April 2021 Longshore/Maritime Update (No. 263)
Notes from your Updater:
The Department of Labor, Division of Federal Employees, Longshore and Harbor Workers’ Compensation, has posted guidance on COVID-19 claims in two sections:
The guidance is also available at the following link:
https://www.dol.gov/agencies/owcp/dlhwc/FAQ/lsfaqs in the Frequently Asked Questions (FAQs).
Judge Burgess addressed the ongoing dispute over which Union (International Longshore & Warehouse Union or Marine Engineers’ Beneficial Association) will provide labor for Sampson Tug and Barge Co. at the terminal at Womens Bay in Alaska in two decisions. See Sampson Tug & Barge Co. v. International Longshore & Warehouse Union, No. 3:20-cv-108, 2021 U.S. Dist. LEXIS 37313 (D. Alaska Mar. 1, 2021), 2021 U.S. Dist. LEXIS 41434 (D. Alaska Mar. 5, 2021).
On March 22, 2021, the United States Supreme Court denied the petition for a writ of certiorari sought by the Massachusetts Lobstermen’s Association from the decision of the D.C. Circuit that upheld the Obama Administration’s creation of a national monument of 5,000 square miles of land beneath the ocean off the Northeast coast so as to allow the United States to ban almost all commercial fishing in the area (see February 2020 Update for a discussion of the decision of the court of appeals). Chief Justice Roberts wrote a statement about the denial, questioning whether designation of an area of submerged land about the size of Connecticut as a monument was appropriate under the Antiquities Act of 1906.
On March 22, 2021, the Supreme Court granted the petition for a writ of certiorari and will hear argument 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.”
On March 22, 2021, the Senate confirmed Boston’s mayor, Marty Walsh, as Secretary of Labor.
On March 29, 2021, the Supreme Court declined to grant a writ of certiorari to consider the dismissal (on grounds of international comity) of the suit filed in California against Tokyo Electric Power Co. by Navy service members who were exposed to radiation from the Fukushima Daiichi Nuclear Power Plant in Japan (see June 2020, August 2020 Updates). Cooper v. Tokyo Electric Power Co., No. 20-730.
On the LHWCA Front . . .
From the federal district courts:
Shipyard worker’s claims were dismissed against subcontractor that worked on products containing asbestos and against manufacturer of pumps containing asbestos; Behrman v. ABB Inc., No. 3:20-cv-5685, 2021 U.S. Dist. Lexis 37929, 2021 U.S. Dist. LEXIS 44159 (Mar. 1, 5, 2021) (Bryan).
Ronald H. Behrmann worked on ships in the Todd and Lockheed shipyards in Seattle, Washington, after serving in the Navy. He claimed that he was exposed to asbestos while working in the shipyards and in the Navy and that his mesothelioma was caused by that exposure. He brought suit against a number of suppliers and contractors involved with products containing asbestos, and Aurora Pump Co., which manufactured pumps and asbestos-containing gaskets and packing for pumps moved for summary judgment. Behrmann argued that he worked on at least ten ships at the Lockheed shipyard that contained Aurora pumps and replacement parts that were manipulated to release asbestos dust in his presence. Applying maritime law, Judge Bryan held that a jury could reasonably infer that Behrmann was exposed to asbestos from Aurora products, but Behrmann was unable to establish that the exposure to Aurora products was a substantial factor in causing his mesothelioma as the evidence did not indicate how often he worked near Aurora pumps or how often he worked near Aurora pumps when they were being manipulated to release asbestos. Propulsion Controls provided engineering services to Lockheed, and Behrmann contended that Propulsion Controls’ employees worked on equipment containing asbestos near Behrmann, exposing him to asbestos. Propulsion Controls moved for summary judgment on the ground that it did not supply any products containing asbestos and it was not responsible for exposing him to asbestos dust that came from products it did not supply. Judge Bryan analyzed the negligence theory as requiring that the defendant must owe a duty to the worker not to expose him to asbestos, that the defendant breached the duty, and that the breach caused the injury. Assuming that Propulsion Controls owed Behrmann a duty, there was no evidence that it breached the duty or that the breach caused Behrmann’s mesothelioma. Behrmann relied on cases involving products liability theories, but Judge Bryan did not find them apposite to this case. He therefore granted summary judgment to Propulsion Controls.
Deckhand who was injured on a former casino boat that was being converted to a music and event venue was not a seaman as the structure was not a vessel in navigation; he was covered under the LHWCA; there were fact questions whether his Section 905(b) claim against his employer was barred under the ship repair exception; and his claims under Louisiana law were barred by the exclusive liability provision in the LHWCA; Dufrene v. Hospitality Enterprises, Inc., No. 19-13748, 2021 U.S. Dist. LEXIS 39597 (E.D. La. Mar. 3, 2021) (Vance).
In 2017, New Orleans Paddlewheels purchased the floating casino, CITY OF EVANSVILLE, which had been moored at its dock in Indiana since 2002 (when Indiana law changed so that casinos no longer had to navigate in order to have gambling). New Orleans Paddlewheels towed the casino boat to Amelia, Louisiana, where the structure was completely gutted to convert it to a music and event venue (its name was changed to the RIVERBOAT LOUIS ARMSTRONG). The structure was moved in October 2018 to the Orange Street Wharf on the Mississippi River in New Orleans, where it remained moored for final renovations. Dalton Dufrene was employed by New Orleans Paddlewheels on the LOUIS ARMSTRONG in August 2019 (as a deckhand according to Dufrene) to perform maintenance and cleaning duties and was injured in September 2019 when he fell from a ladder. In his amended complaint Dufrene brought claims against New Orleans Paddlewheels under the Jones Act and general maritime law (as a seaman), under Section 905(b) of the LHWCA, and under Louisiana law for negligence. New Orleans Paddlewheels moved for summary judgment on all of the claims, asserting that Dufrene was not a seaman because the LOUIS ARMSTRONG was not a vessel in navigation and that LHWCA compensation was his exclusive remedy. Judge Atlas agreed that Dufrene was not a seaman. She first reasoned that the CITY OF EVANSVILLE had been withdrawn from navigation after it stopped navigating and began operating as a stationary, floating casino. Judge Vance then reviewed the extent of the work done to convert the casino boat to a floating music and event venue and held that the work was “sufficiently significant” to prevent the structure from being considered to be a “vessel in navigation.” Dufrene argued that the LOUIS ARMSTRONG regained its status as a vessel after it was moved to New Orleans, as its navigation-essential equipment had been installed, and the work being done involved cleaning and final renovations. Analogizing the conversion to new construction, Judge Vance cited the Fifth Circuit’s Cain decision in which the court held that a drilling vessel that was nearly complete was not a vessel until it could actually perform its intended function. She held that the LOUIS ARMSTRONG was still under construction and was not ready to serve its intended purpose as an entertainment and music venue. Therefore, Dufrene’s seaman’s claims were dismissed. Judge Vance found no dispute that Dufrene was covered under the LHWCA as his injury was on the Mississippi River and he was engaged in maritime employment. The dispute was whether Dufrene could bring a claim against his employer under Section 905(b) for the negligence in its capacity as vessel owner. Instead of arguing whether a Section 905(b) claim could occur when the structure was not a vessel, the parties debated whether the exception in Section 905(b) applied (barring an action against the owner when the employee is employed to provide shipbuilding, repairing, or breaking services). Although there was evidence that Dufrene cleaned up after construction workers, Dufrene testified that he performed basic deckhand work that was unrelated to the construction. Consequently, Judge Vance found fact disputes that precluded resolution of the Section 905(b) issue. Finally, having held that the LHWCA was applicable, Judge Vance held that Dufrene’s claims under Louisiana law were barred by the exclusive remedy provision in Section 905(a) of the LHWCA.
Fact questions prevented time charterer from obtaining summary judgment in longshore worker’s injury suit; Scavo v. CMA DGM S.A., No. 16-cv-5479, 2021 U.S. Dist. LEXIS 42062 (E.D.N.Y. Mar. 4, 2021) (Pollak).
Giovanni Scavo, a longshore worker employed by Red Hook Container Terminal in Brooklyn, New York, was injured during cargo operations on the M/V RANJAN. He brought this action against the owner and time charterer of the vessel, and he dismissed the owner from the suit after an oral representation from the time charterer that it would assume the duties of the owner and defend the case on the merits. Counsel for the charterer made the alleged representation after the owner agreed to undertake the defense of the charterer in accordance with the terms of the New York Produce Exchange Time Charter Party between the parties. CMA later attempted to rescind the representation after the owner’s P&I Club requested that the charterer contribute to the defense. The charterer then moved for summary judgment on the ground that it did not employ the crew and was not responsible for the condition of the vessel when it was turned over the longshore workers. Scavo argued that the charterer was estopped to contend that it had no responsibility for the condition of the vessel, but Chief Magistrate Judge Pollak held that she did not have to reach that issue for this motion as there were fact questions that supported denial of the motion. The charterer cited the decisions from the Second Circuit interpreting clauses similar to those in the time charter in this case in which the appellate court has held that the time charterer is not liable to the longshore workers for injuries during cargo operations, but Scavo relied on a legal duty outside of the charter party arising from the charterer’s knowledge of the ship’s maintenance and notice of damage with requests for repair. Chief Magistrate Judge Pollak recommended that the motion be denied for material issues of fact whether a duty arose from the charterer’s actions and whether the duty was breached.
Compensation carrier that paid LHWCA and state workers’ compensation benefits to workers injured during the DEEPWATER HORIZON/Macondo response efforts was allowed to maintain a negligence action against BP; Louisiana Workers’ Compensation Corp. v. BP, PLC, No. 17-3199, 2021 U.S. Dist. LEXIS 45686 (E.D. La. Mar. 11, 2021) (Barbier).
The Louisiana Workers’ Compensation Corp. paid LHWCA and Louisiana workers’ compensation benefits to workers who were injured during the efforts to contain, remove, and mitigate the DEEPWATER HORIZON/Macondo oil spill. LWCC brought this action against BP for negligence, seeking to recover benefits it paid to and on behalf of workers who sustained injuries (but not for chemical exposure injuries). BP challenged LWCC’s right to recover against it for negligence under the LHWCA and state law, and Judge Barbier rejected both arguments. With respect to the LHWCA, Judge Barbier noted that there are two mechanisms by which the carrier may pursue a third party, the assignment of the right to sue after the payment of benefits pursuant to a compensation order and the Burnside direct action. The carrier would still have to prove that BP was liable, but the case had to proceed against BP. With respect to the state compensation payments, BP argued that Judge Barbier had previously ruled that maritime law preempted application of state law for the personal injury claims. However, Judge Barbier pointed out that the prior decision did not address workers’ compensation subrogation, and he added that he did not agree that a state workers’ compensation carrier could not adjudicate its reimbursement claim against a maritime tortfeasor under the court’s admiralty jurisdiction.
Shipyard timely removed asbestosis suit by employee based on the Federal Officer Removal Statute after taking the employee’s deposition; Joseph v. Eagle, Inc., No. 20-3314, 2021 U.S. Dist. LEXIS 46612 (E.D. La. Mar. 12, 2021) (Morgan); Landreaux v. Huntington Ingalls Inc., No. 20-1208, 2021 U.S. Dist. LEXIS 48973 (E.D. La. Mar. 16, 2021) (Lemelle).
Edward Joseph, Jr. contracted asbestosis and contended that he was exposed to asbestos through his own employment at Avondale Shipyard and through his father’s employment at Avondale Shipyard. He brought this suit in Louisiana state court against the shipyard and various product defendants. Eighteen months after the deadline for removal from the receipt of the suit, the shipyard removed the case to federal court based on the Federal Officer Removal Statute. Joseph argued that the removal was untimely and that the shipyard failed to establish a colorable federal defense that was required for the statute. Judge Morgan rejected both arguments and denied the worker’s motion to remand. The petition did not allege exposure to asbestos from any vessel that the shipyard constructed for the United States. Judge Morgan agreed that it was only after receipt of the transcript of the plaintiff’s deposition in conjunction with his personnel file that the shipyard was on notice of the removability of the suit. Joseph also argued that the government contractor defense was not satisfied because the shipyard failed to comply with many of the requirements of the government contract with respect to protection of its workers from the hazards of asbestos. However, Judge Morgan noted that it is not necessary for the removing defendant to put forth a successful defense in order to remove the case, only to allege a colorable defense. As the shipyard raised a colorable defense, the removal was proper. Landreaux’s suit against the shipyard for exposure to asbestos met with a similar fate when Judge Lemelle held that the shipyard’s assertion of a federal defense was “not wholly insubstantial and frivolous” and was therefore colorable so as to permit removal under the Federal Officer Removal Statute.
Longshore worker adequately preserved objection to maritime removal based on a defect other than subject matter jurisdiction, and the case was remanded to state court; however, the court declined to award fees to the plaintiff; Ibarra v. Port of Houston Authority of Harris County, No. H-20-4227, 2021 U.S. Dist. LEXIS 53782 (S.D. Tex. Mar. 17, 2021) (Lake).
Antonio Ibarra was injured while working as a longshoreman on the M/V ALLEGORIA in the Port of Houston. He brought this suit against the vessel interests and others in state court in Houston, and the defendants removed the case based on the original admiralty jurisdiction of the federal court. Ibarra moved to remand the case on the ground that the defendants removed the case “without a valid legal basis,” arguing that cases brought under the Saving-to-Suitors Clause may not be removed to federal court solely based on admiralty jurisdiction. The defendants responded that the federal court did have admiralty jurisdiction and that Ibarra had waived the right to seek a remand on the basis of a defect other than lack of subject matter jurisdiction (the Saving-to-Suitors Clause). Judge Lake disagreed and held that Ibarra had adequately raised the Saving-to-Suitors Clause as a procedural defect. Judge Lake then reviewed the extensive cases discussing maritime removal and concluded: “While pursuant to § 1333(a) this court would have original jurisdiction over this action had Plaintiff filed it here, “‘original jurisdiction’ evaporated when he filed his action in state court, making [this case] nonremovable on the basis of admiralty jurisdiction.”” Although the defendants argued that they had consented to a jury trial so that the Saving-to-Suitors Clause was not violated by the removal, Judge Lake held that the defendants were free to revoke that consent. Finally, Judge Lake declined to award fees to Ibarra, noting that the Fifth Circuit has stated that the removal issue “is not clear” and that “there is no binding precedent from this circuit.”
Longshore worker failed to establish that grease caused his slip and fall on the vessel; time charterer that did not control cargo operations was not liable for an injury to the longshore worker; Wilkinson v. FA Vinnen & Co., No. 4:19-cv-112, 2021 U.S. Dist. LEXIS 51382 (S.D. Ga. Mar. 18, 2012) (Moore).
