August 2022 Longshore/Maritime Update (No. 279)
Notes from your Updater:
On June 21, 2022, Judge Bloom held that claimants under Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (the LIBERTAD Act), commonly referred to as the Helms-Burton Act, are entitled to a jury trial under the Seventh Amendment. See De Fernandez v. Seaboard Marine, Ltd., No. 20-cv-25176, 2022 U.S. Dist. LEXIS 110106 (S.D. Fla. June 21, 2022).
On June 28, 2022, Magistrate Judge Ho recommended that a longshore worker’s claim against her stevedore-employer (based on state law for intentional infliction of emotional distress for violating the provisions of the collective bargaining agreement), should be dismissed because it was preempted by the Labor Management Relations Act. See Jackson v. Texas Stevedoring Services, LLC, No. 4:21-cv-1566, 2022 U.S. Dist. LEXIS 115705 (S.D. Tex. June 28, 2022).
On June 30, 2022, Judge Talwani dismissed challenges to agency actions authorizing the construction and operation of a proposed offshore wind energy facility off the southern coast of Martha’s Vineyard, Massachusetts for failure to provide the statutorily required notice pursuant to the Outer Continental Shelf Lands Act and the Endangered Species Act. See Allco Renewable Energy Ltd. v. Haaland, No. 1:21-cv-11171, 2022 U.S. Dist. LEXIS 115687 (D. Mass. June 30, 2022).
On June 30, 2022, the Fourth Circuit held that it was too late to assert an Appointments Clause challenge (based on the Lucia case) to the Administrative Law Judge (in a case under the Black Lung Benefits Act) after the case was remanded to the ALJ by the Benefits Review Board. See Edd Potter Coal Co. v. Director, OWCP, No. 21-1623, 2022 U.S. App. LEXIS 18151 (4th Cir. June 30, 2022) (Wilkinson).
On July 7, 2022, the Ninth Circuit rejected federal removal jurisdiction over climate-related claims brought in Hawaii state court by the City and County of Honolulu and the County of Maui against numerous oil and gas companies, reasoning that the connection of the claimed injuries to the defendants’ activities on the outer Continental Shelf was too tenuous to support jurisdiction under the Outer Continental Shelf Lands Act. See City and County of Honolulu v. Sunoco LP, No. 21-15313, 2022 U.S. App. LEXIS 18640 (9th Cir. July 7, 2022) (Nelson).
On July 7, 2022, Magistrate Judge Otazo-Reyes recommended dismissal with prejudice of the qui tam action filed against private shipping companies, alleging a fraudulent scheme to illegally use foreign-flag vessels, instead of U.S.-flag vessels, for relocation and moving of federal civilian employees and their families when transferred to new postings, including overseas stations. See United States ex rel. Sedona Partners LLC v. Able Moving & Storage, Inc., No. 20-23242, 2022 U.S. Dist. LEXIS 119900 (S.D. Fla. July 7, 2022).
In our March 2022 Update, we noted that the Ninth Circuit denied two appeals from Chad Barry Barnes in his long-running litigation seeking to recover for the injuries he suffered when the vessel on which he was working exploded. The appellate court dismissed his appeal of three sanctions orders, noting that the appeal was not filed within thirty days of the first two orders and that the third order did not define Barnes’s rights or liabilities or go to the merits of the case, so there was no interlocutory jurisdiction under Section 1292(a)(3). See Barnes v. Henry, No. 21-16120, 2022 U.S. App. LEXIS 4459 (9th Cir. Feb. 18, 2022) (per curiam). With respect to Barnes’s appeal of the dismissal of his claim for an accounting, the Ninth Circuit held that the district court correctly dismissed the claim for lack of any confidential or trust relationship with the defendants and because Barnes has an adequate remedy at law through the normal discovery process. See Barnes v. Henry, No. 20-17141, 2022 U.S. App. LEXIS 4460 (9th Cir. Feb. 18, 2022) (per curiam). The Ninth Circuit dismissed another appeal in April. That appeal was from Judge Kay’s denial of Barnes’ motion to compel the transfer of the commercial-use permit and to enjoin defendant Henry or his new company from the using the permit. Judge Kay held that he lacked jurisdiction to decide the motion because it raised the same issues that were on appeal to the Ninth Circuit. Barnes appealed as an interlocutory admiralty appeal under Section 1292(a)(3), but the Ninth Circuit held that it lacked jurisdiction as the order did not define the rights and liabilities of the parties or address the merits of the case. See Barnes v. Henry, No. 21-17094, 2022 U.S. App. LEXIS 10004 (9th Cir. April 13, 2022) (per curiam). See May 2022 Update. On July 8, 2022, the Ninth Circuit affirmed the bankruptcy court’s order granting the Standing Trustee’s request to be discharged in the Chapter 13 proceedings of Kristin Kimo Henry, including denial of Barnes’ argument that his due process and equal protection rights were violated (forfeited by failing to raise them in the district court).
In our March 2021 Update, we also discussed McKnight v. Helix Energy Solutions Group, No. H-19-2852, 2021 U.S. Dist. LEXIS 34712 (S.D. Tex. Feb. 23, 2021), in which Judge Hughes was presented with the claims of three stewards who sought overtime under the Fair Labor Standards Act for work on a vessel that transported workers to oil platforms in the Gulf of Mexico. Their employer argued that they fell within the seaman exception to the FLSA. The workers cooked, served, and cleaned for 12-hour watches, working 28 days on, 28 days off. They served two sets of workers on the vessel, the marine crew that operated the ship and the non-marine crew that worked on the oil rigs. Judge Hughes found no distinction between the persons served by the stewards, reasoning that their duties were intrinsic to the operation of the vessel. He therefore held that they were exempt from overtime based on the seaman exemption in the FLSA. On July 27, 2022, the Fifth Circuit reversed the application of the seaman exemption in the FLSA in light of the Fifth Circuit’s intervening decision in Adams v. All Coast, L.L.C (discussed in the November 2021 Update). Judge Elrod, who dissented from the denial of en banc rehearing in Adams, concurred in the reversal in McKnight but wrote separately to express her opinion that “the continued application of Adams leads us further adrift.” However, she noted that the Fifth Circuit’s “byzantine seaman analysis” in the interpretation of the FLSA might be called in question by the grant of certiorari by the Supreme Court in Hewitt v. Helix Energy Solutions Group (discussed in the June 2022 Update) and that “Perhaps the Court will correct our course.” See McKnight v. Helix Energy Solutions Group, No. 21-20109 (5th Cir. July 27, 2022) (per curiam).
On the LHWCA Front . . .
From the federal appellate courts:
John Miken injured his knee while working as a mechanic for ICTSI Oregon, underwent surgery for his knee, injured his right shoulder when he fell while walking with crutches, and underwent surgery for his shoulder. LHWCA carrier Signal Mutual paid compensation and medical benefits for both injuries but suspended compensation for two periods based on Miken’s failure to attend or complete medical examinations, and the parties disputed the extent of disability for the two injuries. The case was tried to Administrative Law Judge Gee, who issued a 146-page opinion finding periods of temporary total disability, denying temporary partial disability compensation, finding suitable non-longshore employment and then suitable longshore employment, and finding that compensation had been properly suspended. The Benefits Review Board affirmed Judge Gee in all respects except the Board modified the decision with an award of temporary partial disability for two months. Miken challenged the suspension of his compensation benefits for refusing to attend a scheduled medical examination on the ground that the notice provided by the carrier was deficient. The Ninth Circuit affirmed Judge Gee’s finding that the justifications given were unreasonable and inadequate, as a reasonable person in Miken’s situation would simply have asked for more information so he could attend the examination. The appellate court also affirmed the continuation of the suspension until he ultimately attended an examination as he could have ended the refusal to attend by expressing a willingness to attend the examination to the carrier. The appellate court also affirmed the suspension of his compensation benefits for failure to complete intake paperwork that his attorney had not reviewed (resulting in him not being seen by the physician), agreeing that there was substantial evidence for Judge Gee’s conclusion that the failure to complete the intake paperwork was unreasonable and unjustified. The Ninth Circuit did conclude that Judge Gee applied an erroneous legal standard when she decided that Miken was not entitled to disability benefits prior to his first doctor’s appointment (she reasoned that Miken had not shown that he was incapable of performing the job because of the injury). The Ninth Circuit stated that she used an improperly high standard because credible complaints of severe and prolonged pain can establish a prima facie case of disability even though the claimant can literally perform his work. The court remanded the case on that single issue to apply the correct standard, noting that it was unclear if Judge Gee would have reached the same conclusion if she had applied the proper standard.
Faustine Kiwia, a longshore worker employed by Coastal Cargo, was injured in the Port of New Orleans when a crew member of the OSLO BULK 9, closed a hatch cover while Kiwia had his hand on the top of the hatch coming for balance, resulting in the loss of three fingers on his left hand. Kiwia brought suit against the vessel and its owners under Section 5(b) of the LHWCA in federal court in New Orleans, and the case was tried to Judge Milazzo, who found negligence of the vessel for breach of the active control duty from Scindia and awarded damages of $1,076,873. The vessel defendants appealed, and the Fifth Circuit first addressed the arguments on the negligence of the vessel. Judge Milazzo found that reasonable care mandated that the crew member warn the stevedore supervisor or foreman before closing the hatch or that he survey the vicinity of the hatch coaming to ensure that no one or object was in the path of the closing cover. The parties presented competing testimony of experts and fact witnesses on the duty/breach issues, and, on appeal, the vessel interests spent considerable effort to challenge the veracity and accuracy of the testimony of Roy Hughes, Jr., who was working as Coastal Cargo’s gang flagman (standing about ten feet away from Kiwia). However, Judge Milazzo found him to be “highly credible,” and the Fifth Circuit rejected the vessel’s argument about reliance on his testimony, considering the argument to be “without merit” as any inconsistencies in his testimony were not critical enough for Judge Milazzo to disregard his testimony. Although there were fact disputes in the witness testimony, the Fifth Circuit did not find clear error in Judge Milazzo’s finding of duty and breach with respect to the active control duty from Scindia. The vessel interests next challenged causation, citing Kiwia’s lack of experience and lack of evidence that Kiwia would have heeded a warning about the hatch cover closing. Additionally, the vessel defendants argued that it was not established how surveying the vicinity before closing the hatch cover would have prevented Kiwia’s injury while the cover was closing. Although the Fifth Circuit considered causation to be a close question, the appellate court could not say that Judge Milazzo erred in finding that the breach was a substantial factor in causing Kiwia’s injury. The vessel interest also challenged Judge Milazzo’s apportionment of 50% fault to the vessel and 50% fault to Coastal Cargo. Judge Milazzo apportioned no fault to Kiwia given his lack of knowledge on the dangers of the hatch coaming as an inexperienced longshore worker (attributing his unfamiliarity with the operations to his employer). The Fifth Circuit answered that Kiwia’s lack of experience did not mean that he lacked the minimum qualifications ordinarily possessed by longshore workers and that the lack of training did not require a finding that Kiwia was negligent. Accordingly, the Fifth Circuit affirmed the apportionment of fault. Finally, the Fifth Circuit addressed the damages, applying the standard that an award is not excessive if it is less than 133% of the highest inflation-adjusted recovery in an analogous, published decision. The Fifth Circuit agreed that the award to Kiwia of $950,000 for general damages was sufficiently analogous to a prior decision to be affirmed, particularly as the defendants did not identify any other factually analogous case to show that the award was excessive. Thus, the Fifth Circuit affirmed the award to Kiwia. Thanks to Alan Brackett of Mouledoux, Bland, Legrand, & Brackett in New Orleans for bringing this case to our attention.
From the federal district courts:
Ahmed Mohammed brought a claim under the LHWCA, as extended by the Defense Base Act, for psychological injuries he allegedly sustained when he was subjected to attempted murder and horrific things during fighting while he worked as a translator for American forces in Iraq. He filed this pro se action in federal court in Arizona, asking the district court to award him benefits for his psychological injury. Magistrate Judge Fine noted that, under the Pearce decision from the Ninth Circuit, the federal district court lacked jurisdiction for any petition for review by the Benefits Review Board of a compensation order arising under the DBA (appeals should be filed with the federal court of appeals) and that the LHWCA displaces common-law causes of action. Accordingly, Magistrate Judge Fine recommended that the suit be dismissed, and, on July 15, 2022, Judge McNamee adopted the recommendation (Mohammed did not file an objection).
John Bennett injured his leg while working for Bulldog Diving from Barge FCC-6 during a marine repair and construction project in the Ohio River near Henderson, Kentucky. His employer’s LHWCA carrier paid him benefits under the Act until Bennett brought suit in Kentucky state court against Bulldog Diving (under the Jones Act), Foertsch Construction Co., ADM Grain Co., and Owensboro Grain Co. Foertsch Construction, owner of the barge, brought this limitation action in federal court in Kentucky, and the court ordered a stay of proceedings against Foertsch. Bennett (through his attorney) negotiated nominal settlements with Foertsch, ADM, and Owensboro Grain, and those parties were dismissed from the limitation action. Bennett’s attorney had verbal authority to settle, and he signed the releases based on a specific power of attorney. Bennett did not sign the releases, and he contended that his attorney did not advise him that he had not obtained the consent of Bulldog or its LHWCA carrier and that the LHWCA benefits would be terminated under Section 33(g) based on the settlements. Bennett asked the court to set aside the releases because of mistake, because the agreement was obtained without being informed of the full effects of the settlements, and because he had not appeared before the notary during the execution of the releases. Judge McKinley rejected all of the arguments for overturning the releases, including the alleged negligence of counsel. However, because the court did not set aside the release as to Foertsch, Foertsch was no longer liable for claims from the incident and there was no reason to continue the limitation action (and the stay of the state action). Accordingly, Judge McKinley dismissed the limitation action and lifted the stay.
Callen Cortez claimed that he contracted mesothelioma from exposure to asbestos during his employment as a welder and tacker helper at Avondale’s Westwego Yard as well as from his brother’s employment with Avondale. Callen lived in his family home in Kraemer, Louisiana until he married and moved out in May 1972. His brother, Daniel, went to work for Avondale in August 1967 and lived in the family home with Callen until Daniel married and moved out in July 1968. Daniel testified that he worked with asbestos during this period and that he and his brother beat the asbestos fibers off his clothes after Daniel came home each day, and Avondale’s expert opined that asbestos taken home on Daniel’s clothes significantly contributed to the development of Callen’s mesothelioma. Callen also complained of exposure to asbestos during his employment with Avondale between March 1969 and May 1974. Callen brought this suit in Louisiana state court against Avondale, its executive officers and insurer (Lloyd’s), Halter Marine, and various parties supplying products containing asbestos, including claims for negligence and for an intentional tort. The suit was removed to federal court, and Avondale and its insurer Lloyd’s moved for summary judgment on the ground that Callen’s claims are preempted by the exclusive remedy provision of the LHWCA. Callen and several of the defendants opposed the motion, arguing that the claims fell within the twilight zone of concurrent state and federal jurisdiction over workers’ compensation claims, that the LHWCA does not preempt Callen’s third-party claims arising out of Daniel’s take-home asbestos, and that the LHWCA has an intentional-tort exception. Judge Vance first addressed the version of the LHWCA that is applicable to the suit, as the exposure occurred before the 1972 Amendments that extended the LHWCA shoreside. Following the manifestation rule, so that Callen’s “injury” arose after the 1972 Amendments, Judge Vance held that Callen’s claim satisfied the situs and status of the LHWCA as amended in 1972. Consequently, she held that the state tort claims against Avondale arising from his employment were preempted and should be dismissed. She reiterated rulings from prior decisions that rejected arguments that preemption did not apply because Callen was not seeking benefits under the LHWCA and that dismissal would violate due process by divesting Callen of an accrued right. Without deciding whether the LHWCA recognizes an intentional-tort exception to its preemption, Judge Vance held that Callen had failed to present evidence sufficient to establish that Avondale either consciously desired that Callen contract mesothelioma or knew that the result was substantially certain to follow from Avondale’s conduct. Consequently, Judge Vance granted summary judgment on all of the claims of Avondale in its capacity as Callen’s employer. However, Callen also sued Avondale related to the exposure to asbestos from the clothes of his brother, Daniel, while Daniel was employed by Avondale. Although Callen argued that the LHWCA preempted this claim as well, Judge Vance held that the exclusive remedy language within Section 5(a) of the LHWCA was not so broad as to encompass exposure that did not occur in the course of Callen’s employment with Avondale but, instead, was related to the employment of Daniel. If Callen had been exposed to dust on his brother’s clothes during Callen’s ride to or from employment, the situation would be different. Avondale also cited the non-apportionment rule from the Benefits Review Board that declines to apportion LHWCA benefits across jurisdictions when a claimant’s employment-related injury/disease occurred both within and without the coverage of the LHWCA. She held that the BRB rule has no application to the issue whether non-employment claims are preempted by the LHWCA and only applies to employment exposure falling within different compensation schemes. Finally, Avondale argued that Callen’s mesothelioma is a single disease, and the individual exposures are not indivisible injuries but a single injury/disease that is preempted. Thus, when the employment injury aggravates or combines with a previous condition or disease, the employer is liable for the resulting total disability. Judge Vance rejected that argument, reasoning that the scope of an LHWCA award does not affect the claimant’s ability to sue manufacturers of products, or, in this case, Avondale as employer of Callen’s brother. As the LHWCA is only concerned with Avondale’s capacity as employer, she denied Avondale’s motion for summary judgment for Callen’s exposure from Avondale’s capacity as employer of Daniel. Judge Vance then applied the holding on Avondale’s motion for summary judgment to the motion filed by Avondale’s insurer, Lloyd’s. She only added that Lloyd’s was also not liable in its capacity as insurer for executive officers of Avondale (even though they were not part of the previous order) because the executive officers have the same immunity to suit as the employer. Similarly, Judge Vance denied Lloyd’s motion to the extent of Avondale’s liability in a non-employer capacity with respect to Callen. See May 2022 Update.
