August 2019 Longshore/Maritime Update (No. 243)
Notes from your Updater:
President Trump announced that he will nominate Eugene Scalia, son of the late Justice Antonin Scalia, to be the next Secretary of Labor after Alexander Acosta announced his plans to resign the position.
David Widener, who served as the District Director for the Eighth Longshore District Office in Houston since 2012, has joined American Equity Underwriters as director of a newly created division, AEU Claims Advisory Services. David Duhon, who is the District Director for the Seventh Longshore District Office in New Orleans, will serve as interim District Director for the Eighth Longshore District Office until a replacement for Mr. Widener is appointed.
The Supreme Court will hear oral argument on November 5, 2019 in No. 18-565, Citgo Asphalt Refining Co. v. Frescati Shipping Co., on the issue of whether a safe berth clause in a voyage charter is a guarantee of a ship’s safety or a duty of due diligence.
The Supreme Court will hear oral argument the next day, November 6, 2019, in No. 18-260, County of Maui v. Hawai’i Wildlife Fund, on the issue whether the Clean Water Act requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater.
In a case involving application of Louisiana law, the Fifth Circuit rejected the claims of William Boateng that he should recover from BP for misappropriating his idea to cap the Macondo well and shut off the leak of oil after the blowout involving the DEEPWATER HORIZON. Boateng v. BP, P.L.C., No. 18-31032 (5th Cir. July 3, 2019).
Judge Doumar declined to reconsider his opinion of May 7, 2019 (June Update) in which he concluded that the note sent by the claimant’s attorney to the registered agent for the shipowner, entitled “Notice of claim,” was insufficient to initiate the six-month period for the shipowner to file a petition for limitation of liability. In re Vulcan Construction Materials, LLC, No. 2:18-cv-668, 2019 U.S. Dist. Lexis 118359 (E.D. Va. July 16, 2019).
After the Supreme Court reversed the Ninth Circuit in Parker Drilling Management Services, Ltd v. Newton (July Update) when the Ninth Circuit applied a California wage-and-hour law to a worker on the outer Continental Shelf, the Ninth Circuit, on remand, affirmed the district court’s decision dismissing the worker’s California minimum wage and overtime claims but remanded the case to the district court to consider the worker’s other state-law claims that had not been addressed.
On July 24, 2019, Judge Huck granted a remittitur of the jury verdict of $2,084,000 obtained by a passenger who suffered a heart attack on an NCL cruise ship, reducing the award of loss of services from $84,000 to $76,011 and the award for future medical expenses from $800,000 to $436,851. Otherwise, Judge Huck denied NCL’s motion for judgment as a matter of law and motion for new trial. Buland v. NCL (Bahamas) Ltd., No. 17-cv-24167 (S.D. Fla. July 24, 2019).
On the LHWCA Front . . .
From the federal appellate courts:
Worker on platform in state waters who was injured while unloading vessel was covered under the LHWCA. Wood Group Production Services v. Director, OWCP, No. 18-60542 2019 U.S. App. Lexis 21762 (5th Cir. July 22, 2019) (Duncan).
Luigi Malta was injured on a fixed platform in Louisiana territorial waters while unloading a vessel. The fixed platform was part of a warehousing facility that supported operations on satellite production platforms in the Helis Black Bay Field. When workers on the satellite platforms required tools for their operations, the necessary items were taken from the warehouse and loaded onto vessels by crane. Malta’s primary duties including ordering, receiving, and maintaining supplies and equipment at the warehouse, but he also spent about 25 to 35 percent of his time loading and unloading vessels (he testified that there was no difference between his duties and those of a dock worker who loaded/unloaded the same vessels in Venice, Louisiana). Malta was injured while standing on the platform in front of the warehouse helping unload a carbon dioxide canister from a vessel when the canister exploded and he was injured. The ALJ initially ruled that the platform was not a covered situs, but the BRB reversed and remanded so that the ALJ could address status. On remand, the ALJ found that Malta satisfied the status test and the BRB affirmed. His employer, Wood Group challenged both situs and status on appeal to the Fifth Circuit. With respect to situs, the warehousing facility did not satisfy the definition in the LHWCA [either for a covered situs as navigable waters or any of the enumerated adjoining structures (pier, wharf, etc.)], so Malta had to establish that his injury occurred on an adjoining area customarily used by his employer in loading/unloading a vessel. That required both a geographic component (adjoining navigable waters) and a functional component (area must be customarily used by an employer in loading/unloading a vessel). Judge Duncan distinguished cases holding that offshore platforms are not the site of significant maritime activity because the warehousing facility in this case was designed as a central hub to support production platforms with its warehouse and its safe harbor designed to allow for loading/unloading vessels in rough seas using three cranes, a full-time crane operator, and dedicated warehousemen. Judge Duncan also rejected Wood Group’s argument that the items that were loaded/unloaded were not cargo to be delivered into the stream of commerce, holding that the statute does not include a maritime cargo requirement. In any event, Malta used a crane to unload vessels containing tools and supplies for the use of multiple satellite production platforms throughout the field. With respect to the status requirement, Malta was injured while unloading a vessel, so Wood Group had to argue that his loading was incidental to the non-maritime work of oil and gas production. Judge Duncan disagreed that the loading/unloading had to be integral to maritime commerce, holding that the status requirement was satisfied because he was injured while unloading a vessel and he was regularly involved in loading/unloading vessels. Therefore, his claim was covered under the LHWCA.
From the federal district courts:
Government’s contractual cross claim against shipyard in personal injury suit was dismissed for failure to exhaust remedies, but the contract was still admissible to establish the shipyard’s duty. Ocampo v. United States, No. 15-cv-180, 2019 U.S. Dist Lexis 116595, 2019 U.S. Dist. Lexis 116618 (S.D. Cal. July 12, 2019) (Houston).
Salomon Rodriguez was employed as a subcontractor of National Steel and Shipbuilding Co., which was performing ship repair services on the United States vessel, USS BOXER in San Diego. He was killed when he fell from the unguarded side of an elevator platform down an elevator trunk of the vessel, and his beneficiaries brought suit against the United States and the shipyard. The United States answered and brought a cross claim against the shipyard for indemnity and breach of contract, and the shipyard filed a motion to dismiss the cross claim of the United States on the ground that the United States had not exhausted its administrative remedies under the Contract Disputes Act. The United States argued that once suit was brought, the contracting officer under the CDA was divested of authority because the Department of Justice had complete authority of the litigation. However, Judge Houston rejected the Government’s argument as the failure to submit the breach of contract claim to the CO prior to filing the cross claim prevented the court from having jurisdiction over the cross claim. In the same vein, the shipyard also moved to exclude all evidence of the contract between the shipyard and the United States on the ground that the failure to exhaust remedies prohibited the court from making contract-related determinations and prevented the plaintiff from establishing the shipyard’s negligence based on purported breaches of the contract. Although Judge Houston did not have jurisdiction to rule on the Government’s contract claim, that did not mean that the contract was not relevant and admissible with respect to the negligence-based claims. Therefore, the court denied the motion to exclude the contract (as well as the shipyard’s motion to exclude expert evidence on the defendant’s duty and on human factors.
Marine electrician survives motion for summary judgment in 905(b) action against vessel; decisions on experts McCoin, Tylawski, and Borison. Rhodes v. Genesis Marine, LLC, No. 18-746, 2019 U.S. Dist. Lexis 116859 (E.D. La. July 15, 2019); 2019 U.S. Dist. Lexis 120614 (E.D. La. July 19, 2019); 2019 U.S. Dist. Lexis 120615 (E.D. La. July 19, 2019) (Morgan).
