December 2021 Longshore/Maritime Update (No. 271)
Notes from your Updater:
On November 3, 2021, Judge Cannon held that the federal court in Florida lacked subject matter jurisdiction over a property dispute involving a cable under the submerged lands beneath the Intracoastal Waterway and remanded the case to Florida state court. See South Spanish Trail, LLC v. Globenet Cabos Submarinos America, Inc., Nos. 21-80728, 21-81208, 21-81207, 21-81206, 2021 U.S. Dist. LEXIS 212714 (S.D. Fla. Nov. 3, 2021).
On November 4, 2021, the California Court of Appeal, Second District, affirmed the decision of Superior Court Judge Chalfant, who declined to allow International Longshore and Warehouse Union Locals 13, 63, and 94 to intervene in the litigation from the “multipolar environmental dispute” involving the China Shipping Container Terminal in the Port of Los Angeles. South Coast Air Quality Management District v. City of Los Angeles, No. B310783, 2021 Cal. App. LEXIS 933 (Cal. App. 2d Dist. Nov. 4, 2021) (Wiley).
On November 15, 2021, Judge Hellerstein confirmed the arbitration award in favor of BP that rejected the interpretation of the owner of deepwater drilling rigs that were chartered to BP for use in the Gulf of Mexico, seeking reimbursement from BP for additional tax liabilities of more than $50 million per annum imposed under the Base Erosion Anti-Abuse Tax. See Aquadrill US Gulf LLC v. BP Exploration & Production, Inc., No. 1:21-cv-08156, 2021 U.S. Dist. LEXIS 219857 (S.D.N.Y. Nov. 15, 2021).
On November 18, 2021, Judge Scola confirmed the arbitration award that the contractor in a multi-billion contract for the design and construction of two new sets of locks (and related approach channels) in the Panama Canal must reimburse an agency of the Panamanian government approximately $238 million. See Grupo Unidos por el Canal, S.A. v. Autoridad del Canal de Panama, No. 1:20-cv-24867 (S.D. Fla. Nov. 18, 2021).
On November 22, 2021, the unanimous Supreme Court extended the equitable apportionment rule, developed to address disputes over interstate river basins, to interstate aquifers, rejecting the argument of the state of Mississippi that it has a sovereign ownership over all water beneath the surface of land in Mississippi. Mississippi v. Tennessee, No. 143, 2021 U.S. LEXIS 5870 (U.S. Nov. 22, 2021) (orig. proceeding) (Roberts).
On the LHWCA Front . . .
From the federal appellate courts:
Brizo, LLC, owner of a 164-foot yacht, contracted with Eastern Marine Services, a commercial diver company, to clean the hull of its yacht. Eastern sent an email to the crew of the yacht that the cleaning would occur around June 26, 2017, but no precise date or time was provided to the crew. On June 27, 2017, Eastern Marine sent Luis Gorgonio Ixba to clean the hull of the yacht. He was allowed entrance to the marina where the yacht was moored and entered the water without notifying anyone on the yacht of his presence. Ixba did not use a diver flag to mark his presence in the water. Shortly thereafter, a crew member of the yacht began the process of activating a thruster on the yacht. He looked into the water and saw no bubbles and then activated the thruster, killing Ixba. Ixba’s estate filed suit against the vessel owner in state court, and the owner filed this limitation action in federal court. Brizo then filed a third-party complaint in the limitation action against several defendants, including the marina owner/operator and marina’s owners’ association. The vessel owner, marina owner/operator, and marina’s owners’ association filed motions for summary judgment, and Judge Rosenberg began her analysis of the motions by determining whether Ixba was covered under the LHWCA–as it provides the exclusive remedy against the vessel in Section 905(b) for workers covered under the Act. Although Judge Rosenberg considered hull-scrubbing scuba divers to fall within the coverage of the Act, Ixba’s estate argued that there was an exemption in the Act for recreational vessels. However, that exemption only applies when the worker is covered by a state workers’ compensation statute. Brizo presented evidence that the Florida workers’ compensation act did not apply and it argued that the state statute provided that benefits are not payable for workers covered under the LHWCA. As the estate did not rebut the evidence or argument, Judge Rosenberg held that the state act was not applicable and that the LHWCA was applicable. Applying maritime law to the accident, Judge Rosenberg cited the Pennsylvania Rule (a party who violates a safety regulation has the burden of proving that his fault in violating the regulation could not have been a cause of the accident). As Ixba failed to comply with regulations requiring that a diver flag his location, Judge Rosenberg concluded that the vessel owner was entitled to summary judgment. Applying the Scindia duties, Judge Rosenberg held that the vessel owner owed Ixba no duty. The turnover duty and the duty to intervene are only triggered when the vessel has been turned over to the workers, but there was no turnover of the vessel in this case. Second, the premise of all of the Scindia duties is that the vessel crew is aware of the workers on the vessel, but Ixba was “invisible to the crew.” Judge Rosenberg concluded that the vessel owner owed no duty to an unannounced, invisible worker. Finally, the owner/operator of the marina and the marina’s owners’ association were granted summary judgment. Although Ixba was allowed access to the vessel, the marina owner/operator and marina’s owners’ association had no duty to protect him from the vessel merely for granting access. See March 2020 Update. The estate appealed the summary judgment granted to the vessel owner. Writing for the Eleventh Circuit, Judge Julie Carnes addressed whether the exception to the LHWCA (individuals employed to repair any recreational vessel) was applicable such that the Scindia duties would not apply. Brizo argued that the exclusion only applies when the worker is not subject to coverage under a state workers’ compensation act, and that the estate failed to demonstrate that the claim was covered under the Florida statute. Eastern had provided a sworn interrogatory response that Ixba was a truly self-employed independent contractor with no controlling employer, and the Eleventh Circuit agreed that, without contrary evidence, Ixba was not covered under the state act. Consequently, Ixba’s claim was not excluded from the LHWCA. Judge Carnes then addressed the Scindia duties owed to a worker covered under the LHWCA. The estate argued that Brizo violated the second Scindia duty—to exercise reasonable care to prevent injuries to workers in areas that are under the vessel owner’s active control; however, Judge Carnes held that the duty is applicable once the contractor’s operations have begun, and that requires that the vessel owner know that operations have begun. It was not sufficient that Brizo had been notified that the diver would arrive at some time in the next few days, otherwise Brizo would “be deemed to have been on perpetual constructive notice of the diver’s arrival.” She reasoned that the owner had a “rightful expectation” that “Ixba would not surreptitiously begin work and knowingly confront an unreasonably dangerous situation that could easily have been avoided.” Therefore, the Eleventh Circuit affirmed the summary judgment for Brizo. Finally, Judge Carnes held that even if the LHWCA did not apply and the general maritime law duty of reasonable care applied, the summary judgment was still appropriate as the owner lacked actual or constructive notice of the risk-creating condition and there was no notice that the diver was about to place himself in harm’s way under the hull of the ship.
Attorneys Jeffrey M. Winter and Kim L. Ellis sought attorney fees and costs after reaching a settlement of Tufa Iuvale’s LHWCA claim for $50,000. They sought $31,654.49 for work performed before the ALJ and OWCP that included a rate of $445 per hour for Mr. Winter. Administrative Law Judge Berlin reduced the hourly rate awarded to Winter to rates ranging from $373 in 2012 to $396 in 2016, reasoning: When evaluating market rates in other areas of legal practice, I take into account that legal representation under the Longshore Act does not require skills needed for jury trials; includes a number of legal presumptions that benefit claimants and ease the task of their attorneys; does not require mastery (or even familiarity) with formal rules of evidence; does not require claimants’ attorneys to manage relationships with large corporate clients; does not involve lengthy, complex litigation in which an attorney must manage over years a changing cadre of associate attorneys, paralegals, and other staff; and allows attorneys who make mistakes an almost unlimited entitlement to reconsideration.” The Benefits Review Board affirmed the reduced award and declined to adjust Winter’s rates to account for a delay in payment. The panel of the Ninth Circuit affirmed both the reduction in the requested amount and the decision not to adjust the rates for the delay in payment. The majority of the panel affirmed Judge Berlin’s consideration of “relevant differences in the litigation-related tasks at issue,” quoting that “it ‘is reasonable . . . to distinguish between complex and non-complex litigation’ and to take account of differences between other types of litigation and ‘LHWCA work.’” Judge Tashima dissented, asserting that hourly rates must be set by market conditions for similar services and that analysis should be based on “objective, market-based criteria” and not “solely on the ALJ’s own subjective assessment of the relative value of LHWCA work.”
From the federal district courts:
Michael Collins was an electrician at Bath Iron Works. He made a claim under the LHWCA that he sustained a work-related injury, and the adjuster made compensation and medical payments. The adjuster later became suspicious that Collins was working despite claiming that he was totally disabled. The adjuster hired a private investigator who conducted surveillance that revealed that Collins was working as a self-employed electrician. After observing Collins driving to several homes in a vehicle registered to him with a decal stating, “Bear Electric and Alarm Co.,” the investigator approached homeowners who confirmed that they had paid Collins for electrical work. The adjuster sent an LS-200 to Collins, and he checked the box “No” for Question 7, asking whether he had earnings from employment or self-employment during the period where he was performing the work for the homeowners. The United States Attorney filed this criminal complaint against Collins for Making a False Statement for Purpose of Obtaining Benefits under the Longshore & Harbor Workers Compensation Act, in violation of 33 U.S.C. Section 931(a)(1), and Collins agreed to plead guilty. He was sentenced to 3 years’ probation and ordered to pay restitution to Bath Iron Works of $12,682.74. Thanks to Eric Richardson, Senior Client Services Manager, Gallagher Bassett in San Diego, and Tom Langan, deservedly retired, for bringing this action to our attention.
Richard D. Gilstrap was injured while performing longshore work on the M/V FOUR EMERALD in the Port of Portland on January 27, 2018. Shortly before the running of the three-year statute of limitations for bringing a suit under Section 905(b) against the vessel interests, Gilstrap brought this suit on January 4, 2021, against Four Handy Ltd. and V-Ships. On January 8, 2021, Gilstrap’s counsel emailed counsel for the defendants, inquiring if the attorney was going to defend the vessel. When he received no response, Gilstrap’s counsel served the defendants through the vessel’s local agent on January 25, 2021. On February 11, 2021, after the running of the statute of limitations, the defense counsel responded that Gilstrap had named the wrong defendants and that Premuda S.p.A was the owner and operator of the FOUR EMERALD on the date of the injury. Gilstrap then filed an amended complaint on March 5, 2021, adding Premuda as a defendant and served the amended complaint on all of the defendants by serving the vessel’s local agent. Premuda asserted that the claim was time-barred as Premuda was named more than three years after Gilstrap’s injury, and Gilstrap responded that the amendment was timely as it related back to the date of the original filing. In order for the pleading to relate back, the party named in the amended complaint must have received notice of the action within the Rule 4(m) service period so that it would not be prejudiced in defending on the merits. Judge Simon reasoned that the letter sent by defense counsel on February 11, 2021, demonstrated that Premuda had actual knowledge that Gilstrap had named the wrong defendant within the 90-day service window of Rule 4(m). Therefore, the amendment related back and was timely. Premuda argued, however, that Gilstrap was negligent in not identifying the vessel’s owner within the three-year period to file suit. As Rule 15, governing amendments, does not provide that the party’s diligence is a factor to be considered in the relation-back analysis, Judge Simon rejected the argument and held that the suit against Premuda was timely.
Stanley Mosley was employed by Ceres Marine Terminals to assist with lashing and unlashing of containers on the M/V VIENNA EXPRESS, owned and operated by the defendants. When they began work on the evening of April 19, 2019, light from a nearby crane provided adequate illumination for the work area. Three hours later, a crew member approached Mosley and his lashing partner, Mark Norris, to advise of a potential issue with the container lashings on the top level of the lashing bridge adjacent to one of bays where Mosley and Norris had worked. The crew member escorted Mosley and Norris to the area with a flashlight that the workers asked him to bring. When they reached the third level, Mosley and Norris closed the manhole cover behind them, and the third level of the lashing bridge was “pitch black” as the lashing operation had moved and there were no crane lights to illuminate the area. Mosley decided that it was too late to get a flashlight and followed the crew member to the offshore side and confirmed that the lashings were proper on the offshore side. The crew member climbed down, leaving the manhole cover open while Mosley checked the inshore lashing. Norris saw the crew member descend through the manhole, but Mosley did not. When returning from the inshore side, Mosley fell through the open manhole and was injured. A Ceres Safety Alert advised employees to watch out for manhole openings and to never assume that others have closed the covers. Mosley brought this suit against the owner and operator of the VIENNA EXPRESS in state court of Chatham County, Georgia, and the defendants removed the case to federal court where they moved for summary judgment. Judge Moore addressed each of the Scindia duties pursuant to Section 905(b). Mosley asserted that darkness on the lashing bridge was a hazardous condition on the turnover of the vessel, and the defendants argued that it was Ceres’ responsibility to provide adequate lighting and that the lighting was an open and obvious condition. Judge Moore agreed that the duty to provide adequate lighting is imposed on the stevedore and that the defendants did not breach the turnover duty. Additionally, the failure to close the manhole cover was not a dangerous condition at the time of turnover so as to require warning or correction under the turnover duty. Consequently, Judge Moore did not have to decide if the condition was open and obvious. Judge Moore then addressed whether the defendants violated the active control duty based on the involvement of the crew member in the operation in which Mosely was injured. Judge Moore reasoned that the crew member’s involvement was limited to indicating the problem with the lashings, leading Mosley to the lashings, and being present when Mosely inspected the lashings. Judge Moore noted that the shipowner may have some participation in cargo operations without becoming actively involved under the Scindia duty, and the actions of the crew member were insufficient (the crew member did not instruct Mosley how to perform the work, and supervision of the work is not sufficient). For the Scindia duty to intervene, the defendants must have actual knowledge of the dangerous condition and that the stevedore, in the exercise of obviously improvident judgment, has failed to remedy it. Mosely argued that the defendants created the danger and were in a better position to remedy it, but that did not establish that the defendants had actual knowledge that the stevedore was exercising improvident judgment. Judge Moore concluded that the fact that Mosley continued to check the lashings without complaint precluded a finding that the lighting was so dangerous that the crew member knew the condition created an unreasonable risk of harm or that the stevedore was exercising obviously improvident judgment. Consequently, Judge Moore granted summary judgment to the defendants and dismissed the case.