Several defendants then moved for summary judgment on the ground that Callen had not produced sufficient evidence of exposure to their products. Defendant Entergy argued that there was no evidence of exposure to asbestos from its facility at Nine Mile Point because Callen supported his claim of exposure with his father’s statements that he worked at the facility. Judge Vance agreed that the testimony was hearsay and dismissed Entergy from the suit. With respect to the other defendants, Judge Vance held that some of the defendants had established that there was no exposure to their products and granted their motions. Callen and some of the defendants sought a clarification or reconsideration of Judge Vance’s decision that the LHWCA does not preempt the plaintiff’s claims against Avondale arising out of his brother’s employment with Avondale; however, Judge Vance did not see any reason for clarifying her holding and reaffirmed that the dismissal was for all of the claims except the take-home exposure claims brought against Avondale in the capacity as employer of Callen’s brother. Albert L. Bossier, Jr. was sued by Callen in his capacity as an officer of Avondale and filed cross claims against multiple co-defendants. The co-defendants moved to dismiss the claims as preempted by the LHWCA, but Bossier died and no substitution was made for him after the suggestion of death was filed for him. Without a substitution, Judge Vance dismissed Bossier’s third-party claims. Callen also alleged that he was exposed to asbestos while employed by Halter Marine, and he named Halter Marine’s insurer, Continental, as a defendant. Continental moved for summary judgment on the ground of preemption under the LHWCA, and Judge Vance reiterated her analysis with respect to the preemptive effect of the LHWCA based on the extension of coverage with the 1972 Amendments. Callen reiterated some arguments and made additional arguments, all of which were rejected by Judge Vance. He argued that Continental’s insurance policy did not provide LHWCA coverage and, consequently, LHWCA immunity was not applicable. Reviewing the policy language digitally, Judge Vance found it legible and clear that there was LHWCA coverage. Callen also argued that even if the LHWCA preempted his claims arising out of injuries incurred while at Halter Marine, it did not preempt his claims arising from exposure from his work clothes while at home. Judge Vance rejected that argument, however, and held that the off-site exposures arose out Callen’s employment and were covered by the LHWCA. Callen also argued that his injuries occurred in the twilight zone of concurrent state/federal jurisdiction where he was allowed to bring a state workers’ compensation claim. Judge Vance noted, however, that Callen was not bringing a state workers’ compensation claim, and she continued to apply her preemption analysis with respect to the state tort action. Judge Vance similarly rejected the argument that the preemption analysis did not apply because Callen was not seeking benefits under the LHWCA, following the previous preemption analysis. Finally, Judge Vance dismissed Callen’s intentional tort claims, holding that the evidence presented fell far short of establishing that Halter Marine intended to harm him or that his mesothelioma was inevitable. See June 2022 Update.
Westinghouse moved for summary judgment, asserting that Callen (now his beneficiaries as Callen recently passed away) failed to produce sufficient evidence that Callen was exposed to asbestos attributable to Westinghouse turbines. Before he died, Callen testified that he was exposed to asbestos gaskets affixed to Westinghouse turbines while he worked as a pipefitter at Avondale from March 1969 to May 1974. He described how he broke the flanges off the turbines and changed the valves. Westinghouse’s representative testified that Westinghouse supplied turbines to Avondale under a contract with Avondale and that the turbines had metallic asbestos gaskets. Reasoning that it is the quality of the exposure, not its length, that satisfies the “substantial factor” test, Judge Vance held that there was sufficient evidence to deny summary judgment as to the use of asbestos gaskets on Westinghouse turbines. However, Judge Vance found that the Cortez claim of exposure to asbestos insulation failed because the plaintiffs failed to submit evidence that Westinghouse manufactured or supplied asbestos-containing insulation. Although there was testimony that the turbines required insulation and that Westinghouse knew that asbestos was a popular insulation time and that military specifications called for asbestos insulation, there was no evidence that Westinghouse’s design included an asbestos requirement or recommendation (this finding disposed of both claims for design defect and failure to warn). Consequently, Judge Vance granted in part and denied in part Westinghouse’s motion for summary judgment.
Lester Johnson, who described himself as a longshoreman, was injured when he fell overboard from a cargo barge moored in the Mississippi River near Darrow, Louisiana and landed on the deck of his employer’s weigh station vessel, AMERICA. His employer, Cooper T. Smith Stevedoring, paid him benefits under the LHWCA, and Johnson brought this action in federal court in Louisiana against Cooper T. as a seaman under the Jones Act and, alternatively, seeking to recover for vessel negligence under Section 5(b) of the LHWCA. Cooper T. owns and operates a number of vessels to assist in cargo operations on vessels moored in the Mississippi River, including weigh station vessels and crew boats used to ferry employees to and from shore. It hires the longshore workers from the local union on a daily basis, terminating employment at the end of each day. Longshore workers are not assigned to any vessel, and their duties vary, but Johnson mainly operated heavy machinery, moving cargo in and among the cargo vessels. Johnson worked for Cooper T. since 2008, and he did not sail aboard any Cooper T. vessel (other than riding to and from work locations on a crew boat). Cooper T. moved for summary judgment, and Judge Jackson agreed that Johnson failed the test for seaman status. Although Johnson contributed to the function or mission of more than one vessel, Judge Jackson held that he failed both the duration and nature elements of the connection test. Johnson failed the duration element because he failed to establish what portion of his 20-year tenure with Cooper T. was spent aboard a vessel or fleet of vessels. Judge Jackson also held that Johnson failed to satisfy the Sanchez factors for the nature element because his allegiance was to a shoreside employer, not a particular vessel; his employment did not require sailing or sea-going activity; and his work on any particular vessel was limited to performing discrete stevedoring services, after which his connection to the vessel ended. Turning to the liability of Cooper T. under Section 5(b) in its capacity as owner of the AMERICA, Judge Jackson considered the Scindia duties and held that Johnson did not identify any defect in the AMERICA at the commencement of operations in connection with Scindia’s turnover duty. Although Johnson argued that Cooper T. breached the active control duty by failing to provide its longshore workers the means to safely remove ladders from holds, Judge Jackson rejected his argument because Johnson’s testimony established that he slipped due to excess cargo on the deck of the cargo barge, which Judge Jackson termed an open and obvious hazard common to stevedoring operations (Johnson did not present argument on the duty to intervene). Thus, Judge Jackson granted summary judgment and dismissed all of Johnson’s claims with prejudice.
Oscar Morales, Sr. claimed that he contracted mesothelioma from exposure to asbestos while he was employed as a tacker for the Avondale shipyard between 1970 and 1973. He brought this action in federal court in Louisiana, asserting claims under state law against Avondale and several product suppliers, and his heirs were substituted for him as plaintiffs after he died. Avondale (and its insurer) moved for summary judgment on the ground that the claims against Avondale were preempted by the exclusive remedy provision of the LHWCA. As Morales was diagnosed with mesothelioma in 2020, Judge Vance applied the LHWCA as it existed in 2020, the date of his injury. Accordingly, she considered the status and situs requirements of the Act after the 1972 Amendments and held that Morales’s employment as a tacker satisfied the situs and status requirements. Applying the exclusive remedy of the LHWCA (in Section 5(a)), Judge Vance held that the state-law causes of action against Avondale (and its insurers and executive officers) were preempted and must be dismissed. See June 2022 Update.
Avondale then requested that Judge Vance certify her dismissal for an interlocutory appeal under Rule 54(b) (the request was unopposed by Morales), and Judge Vance found that the risk of piecemeal appeals was outweighed by the risk that delay would prejudice Avondale. Thus, she directed entry of a final judgment in favor of Avondale so that Morales could file an interlocutory appeal.
Note: As discussed in the July 2022 Update, Judge Ashe certified for an interlocutory appeal the dismissal of a shipyard worker’s tort claims against the shipyard, including the dismissal of claims for exposure to asbestos on the clothes of his brother, who worked at the shipyard. Sentilles v. Huntington Ingalls Inc., No. 21-958, 2022 U.S. Dist. LEXIS 109201 (E.D. La. June 21, 2022), certifying 2022 U.S. Dist. LEXIS 74502 (E.D. La. April 22, 2022) (Ashe).
Shanon Roy Santee was employed by Oceaneering International as a remote operated vehicle technician. He was injured on the drillship, M/V DEEPWATER CONQUEROR, which was performing drilling operations on the outer Continental Shelf off the Louisiana coast. Santee brought this suit in state court in Houston, Texas against his employer Oceaneering, drilling contractor Transocean, and well operator Chevron, asserting claims under the Jones Act and general maritime law. Chevron removed the case to federal court based on federal question jurisdiction under the Outer Continental Shelf Lands Act (arguing that the Jones Act claim was improperly pleaded and did not prevent removal), and Santee moved to remand the case to state court, presenting Judge Hittner with two questions. The first question was whether Santee sufficiently pleaded a Jones Act claim against Oceaneering so as to invoke the bar to removal of Jones Act/FELA cases in Section 1445(a). Judge Hittner held that that Santee’s work as an ROV technician contributed to the function of the vessel and that the 763 days he spent aboard the DEEPWATER CONQUEROR pursuant to Oceaneering’s contract with Chevron (40% of his time over the last five years) satisfied the duration element of the connection test for seaman status. Judge Hittner then analyzed the factors set forth by the Fifth Circuit in the Sanchez case with respect to the nature element of the connection test, and he held that Santee’s allegiance was to Oceaneering, a shoreside employer, and not to the DEEPWATER CONQUEROR; that Santee was a transitory worker who performed discreet services on the vessel pursuant to a contract and was not permanently assigned to the vessel; but that Santee’s work was sea-based. Reasoning that the sea-based nature of Santee’s work was insufficient by itself to satisfy the nature element of the connection test, Judge Hittner held that Santee was not a seaman and the bar to removal was not applicable. Judge Hittner then considered whether there was jurisdiction under the OCSLA, and, as the drillship was attached to the OCS and was involved in exploration and development of oil and gas resources on the OCS, there was federal question jurisdiction under the OCSLA and the case was removable. See March 2022 Update.
Oceaneering moved for summary judgment (claiming it was immune from tort liability under the LHWCA), and Santee moved for reconsideration of its motion to remand. Judge Hittner stated that, as Santee was injured as a result of oil and gas operations on the OCS, his exclusive remedy was in the LHWCA and that his employer only needed to establish that it had LHWCA insurance at the time of the accident in order to invoke the exclusive remedy provision in the Act. Santee responded with a declaration detailing his job duties to show he was a seaman as well as the maintenance checks he received from his employer. However, Judge Hittner held that his seaman status was no longer an issue and that, regardless, his evidence did not create a genuine issue of material fact as to whether the exclusive remedy of the LHWCA was applicable. Holding that Oceaneering was immune from tort actions under the LHWCA, including actions under the Jones Act, Judge Hittner granted summary judgment to Oceaneering.
Lloyd Humphrey was employed by The Modern Group/PMI as a cleaning tech and was injured while assigned to clean tanks on the M/V TERREL TIDE, owned by Tidewater. Humphrey asserted that he was on “flush time” (taking a break) when an employee of Tidewater turned on the wrong valve, causing him to be struck by a hose and by water discharged from the hose. Humphrey brought suit in federal court in Louisiana against Tidewater, seeking to recover under Section 5(b) of the LHWCA and under the general maritime law. Humphrey conceded that he was covered under the LHWCA, but he moved for summary judgment on the ground that general maritime negligence and not Section 5(b) negligence (Scindia duties) applied because he was injured on break and not during stevedoring operations. Noting that Humphrey did not provide authority for his “novel argument that a person covered under the LHWCA who is taking a temporary break from his work aboard a vessel is no longer ‘engaged in work activities’” so as to be removed from coverage under the LHWCA, Judge deGravelles was “not persuaded” by Humphrey’s contention. Finding genuine issues of fact whether Tidewater was negligent under the active control duty from Scindia, Judge deGravelles denied Humphrey’s motion for summary judgment. Thanks to Matthew Ammerman of Houston, Texas for bringing this case to our attention.
And on the maritime front . . .
From the federal appellate courts:
Attorney Craig Mueller contacted Regatta Pointe Marina in Palmetto, Florida about reserving a boat slip for his 78-foot yacht, M/V MOJAVE MOON, with a draft of 8.5 feet. According to Mueller, he spoke with the Dock Master, who assured him that the river channel to the marina was a minimum of 10 feet in depth and could accommodate the vessel. The dock master also made the same representation to the captain of the yacht, Stephan Gravolet, and the marina’s website listed the depth of the channel at a minimum of 10 feet. Based on the representations, Mueller agreed to bring his vessel to the marina. The yacht ran aground, however, in the middle of the river channel and was removed and taken to the marina. Mueller informed the dock master that he would not sign a lease agreement for a boat slip and would take the boat to another marina as soon as possible. Before the yacht could leave, Captain Gravolet broke his hand when the dock collapsed under him, and a subsequent fall caused the captain to leave the vessel. Thus, Mueller could not move the vessel as planned, and he repeated that the vessel was going to leave the marina and that he would not sign a slip agreement. The dock master threatened that the marina would tow the vessel out and abandon it in the river channel if he did not sign a slip agreement, so Mueller signed the agreement as he thought it was the only way to save his vessel from being towed and abandoned. While the yacht was docked at the marina, it began listing to starboard and discharged fuel into the water. The marina paid to contain and clean up the spill, and the marina’s insurer, Great American brought this action, as subrogee, against Mueller in Florida state court to recover the expense based on theories of breach of contract, negligence, and quantum meruit. Mueller removed the action to federal court, and Great American moved for summary judgment that it was entitled to recover based on the terms of the slip agreement. Mueller argued that he was fraudulently induced to sign the contract by misrepresentations about the channel depth, that he only signed the agreement under coercion and duress, and that there was no meeting of the minds as to its terms. Judge Barber held that Mueller was liable for breach of contract, and he rejected the fraudulent inducement and duress defenses. Judge Barber held that the fraudulent inducement defense failed because Mueller knew about the depth of the river channel at the time he signed the agreement and could not have relied on representations at that time. He held that the duress defense failed because the marina was within its rights to remove the vessel if Mueller did not sign the agreement (rejecting the argument that he had no other option because of the injury to his captain as he could have hired a different captain to move the vessel). On appeal, the Eleventh Circuit noted that Mueller signed the slip agreement and that it provided that it was “intended to be a legally binding contract.” Despite Mueller’s prior statements that he would not sign an agreement, he did just that, and his intent not to be bound by the agreement, at the time he signed it, was not relevant because the mutual assent from the parties’ signatures was not overcome by his unilateral, unexpressed intent at the time of signing. Turning to the defenses, the court of appeals agreed that Mueller could not rely on misrepresentations about the depth of the channel in signing the contract and that he had not established duress, stating that it is not improper (and therefore duress) to threaten when one has a legal right to take the action. The court added that there did not appear to be immediacy to the coercive conduct as the threat was more than two weeks before Mueller signed the slip agreement. Thus, the Eleventh Circuit affirmed the judgment against Mueller.