Kevin Rhodes was working as a marine electrician for his employer, Complete Marine, on the Genesis Barge 11103, which was being repaired by Bollinger at its dry dock facility in Amelia, Louisiana. He was injured while descending a ladder to the lower level of the barge when he removed a piece of grating to access the ladder and then tried to replace the hatch cover back over the access hole. The cover became snagged on welding lead cables that were laid out across the walkway by Bollinger, and the plaintiff fell off the ladder when he pushed himself back to avoid being struck by the cover. Barge owner Genesis moved for summary judgment that it did not breach any of the Scindia duties, and its motion was opposed both by Bollinger and by the plaintiff. Judge Morgan addressed each of the Scindia duties and denied the motion for summary judgment. Starting with the turnover duty, Genesis argued that there was no evidence that the hatch cover was either a latent or hidden danger and that the cause of the accident was Bollinger’s welding leads. The worker responded that even though the conditions of the leads and the hatch cover were open and obvious, it was more difficult for him to avoid the hazard because the hatch cover was not hinged so that it could easily be put back into place and there was no barrier around the hatch cover so the worker had to replace the hatch cover in the difficult circumstance of the location of the welding leads. Finding fact questions whether safer alternatives were unduly impracticable or time consuming, Judge Morgan denied the motion as to the turnover duty. She next addressed the active control duty, citing the standard that the vessel owner may be liable if it is actively involved in the contractor’s operations—whether the area has been turned over to the contractor and whether the vessel owner controls the methods and operative details of the contractor’s work. Purporting to apply that standard, Judge Morgan found that the vessel owner had not negated that its employees were in the work area so as to establish that it did not have control of the area. As the plaintiff testified that he saw employees of the vessel owner working in the area from time to time, including a project manager employed by a contractor of the vessel owner, Judge Morgan found material disputed facts about whether the owner maintained active control of the area. Likewise, Judge Morgan found that there was sufficient evidence of actual knowledge of an unreasonably dangerous condition in order to defeat summary judgment on the duty to intervene. Even though the project manager denied observing the welding leads before the accident and denied that Genesis employees were working in the area so as to have knowledge, Judge Morgan stated that the manager “may have been aware of the dangerous condition” because he was in the area from time to time. Judge Morgan then addressed Genesis’ motions to exclude the testimony of Rhodes’ expert marine engineer, John Tylawsky, and expert economist, Kenneth McCoin, and Bollinger’s safety expert, Robert Borison. Judge Morgan had previously ruled that McCoin would not be allowed to opine that Rhodes’ annual wages would increase by .8% annually throughout his worklife expectancy and as to the cost of household services. Genesis objected to Tylawsky’s testimony as unreliable because he considered OSHA regulations rather than Coast Guard rules and because he did not consider any deposition testimony, including that of Rhodes, in formulating his opinions. Concluding that OSHA may enforce its regulations against employers of non-seamen, such as Rhodes, Judge Morgan ruled that Tylawsky could testify that conditions on the Genesis barge violated OSHA regulations (but could not express an opinion on legal conclusions, such as that the violation constituted negligence per se). Although Tylawsky did not consider deposition testimony, he did inspect the barge, so Judge Morgan ruled that Genesis’ objection merely went to the weight of his testimony and not to its admissibility. Judge Morgan did agree that the testimony of Borison that the ladderway was unsafe in its construction and design should be excluded because he was not qualified as an expert in marine engineering or naval architecture. However, she did allow his testimony as to several preventative measures as he was qualified as a safety expert.
Suit by claimant against carrier and employer for violating HIPAA with claimant’s medical information is dismissed. Bowles v. Apro International Inc., No. 4:18-cv-1869, 2019 U.S. Dist. Lexis 117071 (E.D. Mo. July 15, 2019) (Autrey).
Mariah Bowles was employed by APRO International in Afghanistan as a Medical Supply Specialist/Warehouse Specialist, working in a medical warehouse situated in the flight line for medical evacuation of helicopters delivering wounded soldiers to a hospital. Witnessing the casualties of the wounded soldiers, Bowles claimed that she suffered from PTSD, and her psychiatrist restricted her from returning to work in a combat zone. She brought a claim for LHWCA benefits (as extended by the Defense Base Act), and APRO’s carrier, Insurance Company of the State of Pennsylvania (through a representative of its holding company, AIG) investigated the claim, including having Bowles sign a HIPAA release. Bowles alleged that the release did not authorize AIG to provide Bowles’ medical information to APRO or any of its employees, but employees of AIG or ICSOP released her confidential medical information to employees of APRO, and employees of APRO released the information to other employees of APRO. Bowles settled her compensation claim, but the 8(i) agreement only released her compensation/medical claim and not her claims related to the release of medical information. Claiming that she suffered emotional distress, anguish, and anxiety after learning that the carrier and employer released her highly personal and confidential mental health records, Bowles brought suit against the carrier and employer on several different theories, all of which were dismissed by Judge Autrey. Her first theory, negligence per se, was based on the defendants’ violation of HIPAA (HIPAA does not provide a private cause of action, but she asserted a negligence cause of action based on breach of HIPAA). However, HIPAA only applies to a “covered entity” or its “business associate,” and covered entities are health care providers and clearinghouses. Thus, the defendants could not have violated HIPAA. Her second claim was for invasion of privacy; however, that action required that defendants obtain her records through unreasonable means. As the defendants obtained her records through Bowles’ prosecution of her DBA claim, she had no action for invasion of privacy. Next, she made a claim for intentional infliction of emotional distress, but Judge Autrey did not find any allegation that the defendants’ actions were extreme or outrageous, so he dismissed that count. Finally, Bowles alleged that ICSOP owed her a fiduciary duty to keep her mental health information confidential, but she did not set forth facts to establish that her employer’s insurance carrier owed her any fiduciary duty, so that count was dismissed.
Longshore workers’ suits against vessel after its limitation action was concluded were too late. Collins v. Double J Marine, LLC, No. 19-1415, 2019 U.S. Dist. Lexis 117099 (E.D. La. July 15, 2019); Payne v. Double J Marine, LLC, No. 19-1417, 2019 U.S. Dist. Lexis 117104 (E.D. La. July 15, 2019) (Milazzo).
Roosevelt Collins, Cary Payne, and Jerome Davis were performing cargo operations for their employer on the M/V ATLANTIC GRACE, which was moored on navigable waters in Plaquemines Parish, Louisiana, when that vessel was struck by the M/V MISS SYLVIA on February 16, 2016, causing injuries to the three workers. The owner and bareboat charterer of the MISS SYLVIA filed a limitation action on July 21, 2016, and the court in that case issued an order on May 23, 2017 defaulting all persons claiming injuries from the allision who had not filed a claim in the limitation action. All claims that were filed in the limitation action were eventually resolved, and the action was dismissed on November 26, 2018. These workers then brought suit against the owner and charterer of the MISS SYLVIA on February 14, 2019. In response to the defendants’ motion to dismiss the suits as time barred for failing to file in the limitation action, the workers argued that they were never notified of the limitation action. They obtained counsel immediately after the allision, notified their employer, filed workers’ compensation claims, and asserted that discovery obtained by the defendants in the limitation action should have placed them on notice that the workers were potential claimants. Judge Milazzo rejected the workers’ arguments because Supplemental Rule F only requires that notice be given to persons asserting claims and that notice to others be provided by publication. As the defendants were not on notice of their claims, and the workers’ compensation claims against their employer were not notice of a claim against the defendants, Judge Milazzo dismissed the case with prejudice.
Ship repairers’ allegations that he may have been a seaman are dismissed. Mayes v. Selvick Marine Towing Corp., No. 19-C-188, 2019 U.S. Dist. Lexis 126643 (E.D. Wis. July 30, 2019) (Griesbach).
Ronald Mayes was sent by his employer to perform repair work on the starboard engine of Selvick’s vessel M/V DONNY S. He was injured when a pressurized oil pipe burst, causing permanent damage to his eye. Mayes brought suit in state court in Door County, Wisconsin, alleging claims under the LHWCA, the Jones Act and general maritime law, and common-law negligence. The defendant removed the case to federal court based on the federal court’s admiralty jurisdiction and federal question jurisdiction and then moved to dismiss the allegations for seaman’s remedies as insufficient and the allegation of common-law negligence as duplicative of Mayes’ claim under the LHWCA. Chief Judge Griesbach noted that that Mayes alleged that he was a longshoreman under the LHWCA and that he may have been a seaman under the Jones Act. However, he did not allege his status as to the vessel in navigation, and he did not provide facts to suggest that he had a connection to the vessel that was substantial in nature and duration. Therefore, Chief Judge Griesbach dismissed the claims under the Jones Act, for unseaworthiness, and for maintenance and cure. Chief Judge Griesbach did not dismiss the claim for common law negligence, reasoning that Mayes’ status under the LHWCA had not been established. Therefore, he was allowed to plead a common law negligence claim in the alternative to his LHWCA negligence claim.
And on the Maritime Front . . .
From the federal appellate courts:
Factual disputes do not support overturning award from BP based on the Deepwater Horizon Economic and Property Damages Settlement Agreement. BP Exploration & Production, Inc. v. Claimant ID 100157225, No. 18-30904 (5th Cir. June 28, 2019) (per curiam).
The Claims Administrator gave an award to a business engaged in construction of water and sewer lines and related structures. BP challenged the award on the ground that one of the claimant’s larges clients was an oil and gas company, so it was excluded from the settlement as an entity in the oil and gas industry. As there was disputed evidence on whether the claimant was in the business of drilling oil and gas wells, the decision of the Administrator was affirmed. BP’s challenge to revenues as being from facilities outside of Gulf Coast Areas was also rejected because the affidavit of the claimant’s CFO asserted that trailers located outside of the coastal areas were used merely for storage of product and as meeting rooms for consultants and government compliance officers, and BP’s challenge to those assertions was a fact dispute that was resolved against BP. Finally, BP’s challenge to the Appeal Panel’s characterization of costs as fixed on the ground that the Appeal panel merely adopted the labels used by the claimant was rejected as there was no evidence that the Panel failed to examine the record and determine the nature of the expenses as it was required to do.
