accident occurred and there were other plausible theories for the accident, including operator error. Finally, Judge Doughty found nothing difficult to read, confusing, or inconsistent with the warnings and dismissed the claim that the vessel was unreasonably dangerous because of inadequate warnings.
Cincinnati Insurance issued a watercraft insurance policy for Joseph Fish’s 48-foot yacht. Nine days later, Fish’s broker reported that a storm caused damage to the hull and water damage to the interior while the yacht was docked at a marina in Kent Island, Maryland. Cincinnati Insurance requested that Fish take the vessel for an inspection and estimate, but Fish continued to use the vessel and did not forward an estimate to the insurer for 15 months. At that time the estimate exceeded the policy limit of $215,000. Cincinnati Insurance had the vessel inspected, and the surveyor determined that the damage from the storm was $18,625, and the remainder of the damage was caused by wear and tear. After Fish’s complaint with the Maryland Insurance Administration was resolved in favor of Cincinnati Insurance, the insurer filed a declaratory judgment action in federal court, and four days later Fish brought suit in Baltimore City Circuit Court, naming both Cincinnati Insurance and Fish’s non-diverse broker. Cincinnati Insurance removed the state case based on diversity jurisdiction, asserting that the broker was fraudulently joined. Judge Bennett agreed that the broker was fraudulently joined as there was no dispute about the application of the policy or about defenses such as uberrimae fidei that could result in a cause of action against the broker. Consequently, as there was diversity between Cincinnati Insurance and Fish, the case was properly removed to federal court. The removal to federal court of the state action essentially resolved the jurisdictional issues with respect to the suit brought in federal court by Cincinnati Insurance. Fish first objected to that suit, which was brought under the admiralty jurisdiction, as a violation of the saving-to-suitors clause. Of course, the saving-to-suitors clause does not prohibit an admiralty suit being brought in federal court, so the federal court had jurisdiction over the suit by Cincinnati Insurance. That left the argument that the federal court should defer to the action brought in state court; however, that action was now pending in federal court. Consequently, Judge Bennett exercised his discretion to decline to dismiss the federal declaratory judgment action. See May 2020 Update.
The parties filed cross-motions for summary judgment, and Judge Bennett held that there were fact questions whether the wear and tear exclusion applied and whether Fish cooperated with the investigation of the claim. Therefore, the cross-claims with respect to coverage under the policy could not be resolved without trial. However, Judge Bennett found a lack of any material dispute of fact as to the extracontractual claims, reasoning that Cincinnati undertook serious efforts to resolve the dispute with Fish and that it was diligent in its investigation and responsive to Fish’s concerns.
Kwanza DeLagarde, a resident of St. Thomas, U.S. Virgin Islands, was a passenger on the BELLAROSA, a vessel owned by Tours VI, a corporation domiciled in the British Virgin Islands, when he was injured in Great Harbour in the British Virgin Islands. As he was exiting the water from the back of the boat, the vessel’s propellers contacted his body, causing serious injuries. DeLagarde brought this action in federal court in the United States Virgin Islands and served Tours VI and its captain in the British Virgin Islands. When they did not answer, DeLagarde sought to default Tours VI. Chief Judge Molloy declined to grant the default, however, concluding that the court lacked subject matter jurisdiction. There was no indication that the parties were diverse, and Chief Judge Molloy held that the injury took place outside the maritime jurisdiction of the United States as established by international treaty because it occurred in the British Virgin Islands. Concluding that there was no basis for jurisdiction, Chief Judge Molloy dismissed the case. [A lot of litigants, judges, and professors might be surprised at the narrow scope of the maritime jurisdiction of the United States under Section 1333].
Paul Blain, son of David and Caroline Blain, was towing a tube with his parents’ pleasure boat on the Trent River when the tube struck a dock and Juliana Lopez and Aleiah Nottingham were injured. David and Caroline Blain filed a limitation action in federal court in North Carolina, and an order enjoining claims was issued. Lopez and Nottingham filed claims in the limitation action, and Lopez filed a separate action in federal court based on admiralty jurisdiction (the parties were nondiverse) against David, Caroline, and Paul Blain. Chief Judge Myers consolidated the actions, and David and Caroline Blain moved to dismiss the separate suit filed against them. Lopez argued that the action should be suspended and not dismissed, but, reasoning that the action was filed in violation of a valid court order, Chief Judge Myers granted the motion to dismiss the separate complaint as to David and Caroline Blain. Chief Judge Myers did note that Paul Blain did not own the vessel and did not argue that the limitation action barred the Lopez claim against him. Therefore, Chief Judge Myers held that Lopez’s claims against Paul Blain could proceed in the separate action. As that suit was based solely on admiralty jurisdiction and the parties were nondiverse, Chief Judge Myers held that Lopez had no right to a jury in the suit against Paul Blain.
Deloris Henson was a passenger for a sightseeing tour on the vessel SALTY DOLPHIN III, which was navigating in the Intracoastal Waterway near Sister Keys/Longboat Key, Florida. Henson claims she was injured when a vessel owned and operated by Joseph Curley caused large waves that resulted in Henson being thrown to the deck of the SALTY DOLPHIN III. Curley filed this limitation action in federal court in Florida, and Henson filed a claim in the limitation action that alleged negligence and a violation of the Florida statute declaring vessels to be dangerous instrumentalities and requiring the exercise of the highest degree of care to prevent injuries. Curley moved to dismiss the state claim on the ground that it imposes a higher standard of care than is allowed under the general maritime law. Judge Barber agreed that the case was governed by the standard of care under the general maritime law and dismissed the count based on Florida’s statute.
This litigation arises from the Navy’s repair of the Quay Wall at the Philadelphia Naval Yard. After sinkholes formed at the edges of Rhoads Industries’ property following pile driving during the repair work, Rhoads brought suit for impairment to the condition of its dry dock. Rhoades brought suit against the contractors, and, after Rhodes settled with the Navy, the contractors sought a pre-trial determination of the Navy’s liability in order to preemptively preclude any apportionment of a final damage award for the fault of the Navy under Pennsylvania law. However, Magistrate Judge Strawbridge held that the contractors presented sufficient evidence of potential liability of the Navy, and, consequently, the Navy should appear as a settled co-defendant on the verdict form at trial. As the contractors were working pursuant to contracts with the Navy, they asserted government contractor (Boyle) and derivative immunity (Yearsley) defenses by motions for summary judgment. Magistrate Judge Strawbridge found sufficient evidence that the jury could find that the contractors were not operating under the direction of the Navy and that they exercised sufficient discretion so as create fact questions on the derivative immunity defense. He also found disputed evidence as to the Navy’s approval of the design and performance of the contractors’ work and conformity to the project’s specifications so as to deny the government contractor defense. Magistrate Judge Strawbridge did conclude that pile driving is not an abnormally dangerous activity under Pennsylvania law and rejected Rhoads’s claims for strict liability. Finally, Magistrate Judge Strawbridge declined to address the question whether Rhoads was entitled to recover the full cost of repairs or whether the recovery was limited to the decrease in the fair market value of the property, finding questions of fact whether the dry dock qualified as special purpose property under Pennsylvania law.