Chandler Wilkinson was injured while working as a deckman, overseeing cargo operations between Bay 30 and Bay 34 on the M/V ZIM ISTANBUL. He was checking to see that a box was properly secured while standing on a lashing platform when he stepped backward and his left foot came out from under him, causing him to fall from the lashing platform. Wilkinson brought this suit against the owner and time charterer of the vessel under Section 905(b), and the defendants moved for summary judgment. Wilkinson responded that the owner violated the Scindia turnover duty because there was grease all over the vessel, his fiancée stated that she saw grease on the seat of his pants after the accident, and lashers said there was more grease on the vessel than usual. Judge Moore held that the evidence presented by Wilkinson did not establish that there was grease on the lashing platform at the time of his accident or at the time the vessel was turned over to the stevedore. Additionally, Judge Moore held that the owner could not be held liable for failing to warn the longshore workers about a hazard that they should have anticipated (Wilkinson admitted that it is not uncommon for there to be grease on the surface areas of container ships). As to the time charterer, Judge Moore granted summary judgment on the ground that a time charterer who has no control over the cargo operations cannot be liable for injuries to the longshore workers.
And on the maritime front . . .
From the federal appellate courts:
Fifth Circuit affirmed award from arbitration held outside the chosen forum when conditions in that country made arbitration there impracticable; Northrop Grumman Ship Systems, Inc. v. The Ministry of Defense of the Republic of Venezuela, No. 20-60347 (5th Cir. Mar. 10, 2021) (per curiam).
The long-running dispute between Huntington Ingalls and The Ministry of Defense of the Republic of Venezuela (see Updates from June, July, and September 2020) has again reached the Fifth Circuit. Huntington Ingalls agreed to refurbish two Navy frigates for The Ministry of Defense of the Republic of Venezuela in 1997 at Huntington Ingalls’ shipyard in Pascagoula, Mississippi. The contract contained a mandatory arbitration provision that arbitration would take place in Caracas, Venezuela. There were disputes about the work, and Huntington Ingalls brought suit in 2002 in federal court in Mississippi seeking damages and to compel arbitration. The district court declined to compel arbitration in Venezuela based on the violently unstable political situation in Venezuela and ordered arbitration to proceed in Mississippi (although the arbitration panel moved the proceedings to Mexico City). There was also a possible settlement (later denied by the Ministry on the ground that its counsel were not authorized to enter into a settlement), and the district court enforced the settlement. The Fifth Circuit reversed the order on the enforceability of the settlement and ordered the district court to analyze whether the present conditions in Venezuela would make it impracticable to arbitrate there. The district court then held that arbitration would be impracticable in a way that was unforeseeable to Huntington Ingalls at the time the contract was signed and would essentially deprive Huntington Ingalls of its day in court if it were forced to arbitrate in Venezuela. The parties then agreed to arbitrate in Washington, D.C., and the appeal and petition for mandamus were denied. The Ministry objected to Washington, and the arbitration panel moved the arbitration to Rio de Janeiro, Brazil, where an award of more than $128 million was entered in favor of Huntington Ingalls. This appeal ensued, and the Ministry argued that impracticability was not a defense and that the forum-selection clause was not severable from the arbitration agreement. The Fifth Circuit agreed that severability is a prerequisite for voiding an arbitral-forum clause, but the court held that both legal arguments had been presented during the first appeal and had been decided by the panel (implicitly with respect to the severability question). Therefore, the decisions were law of the case and could not be challenged in this appeal. Turning to the decision of the district court that arbitration in Caracas would not be practicable, the Fifth Circuit held that the district court did not err. The Fifth Circuit also held that Huntington Ingalls carried its burden to show that it could not reasonably have foreseen the adverse conditions in Venezuela at the time it entered into the contract in 1997 (the Chavez Bolivarian Revolution was in 1999). Finding no defenses under the Panama Convention to enforcement of the award, the Fifth Circuit held that the district court properly enforced the arbitral award.
Arbitration clause in broker’s Commission Agreement involving construction of a luxury yacht that contemplated the construction of a second yacht applied to the broker’s claims when the client purchased a second yacht; Northrop and Johnson Yachts-Ships, Inc. v. Royal Van Lent Shipyard, B.V, No. 20-13442 (11th Cir. Mar. 26, 2021) (per curiam).
Northrop is a brokerage company that negotiates deals for the purchase and sale of yachts. Northrop introduced its clients to Feadship America for the purchase of a yacht built by Royal Van Lent. As the clients were interested in the purchase of a larger yacht in the future, Northrop’s Commission Agreement provided for a commission for the first sale and an additional commission in the event of a second sale that was a bonus for accepting a reduced commission for the first sale. The agreement contained an arbitration clause in accordance with the Arbitration Rules of the Netherlands Arbitration Institute. When the client and builder entered into a second agreement that excluded Northrop, the broker brought Florida state-law tort claims against the builder for tortious interference with Northrop’s business relationship with its clients. Northrop removed the case to federal court and sought arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Although Northrop argued that the arbitration agreement in the Commission Agreement did not apply to the claims related to the second sale, the district court and Eleventh Circuit disagreed. Whether the claims were based on quantum meruit, unjust enrichment, or interference with its contractual relationship, the claims were governed by the arbitration agreement and arbitration was compelled.
Judge was correct to exclude economist’s vocational testimony that was based on unsupported assumptions in passenger’s injury suit; general instruction on the duty to provide medical care for a cruise ship at sea was not erroneous; Buland v. NCL (Bahamas) Ltd., No. 19-13012 (11th Cir. Mar. 29, 2021) (Pryor).
Andre Ow Buland, a citizen of Trinidad and Tobago, earned about $135,000 a year as the chief financial officer of several large corporations, but he resigned the stressful job to pursue development projects for some properties he owned. Before starting the new endeavor, Buland took a cruise on the NORWEGIAN PEARL, but he suffered a heart attack at sea. The ship’s doctors decided the risk of giving him a thrombolytic was too risky and monitored him in the ship’s intensive care unit until the ship arrive in Miami a day and a half later. Buland brought this suit in diversity and admiralty, complaining that the inadequate medical care caused him permanent medical problems. Although the court lacked diversity (plaintiff and defendant were both foreign), the parties consented to a jury trial. Judge Huck excluded the testimony of Buland’s economist, Dr. Gary A. Anderson, as to Buland’s loss of earning capacity (granting a directed verdict on loss of earning capacity), and he declined to modify the pattern instruction for medical negligence to add emphasis that doctors at sea are not held to the same standard as doctors on land. The jury found in favor of Buland, awarding non-economic damages, future medical expenses, and lost services, and Judge Huck entered judgement in the amount of $1,712,862 after granting a remittitur. Both parties appealed, and Judge Pryor, writing for the Eleventh Circuit, first affirmed that the district court had admiralty jurisdiction, reasoning that medical negligence on a cruise ship has a potentially disruptive impact on maritime commerce. Judge Pryor then addressed the exclusion of the testimony of the economist and upheld the decision because the assumptions made by the economist about career opportunities for Buland were entirely speculative. The lay and medical testimony about Buland’s prior work and his ability to work as a part-time university teacher or member of a corporate board left too much of a gap to support an award and were likewise too speculative to prevent a directed verdict. With respect to the standard of care for the cruise line, Judge Pryor stated that it was “implicit” in the general duty of reasonable care that cruise lines will not be subject to the same standard for medical negligence as would guide treatment onshore. However, the Eleventh Circuit considered the requested instruction (reasonable care on the part of a physician in an admiralty case involving medical malpractice is defined in reference to similar and reasonably careful physicians in the same maritime environment) to be just as accurate as the pattern instruction (medical negligence is doing something that a reasonably careful physician would not do under like circumstances). The precise wording of either instruction fell within the discretion of the district court, and it was up to the litigants to present evidence as to the standard of care. As there was some evidence of the failure to provide reasonable care, the judgment was affirmed.
Appellate court affirmed dismissal of a passenger’s injury suit against the manufacturer of jet ski after the striking of her experts; Wells v. Kawasaki Motors Corp., U.S.A., No. 20-4004 (10th Cir. Mar. 29, 2021) (Phillips).
Nicole Wells suffered internal injuries from an underwater stream of high-pressured water emitted from a Kawasaki jet ski being operated in Lake Powell in Utah. Wells claimed that she sat down on the jet ski’s rear end in the passenger seat and slid backward and fell into the water when the driver accelerated. She suffered a ten-centimeter tear in her large intestine from water emitted from the jet ski that shot up her rectum. Kawasaki knew of the risk of this type of injury and put an orange warning on the back of the jet ski advising that severe injuries can occur if water is forced into body cavities as a result of falling into the water or being near the jet thrust nozzle and that normal swimwear would not adequately protect against forceful water entry into the body. The warning cautioned that all riders must wear a wet suit or equivalent protective clothing. Wells was wearing an ordinary swimsuit. Wells brought this products-liability suit against Kawasaki, asserting a design defect in the seat that made it more likely that a passenger would slide off the seat and into the path of the jet thrust, and failure to properly warn passengers on the basis of Kawasaki knowing that the warning was completely ineffective. She presented Dr. Anand Kasbekar (Ph.D. in mechanical engineering and material science), who opined that Wells would have been less likely to have fallen from the jet ski had it been equipped with Kawasaki’s luxury seat that had more hip support. Dr. Kasbekar reached this conclusion by performing a drag test he designed with a bag at Ms. Wells’ weight covered in swimsuit material. He used a cable/pulley system to measure the force needed to slide the bag across the seat and concluded that Wells would not have fallen from the luxury seat. The district court ruled that this test was unreliable, noting that it had not been subjected to peer review and had no known rate of error and struck Dr. Kasbekar’s opinion. The Tenth Circuit agreed, with Judge Phillips dismissing the argument from Kawasaki’s marketing material that the luxury seat allows riders to feel much more connected to the watercraft under hard acceleration as “merely puffery” that “does not establish that the LX seat would likely have prevented Wells’s injuries.” The district court also excluded the opinion of Wells’ expert, Joellen Gill, that the warning was completely ineffective in changing the behavior of jet ski users. Agreeing that the opinion was unreliable because it had not been subjected to the rigors of testing, peer review, and acceptance throughout a broader community, Judge Phillips affirmed the striking of Gill’s opinion. Without expert evidence on the defect/warning claims, the summary judgment was affirmed.
Charterer of vessel could not pierce the corporate veil of a family enterprise to enforce its arbitration award against a company outside of the arbitration proceeding; Pacific Gulf Shipping Co. v. Vigorous Shipping & Trading S.A., No. 20-35159 (9th Cir. Mar. 29, 2021) (Boggs).
Pacific Gulf chartered the M/V ADAMASTOS, operated by George and Efstathios Gourdomichalis through Phoenix Shipping, from Adamastos Shipping. After numerous problems arose with the vessel, Pacific Gulf initiated arbitration with Adamastos Shipping and obtained an award when Adamastos failed to respond. Pacific Gulf then sought to enforce its award against other entities owned by the Gourdomichalis brothers, including attachment of the M/V VIGOROUS, owned by a company dominated and controlled by the brothers. The case proceeded through discovery with the production of more than 100,000 pages of documents and a dozen depositions. The district court then granted summary judgment to the defendant companies, concluding that Pacific Gulf’s efforts to pierce the corporate veil came back “largely empty handed.” The Ninth Circuit applied federal common law to examine the two corporate identity arguments. Writing for the Ninth Circuit, Sixth Circuit Judge Boggs first addressed the argument that one of the entities was a successor business entity of Adamastos Shipping. Judge Boggs agreed with the decisions of the other circuit courts requiring a transfer of all or substantially all of the predecessor’s assets in order for there to be successor liability. As Pacific Gulf failed to satisfy this standard, the Ninth Circuit held that the district court correctly dismissed the successor liability claim. Pacific Gulf also argued that it was entitled to pierce the corporate veil of the Gourdomichalis companies because it had established that the corporate form of the defendants was being dominated and controlled by the brothers. Judge Boggs noted that the Second Circuit allows the plaintiff to pierce the corporate veil by proving either domination and control or fraud. However, the Ninth Circuit employs a conjunctive test that requires domination and control and injustice from not piercing the veil and some form of ill intent. Although there was ample evidence of the control and domination, there was insufficient evidence to show fraud. Consequently, the Ninth Circuit affirmed the summary judgment against Pacific Shipping.
From the federal district courts:
Italian forum-selection clause was enforced in cargo damage suit; Travelers Property Casualty Co. of America v. Salvino Del Bene U.S. A., Inc., No. CV 20-1352, 2021 U.S. Dist. LEXIS 37830 (C.D. Cal. Mar. 1, 2021) (Olguin).
Salvino Del Bene contracted to carry a cargo of plastic film rolls from Long Beach, California, to the Dominican Republic. The cargo was damaged, and the cargo insurer, Travelers, brought this action in federal court in California to recover for the amount paid under the policy. The carrier sought to dismiss the suit based on the forum-selection clause in the bill of lading requiring suit in Florence, Italy. Travelers argued that the clause was unenforceable under Italian law. However, an expert in Italian law explained that the provisions of Italian law were superseded by regulations of the European Union. Travelers also argued that the clause was unenforceable because the bill of lading contained a nine-month period in which to bring suit, which would violate the one-year period in the Carriage of Goods by Sea Act. Judge Olguin rejected that argument, however, as the bill of lading contained a Paramount Clause so that COGSA’s one-year period would apply, not the nine-month period. Finally, Travelers argued that the bill of lading violated COGSA because it did not provide notice and a fair opportunity for the shipper to declare a value for the cargo so as to avoid the package limitation. However, Judge Olguin held that a failure to provide that notice would not invalidate the forum-selection clause. Consequently, Judge Olguin granted the carrier’s motion to dismiss the case without prejudice.
Pleading that the defendant knew or should have known of the dangerous condition based on prior falls, industry standards, and the weather, without supportive facts, was insufficient to establish notice; Cavitt v. Carnival Corp., No. 20-22259, 2021 U.S. Dist. LEXIS 39911 (S.D. Fla. Mar. 2, 2021) (Moreno).
Linda Cavitt, a passenger on the M/S FASCINATION, was injured when she fell while descending the ship’s gangway in Purerto Rico. The cruise line moved to dismiss the complaint because Cavitt failed to sufficiently allege notice. Cavitt pleaded that the gangway was dangerously uneven, unleveled, wet, and slippery, and that the cruise line should have known of the dangerous condition based on prior falls, industry standards, and the weather. However, Judge Moreno noted that there were no factual allegations to support the conclusory statements. Without facts demonstrating that it was plausible that the cruise line should have known of the risk-creating conditions, the complaint was insufficient to establish notice. Consequently, Judge Moreno dismissed the complaint with leave to amend it to sufficiently allege notice.
Post-damage repair in Florida was insufficient to support personal jurisdiction in Florida over Lloyd’s Underwriters on a hull insurance dispute; Noble House, LLC v. Underwriters at Lloyd’s London, No. 20-62080, 2021 U.S. Dist. LEXIS 46007 (S.D. Fla. Mar. 3, 2021) (Singhal).