Passenger’s spouse may not recover loss of consortium from cruise line. Eslinger v. Celebrity Cruises, Inc., No. 18-14920, 2019 U.S. App. Lexis 19434 (11th Cir. June 28, 2019) (per curiam).
Tara Lynn Eslinger appealed the dismissal of her claim for loss of consortium resulting from the injury her husband suffered on defendant’s cruise ship, EQUINOX. In view of the precedent against her claim, Eslinger cited the Supreme Court’s decision in Atlantic Sounding that seamen can recover punitive damages in maintenance and cure cases. Noting that Atlantic Sounding did not apply to loss of consortium claims and adding that Eslinger was unable to explain why passenger spouses, but not those of seamen, should be permitted to recover for loss of consortium, the court affirmed the dismissal of her consortium claim.
Reorganization of Florida internet marketing company makes it a Start-Up Business for the Deepwater Horizon Economic and Property Damages Settlement. Claimant ID 100145392 v. BP Exploration & Production, Inc., No. 18-31022 (5th Cir. July 2, 2019) (per curiam).
Clickbooth.com is an internet marketing company in Sarasota, Florida, that was formed from a reorganization of IntegraClick in October 2009. After several transfers of assets and liabilities, Clickbooth continued IntegraClick’s line of business as a subsidiary of Eternal Strategies. The Claims Administrator classified Clickbooth as a Start-Up Business, which placed a causation requirement on Clickbooth that it could not satisfy. Thus, Clickbooth argued that it was not a new business and just continued with IntegraClick’s business. The Fifth Circuit rejected that argument as the meaning of a business is a business entity, not a line of business. Clickbooth then argued that it had received all of IntegraClick’s revenue generating assets that were related to the business and assumed all of its liabilities. Acknowledging that under certain circumstances a business claimant that reorganizes or changes its form may still recover, the Fifth Circuit did not consider this case to fall within the exception as IntegraClick retained some liabilities in the asset sale, and at least some of its assets were distributed to other subsidiaries of Eternal Strategies. Consequently, it was inappropriate to place Clickbooth outside of the Start-Up Business category.
Cannot call your car a vessel and be exempt from license and registration to operate a vehicle on state roads. Perkins v. Ivey, No. 19-50023 (5th Cir. July 5, 2019) (per curiam).
Perkins argued that he was arrested without cause for driving a vehicle without a license plate, contending “that because he was not transporting passengers or cargo, he was not operating a ‘vessel,’ and thus he may not be arrested for violations of law governing vehicles—a kind of ‘vessel.’” Noting that the decision of the Supreme Court in Lozman covered vessels that were capable of being used as a means of transportation on water and NOT motor vehicles, the Fifth Circuit held that motor vehicles in Texas are regulated by the Texas Transportation Code and that Perkins had to register his vessel or be subject to arrest.
Claimant bears the burden of proof under the Deepwater Horizon Economic and Property Damages Settlement. Claimant ID 100025887 v. BP Exploration & Production, Inc., No. 18-30676 (5th Cir. July 8, 2019) (per curiam).
This claim for damages pursuant to the Deepwater Horizon Economic and Property Damages Settlement Agreement arose in Zone C. Therefore, the claimant was required to meet one of several causation tests that compare the claimant’s revenue from specific pre- and post-disaster periods. This case involved the Decline-Only Revenue Pattern Test, which required identification of revenue generated from non-local customers or customers located in Zones A to C. The claimant was able to identify addresses and revenue for over 4000 customers, and the administrator declined to include income from those whose addresses were not verified. As the Settlement Agreement is a maritime contract, the court placed the burden of proof on the claimant and the absence of evidence was held against the claimant.
Reversal of award from Deepwater Horizon Economic and Property Damages Settlement to non-profit foundation based on $20 million pledge in 2009. BP Exploration & Production, Inc. v. Claimant ID 100238083, No. 18-30777 (5th Cir. July 22, 2019) (per curiam).
The Claims Administrator for the Deepwater Horizon Economic and Property Damages Settlement awarded a non-profit foundation created to support a local arts center more than $20 million based on a $20 million pledge received by the foundation in 2009. BP challenged that award on the grounds that the foundation is a pass-through entity and because the decline in revenues after this large pledge was not caused by the oil spill. The treatment of entities such as this foundation, that only temporarily possess the funds, presents a recurring issue on which the appeal panels have split. Therefore, the Fifth Circuit held that the district court should have reviewed the issue and the case was remanded to the district court. On remand, the Fifth Circuit noted that it had recently decided cases that raise a causation issue between the spill and the alleged downturn in revenue (such as the claim of the professional basketball player whose income declined because his contract was front-loaded). The district court will have the benefit of these decisions on remand.
Complaint of failing to protect and warn passengers of the danger of rape by fellow passengers survives motion to dismiss. K.T. v. Royal Caribbean Cruises, Ltd., No. 17-14237 (11th Cir. July 24, 2019) (Carnes).
K.T., a minor, was on a cruise with her sisters and grandparents. She alleged that on the first night of the cruise, nearly a dozen adult male passengers bought her multiple alcoholic beverages to the point that she was highly intoxicated and then steered her to a cabin where they brutally assaulted and raped her. She brought suit against the cruise line for failing to protect her and failure to warn her of this danger. The basis for these duties was that the cruise line had experienced and had actual knowledge of assaults, sexual crimes, and other violence between passengers and between passengers and crew. The district judge granted the cruise line’s motion to dismiss on the ground that the plaintiff did not sufficiently allege that the defendant breached its duty of care or that any breach proximately caused her injuries. Writing for the Eleventh Circuit, Judge Carnes disagreed with the district court and held that the allegations (which must be accepted as true with respect to a motion to dismiss) were sufficient to establish that the danger of sexual assault to minors was foreseeable and was known to the cruise line. Therefore, the dismissal was reversed. Judge Carnes then wrote a separate opinion, concurring with his opinion for the court, in which he took judicial notice of publicly available data (Cruise Line Incident Reports) that reinforced the allegations that the cruise line knew or should have known about the danger of sexual assault aboard its cruise ships. Thus, if anything more were necessary beyond the allegations of the complaint, the information in the reports would provide it.
From the federal district courts:
Improper joinder of Jones Act claims does not prevent removal but motion to dismiss is not the means to dismiss the Jones Act claims. De Bree v. Pacific Drilling Services, Inc., No. H-18-4711, 2019 U.S. Dist. Lexis 114712 (S.D. Tex. June 17, 2019) (Stacy), adopted 2019 U.S. Dist. Lexis 112798 (S.D. Tex. July 8, 2019) (Hanen); 2019 U.S. Dist. Lexis 113792 (S.D. Tex. July 1, 2019) (Stacy).
This case illustrates the standards to establish improper joinder and to dismiss a case on the pleadings. De Bree, a citizen of The Netherlands, brought a Jones Act case in state court in Texas against two companies with their principal place of business in Texas and a negligence claim against a co-worker who was a citizen of Texas. The Jones Act defendants removed the case to federal court on the basis of diversity, alleging that all of the defendants were diverse but the Texas citizenship of the defendants should be ignored for purposes of the prohibition of diversity removal by local defendants on the ground that the defendants were all improperly joined. The Jones Act defendants presented evidence establishing that they were not the employer of De Bree and that they did not own or operate the vessel on which De Bree was injured at the time of the injury. Finding that there was no basis for recovery against these defendants, Magistrate Judge Stacy concluded that they were improperly joined so their Texas citizenship would not bar removal. The defendants also established that as a co-worker with De Bree, the other defendant was not liable to De Bree for negligence or gross negligence under the general maritime law, but De Bree amended his complaint to allege an intentional tort against the co-worker. Noting that jurisdiction is determined based on the state-court petition at the time of removal, Judge Stacy held that the amendment could not defeat removal jurisdiction. Judge Hanen then adopted Judge Stacy’s recommendations and denied De Bree’s motion for remand. It was a different result for the defendants’ motion to dismiss the Jones Act claims against the defendants for failure to state a claim under Rule 12(b)(6). As a motion to dismiss is decided on the pleadings, which are taken as true, and is not based on affidavits or declarations, Judge Stacy declined to dismiss the claims against the defendants for failure to state a claim.
Maritime law, not state law governs damages awarded in default judgment on maritime contract. Genesis Marine, LLC v. Noil Petroleum Corp., No. 19-308, 2019 U.S. Dist. Lexis 108308 (E.D. La. June 28, 2019) (Africk).