Empress Marine insured its yacht NEVER SAY NEVER with Certain Underwriters at Lloyd’s. The vessel sustained damage in three incidents, beginning with a grounding while entering the channel to Puerto Plata in the Dominican Republic. Repairs were conducted over nearly four and a half years that exceeded $8.2 million. Lloyd’s contended that the repairs should have been completed at half that amount (Lloyd’s also asserted other defenses) and brought this declaratory judgment action in federal court in Florida under the court’s admiralty jurisdiction. Empress Marine filed a counterclaim with two counts. The first argued that Lloyd’s breached the covenant of good faith and fair dealing and the second sought a declaratory judgment whether there was insurance coverage for the loss and to determine the reasonable cost of the repairs. As New York law applied in accordance with the choice-of-law provision in the policy, Lloyd’s argued that the count for breach of the covenant of good faith and fair dealing was just a disguised claim for bad faith that is not permitted under New York law. Judge Singhal noted that New York law does not recognize a separate cause of action for breach of the implied covenant of good faith and fair dealing when a breach of contract claim is pleaded based on the same facts. In this case, the counterclaim did not plead a claim for breach of contract, so Judge Singhal held that the claim for breach of the implied covenant of good faith survived a motion to dismiss. Judge Singhal then reviewed the second count which mirrored the allegations in the first count. He therefore dismissed the second count. Finally, Empress Marine asserted that, because its counterclaim was based on diversity, it was entitled to a jury on the counterclaim. As the plaintiff’s Rule 9(h) designation precluded the defendant from exercising its right to a jury trial on the counterclaim based on diversity, Judge Singhal struck Empress Marine’s demand for a jury trial.
Marie Carew, operating through her sole proprietorship Holiday Shopping in Georgia, served as a non-vessel operating common carrier to ship her clients’ goods from the United States to Africa. She entered into a Service Contract with Maersk for the carriage, and Maersk handled 73 international shipments with the issuance of bills of lading or sea waybills. The Service Contract contained a London forum-selection clause, and the bills of lading/sea waybills contained a forum-selection clause for the federal district court for the Southern District of New York. Carew did not pay for $146,313 of the invoiced charges, particularly with respect to detention and demurrage charges attributable to failures of intermediaries, such as truckers, terminal operators, and off-terminal facilities. Maersk brought this suit to collect on its invoices in the Southern District of New York, and Carew moved to dismiss or transfer the case for improper venue and forum non conveniens. Judge Cronan first had to resolve the conflict between the forum-selection clauses. As the Service Contract provided that any conflict with the transport document (bill/waybill) would control, he held that the New York clause was applicable. That decision was supported by the rule that, in the absence of a provision to the contrary, the clause in the later-issued bill supersedes the clause in the Service Contract. Giving the clause controlling weight, absent exceptional circumstances, in the forum non conveniens analysis, Judge Cronan denied Carew’s motion to dismiss/transfer. Turning to Maersk’s motion for summary judgment on the merits, Judge Cronan rejected Carew’s arguments that her obligation to pay Maersk did not extend to the demurrage and detention charges and that the charges were unenforceable under the Shipping Act. He therefore granted summary judgment to Maersk except with respect to the amount owed as there were fact questions on whether prepaid charges had actually been paid.
Robert and Joan Desantis brought this action against Vincent Atwood and the BLACKENED DOLPHIN to foreclose on a preferred mortgage on the vessel. When there was no response from the vessel or owner, the court entered a default judgment and the plaintiffs sought attorney fees in accordance with the preferred ship mortgage. The plaintiffs sought $37,685.75 in attorney fees, based on hourly rates of $450 per hour for a lawyer with more than 40 years of experience practicing maritime law, $275 for an associate with four years of experience, and $195 for paralegals. Magistrate Judge Valle found that that the prevailing rates for the attorneys were $375 per hour and $200 per hour, but she declined to award any fees for paralegal work as the time entries were for clerical tasks or lacked sufficient detail to evaluate whether they were recoverable. Magistrate Judge Valle also considered the hours to be excessive because of billing inefficiencies, inappropriate block billing, and excess time. Consequently, she reduced the request by 15% and recommended an award of $32,032.89 in fees.
Joseph Yacino was injured while working as a crewmember on the yacht M/Y APRICITY in the Bahamas. The yacht is registered in the Marshall Islands and is owned by A.M.I. Corp., a Marshall Islands’ corporation. The beneficial owner of A.M.I. is James C. Flores, a Texas domiciliary. Yacino signed an Employment Agreement with A.M.I as employer in Florida before the vessel sailed for the Bahamas. That agreement contained choice-of-law and forum-selection clauses for the vessel’s flag state (Marshall Islands). Yacino brought this action in federal court in Florida against Flores, A.M.I., the yacht, Apricity Operating Co. (alleged to be the charterer or operator), and Moran (alleged to be operator or manager). Flores challenged personal jurisdiction in Florida, and Magistrate Judge Reinhart found insufficient allegations in the pleadings to support specific jurisdiction against Flores in Florida as it was pure speculation that Yacino’s claim arose from business activity of Flores in Florida. The corporate defendants sought to challenge venue in Florida based on the forum-selection clause. Magistrate Judge Reinhart noted that the defendants invoked the wrong procedure to enforce a forum-selection clause (venue was not improper), but he proceeded to address the clause in the interest of completeness and concluded that enforcement of the clause would be unreasonable or unfair. Yacino asserted that he was presented the agreement on the vessel after working for three days and told that he had to sign it with no explanation of the contents. The agreement is 19 pages long and single spaced, Yacino is a chef with no legal training, and the situation is not one of two relatively equal bargainers negotiating to reach a knowing and fair agreement. Magistrate Judge Reinhart did not agree that the forum-selection clause was unenforceable (on the ground that it denied him a right to jury trial under the Jones Act) because that clause only provided the venue for the suit and there was no evidence what law or procedure would apply in a suit in the Marshall Islands. Finally, Magistrate Judge Reinhart held that the vessel and Moran (identified in the agreement) could invoke the forum-selection clause but that it was not foreseeable that the claim against Apricity Operating Agreement could arise from Yacino’s employment status. Nonetheless, as Magistrate Judge Reinhart found that enforcement of the clause was unreasonable and unfair as to the parties who could invoke it, he declined to dismiss the case except as to Flores.
Jerome J. Gehant served in the U.S. Navy as a boiler technician on the USS AMERICA. He developed mesothelioma and brought this suit against vessel product suppliers in state court in Norfolk, Virginia, alleging exposure to asbestos from insulation on the boilers. After his death, his suit was continued by the personal representative of his estate. The defendants removed the case to federal court in Virginia, and, after dismissals and bankruptcy petitions, Foster Wheeler was the only remaining active defendant. Foster Wheeler moved for summary judgment on the grounds that the plaintiff could not meet the burden to establish a duty to warn under the Supreme Court’s DeVries case, the claims were barred by the government contractor defense, and the plaintiff was unable to establish causal connection with respect to Foster Wheeler’s product. Judge Young found fact questions on all of Foster Wheeler’s arguments and denied its motion for summary judgment. With respect to the requirement of DeVries that the defendant’s product required incorporation of a part that is dangerous, Judge Young declined to adopt a more expansive definition of “required” than the three situations described in DeVries, but he found that the inclusion of asbestos-containing products in its design drawings created a genuine dispute despite Foster Wheeler’s claim that the Navy originally specified inclusion of those parts. Judge Young also found fact disputes precluding summary judgment whether Foster Wheeler had reason to know that the integrated parts were dangerous and that the end users of the product were aware of the danger. Judge Young denied Foster Wheeler’s argument on the government contractor defense, finding a fact question whether the Navy was unaware of the specific dangers of asbestos gaskets and insulation and whether Foster Wheeler was in a position to warn the Navy of those dangers. Finally, addressing the causation standard (maritime law’s substantial factor test), Judge Young noted the other courts that had found fact questions in cases involving boiler technicians working on boilers made by Foster Wheeler. As there was evidence of the nature and duration of work on the Foster Wheeler boilers, Judge Young found sufficient evidence whether the failure to warn of the dangers of asbestos was a substantial factor in causing Gehant’s mesothelioma.