Autumn Harvest, owner of the M/V LILA SHANGHAI time chartered the vessel to Bostomar Bulk Shipping. The charter party provided that the charterer would provide and pay for fuel and foreclosed the charterer from unilaterally placing a lien on the vessel. Bostomar subchartered the vessel to Medmar for a voyage from Argentina to India. Costas Mylonakis, an employee of Windrose Marine, contacted Sing Fuels to provide bunkers, and Sing Fuels arranged for South African Marine Fuels to provide bunkers to the vessel on two occasions. Sing Fuels transmitted its Sales Order Confirmation and Terms and Conditions of Sale to Mylonakis, requesting Mylonakis obtain Medmar’s signature and company stamp (which were not forthcoming). Sing Fuels only communicated with Mylonakis. When payment was not received, Sing Fuels sent a notice of nonpayment to Autumn Harvest, but Autumn Harvest declined to pay, and Sing Fuels paid the supplier. Sing Fuels started tracking the vessel, but it waited until the vessel docked in the United States before it arrested the vessel in the Eastern District of Virginia. Judge Jackson held a bench trial and, applying United States law, held that the charter precluded Medmar from placing the lien on the vessel, that Mylonakis did not possess authority to bind the vessel, and that equitable laches barred the suit based on lack of a satisfactory excuse for the delay in arresting the vessel. Sing Fuels appealed, and Judge Floyd, writing for the Fourth Circuit, first addressed the applicable law. The terms of the bunker contract contained a choice-of-law provision permitting Sing Fuels to choose any jurisdiction it wished in order to obtain a lien and a provision that the contract would be governed by Singapore law (which would not afford a lien). Judge Floyd noted that the Fourth Circuit had not addressed that type of choice-of-law provision, but he did not have to decide which law applied, because he held that a lien was unavailable under United States maritime law. Under the Commercial Instruments and Maritime Liens Act, the supplier of necessaries has a maritime lien on the vessel on the order of the owner or a person authorized by the owner. The issue presented was whether the bunkers were supplied on order of a party with apparent authority. Agreeing with Judge Jackson, Judge Floyd noted that Sing Fuels only communicated with Mylonakis and never received any confirmation of the authority of Mylonakis (stating that it is “hornbook law that Mylonakis cannot deem himself Medmar’s apparent agent”). Consequently, the requirements of the CIMLA were not satisfied. Judge Wilkinson concurred to note his agreement that Sing Fuels did not show that Mylonakis was acting as an agent of anyone with authority to bind the vessel. However, with the problems in our supply chains, and increased difficulties in ocean transport of goods, he emphasized the importance that those who provide bunkers or other necessaries be paid promptly. Pointing out the pitfalls that “threaten to destabilize the basic principle of admiralty law that suppliers of necessaries such as bunker fuel must be able to rely on maritime liens to ensure payment,” Judge Wilkinson cautioned that he “would not want this ruling to require too much of suppliers” and that he hoped “that courts in the future will review with skepticism attempts to obscure or confuse agency relationships on the part of those who accept necessaries and then resist strenuously any payment for them.”
Preble-Rish Haiti claimed that it was owed more than $27 million for fuel delivered to Haiti by vessel and consequential damages, and it commenced an arbitration in New York pursuant to the arbitration clause in the contracts between the parties. However, Preble-Rish sought security for the arbitration and tried to garnish/attach funds in the possession of BB Energy, located in Houston, that were designated for payment to Haiti. BB Energy invoked sovereign immunity on behalf of debtor Haiti, and Judge Ellison held that BB Energy had standing to assert Haiti’s defense that it was immune from prejudgment attachment/garnishment. The parties argued about whether there was admiralty jurisdiction, but Judge Ellison reasoned that the jurisdiction inquiry began and ended with the Foreign Sovereign Immunities Act because it is the sole basis for jurisdiction over foreign sovereigns, such as Haiti. Turning to the immunity issues, Judge Ellison first held that the arbitration provisions in the contracts between the parties demonstrated the intent to waive sovereign immunity from suit. Judge Ellison then discussed the exception to the general rule in the FSIA that sovereigns are immune from prejudgment attachment and held that the exception was established because the property was used for a commercial activity in the United States, Haiti had agreed to provide security in the contracts, and the purpose of the attachment/garnishment was to secure satisfaction of a judgment and not to obtain jurisdiction. Therefore, Judge Ellison denied the motion to dismiss the attachment, but he stayed the proceedings pending developments in the arbitration proceeding (whether the contracts were maritime in nature). See September 2021 Update. Judge Ellison gave Preble-Rish leave to amend its complaint to include maritime tort claims and then addressed whether the tort claims were maritime. Preble-Rish asserted that Haiti had wrongfully seized the MT AQUILA L, converted her shipment of fuel oil, and failed to pay for the oil. Reasoning that the wrongs took place on navigable waters at or near the coast of Haiti and that the conversion of the cargo of fuel oil had the potential to disrupt maritime commerce, Judge Ellison concluded that the court had admiralty jurisdiction. After a hearing, Judge Ellison deferred ruling on BB Energy’s motion to dismiss in which BB Energy argued that the FSIA barred the maritime tort claims. Judge Ellison ordered BB Energy to submit to written discovery and a corporate representative deposition. See November 2021 Update.
BB Energy appealed to the Fifth Circuit and sought a stay of discovery, arguing that the district court could not permit broad discovery without first determining whether sovereign immunity barred the garnishment action. Preble-Rish moved to dismiss the appeal for lack of jurisdiction. The Fifth Circuit agreed that unlimited jurisdictional discovery is not permitted as a matter of course when FSIA immunity has been claimed and that discovery orders are not, as a general matter, immediately appealable. However, when the defendant claims immunity, an order that declines to rule on the defense is appealable, and sovereign immunity may be raised by a garnishee holding property of a foreign sovereign. It was unclear in this case whether the order on discovery was to aid in the ruling on the motion to dismiss, which would be permissible, or whether the court was proceeding to discovery without resolving the sovereign immunity defense, which would be erroneous. Giving Judge Ellison the benefit of the doubt, the Fifth Circuit denied BB Energy’s motion to stay, trusting “that the district court will allow limited discovery only as to evidence that will elucidate whether BB Energy is entitled to dismissal on sovereign immunity grounds.” See December 2021 Update). After the decision of the Fifth Circuit, BB Energy refused to comply with Preble-Rish’s discovery requests, and Preble-Rish agreed not to pursue discovery until the sovereign immunity defense was adjudicated. The parties submitted supplemental briefing and Judge Ellison then ruled on the sovereign immunity issue. BB Energy asserted that the tort claims of unjust enrichment, fraud and maritime fraud, and maritime conversion were not subject to waiver of sovereign immunity under the contract that provided for arbitration in New York and that Haitian law does not permit arbitration against governmental entities. Judge Ellison rejected the latter argument based on collateral estoppel from the ruling of the New York state court that the government of Haiti had failed to establish that the arbitration provisions were illegal under Haitian law. Giving a broad interpretation to the language of the contracts for arbitration on disputes “under this Contract,” Judge Ellison held that the arbitration provisions were not limited to contract performance and that the tort claims were subject to arbitration. Accordingly, he held that Haiti had waived sovereign immunity by agreeing to arbitrate in New York and ordered BB Energy to submit to written discovery and a corporate representative deposition. On January 24, Judge Ellison filed an order staying the discovery pending the garnishee’s interlocutory appeal to the Fifth Circuit. See Preble-Rish Haiti, S.A. v. Republic of Haiti, LLC, No. 4:21-cv-1953, 2022 U.S. Dist. LEXIS 12045 (S.D. Tex. Jan. 24, 2022) (Ellison).
In the New York actions between the parties, discussed in the October 2021 Update, Preble-Rish filed an attachment action seeking to attach/garnish funds in a Citibank account in the name of a Haitian governmental agency. After discovering that the account was in the name of the central bank of Haiti, the attachment was supplemented, and the bank sought to intervene and to vacate the attachment. Preble-Rish did not argue that the bank had waived its immunity from attachment and instead argued that the bank did not hold the funds for its own account so that its immunity did not apply. However, Judge Castel held that Preble-Rish did not establish that the bank was acting solely as an intermediary facilitating a payment, noting that accounts that are used for mixed purposes are immune from attachment, even if used for commercial purposes. Consequently, Judge Castel vacated the attachment. Preble-Rish Haiti, S.A. v. Republic of Haiti, No. 21-cv-4960, 2021 U.S. Dist. LEXIS 167927 (S.D.N.Y. Sept. 3, 2021). On October 5, 2021, Judge Castel declined to grant a stay of the court’s order vacating the attachment pending appeal to the Second Circuit, but he did grant a temporary stay so that Preble-Rish could apply for a stay to the Second Circuit. 2021 U.S. Dist. LEXIS 191986 (S.D.N.Y. Oct. 5, 2021). The Second Circuit granted a temporary stay while the case was referred to a panel for adjudication. See Preble-Rish Haiti, S.A. v. Republic of Haiti, No. 21-2469 (2d Cir. Oct. 18, 2021). In a separate proceeding in federal court in New York, Preble-Rish sought to recognize and confirm a partial final award of an international arbitration panel in its favor against the Republic of Haiti. Haiti did not appear at the hearing, and the arbitration panel issued a partial award, granting Preble-Rish $23,043,429.79 in pre-award security. Judge Castel rejected Haiti’s arguments that the award was illegal and unenforceable under Haitian law, that Haiti had not been given proper notice of the proceedings, that the arbitration panel was improper because two of the arbitrators are former partners of the firm representing Preble-Rish. Judge Castel confirmed the award and entered judgment in favor of Preble-Rish. See February 2022 Update.
Garnishee BB Energy filed an interlocutory appeal to the Fifth Circuit from Judge Ellison’s decision that Haiti had waived sovereign immunity, and the Fifth Circuit disagreed with the waiver ruling. Writing for the Fifth Circuit, Judge Graves held that “an explicit waiver must be, well, explicit.” Although the contract required Haiti to provide security in favor of Preble-Rish, Judge Graves was “confident” that the agreement fell short of the explicit waiver language that had been enforced in other cases (for example, a waiver that includes “any immunity from the jurisdiction of any court or from any execution or attachment in aid of execution prior to judgment or otherwise”). The same reasoning applied to the agreement to arbitrate as the arbitration clause did not “explicitly authorize the arbitrator to order a letter of credit as security against a possible final award.” As the district court did not have jurisdiction under the FSIA to enter the writ of attachment, the Fifth Circuit vacated the writ of attachment.
This case involves trials for damage to a marina’s docks during Hurricane Irma. Reef secured its vessels MORNING STAR and EVENING STAR at Crown Bay Marina docks in anticipation of the Hurricane making landfall on St. Thomas. Both vessels remained tied to the dock during the storm, but the dock sustained damage and the marina brought this action seeking to recover for the cost to repair and restore the facility. Reef moved for summary judgment on the claims, and the marina filed a cross-motion for summary judgment. Reef’s motion was based on the fact that the vessels did not sustain significant damage and remained securely moored in their slips. The marina asserted that Reef was liable for the damage to the dock pursuant to the provision in the License Agreement for Dockage, which provided that Reef would be liable for all damages to facilities caused by the vessels. The parties presented substantially different versions of what caused the damage, resulting in Magistrate Judge Miller concluding that negligence and causation were disputed so that the case could not be decided on summary judgment. See November 2020 Update. Subbase Drydock, a marine repair and maintenance company, was agent and custodian of the vessels M/V CULEBRA II and M/V CARIBENA. When the Hurricane approached St. Thomas, Subbase secured the vessels at Crown Bay Marina and signed the marina’s License Agreement for Dockage for the vessels. Both vessels broke free during the storm, and the marina sought to recover from Subbase for the damage sustained by the marina. Subbase moved for summary judgment that it was not the party that was responsible under the agreement and that the marina’s negligence claim was precluded by the gist of the action doctrine. The marina argued in its cross-motion for summary judgment that Subbase was liable under the contracts to the same extent as the vessels’ owner. Concluding that the contract was ambiguous with respect to the responsibility of Subbase, Judge Miller declined to grant summary judgment to either party on the contract claim. With respect to the marina’s tort claim, Subbase argued that the duties asserted by the marina flowed from the contract, which addressed the responsibility for the breach of those duties. Thus, the tort claim could not stand apart from the contract claim (gist of the action doctrine). The marina argued that Subbase could be liable in tort regardless of whether there was a contract, and that it could certainly have sued Subbase for its alleged negligence if there had not been a contract. However, Magistrate Judge Miller held that the tort and contract claims would have to be resolved at trial. See November 2020 Update.
Magistrate Judge Miller reached different results in trial of the two cases. With respect to the marina’s claims against Reef, she concluded that the evidence did not establish that the vessels contacted the docks and that the condition of the docks before the Hurricane was inconclusive so that causation for damages could not be established even if there were contact. Additionally, Magistrate Judge Miller did not find that Reef failed to exercise reasonable care in its tying off of the vessels. Consequently, she held that the marina failed to establish the elements of a maritime negligence claim. Finally, the absence of evidence that the Reef vessels caused damage to the dock was fatal to the claim for breach of contract. In contrast, Magistrate Judge Miller found that the Subbase vessels did cause some of the damage to the marina dock facilities. However, she concluded that Subbase did not act unreasonably and was not liable for maritime negligence. Nonetheless, the contract provided that Subbase, which signed as “Owner” of the vessels, was liable for damages caused by the vessels. Therefore, Magistrate Judge Miller entered judgment in favor of the marina for the damages she found to have been caused by the Subbase vessels, together with prejudgment interest and attorney fees (as provided by the contract). See May 2021 Update.
Crown Bay Marina appealed the adverse decision in the suit against Reef, and the Third Circuit affirmed the judgment entered by Magistrate Judge Miller. Crown Bay Marina argued that Magistrate Judge Miller erred by disregarding the testimony of its forensic engineering expert, Paul Ferreras; however, Judge Matey, writing for the Third Circuit, found ample reason to support Magistrate Judge Miller as Ferreras had never physically examined the vessels, observed the pre-existing damage to the dock, or performed any structural calculations (and by his admission that he had never seen properly built and maintained concrete docks fail while the mooring lines securing the vessels held fast). Although Crown Bay Marina argued for application of a presumption of fault from The Louisiana Rule (vessel impacting a stationary object), Judge Matey found the Rule to be inapplicable as the testimony did not establish that Reef’s vessels contacted the dock. Crown Bay Marina also argued that Magistrate Judge Miller improperly deviated from the standard of care (reasonable care under the circumstances in mooring the vessels) by adding an “in extremis” element considering the impending hurricane. Judge Matey rejected that argument, however, as Magistrate Judge Miller held that Reef had committed no unreasonable errors for an extremis defense to excuse. Judge Matey found no abuse of discretion in the denial of Crown Bay Marina’s late designation of an expert on issues concerning the forces exerted by the hurricane and storm surge, agreeing that the exclusion was appropriate “given the plaintiff’s cavalier treatment of its discovery obligations.” Finally, Crown Bay Marina argued that Reef’s trial counsel should be disqualified because the firm’s predecessor once advised Crown Bay Marina about the License Agreement that Reef argued was unenforceable. Judge Matey agreed that the small amount of time spent by the predecessor firm dealt mainly with evicting a problem tenant and reviewing the agreement for its termination provisions, and this work was not substantially related to the damage case arising from Hurricane Irma.
William, Kristy, Physher, and Weston Farhat were boating in the McClellan-Kerr Arkansas River Navigational System approximately half a mile west of the W.D. Mayo Lock and Dam No. 14 when their boat’s motor failed and they were pulled under the gates, resulting in the deaths of William, Kristy, and Physher Farhat and injuries to Weston Farhat. Administrative claims were filed against the United States Army Corps of Engineers under the Federal Tort Claims Act, but the Corps had not made a final determination on the claims before the plaintiffs filed this action under the FTCA more than two years after the accident. The United States moved to dismiss the case for lack of jurisdiction, asserting that the case fell within the Suits in Admiralty Act, which has a two-year statute of limitations, arguing that the untimely filing was a jurisdictional defect. Alternatively, the United States moved to dismiss the case for failure to state a claim (based on the statute of limitations). Magistrate Judge Shreder agreed that the Suits in Admiralty Act was applicable with its two-year limitations period, but he did not agree that the failure to file within that time deprived the court of jurisdiction. Therefore, he addressed the plaintiffs’ argument that the United States was equitably estopped from asserting the statute of limitations on the ground that the Corps had induced the plaintiffs to believe that the statute of limitations was tolled until the Corps acted on their administrative claim (merely filing a claim under the FTCA does not toll the limitations period for an action under the SIAA). Noting that the defense was raised as a motion to dismiss, Magistrate Judge Shreder declined to consider the evidence in support of equitable tolling as it was not contained in the complaint. Therefore, he ordered that the case should be dismissed but that the plaintiffs should be given leave to file an amended complaint to assert the basis for equitable tolling. See October 2020 Update.
After the filing of the amended complaint, the United States again moved to dismiss the complaint for failure to state a claim (asserting the claims were time barred under the SIAA and that the plaintiffs had not alleged facts sufficient to support the application of the equitable tolling doctrine. Magistrate Judge Shreder first held that there was no implied-in-fact contract with respect to the SIAA. The correspondence from the United States was with respect to the effect of the filing of an administrative claim under the FTCA and the effect that the FTCA permitted the filing of a suit six months after the claim was filed. It did not address the effect of the filing of the FTCA claim on the deadline to file an action under the SIAA. There was no basis for equitable tolling because the plaintiffs did not exercise diligence to file a timely suit, as research would have demonstrated that the filing of the FTCA action did not toll the two-year limitation period in the SIAA. Consequently, Judge Shreder dismissed the suit as time barred. See November 2021 Update.
