December 2022 Longshore/Maritime Update (No. 283)
Notes from your Updater:
In our July 2022 Update we discussed the decision of the Texas Court of Appeals in Dallas, enforcing a venue-selection agreement in a seaman’s employment contract (requiring that personal injury actions against the employer be brought in specified federal or state courts in Kentucky). The appellate court agreed that the provision was a valid forum-selection clause (despite its title) and upheld the dismissal of the suit by the district court in Houston. On November 4, 2022, the Texas Supreme Court declined to hear Risher’s petition for review (No. 22-0655). See Risher v. Marquette Transportation Co. Gulf Inland, LLC, No. 05-21-00289-CV, 2022 Tex. App. LEXIS 3868 (Tex. App.—Dallas June 8, 2022, pet. denied).
The District of Columbia brought suit in the Superior Court of the District of Columbia against several energy companies, asserting violations of the D.C. Consumer Protection Procedures Act for alleged misrepresentations on the effects of fossil fuels on the environment. The energy companies removed the case to the federal court in the District of Columbia on seven jurisdictional bases, including the Outer Continental Shelf Lands Act. Judge Kelly rejected all of the bases for removal, concluding that the connection between the allegations of false advertising and operations on the OCS was too remote to sustain OCSLA jurisdiction. See District of Columbia v. Exxon Mobil Corp., No. 20-1932, 2022 U.S. Dist. LEXIS 205645 (D.D.C Nov. 12, 2022) (Kelly).
In our December 2019 Update, we discussed the “high profile labor dispute that led to the closing of Terminal 6 of the Port of Portland to ocean-going cargo for more than a year.” We advised that a jury in federal court in Oregon found in favor of ICTSI Oregon, Inc. that the International Longshore and Warehouse Union and Local 8 engaged in unlawful labor practices causing damages in the amount of $93,635,000, with 55% attributable to ILWU and 45% attributable to Local 8. In our April 2020 Update we advised that Judge Simon ordered a remittitur to $19,061,248. See ICTSI Oregon, Inc. v. International Longshore and Warehouse Union, No. 3:12-cv-1058 (D. Ore. Mar. 5, 2020). ICTSI rejected the remittitur, and Judge Simon denied the Union’s motion for judgment as a matter of law. Both parties appealed, with the Union challenging the denial of its motion for judgment as a matter of law, and ICTSI challenging the grant of a new trial conditioned on the acceptance of the remittitur. Concluding that it lacked jurisdiction over the appeal, the Ninth Circuit held that “the parties will have to continue their litigation in the district court, at least for now.” See ICTSI Oregon, Inc. v. International Longshore and Warehouse Union, Nos. 20-35818, 20-25819, 2022 U.S. App. LEXIS 1279 (9th Cir. Jan. 18, 2022) (O’Scannlain). See February 2022 Update. Facing a retrial on damages, the parties filed cross-motions for partial summary judgment. Judge Simon denied ICTSI’s motion and granted ILWU’s motion and directed the parties on what would be tried in relationship to the findings in the first trial. See ICTSI Oregon, Inc. v. International Longshore and Warehouse Union, No. 3:12-cv-1058, 2022 U.S. Dist. LEXIS 205978 (D. Ore. Nov. 14, 2022).
The Offshore Marine Service Association, the Shipbuilders Council of America, and Captain Paul Radtke brought suit against the Bureau of Customs and Border Protection, alleging that the Bureau violated the Jones Act and the Administrative Procedure Act by allowing foreign-flagged vessels to handle work in the Gulf of Mexico that should be handled by United States-flagged vessels and crews. After the Bureau retracted some of its letter rulings that permitted the work by foreign vessels, the plaintiffs sought leave to amend their pleadings to add new claims. The Bureau argued that the amendment should be denied as futile and filed a motion for judgment on the pleadings, but Judge Chutkan permitted the amendment and denied the motion for judgment on the pleadings without prejudice. See Radtke v. United States Bureau of Customs & Border Protection, No. 17-cv-2412, 2022 U.S. Dist. LEXIS 206596 (D.D.C. Nov. 14, 2022).
Longshore worker Cheryl L. Preston’s claims (for violation of federal laws for discrimination and retaliation after she sustained an injury) against ILA Local 24, West Gulf Maritime Association, and APS Stevedoring were dismissed based on the results of an arbitration under the collective bargaining agreement. Judge Hanks denied the longshore worker’s request for another arbitration as that had been accomplished as the final step in the grievance process under the collective bargaining agreement. See Preston v. International Longshoremen’s Association Local 24, No. 4:19-cv-2606, 2022 U.S. Dist. LEXIS 211213 (S.D. Tex. Nov. 22, 2022) (Hanks). Thanks to Matthew Ammerman of Houston, Texas for bringing this case to our attention.
On November 23, 2022, the Eleventh Circuit held that Dr. Javier Garcia-Bengochea had standing to assert claims against cruise lines Royal Caribbean and Carnival under the Helms-Burton Act in connection with the confiscation of property in Cuba by the Cuban government that was then used by the cruise lines, but the appellate court affirmed that Dr. Garcia-Bengochea failed to satisfy the requirements of the statute to permit recovery. See Garcia-Bengochea v. Carnival Corp., No. 20-12960, 2022 U.S. App. LEXIS 32448 (11th Cir. Nov. 23, 2022) (per curiam).
On the LHWCA front . . .
From the federal appellate courts:
Troy Owen tore his rotator cuff on July 29, 2016, while employed as a longshore worker for Temco, LLC, in Portland, Oregon. After recovering from the injury, Owen applied for the “Old Man’s Board” of light-duty work, but there were a limited number of positions and his application was declined. Owen retired in November 2018, asserting that his retirement was involuntary because he could not obtain enough hours of work to keep his benefits and was, therefore, permanently and totally disabled. His employer argued that Owen had the physical capacity to perform six different longshore positions that were available so that he was only partially disabled. Administrative Law Judge Larsen found that Owen could not return to the full range of jobs of his regular employment but that he could perform some longshore jobs. Owen admitted that he could still work as a walking boss, foreman, mechanical hopper opener, gang boss, clerk, and button pusher, but he estimated that this would only provide 590.50 hours of work per year and that health insurance and other benefits were only available if he worked at least 800 hours per year. Considering the loss of benefits and the cost of his union dues, Owen argued that the longshore work was not suitable alternate employment because it was financially unfeasible. ALJ Larsen reviewed the witness testimony on the jobs that were available and credited the testimony of union representative/longshore worker Stuart Strader with respect to the jobs that Owen could perform (based on his intimate understanding of the positions and comprehensive knowledge of the physical requirements. Therefore, ALJ Larsen concluded that the employer had established that Owen was partially, and not totally, disabled. ALJ Larsen did discount Strader’s testimony that Owen could only perform half of the mechanical hopper-opener jobs. Accordingly, ALJ Larsen awarded permanent partial disability to Owen based on the availability of all of the mechanical hopper-opener jobs (and the availability of the other longshore jobs that Owen could perform). Owen appealed to the Benefits Review Board, which affirmed ALJ Larsen’s decisions on the effect of Owen’s retirement on his claim for total disability and on the suitability of the longshore jobs with respect to the amount of partial disability. Owen appealed to the Ninth Circuit and argued that his work injury was the reason he had to retire from the waterfront so that his disability should be considered permanent and total. The Ninth Circuit disagreed, stating that decisions on retirement do not factor into the disability determination and rejecting the idea that “retirement necessarily causes a loss of wage-earning capacity.” As the extent of disability “is determined by reference to two criteria: the claimant’s physical abilities and the economic availability of particular jobs in the market,” the Ninth Circuit affirmed the finding of partial disability. The appellate court did disagree, however, with ALJ Larsen’s decision on the suitability of all of the hopper-opener jobs. The court noted that the ALJ had the discretion to accept part of Strader’s testimony and to reject the rest. However, the court disagreed with the decision in this case because no evidence contradicted the rejected part of Strader’s testimony that Owen could not perform half of the hopper-opener jobs. Concluding that substantial evidence did not support that rejection of Strader’s testimony, the court remanded the case to recalculate the number of suitable work hours available to Owen.
From the federal district courts:
Gregory Whelan was employed by Ports America Texas to perform longshore work in the Port of Galveston, Texas, on the M/V ARC INTEGRITY, chartered by American Roll-On Roll-Off. After cargo had been loaded on the vessel, Whelan’s gang secured the cargo with chains and lashings. The gang finished the work, but someone from the vessel requested more chains. It was late, it was dark, and the work area was not well lighted because of shadows from the cargo. Whelan caught his leg on a metal cage surrounding a sounding tube that stuck out of the deck, causing him to fall and hit his head. Whelan brought suit against the charterer of the vessel and his stevedore employer in Texas state court, and the charterer snap-removed the case to federal court in Texas based on diversity (as the Texas-based stevedore had not been served and its citizenship did not prevent complete diversity or implicate the forum-defendant prohibition to removal). After the dismissal of the stevedoring company, the charterer moved for summary judgment, arguing that it had not violated any of the Scindia duties applicable to the worker’s LHWCA Section 5(b) claim. With respect to the turnover duty, the charterer argued that the cage was open and obvious at the time the vessel was turned over to the stevedore for cargo loading. Whelan argued that the cage was not open and obvious as the hazard was not apparent to him because of the poor lighting at the time of the accident. Judge Lake cited the photos of the area that reflected that, at the time the vessel was turned over to the stevedore earlier in the day, the area was well lighted and the cage and tube were obvious. In granting summary judgment on the turnover duty, Judge Lake reasoned that the charterer would not be responsible for shadows that developed during the cargo operations. The charterer argued that it did not breach the active control duty because the cargo deck was turned over to the stevedore. However, Whelan cited the Cargo Standing Orders that provided that a crew member must be present during cargo operations to ensure that correct cargo handling procedures are followed and to ensure a safe and damage-free operation. This claim was supported by the testimony of Captain Perri that the crew members are actively involved in cargo operations and assist the longshore workers and supervise and inspect the lashing operation. In fact, the work being performed was additional lashing at the request of a crew member. Judge Lake considered this involvement to be more than passive inspection, and he denied summary judgment on the active control duty. Similarly, Judge Lake denied summary judgment on the duty to intervene, considering it reasonable to conclude that a crew member would have been aware of the lighting situation from the requirement that crew members observe the cargo operations, and a jury could infer that the charterer knew that the stevedore needed to better light the area in order to make tripping hazards visible.
Christopher Crochet, an employee of Franks Oilfield Services, died of a heart attack while serving on the M/V WEST NEPTUNE, a drillship owned by Seadrill that was located on the outer Continental Shelf off the Louisiana coast. Crochet’s wife and daughter brought suits in St. Tammany Parish and Lafayette Parish, Louisiana, against Franks Oilfield, Seadrill, and the well operator, LLOG, with claims under the Jones Act, the general maritime law, and, alternatively, under LHWCA Section 5(b) and Louisiana law. The defendants removed the suits to federal court (the Lafayette suit to the Western District of Louisiana and the St. Tammany suit to the Eastern District of Louisiana). Judge Lemmon stayed the suit in the Eastern District of Louisiana, and the plaintiffs’ motion to remand the suit in the Western District of Louisiana was referred to Magistrate Judge Ayo. Magistrate Judge Ayo began his analysis by noting that the fact that the case was brought under the Saving-to-Suitors Clause did not prevent removal under the federal question jurisdiction provided by the Outer Continental Shelf Lands Act. Magistrate Judge Ayo explained that choice-of-law and jurisdiction under the OCSLA are independent inquiries (citing the Fifth Circuit’s Baker decision, quoting Engerrand, Primer of Remedies on the Outer Continental Shelf). Thus, even though the Jones Act or general maritime law may be the applicable law under the OCSLA, there was federal question jurisdiction for the suit under the OCSLA. Magistrate Judge Ayo then addressed the plaintiffs’ argument that the case should be remanded because it contained a non-removable Jones Act claim that was not separate and independent from the other claims. Magistrate Judge Ayo rejected that argument because the 2011 Amendment to the Removal Statute eliminated the separate and independent issue for cases removed based on federal question jurisdiction. Although the plaintiffs argued that the defendants failed to allege that the Jones Act claim was fraudulently joined, Magistrate Judge Ayo answered that the Notice of Removal alleged that the Jones Act claim was not viable based on Crochet’s work history, and the defendants only had to prove that there was no possibility that Crochet was a seaman at the time of his death in order to avoid the non-removability of the Jones Act claim. Therefore, he stated that the court would review the viability of the Jones Act claim if it determined that a transfer to the Eastern District of Louisiana was not appropriate. Chief Judge Hicks agreed that Magistrate Judge Ayo’s recommendation was correct and adopted his findings and conclusions on November 7, 2022).