Rodney White was employed by Engine Motor Inc. as a technician to assist in the installation and testing of the steering system of the M/V MILLVILLE, which was constructed by Fincantieri Bay Shipbuilding. White was injured during a hard-over maneuver for the sea trials of the vessel on Lake Michigan and brought suit against the shipyard (Fincantieri), the company that planned to operate the vessel (Keystone), Keystone’s parent (Chas. Kurz), and the company that contracted for the construction of the vessel (Wawa). Judge Griesbach found that White was not a seaman and dismissed his seaman’s claims. He also held that his claims for Wisconsin common-law negligence were barred by the exclusive remedy provision of the LHWCA. Keystone argued that all of White’s claims against Keystone (except the section 905(b) claim) should be dismissed, and Judge Griesbach agreed, noting that White could pursue claims for both compensatory and punitive damages against Keystone under section 905(b). As Chas. Kurz had no involvement in the case other than as owner of Keystone, Judge Griesbach dismissed the remaining claims against that entity. See October 2020 Update. Keystone, Wawa, and Fincantieri then moved for summary judgment on the section 905(b) claims against the defendants. White first argued that the Scindia duties are only applicable when the vessel is turned over to an expert stevedoring company, and there was no stevedore in this case. Citing the rejection of that argument by the Fifth Circuit, Judge Griesbach held that it was appropriate to apply the Scindia duties in this case. Judge Griesbach began by considering Keystone’s motion, in which Keystone argued that it was not within the class of entities that could be liable under section 905(b). Keystone was not the owner and did not contract for the construction of the vessel. White asserted that Keystone was the operator of the vessel because Wawa reached out to Keystone to provide a crew for the sea trials, and Keystone secured a crew headed by Captain Buddy Davis from Key Marine. Additionally, Keystone previously obtained summary judgment that it could not be liable as operator on the grounds alleged. Finally, White asserted that Keystone and Key Marine are a joint enterprise under Wisconsin law so that Keystone is liable for the negligence of Key Marine, employer of Captain Davis. Judge Griesbach rejected White’s arguments and held that the evidence did not establish a joint enterprise, that Keystone was not estopped to argue that it was not the operator, and that it was not negligent as its only representative on the vessel during the sea trials had nothing to do with the accident. White sought to hold Fincantieri liable under Scindia’s active control duty, claiming that the shipbuilder was responsible for conducting the sea trials and that the trials were conducted under its sole risk and expense. Citing the testimony of White’s expert, Captain Richard DiNapoli, that Fincantieri should have made announcements before each hard-over maneuver (and not just a single announcement before the maneuvers started), Judge Griesbach held there was a fact question whether Fincantieri breached the active control duty. Finally, concluding that Wawa was not the employer of Captain Davis and that Captain Davis was not a borrowed servant of Wawa, Judge Griesbach granted summary judgment to Wawa.
Ronald J. Barrosse claimed that he suffered from mesothelioma from exposure to asbestos while working as an electrician at Avondale’s shipyard on destroyer escorts for the Navy. He brought this action under Louisiana state law in the Civil District Court for the Parish of Orleans, Louisiana, against Avondale and several product suppliers, and Avondale removed the case to federal court under the Federal Officer Removal Statute. After Barrosse died, his surviving spouse and children maintained the action. Avondale moved for summary judgment on the basis that the exclusive-remedy provision of the LHWCA preempted the claims under state law. A pivotal issue was whether the pre- or post-1972 LHWCA applied, and Judge Vitter followed the decisions from other judges in the Eastern District of Louisiana, holding that the version in effect at the time of the manifestation, not exposure, governed (post-1972 Amendments). Consequently, Barrosse’s exposure on ships and adjoining areas was covered under the LHWCA (as it was expanded in 1972), and that coverage extended to exposure in his car and at home to dust on his clothes as it arose out of his employment. Judge Vitter then addressed whether the LHWCA was the exclusive remedy in light of the concurrent jurisdiction that is permitted between the LHWCA and state workers’ compensation statutes by the Supreme Court in the Sun Ship case for the twilight zone where both acts can apply. This case was not brought seeking state workers’ compensation benefits, however, and Judge Vitter held that the exclusive remedy provision in the LHWCA preempted the state negligence claims against Avondale. Finally, Judge Vitter rejected the plaintiffs’ argument that the application of the 1972 Amendments to exposure before 1972 was unconstitutional, holding that Congress’ action was not irrational or arbitrary. See October 2021 Update. Avondale then requested that Judge Vitter enter a final judgment pursuant to Rule 54(b) so that the issue of LHWCA preemption could be appealed. Avondale argued that the issue of LHWCA preemption has arisen in at least 16 other cases pending in federal courts in Louisiana and that it was likely that the issue will continue to arise. Therefore, Avondale sought to avoid repeatedly litigating the question in the district courts before the Fifth Circuit can address the issue. Concluding that delay in entry of a final judgment would prejudice Avondale, Judge Vitter entered a final judgment in favor of Avondale.
The plaintiffs in this case were contractor employees working alongside troops at the Army forward operating base in Al Asad, Iraq. Each of the plaintiffs signed an employment contract with Service Employees International, Inc., a subsidiary of KBR. The plaintiffs were injured in a ballistic missile attack on the base in retaliation for the Army’s killing of a senior Iranian general. The injured workers claimed that KBR was negligent for failing to evacuate them before the attack, and they sought damages under Texas law. Citing the provision in the employment agreement that the Defense Base Act provided the exclusive remedy for the workers against Service Employees International and its parent or affiliated companies arising out of the course of employment, KBR moved for summary judgment. In determining whether KBR was an employer and subject to the exclusive remedy provision in the Defense Base Act, Chief Judge Rosenthal cited the relative nature of the work test from the Fifth Circuit and held that the test was satisfied, noting that the employment agreement with SEII provided that the workers were employees of SEII and that their sole recourse for injury against SEII or any parent or affiliate was the DBA, that they received military base access cards from KBR “tied to their employment for KBR,” and that they agreed to the KBR Candidate Expectations of Conduct and signed the KBR Dispute Resolution Agreement and Nondisclosure Agreement with a KBR header. Thus, Chief Judge Rosenthal considered KBR to be responsible for setting the policies and rules that the plaintiffs were required to follow in performing their work, and she rejected the argument that the employment paperwork “has no bearing on reality.” KBR also asserted a Boyle defense-contractor defense based on the combatant activities exception to the Federal Tort Claims Act. The plaintiffs argued that the exception did not apply to government contractors except for the providing of a defective product, but Chief Judge Rosenthal followed the decisions of the Third, Fourth, and D.C. Circuits that have applied the exception outside of equipment procurement. As the military had exclusive control over decisions on security protocols, force protection mechanisms, and evacuations at the base, Chief Judge Rosenthal held that KBR could not be held liable for state-law claims arising out the plaintiffs’ work at the base.
And on the maritime front . . .
From the federal appellate courts:
Glen Clarence Thibodaux died of pancreatic cancer in 2012, and his widow, Angela Thibodaux, brought this suit alleging that his death was caused by exposure to toxic chemicals during his clean-up work in connection with the DEEPWATER HORIZON/Macondo blowout. Judge Barbier ordered that the parties sign up for a docket alert service, but Thibodaux’s counsel did not sign up for the service and did not receive Judge Barbier’s order that all plaintiffs file individual complaints or Judge Barbier’s order that this case was dismissed for failing to comply with the order on filing complaints. When Thibodaux’s counsel realized his mistake, he filed a Rule 60(b) motion for reconsideration, which was denied by Judge Barbier. Thibodaux’s counsel then made a second mistake by waiting over a year to file a second Rule 60(b) motion rather than immediately filing an appeal of the denial of the Rule 60(b) motion. When counsel did not hear anything from the court for six weeks, counsel filed a third Rule 60(b) motion. After the second and third motions were denied by Judge Barbier, Thibodaux finally appealed from the denial of those motions. Although Thibodaux argued that the denial of the first motion was erroneous, the Fifth Circuit held that the first denial was not the subject of the appeal. With respect to the second and third motions, the appellate court reasoned that Rule 60(b) cannot be used as an end run to appeal an order outside of the specified time limits (especially in a complex multi-district situation involving thousands of claims like the DEEPWATER HORIZON/Macondo litigation). Consequently, the Fifth Circuit affirmed Judge Barbier’s orders.
Terri Lewis Steven, Craig Rivera, and Jennifer Rivera live on adjoining properties on Dove Park Road in Covington, Louisiana. When the widening of Dove Park Road in 2015 required the culverting of roadside ditches, allegedly resulting in sanitary sewer overflows to their property from St. Tammany Parish’s drainage ditches and then into waters of the United States, the property owners brought a suit in Louisiana state court against that was eventually dismissed. The owners then brought this suit in federal court against the Parish with many of the same claims but with the addition of a citizens’ suit claim under the Clean Water Act. The non-CWA claims were dismissed by Judge Fallon on the ground that they were barred by res judicata, and Judge Fallon dismissed the claim under the CWA for failure to comply with the pre-suit requirements of the CWA and on the ground that the allegations were conclusory and failed to explicitly connect the actions of the Parish to pollution of the waters of the United States in violation of the CWA. On appeal, Judge Higginson, writing for the Fifth Circuit, affirmed the dismissal of the non-CWA claims on the ground of res judicata and then addressed the dismissal of the CWA claims. Judge Higginson did not have to address the argument that the owners failed to comply with the pre-suit notice requirements of the CWA and affirmed on the ground that the owners failed to establish that they sufficiently alleged a claim under the CWA. The owners cited the allegations in their third amended complaint, but Judge Fallon dismissed the case after the second amended complaint. Judge Higginson reasoned that the owners had consequently forfeited their argument based on the second amended complaint (or first amended or original complaints). As Judge Fallon was within his discretion to deny leave to file the third amended complaint, Judge Higginson affirmed the judgment.
Preble-Rish Haiti claimed that it was owed more than $27 million for fuel delivered to Haiti by vessel and consequential damages and 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 sought to invoke 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 Immunity 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 foreign 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 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.”
Donald Sarter drowned when the MONARK #2 capsized in Lake Superior. His employer/owner of the vessel brought this limitation action, and Sarter’s wife filed the only claim in the federal proceeding. Ms. Sarter filed stipulations with the district court in order to lift the stay, but she declined to stipulate that she would waive res judicata with respect to the liability of the employer/owner. The district court lifted the stay, and Judge Easterbrook of the Seventh Circuit took the opportunity to educate practitioners and judges about limitation procedure. In the first place, he advised that what practitioners “inaccurately” call stipulations are actually concessions. He then noted that concessions are not actually necessary as the protection comes from the Limitation Act and from judicial orders, stating, “When lifting or modifying an injunction to permit litigation in state court, a federal district judge should make any provisos that are essential to safeguard the federal right under § 30505(a). Judge Easterbrook summarized the principles with respect to state and federal litigation when there is a limitation action. If there is only one claimant or the total demanded by multiple claimants does not exceed the value set for limitation, “the court may permit the substantive claim or claims to proceed in state court under the Saving-to-Suitors Clause.” When multiple claims exceed the limitation value, “it is appropriate for the federal judge to retain all aspects of the litigation and decide whether the vessel’s owner is entitled to exoneration.” In all other cases, “it is enough for the federal court to set the maximum amount of recovery that a state court may allow.” Consequently, “there is not an independent right to exoneration, which is derivative from a potential need to control multiparty litigation that may threaten the cap set by the Limitation Act.” As this was a single claimant situation, Judge Easterbrook affirmed the lifting of the stay/injunction, advising district judges that they should “choose appropriate language that will obviate the sort of dispute the parties to this case have had about exactly what words a would-be state-court plaintiff must use in order to protect the vessel owner’s rights.”
After the NEDERLAND REEFER arrived in the Port of Wilmington, Delaware with a cargo of perishable fruit, the vessel’s departure clearance was withheld by the United States while it investigated a possible illegal discharge of bilge water in violation of the Act to Prevent Pollution from Ships. The vessel owner wanted to return the ship to sea as quickly as possible because of the perishable cargo and entered into an agreement with the United States to provide a bond as surety for potential fines (the agreement contained additional provisions, such as assuring that 13 crewmembers would remain in the country at the expense of the owner and providing replacement crewmembers). Despite the owner’s compliance with the agreement, the United States continued to detain the vessel for at least two additional weeks. The owner then brought this suit in federal court in Delaware based on admiralty jurisdiction for breach of a maritime contract and under the federal question jurisdiction for a cause of action under Section 1904(h) of the APPS, which provides that a ship that is unreasonably detained by the United States acting under the APPS is entitled to compensation for loss or damages suffered thereby. The United States moved to dismiss the suit for lack of subject matter jurisdiction, and Judge Andrews agreed and dismissed the case. The vessel owner appealed to the Third Circuit, and Judge Jordan, writing for the appellate court, reversed the decision of the district court. Although the United States argued that the purpose of the agreement was to allow criminal proceedings to continue to conclusion, including the payment of any criminal penalty, Judge Jordan characterized the agreement as setting the vessel free to pursue maritime commerce. As the agreement had “a genuinely salty flavor” (citing Kirby), Judge Jordan held that the district court had admiralty jurisdiction over the claim for breach of the agreement. The United States also objected that Section 1904(h) of the APPS did not explicitly waive the government’s sovereign immunity, so the case had to be brought in the Court of Federal Claims based on the waiver of sovereign immunity in the Tucker Act. That presented the question whether the APPS expressly waived sovereign immunity. Reasoning that there was no “plausible interpretation of the statute that would not authorize monetary damages” against the United States, Judge Jordan held that Section 1904(h) waived sovereign immunity and that the district court had federal question jurisdiction.
Lauren Barham and Matthew Urey were honeymooners on a cruise in New Zealand. They signed up for the shore excursion to White Island, an active volcano, but the volcano erupted when they were on the island, causing the passengers to suffer serious injuries. The passengers sued the excursion operators and cruise line in federal court in Miami, and the excursion operators moved to dismiss the action for lack of personal jurisdiction. Although the excursion operators were New Zealand entities, the passengers argued that the entities were subject to jurisdiction in Florida based on the contract between the excursion operators and the cruise line that contained a choice-of-law provision designating Florida law and selecting Florida as the place of exclusive jurisdiction. Agreeing with the other judges in the Southern District of Florida, Judge Moreno held that the passengers could not use the excursion operators’ consent-to-jurisdiction clause to support jurisdiction in personal injury cases arising during the foreign excursion. Turning to the claims asserted against the cruise line, Judge Moreno noted that the negligent misrepresentation claim was different than the standard case involving a general promise of safety followed by unlucky harm. In this case it was “empirically demonstrable that a volcanic eruption was more likely than usual, and some of the alleged misrepresentations were more specific than promises of safety. Consequently, Judge Moreno declined to dismiss that count. Judge Moreno dismissed the counts based on joint venture, third-party beneficiary, and breach of a non-delegable duty of safe passage, but he held that the allegations of negligent selection/retention, negligent failure to warn, and general negligence were sufficiently pleaded. See September 2021 Update. Barham and Urey appealed the dismissal of the excursion operators for lack of jurisdiction, and the Eleventh Circuit noted that it did not have appellate jurisdiction under Section 1291 as the dismissal order was not a final judgment for all claims. As Judge Moreno did not certify the order for immediate review under Rule 54(b), the only other basis for appeal was as an interlocutory admiralty action. The appellate court held that the dismissal for lack of personal jurisdiction did not fall within the limited class of interlocutory appeals authorized by Section 1292(a)(3) for the rights and liabilities of the parties in admiralty. Consequently, the court dismissed the appeal for lack of jurisdiction.