Kathryn Birren and her daughter Mandy Birren brought this suit against Royal Caribbean for injuries they sustained on the HARMONY OF THE SEAS. They alleged that the elevator doors on deck 6 closed abruptly, striking Kathryn’s arm and forcing her to collide with Mandy. The cruise line responded with twelve affirmative defenses, and the passengers moved to strike seven of the defenses. Before addressing the sufficiency of the pleading, Judge Bloom first had to resolve what standard to apply in assessing the sufficiency. She noted that there are two schools of thought on the sufficiency of pleading defenses and that the Eleventh Circuit has not resolved that split in authority. Comparing the language in Rule 8 (a), (b), and (c), Judge Bloom held that affirmative defenses are not subject to the heightened pleading standard enunciated by the Supreme Court in the Twombly and Iqbal decisions. She then reviewed the defenses asserted and denied the motion to strike as to the allegations of comparative fault, pre-existing conditions, and superseding cause. Judge Bloom also declined to strike the defense that the passengers failed to state a cause of action upon which relief can be granted, treating it as a denial. She did strike the defense that the action was governed by the terms and limitations of the passenger ticket, as limitations on liability are not enforceable against negligence claims. She struck the defense of a set-off for money paid from third parties for medical expenses, reasoning that it was inconsistent with the Higgs case from the Eleventh Circuit; however, she granted the cruise line leave to replead the defense in accordance with the Higgs case. See September 2020 Update.
The cruise line preserved and produced a total of 11 minutes and four seconds of closed-circuit television footage. That included the incident plus 8 minutes and 28 seconds before the incident and 2 minutes and 30 seconds after the incident. The passengers moved for sanctions for spoliation of evidence because the cruise line preserved less than 10 or 15 minutes of footage before the incident and five minutes of footage after the accident. The passengers argued that they were prejudiced by not having footage showing that the doors to the elevator were closing too quickly for at least 15 minutes before the accident—sufficient time to establish notice of the dangerous condition to the cruise line. After reviewing the video, Magistrate Judge Louis noted that the quick closing of the doors did not occur in the first five minutes of the produced footage and only began shortly before the passengers stepped on the elevator and then repeatedly thereafter. Accordingly, Magistrate Judge Louis held that the cruise line had preserved a reasonable amount of footage and no sanctions were appropriate. Judge Bloom concluded that Magistrate Judge Louis’ order was well reasoned and correct in holding that the cruise line had provided sufficient footage, did not act in bad faith, and took reasonable steps to preserve the necessary video footage. See February 2022 Update.
The Birrens and the cruise line then moved to strike each other’s experts, and Judge Bloom gave each side partial relief. Judge Bloom considered the opinions of Tray Edmonds that the elevator was properly maintained and inspected to be sufficiently reliable and helpful to the jury to be permitted; however, she ruled that Edmonds’ opinion that a small girl broke the elevator panel when she pressed the button with her elbow (causing the door close button to be stuck in the pressed position) to be unreliable because it was based on speculation from his viewing of CCTV footage. Kathryn Birren challenged the reliability of the opinion of Dr. Jonathan Gottlieb, an orthopedic spine surgeon, that Birren’s injuries were caused by a motor vehicle accident and not the elevator accident, as Dr. Gottlieb did not review any of the MRIs or images of Birren’s spine and his opinions were based, in part, on CCTV footage. Judge Bloom noted that Dr. Gottlieb had reviewed medical records that included imaging reports, and that was sufficiently reliable methodology. She also allowed his opinion based on the CCTV footage, but he would not be permitted to provide an overview of the footage, which speaks for itself. Similarly, Judge Bloom permitted the testimony of Dr. Richard Rauck, a pain medicine specialist, that Mandy Birren’s alleged Amplified Musculoskeletal Pain Syndrome was not caused by the elevator incident and that her gymnastics and trampoline activities caused greater force on her neck than the elevator incident. The testimony could be based on the CCTV footage, but Dr. Rauck would not be permitted to give an overview of the footage. The cruise line objected to the opinions of Dr. Nicholas Suite as unreliable because he only conducted a telemedicine examination of Kathryn Birren. However, as Dr. Suite did review medical records, CCTV footage, MRI scans, testimony, and other evidence, Judge Bloom considered his methodology to be reliable. Judge Bloom did note that, with respect to future treatment, Dr. Suite only stated that Kathryn Birren was going to need further care and treatment to manage her symptomology. This was insufficient to allow him to testify about future treatment, costs, and medical bills. Finally, the cruise line objected to the testimony of the passengers’ expert, Jeffery Hanson, with respect to the maintenance of the elevator, arguing that he only reviewed materials relating to events that took place after the incident. However, Hanson did conduct a site inspection and reviewed inspection reports from shortly before the incident, industry code, and CCTV footage. Judge Bloom held that this was sufficiently reliable methodology, but that Hanson would not be permitted to give a general overview of the CCTV footage. See March 2022 Update.
The cruise line then moved to dismiss all of the claims. The cruise line argued that it did not have a duty to warn of the dangerous condition of the elevator doors because the Birrens were aware that the doors were closing unusually fast. The passengers argued that the question whether the condition of the doors was open and obvious presented a fact question that was not appropriate for summary judgment. Judge Bloom agreed that the extent of the dangerous condition was not open and obvious because the dangerous condition was not just the fast closing of the doors but that the sensors did not operate properly to re-open the doors. The decision not to exclude the passenger’s expert, Jeffery Hanson, allowed the claim for negligent design/installation to survive as Hanson testified that the design included the mobile application of the manufacturer/installer that provided maintenance notifications about the elevator. Hanson’s opinion along with the testimony of the cruise line’s Chief Electrical Officer and corporate representative supported the passenger’s claim of negligent hiring, retention, and supervision with respect to the proper testing of the sensor. Judge Bloom did dismiss the claims of negligence of the ship’s medical staff for lack of evidence.
DeForge, a tug and barge company, chartered tugs and barges to Alaska Logistics for its Alaska transport operations. The charters for the vessels required on-hire and off-hire surveys that were conclusive evidence of the condition of the vessels during the charters. The charters required removal of added equipment and restoration of the vessels to the condition prior to making changes, ordinary wear and tear excepted. Additionally, the charters provided for redelivery in the same good order and condition as when accepted, ordinary wear and tear excepted. The charters also contained reciprocal indemnity provisions with respect to property damage, regardless of negligence or unseaworthiness. The on-hire and off-hire surveys reflected that there was extensive pre-existing damage to the barge THELMA, and several areas of new damage occurring during the charters. DeForge argued that the indemnity provisions only applied to third-party suits and that the restoration provisions made Alaska Logistics strictly liable for damage to DeForge’s vessel during the charters. Judge Robart disagreed, holding that the charters were not ambiguous and that the broad indemnity provisions covered the damage. Therefore, he dismissed DeForge’s claims for damage to the barge.
The Port of Corpus Christi Authority originally brought this suit against The Port of Corpus Christi LP in state court in Nueces County, Texas, for service mark dilution and service mark infringement. The defendant changed its name to The Port of Texas LP, and the plaintiff amended its petition to allege that the defendant’s dredging activity damaged the plaintiff’s submerged lands and interfered with the Corpus Christi Ship Channel and the La Quinta Ship Channel. Arguing that its operations were conducted in accordance with permits and agreements for dredging with the United States Army Corps of Engineers, the defendant removed the case to federal court based on the Federal Officer Removal Statute, federal question jurisdiction, and admiralty jurisdiction. Judge Ramos rejected each basis for jurisdiction and remanded the case to the state court. She reasoned that the permit issued by the USACE was issued to another company, did not name the defendant and that the defendant did not come within the scope of the Federal Officer Removal Statute merely by being in a business that was subject to federal authority. That reasoning was also fatal to the federal question jurisdiction as the nature of the claim was a state-law trespass, and the premise that the defendants’ actions were authorized by the USACE could not succeed when the defendant was not party to the federal permit. Nor was the claim preempted by federal law. Finally, Judge Ramos rejected the claim for removal based on admiralty jurisdiction as the defendant did not address the issue in its response or sur-reply.