Mauro Hinojosa claimed that he was employed by Callen Marine and was assigned to work on the M/V SEA OAK in Galveston Bay to mobilize a dredge and its support vessels for a move to Corpus Christi, Texas. He asserted that he was injured while lifting a heavy cable without adequate mechanical assistance, and he brought this suit in federal court in Texas against Callan Marine, including claims under the Jones Act, for unseaworthiness and maintenance and cure under the general maritime law, and under Section 5(a) and Section 5(b) of the LHWCA. Callan Marine moved to dismiss the claims, and Magistrate Judge Edison recommended that the motion be denied with respect to the negligence claims under the Jones Act and under Section 5(b) as the complaint enumerated a laundry list of reasons for the negligence of Callan Marine. The complaint did not have any detail on the unseaworthiness claim other than “blithely asserting” that the injuries were caused by the unseaworthiness of the vessel, appurtenances, and equipment. As there was no factual support for the claim, Magistrate Judge Edison recommended that the unseaworthiness count be dismissed. Although Callan Marine argued that the maintenance and cure claim did not identify Callan Marine as the employer or the vessel on which he was injured, Magistrate Judge Edison disagreed and held that the claim was sufficiently pleaded. With respect to the Section 905(a) claim, Hinojosa pleaded that no benefits had been paid to him under the LHWCA and that Callan Marine had not secured the payment of compensation as required under the LHWCA. Accordingly, he asserted a claim for negligence in law and admiralty pursuant to Section 5(a). Callan Marine argued that the claim was not ripe because it was conditioned on the failure to secure payment of compensation under the LHWCA to date. Magistrate Judge Edison responded that the argument was “a tad too clever,” reasoning: “So long as no benefits are paid under the LHWCA, Hinojosa is free to pursue a general maritime negligence claim.” Magistrate Judge Edison added: “If, at a later date, Hinojosa receives LHWCA benefits, then he will not be allowed to move forward with the general maritime negligence claim.” Finally, Callan Marine sought to strike the jury demand in the complaint because Hinojosa brought the case under the court’s admiralty jurisdiction pursuant to Section 1333. Magistrate Judge Edison cited the T.N.T. Marine case from the Fifth Circuit that there is no right to a jury trial when the complaint contains a statement identifying the claim as an admiralty or maritime case, as in Hinojosa’s complaint. However, as a jury is allowed in a case brought under the Jones Act and that right extends to the entire case when maritime cases are added, he held that a jury trial was available on all of the claims (not discussing the effect of the designation of the case as being brought under the admiralty jurisdiction). Thanks to Matthew H. Ammerman of Houston, Texas for bringing this case to our attention.
From the state appellate courts:
Clarence Jackson was employed by Plaquemine Point Shipyard as a welding foreman. Plaquemine Point owns and operates a ship repair and cleaning facility attached to the east bank of the Mississippi River a few miles south of Baton Rouge, Louisiana. The repair facility begins with the TT barge, which runs from the bank in a perpendicular direction (with a welded ramp and utility lines). The PPS-10 barge is then secured perpendicularly to the TT barge by cables with utility connections from the TT barge. The facility also has the Tucker barge (with a cherry picker and small crane) that moves weekly, a dry dock, a shop barge, and other floating equipment. Jackson lived at home and drove to the facility daily. He would go out onto customer barges that were brought to the facility to test tanks and sometimes assist with tying off the barges. He operated heavy equipment, including the crane on the Tucker barge. He traveled by boat two or three times to perform welding work. On the day he was injured, Jackson was welding on the TT barge when he was asked to look at a weld on a barge that was secured between the Tucker barge and the PPS-10. When he was returning to the TT barge, he was called to the PPS-10 for a problem with the welding machine on the PPS-10. After fixing the problem on the PPS-10, Jackson tripped over a welding lead on the PPS-10 and fell on his right shoulder. Jackson brought suit in the District Court of Iberville Parish, Louisiana against Plaquemine Point Shipyard, seeking to recover under the Jones Act and general maritime law. Judge Kimball held a bench trial, and, after the trial was held but before he issued his decision, the en banc Fifth Circuit published its opinion in Sanchez, setting forth factors to consider in determining whether a worker satisfies the nature element of the connection test for seaman status. Judge Kimball did not address or follow Sanchez and found that the PPS-10, Tucker barge, three pontoon boats, sand barges, and a rescue skiff, owned by the shipyard, were all vessels and constituted an identifiable fleet. Judge Kimball found that Jackson spent more than 30% of his time on the fleet, that he was subject to the perils of the sea, that the shipyard was negligent under the Jones Act, that Jackson had a claim for unseaworthiness, that Jackson was entitled to maintenance and cure, and that the shipyard was liable for failure to pay maintenance and cure. Judge Kimball awarded judgment for $1 million for the tort claims and $406,668.19 in maintenance and cure (with maintenance payable at $75 per day until Jackson is determined to have reached maximum cure). The shipyard and its insurer appealed to the Louisiana Court of Appeal in Baton Rouge, and Judge Theriot wrote a thorough opinion on application of the elements of the test for seaman status to the facts of Jackson’s claim. Jackson argued that the PPS-10 was not permanently moored and had moved several times since arriving at the shipyard. However, the shipyard argued that its function was as a work platform, it had large openings in its deck and bulkheads, and it was not practically capable of transporting people or cargo over water. Although the PPS-10 was designed to haul rail cars, it was brought to the shipyard and used in different capacities until it was tried off in its current position to the TT barge for the repair facility. After it was tied off, it had not moved except when its lashings broke or when it was shifted three or four feet for incoming barges. The penetrations made in the barge to open it for storage and access were not sealed or watertight, and it was insured as a work platform. Evaluating the facts under the principles enunciated by the Supreme Court in Lozman, Judge Theriot concluded that a reasonable observer, looking to the activities of the PPS-10, would not consider it designed to a practical degree for carrying people or things over water, and the finding that it was a vessel was manifestly erroneous. Judge Theriot then turned to the substantial connection test for seaman status with its nature and duration elements. Although the appellate court concluded that the PPS-10 was not a vessel and could not be considered for the seaman status analysis, Judge Kimball found that the Tucker barge, the three pontoons, the sand barges, and the rescue skiff were all vessels and part of an identifiable fleet. Therefore, Judge Theriot addressed the connection test in relation to the other structures. Judge Theriot meticulously applied each of the factors set forth by the en banc Fifth Circuit in Sanchez to determine whether Jackson’s connection was substantial in nature. Although Jackson testified that he spent 90% to 100% of his time over water, Judge Theriot concluded that Jackson’s work was not of a seagoing nature as his work was performed on vessels that came to the shipyard for repair and none of his work was done while any vessel performed transportation activities (his assistance in tying off incoming vessels was not performed as a deckhand). With respect to the factor whether his assignment to a vessel was limited to performing a discrete task or ended with him sailing with the vessel, Judge Theriot did not find that Jackson’s work on the structures was just performing discrete tasks; however, Jackson did not travel with the boats for his welding except to ride to vessels two or three times. Finally, Judge Theriot noted that there were risks of falling in the water and from wakes of passing vessels, but he held that, as the work was not sea-based and did not involve seagoing activity, Jackson could not satisfy the nature element of the connection test. With respect to the duration test (and the 30% rule of thumb), Judge Theriot eliminated the time Jackson spent on the PPS-10, the time he spent on customer vessels (not part of the fleet), and the time spent traveling on vessels to location (he was a passenger and not in service of the vessel). That did not leave 30% of his time on the structures considered to be the fleet of vessels. Consequently, Judge Theriot reversed the award in favor of Jackson against the shipyard and remanded the case for further proceedings under the LHWCA. Thanks to Georges M. Legrand with Mouledoux, Bland, Legrand & Brackett LLC in New Orleans for bringing this case to our attention.
And on the maritime front . . .
From the federal appellate courts:
This litigation arises from a cancelled charter of Absolute Nevada’s vessel M/V AMERICANA. Absolute Nevada brought a suit in federal court in New York against the charterer, Grand Majestic Riverboat Co., and the parties (including the owners and officers of Grand Majestic) agreed to submit all of their disputes related to the charter and the vessel to arbitration and to refrain from placing a lien on the vessel. Despite the agreement, however, Captain Joseph Baer, the president and a stockholder of Grand Majestic, violated the order by asserting a lien on the vessel for unpaid wages. Even though Baer was not a party to the suit, District Judge Castel held Baer in contempt and issued monetary sanctions against him. Baer appealed the order of sanctions and challenged the jurisdiction of the federal court in New York. As the litigation arose out of a charter party dispute, the Second Circuit began by holding that the district court had admiralty jurisdiction over the suit, which was settled by the agreement for arbitration and by the agreement that Grand Majestic and its officers would not place a lien on the vessel. The appellate court rejected Baer’s argument that he was not subject to jurisdiction in New York (claiming that he lacked sufficient contacts with the state) and held that a non-party’s intentional violation of an injunction entered by a district court is an action “designed to have purpose and effect in the forum” so that an exercise of personal jurisdiction comports with due process. The Second Circuit did vacate the portion of the contempt order that imposed the fine. The monetary sanction, which began at $1,000 per day for Baer’s failure to comply with the court’s order, doubled every seven days until he came into compliance. By the time of oral argument, the fine had reached trillions of dollars. The Second Circuit ordered the district judge to reconsider what was a reasonable sanction. See March 2022 Update.
Captain Baer also brought suit in federal court in Florida against the AMERICANA and Absolute Nevada seeking to recover lost wages and to enforce a maritime lien against the vessel. Magistrate Judge Klindt issued a show-cause order directing Baer to explain why his claims were not barred by the action in New York that found Baer in contempt for violating the terms of the order requiring that all claims arising from the failed charter must be arbitrated. Baer argued that he performed the repair work on the vessel personally as a contractor, separate from the charter agreement between Absolute Nevada and Grand Majestic; however, Magistrate Judge Klindt recommended that the complaint be dismissed because Baer was attempting to re-litigate the same maters that had been addressed in federal court in New York. Judge Davis adopted the recommendation, concluding that Baer’s claims were barred by res judicata. Baer appealed to the Eleventh Circuit, claiming bias based on the statement of the Magistrate Judge that Baer was proceeding pro se and in forma pauperis. The Eleventh Circuit noted, however, that this truthful statement was actually evidence of the lower court’s indication that Baer’s pleadings would be construed more liberally than those drafted by lawyers. The Eleventh Circuit also rejected the argument that counsel for the vessel and Absolute Nevada should be disqualified because the Firm previously represented Baer in the purchase of a passenger vessel, as Baer failed to show any relationship between that purchase and the instant case involving a claim for unpaid seaman wages. Turning to the merits, the Eleventh Circuit agreed that Baer was not a named party in the New York litigation, but the New York court determined that Baer, as president and sole member of Grand Majestic, was expressly bound by the stipulation in that case and the order entered by the district court involved the same cause of action involved in the Florida suit—Baer’s claim for unpaid seaman wages. Consequently, the Eleventh Circuit agreed that the claim was barred by res judicata and affirmed the dismissal of the Florida suit.