South Pacific Shipping Co., which operated a liner service to New York, entered into a five-year contract with Red Hook Container Terminal to provide stevedoring and marine terminal services. There was a falling out between the parties, and South Pacific opted not to renew the contract 90 days before the contract’s 5th year. The parties disputed whether a penalty was owed for the termination, and Red Hook seized South Pacific’s property pending payment of the disputed fees. The case was tried before Judge Nathan in the Southern District of New York, and she declined to award a penalty to Red Hook. The Second Circuit disagreed, holding that a fee for cancellation 90 days before the contract’s 5th year triggered a fee of $40,000, but not the 4th year’s fee of $80,000. Red Hook argued that it was entitled to hold South Pacific’s property until all outstanding fees were paid in accordance with the New York Terminal Conference Tariff. However, the Second Circuit agreed with Judge Nathan that the Tariff was not applicable as there was a contract between the parties. Thus, the appellate court affirmed the conclusion that Red Hook converted South Pacific’s property. And, to the extent the Tariff went into effect after the termination of the contract, Red Hook was still liable because it exceeded its authority under the Tariff by demanding fees to which it was not entitled. Finally, the Second Circuit disagreed with South Pacific’s argument that its recovery of the full value of the converted equipment was insufficient and that it should have been awarded the amount paid by South Pacific to lease the equipment during the conversion. The appellate court reasoned that the recovery for the lease payments would constitute a double recovery and that the value of the property was the “usual measure of damages for conversion.”
Shell Pipeline contracted with BP to complete an expansion project on Shell’s platform located on the outer Continental Shelf in the Gulf of Mexico off the Louisiana coast. BP engaged Grand Isle to manage the construction, and Grand Isle contracted with Brand Energy to build some scaffolding on the platform. Brand’s employee, Ledell Coleman waited for five days on an adjacent housing vessel before the winds died down enough that Brand decided that the scaffolding work could be undertaken. BP then transported Coleman to the platform, and Coleman was injured when a gust of wind “got up under” a scaffolding board he was carrying, causing an injury to his back. Coleman brought this suit in state court in Texas against BP and Grand Isle, and the defendants removed the case to federal court and moved for summary judgment. Judge Brown granted summary judgment to both BP and Grand Isle, and Coleman appealed. The first issue addressed by Judge Willett, writing for the Fifth Circuit, was the applicable law. As the accident occurred on a fixed platform on the outer Continental Shelf off the Louisiana coast, Judge Willett held that Louisiana law applied as surrogate federal law. Coleman argued that, under Louisiana law, BP and Grand Isle were vicariously liable for the negligence of Brand and that the defendants were also liable for their own negligence. In support of his argument that BP and Grand Isle were vicariously liable for the negligence of Brand, Coleman argued that (1) Brand was not an independent contractor of BP and Grand Isle; (2) the defendants exercised operational control over Brand; and (3) that the defendants authorized unsafe work practices. Judge Willett rejected each of the arguments. Weighing the five factors enunciated by the Louisiana Supreme Court to determine whether Brand qualified as an independent contractor, Judge Willett concluded that only one factor (Grand Isle owned the tools used by Brand to perform the work) weighed in favor of Coleman and that was insufficient to create a fact issue. Coleman next argued that the defendants exercised operational control over Brand because Brand did not have complete or absolute freedom to perform the work as it deemed fit. Judge Willett disagreed with that formulation and stated that operational control requires evidence of direct supervision by the principal “over the step-by-step process of accomplishing the work.” Actions of the defendants, such a requiring compliance with safety rules, setting work priorities, providing tools, and having on-site supervisors did not equate to giving step-by step instructions on how to build the scaffolding. For the third theory for vicarious liability, that the defendants authorized unsafe work practices, Judge Willett noted that the authorization must be for the particular manner which rendered the work unsafe. The parties disagreed about what the unsafe work practice was, with Coleman arguing that the practice was performing scaffolding work in inclement weather. Judge Willett, however, held that the proper articulation of the unsafe practice was carrying scaffolding boards on an offshore platform in gusting winds. As it was Brand’s decision to build the scaffolding in the high winds (even if the defendants influenced that decision and even if they stood by and did nothing to stop Brand), there was no liability for authorizing the unsafe work practice. Coleman’s final argument was that there is an exception to the general rule (that parties owe no duty to independent contractors) when the principal either assumes a duty or creates a workplace hazard. Judge Willett concluded that the defendants did not assume a duty by enforcing safety rules (there was no safety rule governing the carrying of scaffold boards in gusting winds), and the presence of safety supervisors with respect to equipment to be used did not extend to supervising all hazards on the platform. Judge Willett also disagreed that the defendants created the hazard as it was not the transporting of Coleman to the platform that created the hazardous condition but, instead, the decision of Brand to start the scaffolding work in high winds. Judge Willett noted that everyone on the platform had the authority to stop work if conditions were unsafe. Although Coleman testified that he feared for his job if he stopped work because of the high winds, there was no evidence that Brand believed that work could not be stopped. Concluding that Judge Brown “got it right,” the Fifth Circuit affirmed the summary judgment.
From the federal district courts:
Alaska Marine brought this suit in King County Superior Court in Washington alleging that Dunlap Towing Co. damaged Alaska Marine’s barge NANA PROVIDER by allowing the barge to run aground while being towed. Dunlap Towing removed the suit based on the federal court’s original admiralty jurisdiction, arguing that the 2011 amendments to the Removal Statute created federal court original jurisdiction over all admiralty claims whether at law or in admiralty, and the case was consequently removable. Magistrate Judge Peterson disagreed and recommended that the case be remanded to the state court.
Zettie Cox, administrator of the estate of Brandon Stegall, brought suit in the Court of Common Pleas for Erie County, Ohio, against the owner and operator of a boat from which Stegall fell and drowned. The defendants removed the case to the Northern District of Ohio based on the original admiralty jurisdiction of the court. Judge Knepp ordered the case remanded and then addressed the issue whether the removal was objectively unreasonable so that an award of attorney fees could be made to the plaintiff. The defendants cited to the law in other circuits that the removal issue was unsettled, but Judge Knepp held that the law in other circuits was “of limited relevance” as he considered the law in the Sixth Circuit to be “clearly contrary to Defendants’ position.” Consequently, Judge Knepp held that the plaintiff was entitled to attorney fees incurred as a result of the removal.
Billybey Marine, a pier operator, brought this action against Bouchard Transportation and its vessels, asserting that the defendants’ docking permits had expired and that the vessels had not vacated their berths. The parties entered into a settlement agreement that provided that the prevailing party in any legal action seeking to enforce the settlement agreement was entitled to recover its reasonable attorney fees. The case was dismissed, but Billybey later filed a motion to enforce the settlement, and the court issued an order directing the defendants to comply with the settlement agreement and awarding reasonable attorney fees. In this opinion, Chief Judge Swain awarded fees of $34,470, based on rates of $815 per hour and $630 per hour for attorneys in the bankruptcy, insolvency, and restructuring practice of the law firm representing the plaintiff and $265 per hour for a paralegal. Chief Judge Swain then rejected arguments addressed to the time entries, including that many entries were block billed, that bankruptcy expertise was not needed to enforce the settlement, that some of the work was clerical or administrative, and that time spent preparing the fee application was not compensable.
Richard Long brought suit against TowLine River Service for injuries he sustained as a seaman when he fell off the CORI WEILAND into the Ohio River. The parties remotely attended a mediation for 5 ½ hours, and the mediator reported that the case had settled. The defense attorney sent an email to Long’s attorney with a Settlement Term Sheet for the “settlement reached during our mediation today,” and requested that Long acknowledge acceptance and approval. Long’s attorney responded, “approve.” After Long’s attorney approved the draft of the release that was sent by the defense attorney, the release was sent to Long to sign. Long declined to sign it as he disputed reaching maximum medical cure and demanded that his employer continue to pay his medical bills until his doctor said that his shoulder was as good as it was going to be. TowLine filed a motion to enforce the oral settlement agreement allegedly reached at the mediation, but Judge Fischer declined to enforce it. First, she held that Local Rule 17.2 for the Western District of Pennsylvania requires that any settlement of a seaman’s claim be approved pursuant to a verified petition presented by the seaman’s attorney and release signed by the seaman with a hearing in open court attended by the seaman. Regardless of whether an oral settlement agreement was reached, the requirements for enforcement had not been satisfied. Additionally, Judge Fischer held that TowLine had failed to carry its burden to establish that an oral settlement agreement was reached during the mediation. Although the email/Term Sheet stated that an agreement had been reached, it provided that Long agreed to acknowledge acceptance of the Term Sheet, and Long stated that he did not agree to the settlement and was not informed of his rights as a seaman. Finally, the Term Sheet provided that TowLine would continue to pay maintenance and cure through the date of court approval of the settlement, but there was no date by which the settlement must occur, and there was disputed evidence over whether Long had reached maximum cure.
In contrast, Magistrate Judge Sullivan served as mediator of a dispute over services and storage provided by New England Boatworks for the vessel AURORA. The parties settled with a material term that the vessel would be removed from New England Boatworks’ facility by July 1, 2021, but no later than September 1, 2021 in the event of specified circumstances. When the vessel was not removed, New England Boatworks moved for enforcement of the settlement agreement and the defendant sought more time to remove the vessel. Magistrate Judge Sullivan agreed that the settlement was enforceable and ordered the removal of the vessel and payment of storage charges. She also ordered that if the vessel is not removed by December 5, 2021, and/or if the defendant does not pay the storage charges, the conduct would be considered contumacious and amount to vexatiousness and bad faith, and New England Boatworks could remove the vessel and the vessel could be arrested and sold.
Jessica Steele brought this Rule D action against Mark William Steel, Alyssa Tantallon, and the sailing vessel POLARIS “to sort out who holds title to the vessel” after the Steeles’ divorce. The vessel was arrested and then released after an emergency motion for release. The dispute then became over whether the defendants would accept the return of the vessel without an inspection, and Judge Hazel ordered the vessel be released “promptly” without an inspection. Eleven days later, the defendants filed a motion for civil contempt as the vessel had not been returned, and the plaintiff responded 14 days thereafter that the vessel had been returned, and she sought sanctions based on the defendants’ motion. Judge Hazel noted that the order did not specify a specific date for return of the vessel, and that 25 days “stretches” the court’s instruction “to its outer limit.” However, as there were no demonstrated damages from that stretch, as the vague language of the order was not clearly violated, and as the parties had been involved in settlement discussions after the court’s original release order, Judge Hazel declined to find civil contempt was appropriate. Judge Hazel also found that the defendants’ motion was not sanctionable as the vessel had not been returned when it was filed and there was a proper purpose for filing the motion.
Travelers insured the M/Y MY LADY, a 92-foot Hatteras yacht. The policy contained two express warranties, a captain warranty that required the owner to employ a full-time professional captain approved by Travelers and a crew warranty that required the owner to have one full-time or part-time professional crew member aboard the vessel. The owner of the vessel, Ocean Reef Charters, had neither a captain nor crew member when Hurricane Irma headed toward Florida in September 2017. The operator could not engage the former captain and did his best to secure the yacht. The extra mooring lines he added were ineffective when a dock piling to which the port bow line was attached gave way when Irma struck. The yacht was holed and sank. Travelers brought this suit seeking a declaratory judgment that the breaches of the captain and crew warranties voided coverage under the policy, and the owner responded by arguing that the breaches were unrelated to the loss and that the policy was not voided because of the application of the Florida anti-technical statute (providing that breaches of warranty do not void the policy unless they increased the hazard by any means within the control of the insured). The owner asserted that it was the unforeseeable failure of the dock piling that caused the loss. The arguments presented the question, under Wilburn Boat, whether there was an entrenched rule of admiralty that express warranties in marine insurance policies must be strictly construed in the absence of a limiting provision in the policy. The district court held that there was such an entrenched rule and ruled that there was no coverage. The Eleventh Circuit then re-examined Wilburn Boat, noting how it has sown confusion and troubled maritime lawyers for more than 60 years. This was, in part, because the analysis in Wilburn Boat “rests on a flawed premise” that there was no established maritime rule requiring strict fulfillment of warranties in marine insurance policies when the Supreme Court and all major admiralty appellate courts in the United States had long accepted the literal performance rule. This resulted in inconsistent decisions in the lower courts, and Travelers cited cases from the Eleventh Circuit that breaches of a navigation limit warranty and the seaworthiness warranty bar coverage even when the breach is unrelated to the loss. Judge Jordan did not consider those decisions to establish that strict compliance with all warranties in marine policies is required, as that would be contrary to Wilburn Boat. Reviewing the cases addressing the captain and crew warranties, Judge Jordan declined to find an entrenched maritime rule and remanded the case to the district court to apply Florida law. Judge Jordan concluded with this comment: “Maybe, just maybe, this case will prove tempting enough for the Supreme Court to wade in and let us know what it thinks of Wilburn Boat today.” See June 2021 Update. Travelers did not seek a writ of certiorari to find out what the Supreme Court thinks of Wilburn Boat today, and on remand, Judge Ruiz applied the rule from Florida law that the breach of warranty does not void the coverage unless it increased the hazard that the vessel would suffer the loss. Travelers cited the testimony of its expert, Captain Joseph Ahlstrom, to show that breaches of the captain and crew warranties caused or contributed to the loss of the vessel during Hurricane Irma. However, Captain Ahlstrom was designated as a rebuttal expert, and Judge Ruiz held that a party cannot rely on a rebuttal expert to avoid summary judgment. Rejecting evidence from witnesses who were not licensed captains (its underwriter, its adjuster, and the owner of the vessel), Judge Ruiz held that Travelers had failed to carry its burden to establish the defense, and the owner was entitled to summary judgment.
These opinions arise from a confrontation between passengers Yoriel Amparo, Tevin Burks, and Jasmine Fuentes and the crew of the GRAND CLASSICA. There were two different versions of what occurred, but the problems began at a restaurant on the ship after which the passengers were escorted to their room. The passengers claimed that they were confined, shackled, held without food or the ability to use a bathroom, that one was sexually assaulted, and that crewmembers took jewelry and cash from them. The crew asserted that the passengers threw water on and attempted to push a waitress; after the passengers were escorted to their room they smoked marijuana, disabled the smoke detector, and began playing loud music; and after the security team tried to calm the passengers and detain them the passengers attacked the security guards, resulting in the detention of the passengers. The passengers brought this suit in federal court in Florida in admiralty, with counts for sexual assault and battery, battery, false imprisonment, intentional infliction of emotional distress, negligence, and civil theft. The cruise line filed a motion for summary judgment on several of the counts, and, citing Florida law, Judge Ruiz held that the allegations were insufficient to satisfy the outrageousness standard (beyond all possible bounds of decency and regarded as atrocious and utterly intolerable in a civilized community). Judge Ruiz also granted summary judgment on the negligence claim as the passengers asserted claims of intentional torts for battery, civil theft, false imprisonment, sexual assault, and intentional infliction of emotional distress, and Florida law does not recognize a tort for negligent commission of an intentional tort. Although the passengers also asserted that the cruise line failed to warn the passengers of the risk of intentional torts being committed against them, the passengers did not allege notice to the cruise line of any acts similar to those asserted by the passengers. Judge Ruiz dismissed the civil theft claim for multiple reasons. First, there was no allegation with any specificity as to when or how the cruise line obtained their property or of the intent of the defendant to deprive the passengers of their property. Additionally, there was no evidence to support the claims for the stolen property or cash, as the passengers had no receipt, did not remember where the jewelry was purchased for $7,000, and there were documents to establish where the passengers obtained/withdrew the cash. Judge Ruiz declined, however, to dismiss the false imprisonment claim as there were disputed facts as to the circumstances surrounding the confinement and whether the confinement was reasonable and warranted.