Institute for Shipboard Education (ISE) is the owner pro hac vice of the MV WORLD ODYSSEY, which it uses for its Semester at Sea educational program. ISE entered into a management agreement with CMI Leisure Management to manage the vessel’s deck and engine departments. Miguel Angel Sarmiento Banegas, a Honduran citizen, began suffering from symptoms of malaria or a similar disease while working on the vessel and died from the illness. His father (who filed to be the administrator of Banegas’s estate) brought this suit in federal court in Florida against CMI and a separate suit against ISE that was consolidated with the suit against CMI. ISE filed a motion to dismiss the complaint for lack of personal jurisdiction as ISE is a Virginia corporation with its principal place of business in Colorado, does not have any agents in Florida, and CMI is an independent contractor/service provider. Banegas’s father pointed out the contract between ISE and CMI reflected that CMI would act as ISE’s agent and attorney-in-fact in performing the total management of vessel operational and financial services. Considering that the language unambiguously indicated that CMI was acting as agent for ISE, Judge Bloom examined the connexity of the cause of action asserted to conduct of CMI in Florida. As it was the failure of CMI to adequately perform its contractual duties in Florida that allegedly gave rise to the cause of action alleged in the complaint, Judge Bloom held there was specific jurisdiction over ISE in Florida. Judge Bloom also considered that the long-standing, continuous relationship of CMI serving as ISE’s agent was sufficient that it would not violate due process to subject ISE to jurisdiction in Florida.
This litigation arises from the capsizing of a motorboat, operated by Celio San Gabriel, on the Chicago River. Marina M. Ochoa, the mother of Victor Lobato Ochoa, a passenger on the vessel who drowned, brought suit in state court against the owner and operator of a tug and barge who allegedly caused the motorboat to capsize. The defendants removed the case to federal court based on diversity and admiralty jurisdiction, and Ochoa amended her complaint to name San Gabriel as a defendant and moved to remand the case to state court for lack of diversity. The owner of the tug and tow filed a limitation action, and Ochoa filed a claim in the action. When no one else filed a claim in the limitation action and a default was entered against other possible claimants, Ochoa moved to lift the stay. Concluding that Ochoa’s stipulations protected the tug/barge owner’s limitation rights, Judge Ellis lifted the stay to allow Ochoa to pursue the wrongful death case in state court. As the addition of San Gabriel as a defendant defeated diversity jurisdiction and as there was no additional basis for federal jurisdiction other than admiralty, Judge Ellis followed the majority of judges and remanded the suit brought in state court.
David and Joanne Catalano purchased a Sea Ray 300 SLX vessel from Marine Max plus a six-year warranty issued by Brunswick Corp. The Catalanos had continuing problems with the vessel and eventually traded in the vessel at a substantial loss. The Catalanos brought this action against MarineMax and Brunswick in federal court in New York alleging causes of action for breach of contract and breach of express and implied warranties under New York law. The Catalanos argued that the sale of the vessel “as is” by MarineMax was unfair and unconscionable, but Judge Gujarati held that disclaimers of warranties are common and permitted under New York law. With respect to the six-year warranty for defects in material or workmanship, Judge Gujarati held that the warranty did not cover design defects and that the Catalanos’ conclusory pleading of manufacturing defects was insufficient. Judge Gujarati could not conclude at this stage that an amendment would be futile and gave the Catalanos the opportunity to amend their allegations.
Nancy Gould, a passenger on the Carnival LIBERTY, was injured while walking up the gangway of the vessel in Nassau, The Bahamas, when a passenger in front of her charged at a woman and took a swing at the woman, causing the woman to fall into Gould, who fell off the gangway. A few minutes earlier, Gould witnessed the man punch the same woman in the head on the pier in Nassau while they were walking back to the ship. Gould brought this suit against the cruise line, and her theory of liability against the cruise line was that an employee from a different cruise ship witnessed the earlier assault, scurried down the pier toward the LIBERTY, and made gestures to a crewmember of the LIBERTY to indicate that the man had punched his companion. Gould contended that the crew was negligent in failing to prevent the man from pushing the woman on the gangway. The case was tried in a four-day Zoom bench trial to Magistrate Judge Goodman, and he found that Gould did not establish that an employee of the cruise line had been given notice by the gesture of the earlier physical confrontation or that the cruise line breached any duty to Gould. With respect to notice, Magistrate Judge Goodman noted that Gould testified in her deposition that there were no crewmembers standing between a structure on the pier and the crewmembers on the vessel. That testimony was supported by a passenger who testified that she did not remember a crewmember at the base of the gangway. Finding no crewmember at the base of the gangway, Magistrate Judge Goodman could not find that the gesture happened. And, even if the gesture did occur, Magistrate Judge Goodman did not find that it was sufficient to give notice of the risk-creating condition of the passenger while on the gangway (Gould testified that she felt safe on the ramp and had put the prior incident out of her mind). With respect to duty and breach, Magistrate Judge Goodman concluded that the cruise line did not have a duty to monitor the foreign pier, that if the passenger was a risk, his condition was open and obvious to Gould, and that if the cruise line had notice, it did not have a duty to intervene on the gangway and before the security checkpoint inside the ship.
The cruise line then sought to recover taxable costs. Magistrate Judge Goodman first declined to defer ruling on costs during the pendency of the appeal, reasoning that he was unpersuaded that Gould had shown that she would likely prevail on appeal or suffer irreparable harm if the matter was not stayed. He awarded costs of $7,761.25 (out of the $12,716.51 initially sought) for service of subpoenas, transcripts, and copying costs.
Atlas brought this suit against the M/V ARICA, in rem, and its owner, in personam, seeking to recover for necessaries. Calpam intervened to assert a lien for bunkers, and Bank of America Europe intervened to foreclose on a Liberian preferred ship mortgage. Bank of America purchased the vessel on a credit bid of $6.5 million after depositing the amount of the Atlas and Calpam liens into the registry of the court. The order of priority was then presented to Judge Andrews as the proceeds far exceeded the amount of the liens that were presented. The parties did not dispute that the foreign mortgage had priority over the liens under American law, but Calpam argued that the mortgage should be equitably subrogated to the other liens and that the bunkers it supplied were never the vessel owner’s property and were not subject to the mortgage. Judge Andrews first held that equitable subrogation was not applicable as the bank did not exercise control over the debtor (by freezing of the owner’s bank account upon default) and did not engage in inequitable conduct by permitting the vessel owner to continue to accrue debts, by requiring the bank’s approval before paying debts, and by foreclosing on the ARICA and four other vessels and re-mortgaging them to new buyers for nearly twice the amount of the original mortgages. With respect to the bunkers-ownership argument, Calpam cited its standard terms and conditions for the order that stated that the buyer possessed the bunkers as bailee for the seller and that title would pass upon payment in full. The terms and conditions contained a choice-of-law clause for the Federal Republic of Germany, and the German attorney who opined on German conflict rules testified that Delaware law would govern the rights in rem to the vessel and its proceeds as the vessel was arrested in Delaware. Under Delaware’s UCC, the retention of title is a reservation of a security interest. Accordingly, Calpam merely had a lien that was subordinate to the mortgage. Finally, Calpam argued that the vessel committed the tort of conversion by appropriating bunkers belonging to Calpam, but that argument likewise failed because Calpam only retained a security interest in the bunkers under Delaware law (Judge Andrews also ruled that any consumption of the bunkers would not have been wrongful or unauthorized as the usage of the bunkers was the purpose of the sale).
Francesco DiStefano brought this action seeking to limit liability in connection with a collision involving his 39-foot recreational vessel. Citing the Second Circuit’s decision in In re Bensch, the claimants moved to dismiss the limitation complaint for failing to satisfy the plausibility standard for pleadings enunciated by the Supreme Court in the Twombly and Iqbal decisions. DiStefano responded that motion should be denied because the claimants had already answered the limitation complaint and because the complaint was filed prior to the Second Circuit’s application of Twombly/Iqbal to limitation complaints in Bensch. Judge Hurley disagreed and ordered DiStefano to replead the complaint.