Genesis brought suit against Noil Petroleum for breach of a Marine Transportation Services Agreement for hire of the M/V RED RIVER EXPRESS and two barges. When Noil did not answer, Genesis moved for a default judgment but did not brief the applicable law. Judge Africk ordered Genesis to brief the applicable law, and Genesis asserted that Louisiana contract law should apply (including attorneys’ fees). After reviewing the complaint, motion, and case law, Judge Africk asked why maritime law would not apply, and counsel confirmed that it would. Therefore, Judge Africk granted the default judgment for the amount demanded but not for attorneys’ fees as their award would threaten the uniformity of the maritime law that does not permit award of attorneys’ fees for breach of contract.
Failure to provide support for affirmative defenses results in recommendation that defendant not be allowed to introduce evidence on them. Incardone v. Royal Carribean [sic] Cruises, Ltd., No. 16-20924, 2019 U.S. Dist Lexis 108778 (S.D. Fla. June 28, 2019) (Goodman).
This case involves the claims of a group of autistic children and their families who claimed psychological injuries, asserting that Royal Caribbean’s ANTHEM OF THE SEAS sailed into the path of a storm despite severe weather warnings. The plaintiffs filed a motion in limine to prevent the defendant from introducing evidence and presenting argument about its several affirmative defenses. The plaintiffs contended that the defendant had been hiding the ball and preventing them from conducting discovery and preparing responses to the defenses. The response from the defendant was only three pages and did not explain how the defendant had provided discovery about the facts supporting its affirmative defenses in the two-and-a-half years since the Magistrate Judge had ruled that the plaintiffs were entitled to learn the facts supporting the affirmative defenses. Citing the “stunning lack of detail” in some of the defenses, Magistrate Judge Goodman recommended that the defendant not be allowed to introduce evidence on, or assert argument on, some of the affirmative defenses, while denying the motion on others.
Judge enforces forum selection clause in Master Service Agreement for work on OCS offshore Louisiana. 360 International, Inc. v. GoMex Offshore, Ltd, No. 6:19-cv-325, 2019 U.S. Dist. Lexis 110204 (W.D. La. July 1, 2019) (Hannah).
360 International performed work on platforms on the outer Continental Shelf offshore Louisiana for GoMex pursuant to a Master Service Agreement that contained a mandatory forum selection clause for the state/federal courts in Houston. When 360 International brought this suit in federal court in Lafayette for more than two million dollars in unpaid invoices, GoMex moved to transfer the case to federal court in Houston. 360 International opposed the motion, arguing that it was unreasonable to enforce the clause. 360 International brought suit based on federal question jurisdiction under the Outer Continental Shelf Lands Act and diversity and contended that if the jurisdiction were based on diversity the transferee court (Texas) would apply Texas law, depriving 360 International of its Louisiana remedies (that contention would not be true whether the jurisdiction was based on diversity or federal question as the OCSLA contains a mandatory choice of law of the law of the adjacent state—in this case Louisiana). Nonetheless, Judge Hannah rejected the argument because the loss of remedies is insufficient to decline to enforce the clause—the transfer must essentially afford no remedy. 360 International also argued that it would violate the strong policy of the Louisiana Construction Anti-Indemnity Act to transfer the case to Texas, but Judge Hannah did not consider the refurbishing and installation of compressors, pumps, and tanks to be the type of permanent improvements to real property that are contemplated by the statute. However, even if the work fell within the LCAIS, Judge Hannah concluded that the public policy favoring freedom to contract would prevail over the public policy in the LCAIS. Finally, reviewing the factors for enforcing the forum selection clause through the doctrine of forum non conveniens, Judge Hannah concluded the factors did not outweigh the presumption in favor of enforcing the clause and ordered the case transferred to the Southern District of Texas.
Maritime law and maritime damages apply to products liability actions for injury and death of seamen. In re American River Transportation Co., No. 18-2186, 2019 U.S. Dist. Lexis 110100, 2019 U.S. Dist. Lexis 110104 (E.D. La. July 2, 2019) (Lemmon).
This case provides a good summary of seamen’s remedies for products liability in connection with an injury (Neal) and a death (Graves) on the M/V LOUISIANA LADY, a tug doing work on the Mississippi River, when a fire broke out in the deck locker on the vessel’s main deck. The vessel owner/operator filed a petition for limitation of liability, and Neal and the parents of Graves filed third-party claims against the manufacturer (LGCAI) of the lithium battery in an electronic cigarette that allegedly exploded on a shelf in the locker causing the fire and the manufacturer (Kidde) of the smoke and gas detectors and alarms that allegedly failed to work properly. The plaintiffs asserted their products liability claims under the general maritime law and the Louisiana Products Liability Act, and Judge Lemmon began by dismissing the LPLA claims on the ground that the general maritime law provides a cause of action for products liability, including strict liability, and there is no gap that needs to be supplemented by state law. Judge Lemmon then applied the general maritime law to Kidde’s assertion that the personal and actual knowledge of the seamen of the defects in the detection and alarm systems was a defense as they voluntarily proceeded in the presence of a known risk. Although the seamen were fully aware of the risks, they complained about the state of disrepair of the equipment and had no choice but to sleep in their assigned quarters on the ship. Thus, they could not be said to have voluntarily assumed the risk of the faulty detectors, and Judge Lemmon ruled that the assumption of risk defense was inapplicable. Judge Lemmon then addressed the damages asserted by the seamen against Kidde and noted the decisions from the Fifth Circuit that seamen may not recover non-pecuniary punitive damages either from their employer or from non-employer third parties, so the punitive damages claims were dismissed. Moving to the claims for financial support by Graves’ parents, Kidde objected that the parents had not alleged the required dependency in order to recover, and Judge Lemmon gave the parents 15 days to allege dependency more specifically. She also ruled that only the personal representative of the decedent’s estate has standing to bring a claim for wrongful death (or for survival damages) under the Jones Act or general maritime law, so the parents’ were not entitled to bring their claims in their individual capacity, but they could bring the claims as the co-administrators of their son’s succession. The plaintiffs acknowledged that they had no right to maintenance and cure or found from Kidde, so Judge Lemmon dismissed those claims, but she then rejected Kidde’s argument that the claim for past and future meals, lodging, and found should be stricken as duplicative of the plaintiffs’ wage loss claims on the ground that the court could ensure that no double recovery occurred. Finally, Judge Lemmon declined to strike the pleading of res ipsa loquitur as a separate cause of action because the doctrine is simply an evidentiary doctrine. She answered that she understood that distinction and would move forward accordingly. On the same day, Judge Lemmon issued an order with respect to LGCAI’s motion to dismiss the claims against it for lack of personal jurisdiction and allowed limited discovery directed to that issue.
Maritime law applies to contract to provide ROV, support vessel, and associated work using BIMCO Supplytime 2005 form. Grupo HGM Tecnologias Submarina, S.A. v. Energy Subsea, LLC, No. 1:18-430, 2019 U.S. Dist. Lexis 111528 (S.D. Ala. July 2, 2019) (Nelson).
After Grupo entered into a contract to provide services and equipment to locate two aircraft that crashed into Venezuelan waters, Grupo entered into a contract with the defendants to supply some of the needed equipment, including a suitable vessel, using the BIMCO Supplytime 2005 form. Grupo paid more than a million dollars without any mobilization from the defendants, who continued to demand more than a million additional dollars (even though the quoted price was $650,000), leading to Grupo suing for breach of contract plus causes of action for fraud, and violations of the Alabama Deceptive Trade Practices Act. Grupo moved for a default judgment, asserting the application of Alabama law, but Magistrate Judge Nelson noted that maritime law should apply to the contract even though Grupo had brought the case pursuant to the diversity jurisdiction and not admiralty jurisdiction. Therefore, she recommended that the default judgment be denied without prejudice to filing a new motion based on the proper substantive law.
Shipping Act does not displace maritime causes of action when the defendant fails to pay for contracted services. Maersk Line v. TJM International LLC, No. 18-11668, 2019 U.S. Dist. Lexis 111300 (D.N.J. July 3, 2019) (Hillman).
This case involves the defendants’ failure to pay for common carriage of cargo by the plaintiff pursuant to the Shipping Act. Maersk brought suit for the amount due under its tariffs pursuant to the Shipping Act plus breach of contract, unjust enrichment, quantum meruit, account stated, and attorney’s fees. Judge Hillman originally denied the motion for default judgment on the ground that Maersk should address the issue of preemption (actually displacement) of the other claims. Although Maersk did not do that in its amended motion for default judgment, Judge Hillman found no reason to conclude that the Shipping Act preempted (displaced) the common law causes of action and found that Maersk had stated causes of action for breach of contract, unjust enrichment, quantum meruit, and account stated. Even though the maritime law does not generally provide for recovery of attorneys’ fees in contract claims, Judge Hillman gave Maersk 14 days to move for an award of attorneys’ fees.
Vessel storage on land is insufficient hurricane preparedness to maintain insurance coverage. Kephart v. Certain Underwriters at Lloyd’s of London, No. 18-cv-2735, 2019 U.S. Dist. Lexis 111613 (S.D.N.Y. July 3, 2019) (Cote).