The cruise line moved to strike the passengers’ request for punitive damages with respect to the counts for sexual assault and battery, battery, and false imprisonment, arguing that punitive damages are not available in passenger maritime claims. Judge Ruiz noted the differing decisions and adopted the reasoning of the courts that passengers may seek punitive damages upon a showing of the defendant’s intentional misconduct. As the remaining counts were based on intentional conduct, Judge Ruiz declined to strike the punitive damages claim for those counts.
The cruise line moved to dismiss the passenger’s demand for a jury, arguing that the passengers brought their suit under the court’s admiralty jurisdiction. The passengers argued that they had been wrongfully prohibited from asserting their rights under the Saving-to-Suitors Clause by the forum-selection clause in their tickets. Judge Ruiz disagreed as the clause only required that suit be brought in the Southern District of Florida. It did not prevent the passengers from invoking the court’s diversity jurisdiction under which they would be entitled to a jury trial. As the passengers voluntarily denominated their claims as admiralty claims, they were not entitled to a jury trial.
Danielle Varner was injured when she fell from a Yamaha WaveRunner personal watercraft on which she was riding on the Rappahannock River in Virginia. She brought this suit in federal court against Yamaha Motor Corp., manufacturer of the WaveRunner, with counts for maritime negligence and strict liability. Yamaha asserted that the court lacked admiralty jurisdiction (Virginia law does not provide a cause of action for strict liability). After stating that the river was a navigable water of the United States (a navigable waterway regularly used for commercial transportation), Judge Payne addressed Yamaha’s argument that the injury did not satisfy the elements of Executive Jet’s nexus test as defined in the Grubart case. With respect to whether the incident had a potentially disruptive impact on maritime commerce, Varner fell from the vessel near the bank of the river, not in the commercial lanes in the middle, and landed in the path of the powerful current of water created by the WaveRunner’s propulsion, resulting in serious internal injuries from the force of the water entering into her body. Yamaha argued that the incident did not disrupt commercial activity, but Judge Payne held that the general features of the incident did have the potential to disrupt commercial activity. On the issue whether there was a substantial relationship to traditional maritime activity, Yamaha characterized the event as “wave jumping or horsing around” and “three girls drinking, horsing around.” However, Judge Payne answered that the suit was not against the other girls on the WaveRunner. Instead, he characterized the case as “a passenger injury caused by a vessel’s propulsion system after the passenger fell from the vessel in navigable waters.” With that characterization, Judge Payne held that the event was related to traditional maritime activities. Accordingly, he held that the court had admiralty jurisdiction over the case.
Eric Ewing was sitting on the lower bed of his room on the CARNIVAL ECSTASY when the upper stowed bunk bed deployed, striking him on the top of the head. In the summary judgment motions and responses, Ewing asserted a claim of active negligence of the cruise line for failing to lock the bunk or to check that the bunk was locked prior to the passenger’s injury. He claimed that the cruise line was vicariously liable for that negligence and that it was not necessary that he prove that the cruise line was on notice of the dangerous condition. He also brought a claim of res ipsa loquitur. Based on the decision of the Eleventh Circuit in Everett v. Carnival Cruise Lines, Magistrate Judge Goodman held that there is no exception to the notice requirement for “a created-by-defendant or active-negligence-by-employee or vicarious-liability theory.” Thus, regardless of how Ewing pleaded his negligence case, he still had to establish actual or constructive notice of the condition by the cruise line. As the cruise line had a procedure to check bunk beds and make sure that the locking mechanism was activated, it was aware of the danger created by upper bunk beds. Combined with the fact that the ship’s carpenter had previously repaired the locks on two upper bunk beds, there was “adequate (although barely) evidence to withstand summary judgment” on the notice issue. Magistrate Judge Goodman did reject the claim of res ipsa loquitur as Ewing could not establish that the accident does not ordinarily occur in the absence of negligence (screws which loosen over time could have caused the bed to fall). See August 2020 Update. The case was tired to a jury before Magistrate Judge Goodman, and the jury returned a verdict on October 28, 2021, finding that the cruise line and cabin steward were not negligent. Magistrate Judge Goodman entered a final judgement on the verdict on November 19, 2021, and Ewing filed a motion for new trial.
Gabriel Lasala took several friends on his 29-foot boat into the Gulf of Mexico to go tuna fishing with Lasala operating the boat. During the trip the bilge light came on and Lasala noticed that the boat was taking on water. When the engines would not crank, it indicated that the batteries were low, and Lasala reconnected the batteries to allow him to crank the engines and charge the batteries. Lasala determined that the batteries were still going down because the bilge pump continued to remove water from the vessel, so Lasala abandoned the trip. He turned off the radar and used GPS to navigate. The vessel then struck a platform owned by Cantium, LLC, that Lasala contended was not properly lighted. Lasala filed this limitation action seeking to limit liability to $1300, and all of the passengers and Cantium filed claims in the limitation action. Cantium moved for summary judgment on the basis that Lasala was not able to limit his liability because Lasala was negligent in several respects and he necessarily had privity with those acts as he owned and piloted his own vessel. In response, Lasala argued that Cantium was solely at fault and he was consequently entitled to limit his liability. Judge Vitter reasoned that Lasala’s argument on the fault of Cantium missed the mark. What mattered for this limitation action is whether Lasala had privity or knowledge with the acts of negligence asserted against him and the unseaworthiness of the vessel. She stated that the only way that Lasala could be entitled to limitation was if Cantium’s negligence were the sole cause, and “there is no chance that the Court will not find Lasala at least some degree contributorily negligent.” She added that as the owner at the helm of his own pleasure craft, Lasala had privity or knowledge as a matter of law. Therefore, Lasala’s claims for exoneration and limitation of liability were dismissed with prejudice. After Cantium settled with the claimants, Lasala moved for summary judgment on the claims of Cantium for contribution and indemnity against Lasala. Cantium’s settlement with the Pressler plaintiffs (passengers) provided that the Presslers reserved all their rights against Lasala and his insurers. However, depending on the percentage of fault ultimately attributable to Cantium, Cantium’s insurers would be reimbursed some or all of its settlement from the Presslers’ recovery. Cantium argued that, as the amount of the settlement was dependent on the allocation of fault to Cantium and Lasala, the principle from AmClyde, barring contribution to a settling defendant, was not applicable. Judge Vitter first held that none of the situations where indemnity is authorized by the maritime law were applicable in this case. She then held that the buyback clause in the settlement agreement did not alter the rule from AmClyde as the settlement did not release all of the Presslers’ claims against Lasala. As the agreement did not allow Cantium to “essentially step into the shoes” of the Presslers to pursue their claims against Lasala for his proportionate share, there was no basis for Cantium’s claim, and Cantium’s claims for contribution and indemnity were dismissed. See July 2021 Update. Judge Vitter then held a bench trial and held that Lasala was at fault for leaving safe harbor after being made aware of mechanical issues with the vessel. Turning off the radar while increasing speed and navigating at night in open water with numerous platforms, not requesting lookout help from the passengers, choosing to continue to a distant harbor rather than returning to safety at a nearby island or harbor, and failing to see the platform or nav aid light. Judge Vitter found Cantium negligent for failing to have two nav aid lights on the platform as required by federal regulations. She apportioned the fault 85% to Lasala and 15% to Cantium. Before quantifying damages, Judge Vitter addressed the question whether to award the amount billed or the amount paid for medical expenses. Judge Vitter noted that the Fifth Circuit had held that the amount paid was the amount recoverable in cases involving maintenance and cure and the LHWCA. Although neither situation was involved in this vessel allision, Judge Vitter held that the claimants would be “made whole” with respect to past medical expenses by recovering the amount paid to the medical providers. Lasala sought $1.5 million in general damages, $220,000 in past medical bills ($30,528.51 was paid), future medical expenses of $50,000, past lost wages of $629,544, future lost wages of $4,329,531, and $1,200 per month for household services/chores. Judge Vitter awarded $750,000 in general damages, $30,528.51 in past medical expenses, and nothing for future medical expenses, wage loss, or household chores. Passenger Dale Presser sought $305,389.56 in medical expenses ($44,062.23 was paid), $1 million in general damages, $348,033 in past wage losses (plus $120,000 per year for a nurse practitioner to assist in his medical practice), plus future wage loss. Judge Vitter awarded $44,062.23 for the past medical expenses, $126,850 in past wage loss plus the cost of the nurse practitioner up to trial, $1 million in general damages, and no future wage loss. Judge Vitter awarded Presser’s son, who has recovered from his physical injuries, $50,000 in past pain and suffering, $10,000 in future pain and suffering, plus $4,525.25 in paid medical expenses. She awarded $18,282.63 for the damages established by Cantium. The amounts were divided in accordance with the 85%/15% allocation of fault.
Goodloe Marine engaged the services of Caillou Island Towing Co. to tow its dredge PERSEVERANCE and Idler Barge from Texas to Florida, but the dredge sank while in tow of the defendant’s tug, CHARLES J CENAC. Goodloe Marine then brought a six-count complaint against Caillou Island Towing (and others related to the tug), and the defendants moved to dismiss or to strike irrelevant allegations. The defendants objected to the phrase, maritime transportation services, in the negligence counts, arguing that transportation or affreightment is distinguishable from towing. While agreeing with that distinction, Judge Barber declined to dismiss or strike the portions of the negligence counts using the term, maritime transportation services, which was used in the parties’ contract, as it was clear that Goodloe Marine was suing for negligence in towing as opposed to transportation or affreightment. Although the complaint did not set forth the specific facts that constituted gross negligence, Judge Barber considered the allegation that the defendants were “so reckless or wanting in care as to constitute a conscious disregard or indifference to life, safety, or rights of persons and property exposed to such conduct” as sufficient to put the defendants on notice of the claim against them. Noting that the cause of action for damage to a tug is ex delicto and not ex contractu, the defendants objected to the count alleging breach of contract. Judge Barber noted that Goodloe had alleged negligence counts (ex delicto), but this count alleged damages not for damage to the tug but for the tow not being delivered to the contracted destination. Therefore, he considered the breach of contract count to be sufficient. Finally, the defendants objected to the count asserting a breach of the warranty of workmanlike service. Citing the divergent lines of cases whether the tower owes a warranty of workmanlike service or only a negligence duty, Judge Barber declined to dismiss the count and advised that the parties may revisit the issue through summary judgment after developing facts to determine whether the warranty may apply to the defendants’ conduct. See July 2020 Update. Caillou Island Towing then brought a third-party complaint against RJA, Ltd, which was hired by Goodloe to survey the tow and certify its fitness, seeking indemnity and contribution. RJA moved to dismiss Caillou Island Towing’s indemnity claims, and Judge Badalamenti began by agreeing that maritime service contractors, such as the surveyor, must perform their services in compliance with a warranty of workmanlike performance and that failure to do so is a breach of contract (citing Ryan Stevedoring). Judge Badalamenti added that privity of contract is not required for the warranty claim and that Caillou Island Towing, the entity that towed the dredge, was a foreseeable third party of RJA’s warranty. However, the mere existence of the warranty did not make RJA liable for indemnity. Caillou Island Towing also had to show that RJA had a duty to indemnify for liability arising out of the breach. Judge Badalamenti stated that the clear trend in maritime cases has been to reject all-or-nothing indemnity in favor of allocation based on comparative fault, and he found that indemnity was inappropriate in this case for two reasons. First, he held that, based on the “unique services” performed by surveyors and classification societies, courts have regularly held that these entities do not have a duty to indemnify owners and third parties for damages. In this case, RJA was hired to conduct a trip and tow survey and did not create any hazards or defects for which indemnity would be appropriate. Second, citing authority that the WWLP has been “virtually abandoned” for property damage cases, Judge Badalamenti declined to find indemnity was available and dismissed the indemnity claim. It was therefore unnecessary to determine whether the contract between RJA and Goodloe excluded indemnity. Finally, Judge Badalamenti held that Caillou Towing’s third-party complaint against RJA sought judgment against RJA and also in favor of Goodloe based on Rule 14(c). As such, he ordered RJA to answer the claims of Goodloe as well as the claims of Caillou Towing.
The SCANDIES ROSE iced up and sank in rough seas off the Alaska Peninsula, less than 3 miles from Sutwik Island, Alaska. The owner and operator of the vessel brought this limitation action, and the estates of the deceased seamen brought wrongful death and survival claims in the limitation action under the Jones Act and general maritime law. The parties reached a partial settlement by which the owner/operator interpleaded the balance of their insurance policy into the registry of the court. The estates then brought a cross-claim against survivor Dean Gribble, claiming that his recovery should be reduced by his comparative negligence, claiming that Gribble knowingly brought illegal marijuana on the vessel and consumed it immediately before and while he was operating the vessel. Judge Settle found no support for the proposition that one crewmember may assert a contributory negligence claim against a fellow crewmember under the Jones Act or general maritime law. Concluding that the comparative fault affirmative defense is available only to the employer, Judge Settle dismissed the cross-claim with prejudice. Judge Settle then addressed damages that were sought by the estates of the deceased seamen, and he held that the damages available did not include the cost of recovering bodies, loss of society, loss of future earnings, and loss of society. Gribble sought sanctions for the frivolous pleading on comparative negligence and damages, and the attorney for the estates argued that the law of damages in maritime cases is “still in its infancy.” Noting that the Jones Act is now 101 years old, Judge Settle held that the arguments were frivolous and issued a sanction of 50% of the fees incurred by Gribble’s counsel in bringing the motion to dismiss the claims.
Passenger Antionette Holley (Gauntlett) slipped and fell on a wet substance on the lido deck of the CARNIVAL LIBERTY when she walked off the carpeted flooring and onto the tile in Emile’s Restaurant. Holley testified that she did not observe the liquid substance prior to her fall, but her jumpsuit was wet after the fall and fifteen minutes before her fall she observed passengers exiting the pool and going into the restaurant area with wet bathing suits and dripping water. A security officer on the vessel testified that water being tracked into the restaurant was a problem of which he was aware and that it could result in a slip and fall. The cruise line moved for summary judgment in Holley’s suit, arguing that the passenger failed to establish that the liquid was present on the floor long enough to provide notice and allow for corrective action, but Judge Bloom held that a reasonable jury could conclude that a dangerous condition had been in existence for a sufficient amount of time to charge the cruise line with constructive notice.