On appeal, the United States did not challenge the district court’s ruling that a timely filing is a jurisdictional requirement for the SIAA; however, Judge Tymkovich, writing for the Tenth Circuit, noted that the appellate court had to be sure that the court had jurisdiction. In the absence of a clear statement by Congress, he held that a timely filing was not jurisdictional and that Judge Shreder had not exceeded his jurisdiction in considering whether to toll the SIAA’s time limitation. Turning to the tolling issue, the plaintiffs continued to focus on the letters in response to their administrative claims under the FTCA. Agreeing with Judge Shreder, Judge Tymkovich held that the letters clearly referred to the FTCA and that the plaintiffs did not cite any agreement with respect to tolling the time limitation in the SIAA. Judge Tymkovich also agreed that there was no intent to mislead the plaintiffs regarding their SIAA claims and that the plaintiffs failed to establish diligence. Consequently, the appellate court affirmed the rejection of equitable tolling.
From the federal district and bankruptcy courts:
Greg Parzych bought a 21-foot Mastercraft power boat, and his daughter, Melissa Parzych, drove the boat out on Lake Sunapee, New Hampshire. Daniel J. LePorin, who was wakeboarding behind the boat, was injured, including the amputation of four fingers on his right hand. LePorin brought suit in federal court in Massachusetts against Greg and Melissa Parzych for negligence, claiming that Melissa failed to operate the boat in a reasonably safe manner and that Greg failed to ensure that the boat was operated by those with adequate skill and experience. The complaint did not set forth any specific act or omission that caused the injury. The defendants answered the complaint without a motion to dismiss under Rule 12(b)(6), but the defendants later filed an untimely motion to dismiss for failure to state a claim. Judge Gorton treated the motion as a motion for judgment on the pleadings under Rule 12(c), and he held that, although the complaint was not “a paragon of detail or clarity” and the allegations were “sparse,” it did allege sufficient facts to withstand the motion, “albeit just barely.” The negligence claim was “plausible” despite its failure to allege how the operation of the boat jeopardized the safety of the plaintiff.
Frank J. Shelton worked as a Machinist Mate while stationed aboard the USS CONSTELLATION, USS REPOSE, and USS HALEAKALA. He claimed that he was tasked with disturbing, sanding, scraping, cutting, and abrading asbestos-containing components of equipment supplied by the defendants in the suit he brought in California state court. The defendants removed the case to federal court based on the Federal Officer Removal Statute and filed a motion for the application of federal maritime law, resulting in the dismissal of the claims for punitive damages and loss of consortium. Applying the locality and connection tests to determine whether admiralty law applied, Judge Rogers noted the allegations that Shelton was exposed to asbestos while serving as a seaman on the Navy vessels while they moved up and down the Vietnamese Coast or while the ships were docked in port. Shelton made the “creative” argument that the tort did not occur on navigable waters because the claims focused on the conduct of the land-based manufacturers, such as the failure to warn, which did not occur on navigable waters. Judge Rogers rejected the argument, however, as there would be no tort but for Shelton’s work on the ships. Turning to the connection test, Judge Rogers reasoned that unsafe work conditions on a vessel posed a potentially disruptive impact on maritime commerce, including injury to a worker on the vessel that could disrupt repairs of the vessel or vessels waiting for repair. Considering the general character of the activity giving rise to the incident as the defendants’ manufacture of products for vessel repair, Judge Rogers held that the activity had a significant relationship to traditional maritime activity. Applying maritime law, Judge Rogers noted that Shelton had not addressed the argument that dismissal of the claims for punitive damages and loss of consortium were not recoverable under the general maritime law. Accordingly, she dismissed the claims. Thanks to Matthew Ammerman of Houston, Texas for bringing this case to our attention. We note that on July 11, 2022, Judge Rogers applied “the more rigorous requirements of federal law” and struck the specific-causation opinions of Shelton’s causation expert, Dr. Edwin Holstein for lack of a sufficient qualitative or any quantitative methodology.
Roberto Elorreaga died from mesothelioma that he claimed was from exposure to asbestos while serving in the Navy on the USS RUPERTUS and USS COWELL, and he and his wife (his beneficiaries after his death) brought suit in California state court against suppliers of asbestos products. The case was removed to federal court based on the Federal Officer Removal Statute, and defendant General Electric filed a motion to dismiss the claims for punitive damages and loss of consortium. The beneficiaries argued that punitive damages should be permitted based on the decision of the Supreme Court in Atlantic Sounding. Following the framework enunciated in Batterton, however, Judge Gilliam found no evidence that punitive damages were historically available in the claims asserted in this case, and he dismissed the punitive damage claims. As to the claim for loss of consortium, Judge Gilliam did not believe that Atlantic Sounding provided a basis for the court to decline to apply the existing rule in the Ninth Circuit from Smith v. Trinidad that loss of consortium damages are not available under the Jones Act or general maritime law, particularly in light of Batterton. Judge Gilliam did not, on a motion to dismiss, believe that it was appropriate to dismiss the claims brought under California law as it was not yet known for certain whether Elorreaga may have been exposed to asbestos while working on land at a shipyard.
The 51-foot Sea Ray boat owned by Thomas and Diane Rieck caught fire and sank while the vessel was docked at the Halifax Harbor Marina in Daytona Beach, Florida. The Riecks brought this limitation action in federal court in Florida, asserting that potential claimants included the owner of the vessels MY MISSY, DOLCE VITA, and ICEMAN in addition to the Marina. Magistrate Judge Kidd initially declined to approve security and issue the Monition because the complaint did not “clearly state” who provided written notice of the claim or the date/manner in which notice was provided. In response, the Riecks stated that they received notice from the insurer for the DOLCE VITA by the provision of information on the vessel to the Riecks’ insurer. As the Riecks did not state whether they had received written notice of a claim, Magistrate Judge Kidd held that they had not shown that they had statutory standing to bring a limitation action and, again, declined to approve security and issuance of the monition.
Steve Sewell, Inc. owned a 36-foot Twin Vee Catamaran passenger vessel that allided with a 2009 Grady White about 40 miles off the Florida coast. Sewell brought this limitation action in federal court in Florida, and six claims were filed in the limitation action. After the time passed for the filing of claims, Sewell moved for entry of a default judgment for exoneration of liability against all non-filing claimants. As Sewell had complied with the rules, Judge Mizell granted a default judgment of exoneration in favor of Sewell against all non-filing claimants.
Maine Maritime Museum filed a limitation action in federal court in Maine after the knock-down of its SCHOONER MARY E. Three individuals filed claims in the limitation action, and each settled with Maine Maritime Museum. After the time passed for the filing of additional claims, the Museum filed a motion for default and for a decree of exoneration as to all non-appearing claimants. Although the Museum had complied with the procedure for limitation actions, Judge Torresen held that the complaint did not plead sufficient facts to support a decree of exoneration, even if all of the facts were accepted as true (thin on facts and heavy on legal conclusions). Consequently, she declined to hold that the Museum should be exonerated. For the same reason, she declined to find that the Museum had established that it was without privity or knowledge and entitled to limitation of liability.
All of these cases involve opt-outs from the DEEPWATER HORIZON Medical Benefits Class Action Settlement Agreement. Steve Coleman and Frederick Lloyd Dawkins claimed exposure from cleanup work. Michael Darnell Turner was a beach cleanup worker in the areas of Gulf Shores, Theodore, and Dauphin Island, Alabama. Joni Marie Barkley was a beach cleanup worker in Panama City, Destin, and Fort Walton Beach, Florida. David Thomas Backstrom was a recovery technician on the beaches of Harrison County, Mississippi. William Allen Brandon was employed as a decontamination technician at a decontamination facility in Theodore, Alabama. Allen LaForce was employed as a deckhand on vessels offshore near Bayou La Batre and Dauphin Island, Alabama and the Mississippi shoreline. Michael Devon Caraway was employed as a recovery technician on the beaches of Morgan City, Louisiana. William McIntosh was employed as a beach cleanup worker in Perdido Beach and Johnson’s Beach, Florida. Daniel R. Storey was employed as a cleanup worker to handle and transport bagged oil to a decontamination area for the beaches of Orange Beach, Gulf Shores, and Dolphin Island, Alabama. Randi Stephens was employed as a beach cleanup worker, picking up oil, tar balls, and oil-covered debris from the beaches of Gulf Shores and Fort Morgan, Alabama. Kennard Harrison was employed as a shipyard technician in Alabama, entering into the tanks of docked ships to scrape and vacuum oil and tar from tanks into collection trucks. Marcus Grant worked as a recovery technician on the beaches of Pascagoula, Jackson, and Horn Island, Mississippi, cleaning oil and oil-covered debris from sand and coastal areas. Al’Terryal Harris performed clean-up work at Gulfport, Ocean Springs, and Biloxi, Mississippi. Jerome Peairs claimed that he worked as an oil spill recovery technician in Mobile and Theodore, Alabama, and Petit Bois, Pascagoula, and Biloxi, Mississippi. These workers presented the opinions of Dr. Jerald Cook, an occupational and environmental physician to carry their burden on causation, but Judges Vance, Barbier, and Morgan held that Dr. Cook’s opinions were insufficient on general causation and were excluded. Consequently, without expert support, these cases were dismissed with prejudice.
Steven Aguinaga brought his suit seeking to recover as a coastal resident from swimming in the Gulf of Mexico. Chris Albert Martin brought his claim for exposure in recreational activities in the Gulf of Mexico. Bryant A. Naquin brought his claim for exposure from living in close proximity to coastal waters. Mary Griffin Davis brought her claim for exposure from working as a cleanup worker in Mobile, Alabama and on the Gulf waters of Alabama. Carl Revels brought his suit claiming exposure when he assisted in the cleanup of the spill at Venice, Louisiana. Shikiah Hurd brought her suit for exposure near her residences in Pascagoula, Mississippi. Raymond Sledge brought his suit for exposure in fishing waters around Mobile, Alabama. Viola Williams brought her suit claiming exposure near St. Rose, Louisiana. Sedija Davis brought suit for exposure near her residence in Theodore, Alabama and on the beaches at Pensacola, Florida. John Webb brought his suit for exposure at Eight Mile, Mobile Bay, and Dauphin Island, Alabama. As these plaintiffs failed to support their claims with expert testimony, Judges Vitter, Vance, Morgan, and Ashe granted summary judgment for lack of evidence of causation and dismissed the suits.
Gregory R. Bantin served in the Navy from 1965 to 1974. In February 1966, he was assigned to the U.S.S. EATON for 26 months. While he was assigned to the EATON, he served as a fireman and machinist assigned to the vessel’s after engine room. Bantin developed mesothelioma and brought suit against 15 parties that he alleged were responsible for his exposure to asbestos. One of the defendants, Atwood and Morrill, moved for summary judgment, and Bantin responded with the expert report of Captain Moore, who found letters from 1941 and 1942 stating that asbestos-containing valves manufactured by Atwood and Morrill were installed in the engine rooms of the EATON. He also found an order acknowledgement form from May 20, 1968 stating that Atwood and Morrill sold asbestos gaskets to a shipyard that worked only on Navy ships. Chief Judge Reidinger found the report to be insufficient to establish that the defendant’s valves were used in the engine room at the same time that Bantin was present as he began his service on the vessel more than 20 years after the installation of the valves and a month prior to the 1968 sales. Reasoning that the evidence linking Banton to the valves was “at best, speculative,” Chief Judge Reidinger granted summary judgment to Atwood and Morrill.
This action, resulting from the freezing of assets of the beneficial owner of the M/Y WAKU, a yacht registered in the Cayman Islands that was sold for $20,575,000 at a judicial auction, returns to the Update, again. In a nonjury trial, Judge Cohn addressed the lien claims that were asserted against the vessel. Crewmembers brought wage claims based on their contracts that were governed by the law of the vessel’s flag. Applying the law of the Cayman Islands, Judge Cohn held that the crew members had liens for unearned wages, repatriation expenses, unpaid vacation days, and penalty wages. He also found that the claims were inflated and reduced the amounts awarded. Judge Cohn did not find that any severance was allowed under the agreements signed by the crew or under Cayman Islands law. Judge Cohn awarded judgment on the counterclaim against the captain of the vessel, Joseph Williams, for conversion as the captain had removed appurtenances, equipment, furnishings, and supplies that were the property of the vessel and denied the claim of the company beneficially owned by the captain for necessaries (based on credit card balances) because there was no evidence establishing what was purchased to support the credit card balances. (See February 2021 Update). The vessel’s beneficial owner then sought costs from the captain for the successful counterclaim, and Magistrate Judge Strauss recommended that costs be assessed in the amount of $19,844.30 for deposition transcripts, $2,101.68 for trial transcripts, $130 for costs of service, and $7,530.47 for the bond for the vessel. (See May 2021 Update). Another award involved the costs on account of the success of both the defendants and the captain, which resulted in a judgment in favor of the defendants in the amount of $69,399.87 and the judgment obtained by the captain against the defendants in the amount of $24,803.70. As both parties were successful, Magistrate Judge Strauss awarded costs to both, including costs of $6,773.85 to the captain for deposition transcripts, trial transcripts, and service and filing fees. See June 2021 Update.
After the entry of judgments, the judgment creditors sought issuance of a writ of garnishment to Yacht Access, seeking to recover funds that were to be paid to Captain Williams through Yacht Access as a commission for a sale that was confirmed in a separate case. The writ was issued on October 26, 2021, but it was not served until March 8, 2022. Yacht Charters did not file an answer to the writ but responded with a letter that the garnishee had nothing belonging to M/Y WAKU. The judgment creditors obtained a clerk’s default against the garnishee and moved for a final default judgment. In response to a motion to show cause, the garnishee filed a motion to vacate the default. The judgment creditors argued that the funds were wrongfully disbursed to Yacht Charters and Williams because the court in the separate case did not approve disbursement from the registry of the court until May 2022, after the service of the writ. However, Yacht Charters paid the funds prior to the closing in that case, and Magistrate Judge Strauss reasoned that, even if Yacht Charters disbursed the funds prematurely, it was unclear how it would have owed Williams the funds following closing because it would have already paid them. Nonetheless, Magistrate Judge Strauss concluded that the facts established a sufficient meritorious defense and good cause to set aside the default. Note to garnishees: the better practice is not to send a letter to the garnishing party but to file with the court a response to the writ of garnishment.
Linda A. Colross, a paralegal, took hundreds of trips with her boyfriend, John Imperato, on his vessel MIDNIGHT. Imperato has operated his boat for 23 years, and is familiar with the waterways for the trip from Spray Beach Yacht Club in Long Beach Island to Motts Creek Inn in New Jersey. Imperato, Colross, and four other passengers were in the boat that was being operated by Imperato at a speed of about 22 to 25 miles an hour. After Colross alerted Imperato several times that he was navigating out of the channel and toward shoals, Imperato became concerned and looked down at his GPS. While looking down, but not slowing down, he failed to notice an approaching fishing boat that created a large wake. The MIDNIGHT struck the wave, and Colross landed on her tailbone. Colross brought this action against Imperato in federal court in New Jersey, and the case was tried in a bench trial. Judge Quraishi found that Imperato was negligent for violating Inland Rule 2 (good seamanship) for operating the vessel while distracted and not seeing the wake in time to reduce speed and alter course; Rule 5 (failure to maintain a proper lookout) for failure to heed warnings and failure to look up; Rule 6 (safe speed) for failing to slow the speed of the vessel; and Rules 7 and 8 (determine if risk of collision exists and take action to avoid collision) for his unawareness of the fishing vessel and its wake and failure to take action to evade the wake. Colross suffered a compression fracture at T-9 that healed and some mild kyphosis. Although Colross sought past medical expenses of $5,897, Judge Quraishi awarded the amount of the medical lien of $1,501.85. Finding several credibility issues with Colross’s testimony about the amount of alcohol she had consumed, her international travel and several long car trips with Imperato after the accident, and her other activities such as dancing with no visible evidence of impediment or pain, Judge Quraishi awarded $15,000 for past pain, suffering, and mental anguish and nothing for future medical expenses or future pain and suffering. Judge Quraishi added prejudgment interest for the past medical expenses.