This case arises from the allision by the M/T AFRAMAX RIVER (assisted by the tugs JESS NEWTON and GASPARILLA) with mooring dolphins at the Intercontinental Terminal Corp. terminal on the Houston Ship Channel. Intercontinental brought suit against the AFRAMAX RIVER and its owner and operator, and the AFRAMAX interests brought a third-party action against the owners and operators of the tugs, seeking contribution and tort indemnity and tendering the tug interests as defendants pursuant to Rule 14(c). Intercontinental and the AFRAMAX defendants entered into a settlement, and Judge Miller dismissed the Intercontinental claims against the AFRAMAX defendants with prejudice. The tug interests then sought to dismiss the AFRAMAX defendants’ third-party claim on the basis that AmClyde bars contribution and tort-indemnity claims by settling parties unless the settling party obtained a release of the third-party defendants. The AFRAMAX parties argued that the order dismissing Intercontinental’s claims with prejudice had the effect of a discharge of claims against the tug interests because the liability of the tug interests had been tendered directly to Intercontinental pursuant to Rule 14(c). Judge Miller disagreed, reasoning that the AFRAMAX defendants must have obtained a release of the tug interests as part of its settlement with Intercontinental in order to establish that Intercontinental had paid for the entire liability to Intercontinental and not just its proportionate share. He concluded that the dismissal of all claims with prejudice was insufficient unless the settlement agreement provided a full release that included the liability of the tug interests. Although the AFRAMAX defendants argued that the settlement agreement should be interpreted as including claims against the tug interests, Judge Miller did not read the release as extending that far. Finding no exception to AmClyde, Judge Miller dismissed the contribution and tort indemnity claims of the AFRAMAX defendants against the tug interests.
Cody L. Chandler injured his toe while serving as a seaman assigned to the VALARIS RIG 8505. He brought this suit against Halliburton and the owner of the rig, and Halliburton moved for summary judgment on Chandler’s claims for damages on the ground that his foot injury was healed and he was injured in a four-wheeler accident on the land that was unrelated the accident on the vessel. Halliburton argued that Louisiana negligence law applied to the subsequent injury in Louisiana and that Chandler could not recover because he admitted to his doctor that his toe had fully healed by the time of the second accident. Chandler argued that his damages were governed by the general maritime law (because his injuries related to the initial accident on the vessel) and that his toe pain impaired his ability to operate the four-wheeler (supported by the opinion of one of his doctors). Although it was a close question, Judge Fallon held that the issue of causation/superseding cause was fact-dependent and denied summary judgment.
IFG Port Holdings entered into a Ground Lease Agreement with the Port of Lake Charles on which IFG was to build a grain export terminal at a cost of more than $50 million. This dispute arose because the Port did not obtain permits to allow dredging that would permit IFG to load larger, deeper draft cargo vessels that were necessary for IFG to seek trade with the most profitable markets. The case was tried to Magistrate Judge Kay, who held that the Port had breached its contract with IFG by failing to secure the appropriate permits that would allow IFG to dredge to the depth designated in the contract. She ruled that IFG would be entitled to damages to be determined plus its attorney’s fees and costs. See September 2020 Update. After a hearing on damages, Magistrate Judge Kay entered a judgment in the amount of $124,531,652 in favor of IFG against the Port that included business losses of $41,696,272 associated with IFG’s inability to market itself as a fully operational terminal and to load deeper draft cargo vessels, treble damages under the Louisiana Unfair Trade Practice Act on the portion of the business losses after notice, outside counsel attorney fees for the work of several firms in the amount of $2,115,509, and general counsel fees of $1,085,000 for the CEO and General Counsel of IFG (estimated 3,500 hours at $310 per hour as he did not keep a contemporaneous record of his time as in-house counsel).
Ann King was injured in a fall on the gangplank of the M/V SHEILA BORDELON while working for Encore Group. King filed suit against the owner and operator of the vessel, Bordelon, and Encore provided treatment that included an L4-5 lumbar microdiscectomy by Dr. Christopher Cenac. As King continued to complain of pain in her back, Dr. Cenac recommended an L5-S1 lumbar fusion. Bordelon retained Dr. Everett Robert to perform an examination on King, and he did not find any evidence of nerve root impingement or re-herniation and concluded that King had reached maximum medical improvement. King demanded that Encore provide the lumbar fusion as part of its obligation to provide cure, and Encore retained Dr. Andrew Todd to provide a second opinion. He had reservations about surgery and recomended psychological and psychiatric clearance because of nonorganic findings and symptom amplification. If King was cleared psychologically or psychiatrically and had positive EMG nerve conduction findings and relief from a nerve root block, he would consider her to be a candidate for the lumbar fusion. Otherwise, he considered her to be at maximum medical improvement. Encore then brought this action in federal court seeking a judgment that Encore was not liable for maintenance and cure benefits and filed a motion for a court-appointed medical expert to resolve the different opinions of the physicians. Noting that each of the physicians based his opinion, in part, on the degree of pain reported by King, Judge Vance considered that the pivotal issue to be determined by the fact finder was the credibility of the seaman. That finding did not require the assistance of another medical opinion. Moreover, the record did not reflect Dr. Todd’s ultimate conclusion whether surgery was necessary. Concluding that the current doctors were capable of aiding the trier of fact in deciding whether King had reached maximum cure or needed another surgery, Judge Vance declined to appoint an independent medical expert.
Orient Express is a non-vessel operating common carrier that arranged for ocean transportation of goods for Bulb Basics. Orient Express issued a number of bills of lading to Bulb Basics, as shipper/consignor, but Bulb Basics did not pay for a number of the shipments. Orient Express and Bulb Basics then entered into a settlement agreement that released Orient Express’s claims with respect to nine bills of lading, but Orient Express brought this suit in federal court in New York against Bulb Basics with respect to amounts owed under eight of the bills of lading that were included in the settlement agreement. Bulb Basics moved to dismiss the complaint on the grounds of lack of subject matter jurisdiction, lack of personal jurisdiction, and for failure to state a claim based on the settlement agreement. Magistrate Judge Lehrburger first addressed the subject matter jurisdiction of the court. Orient Express argued that the court had admiralty jurisdiction based on amounts due under the bills of lading (maritime contracts). Bulb Basics argued, however, that the court lacked admiralty jurisdiction because the settlement agreement extinguished the bills of lading and the dispute was over the settlement agreement. Magistrate Judge Lehrburger agreed that there would be no maritime jurisdiction if Orient Express had brought suit over enforcement or rescission of the settlement agreement, but its suit was based on the amounts allegedly owed under the bills of lading. Accordingly, he agreed with Orient Express that the court had subject matter jurisdiction based on admiralty. Magistrate Judge Lehrburger also agreed that the court had personal jurisdiction because Bulb Basics consented to jurisdiction in the Southern District of New York in the credit agreement between the parties. Converting the motion to dismiss for failure to state a claim to a motion for summary judgment, Magistrate Judge Lehrburger found no ambiguity on the issue whether the settlement agreement released the claims based on the eight bills of lading involved in the suit (which were enumerated in the settlement agreement). Orient Express argued that the provision in Section 1 of the settlement agreement, reciting that a settlement had been entered into in the amount of $36,496.39, “representing the outstanding balance on the account Bulb Basics has with [Orient Express]” reflected that the remaining amounts due on the bills of lading involved in the suit must not have been released. Magistrate Judge Lehrburger considered that contention to be dubious as the release provisions in Section 2 of the Agreement identified and released all nine bills of lading, including the eight that were involved in the suit. In view of the clarity of the release, Magistrate Judge Lehrburger rejected Orient Express’s arguments of ambiguity and unilateral mistake and granted summary judgment to Bulb Basics. As the settlement agreement entitled the prevailing party to recover attorney fees, Magistrate Judge Lehrburger recommended that Bulb Basics be awarded attorney fees and costs.