The cruise line then sought to preclude Holley from introducing several categories of evidence at trial. In connection with the argument that Holley should not be able to testify about injuries, facts, or damages that go beyond what was furnished in discovery, Judge Bloom reasoned that motions in limine should be limited to specific pieces of evidence and that the request lacked specificity. With respect to the objection to testimony of treating physicians (who were not designated as retained experts) about causation of Holley’s damages and opinions that amount to expert testimony, Judge Bloom held that the doctors were permitted to discuss the treatment and care provided to the passenger as well as future medical intervention, “so long as they testify about their observations based on their personal knowledge and treatment.” The cruise line argued that Holley’s medical records were hearsay and unauthenticated, but Judge Bloom held that there was no basis to exclude the records that had been provided to the cruise line and that Holley could authenticate them. The cruise line also argued that Holley should not be allowed to introduce the full amount of her medical expenses billed, but Judge Bloom cited the principles enunciated by the Eleventh Circuit in Higgs v. Costa Crociere that both the amount billed by providers and the amount paid by insurers are admissible as relevant to determine the reasonable value of the services. However, Judge Bloom explained the relationship between the paid/billed issue and the collateral source rule by noting that the jury’s entitlement to consider evidence of write-offs in determining the reasonable value of medical damages does not impact a tortfeasor’s ability to reduce its liability by amounts paid from collateral sources. She stated: “In other words, because the amount billed does not create a debt in any meaningful sense, the write-off is not a reduction of debt in any meaningful sense[.]”
The cruise line presented a Daubert challenge to Holley’s liability expert, Frank A Fore, who was engaged to conduct an engineering analysis of the area and testify regarding alleged dangerous conditions, precautionary measures that the cruise line should have taken, and noncompliance with industry standards and internal policies. The cruise line objected that Fore is a land-based engineer and not a naval architect with expertise on uniquely maritime issues. However, Judge Bloom held that Fore was qualified from his expertise as a professional engineer and as a certified tribometrist (measuring friction on a surface), and she noted that he has analyzed many slip-and-fall injuries on cruise ships. Judge Bloom then addressed the reliability of Fore’s methodology and held that his opinions that the liquid was camouflaged due to darker colored tiles, that the area is high-traffic and subject to spills, and that a larger floor mat could have prevented the accident were based on sufficient methodology, but she excluded his testimony that a warning sign could have prevented the accident and that two-tone color walkway tiles made it more difficult for Holley to see any walkway contamination. The cruise line objected to Fore’s reliance on non-binding industry standards in reaching several of his conclusions, but Judge Bloom declined to strike those conclusions as Fore did not rely solely on those standards but also used the cruise line’s own published safety standards, internal policies, internal documents, and training videos. Finally, Judge Bloom discussed whether Fore’s opinions were helpful to the fact finder. Although he could testify about opinions he formed while relying on a training video, he would not be allowed to testify about what the video depicted, and he would not be allowed to testify with respect to legal conclusions, such as on constructive or actual notice or whether the cruise line violated the applicable standard of care.
Latoya Lewis, a passenger on the Carnival SENSATION, slipped and fell on the main marble walkway on Deck 9 after being directed around an area where the crew were mopping the deck. The area where Lewis fell was ten to twelve feet from where the crew members were mopping and where the wet floor signs were located. The area where she fell was not cordoned off. Lewis brought this action in federal court for the Southern District of Florida, and the cruise line moved for summary judgment on the grounds that the condition was open and obvious and that the cruise line had adequately warned of the condition of the wet deck. Whether the signs were close enough to the area where the passenger fell to warn Lewis and whether the condition of the deck in that area was open and obvious were issues that Judge Rosenberg considered to be within the province of the fact finder. However, Judge Rosenberg did grant summary judgment to the cruise line on the claim that the cruise line failed to have adequate nonslip flooring in an area where liquids are commonly on the floor (as there was no evidence that the cruise line created or approved of the design) and on the claim for negligent supervision and training (as Lewis did not present evidence to support the claim). See September 2021 Update. The cruise line moved to strike the opinions of Lewis’ liability expert, Andres Correa, with respect to the slip resistance of the flooring and the failure to maintain the area. First, the cruise line argued that Correa had no education, training or experience in areas involving maritime-related design and passenger safety, ship construction, human factors, naval architecture, and cruise ship maintenance. However, Judge Rosenberg held that Correa is a licensed professional civil engineer and building inspector, has consulted on building code compliance and walkway safety, has examined several maritime vessels in connection with this litigation, and has served as an expert in 10 to 15 maritime cases. That was sufficient to meet “the relatively low threshold for qualification.” The cruise line objected that Correa’s methodology was unreliable as he did not perform (and was not certified to perform) slip resistance testing, did not review the area’s specifications, and did not review any relevant testing. However, he did conduct a visual inspection of the walkway and reviewed federal and international regulations governing maritime vessels, and Judge Rosenberg did not consider friction testing to be required before the expert could opine about the cruise line’s choice of flooring and standards for maintenance. With respect to the cruise line’s argument that the standards relied upon by Correa were irrelevant and not binding, Judge Rosenberg cited Correa’s testimony that the standards “echo the binding standards” that were relied on by the cruise line’s expert and held that the cruise line could cross examine Correa about the relevance at trial and renew its challenge at that time.
David Rutledge was injured when he disembarked from the DMO READY, owned by Intracoastal Tug, and was injured when a portion of the dock collapsed at the Ascend Performance Materials facility in Alvin, Texas. Intracoastal Tug brought this limitation action in federal court in Houston, and Rutledge and Ascend Performance brought claims in the limitation action (alleging that the vessel had allided with and damaged the dock). Rutledge did not file stipulations or seek to lift the stay but moved to bifurcate the issues of negligence of the vessel and privity or knowledge of the vessel owner from the issues of damages or fault of the dock owner so that the latter issues could be resolved in Texas state court before a jury. Noting that Rutledge did not seek to have the state action and federal action proceed simultaneously, Magistrate Judge Stacy rejected Intracoastal’s arguments that bifurcation would be uneconomical. She reasoned that the initial non-jury trial on liability would expedite and economize the judicial process and preserve Rutledge’s right to a jury trial in state court. Thus, she held that trial would proceed on the negligence and privity of the vessel owner and, if limitation is denied, the injunction would be dissolved to permit the parties to proceed in state court.
Clifton Badeaux, captain of Eymard Towing’s M/V PEARL C. EYMARD, slipped and fell while stepping onto the vessel from an adjacent spar barge. The spar barge was owned and operated by ARTCO, a subsidiary of ADM. Eymard Towing had entered into a time charter with ADM to use the PEARL C. EYMARD to move barges in the vicinity of ADM’s export facility in Destrehan, Louisiana. Eymard Towing, the owner, was required to maintain P&I insurance on the vessel with the “as owner” clause deleted as to the charterer, ADM, and its affiliates and related companies and with contractual coverage for the obligation of Eymard Towing to ADM. The charter required that the charterer and its affiliated or related companies be named as additional insureds. Eymard Towing procured P&I coverage for the vessel with Stratford Insurance. The policy provided that Eymard Towing could name as additional insureds others for whom Eymard Towing was performing work and also where required by contract provided the loss occurred during and as a result of the actual performance of the work. The policy also provided that the “as owner” clause would not apply. Badeaux brought suit against Eymard Towing, ARTCO, and ADM, and ARTCO, and ADM brought a third-party action against Stratford seeking defense and indemnity. In addressing the parties’ cross-motions for summary judgment, Judge Vance first had to determine the applicable law. Stratford’s policy contained a New York choice-of-law clause, and Judge Vance held that state law was applicable under Wilburn Boat (finding no established maritime rule on additional insureds). However, there was not a single connection with New York, and Judge Vance declined to apply New York law, choosing to apply Louisiana law, noting that Eymard Towing is a Louisiana corporation, doing business exclusively in Louisiana, the accident was in Louisiana, and Badeaux is a Louisiana citizen. Judge Vance found that the policy unambiguously included both ADM and ARTCO as additional insureds—companies (and their affiliates and related companies) for whom Eymard Towing was working, directly or indirectly). Judge Vance then addressed whether the liability of ARTCO and ADM was covered under the vessel’s P&I policy, noting the deletion of the “as owner” language that has produced so many disputes under the Fifth Circuit’s Lanasse case. That presented the question whether the liabilities were sufficiently vessel related, as the losses covered under the policy must be “in respect of” the covered vessel. Badeaux was not aboard the vessel when he was injured, but he was in the process of stepping onto the vessel when he slipped and fell. Judge Vance considered the policy wording to be ambiguous, even after applying rules of construction, so she held that the ambiguity would be resolved against the insurer. Accordingly, she concluded that an injury during the boarding of the vessel was in respect of the vessel and was covered. See November 2021 Update. With trial pending, ARTCO and ADM moved to sever their cross-claims for breach of contract and for defense and indemnity against Eymard Towing. Although Badeaux and Eymard Towing did not oppose the motion, Judge Vance denied the request, stating: “Now, on the eve of trial, ADM and ARTCO seek to prolong this litigation and punt their years-old claim farther down the road. In the interest of avoiding a piecemeal trial that invites delay and further procrastination, the Court denies the request to sever this claim.” The case was tried to Judge Vance on November 8 and 9.
The plaintiffs brought this action in federal court in New York against the purported owners of the pleasure craft SCHAMONCHI, for failing to pay monies owed for dockage pursuant to a licensing agreement between the parties. The plaintiffs requested that the vessel be attached in accordance with Rule B, but the writ expired before it was served. The plaintiffs sought an extension to serve the writ, but Clean Blue Waters Project intervened and asserted that it was the owner of the vessel. As Clean Blue was present in the district and was the owner, it argued that a Rule B attachment was not available. The plaintiffs then sought to amend their complaint and to arrest the vessel under Rule C to enforce a maritime lien for necessaries (dockage). Clean Blue moved to dismiss the amended complaint on the grounds of Colorado River abstention as that there was a parallel state court case. However, after the motion to dismiss, the plaintiffs dismissed that case, and Magistrate Judge Levy recommended that the motion to dismiss based on abstention be denied. Magistrate Judge Levy then addressed the amended complaint that pleaded a quasi-in-rem claim pursuant to Rule C (which governs in rem claims). The amended complaint, captioned as “Amended Verified Complaint for Maritime Attachment” did not allege the existence of a maritime lien and did not allege that necessaries were provided on the order of the owner (the complaint also sought recovery of amounts that are not necessaries). Accordingly, Magistrate Judge Levy recommended that the plaintiffs be given leave to amend the complaint to properly assert an in rem claim.
Jackie L. Sullivan, widow of John L. Sullivan, brought this suit against suppliers of asbestos products, asserting that her husband died from exposure to asbestos while serving as a sailor on the USS CHARLES F. ADAMS, the USS SARATOGA, and the USS LEXINGTON. Viad Corp., alleged successor to Griscom Russell Co., moved for summary judgment on two grounds, that Sullivan failed to establish that an asbestos-containing product for which Viad is responsible was the cause of Sullivan’s death and that Viad was not liable as a successor to Griscom Russell. Applying maritime law, Judge Robreno rejected Sullivan’s arguments that the vessels on which the decedent served had Griscom Russell products containing asbestos. Judge Robreno rejected evidence that other vessels of a different class had distillers that contained asbestos as it was not relevant to the distillers on the vessels on which Sullivan served. Evidence that high temperature uses require asbestos, that the distiller on the CHARLES F. ADAMS was insulated, and that asbestos was present on Navy ships of that era was even more remote. Moreover, the evidence was insufficient to establish that Sullivan performed substantial work on the Griscom Russell distillers, even if there were evidence that they contained asbestos. Finally, noting that the plaintiff has the burden of establishing successor liability, Judge Robreno held that Sullivan had failed to offer sufficient facts to support a finding of successor liability of Viad. Consequently, he granted the motion for summary judgment and dismissed Viad from the suit.
Nathan Durbin was employed as a senior deckhand on the tug M/V SHOW ME STATE. He was injured when he stepped from the deck of the tug to the deck of a barge that was in tow of the tug. He brought this suit against his employer, the owner of the tug, for negligence under the Jones Act, maintenance and cure, and unseaworthiness of the tug, and the defendant moved for summary judgment on the general maritime claims. Durbin filed a counter-motion for summary judgment for reinstatement of his maintenance and cure. The defendant first argued that it was not liable for unseaworthiness of the barge. When Durbin pointed out that he was suing for unseaworthiness of the tug and not the barge, the defendant responded that the court should still grant summary judgment. Judge Russell denied the motion, stating that it was “nonsensical” to grant summary judgment on a claim that the plaintiff had not alleged. The defendant argued that Durbin’s doctor declared that he reached maximum medical cure after the accident and he went back to work. He reinjured his back and was again declared to have reached maximum cure. After his employment was terminated, the defendant heard nothing from Durbin until it learned from discovery that he was receiving treatment for back pain. The defendant argued that its maintenance and cure obligation had ceased after the declarations of maximum cure, but Judge Russell found fact questions whether additional treatment was curative or palliative and denied the defendant’s motion to dismiss the maintenance and cure claim (his order did not mention the seaman’s counter-motion), although he did dismiss the claim of willful failure to pay maintenance and cure. See April 2021 Update. The seaman moved for reconsideration, arguing that the judge had inadvertently failed to consider the seaman’s motion and only ruled on the defendant’s motion in connection with the maintenance and cure claim. Durbin argued that Judge Russell had improperly used a summary judgment standard and should have required the defendant to produce “unequivocal evidence” that the seaman was not entitled to maintenance and cure. Asserting that evidence of a fact question is not the same as unequivocal evidence, Durbin argued that his maintenance and cure should be reinstated. Judge Russell first held that it was irrelevant whether the seaman’s motion was not addressed as the standard was the same for both motions. Second, Judge Russell held that the courts in the Sixth Circuit have repeatedly used a summary judgment standard for maintenance and cure cases. Consequently, he was not persuaded by the caselaw cited by the seaman from different circuits in support of an unequivocal evidence standard for maintenance and cure claims and denied the motion for reconsideration.
After Chase Malone brought a suit against the owner of the sailing vessel ISLAND CHASER for a spinal fracture he suffered because the vessel was allegedly operating at an unsafe speed for the water conditions, the owner filed this limitation action in federal court in the Virgin Islands, attaching an ad interim stipulation and requesting issuance of a monition and injunction. Chief Judge Molloy noted that the ad interim stipulation was inadequate, however, as it was not supported by a bond or letter of undertaking and as there was no support for the purported valuation of the vessel other than the unsworn statement of the owner’s attorney. As the ad interim stipulation was not “approved security,” Chief Judge Molloy declined to enter the ad interim stipulation and issue the monition and stay/injunction.
Eduino Costa was injured on the F/V GEORGES BANKS, and the vessel’s owner filed a limitation action in federal court in Massachusetts. The court ordered that all claims be filed by November 18, 2020, and Costa filed an answer on November 17, 2020 but did not file a claim. More than 7 months later, the owner filed a motion for entry of default as to all persons who failed to file claims, and Costa opposed the motion, arguing that his claim was preserved in the answer. Judge Gorton disagreed, stating that the assertion that Costa’s rights were protected by the answer was impossible to reconcile with the plain language of Rule F and the “clear precedent” that claimants must file claims. Alternatively, Costa sought permission to file a late claim, and Judge Gorton noted that the courts freely grant permission to file late claims upon a sufficient showing of reasons therefore. However, Judge Gorton did not find the assertions of Costa’s counsel, in contravention of Rule F and clear caselaw, to present a convincing excuse, stating that “the failure of his counsel to admit to this oversight in either his initial filing or his sur-reply undermines his good faith.” Consequently, Judge Gorton did not permit the filing of the late claim and entered the default.