Kephart insured his 46-foot KOMEDY III with Certain Underwriters at Lloyd’s, and the vessel sustained damage in a grounding for which the underwriters made initial payments to Kephart and to a vessel repairer. The vessel remained blocked on land in Key West, Florida for several months while Kephart negotiated a final settlement with the underwriters and thereafter. Later, Hurricane Irma struck the Keys and blew the vessel off its blocking. The policy provided coverage for Named Windstorms in the event the insured completed a Hurricane Preparedness Plan, and that included removing and storage of Biminis and dodgers, canvas items, loose upholstery, cushions, roller-furled sails, outriggers and antennas, liferafts, hard tenders or inflatable dinghies. The underwriters denied the claim for damage from Irma on the ground that Kephart had breached the Hurricane Preparedness Plan warranty in the policy. Kephart argued that he had complied with the warranty where the vessel was already hauled out of the water and stored on land prior to the storm. However, that was not enough to comply with the warranty, which also included removing and storing the enumerated items. Judge Cote rejected the argument that the policy was ambiguous with respect to the additional removal obligations for a vessel that had already been removed from the water, holding that the general maritime law requires strict compliance with the warranty and that Kephart had breached the warranty. Therefore, there was no coverage for the hurricane damage.
Anti-subrogation rule results in dismissal of underwriters’ negligence claim against marine surveyor. Lloyd’s Syndicate 457 v. Floatec LLC, No. H-16-3050, 2019 U.S. Dist. LEXIS 113359 (S.D. Tex. July 9, 2019) (Rosenthal).
The saga continues (Fifth Circuit decision reported in May 2019 Update) of the efforts of the underwriters for an Offshore Construction Risk Policy to recover for the $500 million they paid to their insured, Chevron, in connection with the building of a drilling platform in the Gulf of Mexico when parts of the platform sank to the ocean floor. The underwriters sued Chevron’s contractors, including the marine warranty surveyor hired to review and certify the project’s specifications and materials before the installation at the behest of the underwriters. The surveyor was named as an “Other Assured” on the policy against “all risks” of physical damage or loss to the project, including from the surveyor’s negligence. Arguing that the underwriters could not subrogate against their own insured, the surveyor moved to dismiss the underwriters’ negligence claim, and Judge Rosenthal agreed. It did not matter that the policy was not a liability policy that afforded coverage for negligence of its assured. The policy covered the physical damage to the project, the underwriters paid for that damage, and the anti-subrogation rule prevented the underwriters from bringing an action to recover against the insured for damage that was covered under the policy, even though the policy did not afford coverage for the negligence of the surveyor.
More suits by Back-End Litigation Option plaintiffs dismissed for failure to establish causation. Parker v. BP Exploration & Production Inc., No. 18-9518, 2019 U.S. Dist. Lexis 112533 (E.D. La. July 8, 2019); Brown v. BP Exploration & Production Inc. No. 18-9927, 2019 U.S. Dist. Lexis 113155 (E.D. La. July 8, 2019) (Africk).
These cases involve the Deepwater Horizon Medical Benefits Class Action Settlement Agreement, which includes a Back-End Litigation Option for plaintiffs who were exposed to oil, dispersants, and contaminants in connection with the Deepwater Horizon spill and cleanup. Class members are allowed to bring BELO suits against BP for later-manifested physical conditions without having to show fault of BP (but they do have to prove causation). In our July Update, we discussed the dismissal of two BELO suits by Judge Africk because the only evidence in response to BP’s unopposed motions for summary judgment was the reports of examining physicians, and Judge Africk held that the reports were not competent summary judgment evidence. Similarly, the claims of Parker and Brown were dismissed because the submission of medical reports did not satisfy the burden of presenting competent summary judgment evidence. Consequently, Judge Africk dismissed these BELO complaints with prejudice.
Rate and hours reduced in awarding attorneys’ fees. D’Amico Dry D.A.C. v. Nikka Finance, Inc., No. 1:18-cv-284, 2019 U.S. Dist. Lexis 113448 (D. Ala. July 8, 2019) (DuBose).
This case presents an exception to the general rule that a prevailing party in an admiralty action is not entitled to recover legal fees as the contract involved in the case provided for the award of attorneys’ fees. The prevailing party sought an award of fees of $872,844.52 for work performed in litigation in federal court in Mobile, Alabama, related to litigation in New York. Applying the rates for lawyers of comparable skills, experience, and reputation in the applicable community, Mobile, Judge DuBose based her award on hourly rates of $325 per hour for partners with experience of 38 to 45 years, $225 for senior associates, $150 per hour for junior associates, and $75 per hour for paralegals. Judge Vance then addressed the number of hours and found that the case had been overstaffed by three partners, four associates, and three paralegals resulting in redundant billing (for example, after a partner took a deposition for nine hours, three associates spent 40.4 additional hours reviewing and digesting the transcript). As a result, Judge DuBose concluded that the number of hours expended exceeded what the Court considered reasonable by 65%.
Claims by freight forwarder for freight charges are time barred by the limitations in the House Bills issued by the freight forwarder. IAL Logistics India Ltd. v. William Sheppee (USA) Ltd., No. 5:18-cv-2864, 2019 U.S. Dist. Lexis 112729 (N.D. Ohio July 8, 2019) (Lioi).
An Indian seller of merchandise appointed IAL Logistics as a freight forwarder to arrange transportation of goods from India to the consignee, William Sheppee (USA) in the United States. IAL issued House Bills of Lading for the carriage, but Sheppee did not pay for most of the carriage. IAL originally brought suit for breach of a maritime contract and for unjust enrichment, and it amended its complaint to allege the breach of a settlement agreement between the parties. Sheppee moved to dismiss the complaint as time-barred under the provision in the Bills that any action relating to multimodal transport shall be time-barred if judicial proceedings have not been instituted within nine months after delivery of the goods. Even though the defense was raised in a motion to dismiss, Judge Lioi considered the contract provision under the rule that when a complaint is based on breach of contract, the court may consider the terms of the contract in connection with a motion to dismiss. Although Sheppee argued that a suit for freight was not covered by the time limitation, Judge Lioi disagreed and held that the words “any action” were broad enough to include a suit for freight. Thus, the claim for breach of contract was time-barred. Similarly, the claim for unjust enrichment is a quasi-contractual claim and was equally time-barred by the limitation period in the bill of lading. The third claim, breach of a settlement agreement, did not fall within the admiralty jurisdiction, and the amount in controversy was insufficient for diversity jurisdiction. Consequently, Judge Lioi declined to exercise supplemental jurisdiction over that claim, and the case was dismissed.
Arbitrator correctly applied the rules of the Society of Maritime Arbitrators. Eurochem Trading USA Corp. v. Ganske, No. 18-cv-16, 2019 U.S. Dist. Lexis 112194 (W.D. Wash. July 8, 2019) (Crocker).
This is not a maritime case, but the parties agreed to arbitrate their disputes in accordance with the rules of the Society of Marine Arbitrators. After the arbitration, Eurochem sought to confirm the award, but the defendant objected on the ground that the arbitrator followed the rules of the Society of Maritime Arbitrators (the rules permit the arbitrator to award attorney’s fees and costs). Magistrate Judge Crocker dismissed that argument, however, as there is no Society of Marine Arbitrators, so the arbitrator did not commit a reviewable mistake by concluding that the parties had agreed to arbitrate in accordance with the rules of the Society of Maritime Arbitrators.
Expert testimony from Lt. Deutermann in passenger’s case on the timing of the rescue mission was allowed, but expert testimony from Dr. Mirski about the efficacy of emergency treatment for the passenger’s stroke was not allowed. Disler v. Royal Caribbean Cruise Ltd., No. 17-cv-23874, 2019 U.S. Dist. Lexis 116305 (S.D. Fla. July 10, 2019) (Louis).
David Disler suffered a stroke while a passenger on the ANTHEM OF THE SEAS while the vessel was at sea. He was immediately examined by the ship’s doctor, who contacted the bridge and spoke to the Staff Captain to determine the ship’s proximity to port and whether Disler could be evacuated by the Coast Guard. The Staff Captain advised that whether the ship proceeded to its next port or turned back to meet with the Coast Guard, the patient would receive help at approximately the same time. The ship proceeded on and reached port 22 hours after becoming aware of Disler’s condition. Disler sued Royal Caribbean on the basis that stroke treatment would have been successful within six hours of the stroke and the Coast Guard could have transported him to a facility that would have provided that treatment within that time frame. To support causation, Disler relied on the expert opinions of Lt. Daniel Deutermann, a marine search and rescue expert, and Dr. Marek Mirski, an intensive care unit neurologist. Royal Caribbean sought to exclude the testimony of both. Lt. Deutermann opined that the rescue mission would have taken just under 4.5 hours, which he later extended by 15 minutes. After considering Royal Caribbean’s objections, Magistrate Judge Louis recommended that Royal Caribbean’s motion with respect to the testimony of Lt. Deutermann be denied, concluding that he was qualified, his methodology was reliable, and that his opinions would be helpful to the fact finder. Dr. Mirski opined that Disler would have been a candidate to receive emergency stroke treatment within the window of time in which the treatment likely would have reduced Disler’s injuries. Although Magistrate Judge Louis found Dr. Mirski to be qualified, he concluded that Dr. Mirski’s methodology was not reliable and his opinions would not be helpful to the trier of fact. Therefore, he recommended that his testimony be excluded.