C.H. Robinson is a non-vessel operating common carrier that contracted with several manufacturers to ship goods from Miami to Peru. Rimac Seguros insured the shipments. C.H. Robinson arranged for the shipment on the AS FORTUNA, which grounded on a sandbar outside of Guayaquil, Ecuador. C.H. Robinson hired a company to salvage the cargo, and the cargo was successfully carried to its destination. C.H. Robinson demanded that the manufacturers contribute 27.31% of the value of their cargo for the salvor’s fee, and cargo insurer Rimac Seguros paid nearly $600,000 to its insureds to reimburse them for their payment to C.H. Robinson. Rimac Seguros and the manufacturers brought suit in Hennepin County, Minnesota against C.H. Robinson, seeking indemnity for the payments, alleging that the vessel was unseaworthy. C.H. Robinson moved to dismiss the suit based on the forum-selection clause in the bills of lading issued by C.H. Robinson (requiring lawsuits be brought in federal court in Minnesota), and the court held that the bill of lading and forum-selection clause applied, dismissing the action without prejudice. The insurer and manufacturers then brought this suit in federal court in Minnesota, and C.H. Robinson filed a counterclaim against some of the manufacturers, citing the general average clause in the bills of lading and seeking indemnity for the salvage expenses plus attorney fees and costs to defend the suit. The manufacturers moved to dismiss the counterclaim on the ground that their claim was for common-law salvage indemnity, not general average (arguing that the bills of lading did not apply to the dispute). Judge Magnuson rejected that argument, however, as the state court had held that the bills of lading were applicable (in order to apply the forum-selection clause), and the finding was entitled to collateral-estoppel effect. The state court had also determined that the salvage operations were general average expenses, and C.H. Robinson claimed that collateral estoppel also applied to that finding. However, Judge Magnuson noted that the finding on general average was not necessary to the holding that the plaintiffs chose the wrong forum. Consequently, he did not give it preclusive effect. Concluding that the issue whether the salvage costs were general average expenses required fact determinations that could not be determined on a motion to dismiss, Judge Magnuson declined to dismiss the counterclaim on a motion to dismiss. Finally, the plaintiffs argued that the general average clause in the bills of lading was unenforceable under Minnesota law because it required the plaintiffs to indemnify C.H. Robinson for its alleged negligence and the alleged unseaworthiness of the vessel, and that conduct was not expressly enumerated in the general average clause. As with the issue whether the costs were general average expenses, Judge Magnuson concluded that the negligence/unseaworthiness and applicability of Minnesota law to the maritime bills were issues that could not be determined on a motion to dismiss.
Christopher Selfridge, a passenger on the CARNIVAL IMAGINATION, brought this suit in federal court in Florida to recover for injuries he sustained when he fell while entering the library on deck 8 of the vessel. He claimed that the glass door to the library suddenly slammed on him, causing him to stumble forward and trip on the elevated tip of a rug. The cruise line moved for summary judgment, and Magistrate Judge Torres first addressed the argument that the condition of the door and rug was open and obvious. Selfridge argued that the dangerous condition was that the door was pulled toward the passenger to open and when the passenger walked through the door it would swing back past its center point before it stopped. As he walked casually through the door, it swung back and hit him after he had walked through, causing him to stumble and trip on the rug. As it was not obvious that the door would swing back past the center, and as the passenger’s drinking was not dispositive of whether the danger was open and obvious, Magistrate Judge Torres denied summary judgment on the open and obvious defense. With respect to the notice defense, Selfridge introduced evidence that the door and rug were not in accordance with industry standards, and Magistrate Judge Torres noted that the federal courts in Florida have held that non-binding codes, industry standards, and guidelines can support a showing of constructive notice. Although the cruise line disputed both the legal principles and the expert opinions on the standards, Magistrate Judge Torres concluded that Selfridge had presented sufficient evidence of notice. Magistrate Judge Torres agreed with the cruise line that evidence of the purchase order for the rug and installation by contractors or employees for the cruise line was not evidence that the cruise line created, participated in, or approved the allegedly improper design, and he granted summary judgment on the negligent design theory. Additionally, Magistrate Judge Torres rejected Selfridge’s claim that the cruise line was vicariously liable for negligent acts of its crew in maintaining, inspecting, and fixing the door and rug as Selfridge failed to establish negligence against a particular employee as a predicate to vicarious liability.
After the DEEPWATER HORIZON/Macondo blowout, several attorneys formed a joint venture to solicit and engage subsistence claimants (Gulf Coast residents who harvested fish and seafood in the coastal area for their dietary consumption). Three groups of claimants (Henry, Billiot, and Pierce) brought suits in Louisiana state court after their claims were denied, naming the attorneys and their insurers. The cases, which asserted causes of action for malpractice and fraud, were removed to federal court based on diversity, and the attorneys and insurers filed motions to dismiss the suits because of peremption/prescription under Louisiana law and for failure to sufficiently plead fraud under Rule 9(b). The peremption/prescription issue required Judge Vitter to consider the Mississippi choice-of-law provision in the contracts between the claimants and attorneys. Applying Louisiana choice-of-law principles in the cases removed from Louisiana state court under the diversity jurisdiction, Judge Vitter held that the choice-of-law provision applied to contract claims and not to tort claims arising out of the contractual relationship. As Louisiana law views peremption/prescription as procedural in nature, Judge Vitter applied Louisiana’s one-year prescriptive period for tort actions (and not the statute for legal malpractice claims that applies only to attorneys licensed in Louisiana as none of the attorneys were licensed in Louisiana). As the tort statute only accrued when the claimants had constructive knowledge of the alleged legal malpractice, and as the limitation periods were extended in response to the COVID-19 pandemic, Judge Vitter held that the malpractice claims were not time-barred. However, the fraud pleadings failed to contain specific details of the who, what, when, where, and how of the alleged fraud. Consequently, Judge Vitter held that the fraud pleadings failed to satisfy the standard for pleading fraud under Rule 9(b). As the claimants had been on notice of the deficiencies in their fraud allegations for more than a year and had not sought to correct them, Judge Vitter dismissed the fraud claims with prejudice and without leave to amend. For the same reasons, Judge Vitter dismissed the fraud claims against the insurer defendants but declined to dismiss the malpractice claims. Finally, Judge Vitter considered the motion of the insurer defendants to consolidate a fourth suit by subsistence claimants (Gaudet v. Nations). The Gaudet suit was brought as a class action and involved allegations of malpractice and fraud in connection with the untimely filing of or failing to file subsistence claims. The claimants opposed consolidation, arguing that the claims in the consolidated Henry, Billiot, and Pierce actions involved claims of malpractice and fraud after the subsistence claims were filed—during the post-review process. Finding no risk of inconsistent adjudications if the cases were tried separately, different stages of preparedness of the suits, and a risk of confusion by the jury, Judge Vitter declined the motion to consolidate the Gaudet suit with the previously consolidated Henry/Billiot/Pierce actions.