Noble House purchased a hull insurance policy from Certain Underwriters at Lloyd’s London covering its 177-foot motor yacht. Noble House is a Marshall Islands corporation with its principal place of business in Texas. The vessel underwent a substantial refit in Florida before its purchase by Noble House, but after the purchase and during the policy period, the vessel lost its portside rudder in the Bahamas while en route to Fort Lauderdale, Florida. The vessel was towed to Fort Lauderdale, and the Underwriters declined to pay for the repairs or salvage expenses. Noble House brought this action in the federal court in Florida, seeking to recover repair and salvage expenses, and the Underwriters moved to dismiss the case for lack of in personam jurisdiction. Noble House asserted that Underwriters had agents, members, or employees who carried out Underwriters’ business in Florida by contracting to insure and provide coverage to vessels for damage incurred in Florida. Noble House also tried to use Florida contacts of Argonaut Insurance Co. as it shares the same corporate parent as Syndicate 1200, the lead underwriter for the policy. Judge Singhal was careful to distinguish corporate entities, noting that Argonaut Insurance Co. was not involved in the policy or the case, that the Syndicate is organized under the laws of the United Kingdom and is not licensed to conduct business in Florida, that Noble House and its retail broker are located in Texas, and that the wholesale broker for the policy is a United Kingdom corporation. He also found that the connection to Florida was too tenuous in this case as Florida had no interest in litigating a dispute with such a weak nexus with Florida from the post-damage repairs in Florida. Noble House did submit PACER search results listing 46 actions in the Florida federal court involving Underwriters, including some as plaintiff, but Judge Singhal did not find them relevant to this particular case. Consequently, Judge Singhal held that Noble House had not carried its burden to establish personal jurisdiction against Underwriters in this case, cautioning that the decision should not be read as establishing that Certain Underwriters at Lloyd’s London may never be subject to general or specific personal jurisdiction in Florida or anywhere else in the United States.
Fraud must be specific to the forum-selection clause to avoid transfer of the case to the agreed forum; T.W. LaQuay Marine, LLC v. Great Lakes Dredge & Dock Co., No. 3:20-cv-163, 2021 U.S. Dist. LEXIS 39661 (S.D. Tex. Mar. 3, 2021) (Brown).
T.W. LaQuay Marine chartered the dredging vessel IOWA from Great Lakes Dredge in order to fulfill a dredging contract entered into between LaQuay and the Army Corps of Engineers for work in South Texas. LaQuay asserted that the IOWA did not perform as promised and brought this suit in federal court in Galveston seeking a declaratory judgment and damages under the charter. Great Lakes invoked the exclusive forum-selection clause in the charter for the federal court for the Northern District of Illinois, and LaQuay argued that the charter was the result of fraud from misrepresentations about the IOWA’s capacity and seaworthiness, rendering the charter (and its forum-selection clause) void. Judge Brown rejected that argument, as fraud in the inducement of the contract does not automatically invalidate a forum-selection clause. The fraud must have induced the party to agree to the forum-selection clause. As the incorporation of the clause was not the product of fraud or overreaching, Judge Brown held that the clause was enforceable. Turning to the convenience and fairness of transfer to the Northern District of Illinois, Judge Brown did not consider that the transfer would deprive LaQuay of its day in court, and he transferred the case, rather than dismissing it, as the case could have been originally brought in the federal court in Illinois.
Beneficiaries of engineman who was exposed to asbestos on vessel could not establish negligence or causation in action against shipyard; Wineland v. Air & Liquid Systems Corp., No. C19-793, 2921 U.S. Dist. LEXIS 41311 (W.D. Wash. Mar. 4, 2021) (Lasnik).
John Dale Wineland served as an engineman on the USS TUSCALOOSA when it was overhauled at Todd Shipyards. His beneficiaries maintained this action against the shipyard for negligently exposing Wineland to asbestos that caused his death from mesothelioma. The shipyard moved for summary judgment, and the first issue addressed by Judge Lasnik was whether maritime law or Washington law applied to the claim. Although a portion of the exposure occurred while the vessel was in drydock, Judge Lasnik held that vessels in drydock are still considered to be on navigable waters for purposes of admiralty jurisdiction and that asbestos-related injuries suffered by workers on ships have the potential to disrupt maritime commerce. Therefore, he applied maritime law to the claim. Judge Lasnik then considered whether there was evidence of negligence on the part of the shipyard, but there was no evidence of actual conditions at the shipyard or on the vessel when it was in the shipyard in 1974. Similarly, there was no evidence of the nature of any release of asbestos dust, the materials that were mishandled, the duration of any release, or Wineland’s proximity to the release. Consequently, Judge Lasnik granted summary judgment to the shipyard.
Release of claims by vessel owner barred the owner’s limitation action; In re Martinez, No. 4:20-cv-10129, 2021 U.S. Dist. LEXIS 40534 (S.D. Fla. Mar. 4, 2021) (King).
This case arises from a collision between two vessels off Key Largo, Florida, which were operated by their owners, Eric Reynolds and Michael A. Martinez. Both owners were injured. Reynolds filed a limitation action, and Martinez filed a claim in the limitation action. Reynolds’ insurer tendered its policy limit to Martinez, and he accepted the settlement and signed a release. That agreement released Reynolds from all actions and causes of action that could have been brought by Martinez in connection with the accident. A few weeks later, Martinez brought this limitation action, and Reynolds moved to dismiss the action based on the language of the release. Although Martinez claimed that the limitation action was merely a defense, Judge King disagreed and held that the limitation action fell squarely within the provision of the release. As the limitation action was filed in breach of the terms of the release, Judge King dismissed the action with prejudice.
Court declined to disqualify counsel for the insurer based on his involvement pertinent to the insured’s bad faith claim against the insurer; United States Fire Insurance Co. v. Icicle Seafoods, Inc., No. C20-401, 2021 U.S. Dist. LEXIS 41976 (W.D. Wash. Mar. 5, 2021) (Martinez).
United States Fire and others issued a hull policy covering Icicle Seafoods’ R.M. THORSTENSON. The vessel suffered engine damage during the policy, and the parties settled the claim for hull damage. However, the parties could not reach agreement on the insured’s claim for loss of hire, with the insurers’ adjustment in the amount of $966,638.48, and the insured seeking $4,043,445. The major disagreement arose over the amount of pink salmon that the insured would have processed had the vessel been able to travel to Area M in Alaska. The insurers retained an expert who opined that the insured would have been able to process up to 4.5 million pounds of pink salmon. Counsel for the insurer agreed that the report provided some independent support for the insured’s claim, but did not disclose the report to the insured and designated the expert as a consulting expert. The insurer brought this declaratory judgment action, and the insured filed a counterclaim in which it alleged breach of contract and extracontractual claims under Washington law. During the litigation, the insured discovered an email from the insurer’s counsel describing the expert report and its non-disclosure. The insured demanded that counsel withdraw from the matter and then filed a motion to disqualify the attorney and his firm when he declined to withdraw. Chief Judge Martinez first addressed whether, under Washington’s Rules of Professional Conduct, the lawyer could not act at trial because it was likely that he would be a “necessary witness.” The insured argued that the lawyer was a necessary witness to establish bad faith of the insurer by burying the report. Chief Judge Martinez was not convinced, however, that the relevant evidence was solely with the lawyer and was not obtainable elsewhere. In fact, the email itself was quite powerful. Whether the lawyer was acting on behalf of the insurers could be elicited from employees of the insurer. Finally, Chief Judge Martinez was convinced that the insurers would suffer substantial hardship as marine insurance in general, and loss of hire in particular, require specialized expertise that few lawyers possess, and it would be difficult to find qualified replacement counsel at this stage of the proceeding for seven different groups of insurers (including international clients). Chief Judge Martinez also addressed the insured’s argument that the lawyer should be disqualified because of a conflict of interest with his clients. In the first place, Chief Judge Martinez was not persuaded that the insured had standing to move to disqualify the lawyer for his alleged conflict with the insurer. Additionally, Chief Judge Martinez did not find a significant risk that the lawyer’s representation of the insurers would be materially limited by his self-interest so that his ability to represent the insurers would be compromised. Although Chief Judge Martinez denied the motion to disqualify, he did not award sanctions against the insured, finding that the record did not sufficiently support a finding that the insured brought the motion solely for tactical reasons or in bad faith.
Judge Bloom instructed the cruise line and passenger on proper pleading of affirmative defenses; McLendon v. Carnival Corp., No. 20-cv-24939, 2021 U.S. Dist. LEXIS 41161 (S.D. Fla. Mar. 5, 2021) (Bloom).
While travelling on the cruise ship vessel, SENSATION, James McLendon began experiencing symptoms requiring urgent medical care and visited the ship’s doctor. Following an examination of McLendon, the doctor concluded that McLendon was unfit to sail and recommended that he go to a hospital in the Bahamas. McLendon and his wife Jennifer McLendon left the vessel, and he sought treatment at a Bahamian public hospital, but McLendon died in the hospital that same day. Ms. McLendon initiated this action against the cruise line, asserting claims for negligent diagnosis, negligent treatment, negligent failure to timely prepare or set up treatment, negligent consultation, negligence regarding the equipment, and negligent transport. The cruise line filed an Answer and Affirmative Defenses, asserting fifteen Affirmative Defenses, and McLendon filed a Motion to Strike Affirmative Defenses. Judge Bloom reasoned that a defense is insufficient as a matter of law only if, on the face of the pleadings, the defense is patently frivolous or if the defense is clearly invalid as a matter of law. After recounting the debate concerning the appropriate pleading standard required for affirmative defenses, Judge Bloom agreed with the school of thought maintaining an affirmative defense is sufficient when it provides fair notice of issues that may be raised at trial (as opposed to the school that contends affirmative defenses are subject to the heightened pleading standard of Fed. R. Civ. P. 8(a)). As such, Judge Bloom held that the cruise line sufficiently pleaded twelve of the fifteen affirmative defenses and that McLendon failed to demonstrate that the affirmative defenses had no possible relation to the action. Judge Bloom reasoned that the Fifteenth Affirmative Defense (that the plaintiff failed to state a claim for relief because the cruise line did not owe a duty under the facts as alleged) was not an affirmative defense as it simply pointed out a defect or lack of evidence in the plaintiff’s case. As such, Judge Bloom determined the proper remedy was not to strike the defense, but to treat it as a specific denial. With respect to the cruise line’s Sixth Affirmative Defense, which stated that the defendant was entitled to a set-off or to have a jury consider all evidence of sums paid, payable, discounted, or written-off by collateral sources, McLendon argued that it violated the collateral source doctrine of general maritime law in that tortfeasors are barred from mitigating damages by setting off compensation received by the plaintiff from an independent source. Judge Bloom noted that the Higgs decision from the Eleventh Circuit allowed juries to consider evidence of collateral sources to determine reasonable damages, but also provided that tortfeasors were not entitled to set-offs under general maritime law. Accordingly, Judge Bloom struck the first part of the Sixth Affirmative Defense, claiming an entitled to a set-off. McLendon moved to strike the Eight Affirmative Defense, which asserted that the alleged injuries and damages were due to the actions or inactions of third-parties beyond the cruise line’s control, on the grounds that general maritime law adheres to the doctrine of joint and several liability as opposed to the Fabre doctrine from Florida law. The cruise line argued that, under general maritime law, a defendant was not precluded from presenting evidence of non-party fault to defeat a finding of proximate causation. Reasoning that the cruise line was attempting to challenge causation rather than apportion liability, Judge Bloom indicated that the Eighth Affirmative Defense was actually a specific denial as it sought to point out a defect in the plaintiff’s case and held that it should be treated as such instead of being struck from the pleading.
Judge Lenard instructed the cruise line and passenger on proper pleading of affirmative defenses; Reed v. Royal Caribbean Cruises, Ltd., No. 19-24668, 2021 U.S. Dist. LEXIS 42942 (S.D. Fla. Mar. 5, 2021) (Lenard).
While aboard the cruise ship VISION OF THE SEAS, passenger Deborah Reed was approached by an intoxicated John Doe during an organized dance party. After the two began to dance, John Doe spun Reed against her will and suddenly released her, causing Ms. Reed to fall and injure herself. Reed initiated an action against the cruise line, but, after the court struck her original Complaint as a “shotgun pleading,” Reed filed a Second Amended Complaint against the cruise line, asserting negligent supervision and training, failure to adequately warn, and negligent over-service of alcohol. The Amended Complaint also asserted a negligence claim against John Doe (a/k/a Augustine Morris). The cruise line filed an Answer and Affirmative Defenses, asserting 21 affirmative defenses, and Reed filed a Motion for Partial Summary Judgment on most of the cruise line’s affirmative defenses. Judge Lenard reasoned that summary judgment can be entered on a claim only if it is shown that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Judge Lenard further specified that partial summary judgment may be granted on affirmative defenses, but the plaintiff had the burden of showing that the defendant cannot maintain these defenses by a preponderance of evidence. With respect to the cruise line’s First, Third, Fourth, Fifth, Sixth, Eighth, Tenth, Fourteenth, Fifteenth, and Sixteenth Affirmative Defenses, Reed asserted that the cruise line had put forth no evidence to support these defenses. The cruise line argued that merely stating that there is no evidence to support an affirmative defense is insufficient to prevail on summary judgment. Judge Lenard agreed with the cruise line, holding that Reed’s conclusory “no evidence” assertion was insufficient to sustain her burden of showing that the defendant cannot maintain these defenses by a preponderance of evidence. Accordingly, Judge Lenard denied Plaintiff’s Motion for Partial Summary Judgment on Defendant’s First, Third, Fourth, Fifth, Sixth, Eighth, Tenth, Fourteenth, Fifteenth, and Sixteenth Affirmative Defenses. Reed argued that the cruise line’s Ninth and Twelfth Affirmative Defenses (denying Plaintiff’s allegations and seeking to apportion liability to non-parties) were based on Florida’s Fabre doctrine, which is inapplicable under general maritime law. Judge Lenard agreed, noting that, whereas the Fabre doctrine allows named defendants to apportion liability to non-parties, general maritime law instead applies the principle of joint and several liability, under which a plaintiff may obtain judgment for the full amount against any joint tortfeasors without regard to percentage of fault. Judge Lenard determined that the cruise line’s Eleventh Affirmative Defense, asserting that the cruise line acted reasonably and in good faith at all times, was properly construed as a denial and not an affirmative defense. Thus, Judge Lenard granted Reed’s Motion for Partial Summary Judgment as to the Eleventh Affirmative Defense, leaving the factual issue for trial or disposition. Holding that the cruise line’s Thirteenth Affirmative Defense was not a legally proper affirmative defense as it sought to reduce, offset, or set off Reed’s recovery by amounts paid by a collateral source in direct contravention of the Higgs decision from the Eleventh Circuit, Judge Lenard granted Plaintiff’s Motion for Partial Summary Judgment as to that defense. After finding that the cruise line’s Sixteenth Affirmative Defense (“no notice”) was actually a denial as it did not accept Ms. Reed’s Second Complaint as true and instead attempted to controvert Reed’s negligence claim, Judge Lenard granted Partial Summary Judgment as to that defense. As to the cruise line’s Eighteenth, Nineteenth, and Twenty-First Affirmative Defenses, Judge Lenard reasoned that each of these defenses spoke to superseding causes and that a jury could find that the actions of John Doe constituted a superseding cause of Reed’s damages. As such, Judge Lenard denied Reed’s Motion for Partial Summary Judgment as to the Eighteenth, Nineteenth, and Twenty-First Affirmative Defenses.