This suit was brought by the personal representative of Peter Wojcikowski, a seaman on Maersk Line’s vessel, MAERSK PITTSBURGH, who allegedly suffered a back injury while working on the vessel in Bahrain and, after returning to the United States, died of a self-inflicted gunshot wound because he was unable to tolerate the excruciating pain. The suit was filed in federal court in Louisiana under the Jones Act less than a month from the three-year limitation period for a Jones Act suit. The representative alleged that Maersk Line is a Delaware corporation with its principal place of business in Virginia, but that Maersk Line does business in New Orleans and that venue in Jones Act cases is proper in any district in which the defendant is subject to personal jurisdiction. Judge Guidry held that the court in Louisiana lacked either general or specific jurisdiction over Maersk Line and declined to transfer the case to the Eastern District of Virginia, concluding that the representative had not shown that the initial filing of her complaint in Louisiana was reasonable or that her request for a transfer was in the interest of justice. On appeal, the representative argued that Judge Guidry abused his discretion by dismissing the case rather than transferring it, arguing that it was in the interest of justice to transfer the case to avoid a potential bar to refiling the suit based on the expiration of the statute of limitations. Writing for the Fifth Circuit, Judge Oldham first affirmed the holding that there was no general or specific jurisdiction over Maersk Line, reasoning that the events took place in the waters of Bahrain with no connection to the defendant’s business in Louisiana. With respect to the transfer, Judge Oldham found no abuse of discretion when the representative’s attorney admitted that there was no colorable basis for asserting venue in Louisiana, stating that it is not in the interest of justice to aid a non-diligent plaintiff who knowingly files a case in the wrong district. Thus, the Fifth Circuit affirmed the dismissal of the case and the denial of the request to transfer.
From the federal district courts:
Opinion Expeditors & Production Services
Jon Willis, a platform operator, was injured while assisting in the offloading of a grocery box from Barry Graham Oil Service’s work vessel, MS. TAMI, to an offshore platform owned by Fieldwood Energy. As the box was being lowered to the platform, Willis grabbed the tag line to guide the box to its landing spot on the platform; however, the line became loose and Willis fell from the boat onto the platform. Willis brought suit against Barry Graham, and Barry Graham asserted limitation of liability as a defense. Willis responded with a motion for summary judgment on the limitation defense. Willis submitted the report of his expert, Robert Borison, setting forth his opinion on the negligence of the defendant, and argued that if the fact finder found the defendant was negligent in that manner, then the defendant would have privity or knowledge. Barry Graham answered the motion by seeking to strike Borison’s expert report on the ground that it was not a sworn declaration itself but was attached to a declaration that was sworn as to the statements in the declaration. Judge Cain declined to strike the report, however, reasoning that it is improper to strike an expert report on summary judgment solely because it is unsworn (and also because the motion for summary judgment was premature). Judge Cain reasoned that the argument that there would be no privity if Willis established negligence as he alleged would shift the burden to Barry Graham to show that it lacked privity before there was a finding of fault. See January 2021 Update.
Barry Graham filed a third-party claim against Wood Group, asserting that Wood Group was liable for contribution or indemnity for the negligence of its employee who operating the crane that was lowering the grocery box to the platform. Wood Group moved for summary judgment, arguing that, under Louisiana law, each party is liable only for its own negligence and there are no contribution/indemnity claims. Barry Graham argued that maritime law, and not state law under the Outer Continental Shelf Lands Act, because the suit was brought against the vessel owner and not against the platform contractor. Judge Doughty disagreed, concluding that the controversy arose on the artificial structure located on the OCS and that Louisiana law was not inconsistent with federal law (the allocation of fault in LHWCA Section 5(b) claims under Edmonds because Section 5(b) does not apply to claims against platform defendants. Further, Judge Doughty found that maritime law did not apply of its own force as Barry Graham’s claim asserted that Willis sustained injuries on the platform due to the alleged negligence on the platform. Although maritime law may be applicable to Willis’ action against Barry Graham, Judge Doughty reasoned that choice-of-law is determined with respect to each claim. The contribution/indemnity claim was for actions of the platform contractor on the platform. Accordingly, Judge Doughty held that the locality test for admiralty jurisdiction was not satisfied (he also held that the second prong for maritime jurisdiction was not satisfied as the injury to a platform worker who fell to the platform lacked a substantial relationship to traditional maritime activity and did not pose a potential disruption to maritime commerce). Consequently, Judge Doughty held that the claims for contribution and indemnity were barred by Louisiana law as Barry Graham could only be liable for its own fault. That did not mean that the negligence of Wood Group was not relevant. Finding a fact question of that negligence, Judge Doughty held that Barry Graham could present evidence of Wood Group’s comparative negligence (which would reduce its liability to Willis) but Wood Group would no longer be a third-party defendant.
Barry Graham also filed a third-party complaint against Expeditors & Production Services, which owned a dock facility in Cameron, Louisiana from which the TAMI was loaded. Barry Graham contended that, to the extent Expeditors may be found liable with respect to the tagline, Barry Graham was entitled to contribution/indemnity from Expeditors under the general maritime law. Expeditors argued in response that Louisiana law applied and that Louisiana law barred the contribution/indemnity claim. As he had previously held that Louisiana law, and not maritime law, applied to Barry Graham’s claims against Wood Group, Judge Doughty held that Louisiana law applied and the vessel owner could not recover contribution or indemnity against Expeditors with respect to the loading of the box on the vessel.
Sea Shipping is a non-vessel owning common carrier that contracted with My Equipment for the shipment of cargo from Houston, Texas to Antwerp, Belgium. Three containers were seized by U.S. Customs before exportation, and Sea Shipping incurred demurrage charges and brought this action in federal court in Houston against My Equipment to recover the demurrage charges. Sea Shipping asserted admiralty jurisdiction for the suit, and My Equipment moved to dismiss the action for lack of admiralty jurisdiction. My Equipment argued that the bare invocation of admiralty jurisdiction, without identifying a specific claim in admiralty, was insufficient to establish jurisdiction, and that the court should not consider the bills of lading attached to the unverified complaint because unauthenticated evidence was insufficient to carry Sea Shipping’s burden to establish the jurisdiction of the court. Chief Judge Rosenthal noted that My Equipment did not contest that the dispute arose from the bills of lading or that they were authentic. Without a dispute, Chief Judge Rosenthal held that it was not necessary to verify the complaint or include an affidavit attesting to the authenticity of the exhibits. She then addressed whether the allegations were sufficient to establish admiralty jurisdiction. The bills of lading involved ocean transportation and did not reference inland carriage. Under Kirby, the bills of lading, which called for substantial carriage of goods by sea, were maritime contracts, and the claim that My Equipment breached the contracts gave the court admiralty jurisdiction.
Carla G. Dempsey and her husband went on a snorkel tour off the coast of Oahu that was operated by Wild Side Specialty Tours. Before departing, Dempsey signed a release and waiver of liability in favor of Wild Side. Following the tour, Dempsey was walking on the deck of the ISLAND SPIRIT while wearing wet fins and she fell and broke her ankle. She brought this suit in federal court in Hawaii against Wild Side, claiming negligence for failing to instruct and warn passengers about the use of fins on the vessel. Wild Side asserted the release/waiver as a defense, and Dempsey moved for partial summary judgment that the release was void as a matter of law under 46 U.S.C. Section 30509 (applicable to vessels transporting passengers between ports in the United States or between a port in the United States and a port in a foreign country). Wild Side argued that the statute was not applicable because the vessel was not transporting passengers between ports in the United States (departing from and returning to the same port). Judge Gillmor disagreed, holding that the statute bars enforcement of waivers for vessels transporting passengers from one port and back to the same port (finding the reasoning of the Eleventh Circuit to the contrary in the Shultz case to be “unpersuasive.” Accordingly, Judge Gillmor granted partial summary judgment that Wild Side could not rely on the release/waiver as a defense.
Hunter Smith, a passenger on the CARNIVAL GLORY, participated in a sports trivia competition on the vessel that included an arm-wrestling competition as a tiebreaker. Claiming that he had never arm-wrestled before, was not aware of the risks, and that he was following the instructions of the trivia host, Smith brought suit against the cruise line in federal court in Florida based on failure to warn and breach of a duty of reasonable care. The cruise line moved for summary judgment that there was no duty to warn for a danger that was open and obvious and that it did not fail to exercise reasonable care. Citing Smith’s testimony that he knew that arm-wrestling could result in injury and reasoning that any possible danger from arm-wrestling was apparent to a reasonably prudent person through use of common sense, Judge King held that the cruise line did not have a duty to warn. As to the claim of general negligence, Judge King held that Smith willingly participated in the competition and failed to prove a prima facie case for negligence.
This is another case that challenges the attempts of the Richardson Bay Regional Authority in Sausalito, California to designate boats as “marine debris.” See September 2022 Update discussion of Tenwinkle v. Richardsons Bay Regional Agency. Daniel Knight sought a temporary restraining order to prevent Richardson Bay Regional Agency from seizing his boat, the CORONADO, and its anchor system, raising claims under the Fourteenth Amendment (based on the Fourth Amendment and Fifth Amendment). Knight filed a pro se complaint in federal court in California asserting that the boat is not marine debris because it sails and has a functional engine and that he lives on the boat and the effort to dispose of the ship will render him homeless. At the early stage of the proceedings, Judge Orrick held that Knight had sufficiently alleged constitutional violations and harm to his health, compared to the non-urgent need to enforce environmental protection guidelines, that a temporary restraining order should be issued.
Tug Construction was created to construct tugboats to bareboat charter to Harley Marine Services. Five newly constructed tugs were delivered to and accepted by Harley Marine, and the vessels were tendered for redelivery in 2019 (except one that was arrested after redelivery was not tendered). The parties disputed whether the vessels were redelivered in good condition, and Tug Construction brought this suit against Harley Marine seeking damages for its costs of restoring the vessels together with charter hire and insurance premiums for the period until the repairs were completed. The case was tried in a bench trial to Magistrate Judge Tsuchida, who found that Harley Marine had breached the charter party by failing to redeliver the vessels in the same good condition as at delivery, ordinary wear and tear excepted. Magistrate Judge Tsuchida also held that the term “redeliver” is a term of art by which a vessel is not deemed redelivered until it is tendered at the agreed redelivery location in the same good condition as a delivery and that the charterer is required to pay charter hire and insurance until the vessel is restored to the required condition. Accordingly, Magistrate Judge Tsuchida awarded repair costs, charter hire, and insurance costs to Tug Construction for each of the vessels (a total of $1,408,502.16), plus prejudgment interest and attorney fees.
Opinion Charles, Boler, McInnis, Medel, Moore, Peschlow, Aubert, and Jenkins
Opinion Reconsideration Pettaway, Riddell-Hare, Nestle, and Patton
Gregg and Monette Wynne, individually and on behalf of their minor children, alleged that they were exposed to harmful substances and chemicals around their residence in Santa Rosa Beach, Florida, as a result of the Macondo oil spill and the subsequent cleanup efforts. William J. Fitzgerald, III, and Dianna M. Fitzgerald brought an action on behalf of their deceased son, Nathan Fitzgerald, seeking to recover for his exposure to toxic chemicals during the cleanup of beaches, marshes, wetlands, and other onshore areas by removing polluted sand, collecting tar balls, laying or collecting boom, and applying dispersant. Freddie Bawoo Zayzay claimed that he was subjected to crude oil and dispersants while participating in response efforts at the beaches of Bay St. Louis and Waveland, Mississippi and at a decontamination site in Pascagoula, Mississippi. Rennell Brown alleged that he was exposed to toxic chemicals while performing clean-up work in Moss Point and Biloxi, Mississippi. As these plaintiffs failed to support their claims with expert testimony as to causation, Judges Vance, Milazzo, and Morgan granted summary judgment for lack of evidence of causation and dismissed the suits.