Opinion summary judgment and expert
Gracie Lee Price brought this action in federal court in Florida, seeking to recover for injuries she sustained as a passenger on the M/V CARNIVAL VALOR. She claimed that she tripped and fell on a round metal clamp in the walkway while walking through the Photo Gallery on the starboard side of Deck 4 of the vessel. The cruise line filed a motion in limine, seeking to challenge the introduction of certain evidence at trial. The cruise line also filed a motion seeking to exclude the testimony of the passenger’s expert, Dr. John H. Shim. With respect to the motion in limine, Judge Bloom declined to address the issue of industry standards as discovery was not complete and the passenger had not supplemented her disclosures with the industry standards that she would seek to introduce. The cruise line objected to the introduction of opinions of the passenger’s expert, Dr. Shim, on future medical care, medical causation, and as to the reasonableness and necessity of past medical bills. With respect to future medical care, the cruise line objected that Dr. Shim had not treated the passenger and had not reviewed the passenger’s medical history since January 2020. Concluding that the opinion on the need and cost of future medical care would be speculative, Judge Bloom held that Dr. Shim would not be allowed to testify on these subjects (although it was premature to decide whether other evidence, besides the opinions of Dr. Shim, could be introduced on the need and cost of future medical care). As to medical causation and past medical bills, Judge Bloom considered Dr. Shim’s opinions, based on review of medical records, to be premised on sufficiently reliable methodology to be permitted. The cruise line also requested that it be allowed to introduce evidence of the amount the passenger paid in full satisfaction of her medical bills if the passenger introduced the total amount of her medical charges. The passenger objected that the cruise line was attempting to introduce payments from collateral sources to write off its liability as a tortfeasor, but Judge Bloom cited the Eleventh Circuit’s Higgs decision and held that if the passenger introduced the total amount of her medical bills, the cruise line could introduce evidence of write-offs and the amount actually paid. See May 2022 Update.
The cruise line also moved to exclude the testimony of Price’s liability expert, Jay Daily, and Judge Bloom denied the motion on the ground that the cruise line had already filed a Daubert motion and the second motion violated the court’s scheduling order. The cruise line moved for reconsideration on the ground that it would be a manifest injustice to permit Daily’s testimony because he was not timely disclosed by the expert disclosure deadline (which was the reason for the second Daubert motion). Price answered that Daily was not timely disclosed because the cruise line had not made the vessel available for inspection so that Daily could complete his expert report at the time of the deadline for expert disclosures. Although Judge Bloom accepted that the disclosure was beyond the deadline, she reasoned that “common sense dictates that an expert, not Plaintiff herself, was expected to inspect the vessel, and that the purpose of an expert inspecting the vessel is to offer expert testimony.” Consequently, Judge Bloom did not believe that the untimely disclosure of the expert warranted exclusion of his expert opinion.
The cruise line filed another motion to exclude Daily’s opinion, arguing that Daily’s methodology was unreliable—that he had merely looked at the metal clamps and concluded that they constituted an unreasonably dangerous condition because they violated industry standards. Price responded that Daily’s methodology was reliable because he explained that it was the edge profile of the clamps (the rise-to-run ratio) that created the dangerous condition. However, Judge Bloom noted that Daily failed to explain how the edge profile violated any industry standard and thereby posed an unreasonable danger (Daily conceded that the applicable industry standards allowed a change in elevation similar to the clamp in this case). Price responded that the regulations are not very detailed or specific and that Daily could rely on intuition and practical sensibilities. Judge Bloom disagreed, reasoning that his opinion that the cruise line “created a dangerous condition by violating admittedly nonexistent industry standards” was “impermissible ipse dixit.”
The cruise line then moved for summary judgment on the ground that the clamp was not dangerous or hazardous and was open and obvious. The cruise line presented the opinion of its expert, Bryan Emond, that a protrusion of three-sixteenths of an inch with rounded and beveled edges is acceptable under industry standards, and tripping alone does not establish a dangerous condition. Without an expert, Price did not “meaningfully” address the dangerousness argument, and Judge Bloom held that summary judgment was appropriate on the failure to warn and failure to maintain claims. Additionally, Judge Bloom cited Price’s testimony that the clamp was shiny and that she could have and should have seen the clamp (her traveling companions saw the clamp). Consequently, Judge Bloom held that the claims should be dismissed even if the clamp were dangerous as the danger was open and obvious. Although she did not have to address the notice issue in view of her rulings, Judge Bloom noted that Price claimed that the absence of any similar accident was not fatal to her vicarious liability claim based on the alleged admission that the corporate representative knew the clamps were not flush with the floor. Judge Bloom responded that notice of the condition did not establish notice of a dangerous condition, and she dismissed the suit with prejudice.,
Outta Control Sportfishing operates a sport fishing charter business and purchased the M/V AMERICAN PATRIOT to add to its operations (it had one smaller vessel, the SUPER SEA LEGS). The AMERICAN PATRIOT required significant repairs and updates, and Outta Control’s principal negotiated a loan of $2.6 million from L.E.T. Holding of Hollywood. Outta Control signed a note and ship mortgage, but there was a dispute between the parties about the intent of the transaction (which entity was meant to receive the funds), and the mortgage was never filed (the documents also did not include the official number of the vessel). Outta Control never made a payment on the loan, and L.E.T. filed an action to enforce the mortgage in the federal court for the Middle District of Florida. The court issued a warrant for arrest of the vessel, and the vessel was arrested. Instead of posting security to release the vessel, Outta Control filed this action for bankruptcy in the Southern District of Florida. L.E.T. filed a motion to dismiss the bankruptcy proceeding, asserting that it was filed in bad faith. Focusing on the ultimate question whether the disputed ship mortgage was valid and perfected, which was squarely before the Middle District of Florida, Bankruptcy Judge Russin noted that the litigation involved a two-party dispute that could be resolved in the federal district court, and the timing of the bankruptcy filing suggested an intent at forum shopping to avoid having to post a bond or security in the federal district court—circumventing the procedural hurdles that were not to its liking. Reasoning that bankruptcy is not intended to be used as a mechanism to orchestrate pending litigation, Bankruptcy Judge Russin dismissed the bankruptcy action.
Keith H. Holm had been self-employed for about 20 years with his sole proprietorship, Holm Heritage Painting and Boatworks, which provided boat painting and other vessel-related services. He charged customers an hourly shop rate of $55 for his services. Michael Meyers, who was 76 years old and retired, owned the 26-foot vessel, HEAD HUNTER. Meyers needed to sail the vessel from a marina in Kingston, Washington to Port Townsend, Washington for engine repairs. Holm had previously done work on another boat owned by Myers, and Myers called Holm to help sail the HEAD HUNTER on the voyage. There was a dispute between Holm and Myers about what was said and whether Holm was to be paid, but Holm and Myers boarded the vessel and the vessel’s engine stalled 100 to 200 meters from the edge of the marina’s waters. Holm deployed an anchor, and the parties called for help. A Good Samaritan boat arrived to help, and Holm was positioned between the two boats working to tie them together when two motor yachts passed at high speed, creating a wake that caused the HEAD HUNTER and Good Samaritan boat to slam into each other, resulting in an injury to Holm. After the accident, Myers paid Holm cash, either $60 or $200. Holm demanded maintenance and cure and brought this suit against Myers and the HEAD HUNTER, asserting claims for negligence under the Jones Act, unseaworthiness, maintenance and cure, and negligence under the general maritime law. Myers moved for summary judgment on all of the claims. In deciding whether Holm could assert a claim under the Jones Act, Judge Rothstein considered whether Holm was an employee of Myers. Although Holm testified that Myers asked him to be his deckhand, there was no indication that Myers was in any position (76 years old and retired) to employ a deckhand or any crew. Myers never operated (or planned to operate) the boat, and Myers exercised little control over Holm on the vessel. Judge Rothstein found that Holm’s position was more like that of an independent contractor and that Holm’s statement that he was to be paid his shop rate of $55 per hour reflected that he was an independent contractor and not an employee. Consequently, Judge Rothstein held that Holm had not provided sufficient evidence to claim he was an employee who could recover under the Jones Act. Additionally, Judge Rothstein held that Holm’s single voyage on the HEAD HUNTER was insufficient to satisfy the duration element of the connection test for seaman status, reasoning that his temporary work created only a transitory connection to the vessel. As Holm was not an employee or a seaman, he could not bring claims for unseaworthiness or maintenance and cure. As to the negligence claim under the general maritime law, Judge Rothstein noted that Holm suffered from problems with his shoulders before the accident, had been told that he would need rotator cuff surgery eight months earlier, and the defendant’s orthopedic surgeon opined that Holm’s shoulder injuries were neither caused not worsened by the accident. As Holm did not disclose a medical expert, Judge Rothstein held that Holm could not carry his burden on causation and dismissed the negligence claim. Although only Myers moved for summary judgment, Judge Rothstein held that the claims against the vessel should be dismissed for the same reasons.
Holm sought reconsideration, arguing that his brief had stated that he would rely on his disclosed treating physicians at trial for medical causation. Judge Rothstein answered that Holm was required to proffer expert medical causation to survive the motion for summary judgment and the identification of physicians was insufficient. Holm also argued that his ineligibility to maintain a Jones Act claim did not prevent him from asserting a common-law negligence claim. However, Judge Rothstein answered that the failure to establish the element of causation was fatal to that claim. Finally, although Holm argued that there was a fact question whether he was aboard the vessel as an employee, Holm did not cite any evidence or authority, and Judge Rothstein rejected the request for reconsideration.
Three limitation actions were filed after a collision on the Mississippi River in Plaquemines Parish, Louisiana. The M/V LA BELLE, a push boat owned by Caillou Island Towing, and the M/V HELEN, a towing vessel owned by Central Gulf Towing, were towing a 500-foot dredge pipe down the River when the dredge pipe collided with the DAVID G. SEHRT, a towing vessel owned by Ingram Barge that was pushing 18 empty barges up the River. Cecil Brashear, a seaman employed by Caillou Island on the LA BELLE, was injured, and there was damage to the vessels and dredge pipe. The vessel owners filed limitation actions, and asserted claims against each other; the owner of the dredge pipe filed a claim in the Ingram Barge limitation action; and Brashear filed suit in state court and then filed claims in the limitation actions. Brashear filed a motion to bifurcate the issues of exoneration and limitation from the issue of damages (the damages trial would include the allocation of fault), and Central Gulf and Ingram Barge responded that bifurcation could lead to inconsistent judgments, it would waste judicial resources, it was premature before an adjudication of limitation, and it did not contain stipulations from all claimants. Judge Fallon reasoned that the best way to economize and expedite the proceedings and to preserve the right of Brashear to seek a jury trial in state court on damages was to bifurcate the case to allow a trial on liability, limitation, and apportionment of fault. Despite Brashear’s objection, the first trial would include the allocation of fault as the alternate was inefficient. Judge Fallon rejected the argument that the claimants would have to file stipulations (required to lift the stay) as Brashear was not seeking to proceed in state court simultaneously with the limitation proceeding. The owners’ rights to limitation would be protected by trying limitation first and then freeing Brashear to seek damages in state court only if limitation were denied. See May 2022 Update.
Caillou Island Towing moved for summary judgment on Brashear’s claims of maintenance and cure, unseaworthiness, and negligence in connection with the injuries he allegedly sustained when he was violently knocked around in his bunk. Caillou Island Towing presented the report of its medical examiner, concluding that Brashear’s claimed injuries pre-existed the collision, and argued that the reports of Brashear’s post-collision treating physicians should be disregarded because Brashear allegedly concealed from his treating physicians reports of his pre-collision conditions. As the reports of the treating physicians were prepared without this “crucial information,” Caillou Island Towing argued that they were “moot” and that Brashear had no evidence of medical causation with respect to the collision. Judge Fallon did not consider it to be the province of the court to weigh the evidence on a motion for summary judgment (Judge Fallon also considered the motion to be premature before any expert depositions were taken). Accordingly, he denied the motion for summary judgment.
The owner of the yacht NOBLE HOUSE took the vessel to Derecktor’s shipyard in Dania, Florida, for repair and maintenance work, including over 100 hours of work on the vessel’s rudders. After the port rudder fell away from the vessel causing it to partially sink while navigating from The Bahamas to Fort Lauderdale, Florida, the vessel owner brought this action against the shipyard seeking to recover for negligence, breach of contract, unjust enrichment, and breach of the warranty of workmanlike performance. The owner sought damages for salvage, repair, dockage, and lost profits. The shipyard moved to dismiss the counts for negligence, breach of contract, and unjust enrichment and to strike the owner’s prayer for relief. Judge Gayles agreed that the same allegations were asserted for the negligence and contract claims, and he dismissed the negligence claim as it was not independent of the contract claim. As neither party disputed the existence of a contract, Judge Gayles dismissed the claim for unjust enrichment. With respect to the contract work, the allegations of poor workmanship and substandard work did not give the shipyard notice of the exact provisions of the contract that were breached. Therefore, Judge Gayles dismissed the contract claim, advising that the owner could file a motion seeking leave to amend the contract allegations. In defense of the claim for breach of the warranty of workmanlike performance, the shipyard asserted the contractual provision limiting recovery to repair or replacement of the defect and providing that consequential damages were not recoverable. The owner argued that the clause was unenforceable because it did not create a deterrence to negligence, but Judge Gayles held that the shipyard’s repair and replacement obligation was a sufficient deterrent to negligence and he struck the demands for damages that were precluded by the contract. Finally, the owner sought attorney fees under Florida law. Judge Gayles held that maritime law, not state law, was applicable to the vessel repair, and, as the contract only provided for the recovery of attorney fees by the shipyard, no attorney fees could be recovered by the owner. See October 2021 Update.
After Noble House filed an amended complaint, Derecktor filed a motion to dismiss for failure to state a claim or to strike certain allegations. In light of the contract between the parties, Judge Gayles dismissed the negligence, unjust enrichment, and gross negligence claims (noting that even if the gross negligence claim was not barred by the independent tort doctrine, the claim was insufficiently pleaded). Judge Gayles did, however, reconsider the enforceability of the limitation of liability in the contract, ruling that the determination whether the clause clearly and unequivocally indicated the parties’ intentions and provided a deterrent to negligence involved a fact-intensive inquiry that was best determined by summary judgment and not a motion to dismiss.
Jay Molbogot, who was looking to buy a 49-foot Sundancer with low hours was put in touch with MarineMax, which had a “leftover” new Sundancer that had not been sold because of problems with its generator. Molbogot was told that the vessel was new and the generator needed to be tweaked, but he was not told that the generator needed a new controller. Molbogot purchased the Sundancer for $530,595. The controller was not installed before the vessel was delivered, and the generator would not run (the trim tables were not working either). Molbogot brought this suit in federal court in Florida against MarineMax, and MarineMax moved for summary judgment on the claim for fraud in the inducement, asserting the language in the purchase agreement that the buyer disclaimed reliance on any representations of the seller and that the vessel was sold “as is.” Concluding that the language did not contain an explicit and specific disclaimer of liability for fraud, Magistrate Judge Matthewman denied summary judgment to MarineMax on the fraudulent inducement claim. Magistrate Judge Matthewman found fact questions, however, on the claims for violation of the Florida Deceptive and Unfair Trade Practices Act and negligence, and denied the parties’ motions for summary judgment on these counts. Molgobot moved to exclude the opinions of Edward J. Brill, who was retained by MarineMax to investigate defects in the vessel’s electrical systems, arguing that his opinions were not based on reliable scientific methodology and would not be helpful to the jury. Magistrate Judge Matthewman first noted that Brill, who had 40 years of experience with vessels and 20 years of experience investigating the seaworthiness and operations of vessels, was qualified. He then reasoned that Brill had appropriately relied on data derived from the reports, surveys, and documents from others. Finding no accepted standard in the engineering field relating to analysis of electrical issues on a vessel, Magistrate Judge Matthewman held that cognitive testing based on all of the available information and performed with the expert’s training, education, knowledge, and experience was a sufficiently reliable scientific method and would not be stricken as ipse dixit [our second ipse dixit reference in this Update]. Finally, noting that electrical issues on a vessel are complicated and require a detailed explanation to a fact finder, Magistrate Judge Matthewman held that Brill’s testimony would be helpful to the fact finder.
Faulkner Walsh Constructors procured a hull and P&I policy with several insurers for its fleet of nine vessels. The P&I coverage contained the standard indemnity provision that the insurers would pay sums the assured “shall have become legally liable to pay and shall have paid.” In light of a ship survey performed the previous year that observed watertightness problems in some of the vessels (opining that the DELTA CHIEF was unusable and recommending that it be drydocked and made watertight), the policy contained a provision that compliance letters be provided prior to vessels operating, and with regard to the DELTA CHIEF, noting that a letter or email from the original surveyor would be sufficient in lieu of the recommendation to dry dock the vessel. Despite follow up from the broker, Faulkner Walsh never provided any compliance documentation for the DELTA CHIEF. The DELTA CHIEF then sank in a branch of the Kuskokwim River, and the State of Alaska filed suit against Faulkner Walsh when it declined to remove the vessel. Faulkner Walsh tendered its defense to the insurers, who declined to defend it against the suit because of the assured’s failure to comply with a condition precedent to coverage and failure to provide prompt notice of the claim. After a bench trial in which the assured did not file a brief or call any witnesses, the court found the assured liable to the state for $4.2 million in damages (more than $5 million with the inclusion of interest, fees, and costs), and Faulkner Walsh then brought this suit in Anchorage superior court against the insurers after agreeing with the State that the State would not execute on the judgment while the insured pursued its insurers and the insured assigned its right to recover to the State. The insurers removed the case to Alaska federal court, and the parties moved for summary judgment. The assured argued that the insurers violated their duty to defend the assured and were estopped to deny coverage for the sinking. The first question presented to Judge Holland was whether the P&I policy required the insurers to afford a defense to Faulkner Walsh (whether the indemnity language of the P&I policy would be enforced as written)? Judge Holland held that there did not appear to be an established maritime rule on the issue under Wilburn Boat, and he applied Alaska law to hold that P&I policies impose upon insurers the same contractual duty to defend as in standard liability policies. Judge Holland then turned to whether there was a duty to defend the suit. Although the insurers argued that there was no duty to defend because the condition precedent to coverage for the vessel had not been satisfied, Judge Holland separated the duty to defend from the duty to indemnify and held that the P&I policy did afford a defense obligation for the wreck removal allegations of Alaska’s suit (even though facts extrinsic to the pleadings might establish that there was no liability under the policy). Accordingly, Judge Holland held that the denial of a defense was wrongful and the insurers were estopped to deny coverage for the sinking (coverage by estoppel is the remedy in Alaska for breach of the duty to defend). Judge Holland declined to grant summary judgment on the assured’s bad faith claims, holding that there were fact questions on the reasonableness of the insurer’s decision.