Court amended its decision and declined to award attorney’s fees under state law for breach of the maritime contract; Couvillion Group, LLC v. Quality First Construction, LLC, No. 19-676, 2021 U.S. Dist. LEXIS 42585 (E.D. La. March 8, 2021) (Vitter).
Quality First contracted with the United States Army Corps of Engineers to relocate a hydraulic steel flood control gate along the Mississippi River in St. Bernard Parish, Louisiana. Quality First accepted the proposal of Couvillion Group to provide equipment and personnel for the project (including a crane barge), and the parties entered into a written subcontract. Quality First and Couvillion also entered into an agreement for the use of a houseboat to support the personnel working on the project. During the project, Quality First requested that Couvillion perform additional work, outside the scope of work in the subcontract, and when Quality First declined to pay for the additional work, Couvillion brought this suit for breach of contract. Judge Vitter held that the subcontract was a maritime contract (as the crane barge played a substantial role in the performance of the work), and she held that federal admiralty law, rather than state law, applied. On the merits, Judge Vitter awarded damages to Couvillion for the additional work that was performed together with pre-judgment interest as this is an admiralty case. However, Judge Vitter ruled that Couvillion could recover attorney’s fees based on Louisiana’s open account statute, and your Updater noted that the Fifth Circuit, in which this case is pending, has denied recovery of attorney’s fees under state statutes in a maritime contract dispute. See, e.g., Texas A&M Research Foundation v. Magna Transportation, Inc., 338 F.3d 394, 405-06 (5th Cir. 2003) (see October 2020 Update). On March 8, 2021, on further review and without the issue being raised by the parties in a motion, Judge Vitter amended the Findings of Fact and Conclusions of Law that she had issued and held that Couvillion was not entitled to recover attorney’s fees under Louisiana’s open account statute, citing the Texas A&M case and noting that the Fifth Circuit law was “clear.”
Plaintiff corrected insufficient allegation that the garnishee held accounts that are the property of the defendant so as to obtain a Rule B garnishment; Australasia Charterers Ltd. v. Worldwide Bulk Shipping Pte Ltd., No. C21-98, 2021 U.S. Dist. LEXIS 43084 (W.D. Wash. Mar. 8, 2021) (Martinez).
Worldwide Bulk Shipping chartered a vessel from Australasia Charterers to carry coal from Australia to China. The vessel could not discharge the coal in China, however, because China halted the importation of coal from Australia. The parties initiated an arbitration proceeding in London, and Australasia Charterers brought this proceeding seeking to garnish property as security for its claims in the arbitration. Chief Judge Martinez found the complaint was sufficient to establish the right to garnish property belonging to Worldwide Bulk Shipping; however, the assertion that Australasia reasonably believes that the garnishee holds accounts which are the property of Worldwide Bulk Shipping was factually insufficient to establish a plausible right to garnishment with respect to the garnishee. The garnishment was denied without prejudice (see February 2021 Update). Australasia amended its assertions to specify in more detail that Cargill is a significant customer of Worldwide and that it held accounts owing to the defendant. Although the judge had concern whether accounts could truly be said to exist within the district, he held that the attachment could proceed and the issues could be addressed in a post-attachment proceeding. Chief Judge Martinez did deny the request to serve the attachment by facsimile or other electronic means, including email.
Cruise line did not waive its objection to the passenger’s demand for a jury trial by agreeing to a jury in similar cases; Orozco v. Princess Cruise Lines, Ltd., No. 20-2326, 2021 U.S. Dist. LEXIS 45315 (C.D. Cal. Mar. 9, 2021) (Selna).
Jorge Orozco brought this action under the court’s admiralty jurisdiction, and there was no diversity between the parties. Orozco asserted the right to a jury trial in the parties’ Rule 26 Report, and the cruise line did not object. Judge Selna requested briefing on whether a jury trial was available in a case brought within the admiralty jurisdiction, and the cruise line submitted that the passenger was not entitled to a jury trial. The passenger responded that the cruise line had waived its objection to a jury trial in similar cases and that the cruise line had waived any objection to a jury trial by failing to object in the Rule 26 Report. Judge Selna held that there was no other basis for jurisdiction in this case other than admiralty for which the passenger was not entitled to a jury trial. With respect to the passenger’s arguments, Judge Selna responded that neither assertion barred the cruise line’s “right to a bench trial in this case.” The judge directed that the matter be set for a bench trial.
Passing a Coast Guard inspection did not exonerate the vessel owner from a passenger’s claim of defective steps; Nasser v. Imperial Ferry Corp., No. 19-cv-0845, 2021 U.S. Dist. LEXIS 44500 (E.D.N.Y. Mar. 9, 2021) (Komitee).
Passenger Roger Nasser missed a step and fell as he descended the stairs of the ALEXANDER HAMILTON ferry in New York Harbor. Nasser brought suit against Port Imperial Ferry for negligent failure to maintain and inspect and negligent design and construction of the ship’s stairwell. Nesser contended that the stairs of the ferry were of unequal dimensions, which caused him to fall, and that the handrail was four inches higher than is permitted by the Coast Guard Regulations, preventing Nesser from breaking his fall. Port Imperial Ferry filed a motion for summary judgment on all of Nesser’s claims. The question arose whether the stairwell violated the Coast Guard’s regulations, establishing negligence per se, because the ferry had been inspected and certified for operation by the Officer in Charge, Marine Inspection. Port Imperial Ferry argued that because the Coast Guard inspected and approved the vessel, the requisite stairwell standards were implicitly waived for the ALEXANDER HAMILTON. However, Judge Komitee determined that in order for the Coast Guard to excuse a vessel from compliance, the waiver must be affirmatively expressed. Similarly, Coast Guard inspection and compliance does not waive a vessel owner’s duty to exercise reasonable care for the passengers and conduct independent inspections as required under general maritime law. Judge Komitee concluded that the Coast Guard inspection of the vessel did not provide evidence negating negligence on the part of Port Imperial Ferry with respect to maintenance and inspection of the stairwell. However, Judge Komitee determined that there was no genuine dispute as to negligent design and manufacture by Port Imperial Ferry because there was no evidence that the shipowner sold or manufactured the vessel, which was built by a non-party shipbuilder as noted on the vessel’s certificate of inspection.
Maritime injury case that was removed based on the bankruptcy of a defendant was transferred to the bankruptcy court; Cook v. Rowan Cos., No. H-20-3811, 2021 U.S. Dist. LEXIS 45169 (S.D. Tex. Mar. 10, 2021) (Lake).
David Cook, a citizen of the United Kingdom, brought suit in Texas state court against several Rowan entities seeking to recover for injuries he sustained on the ROWAN GORILLA VII while the vessel was jacked up at a shipyard in Dundee, Scotland. Rowan removed the case to the federal court in Houston on the basis of Rowan’s bankruptcy, original admiralty jurisdiction, and diversity jurisdiction. Judge Lake found against diversity and rejected removal based on original admiralty jurisdiction based on the “transformation theory” that maritime cases are somehow transformed into cases at law when they are brought in state court under the Saving-to-Suitors Clause (even though that theory has been contradicted by the Supreme Court in Romero, the Fifth Circuit in Baris, and the Seventh Circuit in Lu Junhong). However, in light of the removing defendant’s assertion that the case was related to the bankruptcy case, Judge Lake transferred the case to the bankruptcy court where Rowan’s bankruptcy is pending.
Court declined to enforce arbitration agreement in employment contract for bartender on river cruise vessel because of the seaman exemption in the Federal Arbitration Act when the bartender sued for overtime wages under the Fair Labor Standards Act because she is not a seaman; Rodgers-Rouzier v. American Queen Steamboat Operating Co., No. 4:20-cv-4, 2021 U.S. Dist. LEXIS 44852 (S.D. Ind. Mar. 10, 2021) (Barker).
Mary Rodgers-Rouzier was employed as a bartender on one of American Queen’s river cruise vessels. American Queen declined to pay her overtime wages based on the seaman exemption in the Fair Labor Standards Act, and Rodgers-Rouzier brought this action individually, and on behalf of similarly situated employees. As her contract with American Queen contained an arbitration clause, American Queen moved to dismiss the suit or stay it pending arbitration. Rodgers-Rouzier cited the exception in the Federal Arbitration Act for contracts of seamen, and Judge Barker held that Rodgers-Rouzier satisfied the test for seamen under the Jones Act and that the arbitration provision could not be enforced. Although holding that Rodgers-Rouzier was a seaman so as to avoid her arbitration agreement, Judge Barker declined to rule at this juncture whether Rodgers-Rouzier was a seaman within the FLSA, simply noting that being a seaman under one statute did not necessarily make her a seaman under the other.
Federal court declined to enjoin suit in state court seeking discovery after the federal court had dismissed the case; De Bree v. Pacific Drilling, Inc., No. 4:18-cv-4711, 2021 U.S. Dist. LEXIS 45165 (S.D. Tex. Mar. 10, 2021) (Hanen).
Brenn De Bree (named in the suit as Breen De Bree), a Netherlands domiciliary, brought suit in state court in Houston, Texas, against several defendants (including Pacific Drilling Services, Inc.) under the Jones Act and general maritime law, seeking to recover for an injury on the PACIFIC SANTA ANA while the vessel was anchored in Las Palmas, Canary Islands. The defendants removed the case to federal court in Houston, and Judge Hanen dismissed the foreign defendants for lack of jurisdiction, dismissed the American defendants because they did not employ De Bree or own the vessel, and dismissed the co-employees as there was no chance of recovery against them under the general maritime law. De Bree then filed another suit in Texas state court against Pacific Drilling Services, seeking to depose witnesses of Pacific on the issue whether a cause of action was warranted and whether Pacific or other entities were subject to jurisdiction in Texas. Pacific then sought to reopen the federal litigation so that the federal court could issue an injunction against the state proceedings. De Bree first argued that the federal court was without jurisdiction to enter an injunction because the state suit was not removable to federal court. Judge Hanen rejected that argument as the federal jurisdiction to issue the injunction followed the first suit that had been removed to federal court. Nonetheless, Judge Hanen declined to grant relief to Pacific because the second state suit only sought discovery and did not seek to recover damages. As that relief did not jeopardize the prior rulings on liability and personal jurisdiction, Judge Hanen held that an injunction was not warranted to protect the court’s judgment.
Marine insurance policy holder was not entitled to jury trial on counterclaims in insurer’s declaratory judgment action; Great Lakes Insurance SE v. Andersson, No. 4:20-40020, 2021 U.S. Dist. LEXIS 45723 (D. Mass. Mar. 10, 2021) (Hillman).
In December 2019, Martin Andersson’s catamaran sustained damage when it hit a breakwater and became stranded in open water near the Dominican Republic. Marine insurer, Great Lakes Insurance (GLI) brought a declaratory judgment action in federal court in Massachusetts against its insured, Andersson, asserting that Andersson’s marine insurance policy did not cover damage sustained to the catamaran because of Andersson’s breach of express warranties. The policy warranted that the catamaran would be seaworthy and would not sail beyond Florida, the Bahamas, and the Caribbean (excluding Cuba, Colombia, Haiti, and Venezuela) or further than 150 miles offshore. GLI alleged that these warranties were breached because at the time of the incident the catamaran’s VHF radio transmitter was broken, and Andersson had sailed beyond the territorial limits for the policy. GLI brought the suit for declaratory judgment under admiralty, expressly denying a jury trial and designating the claim as an admiralty cause within the meaning of Rule 9(h) of the Federal Rules. Andersson brought three counterclaims under state law for breach of contract, equitable estoppel, and unfair insurance practices and demanded a jury trial. GLI filed a motion to strike the jury trial demand on the grounds that GLI’s 9(h) designation extinguished the right to jury trial on any counterclaims. Applying the analysis from Koch Fuels, Inc. v. Cargo of 13,000 Barrels of No. 2 Oil, 704 F.2d 1038 (8th Cir. 1983), Judge Hillman reasoned that the court must determine whether both parties could prevail on their respective claims without prejudice or inconsistent results, with different triers of fact. Here, the claims are inextricably intertwined, and neither party could prevail without harming judicial efficiency because Andersson’s claims cannot proceed without the determination that GLI’s denial of coverage is correct. Consequently, Judge Hillman granted GLI’s motion to strike and ordered that all of Andersson’s counterclaims be tried in the bench trial.
Value of limitation fund for injury on skiff during fishing voyage including the fishing boat and skiff under the flotilla doctrine; In re Ocean Angel V, LLC, No. 5:19-cv-02794, 2021 U.S. Dist. LEXIS 45178 (N.D. Cal. Mar. 10, 2021) (Davila).
Robin DeLeon-Piedra sustained an injury during a squid fishing voyage involving the Ocean Angel V and its skiff. At the time of the injury, DeLeon-Piedra was operating the skiff to assist in the catching of squid. The owner of both vessels filed a complaint in admiralty seeking limitation of liability to the value of the skiff and its freight, valued at $50,000. The Claimant, DeLeon-Piedra, moved to increase the limitation fund to $1,055,000 to reflect the value of both the skiff and the ocean Angel V. Judge Davila evaluated the applicability of the flotilla doctrine under the Fifth Circuit’s test by which the doctrine applies where vessels are owned by the same person, engaged in a common enterprise, and under a single command. Applying this test, Judge Davila concluded that the skiff’s functional purpose was to assist the OCEAN ANGEL V in squid fishing and the Captain of the OCEAN ANGEL V was in command of both. Applying the flotilla rule, Judge Davila granted DeLeon-Piedra’s motion to increase the limitation fund.
Case removed based on original admiralty jurisdiction was remanded, but the defendant had an objectively reasonable basis for removal; Silagyi v. Towriss, No. 20-61850, 2021 U.S. Dist. LEXIS 47121 (S.D. Fla. Mar. 11, 2021) (Snow).
Jarret and Lauren Silagyi brought this suit in state court in Broward County, Florida, seeing to recover for injuries they sustained as passengers on the BLUE STEEL, operated by Daniel Towriss, when the vessel struck the south jetty at Port Everglades. Towriss removed the case to federal court, and Judge Dimitrouleas concluded that there was no diversity jurisdiction as Towriss and the Silagyis were citizens of Indiana. Following the decisions of a majority of courts, Judge Dimitrouleas declined to hold that the case could be removed based on the original admiralty jurisdiction over the accident (see January 2021 Update). He then referred the Silagyis’ motion for attorney’s fees to Magistrate Judge Snow for her recommendation. Magistrate Judge Snow rejected the Silagyis’ argument that the Eleventh Circuit decision in Deroy was a definitive holding by the Eleventh that the minority line of cases favoring maritime removal is in error, and she also noted that the Silagyis had not cited Deroy in their Motion for Remand. Magistrate Judge Snow concluded that Towriss had an objectively reasonable basis for removal, even though the weight of authority is against removal based on the original admiralty jurisdiction. She therefore recommended that the court decline to award attorneys’ fees.