Chianti Lashon Booth alleged exposure to oil and dispersants while cleaning oil and oil-soaked debris from beaches and boats and from laying and retrieving containment booms. Carlos Alexander Thomas claimed exposure to oil and dispersants while engaged in clean-up work in Gulfport, Bay St. Louis, Cat Island, and Horn Island, Mississippi. Corey Anthony Charles, Sterling Wayne Boler, Jacques Pierre McInnis, Jr., Jesse Cantu Medel, III, Dennis Ray Moore, Mark L. Peschlow, Teandra S. Aubert, and Terria Jenkins claimed that they were exposed to crude oil and dispersants while they were involved in cleanup or recovery work after the oil spill. Kirk Prest alleged that he was exposed to oil and dispersants when he joined the Vessels-of-Opportunity program with the use of his vessel in the cleanup from the Macondo spill. His work consisted mostly of wildlife rescue operations near Venice, Grand Isle, and Port Fourchon, Louisiana. These plaintiffs presented the opinions of Dr. Jerald Cook, an occupational and environmental physician to carry their burden on causation, but Judges Milazzo and Ashe held that Dr. Cook’s opinions were insufficient on general causation and were excluded (Judge Ashe also excluded the opinions of Dr. Robert Ross in Prest’s case). Consequently, without expert support, these cases were dismissed with prejudice.
John Pettaway, Teresa Lynn Riddell-Hare, Stephen Nestle, Carlos Patton, and James R. Wade brought suits for exposure to crude oil and dispersants from the Macondo spill, and each plaintiff submitted an expert report from occupational and environmental physician Dr. Jerald Cook. Judge Vance struck the opinions of Dr. Cook and granted summary judgment, and these plaintiffs moved for reconsideration, arguing that they were unable to properly present appropriate expert testimony on dosage because of BP’s alleged mismanagement of biological monitoring. They noted that BP had been sanctioned for failing to produce a proper corporate witness on biological monitoring in another case. They argued that the court should deny ruling on the motion for summary judgment until they could obtain the deposition of an appropriate corporate witness. Judge Vance disagreed, noting that the plaintiffs did not contend that the discovery about what BP did not do after the oil spill was not going to supply evidence of dosage or cure the lack of expert evidence that was the basis for the dismissals. The plaintiffs did not claim that they had new evidence on the merits of their claims. Accordingly, Judge Vance declined the requests for reconsideration.
Captain Charles Moran, a seaman assigned to the tug SIGNET PURITAN, reported for his 28-day hitch on the vessel on September 29, 2021, but was informed that the vessel was not departing due to poor weather. He was given permission to get a haircut and pick up groceries for the crew, but he broke his ankle in the parking lot of the hair salon and could not perform his duties for his hitch. He was fired on October 13, 2021 after an investigation of an unrelated incident. On December 21, 2021, Moran brought this action in Texas state court against his employer, Signet Maritime, seeking maintenance and cure and punitive damages for willful failure to pay maintenance and cure. Although his employer is a Texas company, it snap-removed the case to federal court based on diversity, arguing that the forum defendant rule did not prevent removal because it had not been served and that the bar to removal of a Jones Act case did not prevent removal of the suit seeking maintenance and cure. Signet Maritime then moved for summary judgment on the claim for punitive damages for willful failure to pay maintenance and cure, arguing that it did not know that Moran was seeking payment for his medical care. Moran responded that he needed medical care for the broken ankle, he told the captain about his injury when it occurred, and that he has not been provided with treatment from Signet Maritime. Finding no support for an inference that Signet Maritime exhibited callousness and indifference to Moran’s injury, Chief Judge Rosenthal held that Moran could not recover punitive damages. On August 29, 2022, Chief Judge Rosenthal denied Moran’s motion for reconsideration, reasoning that Moran gave no indication that he would seek maintenance and cure until after Signet had terminated his employment and just a few days before the filing of this lawsuit and adding that punitive damages were not available for the claim for wrongful discharge. See September 2022 Update.
The parties agreed to bifurcate the trial of Moran’s claims, and liability was tried to a jury, which found that Moran was injured in the service of the vessel (so that Signet was liable for maintenance and cure). From the time of the accident until days before trial, the only injury Moran claimed was to his foot and ankle. Subsequently, Moran sought to recover for neck and back injuries he contends are related to the fall or that were incurred in the service of the vessel. Signet argued that the claim for neck and back injuries was too long after the fall to be the basis for maintenance and cure, but Chief Judge Rosenthal held that the time of the injury, not the timing of the symptoms, determines maintenance and cure benefits. Although Moran argued that injuries occurring during the maintenance and cure period are sustained in the service of the ship, Chief Judge Rosenthal held that consideration of maintenance and cure benefits would be limited to benefits related to conditions arising from or aggravated by the fall. Accordingly, she held that she would allow testimony with respect to Moran’s foot and ankle injuries and other injuries that may have been caused or aggravated by the fall on the ship.
This case arises out of a collision on the Willamette River between two vessels owned by Willamette Jet Boat Excursions, the PEREGRINE FALCON and the OSPREY. After one set of claimants brought suit against Willamette in state court, Willamette brought this action in federal court in Oregon seeking to limit its liability for the two vessels. Passengers on both boats filed claims in the limitation action, and moved to lift the stay so that they could litigate their claims in the state court (the second set of claimants agreed to join in the suit already filed in state court). Willamette objected to lifting the stay, but Judge Simon held that the stipulations were adequate to protect Willamette’s rights in the federal proceeding. The claimants agreed to waive both claim preclusion and issue preclusion, they agreed that they would not enforce any judgment exceeding the limitation fund outside the limitation proceeding, and they stipulated to an irrevocable priority of claims on a pro rata basis in proportion to their respective claims (to be determined by a binding mediation within 30 days following resolution of the state action). Concluding that the stipulations and the agreement to proceed in a single action (so as not to deplete the insurance coverage) were sufficient, Judge Simon lifted the stay to allow the claimants to proceed against Willamette in the state action.
Irfansyah Riyanto, personal representative of the heirs of passengers who died when a Boeing jet (Sriwijaya Air Flight 182) crashed into the Java Sea, brought this suit against Boeing in state court in Cook County, Illinois. Boeing removed the case to federal court based on admiralty and diversity jurisdiction, and Riyanto moved to remand the case to state court. Citing the majority view, Judge Dow held that admiralty claims are not removable absent another basis of jurisdiction. Boeing cited the diversity between Riyanto and Boeing and argued that the forum defendant rule (Boeing’s principal place of business is in Illinois) was a procedural rule and was not jurisdictional—therefore, there was an independent basis for federal jurisdiction. Judge Dow disagreed, considering each basis for jurisdiction separately. As the case could not be removed on the basis of diversity because of the forum defendant rule, Judge Dow did not believe that diversity could serve as a basis to avoid the perceived non-removability from the saving-to-suitors clause [failing to address the admonition of the Supreme Court: “It is not a remedy in the common-law courts which is saved, but a common-law remedy.”].
Walter Jackson was employed as a rigger on a platform located on the outer Continental Shelf of the Gulf of Mexico off the Louisiana coast. A section of pipe that was being removed from the platform came loose and struck Jackson, resulting in his death. The spouse and guardian of his minor child brought suits in federal court in Louisiana that were consolidated. The platform operator moved for summary judgment on the survival claim, asserting that Jackson did not experience conscious physical or mental pain and suffering before his death. Judge Cain applied Louisiana law to the accident on the platform, which permits recovery for damages suffered by the deceased from the time of injury to the moment of death. The platform operator argued that Jackson was rendered unconscious instantly when struck by the falling pipe and that he could not have experienced fear before his death because he was hit on the back of the head. The plaintiffs cited the report of Jackson’s rapid breathing when crew members first approached him and began to administer CPR, and Judge Cain agreed that the report provided evidence that Jackson may not have died instantaneously. However, it did not demonstrate he experienced any pain, suffering, or other emotion between injury and death. Accordingly, Judge Cain dismissed the survival claim with prejudice.
Andrew Delgado slipped and fell on water on the deck of the cruise ship Carnival GLORY and brought this action against the cruise line in federal court in Florida. The cruise line filed an answer and affirmative defenses, and Delgado moved to strike several of the affirmative defenses. Magistrate Judge Damian began by noting that affirmative defenses provide for judgment for the defendant even though the plaintiff can prove his case by a preponderance of the evidence. Magistrate Judge Damian added that affirmative defenses are subject to the general pleading requirements of Rule 8(a) and will be stricken if they contain no more than bare-bones conclusory allegations. Turning to the specific defenses, Magistrate Judge Damian held that the pleading that the complaint failed to state facts that are sufficient to constitute a cause of action was not an affirmative defense and should be stricken. However, the cruise line was allowed to reassert the defense as a general denial. Magistrate Judge Damian agreed that the defenses that the injuries were attributable to a pre-existing condition, that the plaintiff failed to mitigate damages, and that the injuries were the result of an intervening or superseding cause were valid affirmative defenses, but the cruise line would have to replead the defenses with sufficient facts to give the plaintiff fair notice of the defenses. Accordingly, these defenses were stricken without prejudice to repleading them.
Charlotte Smith slipped and fell on a foreign liquid substance while a passenger on the CARNIVAL VISTA and brought this suit against the cruise line in federal court in Florida to recover for her injuries. She asserted claims for direct liability of the cruise line and vicarious liability for the conduct of a crew member, and the cruise line moved to dismiss the complaint as inadequately pleaded. Judge Bloom agreed that the complaint needed to be repleaded for two reasons. First, the pleading whose title indicated it was intended for vicarious liability included language for a claim of direct liability, which would have to be brought in a separate count. Additionally, although Smith did identify the crewmember whose conduct was involved (including the date and location for the action), there were no allegations setting forth the duty that was breached by the crewmember. Smith set out the duty breached by the cruise line but did not identify how the crewmember breached a duty that caused her injury. Consequently, the pleading did not state a claim as a matter of law and had to be repleaded.
Kevin Beam was injured while working as a deckhand on Watco’s tug, unloading coal barges on a floating dock at Watco’s Cora Illinois Terminal, when a steel cable snapped and struck him in the back. Beam brought this action against his employer in federal court in Illinois alleging claims of negligence under the Jones Act and unseaworthiness and maintenance and cure under the general maritime law. Beam underwent extensive medical procedures and surgeries, and his employer’s expert, Dr. John Mattingly, stated that one of the procedures that was performed was necessary because of underlying degenerative conditions such as osteoporosis or osteopenia. Beam’s radiologist, Dr. Sandeep agreed that Beam suffered from osteoporosis and osteopenia and recommended that he undergo a DEXA bone scan. Watco sought an independent medical examination to conduct a DEXA bone scan to establish that Beam’s later conditions were not related to his accident. Beam argued that, under the Eggshell Skull Rule, Watco was responsible for the conditions caused by the injury even if a preexisting condition contributed to them. Magistrate Judge Sison noted the exception to the rule that the tortfeasor is only liable to the extent of the aggravation to the preexisting condition. If Beam suffers from osteoporosis or osteopenia, those conditions could be the actual cause of his ongoing treatment. Concluding that Watco established good cause to conduct a DEXA bone scan, Magistrate Judge Sison compelled an independent medical examination. See July 2021 Update.
Watco admitted negligence under the Jones Act but did not admit that all of Beam’s injuries and medical conditions were caused by its negligence. Therefore, Judge Yandle granted partial summary judgment on liability with a trial to be held on causation and damages. Watco’s motion for summary judgment on Beam’s claim for punitive damages for willful failure to pay maintenance and cure was granted for lack of evidence that Watco acted in a willful and wanton matter, reasoning that the failure to pay enough in maintenance to cover the seaman’s living expenses “is not proof of bad faith in-an-of-itself.” (Order on December 16, 2020). Damages and causation were then tried in a five-day bench trial to Judge Yandle, and she found that Beam was totally and permanently disabled from the accident, that he was entitled to maintenance at the rate of $40 per day, and that he was entitled to the full cost of the medical bills introduced into evidence (without reduction) except for bills associated with his right wrist surgery and treatment that she held were not causally related after striking Beam’s medical opinions on that matter. She awarded additional maintenance of $15,800, unpaid medical expenses (cure) of $978,961.98, future medical expenses of $789,531.26, past wage loss of $203,422, future wage loss of $563,756, past pain and suffering of $1 million, future pain and suffering of $500,000, and physical impairment/disability of $1 million. The total award was $5,051,471.24.