Richard Welter owns and operates several water sports vessels and entities in Key West, Florida. Prior to insuring his boats and companies with Great Lakes Insurance, he insured them with Navigators. Welter decided to change his insurance program and engaged a broker, which represented that the parasail operations conducted by Welter had been “incident free” for more than eight years (although Navigators’ loss runs reflected 12 claims and expenditures of $597,243, and there were at least nine other incidents not reported in the loss runs). Great Lakes issued policies covering Welter’s companies and parasailing vessels, and claims were made for Debra Manderson, who injured her foot while boarding the PARASAIL V, beneficiaries of Nicholas Hayward and Azalea Silva, who died from injuries sustained when the line tying them to the PARASAIL V snapped and they fell into the water, and Sarah and Ryan Arroyo, who witnessed the accident involving Hayward and Silva while on the PARASAIL V. Great Lakes brought declaratory judgment actions against the Welter insureds in the Southern District of Florida that were consolidated and then filed a motion for summary judgment arguing that the policies were void based on uberrimae fidei or that no coverage was afforded based on exclusions and warranties in the policies. The insureds argued that the Eleventh Circuit has not extended the uberrimae fidei doctrine to the protection and indemnity context, but Judge Dimitrouleas held that application of the doctrine was appropriate in this case. And, even if it did not apply by operation of the general maritime law, the policies contained a similar warranty. However, Judge Dimitrouleas held that the conflicting expert testimony presented in the case raised a fact question whether the omitted information was material to the decision to underwrite the risk. The insureds sought coverage under policies issued for the PARTY CAT and the PARASAIL V with respect to the Hayward/Silva death claims. The PARTY CAT transported Hayward and Silva to the PARASAIL V, but Hayward and Silva were tethered to the PARASAIL V when the line snapped. Reviewing the allegations in the underlying complaint in the Hayward/Silva claim, Judge Dimitrouleas found no allegation that negligence in the ownership or operation of the PARTY CAT contributed to the accident. Consequently, Great Lakes had no obligation under the policy insuring the PARTY CAT. The policy covering the PARASAIL V contained a navigational warranty that the vessel would not navigate in excess of one mile offshore. Citing the rule from the Eleventh Circuit that maritime law requires strict or absolute enforcement of express navigational warranties, Judge Dimitrouleas held that the policy was void because the accident occurred more than a mile from shore. The insureds argued that a quote for the policy contained a 10-mile warranty and that warranty was repeated in subsequent quotes during the negotiation for the policy. However, the binder and final policy contained the one-mile warranty, and both were presented to the broker prior to the incident. Citing the rule that estoppel cannot create coverage where none exists, Judge Dimitrouleas held that there was no coverage for the Hayward/Silva claim under the policy covering the PARASAIL V (for the same reason there was no coverage for the claim of the Arroyos based on witnessing the accident involving Hayward/Silva). For the Manderson claim, the policy covering the PARASAIL V contained a warranty that participants and passengers would sign a Release form before boarding the vessel. As Manderson did not sign a release before boarding the PARASAIL V, Judge Dimitrouleas held that coverage was voided for the Manderson claim.
Michael Data served in the Navy on the USS NEWPORT NEWS. During a portion of that time he claimed that he was exposed to asbestos dust and fibers while serving as a fireman in the engine room of the vessel. He also asserted that he was exposed to asbestos while working thereafter in land-based employment. Data died from mesothelioma, and his widow brought this action against suppliers of products that allegedly contained asbestos. Several of the defendants filed motions for summary judgment, and both the plaintiff and defendant argued that state law provided the causation standard for the product liability claims. Chief Magistrate Judge Eddy disagreed and considered the test for admiralty jurisdiction. Data’s exposure on the NEWPORT NEWS while on navigable waters and in dry dock satisfied the locality test, and his exposure to asbestos while performing maintenance on equipment integral to the functioning of the vessel had a potentially disruptive impact on maritime commerce and a substantial relationship to traditional maritime activity. Consequently, Chief Magistrate Judge Eddy applied the substantial factor test under the general maritime law to Data’s exposure on the vessel. For Air & Liquid, which supplied Buffalo pumps with gaskets and packing material that allegedly contained asbestos, Chief Magistrate Judge Eddy found sufficient evidence that Data was substantially exposed to pumps that contained asbestos and that the bare-metal defense was not applicable in light of instruction manuals and testimony that Buffalo required the use of asbestos in the pumps. Therefore, she denied the Air & Liquid motion. She also denied the motions of the Dana Companies (concluding that Data was substantially exposed to asbestos in Victor-brand sheet gasket material from the Dana Companies), General Electric (concluding that Data was substantially exposed to asbestos in GE control panels and generators), and FMC Corp. (concluding that Data was substantially exposed to Northern-brand pumps that contained asbestos gaskets and packing). Although Chief Magistrate Judge Eddy found asbestos-containing products from defendants Atwood & Morrill and Alfa Laval were aboard the NEWPORT NEWS, she considered the evidence of Data’s exposure to the products to be too speculative and granted Atwood and Morrill’s and Alfa Laval’s motions.
Travis Perry insured his vessel, the ISLA & GRAYSON, with Hanover Insurance, including losses from fire. The policy contained a provision that any suit seeking to recover under the policy had to be brought within twelve months of the loss unless the laws of the state within which the policy is issued forbid such a limitation period. Perry borrowed the money to buy the vessel from Bar Harbor Bank, which had a mortgage on the vessel and which was named as a loss payee under the policy. The vessel was damaged by fire on August 22, 2019, and was declared a total loss. Hanover Insurance concluded that Perry caused the fire to collect on the policy and denied the claim. Perry then brought a suit against Hanover Insurance on August 19, 2020, which is still pending, and Bar Harbor Bank brought this suit against Hanover Insurance on July 19, 2021. Hanover Insurance moved to dismiss the suit as untimely under the terms of the policy as the suit was brought 23 months after the fire. Bar Harbor Bank cited the provision of the Maine Insurance Code that provides a two-year period to file suit for standard fire insurance policies issued in the state of Maine. Judge Walker concluded that the cited section of the Maine Insurance Code was not applicable because the policy was not a standard fire insurance policy but that another section of the Code, applicable to combination policies that insure against fire and other perils, was applicable to wet marine insurance contracts. Interpreting the Maine Insurance Code as requiring the same two-year limitation period for combination policies, Judge Walker held that the Bank’s suit was timely and denied the motion to dismiss.
Klearwall has imported glass windows and doors for its facility in Connecticut from Munster Joiner in Cork, Ireland, since 2011 without a problem until a shipment in 2017. Munster packed a cargo of glass windows and doors into containers and shipped them to the Port of Cork where the sealed containers were loaded onto a Maersk vessel that carried them to Rotterdam, where they were discharged and loaded onto a Maersk vessel for transport to Newark. The contents were not inspected at Cork, Rotterdam, or Newark. The containers were discharged in Newark and were trucked to Connecticut. When the containers were opened in Connecticut, extensive damage to the windows and doors was discovered. The boxes were crushed, the straps were ripped, and the sides and roof of the containers were pushed out. Klearwall’s insurer brought this subrogation action against Maersk, and Judge Castel held a bench trial. He noted that issuance of a clean bill of lading creates a presumption of delivery in good condition, but that presumption does not apply in the case of sealed containers. Additionally, there was no evidence of damage at the time of discharge from the ship in Newark. Klearwall’s surveyor, Nicholas Bruno with National Cargo Bureau, opined that the containers endured extreme movements and forces during transport and that the supporting and bracing structures, securing, and lashing failed to provide adequate protection. Although the insurer argued that the damage was necessarily caused by inclement weather on the high seas, there was no evidence of the weather conditions during the voyage. Consequently, Judge Castel held that the insurer did not make out a prima facie case against Maersk. Although Bruno was not offered as an expert, Judge Castel did consider his observations about the securing as persuasive evidence that Munster did not adequately pack and secure the cargo in the containers and concluded that Maersk had established that the cargo was damaged because of the excepted cause of insufficient packaging. Accordingly, Judge Castel entered judgment in favor of Maersk.
Jeremy Eades, an employee of Performance Contractors in Louisiana, had been living with a co-employee of the company in Louisiana for about three years when a group of employees decided to go on a fishing trip. Eades was injured in an explosion and fire on the fishing boat in Louisiana territorial waters, but after his injury he returned to Arkansas where he lived with his mother and was treated for his injuries until he died. Suits were filed in the Eastern District of Louisiana against the designer/manufacturer of the vessel by or behalf of the guests who were injured or killed in the explosion, and the suits were transferred to the Western District of Louisiana. The suit by Eades included a survival claim and a wrongful death claim on behalf of his parents and children. The defendant moved to dismiss the claims of Eades’ parents on the ground that Louisiana law applies and does not afford a remedy to parents when the decedent is survived by his children. The parties agreed that when the decedent is not a seaman, longshore worker, or person engaged in a maritime trade, state remedies are applicable for the death. The question presented was whether Louisiana law applied (location of the accident, where the conduct causing the explosion occurred, where the owner of the boat lived, where repairs were made on the boat, and where Eads had been living and working) or whether Arkansas law applied (where Eades was a domiciliary, where he died, where his mother and one of his children live, and where his estate is being probated). Judge Cain concluded that, for the survival action, Louisiana law had the most significant relationship and would apply. However, Judge Cain found that to apply Louisiana law to the wrongful death action would cause an injustice to Eades’ parents, who were domiciled in Arkansas. As the wrongful death action did not arise until Eades died in Arkansas, where his estate is being probated, Judge Cain held that Arkansas law applies to the wrongful death action. He dismissed the parents’ claims for a survival action due to lack of procedural capacity to pursue the claim, but denied the motion to dismiss their claims for wrongful death.
Daniel Ramirez, a Louisiana resident, worked for Performance Energy, which contracted with the owners and operators of a platform rig on the outer Continental Shelf, 25 miles off the coast of Louisiana, to perform construction work on the rig. The rig owners also hired Paloma Energy to serve as their representative for the contract with Performance Energy. Paloma Energy hired Madrid Pitre as an inspector and coordinator for the contract. Ramirez and Pitre were roommates on the rig. Ramirez awoke late one night thinking he was having a medical emergency, and he awakened Pitre, who escorted Ramirez to a nearby office. Pitre asked about the symptoms and researched the symptoms. Within 20 minutes after being awakened, Pitre brought the Person-in-Charge to Ramirez, and the Person-in-Charge called a medic on an adjacent platform who recommended that Ramirez go to a hospital. The Person-in-Charge then called a helicopter, which took Ramirez to a hospital where he was treated for a stroke. Ramirez brought suit in state court in Texas against Paloma Energy and others, asserting that the defendants did not provide timely and adequate medical care and failed to timely evacuate him from the platform. The case was removed to federal court, and Paloma moved for summary judgment on the ground that it did not assume a duty to Ramirez or breach any duty to him. Citing Louisiana law, applicable through the Outer Continental Shelf Lands Act, Chief Judge Rosenthal reasoned that a defendant does not generally have a duty to assist a person who is in peril, even if the defendant’s aid could save the plaintiff. However, Ramirez argued that, buy voluntarily helping Ramirez, Pitre assumed a duty and had to act in a reasonable and prudent manner. However, Chief Judge Rosenthal pointed out that the duty only arises if the defendant caused the need for medical aid, had a special relationship with the plaintiff, or discouraged others from giving aid. As those facts were not presented in this case, Chief Judge Rosenthal held that no duty was owed. And, even if a duty were owed, Chief Judge Rosenthal held that the record did not establish any breach as Pitre brought the Person-in-Charge to Ramirez within 20 minutes, and the Person-in-Charge took over the situation and provided for the evacuation of Ramirez. See September 2021 Update. Talos, the owner of the platform and operator of the lease, then moved for summary judgment on the claim that it was negligent for failing to evacuate Ramirez faster. Ramirez argued that by the time he reached the hospital it was too late to administer a plasminogen activator (tPA) that can dissolve blood clots in patients suffering an ischemic stroke. The parties agreed that tPA should be administered within three hours of the last known well time, but that it can be administered up to four and a half hours after the onset of a stroke. Although the parties disputed the last known well time for Ramirez, Chief Judge Rosenthal calculated the time it took for the Medevac helicopter to get to the platform, transport Ramirez to the hospital, and complete the test to rule out Bell’s Palsy, and she agreed that there was no cause-in-fact for injury from actions of Talos as Ramirez was outside the eligible window to receive tPA regardless of Talos’ conduct. As Talos was not responsible for Ramirez’s inability to receive tPA, Chief Judge Rosenthal granted summary judgment to Talos.
Poseidon Global, disponent owner of the M/V VICJOUR ACE, time chartered the vessel to Aris Chartering. The ship hauled a cargo of steel for delivery at South American ports, and disputes arose over possible damage to the cargo and the issuance of a second “claused” bill of lading reflecting the possible damage (after a “clean” bill of lading was issued earlier). Poseidon was put on notice of its potential liability, and Aris provided Poseidon a Letter of Indemnity by which Aris agreed to hold Poseidon harmless of any liability by reason of delivering cargo in accordance with Aris’ request. Nonetheless, Poseidon brought this action against Aris and sought to attach two bank accounts allegedly controlled by Aris. Citing the doctrine of equitable vacatur, Magistrate Judge Kim vacated the writs of attachment. In the first order, Magistrate Judge Kim reasoned that Poseidon had obtained sufficient security for a potential judgment and liability against Poseidon was sufficiently speculative that the Letter of Indemnity protected Poseidon. Consequently, she vacated one of the writs. Magistrate Judge Kim then gave Poseidon ten days to establish that the second attachment should not be vacated because Poseidon faced a ripe claim for damage or that the Letter of Indemnity was insufficient. On the last day, Poseidon re-urged its argument on the need for security without answering the questions posed by Magistrate Judge Kim. Consequently, Magistrate Judge Kim vacated the second attachment.
Michael Saunders was operating his sailboat on the Grand River at dusk, scouting for ducks for the upcoming hunting season. He proceeded into the Lost Channel using a flashlight to look for dead tree stumps on 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. 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 Malone 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 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.
Passenger James Smith attended a show at the Blue Sapphire Lounge on the cruise ship ECSTASY. The Cruise Director hosted the show and, while Smith was exiting the show, touched Smith’s buttocks with a microphone. Smith reported the incident and the Director apologized and stated that the touching was an accident as he was trying to get through the audience. The cruise line, which has a zero-tolerance policy for sexual harassment, removed the Cruise Director from duty for the remainder of the cruise. Smith brought this action against the cruise line, asserting negligence in the training and supervision of the Cruise Director, and the cruise line moved for summary judgment. There was no evidence that the training was insufficient or that anyone had ever lodged a claim against the Cruise Director, so there was no actual or constructive knowledge that the Cruise Director would mistakenly or intentionally touch a passenger in an inappropriate manner. Therefore, Judge Gayles granted summary judgment on the negligence claim. In response to the motion for summary judgment, Smith argued that the cruise line was vicariously liable for the touching. Although Smith had not pleaded vicarious liability, Judge Gayles held that it was undisputed that touching passengers on the buttocks with microphones was not within the scope of employment. Consequently, there was no vicarious liability and an amendment to the complaint would be futile.