Loss of society and consortium were not available to beneficiaries of Navy sailor in suit against suppliers of products with asbestos; court denied supplier’s government contractor defense based on disputed evidence; causation was sufficiently established against one contractor but not another; Sebright v. General Electric Co., No. 19-10593, 2021 U.S. Dist. LEXIS 46660 (D. Mass. Mar. 11, 2021) (Young).
Glenn E. Sebright is a former machinist mate for the Navy who suffers from mesothelioma from asbestos exposure that he links to his service on Navy vessels. He brought this action against General Electric and Velan for supplying products (generator sets and valves) containing asbestos, and he was joined by his wife and disabled daughter who brought claims for loss of consortium and society. Judge Young held that maritime law applied to the claims and then addressed defenses asserted by the defendants. GE invoked the sophisticated purchaser defense that it was entitled to rely on the Navy to warn the ultimate end user of the danger in its product, but Judge Young held that the defense was dependent on the weighing of the risk of harm to the user against the time, cost, and effort of warning users directly and the jury would have to do the weighing. GE and Velan argued that the evidence of causation was insufficient with respect to their products, and Judge Young agreed that the evidence was insufficient to show sufficient exposure to any Velan valves containing asbestos. However, Sebright did present sufficient evidence of exposure to GE’s asbestos-containing generator set to deny summary judgment to GE. Judge Young addressed GE’s argument that the claims against it were barred by the government contractor defense. Judge Young agreed that the defense applied to both design defect and failure to warn claims, but the evidence did not establish all of the elements of the defense as a matter of law. Consequently, Judge Young denied summary judgment on the defense. Finally, Judge Young held that the general maritime law did not allow the claims for loss of society and consortium by the seaman’s daughter and spouse.
Freight forwarder was not liable for cargo damage; carrier was not entitled to summary judgment on the package limitation as the bills of lading did not identify the containers as the packages; Hartford Fire Insurance Co. v. Maersk Line, No. 18-cv-121, 2021 U.S. Dist. LEXIS 46761 (S.D.N.Y. Mar. 11, 2021) (Castel).
This case involves a shipment of glass doors and windows from Ireland to Connecticut via the Port of Newark. Klearwell ordered the goods and hired Albatrans, Inc. to serve as the shipment’s customs broker. Albatrans engaged a freight forwarder in Ireland, which arranged for Maersk to provide the ocean carriage. Maersk issued two bills of lading that consigned the shipments to Albatrans. Those bills of lading identified the cargo as “1 Container Said to Contain 160 PIECES WINDOWS AND DOORS” and “1 Container Said to Contain 102 PIECES WINDOWS AND DOORS.” Albatrans then arranged for the trucking of the cargo from Newark to the warehouse designated by Klearwall. The cargo was damaged on arrival in Connecticut, but there was no evidence where the damage occurred. Maersk moved for summary judgment that its liability under the Carriage of Goods by Sea Act was limited to $500 per container. Judge Castel initially noted that the fair opportunity doctrine (package limitation is not applicable unless the shipper was given an opportunity to declare a higher value) was inapplicable because Klearwell was not listed as the shipper or the consignee on the bill of lading. Turning to the question whether the container was the package, Judge Castel cited the rule in the Second Circuit that the container is the package when the bill of lading refers to the container as one package or when the parties fail to specify an alternative measure of the packages. Maersk cited testimony that the items were unpackaged and unsecured, and Klearwell cited testimony that each item was individually packed with adhesive films and separated and secured with cardboard, plywood, or other protective material. Concluding that the “pieces” identified in the bills could reasonably be understood to be the packages, Judge Castel denied Maersk’s motion. Judge Castel did agree with Albatrans that it did not act as the carrier or as a non-vessel operating common carrier and only as a freight forwarder. Therefore, he dismissed Albatrans from the suit.
Court vacated arbitration award because the arbitrators exceeded their authority and rendered their award in manifest disregard of the law; Copragri S.A. v. Agribusiness United DMCC, No. 20-cv-5486, 2021 U.S. Dist. LEXIS 48206 (S.D.N.Y. Mar. 15, 2021) (Schofield).
Copragri S.A., a citizen of Morocco that buys feed and grain, agreed to purchases of grain from Agribusiness, a citizen of the United Arab Emirates that sells feed and grain. The Sales Agreements between the parties required Agribusiness to arrange for the transportation of the goods by sea. The Agreements contained an arbitration provision based on the Grain and Feed Trade Association Form 125 Arbitration Rules. Agribusiness chartered a vessel from Vitosha Maritime to transport the grain from Louisiana to Morocco, and Copragri was not a party to the bills of lading. The bills included a provision calling for arbitration in New York by the Society of Maritime Arbitrators. Vitosha presented a demurrage claim against Agribusiness for delays in Morocco, and Agribusiness submitted an indemnity claim to Copragri and then commenced an arbitration six years later with the Society of Maritime Arbitrators. Copragri objected to the SMA arbitration, and Agribusiness proceeded with the arbitration over the continued objection of Copragri. Agribusiness appointed a second SMA arbitrator, and the two arbitrators appointed by Agribusiness appointed the third arbitrator. The panel issued an award in favor of Agribusiness, and Copragri filed a petition seeking to set aside the award. After extensive effort to service Agribusiness, Copragri followed a court order permitting alternative service, but Agribusiness did not respond to the petition. Judge Schofield ordered that the arbitration award be vacated for two reasons. First, he held that there was no contractual basis for arbitration with the Society of Maritime Arbitrators and that the arbitrators therefore exceeded their authority in issuing the award. Second, the arbitrators did not address the objections raised by Copragri so their award was issued in manifest disregard of the law. Note that this case involved an action to set aside an arbitration award by the party that did not actively participate in the arbitration. Compare the Seascape case discussed below that involved the confirmation of an arbitration award against the party that did not actively participate in the arbitration.
Owner of inland tug could assert limitation as a defense more than six months after notice, and the knowledge of its captain at the commencement of the voyage did not afford privity or knowledge to the owner; however, there were fact questions with respect to the privity or knowledge of the owner; In re Dredge Big Bear, No. 18-cv-457, 2021 U.S. Dist. LEXIS 47340 (M.D. La. Mar. 15, 2021) (deGravelles).
The inland tug M/V TREY PAUL was pushing six loaded barges southbound in the Mississippi River near Baton Rouge when its navigation was overcome by the strength of an eddy that caused it to allide with the dredge BIG BEAR. Crew member Eugene Jackson was injured, and the owner of the dredge brought this action seeking limitation of liability. Jackson and LA Carriers, owner of the tug and employer of Jackson, filed claims in the dredge’s limitation action. Jackson brought a third-party claim against LA Carriers, which asserted limitation of liability as a defense. Jackson argued that the limitation defense asserted by LA Carriers was not timely because it was not filed within six months of written notice; however, Judge deGravelles noted that there are two ways to invoke limitation, a petition filed within six months of written notice and as a defense filed to a claim in federal court. As the defense filed in an answer is not required to be brought in six months, Judge deGravelles held that LA Carriers’ limitation defense was timely. Citing the relaxed standard for privity or knowledge from the Morro Castle Amendments to the Shipowners’ Limitation of Liability Act, Jackson argued that the knowledge of the tug’s captain of the strong eddy in the River had to be imputed to the owner. However, Judge deGravelles pointed out that the knowledge of the captain at or prior to the commencement of the voyage is imputed to the owner only for seagoing vessels, and the TREY PAUL is an inland tug. Therefore, the captain’s knowledge was insufficient to establish privity or knowledge of the owner. However, Judge deGravelles did find fact questions regarding the owner’s failure to implement policies or procedures regarding eddies, regarding its failure to train the captain about the dangers of eddies, and regarding its knowledge of the sufficiency of the power of the tug that prevented the owner from obtaining summary judgment with respect to its privity or knowledge of the faults that occasioned the loss.
Dispute between ship repairer and vessel owner over repairs to vessel was resolved in favor of the repairer; American Marine Tech., Inc. v. M/Y ALCHEMIST, No. 19-60636, 2021 U.S. Dist. LEXIS 49938 (S.D. Fla. Mar. 16, 2021) (Singhal).
World Group Yachting hired American Marine to perform engine work on its yacht ALCHEMIST to ready the vessel for sale. The ship repairer recommended installation of engines of the same size as the original engines to avoid a more complicated installation, but the owner purchased two larger used engines that did not fit without modifications. The parties disagreed about the custom installation, and their disputes resulted in this litigation in which the repairer sought to enforce a lien for necessaries on the vessel. The owner counterclaimed for breach of contract and breach of the warranty of workmanlike performance. After a bench trial, Judge Singhal resolved the disputes in favor of the repairer, awarding it judgment and denying the owner’s counterclaim. Judge Singhal also denied the parties’ cross motions for sanctions.
Expert on seamanship was qualified to give opinions on warranty breaches in marine insurance dispute; Serendipity at Sea, LLC v. Underwriters at Lloyd’s of London, No. 20-cv-60520, 2021 U.S. Dist. LEXIS 48930 (S.D. Fla. Mar. 16, 2021) (Strauss).
Serendipity at Sea’s 61-foot yacht M/Y SERENDIPITY was damaged by Hurricane Dorian while docked in the Bahamas. The vessel’s insurer, Underwriters at Lloyd’s, denied the claim, citing breach of the Captain Warranty, breach of a hurricane plan, and misrepresenting information in its insurance application. In our March 2021 Update we discussed Magistrate Judge Strauss’s conclusion that Serendipity breached the captain warranty but that a trial was necessary to address the issue of increased risk. Lloyd’s engaged Thomas E. Danti as an expert for his experience as a seaman, officer in the merchant marine, commander in the Navy Reserve, yacht captain, professor of marine science, and instructor/dean at the Chapman School of Seamanship. He opined that the failure to employ a full-time licensed captain contributed to the loss of the vessel, there were favorable hurricane protection features in the agreed mooring location for the vessel in Part Canaveral, Florida, Automatic Identification System tracking showed numerous vessels departing the Bahamas before the Hurricane, and the SERENDIPITY was not prepared for hurricane season and that lack of preparation contributed to the loss. The owner moved to exclude Danti’s opinions for lack of qualification, reliability, and helpfulness. With respect to qualification, the owner argued that Danti is not an insurance expert; however, Magistrate Judge Strauss responded that Danti’s testimony is with respect to seamanship, for which is qualified. As to reliability, Magistrate Judge Strauss cited Danti’s extensive experience and knowledge on the subject matter that rendered his opinions reliable together with the significant information and explanation that supported his opinions with respect to the business of being a vessel captain and preparing vessels for hurricanes, not insurance coverage arguments. Finally, the matters on which he gave his opinions were beyond the purview of an average lay person and were therefore helpful. Consequently, Magistrate Judge Strauss denied the motion to strike.
Court lacked admiralty jurisdiction over crew member’s alleged assault on a non-invited shipyard security guard on a drydocked vessel; Hoblick v. United States, No. 2:19-cv-1829, 2021 U.S. Dist. LEXIS 49199 (D.S.C. Mar. 16, 2021) (Norton).
This case involves a confrontation between a shipyard security guard at the Detyens Shipyards in North Charleston, South Carolina, and a crew member of the USNS MAURY, which was drydocked at the shipyard. Harold James Hoblick, an employee of the shipyard, observed Travis T. Rose, a crew member on the vessel, park an unauthorized personal vehicle on the pier and then walk down the gangway onto the vessel. Although he was not permitted on the vessel, Hoblick followed Rose onto the vessel to request that he move his vehicle. A dispute ensued and Hoblick claimed that Rose beat him like a drum. Rose claimed that Hoblick used racially offensive language and tripped while stepping backward from Rose. Hoblick brought this suit against the United States under the Public Vessels Act and Suits in Admiralty Act, and the United States moved to dismiss the action for lack of admiralty jurisdiction. The United States conceded the locality aspect of the test but contested whether the test that requires a connection to maritime activity was satisfied, particularly whether the incident had a potentially disruptive impact on maritime commerce. Judge Norton characterized the incident as an assault and battery of a non-invited person on a drydocked ship. He then reasoned that the assault on the drydocked ship could not immediately disrupt navigation like a collision or allision or even a plane crashing in the water (a crash in the water would require rescue efforts by commercial vessels). The fight was unlikely to spread to nearby vessels and cause damage (as in the case of a fire), and, as the fight was directed to a non-invited person on the vessel, it did not have the potential to delay the activity of the vessel in the same way than an injury to a repairman or crew member might. Concluding that there was no admiralty jurisdiction or waiver of immunity under the Public Vessels Act or the Suits in Admiralty Act, Judge Norton dismissed the suit.
Military Sealift Command time charter of tanker to United States did not allow the owner to invoke sovereign immunity in defense to a crew member’s suit; Gale-Ebanks v. Chesapeake Crewing, LLC, No. JKB-20-3121, 2021 U.S. Dist. LEXIS 49729 (D. Md. Mar. 16, 2021) (Breder).
Stephen A. Gale-Ebanks was working as a crew member on the defendants’ vessel, SLNC GOODWILL, which was the subject of a Military Sealift Command Tanker Time Charter agreement with the United States. Gale-Ebanks experienced acute chest pain while the vessel was operating in the western Pacific Ocean, and he was transferred by helicopter to Japan where he received treatment for an aortal dissection. Ultimately, Gale-Ebanks was totally disabled and brought this action against the vessel owner and operator under the Jones Act and general maritime law. The defendants moved to dismiss the case, citing sovereign immunity on the ground that the United States was the appropriate defendant. Chief Judge Breder stated that the defendants could invoke sovereign immunity if they established that a traditional admiralty claim could have been stated against the United States in this case, such as in the case of a bareboat charter to the United States. In this case, however, the United States time-chartered the GOODWILL, and the time charter reflected that the defendants retained operational control of the vessel. As such, the sovereign immunity from the Suits in Admiralty Act was inapplicable. The defendants also tried to invoke the exclusive-remedy provision of the Suits in Admiralty Act that applies to agents of the United States, citing the provision in the charter party that the United States is the statutory employer of any of the owner’s employees and entitled to tort immunity under Louisiana law. Chief Judge Breder initially held that Louisiana law did not apply to this case where Gale-Ebanks never performed any work in Louisiana; however, he added that the agency theory from the Suits in Admiralty Act was inapplicable as he had already held that the statute was inapplicable in this case. Finally, as the Suits in Admiralty Act was not applicable, its two-year statute of limitations did not apply. The suit was timely within the three-year limitation period for admiralty tort claims.
Notice letter triggering the time to file a limitation of liability action did not have to threaten legal action; In re Las Vegas Boat Harbor, Inc., No. 2:20-cv-1457, 2021 U.S. Dist. LEXIS 50084 (D. Nev. Mar. 17, 2021) (Dorsey).