Daniel Gonzales Llagas, a citizen of The Philippines, brought this suit, individually and as a class action, in the District Court of Calcasieu Parish, Louisiana, claiming unpaid wages against Sealift Fleet under United States statutes and maritime law. The case was removed to federal court in Louisiana, and, after extensive procedural wrangling, Llagas was ordered to arbitration with the National Conciliation and Mediation Board of the Department of Labor and Employment in The Philippines. The arbitrator ruled against Llagas on his claims under the law of The Philippines and the law of the United States, finding that Llagas “miserably failed to prove by any slight of evidence that he, a Filipino seafarer is in fact considered a ‘gang member’ under US Law.” Sealift moved to enforce the award of the arbitrator under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), and Llagas argued that enforcement of the award, denying the claim under American law, would be contrary to public policy. Judge Cain explained that, under the effective vindication doctrine, foreign tribunals have the authority to arbitrate claims under American law, but the court in the United States must ensure that the legitimate interests of American law have been addressed. The scope of the inquiry is limited, however. The American court need only inquire if the foreign tribunal took cognizance of the American claims and actually decided then. The American court cannot decline to enforce the award based on a mistake of law or fact. In this case, Llagas was given the opportunity to present his American claims, and they were denied on the merits. That decision did not violate public policy, and Judge Cain recognized and enforced the decision of the arbitrator.
Coastal Cement hired Colonna’s Shipyard to perform repair on its barge MBT-35 in Norfolk, Virginia. There were disputes about the scope of the work and the amount that Colonna charged, that resulted in a payment schedule that was not fulfilled. Coastal transferred the barge to its affiliate, Dragon Products, which used the vessel to carry and unload cement in Boston Harbor. Colonna’s Shipyard filed this complaint in federal court in Virginia against Coastal Cement, and Coastal began negotiation with Colonna’s Shipyard to prevent arrest of the vessel, offering to file a surety bond in the amount of $3.4 million. After Colonna’s Shipyard declined to accept the bond, Coastal sought a temporary restraining order to prevent Colonna’s Shipyard from arresting the vessel (which would allegedly cause Coastal and its affiliate Dragon to suffer damages that they could not recover). Coastal argued that the district court had the right to place a res as a substitute for a vessel that is not located within the district; however, Chief Judge Davis declined to apply that principle to the situation where an in rem action was not pursued prior to the filing of the motion and where the vessel was located in the territorial bounds of another jurisdiction. Without reaching the merits of the request, Chief Judge Davis denied the request for the TRO, stating that the court in the district where the vessel is located should address the security.
The limitation action filed by Yazoo River Towing in connection with the drowning deaths of two of its employees returns to the Update. The M/V MELVIN KING, a push boat owned by Yazoo River Towing, was waiting its turn to pass through the Bayou Sorrel locks of Little Tensas Bayou in Louisiana, when four crew members (including Lloyd Standridge and Norsalus Jackson) boarded the vessel’s skiff and traveled to Jack Miller’s Landing/J’s Lounge where they consumed alcohol until the bartender felt they had enough to drink and kicked them out. On the return to the MELVIN KING, the skiff either struck an object in the water and swamped or collided with M/V CECILE A. FITCH. Mate Jamie Lee May was operating the skiff. Standridge and Jackson drowned, and the owners of the MELVIN KING and CECILE A. FITCH filed limitation actions in federal court in Louisiana that were consolidated. Claims were filed in the limitation actions by the injured seamen, the families of the deceased seamen, and the vessel owners. The Standridge beneficiaries moved to bifurcate the limitation actions so that only the exoneration-limitation actions were decided in federal court and they could then try their damage claims and actions against third parties in state court. Evaluating the rights of the parties under the Limitation Act and the Saving-to-Suitors Clause in the context of judicial efficiency, Judge deGravelles held that the court would bifurcate proceedings and try exoneration, limitation, and apportionment of fault in one proceeding. That trial would include the fault of all of the parties from whom Standridge sought to recover in order to avoid separate, duplicative, and expensive liability trials. If the first trial were to result in the denial of limitation and Standridge were entitled to recovery, the limitation stay would be dissolved so that Standridge could proceed with trial of damages in state court. See August 2021 Update.
Yazoo River Towing then filed a motion for summary judgment, arguing that it was not liable because the employees involved in the incident were not acting within the course and scope of their employment and because their actions in operating the skiff after drinking were a superseding cause that would break any chain of causation as to Yazoo River Towing. Yazoo River Towing argued that the crew members left the vessel in the skiff without authority or permission and that their actions were directly contrary to their employer’s policies (prohibiting the crew from using the skiff for personal reasons). The claimants provided evidence, however, that the skiff had been used to get groceries and cigarettes and, on at least two other occasions, to buy liquor. Moreover, there was evidence that the Captain of the MELVIN KING called the crew while they were ashore and asked them to bring back some crawfish. Thus, there was some evidence that the crew was returning to the vessel with food on the order of the Captain. Additionally, Judge deGravelles cited case law that a seaman’s intoxication on authorized shore leave will not take him outside the course of employment unless the intoxication was a cause of the accident, which could not be determined on summary judgment. Judge deGravelles noted Yazoo River Towing’s policy prohibiting employees from drinking alcohol while on/in a vessel/vehicle and being paid by Yazoo River Towing, but there was evidence that the policy was not enforced and that alcohol was consumed in the wheelhouse of the vessel while it was under weigh. Consequently, there were multiple issues to be resolved with respect to the course of employment. As to superseding cause, which is ordinarily a fact question, Judge deGravelles reiterated the same questions of authorization and enforcement (for the alcohol policy) with respect to the policy on the use of the skiff. Therefore, he held that summary judgment was not appropriate on the defense of superseding cause.
Galaxy Lights owns the 95-foot yacht SANTANDREA, which was moored as a dead ship at the J. Goodison shipyard in Rhode Island. The M/V MONHEGAN, owned by Kinda Priestly, was also moored at the shipyard. In anticipation of a storm, the MONHEGAN was moved to an area closer to the SANTANDREA. During the storm, the MONHEGAN remained at the pier with her engines operating and lines connected to the pier. However, some of the SANTANDREA’s mooring lines parted, and the vessel drifted from the berth and allided with the MONHEGAN, resulting in damage to both vessels and the pier. Galaxy Lights brought this action against Priestly and Goodison, claiming they were liable for the damages to the SANTANDREA. Priestly moved for summary judgment, arguing that Galaxy Lights was solely at fault and could not overcome the presumption of fault provided by The LOUISIANA Rule. Galaxy Lights argued that The LOUISIANA Rule did not apply because the MONHEGAN was not stationary at the time of the incident, citing the fact that the engines were engaged to keep the vessel moving against the waves to keep the vessel off the dock. Judge Smith rejected that argument, noting that the vessel may have been moving in some sense of the word, but “perfect stillness” was not necessary for the vessel to be stationary and for The LOUISIANA Rule to apply. Judge Smith found that Galaxy Lights had not rebutted the presumption from the Rule and then addressed the contention that Priestly was guilty of statutory violations that would cause the presumption of causation from The PENNSYLVANIA Rule to apply. However, despite the presumption, Judge Smith could not find any causal link between the statutory violations and the allision. Therefore, he granted summary judgment to Priestly.
Wind is the developer of a windfarm off the coast of Ocean City, Maryland. US Wind needed to install a Met Mast Tower (a meteorological tower to gather information about site conditions for the operation of the wind turbines), and it ordered the Met Mast from a Louisiana company. US Wind originally hired EPIC Applied Technologies as an installation contractor to transport and install the Met Mast, but EPIC fell into bankruptcy. One of EPIC’s contractors was InterMoor, and InterMoor agreed to work with other contractors to complete the project in the absence of EPIC, including working with the other contractors who had been hired. One of those contractors was All Coast, which was hired to carry and install the alignment frame that was necessary for the installation of the Met Mast, using its vessel the GREAT WHITE. US Wind’s insurer required that US Wind retain a marine warranty surveyor to assess the feasibility of plans for various stages of the wind farm project, including the suitability of vessels being used. American Global Marine’s bid was accepted, and American Global issued a Certificate of Approval for the sailaway of the GREAT WHITE. The vessel arrived late, however, because of adverse weather, and US Wind incurred significant losses as a result. US Wind brought this suit in federal court in Maryland against InterMoor in 2019 and added American Global as a defendant in 2021 on the basis that its approval should have considered the suitability of the vessel in anticipated weather conditions. American Global moved to transfer the case to Texas because InterMoor and American Global are both Texas entities and a majority of their witnesses are from Texas. Citing US Wind’s choice of its home forum, the fact that the target destination was off the coast of Maryland, and the familiarity of the court with the facts and issues after presiding over the case for two years, Judge Gallagher declined to transfer the case from Maryland to Texas. American Global then moved for judgment on the pleadings on the grounds that timely notice had not been given and its liability was limited to $50,000 based on the provisions of its standard Terms and Conditions, which it alleged were incorporated into its contract with US Wind. There was no reference to those Terms and Conditions in the Proposal that American Global sent to US Wind for execution; however, American Global argued that the Terms and Conditions were incorporated through the confidentiality footer on emails and in the Certificates of Approval and invoices. Judge Gallagher declined to rule based on the Certificates and invoices for lack of sufficient facts. The language in the email footers under the title “CONFIDENTIALITY NOTICE” contained several sentences about the confidentiality of the communication and agreeing to delete the email if received in error. At the end it contained an incomplete sentence: “All work undertaken subject to our standard terms and conditions of business (a copy of which is available on request).” Noting that the unclear language, buried in an incomplete sentence of an otherwise relatively standard confidentiality notice at the footer of corporate emails was sufficiently unclear to incorporate the Terms and Conditions, Judge Gallagher denied the motion for judgment on the pleadings. See October 2021 Update.
InterMoor chartered the barge MARMAC 261 under a time charter with MARMAC to transport the Met Mast. When weather conditions forced delays in the installation, US Wind requested that InterMoor deposit the Met Mast at US Wind’s facility in Baltimore. MARMAC told US Wind to work out the details with charterer InterMoor, but negotiations failed, and InterMoor directed MARMAC to return the Met Mast to Louisiana. On the return, the Met Mast was arrested by US Wind in North Carolina in a Rule D possessory action (while the Met Mast was on the barge), and InterMoor attached the Met Mast under Rule B as security for an action against US Wind for breach of contract. The Met Mast was released under a bond issued by US Wind with US Wind and InterMoor splitting the custodia legis costs during the arrest/attachment. US Wind filed the action for breach of contract against InterMoor in federal court in Maryland, and the North Carolina suit was transferred to the federal court in Maryland. A suit by InterMoor against US Wind that was filed in federal court in Texas was dismissed for lack of personal jurisdiction over US Wind. MARMAC, which was not a party to the other actions, brought an action in federal court in Louisiana against InterMoor, in personam, and against the Met Mast in rem (asserting a maritime lien for trespass because US Wind failed to retake possession of the Met Mast, depriving MARMAC of the services of its barge). MARMAC also brought a Rule B attachment (and quasi in rem action against US Wind) for maritime trespass and for unjust enrichment because MARMAC had to pay storage for the Met Mast after it was removed from the barge. The Louisiana federal judge (Morgan) released the Met Mast from arrest and attachment on bond, and the Met Mast and US Wind filed motions addressed by Judge Morgan. MARMAC asserted a carrier’s lien against the Met Mast for the arrest, and US Wind argued that the court lacked jurisdiction over the in rem claim in Louisiana because the Met Mast was taken to Louisiana contrary to the instructions of US Wind and there was no purposeful availment of the Louisiana forum by US Wind. Describing that argument as irrelevant, Judge Morgan held that minimum contacts are not required for the arrest of the vessel and that once the procedures of Rule C were satisfied, the court had jurisdiction. Judge Morgan then addressed the issue whether the arrest and attachment of the Met Mast in North Carolina prevented MARMAC from arresting it in Louisiana. As the Met Mast was released on a bond that was only applicable to damages sought by InterMoor, the bond/prior arrest did not provide security to MARMAC and did not prevent MARMAC from arresting the vessel in the subsequent proceeding. That was not the end of the story for the arrest, however. Judge Morgan found that the Met Mast was on the barge pursuant to the charter with InterMoor. That charter did not extend the carrier’s lien to cargo owned by third parties and no notice of any carrier lien was given to owner US Wind. Accordingly, Judge Morgan held that MARMAC did not have a carrier’s lien on the Met Mast and she dismissed the in rem claim. US Wind also argued that the court lacked general or specific personal jurisdiction with respect to US Wind, but Judge Morgan held that minimum contacts were not required for the quasi in rem jurisdiction over the Met Mast owned by US Wind. As MARMAC pleaded a prima facie claim of maritime trespass by abandoning the Met Mast on the barge, depriving MARMAC of the use of the barge, and as US Wind was not present within the district, Judge Morgan held that the requirements for the attachment and jurisdiction against US Wind were satisfied, and she declined to dismiss those claims. Finally, Judge Morgan declined to transfer MARMAC’s claims to the federal court in Maryland, considering that the barge, the Met Mast, and MARMAC are in Louisiana and that InterMoor is headquartered in Texas; however, she severed and transferred InterMoor’s cross-claim against US Wind to Maryland as it was substantially similar to the litigation in Maryland (involving breach of the contract between US Wind and InterMoor over the transportation of the Met Mast). See November 2021 Update.