This opinion involves the opposite of the timeliness issue that is often presented in limitation actions (whether the limitation action was filed within six months of written notice of a claim). Dean Talbott, owner of a 30-foot 2000 Carver 356 motor yacht, filed this action seeking to limit liability in connection with an incident that occurred on Lake Michigan. Talbott alleged that the yacht was docking with the help of a bystander when a gust of wind changed the yacht’s course, causing the bystander to fall into the water from the dock and causing the yacht to strike the dock. Talbott filed the action after receiving a letter of representation from an attorney for the bystander. The court previously held that the locality prong of the admiralty jurisdiction was satisfied but requested an amendment with respect to the issue whether the incident demonstrated a substantial relationship to maritime activity. After Talbott amended his complaint, Judge Leichty held that it was not difficult to imagine a circumstance in which the damage related to docking could impact maritime commerce and that docking a vessel was a maritime activity. However, Judge Leichty did not believe that Talbott had plausibly alleged that the claims exceeded the value of the vessel, $74,350. Without the allegations of a suit by the bystander or the dock owner to establish the severity of the claims, Judge Leichty did not consider it plausible or reasonable that the damage to the dock, given the slow speed of the vessel during docking, and injury to the bystander, who only fell in the water and was not struck by the boat, would exceed the value of the vessel. See October 2021 Update. Talbott attached the letter of representation to his second amended complaint and pleaded that the value of the bystander’s claim exceeded the value of the yacht, but Judge Leichty did not believe that the letter or amended complaint provided sufficient detail to assess the scope of damages. Judge Leichty understood “that counsel may have been acting protectively,” but he held that the action was premature and dismissed the action without prejudice.
Carl E. Weidner, a passenger on the GRAND PRINCESS, allegedly contracted COVID-19 on a voyage from San Francisco to Hawaii and died after returning home. His niece brought this action in federal court in California on behalf of Weidner’s estate against Carnival and Princess Cruise Lines, asserting claims for negligence, negligent misrepresentation, fraud, and intentional infliction of emotional distress. Carnival moved to dismiss the claims against it on the ground that the complaint did not sufficiently allege that Carnival was an alter ego of Princess Cruise Lines. Judge Gee agreed that the alter ego allegations were insufficient, but held that the plaintiff had sufficiently alleged that Carnival owned and operated the GRAND PRINCESS so as to owe a duty of care in this case. Judge Gee also denied the defendants’ motion to dismiss for lack of notice of the alleged risk-creating conditions as the defendants sent a warning during the Hawaii voyage to passengers from the previous voyage of the GRAND PRINCESS about exposure of the passengers to COVID-19. The warning during the voyage was sufficient to establish notice of the danger while Weidner was a passenger on the vessel. Judge Gee dismissed the claim for intentional infliction of emotional distress, with leave to amend, as there were no allegations that the defendants acted with intent or reckless disregard for the probability of causing emotional distress, and the complaint was deficient in alleging severe emotional distress (so severe that no reasonable person should be expected to endure it).
This is a limitation action brought by the owner and manager of the M/V YOCHOW, which allided with the barge OSG 243 that was moored at a dock in the Port of Houston. Judge Ellison heard motions for summary judgment of several of the parties and issued rulings on them. He granted the motion of OSG, denying the claim of the YOCHOW interests that OSG’s docked barge was not properly lighted. Judge Ellison rejected the testimony of the Captain of the YOCHOW that neither he nor the compulsory pilot on the YOCHOW saw the barge, as the pilot’s testimony, video evidence, and an email from the Coast Guard Marine Safety Specialist established that the barge was illuminated prior to the incident. Judge Ellison concluded that the lack of expert testimony, coupled with the presumption of fault from The Oregon, caused there to be no genuine issue of material fact regarding the negligence of OSG. The YOCHOW interests also contested the allegations of unseaworthiness asserted against the YOCHOW, arguing that the warranty of seaworthiness only applies to claims of crew members. Citing cases in which the Fifth Circuit analyzed evidence of unseaworthiness proffered by non-seamen limitation claimants, Judge Ellison denied the YOCHOW interests’ argument. Additionally, as he was going to have to hear evidence of negligence, Judge Ellison declined to dismiss the claims of gross negligence on the part of the YOCHOW. Finally, Judge Ellison addressed the arguments of the Port of Houston, whose dock was damaged from the allision, that the YOCHOW was liable to the Port for breach of the Port’s tariff. As the YOCHOW owner and manager had not signed the berth application (containing the terms and conditions of the tariff), and as the charterer of the vessel was the party who received the services of the Port, Judge Ellison dismissed the Port’s claims for breach of contract against the YOCHOW owner and manager. See August 2020 Update. On September 15, 2020, however, Judge Ellison granted reconsideration and granted the Port’s motion for summary judgment that the YOCHOW was subject to the Port’s tariff. The application of the Port’s tariff was raised again when OSG, owner of the docked vessel that was exonerated of fault, moved for summary judgment on the contract claims presented by the Port against OSG. OSG cited Subrule 059 that provided for liability for “Users causing damage” to Port property or facilities. As the Port presented “no evidence to indicate that the Barge served as anything other than a big metal bumper” between the YOCHOW and the dock, Judge Ellison held that Subrule 059 could not be the basis for contractual liability of OSG. The Port also cited Subrule 052(5)(a), which provided that Users are responsible for all damages or injury to Port property or facilities occurring during the occupation or use, without regard to who caused it. Judge Ellison did not apply that provision to OSG as it conflicted with Subrule 059. Additionally, the context of the Subrule and the evidence militated in favor of a narrow reading. After OSG filed its motion, the YOCHOW sought to reconsider the ruling from a year earlier that the tariff applied to the YOCHOW. Judge Ellison did not find a sufficient reason for giving the YOCHOW a “third bite at the apple,” noting that it appeared that YOCHOW had “read OSG’s Motion and regretted not making the argument.” However, if he were to consider the argument, Judge Ellison did not consider it to be sufficiently persuasive to qualify for reconsideration.
World Fuel Services supplies bunkers through its group of companies that include WFS Singapore and WFS Dubai. Silk Road Trading entered into a purchase agreement for bunkers for its vessel that was confirmed by an email from an executive of WFS Dubai identifying the seller as WFS Singapore. A third party delivered substandard fuel to the vessel, and Silk Road provided notice to WFS Dubai, which responded that the notice was untimely under the General Terms and Conditions. Silk Road brought an action against WFS Corp. in Florida state court that was removed to the federal court in Miami. Judge Scola dismissed the complaint against WFS Corp. as WFS Singapore had sold the fuel. Silk Road then filed this action in federal court in Miami against WFS Corp., WFS Singapore, and WFS Dubai. As WFS Corp. was dismissed with prejudice in the prior litigation, Judge Gayles held that res judicata barred the subsequent suit against WFS Corp. Judge Gayles held that the bunker-supply contract was maritime and that there were sufficient allegations for Silk Road to name WFS Dubai in this action and for Silk Road to defeat the defendants’ motion to dismiss based on the time-bar from the Terms and Conditions (he could not determine if a meeting of the minds occurred because the purchase agreement was not attached or sufficiently described).
Jamie Simon brought this complaint ten years ago, claiming that she suffered injuries from exposure to oil, chemicals, and toxic materials in the clean-up of the oil spill from the DEEPWATER HORIZON/Macondo blowout. She claimed that she worked for Grand Isle as a seaman on the ELLIE MAE, a vessel which served as a floating hotel and living quarters for workers involved in the clean-up of the spill. She named Grand Isle and BP as defendants, and Grand Isle filed a Rule 14(c) tender against BP. Grand Isle reasoned that the tender allowed to the jury to consider BP’s liability as a direct defendant and also to consider BP’s liability as the party legally liable for damages that Simon could prove arising from her employment with Grand Isle. BP objected that Rule 14(c) applies only to third parties and not to parties who are already defendants in the case. Reasoning that the Rule only applies to allow the third-party plaintiff to demand judgment directly against a third-party defendant and that BP was already a defendant, Chief Judge Brown held that BP could not be tendered to Simon by Grand Isle pursuant to Rule 14(c). She advised that the proper mechanism to bring the claim is as a cross-claim in accordance with Rule 13(g).
Sportswear Group purchased women’s apparel from a factory in Bangladesh, and the shipper arranged for the ocean carriage to the Port of New York. The goods were carried under negotiable bills of lading drawn to the “order” of the shipper’s bank in Bangladesh. When Sportswear paid the bank, the bills of lading were released to Sportswear, which presented them to the carrier. Sportswear hired a trucking company to pick up the apparel at the port and deliver it to Sportswear’s warehouse, but the empty containers were not returned to the carrier, in violation of the detention provisions in the bills of lading. As the bills of lading provided that the Merchant was responsible for the detention and defined the Merchant as shipper, consignee, holder, assignee, and endorser of the bills, the carrier brought this action against Sportswear seeking detention for the containers. The first question presented to the court was whether there was subject matter jurisdiction over the action. There was no dispute that the bills of lading were maritime contracts, but Sportswear argued that the obligation to return the containers arose out of non-maritime transportation services. As the right to recovery was based on the obligation in the bills of lading, however, Judge Liman held that the court had admiralty jurisdiction over the claim. Although the court had admiralty jurisdiction, Judge Liman cited New York law for the elements of a claim for breach of contract and held that the allegations in the complaint were insufficient to establish contractual privity between the carrier and Sportswear. Although the bills of lading were negotiable and Sportswear was able to obtain the apparel by surrendering the bills of lading, Judge Liman held that the complaint itself did not allege that Sportswear was the shipper, consignee, holder, assignee, or endorsee of the bills or how Sportswear became such a party. Consequently, the claims for breach of contract were dismissed. The lack of such pleading was also fatal to the claims for quantum meruit and unjust enrichment as there was no pleading of expectation of compensation other than that to which the carrier was entitled by the terms of the bills of lading and the parties thereto. See September 2021 Update. After the carrier filed an amended complaint, Sportswear moved to dismiss the complaint for failure to state a claim, and Judge Liman found no allegations in the amended complaint that Sportswear, as holder or endorsee of the bills of lading presented the bills or accepted the goods under them. Its status as a Merchant under the bills of lading was insufficient to establish contractual privity, and Judge Liman dismissed the contractual claims. Judge Liman also dismissed the quasi-contract claims (unjust enrichment and quantum meruit) as the complaint did not allege that the parties had a relationship that could have caused reliance or inducement (even though Sportswear was alleged to be the ultimate receiver of the cargo). Finally, as the carrier did not allege a claim establishing underlying liability, there was no basis for a claim for an account. Judge Liman gave the carrier “one last chance” to amend its complaint to address the deficiencies noted by the judge.
Danny Campbell, a deckhand on the F/V DELMA ANN fell over an unmarked chain on the Port of Newport’s commercial marina while taking out the trash from the vessel. The chain was used by the Port to temporarily secure a broken finger pier on the dock and was hanging about one inch above the dock. Campbell brought this suit under the Jones Act against his employer/vessel owner (Delma Ann) and against the Port for negligence. The Port brought a cross-claim against Delma Ann for indemnity based on the Moorage License Agreement between Delma Ann and the Port, and Delma Ann moved for summary judgment on the Jones Act claim and on the indemnity claim. Although the employer owes a duty to provide a seaman with a safe place to work, Judge McShane noted that the duty does not extend to premises over which the employer has no dominion or control or opportunity to correct. Even if the vessel’s captain failed to warn Campbell of the chain (the captain had complained to the Port’s maintenance office and had stumbled over the chain himself), Judge McShane held that the failure was insufficient to establish negligence as there is no duty of the vessel owner with respect to the dock area controlled by a third party. Judge McShane also rejected that the assertion that Delma Ann violated federal or state regulations and was negligent per se, concluding that the regulations did not apply. To support its claim based on the Moorage License Agreement, the Port argued that it was entitled to indemnity for injury resulting from the acts or omissions of Delma Ann or its employees. The Port argued that it was not necessary that Delma Ann be found negligent as long as its acts or omissions contributed to the injury. In this case, Campbell and the Port argued that Campbell was distracted while carrying the trash because another crewmember called out to him and tossed him another bag of trash. Campbell turned around to get the additional bag and tripped when he turned back to continue. Judge McShane was “unpersuaded,” citing the fact that Delma Ann did not have dominion or control over the area and reasoning that the agreement did not require indemnity for injuries that were not caused by the licensee.
United States Fire and others provided hull insurance covering Icicle Seafoods’ R.M. THORSTENSON. The vessel suffered engine damage during the policy, and the parties settled the claim for hull damage. However, the parties could not reach agreement on the insured’s claim for loss of hire, with the insurers’ adjustment in the amount of $966,638.48, and the insured seeking $4,043,445. The major disagreement arose over the amount of pink salmon that the insured would have processed had the vessel been able to travel to Area M in Alaska. The insurers retained an expert who opined that the insured would have been able to process up to 4.5 million pounds of pink salmon. Counsel for the insurer agreed that the report provided some independent support for the insured’s claim, but did not disclose the report to the insured and designated the expert as a consulting expert. The insurer brought this declaratory judgment action, and the insured filed a counterclaim in which it alleged breach of contract and extracontractual claims under Washington law. During the litigation, the insured discovered an email from the insurer’s counsel describing the expert report and its non-disclosure. The insured demanded that counsel withdraw from the matter and then filed a motion to disqualify the attorney and his firm when he declined to withdraw. Chief Judge Martinez first addressed whether, under Washington’s Rules of Professional Conduct, the lawyer could not act at trial because it was likely that he would be a “necessary witness.” The insured argued that the lawyer was a necessary witness to establish bad faith of the insurer by burying the report. Chief Judge Martinez was not convinced, however, that the relevant evidence was solely with the lawyer and was not obtainable elsewhere. In fact, the email itself was quite powerful. Whether the lawyer was acting on behalf of the insurers could be elicited from employees of the insurer. Finally, Chief Judge Martinez was convinced that the insurers would suffer substantial hardship as marine insurance in general, and loss of hire in particular, require specialized expertise that few lawyers possess, and it would be difficult to find qualified replacement counsel at this stage of the proceeding for seven different groups of insurers (including international clients). Chief Judge Martinez also addressed the insured’s argument that the lawyer should be disqualified because of a conflict of interest with his clients. In the first place, Chief Judge Martinez was not persuaded that the insured had standing to move to disqualify the lawyer for his alleged conflict with the insurer. Additionally, Chief Judge Martinez did not find a significant risk that the lawyer’s representation of the insurers would be materially limited by his self-interest so that his ability to represent the insurers would be compromised. See April 2021 Update. Icicle and its insurers then filed cross-motions for partial summary judgment on the applicable law and the recoverable amount for economic loss under the policies. Chief Judge Martinez first addressed the applicable law, noting that the USA Marine policy and the Lloyds Slip policy provisions on loss of hire both provided: “This insurance is subject to English law and practice U.S. LAW AND PRACTICE.” Another section in the Lloyds Slip policy provided that any case arising out of the insurance “shall be governed by and construed in accordance with Washington law and practice.” The insurers argued that the policies provided for the application of federal admiralty law and federal common law, but Chief Judge Martinez held that the reference to “U.S. LAW” merely indicated a choice of American law over English law and that there was no conflict with the provision identifying Washington law as the governing law. He added that this interpretation was consistent with Wilburn Boat’s application of state law in the absence of an established maritime rule. Therefore, he applied Washington law to the dispute. Chief Judge Martinez then addressed the question whether Icicle was entitled to a jury trial on its counterclaims in the insurers’ declaratory judgment action that was brought under the court’s admiralty jurisdiction. As Icicle did not allege any independent jurisdictional grounds for its counterclaims, Chief Judge Martinez held that Icicle was not entitled to a jury trial. Turning to the language of the policies, the insurers argued that the policies required a waiting period of 14 days from the date of loss of hire, and Icicle argued that the 14-day period was triggered by physical damage to property. As the loss of hire provision provided that the insurers would pay if “in consequence of . . . loss, damage or occurrence” the vessel could not earn hire for a period “in excess of” the 14-day period, Chief Judge Martinez found the language unambiguously required a loss or damage of property that prevented the vessel from earning hire in excess of the 14-day period before there could be a recovery for loss of hire. Chief Judge Martinez then addressed Icicle’s counterclaims for breach of contract and bad faith and held, as a matter of law, that Icicle’s failure to provide material records or respond to the insurers’ questions hampered the insurer’s investigation and were a breach of Icicle’s duty to cooperate that prejudiced the insurers. Under Washington law, that breach relieved the insurers from their obligations under the policy. Thus, Chief Judge Martinez dismissed Icicle’s counterclaim, including its claims for bad faith and violation of Washington statutes.