Leslie Burns was injured by the propeller of a pontoon boat rented from Las Vegas Boat Harbor on July 2, 2019. A week later her counsel advised the owner of the vessel about the incident, that Burns’ leg was amputated, and which boat was involved. The letter demanded that the owner preserve all evidence relevant to the “claim” and requested that the owner provide information about its insurance. There was further correspondence between the parties, including arrangements for a boat inspection. On May 14, 2020, Burns’ counsel sent a settlement demand package and then filed suit against Las Vegas Boat Harbor and the manufacturers of the boat and its engine in Nevada state court on June 30, 2020. Las Vegas Boat Harbor filed this federal action seeking limitation of liability on August 6, 2020, within six months of her demand, but almost a year after the initial correspondence from Burns’ counsel. Burns moved to dismiss the limitation action as not having been filed within six months of written notice, and Las Vegas Boat Harbor responded that the initial letter was insufficient to trigger the time to file the action. Enjoying the opportunity to write about an admiralty matter in a state where clouds are usually the most water present, Judge Dorsey wrote an extensive analysis of the applicable legal principles and adopted the test used by the Second, Fifth, Seventh, and Eleventh Circuits that has two inquiries, (1) whether the writing communicates the reasonable possibility of a claim and (2) whether it communicates the reasonable possibility of damages in excess of the vessel’s value. Although the initial letter did not threaten litigation, it did request the preservation of evidence for all relevant matters at issue for “this claim.” Judge Dorsey concluded that the request for preservation of evidence coupled with the request for insurance information was sufficient to give notice of a potential claim; however, if that was not enough, Las Vegas Boat Harbor’s counsel referred to Burns as “Claimant” and also sent a Notice of Claim and Inspection letter to the boat and motor manufacturers. With respect to the question whether the possibility that the claim would exceed the value of the vessel, Judge Dorsey noted that the value of the pontoon boat was between $22,205 and $31,235. As the initial letter advised that Burns had suffered an amputation of her leg, the owner should have known that the claim value was potentially in excess of the value of the vessel. Consequently, Judge Dorsey dismissed the limitation action as untimely.
Honeymooner will litigate her injury claim involving a jet ski in state court; Wright v. Key West Jetski, Inc., No. 21-10028, 2021 U.S. Dist. LEXIS 51314 (S.D. Fla. Mar. 17, 2021) (Martinez).
Wanesha Wright and her wife Melinda Smith, residents of Georgia, were celebrating their honeymoon in Key West. Wright was injured during a jet ski tour and brought suit in state court in Key West against the owner and operator of the jet ski and tour. The defendants removed the case to federal court based on diversity and original admiralty jurisdiction, and Wright moved to remand the case. As the defendants are Florida citizens, the case could not be removed based on the forum-defendant bar for diversity cases. Citing the Saving-to-Suitors Clause, Judge Martinez held that the case could not be removed based on original admiralty jurisdiction. The defendants did not oppose the motion to remand, so Judge Martinez was not presented with the argument in Curry v. Boeing Co. that is discussed below.
Dismissal of wrong entity in Jones Act case was entered without prejudice; Ellisor v. Maersk Drilling USA, Inc., No. 20-2160, 2021 U.S. Dist. LEXIS 49965 (E.D. La. Mar. 17, 2021) (Feldman).
Daniel Ellisor claimed to have suffered injuries while serving as a seaman on the M/V MAERSK VALIANT. He brought suit against Maersk Drilling USA, which responded that the case should be dismissed with prejudice because it was not the employer or vessel owner or operator. Ellisor was twice granted extensions to respond to the motion, and he finally moved to dismiss his claims without prejudice so that he could refile his suit in Texas state court against all Maersk entities involved with his employment or ownership/operation of the vessel. Maersk Drilling USA opposed the dismissal without prejudice, arguing that it should not have to face a second lawsuit. Judge Feldman found that to be “patently insufficient to warrant denial of a motion for voluntary dismissal” and dismissed the case without prejudice.
Energy company did not breach its obligation under its MSA with respect to payment for a Marcel Endorsement; Hiller Cos. V. Wood Group PSN, Inc., No. 20-2647, 2021 U.S. Dist. LEXIS 49967 (E.D. La. Mar. 17, 2021) (Vance).
The complicated contractual issues in this case involve work being performed for energy company Helis Oil and Gas Co. in Louisiana. Helis contracted with Hiller Cos. and Wood Group to perform work. A Wood Group employee, Luigi Malta, was injured by carbon dioxide cylinders that he was offloading from a vessel. Malta brought suit against Hiller and Helis, and Hiller was found solely at fault for Malta’s injuries. Wood Group entered into a Master Service Agreement with Helis by which Wood Group agreed to name Helis and its Company Group (including its contractor Hiller) as insureds on Wood Group’s liability policies. The MSA contained a specific provision for work in Louisiana (where the Louisiana Oilfield Indemnity Act generally prohibits indemnity and insurance agreements for a party’s negligence). Some courts have permitted a workaround for the statutory prohibition by which a party may pay for its own additional insurance coverage on another party’s liability policy, known as a Marcel Endorsement. The MSA provided that Helis would pay, on behalf of the Company Group, for coverage on Wood Group’s policies. Wood Group agreed to arrange to have Helis billed for the appropriate premium, and Helis was presented with a bill, but the bill was insufficient to cover Helis and its subcontractors. Wood Group’s liability insurer declined to defend or indemnify subcontractor Hiller, and Hiller and its insurer alleged breach of contract claims against Wood Group and Helis. Helis moved to dismiss the breach of contract claim, and Judge Vance agreed. Before addressing the merits, Judge Vance had to determine the applicable law for the MSA. The MSA contained a clause providing that it was governed by the general maritime law, and to the extent that maritime law was not permitted to apply, then by the laws of Texas. Judge Vance held that the federal court was sitting in diversity, and that she had to apply Louisiana state law to determine the validity of the choice-of-law provision. As the provision was valid under Louisiana law, Judge Vance applied maritime law to the breach of contract claim. Turning to the provisions of the MSA, Judge Vance noted that Wood Group had the obligation to have Helis billed for the appropriate premium. Helis’s obligation was only to pay the premium as billed by Wood Group or its insurers. As Helis paid the bill that was submitted, Judge Vance held that Helis did not breach its obligation under the MSA.
Court maintained limitation stay against litigation involving non-owners of the vessel; In re Plimsoll Marine, Inc., No. 19-861, 2021 U.S. Dist. LEXIS 51295 (Mar. 17, 2021) (Jackson).
David Lewis was injured while working on the MARGARET, located in the Mississippi River near Darrow, Louisiana. He brought suit in Texas state court against various Cooper/Ports America entities, alleging that they owned, operated, and or crewed the MARGARET and that he was a member of the crew of the MARGARET. Plimsoll Marine, owner of the MARGARET, was not named in the Texas suit, but it filed this limitation action in federal court in Louisiana. The Louisiana court then issued the limitation stay on all actions against Plimsoll and the MARGARET. Lewis filed a motion to lift the stay, asserting that it should only apply to Plimsoll and not to the defendants in the Texas proceeding in which Plimsoll was not named as a defendant. Judge Jackson denied the motion. He reasoned that the state litigation was properly stayed because the state action attributed blame for his injuries to the owner of the Margaret, naming the vessel. Therefore, Plimsoll had an interest in protecting its limitation rights, and the federal court had the obligation to determine the ownership of the vessel and the relationship between the Texas defendants and Plimsoll, issues that could be improperly litigated in the state court if the stay were lifted. As the limitation fund was less than the amount claimed as damages, proper stipulations were necessary before the stay could be lifted.
Rail carrier that was exonerated by the Covenant Not to Sue in an ocean bill of lading, applicable by the Himalaya Clause, was entitled to attorney fees by the bill’s indemnity clause; Siemens Energy, Inc. v. CSX Transportation, Inc., No. 3:15-cv-18, 2021 U.S. Dist. LEXIS 50146 (E.D. Kent. Mar. 17, 2021) (VanTatenhove).
This case is on remand from the decision of the Sixth Circuit that was summarized in our January 2020 Update. Siemens AG, a German company, sells industrial manufacturing equipment. Its American subsidiary, Siemens Energy, sold two transformers to Gallatin Steel in Ghent, Kentucky. Siemens AG arranged with a freight forwarder to ship the goods, and the freight forwarder engaged Blue Anchor Line, which issued a bill of lading for the carriage from Germany to Kentucky. Siemens Energy agreed in the bill of lading not to sue subcontractors of Blue Anchor Line for any problems arising out of the transportation from Germany to Kentucky. The freight forwarder arranged for K-Line to complete the ocean leg of the carriage, and a different entity of the freight forwarder contracted with CSX to perform the land leg of the shipment from Baltimore to Kentucky. One of the transformers was damaged during the rail shipment, and Siemens Energy brought this action against CSX. Judge Tatenhove granted summary judgment for CSX on the ground that the rail carrier qualified as a subcontractor under the Blue Anchor bill of lading and was insulated from liability by the Covenant Not to Sue in the bill of lading (see April 2020 Update). The Sixth Circuit agreed. Following the decision of the Supreme Court in Kirby, Judge Sutton held that the Blue Anchor bill of lading was a maritime contract and that maritime law applied even to the non-maritime rail carriage. The fact that CSX issued its own contract for the rail portion of the trip did not alter this conclusion, nor did the fact that Siemens AG paid for the ocean leg and Siemens Energy paid for the land leg. The Blue Anchor bill was still a multimodal bill of lading that applied throughout the shipment, regardless of whether the shipper or ocean carrier retained or paid for the rail carrier. After the decision of the Sixth Circuit, CSX sought attorney fees from Siemens based on the Indemnity Clause in the Blue Anchor bill. That clause requires Siemens to indemnify the carrier if an action is brought against a sub-contractor. As the Himalaya Clause gave CSX the benefit of all provisions benefitting the carrier, CSX was entitled to the carrier’s indemnity from Siemens. Consequently, Judge VanTatenhove held that the Blue Anchor bill required Siemens to pay the attorney fees of improperly sued CSX.
Chair placed over spilled food, dried steps in the spilled substance, and crew in the proximity to the spill were sufficient to establish notice to the cruise line; Randall Jaques was allowed as an expert for the passenger, but some of his opinions were stricken; Maxwell v. Carnival Corp., No. 19-cv-23054, 2021 U.S. Dist. LEXIS 50967, 51632 (S.D. Fla. Mar. 18, 2021) (Bloom).
Theodore Maxwell was walking past the condiment station at Guy’s Burger Joint on the Lido Deck of the CARNIVAL LIBERTY when he noticed a chair in the middle of the walkway. As he walked around the chair he slipped and fell in food and liquid that had spilled on the deck. The cruise line moved for summary judgment in Maxwell’s suit, asserting that it did not have actual or constructive notice of any dangerous condition. Judge Bloom denied the motion. She found sufficient evidence of actual knowledge of the hazard, reasoning that a reasonable factfinder could conclude that a crew member placed the chair over the substance in accordance with instructions to cordon off large spills by using cones or chairs if no cones are readily available. She also found sufficient evidence of constructive notice from the testimony of Baxter’s companion, who testified that she observed dried steps in the spilled substance on the deck as though someone had already walked in it. Additionally, the companion observed crewmembers cleaning the pool area of the Lido Deck at the time of the fall, and they were sufficiently close to Guy’s Burger Joint to have seen the substance and remove it. The cruise line also moved to strike Randall Jaques as an expert witness for his opinions as to why Maxwell slipped and fell on the substance on the deck of the vessel. The fact that Jaques’s opinions have been excluded in other cases was not persuasive to Judge Bloom (citing several cases in footnote 5). Judge Bloom considered Jaques’s years of experience as a maritime security and safety officer for Carnival and other cruise lines to be sufficient for him to opine on the industry standard of care, including the defendant’s policies and on marking and responding to spills. However, his opinions assigning fault to the cruise line and indicating that the cruise line had notice of the dangerous condition were impermissible legal conclusions. Judge Bloom held that Jaques was precluded from testifying that the cruise line was at fault, liable, negligent, chose to do nothing, and failed to take corrective action.
Court adjusted rates of attorneys in maritime lien case for work in obtaining a default judgment; Vice City Marina, LLC v. Philippians, LLC, No. 20-23800, 2021 U.S. Dist. LEXIS 52501 (S.D. Fla. Mar. 18, 2021) (Torres).
Vice City Marina brought this suit against THE BLESSING and its owner for necessaries of dockage and vessel storage. The court granted a default against the defendants and then addressed the fees sought by Vice City’s counsel. Vice City sought hourly rates of $500 for lawyers with 12 and 20 years of experience, $350 for a lawyer with two years of experience, and $125 and $75 for paralegals. Magistrate Judge Torres considered the paralegal rates to be reasonable, but he reduced the attorney rates to $400, $350, and $200 considering the experience of the attorneys, the market rates, and the fact that the work was on a default judgment.
Opinions of boat owner with experience on diesel furnaces, together with opinions of an expert on causes of marine fires, supported liability and denial of limitation of liability for the boat owner’s claim against the owner of a vessel that caused a fire at a marina where both boats were moored; In re Schladetzky, No. C19-0493, 2021 U.S. Dist. LEXIS 51477 (W.D. Wash. Mar. 18, 2021) (Robart).
Douglas McKenzie and Michael Schladetzky moored their boats in berths next to each other at the Port of Everett Marina. McKenzie is a heating, ventilation, and air condition technician who has worked with marine and shoreside HVAC installations since 1985. He has worked on diesel furnaces and is familiar with their operation and maintenance. McKenzie noticed that the diesel furnace on Schladetzky’s boat blew out thick black smoke and smelled of raw diesel fuel. He discussed the need for maintenance and repairs on the furnace with Schladetzky on several occasions, but did not observe any repairs. Later, Schladetzky’s boat burned at the slip, resulting in a total loss of the boat and damage to McKenzie’s slip and property stored in his boathouse. Schladetzky filed this limitation action, but his attorney withdrew from the case and Schladetzky did not respond to motions filed in the case. McKenzie first filed a motion for summary judgment that Schladetzky was liable for McKenzie’s damage and was not entitled to limit liability, basing it on McKenzie’s opinion about the condition and maintenance on the furnace on Schladetzky’s boat. Judge Robart accepted McKenzie as an expert, but not on the issue of causation. McKenzie then presented the opinion of Kurt Serwold, an expert on marine fires and their causes, who opined that the fire was caused by the poor condition of the diesel furnace and the lack of maintenance. Judge Robart then granted summary judgment to McKenzie on the negligence claim and denied limitation on the ground that McKenzie had told Schladetzky of the hazard.
Court confirmed arbitration award against charterer despite the charterer’s failure to appear in the confirmation suit and the charterer’s limited participation in the arbitration; Seascape Shipping & Trading, LLC v. Metalex 2000 S.A., No. 20-cv-9620, 2021 U.S. Dist. LEXIS 52175 (S.D.N.Y. Mar. 19, 2021) (Stein).