Richard S. Hannye, a lawyer licensed in New Jersey and Pennsylvania, sailed his 39-foot vessel PHOENICIAN on a voyage that began at Herrington Harbor, Maryland and was to end at Cape Charles, Virginia. The vessel was blown onto a shoal, and Hannye contacted Atlantic Coast Marine in Morehead City, North Carolina to arrange for salvage. Atlantic Coast mobilized vessels and equipment from North Carolina, and Hannye signed a salvage contract on a no-cure/no-pay basis with enumerated rates for time and materials. Atlantic Coast extricated the vessel, towed it to Cape Charles, Virginia, and sought $46,686.31 from Hannye. Atlantic Marine brought suit in federal court in North Carolina, but the court declined to compel arbitration (although the court determined that it had jurisdiction over the action). Hannye brought a suit against Atlantic Coast in Pennsylvania state court, and Atlantic Coast brought this action in federal court in North Carolina, seeking a salvage award, an equitable uplift, and attorney fees. Hannye moved to dismiss the suit, and Chief Judge Myers first held that there was personal jurisdiction. He noted that the court had previously held that it had specific personal jurisdiction over Hannye based on his purposefully obtaining services of Atlantic Coast in North Carolina. As the same parties, facts, and underlying dispute were involved in this suit, Chief Judge Myers held that the court had personal jurisdiction over Hannye. Hannye next argued that the case should be dismissed because it was lacking a necessary party, Sandy Point Marine Services, which performed the towing services ($6,000). Hannye did not contract with Sandy Point, and Chief Judge Myers held that he could shape the relief to avoid any prejudice that might be caused by the absence of Sandy Point, such as requiring that Atlantic Coast satisfy any liability to Sandy Point. Accordingly, the absence of Sandy Point did not undermine the jurisdiction of the court. Finally, Hannye argued that the federal suit should be dismissed because it was filed after the suit Hannye filed in Pennsylvania state court against Atlantic Coast. Reasoning that the first-to-file rule only applies to concurrent federal suits, Chief Judge Myers denied Hannye’s motion.
Courtney Montrez Green alleged that she entered the buffet area adjacent to the Lido Deck of the CARNIVAL ECSTASY and began to select food when he slipped and fell due to grease, oil, food residue, or other slippery substance (his girlfriend also slipped but was not injured). He was informed that another passenger had dropped a hamburger (including condiments) and that a crew member had attempted to clean the area with a napkin but had not mopped the area or otherwise followed procedure to clean it. Green brought this suit against Carnival in federal court in Florida, alleging several causes of action for negligence, and Carnival moved to dismiss Green’s amended complaint. With respect to the counts for failure to warn and failure to maintain, Judge Bloom held that Green had sufficiently pleaded that the cruise line had actual or constructive notice of the unsafe condition as the crew member had attempted to correct the condition. Additionally, Green alleged 15 prior substantially similar incidents. These were sufficient to plead the “how” and “why” required for constructive notice. Judge Bloom disagreed with the passenger’s argument that he did not have to plead that the danger was not open and obvious for the failure to warn claim; however, at the motion to dismiss stage, Judge Bloom held that the court could reasonably infer that the danger was not open and obvious, given the inconspicuous nature of grease and oil. The cruise line argued that the vicarious liability claim was an attempt to bypass the notice requirement for the failure to warn and maintain claims. Judge Bloom noted that it was not necessary that the passenger allege the name of the crew member who allegedly failed to adequately clean the deck after the dropped hamburger, and that Green had sufficiently alleged negligent conduct by an employee acting on behalf of the cruise line.
Robert Scott was employed by Westbank Fishing as a chef on the F/V KITTIWAKE and died from complications from COVID-19, which he claimed to have contracted on the vessel. His widow brought this action in federal court in Louisiana under the Jones Act and general maritime law. Westbank Fishing moved for summary judgment on the Jones Act and unseaworthiness claims, contending that the plaintiff could not proved that Scott contracted COVID-19 while aboard the vessel. The plaintiff’s expert opined that Scott was most likely infected while he was on the vessel (calculating backward from the onset of symptoms), but Westbank Fishing responded that the expert could not identify the source of the infection with a reasonable degree of certainty (asserting that the use of a temporal connection led to “the blunder of the post hoc ergo propter hoc fallacy.” Chief Judge Brown answered that the Jones Act contains a liberal causation standard that can be satisfied with entirely circumstantial evidence. She reasoned that COVID-19 is a virus that cannot be seen, so no witness could have “seen” its presence on the vessel while it was occupied by Scott. Although Westbank Fishing presented evidence suggesting that Scott could have been infected other than on the ship, Chief Judge Brown held that this demonstrated the disputed fact issue that could not be resolved on a motion for summary judgment. Although the causation standard for the unseaworthiness claim is more demanding than for the Jones Act claim, Chief Judge Brown held that the circumstantial evidence was sufficient to create a fact question for causation on the unseaworthiness claim as well.
Westbank Fishing also moved for partial summary judgment on the claims for past medical expenses, past maintenance, cure, and found, funeral and burial expenses, and nonpecuniary damages. As the plaintiff did not present any records, receipts, or invoices reflecting any charges or expenses incurred as a result of the death, the plaintiff did not oppose summary judgment on the funeral expenses. However, she did argue that there was an outstanding bill for $3,580.65 for medical care and that Scott’s health insurer had made payments in the amount of $31,035.61. Westbank Fishing acknowledged the collateral source rule and replied that it should be granted summary judgment on medical expenses in excess of $34,616.26, but Chief Judge Brown declined to address the argument made in the reply and held that the parties could stipulate to the amount for trial. The plaintiff conceded that she was not entitled to recover for her own nonpecuniary damages for pain and suffering, fear of impending doom, and loss of enjoyment of life, and those elements (but not the decedent’s claims that were not the subject of the motion) were dismissed. To the extent that the plaintiff sought wages as a subset of her claim for maintenance, Chief Judge Brown dismissed the claim as Westbank Fishing paid full wages to Scott until his death. As the plaintiff failed to explain the basis of her claim for found (future fringe benefits, such as meals on the vessel, after maximum cure has been reached), Chief Judge Brown granted summary judgment on the claim for found.
AWE Watersports filed this limitation action in federal court in Florida after a boating accident in Collier County, Florida in which a minor child died. The child’s mother, Jessica Castillo, filed a claim in the limitation action on her behalf and as personal representative of the child’s estate and moved to lift the stay so that she could pursue the claim in state court. AWE Watersports responded that there could be additional claims and that Castillo had waived the right to proceed in state court by filing a third-party complaint in the federal action against the tour guide for AWE Watersports. However, while the motion was pending, the court entered a default against any non-appearing claimants and the claim against the tour guide was dismissed. As these orders left only the single claimant, and as Castillo entered into stipulations to preserve the right to limit liability, Judge Chappell lifted the stay.
Herbert Hardimon was employed by SCF Lewis & Clark Fleeting and spent most of his time cleaning barges. He claimed that he assigned to work on a flat-deck crane barge that was afloat on the Mississippi River and that was moved by harbor tugs to the location of barges that were cleaned by Hardimon. On the day of his accident, the crane barge was moved to a location near Sauget, Illinois in inclement weather. Hardimon was assigned to board a barge had broken away from a fleet controlled by American River Transportation Co. and had sustained damage. Hardimon was working to help remove the hatch cover, but he slipped because the barge was covered with ice, resulting in Hardimon falling into the Mississippi River. Hardimon brought this suit in federal court in Illinois against his employer, SCF Lewis & Clark Fleeting, under the Jones Act (asserting that he was a member of the crew of the crane barge) and against American River Transportation for negligence under the general maritime law. Hardimon pleaded that American River Transportation was negligent in the mooring of the barges that broke loose; that it was reasonably foreseeable that the consequence of the breakaway from the negligent mooring would be damage to other barges and structures; and that it was reasonably foreseeable that repairs would be made as soon as possible on the damaged barges and structures in inclement or dangerous weather conditions. American River Transportation moved to dismiss Hardimon’s amended complaint for failure to sufficiently plead facts establishing proximate cause with respect to the negligence claim against it, arguing that the connection between the negligence of American River Transportation and Hardimon’s injury was too tenuous (asserting that merely causing someone to be in the location where they are injured is not enough for proximate cause). Magistrate Judge Daly agreed, declining to find foreseeability as to damages beyond those caused directly by downstream allisions, reasoning that Hardimon’s argument would support liability of American River Transportation for any injury that Hardimon sustained on the barge. Accordingly, Magistrate Judge Daly did not have to address whether American River Transportation owed a duty to Hardimon as the complaint failed to sufficiently allege proximate cause (dismissing the claims against American River Transportation with prejudice).
This is the first of three opinions in this edition of the Update addressing waivers of liability and reaches a different conclusion than the other two discussed below (Boldt and Lasky). Maureen Anne Ehart and her husband, William McMein Ehart, Jr., went on a chartered scuba/snorkeling tour to Molokini Crater off the south coast of Maui, Hawaii. Maureen disappeared while snorkeling and is presumed to have died. William brought this wrongful death action in federal court in Hawaii against the owner of the vessel, the captain of the vessel (Cory Dam), and scuba instructors Kaitlin Miller and Julianne Cricchio. The scuba instructors moved to dismiss the complaint on the ground that they did not owe a duty to Maureen, and William moved to strike the affirmative defenses of waiver and release that were asserted based on the document signed by the Eharts before the tour (releasing the defendants from negligence in connection with the diving/snorkeling). Applying admiralty law, Judge Mollway held that the complaint plausibly alleged that the instructors breached a duty of care with respect to planning, organizing, and conducting the tour, failing to use appropriate care in adopting, implementing and enforcing procedures for supervising the snorkeling activities and rescue procedures, and failing to timely and effectively conduct a rescue effort. The waiver/release argument was based on the provision of the Shipowner’s Limitation of Liability Act that prohibits waivers of negligence in the transportation of passengers between ports in the United States or between a port in the United States and a foreign port. The defendants cited numerous cases, including decisions from the Eleventh Circuit, enforcing similar waivers for accidents involving recreational ocean sporting activities (reasoning that Congress was not thinking of dive boats when it enacted the provision). Judge Mollway disagreed, reasoning that there was no reason to differentiate waivers for passengers who drown while being transported to a dive spot from passengers who drown during diving after reaching the dive spot. As Maureen was transported between locations in the United States, Judge Mollway struck the waiver/release defense as violative of the Limitation Act and, therefore, did not have to decide whether a Hawaii statute also voided the release. See June 2022 Update.
The scuba instructors moved for reconsideration and, alternatively, for certification for an interlocutory appeal of the decision striking the waiver/release defense. Judge Mollway did not consider the motion to present anything new and declined reconsideration. The instructors argued that an interlocutory appeal would materially advance the litigation; however, Judge Mollway disagreed, reasoning that neither maritime law nor state law permits a waiver to shield a party from gross negligence. Thus, a trial would still be necessary for the gross negligence claim with overlapping evidence on the negligence and gross negligence. As there will be findings as to both negligence and gross negligence, if an appellate court upholds the waiver/release, the court can simply disregard that portion of the judgment on negligence. She also rejected the argument that the fact that the insurance policy was being depleted by defense costs supported an appeal, stating that the interlocutory appeal might actually increase the defense costs as further litigation could still be necessary. Accordingly, she declined to certify the order for an interlocutory appeal.
Terry Katz and his wife invited Joy and Alfred Jellinek and other couples to their house in Bellmore, New York. The couples departed from the Bellmore house on Katz’s 29-foot Chaparral Bow Rider to spend the afternoon on a beach on Fire Island, and they began the journey back to the Katz house in Bellmore around 6:00 p.m. Katz, who had navigated the route 20 to 25 times, was operating the boat without using the GPS and missed a right turn. The vessel went aground in shallow waters and was stuck. Katz called Sea Tow for assistance, but, as it got dark, Katz testified that the “’girls’ got a little hysterical.” Katz decided to try to steer the vessel toward Sore Thumb Beach, using the waves to maneuver the vessel. The vessel almost capsized as it approached the beach, and some of the passengers began jumping off the vessel as it was still moving and was approximately 4 feet from the beach. Joy Jellinek was injured jumping from the vessel, and Alfred was injured either jumping from the vessel or when he was thrown in the air and washed over the side after landing on the boat. The Jellineks brought suit against Katz in New York state court, and Katz brought this limitation action in New York federal court. Katz and the Jellineks brought cross-motions for summary judgment, and Magistrate Judge Tiscione addressed the negligence of Katz, causation, and the standard of care. Although there are older cases applying a higher standard of care for vessel owners to passengers, Magistrate Judge Tiscione held that the duty owed was that from Kermarec of reasonable care under the circumstances. Although finding the law in the Second Circuit was unclear whether a presumption of fault arises from a grounding, Magistrate Judge Tiscione held that the mere grounding did not establish a rebuttable presumption of negligence against the party responsible for the grounding and that the party claiming negligence must introduce proof of negligent conduct by a preponderance of the evidence. As there was evidence as to the fault of Katz in his navigation and failing to advise the passengers not to leave the vessel while it was still in motion and that his actions were reasonable given his past experience in operating the vessel and the lack of foreseeability that the passengers would jump into the water, Magistrate Judge Tiscione recommended that the cross-motions be denied based on fact questions whether Katz’s actions were reasonable and whether his alleged breach of duty caused the injuries. Finally, Magistrate Judge Tiscione noted that Katz was in privity with himself when he was operating his vessel.
Nucor Corp. operates a steel facility in Berkeley County, South Carolina that includes a berth on the Cooper River used by Nucor to unload materials from barges for use in its manufacture of steel products. Nucor engaged Berenyi to construct an extension to the berth that included driving sheet piling into the eastern end of the berth to form a temporary wall where the existing and expanded berth would join (the wall was intended to prevent water from the River from flowing into the area behind the wall while it was being excavated for the expanded berth). Nucor continued to use the facility during the construction, with the help of workmen and equipment provided to Nucor by Kinder Morgan Terminals, which owned a fleet of barges that were used to deliver materials to the facility with the assistance of tugs provided by Stevens Towing Co. While the facility was shut down due to the threat posed by Hurricane Irma, Kinder Morgan secured its equipment in preparation for the storm. Thereafter, a Nucor employee discovered that the temporary sheet pile wall had collapsed, causing water to flood into the excavated area of the extended berth. Berenyi filed suit against Kinder Morgan, Nucor, and Stevens Towing, alleging that a barge or barges owned by Kinder Morgan allided with the wall and caused the collapse. Kinder Morgan filed a motion for summary judgment, and, after the response and reply, Berenyi filed a motion to amend the scheduling order to allow it to file an amended complaint. The amended complaint was to clarify that the allision did not occur during movement of a barge but that the allision was caused by the movement of a barge by wind and water. Judge Norton agreed that Berenyi had good cause to amend to identify new facts obtained through discovery; however, he held that Berenyi had not acted with diligence on the information, waiting five or more months to seek leave to amend, waiting until after the filing of the motion for summary judgment. Whether he considered the amendment under Rule 16 or Rule 15 (he also found prejudice to Kinder Morgan), Judge Norton denied leave to amend. Kinder Morgan argued in its motion for summary judgment that it had not breached any duty to Berenyi, asserting that it was water pressure from the Cooper River that caused the wall to fall. Berenyi argued that there was a presumption of fault from The Louisiana Rule (when a vessel breaks free from its moorings and drifts into an allision with a stationary object) or from The Oregon Rule (allision by a moving vessel with a stationary object); however, Judge Norton did not find that either rule applied in response to the summary judgment as it was not established as a fact that a barge had struck the sheet pile wall. Berenyi also argued that, pursuant to the res ipsa loquitur doctrine, it did not have to establish exactly what caused the damage in order to prevail on a negligence theory. However, Judge Norton held that application of res ipsa loquitur was premature as there were fact questions on at least one of the elements of the doctrine, including whether Berenyi may have had a role in the collapse of the wall by failing to install the wall based on the design plans. The rejection of Berenyi’s theories from a factual basis did not translate to the granting of summary judgment to Kinder Morgan. Judge Norton found fact issues that were sufficient for a fact finder to rule in favor of Berenyi, including evidence that the wall was designed to withstand pressure from the River, that the damages could only have been caused by a large heavy object such as a barge, and that an indentation on the wall matched the width of the barge. Therefore, he denied Kinder Morgan’s motion for summary judgment.