Ralf Vollandt, a German national, purchased a 28-foot pleasure boat at an auction for $7,000, listing his address in McKinney, Texas. He insured the boat with Axis Insurance for a value of $36,500, listing his address in McKinney, Texas, and then submitted a claim for an accident two weeks later. He alleged that he was operating the boat on Lake Lewisville and believed he struck a submerged object. He claimed the engine room flooded and the boat sank rapidly. The boat was towed to shore, and the insurer sent an expert to inspect the boat but he found no evidence that the boat struck any submerged object. The insurer demanded evidence to support the claim, including the title, registration, and bill of sale, but it took 18 months before the owner agreed to an examination under oath at which he produced the documentation for purchase for the total amount of $8,200 (including $1,200 for the trailer). The owner testified that the boat was purchased without an engine and that he had a used engine installed for $20,000 in cash, and he paid an additional $9,000 in cash, with no receipts, for repairs and additional items for the boat. Axis did not pay for the alleged damage, and Vollandt brought this suit for breach of contract and extra-contractual remedies under Texas law. Axis moved for summary judgment that Vollandt had breached the cooperation clause, but Magistrate Judge Johnson found fact and credibility issues whether Vollandt had breached the cooperation clause. And, even if the insurer had established a material breach of the cooperation clause, Magistrate Judge Johnson did not believe that Axis had established prejudice as a matter of law. Similarly, Magistrate Judge Johnson found fact disputes as to the claim for the policy value of $36,500. Magistrate Judge Johnson did dismiss the claim for statutory interest under the Texas Prompt Payment of Claims Act because the Act expressly excludes marine insurance policies. Magistrate Judge Johnson also dismissed Vollandt’s claim for violation of the Texas Unfair Settlement Practices Act because that statute does not afford a private right of action for violations (referring only to enforcement by the state Department of Insurance and Attorney General). Magistrate Judge Johnson declined to dismiss Vollandt’s claim for violation of the common-law duty of good faith and fair dealing and the similar claim under the Texas Insurance Code, finding a fact question whether the insurer failed to timely investigate the claim.
Daniel Guevara, an employee of Diverse Safety and Scaffolding, was injured while working on the decommissioning of a platform in the Gulf of Mexico off the Louisiana coast. Guevara was assigned to a lift boat owned by Laredo Offshore Services and was working with personnel of ARO Solutions. Platform owner, EnVen, entered into master service agreements which each of the contactors. Guevara brought suit against EnVen, ARO, and Laredo, and Diverse Safety agreed to defend and indemnify EnVen because EnVen made Marcel payments to Diverse Safety that bypassed the anti-indemnity provisions of the Louisiana Oilfield Indemnity Act for the claim against EnVen. Diverse Safety declined to provide pass-through indemnity to ARO and Laredo under Louisiana law for failure to make Marcel payments. ARO filed a cross-claim against EnVen seeking defense and indemnity from EnVen pursuant to the master service agreement between EnVen, and ARO and EnVen each moved for summary judgment with respect to the indemnity claim. The parties agreed that the indemnity claim was invalid if Louisiana law applied, but they disagreed whether the indemnity was valid if maritime law applied to the contract. Rather than determining whether the contract was maritime, Judge Joseph decided to test the parties’ arguments on the merits under maritime law to decide whether the matter could be decided without having to resolve the choice-of-law issue. The contract required EnVen to indemnify ARO for injuries to employees of the “EnVen Group,” which included EnVen, its invitees and contractors (other than ARO). However, the indemnity did not include employees of any contractor who refused to defend and indemnify EnVen’s contractors (which would include the claim of Guevara, an employee of Diverse Safety that declined to indemnify ARO). ARO argued that the use of the term “invitee” applied in this case as Guevara was an invitee. Judge Joseph disagreed with the argument because the interpretation would render meaningless the express exception to the EnVen Group for contractors who do not agree to provide indemnity. Therefore, Judge Joseph held that the agreement between EnVen and ARO did not require EnVen to indemnify ARO under maritime law (or Louisiana law), and he granted summary judgment to EnVen and dismissed ARO’s cross claim.
Laufer Group, a non-vessel operating common carrier, entered into a Service Arrangement with Standard Furniture Manufacturing and International Furniture Marketing (Alabama companies) to transport goods from Asia to the United States. Laufer Group issued bills of lading for each of the shipments in accordance with the provisions of the Service Arrangement. When SFM and IFM did not pay all of the charges for the shipments, Laufer Group brought this suit in federal court in New York against SFM, IFM, and Alabama residents that it identified as principals of SFM and IFM. The defendants moved to dismiss the action on the ground that there was no personal jurisdiction over the defendants in the action brought in New York, and Laufer Group cited the New York forum-selection clause in its bills of lading. The defendants responded that the actual bills of lading were not before the court because Laufer Group had only attached generic, unnamed bills to its complaint. Judge Oetken disagreed, reasoning that the plaintiff can defeat a motion to dismiss by pleading legally sufficient allegations of jurisdiction, and it is not necessary to attach the actual bills of lading in order to plead that there was jurisdiction in New York in accordance with the forum-selection clause. Similarly, Judge Oetken denied the defendants’ motion to dismiss for failure to allege a claim of breach of contract because of the failure to attach the bills of lading. All that was necessary was that Laufer Group plead the elements of breach of contract, and Laufer Group did not have to attach the actual bills of lading to do that. Finally, the individual defendants challenged that they were principals of SFM and IFM, so that they did not fall within the terms of the bills of lading that extended liability for freight charges to principals of the named shippers. As the evidence established that one individual was a principal and the other was not, Judge Oetken granted Laufer Group leave to amend to establish that the non-principal executed credit agreements binding her to the terms of the bills of lading. See September 2020 Update.
Laufer Group later moved for summary judgment based on the terms of the Service Arrangement. When shipments arrived in the United States, Laufer was allotted a certain amount of time to pick up the goods and return the container before accessorial charges were assessed by the carriers, ports, railroads, and truckers. Laufer paid the charges and sought reimbursement from the defendants pursuant to the Service Arrangement, but the defendants disputed a number of the charges, asserting that Laufer had failed to perform in accordance with the Standard Operating Procedures that were prepared by Laufer with the defendants’ input. Judge Oetken agreed that the Service Arrangement was unambiguous and that the Standard Operating Procedures, which were not referenced in the Service Arrangement or signed by Laufer, were not part of the contract and did not provide a basis for the defendants to claim that Laufer was guilty of breach of contract. Accordingly, Judge Oetken granted summary judgment as to liability, but he held there was a limited fact question on damages.
Joseph Savoie was injured on May 18, 2018, while serving as Captain on Inland Dredging Co.’s dredge, M/V INGENUITY, which was assisting in building a dock in Port Arthur, Texas. Savoie brought this suit in federal court in Louisiana in August 2020 under the Jones Act and general maritime law. In January of 2020, counsel for Savoie sent an email to Inland Dredging notifying it of the injury and requesting preservation of logs from the job. After suit was filed, the defendant’s discovery responses lacked daily logs from the INGENUITY dating from May 14 to 19, and included Dredge Equipment Inventory Reports from May 17 and May 19 but not from May 18. Savoie then moved for sanctions, including an adverse inference, asserting that Inland Dredging had destroyed documents. Inland Dredging responded that the documents either did not exist in the first place or were lost inadvertently, stating that not all types of reports were generated on the dredge every day. If the dredge was not actively dredging material (Savoie alleged that the dredge had a broken pump bearing on May 18), then daily logs were not necessarily kept. Judge Milazzo noted that Savoie may not have agreed with Inland Dredging’s explanation, but he was not able to cast doubt on the explanation with evidence of intentional destruction. In order to support his argument that Inland Dredging was acting in bad faith, Savoie argued that the defendant drummed up facts about Savoie’s job performance in order to fire him, suggesting that the defendant had a culpable mind. Judge Milazzo rejected that argument however, answering that the seaman’s employment status had no bearing on the claim of destruction of documents.
Fred J. Hankins and FJ Hankins Enterprises defaulted on their loan with First Bank that was secured by Hankins’ vessel EXODUS and their fishing rights. First Bank brought this suit in federal court in Washington against the vessel, in rem, and the owners, in personam, and arrested the EXODUS. The bank then moved for summary judgment, seeking a judgment against the vessel and defendants for the unpaid balance on the loan, late fees, and the fishing rights, and requesting the sale of the vessel. The bank argued that the fishing rights qualified as an appurtenance of the vessel, and the defendants opposed that argument and added that the fishing rights had been leased to be used by other vessels. Judge Estudillo cited authority from the Supreme Court and appellate courts that intangible assets, such as fishing rights, can qualify as appurtenances; however, he noted that there was some authority to the contrary. Judge Estudillo did not have to decide the question, however, as the security agreements explicitly listed the fishing rights as collateral for the loan. Accordingly, he ordered that the security interest in the fishing rights be foreclosed, and the Marshal was ordered to sell the vessel and fishing rights (together or separately) at the election of the bank.