Seascape Shipping and Metalex entered into a charter party for the shipment of iron briquettes from Venezuela to Algeria on the LIVADI. Metalex failed to provide the cargo as agreed, and Seascape commenced arbitration proceedings. Metalex did not appoint an arbitrator, and Seascape chose two arbitrators, who chose the third. Metalex’s participation in the arbitration was limited (brief submissions by email), and the panel awarded damages in favor of Seascape. Seascape then petitioned the federal court in New York to confirm the award, and, when Metalex did not appear, a default was entered. Judge Stein noted that default judgments in proceedings to confirm an arbitration award are generally inappropriate as there is an insufficient record. Therefore, the court considered the case on a summary judgment standard based on Seascape’s submission. Using that standard, Judge Stein found sufficient evidence to support Seascape’s petition and confirmed the award.
Son of deceased seaman lacked capacity to bring suit under the Jones Act and general maritime law; In re Alpha Vesselco, LLC, Nos. 6:19-cv-1253, 1194, 6:20-cv-1301, 1349, 6:21-cv-287, 2021 U.S. Dist. LEXIS 52571 (W.D. La. Mar. 19, 2021) (Hanna).
Wilbert Otis Ross, III was killed when he was dragged overboard by the fishing nets while he was working as a fisherman on the F/V TERREBONNE BAY. Five lawsuits were filed seeking recovery for Ross’s death, including a suit by Carrie Fuller, Ross’s mother, who attached letters of administration to her complaint, confirming her appointment as administratrix of Ross’s estate. The suit that resulted in this opinion was brought by Ross’s son, Jarmaine Brailey. When Brailey brought the suit, he failed to comply with the local rule requiring the filing of a civil cover sheet. Brailey was notified of the deficiency twice, but he did not cure the deficiency and the complaint was stricken. Eventually Brailey filed the cover sheet and asked for the case to be reopened. Magistrate Judge Hanna first noted that the failure to correct the deficiency was arguably a valid basis to strike the complaint, but he would be inclined to reinstate the suit if that were the only problem with the complaint. The bigger problem was that the Jones Act, DOHSA, and the general maritime law require that the suit be brought by the personal representative of the decedent (court approved executor or administrator of the estate). In this case, Ms. Fuller was the administratrix and had brought suit. Concluding that Brailey lacked standing, Magistrate Judge Hanna declined to reopen Brailey’s case.
Removal based on diversity and admiralty avoided the forum-defendant bar to removal of diversity cases; 30-day removal period was not triggered by the complaint; illness claim from contaminated air on international flight was maritime; Curry v. Boeing Co., No. 20-cv-3088, 2021 U.S. Dist. LEXIS 52882 (E.D. Ill. Mar. 22, 2021) (Feinerman).
Linda Verboom Curry and Allen Cheung were flight attendants on a United flight from Amsterdam, Netherlands, to Newark, New Jersey, on a Boeing 767 aircraft. They brought suit against Boeing in the Circuit Court of Cook County, Illinois, asserting that about 45 minutes after takeoff a dirty-sock smell overcame the cabin, causing them to suffer health problems. Four months after being served with the complaint, Boeing removed the suit to federal court based on admiralty jurisdiction and diversity jurisdiction. The plaintiffs moved to remand the suit as untimely (not within the 30-day period for removal), as (1) Boeing was a forum defendant who cannot remove a case without federal question jurisdiction, (2) for lack of admiralty jurisdiction, and (3) based on the saving-to-suitors clause barring removal based on admiralty jurisdiction. Judge Feinerman first held that the case fell within the admiralty jurisdiction. The complaint was silent on whether the plane was over navigable waters at the time of the incident, so Boeing used publicly available data to show that the flight was above the North Sea at the point when the passengers first noticed the smell. Judge Feinerman also concluded that the incident had a potentially disruptive impact on maritime commerce. Comparing transoceanic air travel to intercontinental maritime travel, Judge Feinerman held that the potential and actual health effects of the incident were significant. In the short term, the flight returned to Amsterdam, disrupting passengers’ plans, delaying other flights, and altering air traffic patterns. He noted that it does not matter whether the incident had an actual impact on intercontinental commerce; it only needed to have the potential to cause such a disruption. Judge Feinerman also pointed out that the ruling in this case did not mean that any tort suit involving a transoceanic flight automatically fell within the admiralty jurisdiction. The locality test was satisfied in this case because the plaintiffs alleged that the incident occurred 45 minutes into the flight, when the data showed that the plane was over navigable waters. The plaintiffs argued that Boeing did not remove the case within 30 days after receipt of the complaint as required by Section 1446(b), and Boeing responded that the pleading did not unambiguously reveal that the predicates for removal were present so the removal clock never started to run. Boeing had to calculate where the flight was when the smell entered the cabin and then removed the case. The plaintiffs argued that the calculation should only have taken a few minutes, not four months; however, Judge Feinerman held that it is not the amount of time it takes to determine if the case was actually removable that counts. As the complaint did not set forth the facts that established admiralty jurisdiction, the time to remove the case was not triggered. Judge Feinerman did agree with the plaintiffs that the saving-to-suitors clause operated to preserve the plaintiffs the right to select a state court forum and that the case was not removable based on original admiralty jurisdiction; however, he noted the exception when there is a basis for federal jurisdiction other than admiralty, such as diversity jurisdiction. In this case there was diversity jurisdiction, but the removal statute provides in Section 1441(b) that a suit removed solely on the basis of diversity cannot be removed if any of the defendants properly joined and served is a citizen of the forum state. As the federal court had admiralty jurisdiction, and as diversity was not the sole basis for federal jurisdiction, Judge Feinerman held that the forum-defendant rule did not prevent removal. The combination of admiralty jurisdiction and diversity jurisdiction allowed removal, even if neither was sufficient to permit removal separately.
Federal judge dismissed suit seeking declaratory judgment that the vessel owner and charterer did not owe the shipyard for repairs performed before a fire on the vessel as there was a suit in state court by the shipyard against the president of the vessel owner as guarantor of the repair contract; Marlin Oilfield Divers, Inc. v. Allied Shipyard, Inc., No. 20-2431, 2021 U.S. Dist. LEXIS 54357 (Mar. 23, 2021) (Milazzo).
Blue Marlin and Marlin Oilfield Divers are the owner and bareboat charterer of the M/V IRON MAIDEN, which was undergoing repairs by Allied Shipyard. That agreement was guaranteed by the president of the vessel owner, Logan Moore. The vessel was damaged by a fire while the vessel was at the shipyard, and Marlin declined to pay for repairs performed before the fire. The shipyard sent a demand letter seeking payment for the repairs, and Marlin filed this suit in federal court seeking a declaratory judgment that it was not liable for the repairs. The shipyard then filed suit in Louisiana state court against Logan Moore based on his guarantee of the payment for the repairs and sought the dismissal of the federal suit. Judge Milazzo held that the federal action (seeking a declaration that it did not owe for the repair because the shipyard “may be responsible for the fire”) did present an actual controversy to support the court’s jurisdiction; however, she held that the Trejo factors favored dismissal of the federal action. As the state court will have to consider the same issues to adjudicate liability under the guarantee as are involved in the federal proceeding, the federal action will serve no purpose other than duplication of effort.
Court struck jury demand in admiralty action designating Rule 9(h); Confederación Hipica De Puerto Rico Inc. v. Tote Maritime Puerto Rico, LLC, No. 3:20-cv-448, 2021 U.S. Dist. LEXIS 55413 (M.D. Fla. Mar. 23, 2021) (Klindt).
Confederación brought this action seeking to recover for the death of its horses on the defendant’s vessel. The action was brought based on the court’s admiralty jurisdiction and designated Rule 9(h). Confederación amended its complaint to name additional defendants whose liability was based on state law. Confederación sought a jury in the amended complaint, but the vessel owner moved to strike the jury demand. Judge Klindt noted that the only basis for jurisdiction was admiralty as diversity was lacking. Therefore, no jury was allowed. However, even if there were a right to a jury because of the addition of the state claims, the designation of Rule 9(h) eliminated the right to a jury on those claims. In its response, Confederación requested leave to file an amended complaint, but Judge Klindt instructed the plaintiff that it had to file a motion seeking leave, not bury the request in a response to another party’s motion.
Court vacated clerk’s amended garnishment order because it was not supported by the court’s original order for garnishment; original order was allowed to stand despite amended complaint; KPI Bridge Oil, Ltd. v. Alfa Denizcilik Anonim Sirketi, No. 4:20-cv-40, 2021 U.S. Dist. LEXIS 54916 (E.D. Va. Mar. 23, 2021) (Smith).
This action involves a claim for breach of maritime contracts together with a maritime garnishment against garnishee American Borate Company. In its original complaint, KPI attached invoices in an amount of $173,150, and the court issued an order allowing the clerk to issue the writ of attachment/garnishment. The writ was issued, and KPI amended its complaint to seek increased damages of $1,848,922.94. KPI requested supplemental writs in the new amount, and the clerk issued the writs. The defendant objected, and Judge Smith held that the new writs had to be vacated because their issuance by the clerk was not supported by the original order. The defendant also sought vacatur of the original writ on the ground that the amended complaint superseded the original complaint and did not support the original invoices as it only attached the new invoices. Judge Smith denied that request, declining to exalt form over substance. She also rejected the defendant’s argument that the original writ could not stand on the ground that the defendant had paid one of the invoices as Judge Smith considered KPI to have established a prima facie case sufficient for the issuance of the original writ.
Judge declined to apply the Oregon Rule or the Pennsylvania Rule in the summary judgment context in a vessel allision case; Impala Terminals Burnside LLC v. Marquette Transportation Co., No. 19-12584, 2021 U.S. Dist. LEXIS 55579 (E.D. La. Mar. 24, 2021) (Feldman).
This case involves an allision in the Mississippi River between the downbound tug, C. MICHAEL REEVES, and its 14 barges and the dolphin and dock at the Impala Terminals coal facility near Burnside, Louisiana. The tug owner had already acknowledged some fault in navigation, but the tug sought to place blame on the terminal because the dock and dolphin were not lighted. The terminal invoked the Oregon Rule (presumption of fault when a moving vessel strikes a stationary object), and both parties asserted the Pennsylvania Rule presumption of causation when a party to a collision/allision violates a statutory rule. Judge Feldman noted that the Oregon Rule does not give rise to a presumption of sole fault, so it was not helpful in the situation in which the tug owner did not deny some responsibility. Similarly, any utility of the presumption of causation from the Pennsylvania Rule was dispelled by the finger-pointing of each side on what caused the allision. Denying the parties’ motions for partial summary judgment, Judge Feldman stated that the focus on presumptions “elevates form over substance, common sense, and the longstanding admiralty tradition embracing comparative fault in allision cases” [maritime law tends to embrace comparative fault more in collision cases than in allision cases].
Judge did not grant summary judgment on the seaworthiness of the barge on which the seaman was injured as the seaman did not allege that the barge was unseaworthy; court did not grant summary judgment to the employer on the seaman’s maintenance and cure claim, despite two opinions that the seaman reached maximum cure, as there was a fact question whether continuing treatment was curative or palliative, but the court did dismiss the seaman’s claim for attorney fees for will failure to pay maintenance and cure; Durbin v. Marquette Transportation Co., No. 5:18-cv-55, 2021 U.S. Dist. LEXIS 55758 (W.D. Kent. Mar. 24, 2021) (Russell).
Nathan Durbin was employed as a senior deckhand on the tug M/V SHOW ME STATE. He was injured when he stepped from the deck of the tug to the deck of a barge that was in tow of the tug. He brought this suit against his employer, the owner of the tug, for negligence under the Jones Act, maintenance and cure, and unseaworthiness of the tug, and the defendant moved for summary judgment on the general maritime claims. The defendant first argued that it was not liable for unseaworthiness of the barge. When Durbin pointed out that he was suing for unseaworthiness of the tug and not the barge, the defendant responded that the court should still grant summary judgment. Judge Russell denied the motion, stating that it was “nonsensical” to grant summary judgment on a claim that the plaintiff had not alleged. The defendant argued that Durbin’s doctor declared that he reached maximum medical cure after the accident and he went back to work. He reinjured his back and was again declared to have reached maximum cure. After his employment was terminated, the defendant heard nothing from Durbin until it learned from discovery that he was receiving treatment for back pain. The defendant argued that its maintenance and cure obligation had ceased after the declarations of maximum cure, but Judge Russell found fact questions whether additional treatment was curative or palliative and denied the motion. However, Judge Russell did find that the failure to pay maintenance and cure was reasonable and granted summary judgment on Durbin’s claim for attorney fees for willful failure to pay maintenance and cure.
Jones Act employer’s indemnity agreements with sister companies did not cancel each other out; In re Cibco Barge Line, No. 19-9512, 2021 U.S. Dist. LEXIS 55583 (E.D. La. Mar. 24, 2021) (Lemmon).
Cody Jackson was injured while working as a deckhand on the M/V MISTER C, owned by Cibco Barge Line. Jackson was employed by Creole Chief, which had a Crewing Agreement with Cibco Barge Line. Cibco Barge filed a limitation action, and Creole Chief filed a claim in the limitation action seeking contribution and indemnity. Cibco Barge filed a counterclaim against Creole Chief, alleging that Cibco Barge was entitled to indemnity and insurance protection by the terms of the Crewing Agreement. Cibco Barge then moved for summary judgment on its contractual claims, and Creole Chief responded by citing the charter party between Cibco Barge and its sister company C&C Marine, which required C&C Marine to indemnify the time charterer and its subcontractors (Creole Chief). Creole Chief argued that the agreements created reciprocal indemnity obligations that cancelled each other out. Judge Lemmon noted that C&C Marine was not party to the suit and that she could not adjudicate a claim against it. As the Crewing Agreement and its parties were before the court, and as that agreement provided for indemnity from Creole Chief to Cibco Barge, Judge Lemon granted summary judgment to Cibco, noting that Creole Chief could raise the issue of indemnity from C&C Marine when the issue was properly before the court.
Allegation of failure to pay maintenance and cure to Louisiana seaman by Florida companies for injury in the Bahamas was insufficient to establish personal jurisdiction in Louisiana suit; Baham v. Crowley Maritime Corp., No. 20-2726, 2021 U.S. Dist. LEXIS 56358 (E.D. La. Mar. 25, 2021) (Zainey).
Sharon Baham was injured while employed as a cook on the M/V GOLDEN STATE in Freeport, Bahamas. Baham, who lives in Slidell, Louisiana, underwent knee replacement surgery in New Orleans and brought this suit under the Jones Act and general maritime law in Louisiana. The defendants, which are Delaware corporations with their headquarters in Jacksonville, Florida, moved to dismiss the case for lack of personal jurisdiction, and Judge Zainey agreed. Baham tried to establish activities of the defendants in Louisiana by alleging the failure to properly pay her maintenance and cure related to her treatment in Louisiana. However, even if the acts and omissions were true, they occurred in Florida where the defendants are located. Judge Zainey reasoned that the defendants are not subject to suit wherever the seaman elects to obtain treatment and convalesce that has no connection to the purposeful activities of the defendants.