The luxury steamer SS ISLANDER (carrying passengers and a cargo of gold bullion valued at more than $6 million at the time) sank in 1901 on a voyage that began in Skagway, Alaska and was headed for Victoria, British Columbia. Tyche High Seas Capital, which owns the contract salvage rights to the gold, chartered the OCEAN TITAN from Pacific Survey Group to survey and explore the area where the ISLANDER is believed to be located and to retrieve property from the vessel if possible. There is litigation pending in federal court in Washington between Pacific and Tyche in which Pacific is seeking payment due under the charter party and a maritime lien on the data collected during the charter party (arguing that the charter party granted Pacific a lien on property recovered from the ISLANDER to the extent of amounts owed under the charter party). In 1996, this in rem action against the cargo of the ISLANDER was initiated in federal court in Alaska, and Tyche was ultimately awarded salvage rights in the proceeding. After Tyche moved to file its report with its survey, salvage, and recovery plan under seal so that it was unavailable for the public or other parties to view until completion of Tyche’s salvage operations, Pacific moved to intervene in the Alaska suit so that it could seek to modify the protective order granted by the court (it wants access to the reports filed by Tyche so that it can use them in the Washington litigation). Judge Holland granted leave for Pacific to intervene and also held that Pacific would be granted access to Tyche’s sealed status report after an appropriate non-disclosure agreement was reached.
DRE Health Corp. contracted with common carrier All-Ways to deliver 68 containers of medical gloves from China to the United States pursuant to All-Ways’ bill of lading. The front of the bill of lading contained a New York arbitration clause for any disputes under the contract, and the terms and conditions in All-Ways’ tariff (referenced on the back of the bill of lading) contained a New York forum-selection clause for any suits. All-Ways asserted a lien on the goods for DRE’s failure to pay invoices owed to All-Ways, and BRM Trades entered into a Purchase Agreement with DRE by which BRM paid DRE approximately $3 million for title to the goods based on representations that BRM claimed were made by DRE that it would use the proceeds to pay the invoices to All-Ways. The Purchase Agreement contained a forum-selection clause for the state or federal courts of Jackson County, Missouri. BRM claimed that All-Ways and DRE defrauded it and breached their contracts by selling the goods to third parties instead of transferring them to BRM. DRE filed a lawsuit against BRM in the Circuit Court of Jackson County, Missouri, and that suit was removed to the federal court in Missouri based on diversity. BRM then brought this action in federal court in New York against All-Ways, later adding DRE as an additional defendant. All-Ways and DRE moved to dismiss the New York suit, and Judge Briccetti first held that the court had subject matter jurisdiction as the action by BRM against All-Ways arose out of the bill of lading, a maritime contract (there was also diversity). The defendants then argued that there was no personal jurisdiction over them, but Judge Briccetti disagreed. First, Judge Briccetti held that All-Ways consented to personal jurisdiction pursuant to the forum-selection clause in the bill of lading because BRM was claiming under the bill of lading and fell within the definition of “Merchant” as used in the bill of lading. As to DRE, the claims of BRM arose under the Purchase Agreement, which did not contain the New York forum-selection clause. However, Judge Briccetti held that the agreement to sell and ship millions of dollars of gloves to New York was sufficient for the court to exercise personal jurisdiction over DRE. All-Ways moved to compel arbitration in accordance with the New York arbitration clause in its bill of lading. Judge Briccetti considered the clause to be applicable for BRM’s claim against All-Ways as BRM was claiming under the bill of lading, but there was a potential conflict with the New York forum-selection clause. However, as the arbitration clause provided that all disputes would be settled by arbitration, and the forum-selection clause applied to suits, Judge Briccetti harmonized the provisions by holding that the parties agreed to arbitrate disputes and enforce/challenge arbitration in the federal court in New York. As the claims for breach of contract and for fraud were inextricably intertwined, Judge Briccetti stayed the suit to allow arbitration of all of BRM’s claims. With respect to BRM’s claims against DRE, the first-filed rule applied because DRE commenced the suit in Missouri before BRM brought the action in New York. BRM argued that the balance of convenience favored the later filed action in New York, but Judge Briccetti held that, in light of the forum-selection clause in the Purchase Agreement, the balance of convenience did not weigh in favor of New York.
Bowhead Operations entered into a contract with the United States Navy that required Bowhead to use Navy vessels to retrieve torpedoes used in training exercises, to transport munitions and personnel, and to support training activities at Joint Base Pearl Harbor-Hickam in Hawaii. During the performance of these services, Bowhead ran the Naval vessel Multipurpose Craft 4 onto a submerged reef for which Bowhead claimed it would incur repair costs in accordance with its contract with the Navy. Bowhead made a claim on a Comprehensive Marine Liability Policy issued by Endurance American Insurance and U.S. Specialty Insurance, and it brought this action against the insurers in state court in Washington when the insurers denied coverage. The insurers removed the case to federal court in Washington and the parties filed cross-motions for summary judgment. Judge Coughenour noted that, “perhaps surprisingly,” the marine policy contained a watercraft exclusion for property damage arising from the use of any watercraft owned, operated by, or rented or loaned to the assured. It also contained a contractual liability exclusion, but the exclusion was subject to an exception for liability under an incidental contract with a definition that Judge Coughenour considered would “paradoxically” broaden coverage so as to avoid the watercraft exclusion. The policy also contained a Charterer’s Legal Liability Endorsement covering the legal and contractual liability of the Assured as Charterer of the vessel insured under the policy. Judge Coughenour first addressed whether the insured had chartered the Navy vessel so as to be entitled to coverage under the Charterer’s Legal Liability Endorsement. Looking at dictionary definitions for charter (leasing or hiring a vessel) and the definition of hire (engaging services for wages or other payment; procuring use of property at a set price), Judge Coughenour held that a charter requires payment for the temporary use of a vessel. Bowhead argued that it did pay for the use of the vessel by agreeing to provide services in exchange for the charter. However, Judge Coughenour rejected that argument, reasoning that Bowhead did not promise to perform services for the Navy so it could operate its vessels. It was the Navy that paid Bowhead to operate the vessels (Bowhead “no more chartered the Craft from the Navy than a school bus driver ‘hires’ or ‘charters’ a bus from the school district’”). Consequently, Judge Coughenour held that the loss was not covered under the Charterer’s Legal Liability Endorsement. Nonetheless, Judge Coughenour held that the loss was covered under the exception to the contractual liability exclusion. The exception permitted coverage for liability assumed under an incidental contract, that included virtually any contract entered into in the course of the Assured’s business. Reviewing the provisions of the contract between the Navy and Bowhead, Judge Coughenour held that risk of loss for the Craft was allocated to Bowhead, and that assumption of liability was covered as an incidental contract. Thus, Judge Coughenour held that the loss was covered under the policy.
Harry Boldt embarked on a chartered fishing tour operated by Reel Recreation and led by Captain Brett Taylor. After Boldt boarded the boat, he signed a waiver (Assumption of Risk and Complete Release of Liability). During the expedition, Bolt was injured when the vessel was struck by a wave and he fell from his seat while the vessel was on the waters of Barnegat Bay. Bolt brought suit in state court in Ocean County, New Jersey against Captain Taylor and Reel Recreation, and the defendants removed the action to federal court in New Jersey based on the original admiralty jurisdiction of the federal court. The defendants moved for summary judgment, and Chief Judge Wolfson first addressed the applicable law. As she concluded that both maritime law and New Jersey law applied similar principles to the enforceability of waivers, Judge Wolfson cited both maritime and New Jersey cases in her analysis. Chief Judge Wolfson held that the language of the waiver was unambiguous and that the waiver sufficiently put Boldt on notice of its legal significance and effect (although Boldt did not remember the waiver or read it). Chief Judge Wolfson also held that the waiver was not inconsistent with public policy as Boldt only pleaded negligence, and maritime law upholds waivers for negligent conduct. Although Boldt did assert a claim for gross negligence in the separate limitation action, Chief Judge Wolfson held that there was no evidence in the record to suggest that the defendants acted with an extreme departure from the ordinary standard of care. Consequently, in the absence of any evidence of gross negligence, Chief Judge Wolfson held that the waiver did not violate public policy. Finally, as the expedition was a voluntary recreational activity in which Boldt freely chose to participate, Chief Judge Wolfson held that the waiver was not a contract of adhesion, and she dismissed the suit.
Raylin Boudreaux was injured when he fell from a crane’s personnel basket while employed by The Nacher Corp. as an X-Ray technician on an offshore utility vessel, the M/V PIPER, owned by ADS Marine and operated by Fleet Operators. Kilgore Marine Services acted as Fleet Operators’ agent to obtain charters or other work contracts for Fleet Operators’ vessels pursuant to a Brokerage Agreement. The PIPER was chartered to Fieldwood Energy through Kilgore with a Master Time Charter Agreement. Boudreaux settled with ADS Marine, Fleet Operators, Fieldwood, and crane operator Island Operating Co, and ADS Marine, Fleet Operators, and Zurich American Insurance (subrogee for Fleet) brought this suit in federal court in Texas seeking indemnity from Fieldwood and its insurer, Certain Underwriters at Lloyd’s. The vessel interests argued that they were owed defense and indemnity pursuant to the Master Time Charter between Fieldwood and Kilgore and the insurance policy issued to Fieldwood by the Lloyd’s Underwriters. Lloyd’s Underwriters recognized that they were obligated to defend Fieldwood and that the Master Time Charter obligated Fieldwood to name the Owner Group (including the vessel interests) as additional insureds. However, Fieldwood argued that the Brokerage Agreement between Fleet Operators and Kilgore obligated Fleet Operators to defend Fieldwood from any claims for personal injury that arose from the work performed under the Brokerage Agreement. Thus, Fieldwood argued that it was entitled to defense and indemnity from Fleet Operators (under the Brokerage Agreement) for the claims asserted by Fleet Operators, ADS Marine, and their insurer Zurich American Insurance that were made under the Master Time Charter Agreement. The vessel interests responded that the Brokerage Agreement addressed Fieldwood’s right to indemnity for personal injury claims and did not extend to the contractual liability claims presented by the vessel interests under the Master Time Charter Agreement (citing cases such as Corbitt v. Diamond M. Drilling that the contract must clearly express a right of indemnity for independent contractual liabilities). Applying maritime law, Judge Brown found that express undertaking in the Brokerage Agreement as the indemnity extended to claims brought by Fleet or any contractor, sub-contractor, invitee, vendor or client of Fleet, arising directly or indirectly out of, incident to, or connected with the work performed under the Brokerage Agreement. The question was then presented whether the Brokerage Agreement had to yield to the Master Time Charter Agreement. The vessel interests argued that because Fleet Operators and Fieldwood contracted through Kilgore Marine, the parties to the Brokerage Agreement (Fleet Operators and Kilgore Marine) anticipated the existence of a time charter and the terms of the time charter would control. This was set forth in the provision of the Brokerage Agreement that in procuring work for the vessel, a charterer may require a time charter party between the broker (Kilgore Marine) and the charterer (in this case Fieldwood) and that the charter would be controlled by that charter party. And the Master Time Charter Agreement contained a merger clause that it constituted the complete agreement of the parties. However, the merger clause did not provide that the Master Time Charter Agreement had priority over other agreements, such as the Brokerage Agreement, and Fleet Operators was not a party as defined in the Master Time Charter Agreement. Concluding that the Brokerage Agreement did not expressly yield priority to the Master Time Charter Agreement, Judge Brown held that, in accordance with the Brokerage Agreement, Fleet Operators agreed to defend and indemnify Fieldwood from the claims of Fleet Operators and ADS Marine, and he granted summary judgment to Fieldwood.
Boudreaux’s employer, Nacher, and its insurer, Nautilus, also moved for summary judgment on the claims of Fleet Operators, ADS Marine, and Zurich American Insurance. The vessel interests sought defense and indemnity as third-party beneficiaries of a master service contract between Nacher and Fieldwood (Nacher’s obligations extended to Fieldwood and Fleet Operators and ADS Marine). Judge Brown previously held that Louisiana law, not maritime law, applied to the master service contract between Nacher and Fieldwood. Nacher and Nautilus now argued that, under the Louisiana Oilfield Indemnity Act, the indemnity obligation of Nacher and Nautilus was void. Judge Brown first noted that the particular job that resulted in the injury is irrelevant in determining whether an agreement that pertains to a well (for the application of the LOIA). Instead, the application of the LOIA is considered in relation to the nature of the contract, and the majority of Nacher’s performance under the contract occurred on platforms on the seabed of Eugene Island, off the Louisiana coast that were engaged in production of oil and gas (the platforms contain a network of pipelines that are connected to wells so that oil and gas can be produced). Accordingly, Judge Brown granted summary judgment to Nacher and Nautilus that the indemnity claims were not valid under the LOIA.
New York resident Gary Beaumont contracted with Vanguard Logistics for the carriage of personal items (including a motorcycle and bicycle) from Australia to Ballstrom Spa, New York. Beaumont alleged that the goods were carried from Australia to Los Angeles and then transported by rail to Carteret, New Jersey, where they were damaged in Vanguard’s warehouse. Beaumont filed suit in state court in New Jersey for negligent bailment under state law and violation of the New Jersey Consumer Fraud Act. Vanguard Logistics removed the suit to federal court in New Jersey based on diversity and maritime jurisdiction, and moved to transfer the case to the federal court in New York based on the forum-selection clause in the bill of lading. Beaumont opposed the transfer on the grounds that admiralty jurisdiction did not exist over the claim for cargo damage on the land and the terms of the bill of lading were unenforceable and inapplicable. As the carriage was pursuant to a through bill of lading from Australia to New York, the case was like the Supreme Court’s Kirby decision, which held that the contract between the parties involving both ocean and rail carriage was a maritime contract and that maritime law applied to damage during the land portion of the carriage. Applying maritime law, Judge Martini held that the clause was prima facie valid, and Beaumont did not demonstrate sufficient cause to render the clause unenforceable. Although the bill of lading did not specifically identify the land route to the final destination, Judge Martini noted that the carriage had to include transport by land because Ballston Spa, New York is an inland point located about 30 miles north of Albany, New York. Consequently, although the damage occurred on land, the parties’ contracted forum was given controlling weight, and Judge Martini transferred the case to the Southern District of New York.
Michael Saunders was operating his sailboat on the Grand River at dusk, scouting for ducks for the upcoming hunting season. [The Grand River is the body of water that gave us the test for navigable waters in The Daniel Ball]. Saunders proceeded into the Lost Channel using a flashlight to look for dead tree stumps in the water, sailing with the mast up. Saunders had previously consulted NOAA charts, which reflected that powerlines crossed the Grand River with a clearance of 90 feet and that the power lines continued over the Lost Channel, showing a dashed line. The line was labeled “OVHD PWR CAB AUTH CL 90 FT” for the Grand River and “OVHD PWR CAB” for the Lost Channel. The clearance was 90 feet above the Grand River, but it was only 28.1 feet over the Lost Channel, and Saunders suffered severe burns when the vessel’s mast came in contact with the power line as it crossed the Lost Channel. Saunders brought this action in federal court in Michigan against Consumers Energy Co., which moved for summary judgment on the basis that it did not owe a duty to warn Saunders of the open and obvious power line. Before addressing the motion, Judge Maloney did hold that the opinions tendered by Consumers from Donald Reinke with the Regulatory Office of the Army Corps of Engineers would not be considered because he had not been designated as an expert witness. Applying maritime law in the consideration of the motion for summary judgment, Judge Maloney found no answer whether power lines over navigable waters are open and obvious hazards. He therefore consulted the Restatement (Second) of Torts, Section 343, applicable to the duty owed by a possessor of land to invitees, but he found no authority determining whether power lines that cross navigable waterways constitute “land” or whether Saunders should be considered to be an “invitee.” There were also questions whether the condition was obvious, whether harm was foreseeable, whether the NOAA charts adequately warned Saunders, whether fault of Saunders was an intervening and superseding cause, and whether Consumers Energy violated any statutes so as to be liable for negligence per se. The same issues applied to the motion for summary judgment filed by Saunders with respect to duty, breach, causation, negligence per se, and violation of The Pennsylvania Rule (whether a permit was required to construct the lines over the Lost Channel). Consequently, Judge Maloney denied the motions of both parties. See December 2021 Update.