InterMoor then filed a motion for partial summary judgment along with evidentiary motions in the action filed by US Wind against InterMoor in Maryland (the claims against InterMoor centered on InterMoor’s failure to install the Met Mast and the failure to turn over the Mast to US Wind after the project failed). InterMoor had entered into a Master Services Agreement with US Wind after EPIC stepped out of the picture, and InterMoor worked with US Wind, All Coast, and other contractors to prepare the GREAT WHITE for departure. However, InterMoor did not compare the operational limits of the GREAT WHITE with the expected weather conditions. When delays put the transportation into hurricane season and unfavorable weather, the installation was scrapped. Before addressing the merits of the claims against InterMoor, Judge Gallagher had to determine the applicable law. The MSA provided for the application of maritime law, but if maritime law is not applicable, then by Texas law. Consequently, Judge Gallagher agreed to apply maritime law and Texas law if no maritime law is on point. Judge Gallagher declined to strike the opinions of Michael Frampton and Scott C. McClure on the roles and responsibilities of an installation contractor on the offshore installation project. With respect to the motion for summary judgment, Count 1 of the complaint alleged breach of contract, and Count 2 alleged breach of warranty. The contract provided that all items furnished by InterMoor and incorporated into the work would be suitable, and US Wind argued that the use of the lift boat whose operating limits were incompatible with the expected weather conditions was a breach of contract. InterMoor argued that it was not responsible for the subcontractor’s vessel, but Judge Gallagher responded that InterMoor’s position was an artificially narrow reading of the contract and would allow it to transfer responsibility by delegating tasks to subcontractors. However, the scope of the work to be performed was vague and “unilluminating,” and Judge Gallagher could not grant summary judgment. With respect to US Wind’s claim that InterMoor failed to return the Met Mast to Baltimore once the project was called off, InterMoor argued that US Wind had not complied with the contractual requirement setting forth the procedure for additions to the scope of the contractual work. However, Judge Gallagher found sufficient evidence of authorization from emails from US Wind to unload the mast in Baltimore with an agreement to cover the cost. Therefore, she declined to dismiss that claim. US Wind also argued for rescission of the contract based on negligent misrepresentations, claiming that it should recover the $3.3 million it had paid and for which it received no benefit. Citing Texas law, Judge Gallagher held that rescission was not available for breach of contract or negligent misrepresentation when there is an adequate remedy at law. Accordingly, Judge Gallagher granted summary judgment to InterMoor that US Wind would be entitled to monetary damages, not rescission, for the claim of negligent misrepresentation. As there was a contract between the parties and as any claims falling outside the contract would be outside of InterMoor’s duties to US Wind, Judge Gallagher dismissed US Wind’s count seeking recovery based on unjust enrichment. Finally, US Wind argued that InterMoor interfered with contractual relations with subcontractors by refusal to return the mast and by instructing its subcontractors not to work with US Wind when InterMoor directed that the Met Mast be returned to New Orleans instead of being offloaded in Baltimore. Assuming that InterMoor had a legal right to seize US Wind’s property, Judge Gallagher considered the act of holding the Mast hostage arguably demonstrated sufficient malicious intent, particularly when combined with InterMoor’s discouraging its subcontractors from communicating with US Wind so that US Wind could negotiate directly with the subcontractors. Therefore, she denied InterMoor’s motion with respect to the tortious interference claim.
Opinion M/V MSC MARIA ELENA (533 cartons)
Opinion M/V MSC MARIA ELENA (1292 cartons)
These opinions arise from shipments of cosmetics from Italy to New Jersey on several vessels. The goods were shipped by sea waybills for sealed containers to Port Elizabeth, New Jersey and were transferred by truck to their destination in Monroe Township, New Jersey. When the containers were unloaded, there were missing product units, and, after paying for the shortage, insurer Siaci Saint Honore brought subrogation actions in federal court in New Jersey against the vessel interests (non-vessel operating common carrier and vessel owner/operator) and the inland trucker. The vessel interests brought claims against the trucker for contribution and indemnity. The trucker moved to dismiss the claims for negligence, breach of bailment, and conversion as well as the contribution/indemnity claims, asserting preemption of those claims pursuant to the Federal Aviation Administration Authorization Act of 1994 (the trucker did not move to dismiss the claim for breach of contract). The trucker argued that the suits were governed by the Carmack Amendment and not the FAAAA, but Judge Padin answered that the Carmack Amendment is only applicable to interstate shipping and the trucking portion of the carriage was wholly within the state of New Jersey. Agreeing that the non-contractual claims were preempted by the FAAAA, Judge Padin dismissed them. As to the contribution/indemnity claims, the vessel interests argued that the cross-claims were premised on federal maritime law and not state law. However, the vessel interests did not plead that a maritime contract existed that extended the Carriage of Goods by Sea Act to the trucking portion of the shipment and there was no contractual relationship between the vessel interests and the trucker. Judge Padin did note that the contribution/indemnity claims would be governed by maritime law if they arose from an underlying maritime tort, but the tort that was alleged in the cross-claims did not occur on navigable water (or on land caused by a vessel on navigable water) and had only a tenuous maritime connection. Consequently, Judge Padin held that the cross-claims were preempted by the FAAAA and were dismissed.
The NVOCC, Expeditors International of Washington, moved to transfer the claims against it to federal court in Washington pursuant to the forum-selection clause in the sea waybills it issued for the shipments. The plaintiff argued that the NVOCC had not established that the forum-selection clause was actually incorporated into the bills and, alternatively, that the clause was permissive and not mandatory. Assuming the clause was applicable, Magistrate Judge Allen reviewed the language that the shipper “irrevocably consents to nonexclusive jurisdiction and venue” in Washington and concluded that the provision was permissive and did not require transfer. Therefore, the clause was only one factor in deciding whether to transfer the case. As the private interest factors and public interest factors weighed in favor of the plaintiff’s choice of New Jersey, Magistrate Judge Allen denied the motion to transfer.
Larry Meador was operating his 29-foot Hallett 290 powerboat on the navigable waters of Lake Powell with his wife, Annette Meador, and three members of the Lewis family on the boat. Five members of the Lewis family were on jet skis behind the boat. Approaching in the opposite direction was the 76-foot tour boat DESERT SHADOW, owned by defendant Aramark. As the vessels passed, the wake of the DESERT SHADOW impacted the Meadors’ boat, and Annette Meador was injured when the boat rose into the air and crashed back down onto the water. Larry and Annette Meador brought suit in admiralty in federal court in Arizona against Aramark for negligence and gross negligence, and they sought compensatory and punitive damages. Aramark filed a counterclaim against Larry Meador, seeking equitable indemnity and contribution. The case was tried to the bench in November 2021, and Annette Meador died from cancer on the last day of trial. The Meadors presented several grounds of recovery for negligence under the general maritime law and Arizona law. The Meadors argued that the area of Lake Powell where the accident occurred was a narrow channel under Inland Rule 9 so that the DESERT SHADOW had a duty under Rule 34 to signal with a loud blast as it was entering a sharp bend in the channel where it could not see oncoming vessels. Although considering the applicability of Rule 9 to be a close issue, Judge Tuchi found that the area was not a narrow channel and the duty to signal did not apply. However, Judge Tuchi concluded that Aramark owed a duty of ordinary care under the general maritime law and that Arizona state law and Inland Rules 2, 5, 6, and 7 applied. In determining whether Aramark breached any duty, Judge Tuchi considered conflicting testimony of witnesses and experts as to the speed of the DESERT SHADOW, its location in the channel, and the height of its wake. He concluded that the vessel was proceeding in the middle of the channel, that it was on plane as it approached the turn, slowing to around 15 mph and reaching a speed of around 10 mph, and that it generated a wake of around 3.3 feet or slightly higher, which was the result of the transitional period in speed that generated the largest possible wake at the time it crossed paths with the Meadors’ boat. Judge Tuchi did not believe that the tour boat violated the proper lookout rule (Rule 5), the safe speed rule (Rule 6), or the requirement of Rule 7 that the tour boat use all available means appropriate to the circumstances to determine if risk of collision exists. He did find a violation of the Arizona statute on reasonable and prudent speed because it specifies that speed must be controlled to avoid swamping other watercraft (concluding that the tour boat should not have made the transition down from plane at a time when it had reduced visibility and could not know if the resulting wake would endanger another watercraft). Judge Tuchi also concluded that the tour boat breached the duty of ordinary care by navigating down the middle of the channel as it approached the blind turn and for slowing its speed and producing the largest wave at the time it passed the pleasure boat. Judge Tuchi also found that the tour boat violated Rule 2 with respect to the ordinary practice of seamen because the captain did not have regard to the danger that the vessel’s wake posed to others. Judge Tuchi applied The PENNSYLVANIA Rule’s presumption of causation to the violations of Arizona’s statute and the Inland Rules, and he then concluded that Larry Meador had an obligation to approach the wake of the vessel at a perpendicular angle but turned away so that the angle of impact was 45 degrees. Judge Tuchi apportioned fault 50% to Larry Meador and Aramark. For damages, Judge Tuchi awarded $70,746.99 for Annette Meador’s medical bills and $160,000 for her pain and suffering before her death from cancer. These amounts were reduced in half for the comparative fault of Larry Meador. Concluding that Aramark was aware, from prior incidents, that its tour boats had the potential to generate dangerous wakes (although Aramark received favorable ratings on its operations from the National Park Service), Judge Tuchi held that Aramark had showed a reckless indifference for the rights of others and awarded punitive damages of $100,000 (mindful of the 1:1 limit in maritime tort cases). Finally, Judge Tuchi addressed Larry Meador’s claim for emotional/consortium damages because he was in the zone of danger at the time of the accident. Citing the Ninth Circuit Chan decision that courts should consult state common law for guidance in determining recovery for maritime claims for emotional distress, Judge Tuchi held that the mental anguish must manifest as a physical injury. Although Larry Meador was impacted severely by the accident, his mental anguish had not manifested as a physical injury, and Judge Tuchi denied recovery. See March 2022 Update.