Time charterer’s claims from contaminated fuel were dismissed based on the contractual limitation of liability and the economic loss rule; VL8 Pool, Inc. v. Glencore Ltd., No. 1:20-cv-2053, 2021 U.S. Dist. LEXIS 56968 (S.D.N.Y. Mar. 25, 2021) (Carter).
VL8 time chartered the M/V NAVE PHOTON from Delos Shipping and ordered fuel for the vessel from Integr8, which arranged for the fueling of the vessel with Glencore. VL8 and Glencore did not have direct contact, but the Order Confirmation incorporated Glencore’s General Terms and Conditions. The fuel Glencore procured from Valero was contaminated, and the vessel was damaged, resulting in VL8 taking the vessel off hire. VL8 brought suit against Glencore based on breach of contract and various tort theories, and Glencore moved to dismiss the complaint. Glencore cited the section of the Terms and Conditions that provided that the seller was not obligated to pay for consequential or indirect damages, including deviation costs, demurrage, damage to vessels, engines or tanks, and loss of profits. Judge Carter found the clause to be enforceable and applicable, rejecting VL8’s argument that the damages claimed were not covered by the clause because they were directly caused by the contamination and the clause only covered damages that were indirectly caused. Judge Carter then dismissed the tort claims for negligence and product liability as the charterer did not allege a proprietary interest in the vessel so as to avoid the economic loss rule enunciated in Robins Dry Dock. Judge Carter did give VL8 leave to amend its complaint.
Judge dismissed case based on Engagement Letter and Certificate of Approval, incorporating terms that included an arbitration agreement; Scorpio Drilling International Pte Ltd. v. HLV MIGHTY SERVANT 3, No. 20-231, 2021 U.S. Dist. LEXIS 56731 (E.D. La. Mar. 25, 2021) (Guidry).
Scorpio’s drilling barge sustained damage while being loaded onto a transport ship for transit from Louisiana to Nigeria. Scorpio obtained a marine warranty survey proposal from Aqualis for the transport, and brought this suit against the transport vessel and Aqualis, asserting that Aqualis was negligent in the planning for the transport. Aqualis moved to dismiss the suit based on the mandatory arbitration clause in Aqualis’s Terms and Conditions. Scorpio argued that there were significant factual issues whether it had expressly agreed to the arbitration agreement, but Judge Guidry noted that the Certificate of Approval signed by Scorpio in response to the Proposal and Engagement Letter, referenced the Terms and Conditions. As the contract documents sufficiently incorporated the Terms and Conditions with the arbitration clause, Judge Guidry dismissed Aqualis for lack of subject matter jurisdiction.
Passenger was awarded damages for slip and fall on unknown substance on the deck of a cruise ship; Easterwood v. Carnival Corp., No. 19-22932, 2021 U.S. Dist. LEXIS 57928 (S.D. Fla. Mar. 26, 2021) (Bloom).
Mindy Easterwood was injured on June 7, 2019, while walking on the pool deck of Carnival’s PARADISE. An hour before Easterwood’s fall, Christy Baker fell in the same spot on the pool deck. Ms. Baker went to the ship’s medical center, but it was closed. The nurse on call noted no swelling or obvious deformity, applied an ACE bandage to Baker’s wrist, and told her to return to be seen by the doctor. Baker never returned, and no official incident report was created for the accident. In our December 2020 Update, we discussed Judge Bloom’s decision declining to award a spoliation sanction against the cruise line for recording over the video footage of the earlier accident involving Ms. Baker. We also discussed Judge Bloom’s decision excluding the opinions of Easterwood’s expert Randall Jaques but allowing the opinions of the cruise line’s expert, Dr. Zdenek Hejzlar. Judge Bloom then addressed the cruise line’s motion in limine that included a request to prevent the passenger’s treating physicians from testifying about causation if they did not prepare Rule 26 expert reports. Noting that when a treating physician testifies to opinions that are outside of his/her personal observations, the opinions are inadmissible unless the physician proves a written report in compliance with Rule 26, Judge Bloom held that testimony about causation would not be allowed from the treating physicians who did not comply with the Rule. Judge Bloom also addressed the paid-versus-incurred issue with respect to medical bills and held that if the passenger attempted to introduce the totality of her medical bills, the cruise line would be permitted to introduce evidence of write downs. Introduction of the write downs does not violate the collateral source rule as the guiding principle is that the injured party is entitled to recover the reasonable value of the treatment that was provided. Easterwood and the cruise line both moved for summary judgment on the issues of notice and whether the condition on the deck was open and obvious. Finding fact questions on these issues, Judge Bloom denied both motions. Finally, Judge Bloom addressed the causation for the gastric bypass surgery that Easterwood underwent a year after her fall on account of her diabetes, morbid obesity, and worsening acid reflux. Easterwood argued that her medical issues were aggravated by her post-injury stress, and she cited the opinions of her treating physicians that the purpose of the surgery was to relieve the stress of her medical conditions and her injury and treatment. As Easterwood did not disclose a medical expert on causation, Judge Bloom granted partial summary judgment (January 2021 Update). Judge Bloom then held a three-day bench trial and issued findings of fact and conclusions of law in favor of Easterwood. Judge Bloom held that even though Easterwood was not able to prove what substance was present on the deck, she had demonstrated that something other than water was present, creating a condition that was dangerous and that was not open and obvious. The cruise line presented CCTV footage of three other passengers traversing the area without incident, but Judge Bloom dismissed that as proving that those passengers were fortunate, not that the condition was not dangerous. Turning to the question whether the cruise line had constructive notice of the condition, the fact that a passenger fell in the same area an hour before Easterwood’s fall and reported it to the nurse was sufficient. This did not trigger the defendant’s protocol for reporting injuries, but it did provide notice to the defendant. Judge Bloom did not find any comparative fault on the part of Easterwood. The CCTV footage showed that she was facing forward, although she was not looking down, and it did not reflect any impairment from consumption of alcohol. Easterwood requested a judgment of $400,000 at trial, and Judge Bloom awarded total damages of $447,991.29, based on lost wages of $6,021, medical expenses in the amount of $29,895.29 and pain and suffering for the 13% impairment to her lower right extremity based on $50 per day from the incident to trial and $25 per day for the remainder of Easterwood’s 42.2-year life expectancy.
Suit filed in the district where the seaman died was transferred to the district where the defendant and key witness reside; Villeda v. Inland Marine Service, Inc., No. 20-cv-1412, 2021 U.S. Dist. LEXIS 57530 (D. Minn. Mar. 26, 2021) (Wright).
Micah Kevin Pittman drowned in the Mississippi River in Minnesota when he fell from Inland Marine’s tug. His personal representative in Alabama was appointed as administratrix of the estate and then brought this action in federal court in Minnesota. Inland Marine, whose center of operations is in Paducah, Kentucky, moved to transfer the suit to Kentucky. In granting the motion, Judge Wright noted that the key witness, who was injured trying to rescue Pittman, had filed a suit in the Western District of Kentucky, and that Kentucky was much closer to Alabama, where the plaintiff resided, than Minnesota. Judge Wright did not find the plaintiff’s choice of forum to bear as much weight as it would if it were the plaintiff’s home forum. She was also not persuaded by the argument that it is more convenient for the plaintiff to fly a longer distance from Alabama to a major airport in Minnesota than a shorter distance to a regional airport in Paducah. Judge Wright did give great weight to the fact that the transfer would allow consolidation of the two suits which involved the same issues.
From the state courts:
Louisiana Supreme Court reversed the use of the Oyster Lease Damage Evaluation Board formulas for restoration and loss of production, applicable to damage to oyster beds from oil and gas activities, in calculating damages to an oyster lease caused by the grounding of a tug; Melerine v. Tom’s Marine & Salvage, LLC, No. 2020-C-00571, 2021 La. LEXIS 726 (La. Mar. 24, 2021) (Crain).
After a vessel owned by Tom’s Marine & Salvage grounded in Bayou Lacombe, along the Northshore of Lake Pontchartrain, Tom’s Marine sent a tug and crane barge to rescue it. The sunken vessel was rescued, however, the tug grounded over Marty Melerine’s oyster lease. The captain of the tug tried to rock the tug back and forth to move off the lease, stirring up sediment, but it was not until the next day that the tug was freed. Melerine brought this suit to recover for damage to his lease, and the jury awarded $6,087,701.47 in damages, using the formulas devised by the Oyster Lease Damage Evaluation Board (created by the Louisiana legislature to effect an equitable resolution of claims for damage to oyster beds by the oil and gas industry in Louisiana). Although Tom’s Marine argued that the formulas were inapplicable outside of oil and gas cases, the court of appeal held that it was not error to use the formulas in cases outside of oil and gas matters and affirmed the award of damages (see April 2020 Update). The Louisiana Supreme Court reversed the judgment and remanded for a new trial. The Court first held that the OLDEB formulas were dependent on a pre-biological survey, and, consequently, they could not be used without a pre-project biological survey. As the damage from the tug was not anticipated, there was no survey and the OLDEB formulas could not be used. Additionally, the Court held that it was error to allow Dr. Edwin Cake, Jr., an expert with forty years of experience in oyster biology, to testify (outside of that experience/expertise) with respect to sedimentology and hydrology. The Court noted that an oyster lessee has a valuable property right that is entitled to protection under the law; however, the claims are subject to the same evidentiary standards that apply to other claims.
Mitchell Navarre was employed as a pumper/gauger/operator for oil and gas facilities. He was ordered to perform work on Texas Petroleum’s fixed platform in Sweet Lake in Cameron Parish, Louisiana, and the Lake was rough from Tropical Storm Bill. Navarre pulled alongside the platform, but he could not moor his vessel for lack of mooring bitts, cleats, or other means to secure the vessel. He left the vessel in gear to maintain contact with the platform, but the vessel started to drift away. Navarre jumped from the platform to the vessel to avoid being stranded on the platform, resulting in injuries. He brought this suit against his employer and then amended the suit to add Texas Petroleum. However, Texas Petroleum was named more than a year after the accident. Citing the one-year period for prescription under Louisiana law, Texas Petroleum excepted to Navarre’s suit, and the judge dismissed the case against Texas Petroleum with prejudice. The Louisiana Court of Appeal for the Third Circuit disagreed. Although Navarre was injured during his jump to a vessel, Judge Kyzar, writing for the court of appeal, first held that state law applied to the case as the accident involved a fixed platform located in navigable waters. Applying Louisiana substantive law, Judge Kyzar disagreed with the lower court and held that the timely suit against Navarre’s employer interrupted prescription against Texas Petroleum. Therefore, the suit was timely against Texas Petroleum under Louisiana law.
Evidence was insufficient to establish energy company’s ownership or placement of obstruction that damaged fishing boat; Puderer v. Hilcorp Energy Co., No. 2020-CA-383, 2021 La. App. LEXIS 396 (La. App. 4 Cir. Mar. 24, 2021) (Love).
Jacob Puderer’s fishing boat sank after alliding with a submerged obstruction while shrimp trawling in South Louisiana. The vessel owner claimed to have identified the obstruction as a wellhead and then notified Hilcorp Energy, which allegedly held a lease for the area. Hilcorp retained a dive service, which concluded that a handrail was the only object above the mudline. The vessel owner then accused Hilcorp of cleaning up the site. The owner brought this suit against Hilcorp in Louisiana state court, and the court granted summary judgment to Hilcorp, holding that the vessel owner failed to show that the obstruction was owned or under the control of Hilcorp. Applying maritime law, Judge Love held that the affidavit of Hilcorp, denying any control over the obstruction, shifted the burden of proof to the vessel owner to present evidence of ownership or control of the obstruction by Hilcorp. The owner argued that the requisite control was established because the area was originally under a lease to Chevron, and Chevron had assigned all of its leases in the area to Hilcorp. However, ownership of the lease was not a material fact regarding the defendant’s ownership, placement, or control of the obstruction. Additionally, even if the owner proved that Hilcorp had removed objects or worked in the area of the allision, it would not provide proof of the ownership or control over the obstruction so as to defeat summary judgment.
African-American seaman was allowed to maintain a Jones Act claim for infliction of emotional distress from being exposed to a noose hanging in the vessel’s wheelhouse; Thompson v. Cenac Towing Co., No. 2019 CA 1185, 2021 La. App. LEXIS 403 (La. App. 1 Cir. Mar. 25, 2021) (Holdridge).
Robert E. Thompson, an African-American, was employed as a tankerman on a 28-day hitch on the M/V NORMAN PROEHL. On October 3, 2008, he noticed a rope that resembled a noose hanging in the vessel’s wheelhouse. Thompson did not express any concerns about the noose until October 17, 2008, when he told the captain that he was going to report him for the noose. There was no physical contact between Thompson and the captain or the noose. A year later, Thompson filed this suit alleging a Jones Act claim for intentional and negligent infliction of emotional distress, an unseaworthiness claim, and a cause of action under Louisiana law. The judge first dismissed the state claim and then dismissed the claims under the Jones Act and general maritime law because Thompson did not satisfy the zone of danger test. The court of appeal disagreed and reversed the dismissal of Thompson’s maritime claims. Although there was no fact question that Thompson did not sustain any physical injury from seeing the noose, Judge Holdridge concluded that he was objectively within the zone of danger because he was on the vessel where he was potentially exposed to physical injury or harm from the person or persons who hung the noose in the wheelhouse. Thompson must have feared that his life was endangered when he was confined on the vessel for 28 days with crewmembers who would do such an act.
Thanks to Katherine E. Kaplan and Fitzgerald Eze for their help in preparing this Update.
Kenneth G. Engerrand
President, Brown Sims, P.C.
1177 West Loop South
Houston, TX 77027
600 Jefferson Street
Lafayette, LA 70501
1100 Poydras Street
New Orleans, LA 70163
2304 19th Street
Gulfport, MS 39501
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Coral Gables, FL 33146
Critics of this Circuit’s shotgun pleading case law may condemn the emphasis we place on form, but as I have explained, the form of pleadings imposes very real costs on courts, lawyers, and the rights of litigants. For over thirty-five years, lawyers practicing in this Circuit have been aware of our stance on shotgun pleadings, and thus I have little sympathy for lawyers who draft slapdash complaints that are ultimately dismissed. Going forward, it is my hope that this opinion will serve as a guide for lawyers who truly seek to vindicate their client’s rights—and avoid unfortunate outcomes for their clients—by filing clear, precise pleadings.
Barmapov v. Amuial, No. 19-12256 (11th Cir. Feb. 3, 2021) (Tjoflat, J., concurring). Judge Tjoflat has seen his share of pleadings. He sat on the federal district bench from 1970 to 1975 before being appointed to the appellate bench on which he has served since 1975 (including serving as Chief Judge from 1989 to 1996). He was also a judge on the Florida Fourth Judicial Circuit Court from 1968 to 1970.
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© Kenneth G. Engerrand, April 2, 2021; redistribution permitted with proper attribution.