Exception in indemnity clause for sole negligence of indemnitee prevents indemnity prior to determination of negligence of the parties. Skipper v. A&M Dockside Repair, Inc., No. 18-6164, 2019 U.S. Dist. Lexis 115049 (E.D. La. July 11, 2019) (Vance).
Skipper was employed by Helix as a painter and blaster and was injured while working on a barge at a shipyard owned and operated by A&M. Skipper brought suit against A&M and others, and A&M brought an indemnity claim against Helix pursuant to the contract between Helix and A&M. That contract contained reciprocal/knock-for-knock indemnity provisions between Helix and A&M by which each party indemnified the other for claims brought by its own employees. However, the indemnity provisions contained an exception for injury or death resulting solely from the negligence of the indemnitee. Although the contract was a maritime contract, it contained a provision that the contract would be governed by Louisiana law, and Judge Vance held that the choice of law was valid and enforceable. Applying Louisiana law [the result would have been the same under maritime law or Louisiana law], Judge Vance held that the contract clearly did not require Helix to indemnify A&M if A&M was solely negligent. Therefore, as no determination had been made as to the negligence of the parties, the agreement could not be enforced at this time.
Judge rules that passenger’s recovery for medical bills was not limited to amounts actually paid to the providers. Smith v. Royal Caribbean, No. 19-cv-21793, 2019 U.S. Dist. Lexis 115866 (S.D. Fla. July 12, 2019) (Torres).
In response to a passenger’s suit seeking to recover from a fall on defendant’s vessel, the owner filed an affirmative defense that the plaintiff’s recovery should be reduced or offset by collateral source benefits received by or payable to plaintiff. The defendant justified the defense on the ground that the passenger should not be allowed to introduce medical bills into evidence that the passenger never paid, objecting to “phantom damages” when the medical bills had been reduced. The defendant introduced case law from the Eleventh Circuit to support its proposition [the Fifth Circuit has ruled that such reductions are not recoverable both in seamen’s claims and in claims under the general maritime law (Manderson and DePerrodil]. Noting cases from the Southern District of Florida that the defendant cannot introduce evidence of payment of the medical bills or the discount on medical bills (Brown, Jones, and Bonnell), Judge Torres held that the defendant may not introduce evidence of benefits or payments made to the plaintiff from a collateral source, although the plaintiff would have the burden of establishing the reasonableness and necessity of her medical expenses).
Little tolerance for shotgun pleading. Ballard v. Royal Caribbean Cruises Ltd., No. 19-22810, 2019 U.S. Dist. Lexis 116768 (S.D. Fla. July 12, 2019) (Scola).
Robert Ballard brought this action seeking to recover for injuries he sustained when he fell while walking to his seat at the ice show on the defendant’s vessel. He asserted one count for negligence based on at least three theories of liability, failure to properly staff, negligent design, and negligent medical care. Noting that the courts in the Eleventh Circuit “have little tolerance for shotgun pleadings,” Judge Scola struck the complaint as a shotgun pleading and gave Ballard leave to file an amended complaint with a warning that failure to replead in compliance with Iqbal/Twombly may result in dismissal and monetary sanctions.
Navy fireman cannot establish causation against supplier of products containing asbestos. In re Asbestos Litigation, No. 16-308, 2019 U.S. Dist. Lexis 116796 (D. Del. July 15, 2019) (Fallon).
Gerald Hickman served as a fireman on a number of Navy ships and asserted that he was exposed to asbestos. He brought suit before he died against a number of defendants, including Air & Liquid Systems, successor to Buffalo Pumps. After his deposition was taken, Air & Liquid moved for summary judgment on the ground that the maritime law standard for causation was not satisfied (the plaintiff must show a high enough level of exposure to asbestos to support an inference that the asbestos was a substantial factor in the injury, more than conjectural). In his deposition, Hickman was unable to place Buffalo pumps aboard any specific ship. He could not recall the type, purpose, function, size, horsepower, etc. of any Buffalo pump. He did not recall the frequency with which he was exposed to a Buffalo pump as opposed to any other pump. Although he removed asbestos from pumps on one ship, he was unable to identify from which pumps he removed asbestos. In opposition, Hickman filed an Unsworn Declaration (under penalty of perjury) that contained more specific details. However, he did not provide any explanation for the detail in his declaration compared to “the striking lack of specificity in his deposition testimony taken only three months earlier.” Consequently, Magistrate Judge Fallon disregarded the declaration. Likewise, she ruled that unauthenticated ship records showing that Buffalo pumps were present on the class of ships on which Hickman served was insufficient to create a fact question of substantial factor causation. Therefore, she recommended that Air & Liquid’s motion for summary judgment be granted.
Equitable vacatur applied to Louisiana seaman’s attachment action against Louisiana defendant in federal court in Texas. Knox v. Hornbeck Offshore Services, LLC, No. 3:19-cv-181, 2019 U.S. Dist. Lexis 117959 (S.D. Tex. July 16, 2019) (Edison).
After Louisiana resident Carlos Knox was injured while working as a galley hand on Hornbeck Offshore’s HOS BAYOU, Knox filed suit in state court in Houston. Hornbeck objected to the venue, and Knox dismissed the suit without prejudice. Hornbeck filed a declaratory judgment action in federal court in Louisiana to adjudicate whether it owed maintenance and cure to Knox, and then Knox filed this action in federal court in Galveston under the Jones Act and sought to attach the funds, credits, and property of Hornbeck Services in the custody of entities identified in the attachment proceeding. Hornbeck moved to dismiss the attachment on the grounds of equitable vacatur, which has been held to be available under any of these conditions: the defendant is subject to suit in a convenient adjacent jurisdiction, the plaintiff could obtain in personam jurisdiction over the defendant in the district where the plaintiff is located, or if the plaintiff has already obtained sufficient security for a potential judgment. Noting that the defendant was conveniently subject to suit in the same district where the plaintiff resides (Eastern District of Louisiana), Hornbeck cited the first two bases for vacatur. As the plaintiff and defendant “are essentially neighbors in one state” but the plaintiff nonetheless sought attachment in a neighboring state, Magistrate Judge Edison ordered the attachment vacated.
Seaman did not waive right to a jury trial on his maintenance and cure claim by repeatedly agreeing to a bench trial. St. Romain v. E.N. Bisso & Son, Inc., No. 18-8385, 2019 U.S. Dist. Lexis 118051 (E.D. La. July 16, 2019) (Vitter).
St. Romain filed this action as a Jones Act claim with a jury demand and then requested an expedited trial of his maintenance and cure claim. Judge Milazzo, an appointee of President Obama, agreed to an expedited trial and set the case for a bench trial after a conference at which both parties agreed to have Judge Milazzo try the matter. The trial was cancelled, reset, continued, and reset before the case was reassigned to Judge Vitter, an appointee of President Trump. St. Romain then changed his mind and asked for a jury trial. Absent strong and compelling reasons to the contrary, Judge Vitter exercised her discretion in favor of granting a jury trial.
Action by organization of marine surveyors against boat owners association for not including its surveyors on the boat owners’ preferred list of surveyors is dismissed. Navtech US Surveyors USSA Inc. v. Boat/US Inc., No. 2:19-cv-184, 2019 U.S. Dist. Lexis 118881 (M.D. Fla. July 16, 2019) (Chappell).
Navtech provides marine survey education and licensing for its subscribing members. Boat/US is an organization that offers services to its member boat owners such as helping them get marine insurance. Alleging that Boat/US referred its marine survey opportunities to members of the National Association of Marine Surveyors and the Society of Accredited Marine Surveyors, Navtech sued Boat/US for tortious interference with business relations and violations of the Florida Deceptive and Unfair Trade Practices Act. Noting the problems with the standing of Navtech (the complaint did not state whether Navtech brought the suit on its own behalf or on behalf of its members), the fact that the complaint was a shotgun pleading, and the fact that the complaint did not state plausible claims for tortious interference with business relations or a violation of the Florida statute, Judge Chappell dismissed the complaint and gave Navtech the opportunity to file an amended complaint.
Cargo claim against company that agreed to ship wine to Vietnam survives motion to dismiss on grounds that defendant is not the carrier and that there are defenses in the terms of the carrier’s bill of lading. Rang Dong Joint Stock Co. v. J.F. Hillebrand USA, Inc., No. 2:18-cv-3195, 2019 U.S. Dist. Lexis 119273 (E.D. Cal. July 17, 2019) (Mueller).