Charisse and Warren Lewis filed a separate action against Aramark in federal court in Arizona seeking to recover for injuries in the same incident when one of the jet skis ran into the back of the Meador boat, hitting Ms. Lewis in the head. The Lewis plaintiffs filed a motion for summary judgment on the issue of punitive damages, arguing that the punitive damage facts against Aramark were the same as in the Meador suit and that punitive damages were established by collateral estoppel. Aramark argued that the causation issues from the boat striking the wave in the Meador case were not the same as the causation issues resulting from hit in the head by the jet ski. In evaluating whether to apply offensive collateral estoppel, Judge Humetewa noted that the issue of punitive damages was fully litigated in the trial before Judge Tuchi and that he had denied a motion to transfer based in part on the reason that the findings in the Meador case on punitive damages would be relevant to the Lewis suit and that the judge in the Lewis suit would not have to duplicate labor on the common issue. Judge Humetewa agreed that the causation issue for Lewis’ injury was different, but she believed the punitive damages issue with respect to Aramark’s awareness of the dangers of the waves from its vessel were the same. Therefore, she concluded that the issue of the willfulness of Aramark’s conduct had been concluded, but that it was premature to rule on Aramark’s liability for punitive damages until the court addressed the negligence of the operator of the jet ski and whether Aramark was negligent and that negligence contributed to the injury.
Jerry McNeill worked as a seaman for Otto Candies for 22 years and was securing the M/V ROSS CANDIES at the time of his injury. The vessel was out of service, and the Coast Guard authorized the vessel to reduce its crew size to four crew members. The vessel was being shifted at its berth in Port Fourchon, Louisiana to accommodate an incoming vessel, and the mooring lines were wet because it had rained. McNeill was feeding a mooring line over the side of the ship so that another deckhand could secure the line to the dock when he felt a pain in his abdomen around the site of a prior hernia surgery (repair with surgical mesh). Otto Candies paid for the surgery to repair the surgical mesh, and McNeill brought this action in federal court in Louisiana seeking to recover for Jones Act negligence and unseaworthiness. Otto Candies moved for summary judgment, and Judge Barbier found that it was the decision of McNeill to move the lines (that were heavier due to the rain) without asking for assistance. Judge Barbier concluded that a reasonable jury could not find that Otto Candies was negligent. McNeill argued that the vessel was unseaworthy for lack of an adequate crew, noting that the size of the crew had recently been reduced. However, Judge Barbier answered that McNeill agreed that this was a one-man job for which he could have asked for assistance. Further, the Coast Guard had approved the reduction in the size of the crew. Although McNeill’s expert, Captain William Boyce, opined that the vessel was deficient for a lack of deckhands, Judge Barbier found that a full crew was not necessary for McNeill to complete the work, and he dismissed the unseaworthiness claim as well.
Nikola Prcic, a Serbian citizen, claimed that he sustained injuries while serving as a seaman (waiter) on the Cunard ship QUEEN MARY II. He brought this suit in Florida state court against Carnival Corp., Carnival PLC d/b/a Cunard Line, and Fleet Maritime Services, and the defendants removed the case to federal court in Florida based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). The defendants jointly moved to compel arbitration based on the arbitration provision in the employment contract signed by Prcic with Fleet Maritime, and Prcic objected on two grounds. First, Prcic argued that only Fleet Maritime was party to the agreement and could enforce the arbitration provision; however, Judge Scola disagreed as the agreement extended to any other Carnival Corporation and plc group brand for the ships on which Prcic worked. Although the agreement called for the application of Bermuda law, Judge Scola applied the reasoning from the Eleventh Circuit that federal common law applies to the threshold questions of arbitrability, including the determination of the arbitrability for non-signatories. Prcic also argued that defendants waived their right to invoke the arbitration clause because they waited over 19 months to provide him with a copy of the agreement containing the arbitration clause. However, that delay was almost entirely before the suit was filed as the defendants moved to compel arbitration upon removal of the case to federal court. Finding no authority that a defendant can waive its right to arbitration based on pre-litigation conduct, Judge Scola granted the defendants’ motion to compel arbitration and dismissed the case. Prcic filed a notice of appeal the next day.
John W. Stone brought this suit against the M/V DANA K in federal court in Mississippi, alleging that it had provided diesel fuel and other necessaries to the vessel and asserting a lien on the vessel. The vessel was arrested, and, when no claim of owner was filed, Judge Guirola ordered an interlocutory sale at a judicial auction by the United States Marshal with a minimum bid of $300,000. William Ladnier, doing business as Gulfstream Marine, then filed a claim of owner but did not post security. The Marshal conducted the auction, but no one submitted a bid that satisfied the minimum amount. As the vessel is in poor condition and pumps are required to remove water to protect the engines, John W. Stone asked the court for an order to scrap the vessel. Ladnier opposed the motion, arguing that the vessel should not be scrapped until the validity of John W. Stone’s claim was determined. Judge Guirola reviewed the Supplemental Rules and found no authority for the court to order that a vessel be scrapped. Accordingly, he denied the motion.
Bailey Belk was a passenger in an 18-foot aluminum boat that was being operated by Chad Mull, Jr. in waters adjacent to the Tangipahoa River in Ponchatoula, Louisiana. The boat struck a partially submerged steel I-beam that was owned and operated by Entergy and located under a strip of power lines on a flooded tract of land adjacent to the River. Belk was ejected from the boat and brought this suit in federal court in Louisiana based on admiralty jurisdiction. Entergy moved to dismiss the lawsuit on the ground that the court lacked admiralty jurisdiction. According to the Louisiana Department of Wildlife, the I-beam (adjacent to an Entergy power pole) is located on a tract of land under the care and custody of Entergy through a servitude granted to Entergy by the state of Louisiana. The servitude canal has thick vegetation and a depth of nearly two feet of water; however, the center of the canal has a clear path that is devoid of vegetation. The Tangipahoa River is the only means of ingress and egress for the canal, which is not landlocked. The passengers decided to traverse the canal after fishing on the Tangipahoa River for a couple of hours. Judge Zainey found that the crash site was a functional tributary of the Tangipahoa River. The entrance to the canal had no signage indicating hazards, and the path down the center of the canal led Judge Zainey to believe that this incident had the potential to disrupt maritime commerce (reasoning that fishing on a tributary of a major river bears a substantial relationship to the traditional maritime activity of recreational fishing). Additionally, Judge Zainey declined to dismiss the case based on immunity under the Louisiana Recreational Use Immunity Statute, noting that an injury on a navigable waterway is not subject to defense under the statute.
Miligza Rivera brought this suit against MSC Cruises seeking to recover for injuries she sustained as a passenger when she slipped on a foreign transitory liquid and hit her head on the floor while walking in the vicinity of the Black and White Club on Deck 7 of the MSC DIVINA. In her First Amended Complaint Rivera alleged nine claims and listed a litany of conditions that purportedly existed at the time of the incident. However, she did not allege which condition or conditions caused her to fall. Judge Moore noted the Eleventh Circuit’s “thirty-year salvo of criticism aimed at shotgun pleadings” (quoting the Eleventh Circuit’s Weiland opinion) and complained that shotgun pleadings are not just a violation of Rule 8, but are a waste of judicial resources. Judge Moore explained that the breadth of the allegations forces the defendant to guess which combinations or pairings are genuinely at issue, which creates an unnecessary discovery burden on the defendant. After explaining the reasons for and application of the shotgun-pleading rule, Judge Moore dismissed the amended complaint without prejudice.
Victory Shipping and Texcem agreed to a charter party for the shipment of 50,109 metric tons of cement from Karachi, Pakistan, to Houston, Texas. The voyage to Houston was uneventful, but the discharge in Houston took 63 days instead of the six days allowed in the charter party, resulting in Victory Shipping’s claim for demurrage of more than $2 million plus additional costs for which it asserted a lien of $2.3 million. Citing an arbitration clause in the charter party, Victory Shipping filed this suit in the federal court for the Southern District of Texas against the cargo pursuant to the Federal Arbitration Act and sought to attach and arrest the cargo under Supplemental Rules B and C. The court authorized the attachment and arrest, and Texcem appeared and moved to vacate the attachment and the arrest. Although Magistrate Judge Edison referred to attachment throughout his discussion of the arguments and decision, his discussion of the lien reflects that he was actually discussing the arrest when he referred to attachment of the cargo. Texcem argued that the governing documents produced by Victory Shipping did not contain a signature by Texcem and that Victory Shipping could not support the demurrage claim with a written agreement. At the hearing, Victory Shipping admitted that the agreement it sought to apply provided for the application of English law, which would not afford a lien on the cargo. Texcem argued that United States maritime law applied because Rules B and C are procedural remedies, and it admitted that liens arise by operation of law (as it denied the written charter party). However, if American maritime law applied, it would allow a lien on the cargo. Magistrate Judge Edison summarized: “What a curious predicament—the party seeking vacatur has adopted a position that seemingly supports probable cause for the attachment by contending that the charter party is invalid, while the party seeking attachment has candidly admitted, by implication, that probable cause does not exist if the charter party is valid.” Magistrate Judge Edison resolved the issue by noting that “Texcem’s self-defeating position regarding the validity of the charter party—and by implication, the validity of Victory Shipping’s alleged maritime lien—is irrelevant.” As English law would not recognize the claim, Magistrate Judge Edison held that Victory Shipping could not carry its burden to establish the lien. And, even if it could carry its burden, Magistrate Judge Edison would still vacate the arrest on equitable grounds (even though the arrest was to obtain security for arbitration pursuant to the FAA). Texcem was subject to suit in the Northern District of Texas (equitable vacatur), and it consented to the jurisdiction of the Southern District of Texas. Although Victory Shipping argued that Texcem had only been in business for a year, that was not enough, given the value of the cargo being for in excess of the amount in issue, for equity to tip in favor of Victory Shipping. Concluding that “Victory Shipping does not have a valid maritime lien that can sustain a Rule B attachment,” Magistrate Judge Edison vacated the order authorizing attachment. However, he stayed the vacatur to allow Victory Shipping to object to the order.
Nautor provided necessaries to the S/V RED SKY at its shipyard in Badalona, Spain and invoiced the vessel owner. The vessel owner did not pay the invoices, and the shipyard and owner entered into a Debt Recognition Agreement by which the owner acknowledged that it owed for the repairs, materials, and services that had been provided to the vessel and the shipyard then provided additional services to the vessel. The vessel owner did not pay for the services, before or after the Agreement, and the shipyard arrested the vessel in the federal court in Rhode Island. The owner moved to vacate the arrest, arguing that the court lacked admiralty jurisdiction as there was no maritime lien for the work/services/material. The owner argued that the Debt Recognition Agreement was a land-based financial agreement and was not a maritime contract subject to the court’s admiralty jurisdiction. Magistrate Judge Almond disagreed. He reasoned that the suit was not an action based on breach of the Debt Recognition Agreement but was an action to enforce a maritime lien for the provision of necessaries. Magistrate Judge Almond found nothing in the Agreement that waived the shipyard’s maritime lien for necessaries—it only provided an installment payment schedule and a personal guarantee. Accordingly, he recommended that the motion to vacate the arrest and to dismiss the complaint be denied.
Kholkar Vishveshwar Ganpat, a resident of India, signed a Seafarer’s Mumbai Employment Agreement in India with an Indian subsidiary of Eastern Pacific Singapore that provided for benefits in the event of his disability. Ganpat claimed that he contracted malaria while serving as a crewmember of the M/V STARGATE on a voyage from Gabon to Brazil and brought this suit in federal court in Louisiana against Eastern Pacific under the Jones Act and general maritime law. The suit included a claim for benefits under the employment agreement that provided for the application of Liberian law. Ganpat served Captain Owen Bona on the M/V BANDA SEA while the ship lay at anchor in the Mississippi River just below New Orleans, asserting that Captain Bona was a managing agent of Eastern Pacific. Eastern Pacific objected to the service, arguing that Captain Bona was an employee of Ventnor Navigation, not Eastern Pacific. Ganpat responded that Eastern Pacific was the manager of the STARGATE and that Captain Bona was a borrowed servant or managing agent of Eastern Pacific. As there was no evidence that Captain Bona was employed by Eastern Pacific, the question presented was whether he could be considered a managing agent of Eastern Pacific. However, the evidence established that Captain Bona was not involved in any aspect of Eastern Pacific’s business that related to the vessel on which the cause of action arose. Judge Morgan declined to conclude that service could be made on a foreign corporation that was not transacting business in Louisiana through a non-employee captain of a vessel on which the accident did not occur who had no control over any operations of the defendant in the forum state. See February 2020 Update. Judge Morgan gave Ganpat several extensions to properly serve Eastern Pacific. Finally, more than a year later, Ganpat filed a proof of service, an affidavit from a process server in Singapore who stated that he handed the summons and complaint to Eastern Pacific’s receptionist, who signed and affixed the company stamp to the summons. Eastern Pacific challenged the sufficiency of the service, and Judge Morgan held that the service complied with Rule 4(f)(2)(A) in that it was accomplished by a method prescribed by the laws of Singapore for service in that country in its courts of general jurisdiction. See September 2021 Update.