Judge Maloney then held a bench trial and addressed Consumers Energy’s motion for judgment as a matter of law on its open and obvious defense. Neither party located an admiralty case holding that the open and obvious defense applied to power lines across waterways, but Michigan courts have recognized that there is no duty to warn of known overhead power lines. As Saunders did not know of the clearance height of the power line, however, Judge Maloney held that the power line was not an open and obvious danger, and Consumers Energy was not alleviated of its duty to warn. Saunders also moved for judgment as a matter of law, arguing that The Pennsylvania Rule applied because Consumers Energy violated the Rivers and Harbors Act by creating an obstruction over a navigable waterway of the United States without a permit. Judge Maloney agreed and held that Consumers Energy was guilty of negligence per se and that The Pennsylvania Rule applied to the negligence. Additionally, Judge Maloney found that the Lost Channel was suitable for sailing and that Consumers Energy violated the National Energy Safety Code standard for the vertical clearance of the power line. Judge Maloney found the violation was not dispositive of the issue of negligence under maritime law, but it was evidence of the failure to exercise due care and that the failure to comply with the standard was a violation of Consumer Energy’s duty of care (Judge Maloney also found that Consumers Energy was negligent for violating its own internal policies and for failing to warn). Consumers Energy argued that the maritime doctrines of intervening and superseding case prevented a finding of proximate cause for the negligence found by Judge Maloney, but the judge disagreed, reasoning that it was foreseeable that a sailboat with a mast taller than 28 feet would sail on the Lost Channel. And, Judge Maloney also found that Consumers had not met its heavy burden to rebut the presumption of causation under The Pennsylvania Rule (that its negligence could not have been a cause of the accident). Judge Maloney also found that Saunders was comparatively at fault (30%) for sailing on an unfamiliar portion of the Lost Channel at dusk and focusing on the conditions in the water and not above the boat when he knew that there was a power line over the channel. Turning to damages, Judge Maloney found that Saunders had not established either past or future lost wages, and he awarded $175,000 in past pain and suffering and $175,000 for future pain and suffering. Judge Maloney awarded Saunders the past medical expenses he had incurred and proved ($11,156.30), but Saunders’ counsel failed to move to admit all of the medical bills. Reasoning that it would be unfair to penalize Saunders for the error of his counsel, Judge Maloney held that the would award Saunders the amount of medical bills paid by his insurance company to the extent that the insurer asserted a lien against Saunders’ recovery (reduced by Saunders’ comparative fault). Judge Maloney believed that Saunders would need future medical treatment, including a surgical procedure, but Saunders did not provide evidence of the cost. Consequently, Judge Maloney awarded no future medical expenses. In summary, Judge Maloney awarded $252,809.41 (70% of $361,156.30) plus 70% of the medical liens plus prejudgment interest on past damages.
Charles McCoy alleged that he suffered two injuries during his service as a second cook for the E. STROUD. He claimed that he injured his back while moving boxes of food on December 28, 2018, and that he injured his leg, back, and foot when he stepped through a rusty grating on Alabama Shipyard’s dock in Mobile, Alabama, on January 10, 2019. McCoy brought suit in the district court of Calcasieu Parish, Louisiana, and his employer, the owner of the E. STROUD, filed this limitation action in federal court in the Western District of Louisiana. Citing McCoy’s failure to disclose a significant history of cervical spine issues on his employment application in 2016, Hooks filed a motion for summary judgment in the limitation action that McCoy was not entitled to recover maintenance and cure for his December 2018 accident based on the McCorpen willful concealment defense. Judge Cain concluded that Hooks had established that McCoy intentionally concealed or misrepresented his prior condition but his employer had not established the causal connection between the concealment and McCoy’s complaints from the December accident. Hooks relied on McCoy’s testimony that the December accident resulted in injuries to his neck and back, but there were no medical records establishing the specific region of the spine that was involved in the December accident. As the injury might have occurred in a separate region of the spine, Judge Cain found the evidence to be insufficient. Magistrate Judge Kay then addressed McCoy’s motion to bifurcate the limitation action, severing the issues of exoneration and limitation and allowing all non-limitation actions to be resolved in the state action. Magistrate Judge Kay noted that the court had “considerable discretion” on how to try the limitation and non-limitation issues. However, the primary reason for bifurcation was to minimize prejudice to McCoy’s rights to pursue his common-law remedies. In this case, McCoy had not offered any stipulations to lift the limitation stay, and claimant Alabama Shipyard indicated that it might not enter into a stipulation. Although Magistrate Judge Kay declared that she had discretion to bifurcate the case even in the absence of stipulations, she did not consider bifurcation was appropriate or necessary, finding no certainty that Hooks’ limitation rights would be protected if the matter were bifurcated. See September 2021 Update.
Hooks filed a second motion for partial summary judgment in the federal limitation action, arguing that it now met its burden on the remaining elements of the McCorpen willful concealment defense and that it was entitled to a judgment that it did not owe maintenance and cure to McCoy. As Judge Cain had previously held that the concealment element had been satisfied, he addressed the other two elements of the test. With respect to the materiality element of the test, McCoy cited evidence that he had passed his physical and the testimony from Hooks’ corporate representative that the company left decisions on medical fitness to its doctor and that disclosure of a history of neck or back pain would not necessarily have made McCoy ineligible for the job. However, the job duties included lifting heavy objects (including unloading groceries) and Judge Cain found the previous neck and back ailments were rationally related to these functions. The fact that McCoy would not necessarily have been ineligible for employment did not defeat materiality as the full disclosure would have prompted his employer to conduct further medical evaluation. The failure to disclose thus satisfied the materiality element. The third element required that Hooks show a causal connection between the previous injury/condition and the present injury. Hooks showed a well-documented record of injuries to the same regions of McCoy’s neck and back, and McCoy had no answer for this element except to request that Judge Cain defer the issue to the underlying state court litigation. As the McCorpen defense had twice been brought to the federal court and was fully briefed, Judge Cain proceeded to grant summary judgment that Hooks had no obligation to pay maintenance and cure, reasoning that deferring resolution to the state court would allow McCoy to continue to receive maintenance and cure after Hooks had proven that he was not entitled to it.
Lance Folse, an employee of DHD Services, was injured during salvage operations of the M/V CANDY STORE. The owner of the CANDY STORE filed a limitation action in the federal court for the Eastern District of Louisiana, and Folse brought this suit under the Jones Act and general maritime law against DHD Services and Diamond Services (owner of the crane barge used to lift the CANDY STORE) in federal court in the Western District of Louisiana. Folse settled with DHD and Diamond with reservations. He released Diamond from the medical benefits that DHD had paid, and he released Diamond of all claims for maintenance and cure. He reserved all claims not expressly released, including claims for general damages, past and future lost wages, lost fringe benefits and meals after October 15, 2020, and medical expenses that were not enumerated. Diamond filed a motion to enforce the settlement agreement, which presented the question whether the release of cure released future medical expenses. Folse argued that medical expenses and cure are conceptually different, and Magistrate Judge Whitehurst agreed. The duty to provide cure only extends to maximum cure and does not include expenses that are palliative and not curative. As the relationship between cure and tort damages is one of offset, not legal preclusion, she reasoned that it is better that the issue be answered after the award of medical expenses at trial, at which time a determination can be made whether the medical expenses are curative (offset as an element of cure) or palliative (recoverable as tort damages and not offset).
Doe and her cabinmate, who were passengers on the Carnival MIRACLE, were returning to their cabin after having a drink in the cabin of other passengers, James and John. James attempted to walk them back to their cabin, but Doe kept hiding from them. At some point Doe slipped and hit her head, and James gave up on escorting her back to her cabin. Doe ended up in a storage closet where she asserts she was sexually assaulted by a crew member. Doe does not recall going in or out of the closet, but she believed that the crewmember kept the door to the closet locked and would not let her leave. The cruise line asserted that Doe consented to the interaction and was free to leave the closet based on a report prepared by the FBI. Doe brought this suit against the cruise line, asserting a number of causes of action. The cruise line moved for summary judgment on the claim of false imprisonment, citing the FBI’s conclusion that Doe was free to leave the closet at any time (based on statements of the crewmember during the FBI investigation). Magistrate Judge Torres ruled that the statements of the crewmember were hearsay. As the crewmember was not available to corroborate his statements, there was no evidence to counter Doe’s allegation that she was locked in the closet, and Magistrate Judge Torres consequently granted summary judgment in favor of Doe on the false imprisonment claim. The cruise line moved for summary judgment on Doe’s claim for negligent infliction of emotional distress, and Magistrate Judge Torres agreed that the cause of action applies to mental or emotional harm that is not directly brought about by a physical injury but that manifests itself in physical symptoms. As Doe claimed emotional distress from a physical injury, Magistrate Judge Torres recommended that her claim for negligent infliction of emotional distress be dismissed. See July 2021 Update.
The case was tried to a jury before Judge Williams, and, on July 19, 2022, the jury returned a verdict that the passenger was falsely imprisoned by the cruise line’s crew member and that the crew member sexually assaulted the passenger. The jury declined to find that the crew member intentionally inflicted emotional distress on the passenger or that the cruise line was negligent. The jury awarded damages of $3,000 for medical and psychological treatment in the past, $240,000 for future medical and psychological expenses, $6,000,000 for pain, suffering, and anguish in the past, and $4,000,000 for future pain, suffering, and anguish (a total of $10,243,000).
Carlos Gonzales, a resident of Texas, was injured while working in Florida on a Weeks Marine vessel. He brought this suit against Weeks Marine in federal court in Louisiana seeking to recover under the Jones Act and general maritime law. Weeks Marine filed a motion to dismiss the suit for lack of personal jurisdiction, and Gonzales responded that his claims arose out of purposeful contacts of Weeks Marine with Louisiana, asserting that Weeks Marine’s dredging operation for the United States (including Florida) was run out of Weeks Marine’s office in Covington, Louisiana. Gonzales contended that the dredging operation in Florida was not properly staffed, the workers were not properly trained, and these asserted faults were the result of corporate level decisions made in Louisiana. Although Weeks Marine answered that the safety decisions for its dredging operations are made on site by the project manager, Judge Fallon found the issue to be disputed and denied the motion to dismiss for lack of personal jurisdiction.
From the state courts . . .
The ownership and registration of the yacht ACAR has been in dispute for six years. The yacht was owned by Delaware company Alize Yachting and was sold to Moiz Mose Saltiel and his company, MS Maritime, a Delaware company, by a bill of sale in 2016. MS Maritime registered the yacht with the Delaware Department of Natural Resources and Environmental Control under the name MELISSA, and also registered the yacht with Cesme Harbor in Turkey, where the yacht was located. There were disputes whether the paperwork was forged and whether payment was made, and the yacht was seized by a Turkish court. The Turkish court initially ruled in favor of Saltiel and MS Maritime, but after Delaware cancelled the registration and recorded the yacht as belonging to Alize, Alize seized the yacht in Turkey. While the Turkish actions were pending, Saltiel and MS Maritime filed this action to quiet title and reform the bill of sale in the Delaware chancery court. In entering a default after Alize’s Delaware counsel withdrew, the master ruled that the Delaware court had jurisdiction over the parties and had jurisdiction to provide in rem relief to quiet title to the vessel because, although it was not located in Delaware, it was registered in Delaware (not Turkey). However, noting that the jurisdiction in Delaware was not exclusive of Turkey where the yacht was seized, the Delaware master chose to forego the exercise of jurisdiction and stay the Delaware litigation for forum non conveniens. Thus, although the master held that the court had jurisdiction to enter an in rem judgment quieting title to the vessel, the master stayed litigation for resolution of the first-filed action in Turkey. See April 2022 Update.
Additional briefing reflected that Saltiel had paid in full for the vessel, that the Turkish criminal proceedings had concluded with no prosecution, that the civil case in Turkey had not proceeded, and that Saltiel continued to pay to insure and maintain the vessel without the privilege of using it. Concluding that the Turkish courts were incapable of providing the relief sought in this case (as Delaware has jurisdiction over the validity of the vessel‘s registration), Master in Chancery Molina ordered that the vessel should be registered in Delaware in the name of Saltiel’s company, MS Marine.
Randy Kelley was a passenger in a boat owned by his friend, Larry “Chip” Wheat on the Coosa River in Floyd County, Georgia (“the Coosa River flows east to west through Rome, Georgia before entering Alabama, where it eventually flows into the Gulf of Mexico, much like the Kuhbach flows into the Danube and on to the Black Sea”). As the boat rounded a bend in the river, a boat raveling in the opposite direction, navigated by Melvin Ellison, collided with Wheat’s boat, resulting in serious injuries to Kelley and more than $500,000 in medical expenses. Ellison had a watercraft policy with State Farm with a liability limit of $100,000, which was exhausted by payments of $90,000 to Kelley and $10,000 to Wheat. Kelley maintained an auto policy with Cincinnati Insurance with $500,000 in uninsured motorist coverage and a personal watercraft policy with Cincinnati Insurance with $500,000 in uninsured watercraft coverage. After State Farm exhausted its policy limit, Kelley made a claim under the two Cincinnati Insurance policies. Cincinnati Insurance denied the claims as the uninsured motorist coverage in the auto policy required a motor vehicle, and the policy definition of a motor vehicle excluded a watercraft, and as the uninsured watercraft coverage of the personal watercraft policy only applied when there was no bodily injury policy applicable to the accident. Kelley brought this suit in Georgia state court against Cincinnati Insurance, seeking to recover the policy limits for uninsured motorist coverage in the policies. He did not contest the insurer’s interpretation of the policy language, but he argued that the policies afforded coverage in accordance with a Georgia statute governing uninsured motor vehicles. The lower court held that the statute did not apply to personal watercraft, and the appellate court agreed. Writing for the court of appeals, Judge Hodges noted that the statute did not define an uninsured motor vehicle, so he looked to other sources for the definition as well as the context for the statutory provision. Considering the statute in context and giving the language its plain and ordinary meaning, Judge Hodges held that the meaning of uninsured motor vehicle in the statute was limited to land vehicles and did not include motorized watercraft. Consequently, the court of appeals affirmed the denial of benefits to Kelley under the auto policy.
Jay Lasky is a member of the Freedom Boat Club of Portsmouth, Rhode Island, which is owned by MSI Boat Club. Lasky and the Club were parties to a Membership Agreement that contained indemnity and waiver provisions in favor of the Club. Lasky, an experienced sailor, placed a reservation to use the sailboat WYLD THING for a day of solo sailing on Narraganset Bay. Before he left the dock, he knew that the some of the equipment on the vessel was not functioning, but when he was raising the mainsail, he noticed that the bottom sail slide (which attaches the mainsail to the mast) was missing and appeared to be broken off. Lasky decided it was safe to sail with the missing sail slide, but twenty minutes later the remaining sail slides began to break off, and Lasky claims that he injured his shoulder while attempting to pull down the mainsail. He ultimately underwent rotator cuff surgery and brought this suit against the Club in federal court in Rhode Island, asserting claims for negligence and res ipsa loquitur. The case was stayed for arbitration in accordance with the terms of the Membership Agreement, and the arbitrator denied recovery to Lasky, enforcing the waiver in the Membership Agreement as unambiguous and not in violation of public policy. Lasky moved to vacate the arbitration award on the ground that the arbitrator manifestly disregarded the law, but Judge Carnes disagreed. The arbitrator thoroughly analyzed the language of the waiver under admiralty law and Rhode Island law and held that the language unambiguously waived liability for the Club. Judge Carnes noted the different arguments and case law that were presented, and he held that the decision to apply admiralty cases that recognize exculpatory clauses did not satisfy the burden to demonstrate a willful misapplication of the law (ruling that the decision reflected an honest attempt to interpret the waiver in accordance with applicable law). Lasky also cited the violation of a Coast Guard regulation as a basis for arguing that public policy should prevent the enforcement of the exculpatory clause, but the arbitrator considered the argument and the response that the violation was not a proximate cause of the injury. As there was evidence to support a lack of causal connection to the violation, the arbitrator did not manifestly disregard the law.
Kenneth G. Engerrand
President, Brown Sims, P.C.
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Quote:
A Perfect Storm
The skies unrest when the government tests performance-based solicitations,
A wary dredger would fare far better if it worked with fewer hesitations,
Fighting the elements, with debris and sediments, onward the task did drag,
Before they knew it, the fish window, they blew it, so up they raised the white flag,
Motions were filed, allegations compiled, but material facts are disputed,
To trial we go so the parties may show if this perfect storm has concluded.
Judge Ryan T. Holte, Marine Industrial Construction, LLC v. United States, 158 Fed. Cl. 158, (Ct. Fed. Cl. 2022) (as a tribute to Judge Loren A. Smith and his maritime poem published in Neal & Co. v. United States).
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© Kenneth G. Engerrand, July 29, 2022; redistribution permitted with proper attribution.