Napa Valley’s Rang Dong Winery contracted with J.F. Hillebrand to ship three containers of wine to Ho Chi Minh City, Vietnam. As with previous shipments, it expected that the wine would be delivered at the Cat Lai terminal in Ho Chi Minh City. A bill of lading was issued by Blue Eagle, a German shipping company, which delivered the wine to Cai Mep Port in Ho Chi Minh City without any notice to Rang Dong. Hillebrand agreed to move the cargo to Cat Lai, but by the time it was moved there, the heat caused extensive damage. Rang Dong sued both Hillebrand and Blue Eagle for damages under the Carriage of Goods by Sea Act, false bill of lading, deviation, and breach of fiduciary duty. Hillebrand moved to dismiss the suit on the ground that Rang Dong had not alleged Hillebrand was a carrier and that the bill of lading reflected that Blue Eagle (which had not been served or answered) was the carrier. Although Judge Mueller noted that there is a difference of opinion in the cases about what entity is a COGSA carrier, the complaint did not allege that Rang Dong was a carrier. Therefore, Judge Mueller agreed to the dismissal but gave Rang Dong leave to amend to make proper assertions to support a finding that Hillebrand was a carrier. Although the bill of lading only listed Ho Chi Minh City as the destination, Judge Mueller considered that identification to be ambiguous, and, construing the complaint in favor of the plaintiff in connection with a motion to dismiss, she held that it was plausible that the parties understood Ho Chi Minh City to refer to a specific terminal. Hillebrand also argued that Rang Dong was bound by provisions in the Blue Eagle bill of lading that contained an exoneration clause and a forum selection clause for Germany. However, there was a dispute as to the terms of the bill of lading, as Rang Dong produced a bill of lading that contained only two pages without any substantive terms, but Hillebrand argued that the terms of its published tariff and sample bill of lading posted on the internet (with the exoneration and forum selection clauses) governed. At this stage of the proceedings (motion to dismiss), Judge Mueller could not assume that Rang Dong had the terms Hillebrand sought to enforce, so the motion was denied.
Methodology in expert opinion of Captain Gilliam is not the most compelling, but it is not so unreliable that it is stricken under Daubert. Pacinelli v. Carnival Corp., No. 18-22731, 2019 U.S. Dist. Lexis 120626 (S.D. Fla. July 19, 2019) (Torres).
Carmen Pacinelli, a passenger on the Carnival MIRACLE, was injured while boarding a tender boat from the cruise ship in the port of Belize. Carnival filed a motion to exclude the testimony of Pacinelli’s expert, Captain Bret C. Gilliam, with respect to the negligence of Carnival in failing to follow proper safety protocols. Arguing that Captain Gilliam holds himself out as a marine and diving expert, Carnival concluded that Captain Gilliam was unqualified to opine about procedures concerning the disembarkation from a cruise ship to a tender. Magistrate Judge Torres rejected that argument, however, on the ground that Captain Gilliam’s experience is not limited to diving emergencies and that he has significant maritime experience related to the operation and safety protocols of maritime vessels. Carnival also objected to his opinion because he failed to rely on a discernible methodology, based his testimony on telephone interviews with lay witnesses, and failed to rely on a single study, treatise, article, book, rule, or regulation. Agreeing that the methodology might not have been the most compelling, Magistrate Judge Torres concluded that the objections raised by Carnival were weaknesses that could be used to discredit the opinions of Captain Gilliam, but that his opinions were not so unreliable that they should be stricken. However, Magistrate Judge Torres did rule that Captain Gilliam’s opinion contained impermissible legal conclusions that would have to be stricken under Daubert.
Jurisdiction upheld in Louisiana over dispute between Louisiana and Minnesota companies over barge transportation services. Celtic Marine Corp v. Basin Commerce, Inc., No. 18-8370, 2019 U.S. Dist. Lexis 1120362 (E.D. La. July 19, 2019) (Barbier).
This suit arose from negotiations and agreements for barges and barge transportation services to be provided by a Louisiana corporation to a Minnesota corporation. The Minnesota corporation objected to personal jurisdiction in Louisiana and also argued that the case should be transferred to Minnesota on the basis of forum non conveniens. The Louisiana corporation argued that there was a contract between the parties that contained a Louisiana forum selection clause, and Judge Barbier agreed. Therefore, he held that venue was proper in Louisiana based on the forum selection clause. He also denied the forum non conveniens motion because the contract involved a Louisiana corporation, anticipated partial performance in Louisiana, and involved a contractual provision that Louisiana law would apply if general maritime law was deemed inapplicable.
State claims for climate change are not removable under admiralty jurisdiction. Rhode Island v. Chevron Corp., No. 18-395, 2019 U.S. Dist. Lexis 121128 (D.R.I. July 22, 2019) (Miller).
The dispute among district judges on the issue of whether original admiralty jurisdiction is a basis for removal continued with this suit by the State of Rhode Island against energy companies that the State asserted are responsible for climate change. Judge Smith declined several grounds for removal including, lastly, admiralty jurisdiction, ruling that admiralty jurisdiction, standing alone, is insufficient to permit removal of a case.
Court enforces forum selection clause in cruise contract. Commander v. American Cruise Lines, Inc., No. 1:18-cv-1274, 2019 U.S. Dist. Lexis 125296 (N.D.N.Y. July 24, 2019) (Hurd).
Howard Commander and his wife Elizabeth brought suit against American Cruise Lines in federal court in New York seeking to recover for the injury sustained by Howard on the defendant’s cruise ship. American Cruise Lines moved to transfer the case to the federal court in Connecticut based on the forum selection clause in its contract. Howard argued that he had never received the contract, but American Cruise Lines established that it sent the contract, boarding passes, receipt, and information on lodging and shore excursions to Elizabeth, who booked the cruise. Her assertion that she did not recall receiving the contract was insufficient to contest the documentation of receipt, so Judge Hurd analyzed the factors for transfer in consideration of the forum selection clause and transferred the case to the federal court in Connecticut.
Sanctions awarded for defendant’s failure to comply with discovery order. Certain Underwriters at Lloyd’s v. Advanfort Co., No. 1:18-cv-1421, 2019 U.S. Dist. Lexis 124572 (E.D. Va. July 25, 2019) (Buchanan).
This case involves a declaratory judgment action by Certain Underwriters at Lloyd’s against their insured arising out of the seizure and detention by the Indian government of a vessel chartered by the insured based on a charge of illegally importing weapons into the country. The contentious dispute over the insured’s discovery responses resulted in an order from the court and the court even giving specific guidance on how to answer the discovery requests properly. In particular, the court noted that the defendant responded not with specifics but by reference to large ranges and groups of documents. Calling the responses misleading, incomplete, evasive, obfuscatory, and exhibiting a gamesmanship approach to litigation, Magistrate Judge Buchanan held that the defendant had willfully disobeyed the court’s discovery order in bad faith and then sanctioned the defendant. Judge Buchanan did not grant the death-penalty sanction of a default judgment but did grant sanctions of preclusion and monetary sanctions. For preclusion, the defendant was limited to the answers it provided for summary judgment and at trial, and the defendant could not clarify its answers nor reference any documents, testimony, or information not already provided to the plaintiffs through discovery.
Federal declaratory judgment action in maintenance and cure case dismissed after seaman filed suit in state court. Magnolia Fleet, LLC v. Grey, No. 18-8363, 2019 U.S. Dist. Lexis 123872 (E.D. La. July 25, 2019) (Lemelle).
After Rick Grey was injured in service of the M/V LYNNE, his employer instituted maintenance and cure payments. When the seamen refused to undergo medical examinations scheduled by the employer or execute authorizations for medical and employment records, his employer filed a declaratory judgment action in federal court to order him to submit to the examinations and to declare the maintenance and cure obligations of the employer. The seaman then filed suit in state court to recover for his injuries, and Judge Lemelle dismissed the federal action, citing the Fifth Circuit’s Torch case, as the maintenance and cure issues could be addressed in the state proceeding.
Reduction of damages sought by the Corps of Engineers for the repair of a hurricane barrier that was struck by defendant’s barge. United States v. Tisbury Towing & Transportation, Inc., No. 16-11857, 2019 U.S. Dist. Lexis 123915 (D. Mass. July 25, 2019) (Sorokin).