After service was accomplished, Judge Morgan addressed Eastern Pacific’s argument that the case should be dismissed on the basis of forum non conveniens because Ganpat is a resident and citizen of the Republic of India, Eastern Pacific is a Singapore company with its principal place of business in Singapore, Ganpat experienced symptoms of malaria while the vessel was on the high seas sailing from Gabon to Brazil, he was hospitalized and treated for malaria in Brazil, and was repatriated to India where complications arose. Judge Morgan assumed there was an adequate alternative forum available in India, but she held that Eastern Pacific did not meet its burden of proof with respect to the private interest factors or the public interest factors. Judge Morgan noted, with respect to the private interest factors, that the witnesses were spread across the world. Although many of the crew reside in India, there were others in Romania, Ukraine, Bulgaria, the Philippines, Russia, and Turkey. There were medical witnesses from Brazil and India as well as witnesses with respect to the provisioning of the ship in Savannah before it sailed to Africa. There were also possible witnesses from Liberia where the owner of the vessel and employer of Ganpat were located. Similarly, with respect to the public interest factors, Judge Morgan found no clear “home” for the dispute involving multiple international contacts. Factoring into the analysis the dilatoriness of Eastern Pacific’s filing of the motion (the longer the case was pending in the United States, the less the defendant can claim inconvenience in the United States), Judge Morgan could not conclude that Eastern Pacific had met the heavy burden of demonstrating that the public and private interest factors weighed in favor of dismissal, and denied the motion to dismiss. The facts were not developed sufficiently for Judge Morgan to decide whether Indian law applied in the context of Eastern Pacific’s motion to dismiss the suit for failure to state a claim under Indian law (there were disputes about which entities owned and employed Ganpat). Accordingly, Judge Morgan held that a determination of the applicable law was premature. See February 2022 Update.
While Ganpat was trying to serve Eastern Pacific, Eastern Pacific and its Indian subsidiary filed suit against Ganpat in South Goa, India (March 2, 2020), seeking an injunction restraining vexatious and oppressive foreign legal proceedings, i.e., the suit in federal court in Louisiana. On March 7, 2020, the court in South Goa, India issued an order temporarily restraining Ganpat from prosecuting the action in the United States, concluding that the parties and the ends of justice would be better served if trial on liability and damages in relation to the Mumbai Employment Agreement were in India. Almost a year and half after being restrained from pursuing his suit in Louisiana, Ganpat filed a motion in the Louisiana proceeding seeking to enjoin the Indian litigation that had restrained the prosecution of the American litigation. Noting that Eastern Pacific’s counsel had withdrawn its objections to personal jurisdiction in a telephone status conference on April 18, 2019 (although it was not served until later), Judge Morgan held that the court in Louisiana had jurisdiction over the defendant and that its suit in India constituted vexatious and oppressive litigation. She also held that the need to prevent the litigation in India and to protect the jurisdiction of the American court outweighed the need to defer to principles of international comity. Consequently, she enjoined Eastern Pacific from litigating the Indian suit, ordered it to dismiss the Indian suit, and extended the injunction to its Indian subsidiary as it was acting in “active concert” with Eastern Pacific. Eastern Pacific filed a notice of appeal the next day. See May 2022 Update.
Judge Morgan then addressed the choice of law applicable to the claims brought by Ganpat based on the eight factors enunciated by the Supreme Court in Lauritzen and Rhoditis. As the illness arose at sea, Judge Morgan concluded that the factor for the place of the wrongful act did not weigh in favor of applying the laws of the United States, India, Singapore, Gabon, or Liberia. Although the factor for the law of the flag (Liberia) is ordinarily “accorded great significance,” Judge Morgan dismissed it as having no specific application as the vessel owner was not a party. Judge Morgan also gave little significance to the factor for the allegiance or domicile of the injured worker (India) because Ganpat’s work took him beyond the territorial boundaries of his domicile. With respect to the allegiance of the shipowner, who was not a party, Judge Morgan took into consideration the defendant’s organization in Singapore. The place where the contract was executed was Mubai, India, by Ganpat and an Indian company acting on behalf of a Liberian company. The agreement provided that it would be interpreted in accordance with the laws of the state of the flag of the ship on which Ganpat was employed (Liberia). As the employer was not a defendant, Judge Morgan held that the place of the contract was of no particular application, even though Ganpat brought a claim for benefits under the agreement. Judge Morgan previously assumed that India was an accessible forum (for the factor on the inaccessibility of the foreign forum), but she held that this factor was only applicable only for the forum non conveniens issue and not with respect to the determination of applicable law. As the suit was brought in the United States, Judge Morgan found that the factor of the law of the forum favored application of American law. Finally, Judge Morgan held that the shipowner’s base of operations was not a factor because the shipowner was not a defendant. In summary, Judge Morgan found three relevant factors, the Indian allegiance of the seaman, the Singapore allegiance of the defendant, and the United States forum for the litigation. Reasoning that the Lauritzen/Rhoditis factors are not exclusive, Judge Morgan considered Ganpat’s allegation that the vessel was not properly provisioned when it left Savannah and that vessels managed by the defendant made hundreds of visits to ports in the United States and held that United States law should apply to the claims brought under the Jones Act and general maritime law. Judge Morgan then addressed the applicable law for the claim for contractual benefits. The Seafarer Employment Agreement incorporated a Collective Bargaining Agreement between Eastern Pacific and the International Transport Workers Federation. Judge Morgan considered the CBA to be a maritime contract and noted that it did not contain a provision for choice of law. She therefore held that her previous Lauritzen/Rhoditis analysis applied so that United States law applied to the claim for benefits under the contract that was entered into by the Indian seaman in India. In an amended complaint, Ganpat added a claim for malicious prosecution against Eastern Pacific arising out of the lawsuit it filed against Ganpat in India. As that alleged tort took place in India and not on navigable waters, Judge Morgan held that Indian law applied to this claim. After concluding her decision on the applicable law, Judge Morgan ruled that the decision involved a controlling question of law that would materially affect the outcome of the case. Therefore, she certified her order for interlocutory appeal pursuant to Section 1292(b) and stayed the case pending resolution of the appeal.
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. See December 2022 Update.
Ewing filed a motion for new trial that asserted several errors during the trial, and, admitting he made a mistake during the trial, Magistrate Judge Goodman ordered a new trial. Ewing’s expert, forensic engineer Dr. Srinivas Kadiyala, testified that the bunk would not have fallen on Ewing’s head if it was locked and latched and that he believed the bunk was not locked. He did not believe that Ewing had opened the lock because it had a tamper-resistant key. Magistrate Judge Goodman allowed the cruise line to cross-examine Kadiyala with a cell phone video showing a burly security guard prying open a lock, but there was no evidence authenticating the video or explaining when, where, or how it was made. Reasoning that the video essentially accused Ewing of perpetrating a fraud (a defense that was not pleaded) with no evidence to support the accusation and no evidence of similarity of the video to Ewing’s bed, and considering that the video was unfairly prejudicial to Ewing and that an adequate curative instruction was not given, Magistrate Judge Goodman felt compelled to correct his error by ordering a new trial. See May 2022 Update.
A second jury trial was held before Magistrate Judge Goodman. The jury returned a verdict that the cruise line was negligent, Ewing was not negligent, and Ewing was entitled to $275,000 for past non-pecuniary damages and $400,000 for future non-pecuniary damages.
From the state appellate courts . . .
Rajesh Ramchandra Chauhan, a seaman on the M/V WHITE HORSE, owned by Southern Pacific Holding Corp., was injured on the vessel while on a voyage in the Atlantic Ocean from Tarragona, Spain, to Baltimore, Maryland. Chauhan is citizen and resident of India, and Southern Pacific is a Panamanian company with its principal place of business in Tokyo, Japan. Two months after the injury the vessel called at the port of St. Rose, Louisiana, and the local sheriff attached the vessel in a suit brought in St. Charles Parish state court by Chauhan. Southern Pacific challenged personal jurisdiction, and the trial judge held that, in this maritime action, the presence of the vessel was the only jurisdictional fact necessary to support in personam jurisdiction over the foreign defendant. Southern Pacific sought review of the decision in the Louisiana Court of Appeal, Fifth Circuit, and relied on the Supreme Court’s decision in Shaffer v. Heitner (it is unconstitutional for a state to exercise jurisdiction over a foreign defendant based on attachment of property in the state absent minimum contacts with the state), but Judge Gravois noted that the federal courts have held that Shaffer does not apply to maritime attachments in accordance with Supplemental Rule B (it is hard to argue that the Supreme Court would approve an unconstitutional rule). Following the principles applicable to attachments brought under the federal rules, Judge Gravois held that attachment of the WHITE HORSE established quasi in rem jurisdiction over Southern Pacific. Therefore, the appellate court found no error in the trial court’s decision on jurisdiction over Southern Pacific.
Lake Service Shipping chartered its barge MCKEE SONS to Grand River Navigation in 2000. Grand River was responsible for the maintenance, repair, and operation of the vessel. Besides the obligation throughout the charter to maintain and repair the barge in a seaworthy and efficient operating condition, Grand River was obligated to return the vessel at the termination in good condition, ordinary wear and tear excepted. The charter party was renewed several times with its final term set to expire in 2018. The charter party contained an early termination provision that if the cost of structural repairs required under the charter party at the end of each five-year classification society inspection exceeds the then value of the barge, Grand River could terminate the charter and the hire would be prorated. In December 2014, Grand River returned the barge in a deplorable condition, with burst pipes, rotted electrical systems, missing machinery, rotting perishable goods, and hazardous waste. Grand River advised Lake Service that the cost of necessary repairs exceeded the then value of the vessel and declined to perform any repairs. Lake Service brought this action against Grand River in Michigan state court for breach of the charter party, and the case was tried to a jury because the judge considered the early termination provision to be ambiguous. Lake Shipping argued that the “then value” referred to the value of the vessel after repairs, and Grand River argued that the phrase referred to the value of the vessel without repairs. The judge instructed the jury on the interpretation of ambiguous contracts, and the jury awarded Lake Service $11,825,685 in damages. The majority of the court of appeals agreed that the language of the early termination provision was ambiguous, reasoning that the parties may have intended for Grand River to maintain the value of the vessel so that it would not make sense to give it a “get out of jail free” card that absolved it of its repair/maintenance obligation and allowed the barge to fall into such a state that the cost of repair would exceed its trashed value. Thus, “then value” could refer to the value of a properly maintained, repaired and seaworthy vessel. As Grand River could not rely on the early termination provision, the jury could conclude that Grand River failed to perform its contractual obligation for repair/maintenance, and the appellate court affirmed the award. Judge Boonstra concurred in part and dissented in part. He did not find the language of the early termination provision to be ambiguous; however, he did not believe that the clause retroactively excused Grand River from prior breaches of the repair obligation, which should have been the subject of the jury trial.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
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Quote:
No self-respecting Dolphins fan would ever buy a Jets or Patriots hat (at least not for herself). And Jets and Patriots fans are pretty unlikely to purchase Dolphins garb (though they are missing the boat on that one).
Circuit Judge Robin S. Rosenbaum (Florida). Arrington v. Burger King Worldwide, Inc., 47 F.4th 1247, 1249 (11th Cir. 2022).
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© Kenneth G. Engerrand, November 30, 2022; redistribution permitted with proper attribution.