ADMIntermare time chartered the M/V SFL YUKON, and it also entered into an agreement with Kamca Trading to supply bunkers to the vessel. Kamca obtained the fuel from Glencore, and the fuel that Kamca delivered from Glencore was defective and off specification, resulting in engine failure on the YUKON. The vessel owner initiated an arbitration against ADMIntermare, and ADMIntermare brought this suit in federal court in Texas (transferred to New York) seeking to recover against Kamca and Glencore on the basis of breach of contract/warranty, misrepresentation, negligence, product liability, contribution, indemnity, and equitable subrogation. Kamca moved to dismiss the claims against Kamca, and Judge Oetken granted the motion. With respect to the contract/warranty claim, Kamca’s general terms and conditions required ADMIntermare to give notice to Kamca within 21 days of any quality issues (notice was given in 27 days). ADMIntermare argued that it should have a reasonable time to notify the seller after discovering the breach (under the UCC), but Judge Oetken declined to apply that rule in this maritime dispute and instead considered whether the provision was “manifestly unreasonable.” Reasoning that the 21-day period was not manifestly unreasonable, Judge Oetken dismissed the contract/warranty claims. He also dismissed the negligent misrepresentation claim as that theory cannot be the basis of liability where the defendant’s sole legal duties to the plaintiff arose out of the contract. Judge Oetken dismissed the negligence and products liability claims based on the Robins Dry Dock economic loss rule as ADMIntermare did not have a sufficient proprietary interest in the vessel. Judge Oetken dismissed the contribution and indemnity claims based on the economic loss rule, noting that under the maritime law each tortfeasor must pay the damages attributable to its actions. Judge Oetken dismissed the equitable subrogation claim as it is only available after full payment of the debt and ADMIntermare had not yet paid for any damage to the vessel. Glencore also moved for a dismissal, and Judge Oetken dismissed all of the claims against Glencore for the same reasons as he gave for the dismissal against Kamca, except he dismissed the misrepresentation and warranty claims because Glencore did not provide any information to ADMIntermare on which it could have relied and because there was no privity between Glencore and ADMIntermare.
Michael Perez was killed while working for Cayo/Aquaterra near the Pointe Celeste Pumping Station in Plaquemines Parish, Louisiana. His beneficiaries brought suit in state court in Louisiana under the Jones Act, and the defendants removed the case to federal court based on diversity, arguing that the Jones Act allegation was improperly pleaded. The first issue was whether Perez’s service on a vessel for Cayo/Aquaterra before he resigned from his employment should be considered in determining his seaman status. As Perez ceased all work for defendants, Judge Vance only considered Perez’s work after he was re-hired and was assigned to the pumping station. The defendants presented affidavits to establish that Perez was never aboard a vessel on navigable waters after his re-hiring. Although the defendants asserted that the drainage canal at the project did not discharge into navigable waters, Judge Vance held that she could not resolve the issue on the record presented for the removal and held that the defendants did not establish that the Jones Act claim was improperly pleaded. Consequently, she remanded the case to the Louisiana state court.
This suit involves a dispute over insurance coverage for Matador Sportfishing’s vessel MATADOR. The hull insurer, Clear Spring Property and Casualty Co., declined Matador’s claim from the partial sinking of the vessel based on breach of an express warranty, lack of fortuity, an exclusion for certain damages, unseaworthiness, uberrimae fidei, and misrepresentation/nondisclosure. Clear Spring brought this declaratory judgment action against Matador in federal court in Pennsylvania, and Matador brought a counterclaim asserting breach of contract and also bad faith under Pennsylvania statute. Clear Spring filed a motion for judgment on the pleadings on the bad faith counterclaim, citing the choice-of-law provision in the policy that “any dispute arising hereunder” shall be adjudicated according to entrenched principles of federal admiralty law, but in the absence of entrenched admiralty law, the “insuring agreement is subject to the substantive laws of the State of New York.” Matador argued that the scope of the clause did not encompass the bad faith claim, but Judge Kane disagreed, citing a number of “persuasive” district court cases applying similar language to state statutory claims, including bad faith claims. Judge Kane was also unpersuaded by Matador’s argument that Pennsylvania public policy should permit the bad faith claim to proceed (accepting that Pennsylvania had an interest in applying its statute to a Pennsylvania resident) because of the maritime authorities applying choice-of-law and forum-selection provisions when the forum has a substantial relationship to the parties or transaction. As the bad faith claim was not available under entrenched admiralty law or New York law, Judge Kane dismissed the bad faith claim.
The declaratory judgment action brought by Clear Spring was based on the court’s admiralty jurisdiction and included a Rule 9(h) designation. In its counterclaim, however, Matador demanded a jury trial based on diversity jurisdiction. Clear Spring moved to strike the jury demand, and Judge Kane granted the motion, citing the rule from most courts that the Rule (h) designation in the declaratory judgment action trumps the jury demand in a counterclaim arising out of the same operative facts so that the entire case is tried to the court.
From the state appellate courts:
The ownership and registration of the yacht ACAR has been in dispute for six years. The yacht was owned by Delaware company Alize Yachting and was sold to Moiz Mose Saltiel and his company, MS Maritime, a Delaware company, by a bill of sale in 2016. MS Maritime registered the yacht with the Delaware Department of Natural Resources and Environmental Control under the name MELISSA, and also registered the yacht with Cesme Harbor in Turkey, where the yacht was located. There were disputes whether the paperwork was forged and whether payment was made, and the yacht was seized by a Turkish court. The Turkish court initially ruled in favor of Saltiel and MS Maritime, but after Delaware cancelled the registration and recorded the yacht as belonging to Alize, Alize seized the yacht in Turkey. While the Turkish actions were pending, Saltiel and MS Maritime filed this action to quiet title and reform the bill of sale in the Delaware chancery court. In entering a default after Alize’s Delaware counsel withdrew, the master ruled that the court had jurisdiction over the parties and had jurisdiction to provide in rem relief to quiet title to the vessel because, although it was not located in Delaware, it was registered in Delaware (not Turkey). However, noting that the jurisdiction in Delaware was not exclusive of Turkey where the yacht was seized, the master chose to forego the exercise of jurisdiction and stay the Delaware litigation for forum non conveniens. Thus, although the master held that the court had jurisdiction to enter an in rem judgment quieting title to the vessel, the master stayed litigation for resolution of the first-filed action in Turkey.
Kenneth G. Engerrand
President, Brown Sims, P.C.
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Quote:
Writing for the Sixth Circuit in Williamson v. Recovery Ltd. Partnership, 826 F.3d 297, 305 (6th Cir. 2016), Judge Boggs quoted Lewis R. Carrol, Through the Looking-Glass, and What Alice Found There (1872):
The fatal flaw in both of these arguments is that, even if we assume that Robol did not know the specific fact that the inventories were located in his duplex during his misrepresentations—a claim of which Robol has not convinced us—Robol surely had enough knowledge about the inventories that when his clients told him that the California-Gold-sale inventory was all they had, he could not have believed that statement. Given Robol’s composition of the 1991 letter to Bank One, representation in the Virginia admiralty litigation, interactions with Bob Evans, and conversation with Jim Henson, not even believing in “six impossible things before breakfast ” could lead to the conclusion that Robol reasonably believed that his clients did not possess additional inventories.
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© Kenneth G. Engerrand, March 31, 2022; redistribution permitted with proper attribution.