Stephen Johnson fell ill during a five-day Western Caribbean cruise on the Carnival DREAM that departed from Galveston, Texas. When the ship called in Progresso in Yucatan, Mexico, Johnson was transferred by ambulance to the Centro Medico American Hospital, accompanied by a port agent for the cruise line. Johnson received treatment at that hospital and at another hospital, and, upon discharge, was advised by Centro Medico that he could not leave until he paid the bill in the amount of $14,260.43. His efforts to leave without paying the full amount were met with physical altercations that resulted in injuries. He was not allowed to leave until publicity resulted in a movie producer paying the medical bill a week after he had been discharged. Johnson brought suit against the cruise line in federal court in Miami, and the cruise line moved to dismiss the complaint. Johnson asserted that the cruise line was negligent for failing to warn him of the dangerous conditions in the hospital and for allowing him to remain at the hospital without assistance. The cruise line argued that it did not have notice of the hospital being a risk-creating condition, and Johnson responded that the United States Embassy and State Department publish a list of hospitals that are safe for American citizens in Mexico and Centro Medico is not on the list. However, the list states that it does not endorse the hospitals on the list and does not state or imply that hospitals that are not on the list must be avoided. The list warned of cases of United States citizens being detained until payment was made in full and that hospitals on the list had engaged in that behavior. Johnson did not allege that the cruise line had ever sent a patient to Centro Medico or experienced the treatment that Johnson received. Consequently, Magistrate Judge McAliley dismissed the negligence count (failure to warn) without prejudice. In response to the negligence count that the cruise line should have assisted in obtaining Johnson’s release from the hospital, the cruise line argued that once the passenger leaves the vessel the duty is limited to warning of known dangers. Magistrate Judge McAliley noted that there is an exception when the cruise line has an agency relationship with the third party, but there was no such allegation in this case. Consequently, Magistrate Judge McAliley dismissed this count and did not grant leave for its repleading. Johnson reiterated his negligence theories with counts of intentional infliction of emotional distress, and Magistrate Judge McAliley dismissed them for the same reasons as the negligence counts. Johnson’s traveling companion, Tori Austin, asserted a claim for negligent infliction of emotional distress for watching the harm to Johnson and for her own injuries when Johnson and she were attacked when he tried to leave the hospital. As Johnson’s negligence claims failed, Magistrate Judge McAliley held that her claims failed for the same reasons. As Johnson and Austin did not allege that the cruise line participating in confining them within boundaries fixed by the cruise line, and as they did not allege that the cruise line was vicariously liable for the actions of the hospital, Magistrate Judge McAliley dismissed Johnson’s and Austin’s false imprisonment claim. Finally, as the plaintiffs did not allege intentional misconduct on the part of the cruise line, Magistrate Judge McAliley held that the complaint did not support a claim for punitive damages (there was no reason to strike the allegations, however, as all of the claims were dismissed).
Four family members, Bernabe Macias, Jr., his wife Esperanza Macias, his sister Maria Carreras, and his brother-in-law Alvaro Carreras, were passengers on the CELEBRITY ECLIPSE on a cruise from Buenos Aires, Argentina, to San Antonio, Chile, in March 2020. They were not allowed to disembark in Chile because of the COVID-19 outbreak and had to remain on the vessel until the vessel finally docked in San Diego, California. The cruise line continued to provide a full schedule of entertainment, activities, and buffet-style dining. Mr. Macias and Mr. Carreras presented to the ship’s infirmary with symptoms of COVID-19, but they were not tested. After the family disembarked and flew to their home in Miami, three of the family members on the voyage tested positive for COVID-19 and the fourth (Mrs. Macias) received a positive test two weeks later. Mr. Carreras’s health declined for several months and he eventually died 10 months after the voyage. The plaintiffs brought this action against the cruise line in federal court in Miami based on negligence and intentional infliction of emotional distress, and the cruise line moved to dismiss the complaint. The negligence claim contained three distinct negligence-based torts, including a “hidden” claim of negligent misrepresentation (that all of the passengers on the vessel were in good health). The cruise line argued that the allegations were insufficient to satisfy the heightened pleading standard for negligent misrepresentation from Rule 9(b), and Magistrate Judge Torres agreed. He recommended dismissal of the negligence count with leave to replead. As the negligence count had to be repleaded, Magistrate Judge Torres did not address the argument that Mrs. Macias failed to allege a plausible causation theory for her contracting COVID-19 two weeks after disembarking; however, Magistrate Judge Torres did note that “causation is typically not justiciable on a motion to dismiss.” The cruise line also moved to dismiss the claim of intentional infliction of emotional distress for lack of “outrageous conduct.” Citing cases in which the court had rejected substantially similar claims from passengers on the CELEBRITY ECLIPSE, Magistrate Judge Torres recommended that the intentional infliction of emotional distress claims be dismissed with prejudice. The plaintiffs argued that they were entitled to a jury trial under the saving to suitors clause or as an advisory jury, but Magistrate Judge Torres rejected their arguments as the case was brought pursuant to the court’s admiralty jurisdiction. Magistrate Judge Torres did note that the court has discretion to grant an advisory jury and that the decision about an advisory jury could be revisited “as trial draws near.” It was also premature to decide whether the Death on the High Seas Act applied so as to limit the damages that could be recovered on behalf of Mr. Carreras’ estate.
Kay Darby, who claims to have lost her footing on a wet surface on the deck of the VALOR, engaged Dr. Francisco De Caso to provide expert opinions about the cause of the incident. The cruise line filed a Daubert motion to exclude his opinions, and Magistrate Judge Goodman first held that De Caso did not have to have a degree in naval architecture, have studied marine engineering or shipbuilding, or been involved in design of a cruise ship or the selection of flooring for a passenger vessel in order to qualify as an expert with respect to slip resistance of the surface of the deck of the vessel. The cruise line objected that De Caso should not be permitted to testify about authoritative codes or industry standards (relying on American Society for Testing and Materials International’s Standard Practice for Human Engineering Design for Marine Systems, Equipment and Facilities), but Magistrate Judge Goodman considered the objection to be a subject of cross-examination. Magistrate Judge Goodman recommended that De Caso be allowed to testify on slip resistance based on tests he conducted with a tribometer, rejecting the cruise line’s argument that the tribometer is not generally accepted by the scientific community and that it is an ineffective instrument to use to measure the risk of a slip or fall. However, Magistrate Judge Goodman agreed that De Caso should not be allowed to testify that the tribometer mimics significant biomechanical parameters of the human walking gait because he is not an expert in human factors. Magistrate Judge Goodman did not consider De Caso to be qualified to render opinions on lighting issues, and he did not believe that De Caso should be permitted to opine on the constructive knowledge of the cruise line as that invaded the province of the jury.
From the state courts:
Ana Maria Reis Martins worked as an assistant dining room server on Disney’s cruise ship DREAM. She was injured on shore leave in the Bahamas when she was struck by a car while she was crossing a street. Martins returned home to Portugal for treatment of fractured ribs, and the cruise line paid maintenance and cure until her doctor in Portugal determined that Martins had reached maximum cure. Martins returned to work on the DREAM, but within a few weeks she complained of intense chest pain and returned home to Portugal for treatment. The cruise line advised her to select any physician, and it paid maintenance and cure until her choice of neurosurgeon (Dr. Ribeiro) declared that she had reached maximum cure. A year later Martins engaged counsel who filed this lawsuit and then submitted records and receipts showing that Martins was being treated for chronic pain under the care of a psychologist and neurologist. The cruise line did not reinstate maintenance and cure as the representative concluded that the evidence did not negate the two findings of maximum cure and did not contain any recommendation for curative treatment. Martin’s counsel then obtained a statement from Dr. Ribeiro that his conclusion with respect to maximum cure was a neurosurgical opinion and did not address Martin’s status from an orthopedic, neurologic, psychological, psychiatric, or pain medicine standpoint, and Martins amended her complaint to add a count for punitive damages for willful and callous failure to reinstate maintenance and cure (seeking punitive damages). The district judge denied the cruise line’s motion for summary judgment on the count for punitive damages, and the jury apportioned fault 70% to the cruise line and 30% to Martins, awarding $1 million for non-pecuniary damages, $2 million for lost earnings and medical expenses, and $1 million in punitive damages. The district judge entered judgment in favor of Martins after reducing the actual damages by her 30% comparative fault. The cruise line and Martins appealed. Writing for the court of appeal, Judge Wozniak reversed the award of punitive damages, reasoning that the cruise lines’ responses were reasonable at best and unreasonable at worst. However, she found no evidence of a callous disregard of Martin’s condition. Judge Wozniak also held that the award of economic damages had to be reversed. Martins relied on the testimony of Dr. Gary Anderson, a forensic economist to support the award of past and future economic damages. Dr. Anderson testified that his calculations were based, in part, on a telephone conversation with vocational rehabilitation expert Susan McKenzie, who was engaged to provide costs for future medical treatment. Dr. Anderson relied on information from Ms. McKenzie on how often Martins would need various future medical procedures, medications, and therapies and on the information that she provided about Martins’ work life (two to three hours per day at a coffee shop, which was her full capacity). However, McKenzie, a life-care planner, denied discussing with Dr. Anderson how often Martins would need procedures or medications and had no idea how often Martins would require them, and she denied discussing with Dr. Anderson how long Martins was able to work. The district court considered this dispute to be a credibility issue for the jury, but Judge Wozniak held that Dr. Anderson’s calculations were unreliable and should have been stricken. Consequently, the award of past and future economic damages was reversed and the case was remanded for a new trial on those damages. Martins argued that the district court erred in reducing her actual damages by 30% because a maintenance and cure award cannot be reduced by the comparative fault of the seaman. The jury found that the cruise line was negligent and apportioned fault at 70%/30%. It also found that the cruise line had failed to provide the entire amount of maintenance and cure that it owed. However, the jury form did not require the jury to attribute damages between the claims. The cruise line brought this to the attention of the court prior to jury deliberations, but Martins objected to any change and did not submit a form that separated the negligence award from the maintenance and cure award. The cruise line argued that Martins waived any appellate argument with respect to the reduction, and the appellate court agreed. As Martins could not demonstrate that the interpretation of the verdict by the district court was improper, the court rejected her appeal on the reduction for comparative fault. Finally, Martins argued that the district court erred in denying her post-trial motion for attorney fees. The jury instructions advised that Martins was entitled to recover punitive damages and attorney fees for willful and arbitrary failure to pay maintenance and cure but not for prosecution of the Jones Act claim. However, the jury form did not have a question addressed specifically to an award of attorney fees. As Martin did not object to the verdict form, Judge Wozniak held that Martins waived her appellate argument on the awarding of attorney fees. Consequently, the jury would not be allowed to consider attorney fees as part of economic damages in the damage trial on remand [the appellate court did not have to address whether attorney fees were recoverable after the holding on the absence of evidence of punitive conduct in light of the waiver ruling].
Three sixteen-year old boys went boating on Lake Coeur d’Alene in Idaho on a boat owned by the father of one of the boys. The boys consumed about twelve beers and then stopped at a restaurant and bar an obtained a “Shooter sinker” (also known as a “derailer” and a “d tailer”), which contained six (possibly twelve) shots of hard alcohol. The boys drank the Shooter sinker on the lake, and one of the boys drowned after either jumping or falling off the boat into the lake. The mother and sister of the decedent filed a complaint in Idaho state court against Tracy Lynn, who allegedly served the Shooter sinker to the boys, and the suit also named the other two boys. The decedent’s father also brought an action that was consolidated. Lynn filed a motion for summary judgment based on the plaintiffs’ failure to comply with the notice provision of the Idaho Dram Shop Act. The plaintiffs argued that the case was governed by the general maritime law and that the state law did not apply. The district court held that the state act applied and dismissed the case for the failure of the plaintiffs to provide the 180-day notice required by the statute. Lynn raised on appeal the question whether Lake Coeur d’Alene is a navigable body of water, but the Idaho Supreme Court declined to address the issue as it was not adequately presented for the appeal. Although the district court held that maritime law was applicable, the Idaho Supreme Court held that the issue was “a question of law that we leave for another day” and applied maritime law as the district court had done. After reviewing the decisions addressing application of state dram shop statutes, Chief Justice Bevan concluded that “there is no well-settled body of admiralty case law regarding the applicability of state dram shop statutes.” As there was no uniform admiralty rule, there was no conflict between the state statute and federal maritime law, even though application of state law resulted in denial of recovery under the general maritime law. Agreeing with the application of the state statute that was not preempted by the general maritime law, Chief Justice Bevan affirmed the dismissal of the suit against Lynn.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
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Quote:
Argument of Raymond Peyton, a state prisoner, proceeding pro se in a civil rights action:
Plaintiff alleges that the Sentencing Judge committed fraud by failing to reveal to Plaintiff that the yellow-fringed American Flag in his and all Admiralty Courtrooms are [sic] actually the flag of the Commander-In Chief of the corporate United States, a flag of war, which is forbidden to be flown in an American Common Law Court.
Peyton v. Cates, No. 1:21-cv-00740, 2021 U.S. Dist. LEXIS 176764, at *4 (E.D. Cal. Sept. 16, 2021).
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© Kenneth G. Engerrand, November 30, 2021; redistribution permitted with proper attribution.