This case involves the amount of damages recoverable by the Corps of Engineers when the defendant’s barge struck the hurricane barrier at the mouth of the Acushnet River near New Bedford, Massachusetts. The defendant stipulated to its strict liability in violation of Section 408 of the Rivers and Harbors Act, leaving Judge Sorokin to determine how much of the Corps’ damage claim was reasonable and related to the allision. The defendant first argued that the damages should be depreciated because the repairs left the barrier in a better condition than before the allision. However, Judge Sorokin denied any depreciation because the repairs were only to part of the barrier and they did not extend the life of the barrier (it would still have to be replaced at the same time as if there had been no allision or repair). Judge Sorokin was not able to find that the
Corps’ bidding process was reasonable, so he reduced the recovery accordingly. He also reduced the damages for wooden fenders that the Corps was unable to show were present at the time of the allision. Judge Sorokin did not disagree with the Corps’ calculation of its internal operating costs that it sought to recover as attributable to the allision (including rent, utilities, and administrative costs that the defendant asserted were unrelated to the allision), but he did reduce the damages for overhead for those portions of the damages that the judge reduced as described above. Finally, Judge Sorokin awarded prejudgment interest from the date that the repairs were completed.
Judge strikes opinions of liability experts Fore and Hejzlar and some of the opinions of Dr. Roush. McBride v. Carnival Corp., No. 1:16-cv-24894, 2019 U.S. Dist. Lexis 124380 (S.D. Fla. July 25, 2019) (King).
Earline McBride was injured in a fall from her wheelchair while disembarking from Carnival’s vessel at a ramp leading to the terminal building at the Port of Miami. She engaged Frank Fore as a liability expert, including an extensive biometric analysis of the plaintiff with torso acceleration analysis and back shear force analysis. Carnival responded with its own liability expert, Zdenek Hejzlar, who took photographs and measurements of the ramp and gave opinions about the design and installation of the ramp and its relationship to the injury. The plaintiff also proffered Dr. Thomas Roush, an orthopedic spinal surgeon, as an expert on the cause of her injuries, her impairment, and the cost of future procedures she might need. Judge King agreed to strike the opinions of both Fore and Hejzlar, concluding that they were based on methodology that was unreliable. Judge King considered Fore’s ejection calculations did not support his opinions, which were based almost entirely on anecdotal experience or speculation. Judge King found Hejzlar’s methodology to be unreliable because the ramp changes angle with the tide, and his opinion had no repeatable scientific methodology explaining how the measurements he made related to the angle of the ramp at the time of the plaintiff’s accident. Judge King struck Dr. Roush’s opinions on the cause of the plaintiff’s injuries as they were based on Fore’s opinions and because there was no scientific methodology for his opinions. However, Judge King ruled that Dr. Roush’s opinions about future back surgery in the 20-to-30 year expectation level for the 65-year old plaintiff were not unduly speculative and would be helpful to the jury.
Court remands case removed based on original admiralty jurisdiction. Carrillo v. Marina Purerto Del Rey Operations, LLC, No. 19-1041, 2019 U.S. Dist. Lexis 125225 (D.P.R. July 26, 2019) (Arias-Marxuach).
The marina and security company removed this vessel sinking case to federal court based on the court’s admiralty jurisdiction, citing Ryan and other decisions permitting such removal. Judge Arias-Marxuach did not undertake any substantive analysis of the arguments in favor of and against removal based on original admiralty jurisdiction. Instead, he simply noted that a majority of courts and commentators disagreed with maritime removal when there is no basis for federal jurisdiction other than admiralty and that neither the First Circuit nor the district court in Puerto Rico had addressed the issue. Thus, he remanded the case. However, as the defendant had an objectively reasonable basis for removal, the court declined to award attorneys’ fees and costs to the plaintiffs.
From the state courts:
Louisiana Court of Appeal for the Third Circuit continues to go its own way on seaman status. Caldwell v. St. Charles Gaming Co., No. 18-868 c/w No. 18-915, 2019 La. App. Lexis 1208 (La. App. 3 Cir. July 3, 2019) (Saunders).
Don Caldwell was injured while operating a scissor lift on St. Charles Gaming Co.’s riverboat casino, GRAND PALAIS, in Lake Charles, Louisiana, and brought suit as a Jones Act seaman. Arguing that the casino, which was indefinitely moored to shore, was not a vessel, as the court of appeal had previously ruled in Benoit v. St. Charles Gaming Co., St. Charles moved for summary judgment while Caldwell filed his own motion contending that the casino was a vessel and he was a seaman. The federal Fifth Circuit had likewise held that St. Charles’ indefinitely moored casino was not a vessel as a matter of law in De la Rosa v. St. Charles Gaming Co. Disagreeing with the Fifth Circuit and the decisions of his own court, Judge Saunders held that Caldwell was entitled to summary judgment that he was a seaman (it was Judge Saunders who flouted precedent to hold that Richard was a seaman in Richard v. Mike Hooks, Inc., only to be reversed by the Louisiana Supreme Court).
Sovereign immunity and qualified immunity apply to worker’s action against city and city employee for maritime injury. Pridemore v. Hryniewich, Nos. 180373, 180379, 2019 Va. Unpub. Lexis 16 (Va. July 11, 2019) (per curiam).
The City of Norfolk engaged Pridemore’s employer to upgrade the engines and replace the steering system on a police boat. During its sea trial, the boat capsized on the navigable waters of Willoughby Bay while being operated by Hryniewich, a member of the City’s police department, and Pridemore was injured. Pridemore brought suit against the City and Hryniewich for negligence and gross negligence, and the City responded that it was entitled to sovereign immunity. As the maritime law does not abrogate state sovereign immunity, Pridemore’s motion to strike the City’s plea in bar was denied. The next question was whether Hryniewich was entitled to assert the federal common-law defense of qualified immunity. The parties agreed that federal qualified immunity is available as a defense under the general maritime law and that the state court must apply maritime substantive law in this case. Therefore, the Virginia Supreme Court remanded the case for application of the correct standard for qualified immunity under the general maritime law.
Thanks to Monica Markovich for her help in preparing this Update.
Kenneth G. Engerrand
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Quote:
Claimant ID 100246928—a/k/a the Tampa Bay Buccaneers—asks this court to seal the courtroom where the team will argue its appeal on April 1. It also wants to bar public access to the recording of the argument that this court routinely makes available on its website. The team’s motion is DENIED.
Until recently, this court filed Deepwater Horizon appeals under seal when they were first docketed. Even under that sealing order, however, the court ultimately unsealed many cases and the vast majority of appeals were argued in a public courtroom. Reflecting this determination that most BP cases did not warrant full sealing, an en banc order issued last month vacating the court’s prior sealing order. As is the situation for other cases, parties in Deepwater Horizon cases must now justify sealing. The default is public access. After that order issued, the Buccaneers succeeded in keeping the record and briefs sealed based on its concerns that the amount of revenue it receives from the NFL—a focus of this appeal—is proprietary.
But its request to seal the courtroom goes too far—by a longshot. “The right to public access ‘serves to promote trustworthiness of the judicial process, to curb judicial abuses, and to provide the public with a more complete understanding of the judicial system, including a better perception of its fairness.'” Public confidence in the courts is the issue: How can the public know that courts are deciding cases fairly and impartially if it doesn’t know what is being decided? “Open trials assure the public that procedural rights are respected, and that justice is afforded equally. Closed trials breed suspicion of prejudice and arbitrariness, which in turn spawns disrespect for law.” . . .
And there is a more fundamental reason that a sealing agreement by the parties should not bind a court. It is the public that has the right of access, so private litigants should not be able to contract that right away. Most litigants have no incentive to protect the public’s right of access. Both sides may want confidentiality. Even when only one party does, the other may be able to extract a concession by agreeing to a sealing request (this type of tradeoff is common in settlement agreements). That is why it is for judges, not litigants, to decide whether the justification for sealing overcomes the right of access.
At the end of the day, because this court has maintained confidential treatment of its financial statements, the Buccaneers’ request for sealing the oral argument is based on nothing more than a desire to keep secret that it filed a Deepwater Horizon claim. The court will leave it to others to guess why the team is so concerned about public disclosure of its claim when numerous other BP claimants in the appeals inundating our court are not. Just three months into this year, at least ten Deepwater Horizon decisions naming the claimants have issued. Among them is one from another of Tampa Bay’s professional sports franchises, the NHL’s Lightning. The court is unable to discern any reason for keeping secret the oil-spill claim of a football team when the claim of a hockey team (and of course those of numerous other businesses) is a public matter.
As is its right, Claimant ID 100246928 has used the federal courts in its attempt to obtain millions of dollars it believes BP owes because of the oil spill. But it should not be able to benefit from this public resource while treating it like a private tribunal when there is no good reason to do so. On Monday, the public will be able to access the courtroom it pays for.
Judge Gregg J. Costa, United States Court of Appeals for the Fifth Circuit, BP Exploration & Production, Inc., 920 F.3d 209 (5th Cir. Mar. 29, 2019) (citations omitted).
Please note that these opinions and statements are my own analysis of the cases that are discussed. They do not represent the position of Brown Sims, P.C. or any organization to which I belong or that I represent. Under no circumstances should these opinions and statements be considered legal advice. If you want legal advice, please consult an attorney.
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