December 2024 Longshore/Maritime Update (No. 307)
Notes from your Updater:
On October 15, 2024, Judge Gleason of the United States District Court for the District of Alaska adopted the report and recommendation of Chief Magistrate Judge Scoble and dismissed the suit brought by the owner of the M/V WILD ALASKAN against the City of Kodiak, its mayor, councilmembers, and former harbormaster, and Highmark Marine Fabrication, asserting that the City unlawfully impounded and destroyed his vessel (“nefariously sunk [his] vessel”) arising from “personal disagreements” between the owner and mayor. The owner argued that the harbormaster did not follow federal maritime law procedural requirements to properly arrest the vessel; however, Judge Gleason answered that “federal laws and regulations do not occupy the field of anchorage and mooring; a state may also regulate in this area.” In this case the state hearing officer found violations of the Kodiak City Code including unpaid moorage charges, the absence of a moorage agreement, moorage in a restricted area without authorization, a lack of insurance coverage, failure to obey harbormaster orders to remove the vessel from the harbor, and tampering with posted signs. See Oil Spill Response Vessels, LLC v. City of Kodiak, No. 3:23-cv-67, 2024 U.S. Dist. LEXIS 188568 (D. Alaska Oct. 15, 2024), adopting 2024 U.S. Dist. LEXIS 188799 (D. Alaska Sept. 4, 2024).
In our March 2023 Update, we reported that the Supreme Court (in Chevron USA, Inc. v. Plaquemines Parish, No. 22-715) declined to grant a writ of certiorari to consider the affirmance of a remand to the state court by the Fifth Circuit in Plaquemines Parish v. Chevron USA, Inc., No. 22-30055, 2022 U.S. App. LEXIS 28733 (5th Cir. Oct. 17, 2023). That appeal involved cases filed in Louisiana state courts by Louisiana coastal Parishes against energy companies, seeking to recover restoration costs for loss of land along the Louisiana Gulf Coast allegedly resulting from production practices carried out by the energy companies going back to World War II.
After the Supreme Court declined to hear the petition from the energy companies, Judge Zainey of the United States District Court for the Eastern District of Louisiana issued an order remanding to state court the suit brought by Plaquemines Parish and the State of Louisiana against a host of energy companies. The energy companies argued that they had threaded the needle to satisfy the “acting under” requirement for federal officer removal because that case involved a World War II-era refinery contract. Judge Zainey was unpersuaded, answering that the refinery contract satisfied neither the acting-under nor the related-to requirements (the energy company “may have acted under a federal officer when refining oil in Port Arthur, Texas but it did not act under a federal officer when producing that oil in Louisiana”). See Parish of Plaquemines v. Northcoast Oil Co., No. 18-cv-5228, 2023 U.S. Dist. LEXIS 67290 (E.D. La. Apr. 18, 2023). The energy companies appealed the order of remand to the Fifth Circuit (No. 23-30304), and Judge Zainey stayed the order of remand pending the appeal. Judge Morgan of the United States District Court for the Eastern District of Louisiana reached a similar result in Parish of Plaquemines v. Rozel Operating Co., No. 18-5189, 2023 U.S. Dist. LEXIS 81541 (E.D. La. May 10, 2023). The energy companies appealed the order of remand (No. 23-30336), and Judge Morgan stayed the order of remand pending the appeal. See June 2023 Update. On June 13, 2023, Judge Summerhays of the United States District Court for the Western District of Louisiana declined to reconsider his decision remanding 42 lawsuits (removed under the Federal Officer Removal Statute) that were brought by several Louisiana parishes against energy companies based on violations of permits under the State and Local Coastal Resources Management Act of 1978 and associated regulations, rules, and ordinances in connection with the defendants’ oil exploration and production activities in coastal parishes. See Parish of Cameron v. Apache Corp. (of Delaware), No. 2:18-cv-688, 2023 U.S. Dist. LEXIS 103010 (W.D. La. June 13, 2023). Judge Summerhays granted a stay of the remand pending appeal, and the energy companies filed a notice of appeal to the Fifth Circuit (No. 23-30422). Judge Fallon also stayed remand orders pending appeal to the Fifth Circuit in Parish of Jefferson v. Destin Operating Co., No. 2:18-cv-5206 (appeal No. 23-30225); Plaquemines Parish v. Exchange Oil & Gas Co., No. 2:18-cv-5215 (appeal No. 23-30291); and Plaquemines Parish v. Great Southern Oil & Gas Co., No. 2:18-cv-5227 (appeal No. 23-30303). See August 2023 Update. On October 11, 2023, the Fifth Circuit granted the motion to lift and vacate the stay pending appeal in Plaquemines Parish v. Chevron USA, Inc., No. 23-30291, 2023 U.S. App. LEXIS 27249 (5th Cir. Oct. 11, 2023) (Higginson) in a published order, concluding that the balance of equities weighed against issuance of a stay.
Meanwhile, the energy companies requested that the Supreme Court issue a stay of the trial scheduled to begin in state court in Cameron Parish, Louisiana on November 27, 2023 (the energy companies argued that the case should be transferred to a venue where the jurors did not have a financial interest in the outcome). See No. 23A364, BP America Production Co. v. Parish of Cameron, Louisiana. On November 7, 2023, the Supreme Court declined to grant the stay. See December 2023 Update.
On May 29, 2024, the Fifth Circuit (with a dissent by Judge Oldham) held that the actions of the energy companies with respect to oil production did not have a sufficient connection with the governmental direction in their federal refinery contracts during World War II to permit removal of the cases under the Federal Officer Removal Statute. Accordingly, the Fifth Circuit affirmed the remand of the suits by Louisiana parishes against the energy companies. See Plaquemines Parish v. BP America Production Co., No. 23-30294, 2024 U.S. App. LEXIS 12890 (5th Cir. May 29, 2024) (Davis).
The energy companies sought rehearing en banc, and, on October 31, 2024, the Fifth Circuit declined to grant rehearing en banc by a vote of 7-6, with 4 judges not participating in the consideration of the request for rehearing en banc. See Plaquemines Parish v. BP America Production Co., No. 23-30294 c/w No. 23-30422, 2024 U.S. App. LEXIS 27775 (5th Cir. Oct. 31, 2024).
On November 4, 2024, the United States Supreme Court declined to grant a writ of certiorari to review a non-maritime arbitration award that presented this question: “Whether the Eleventh Circuit erred in holding that – even when the arbitral panel imposed punitive and dispositive sanctions in disregard of a party’s due process rights – the federal court could not vacate under the ‘manifest disregard of the law’ doctrine?” Shefer v. Morgan Stanley Smith Barney LLC, No. 24-192, 2024 U.S. LEXIS 4468 (U.S. Nov. 4, 2024).
In our July 2022 Update, we reported that, on June 7, 2022, the Ninth Circuit held that Leon Belaustegui, an entry-level longshore worker at Port Hueneme, California, who left his job to enlist in the Air Force and returned to work on the waterfront after nine years of active duty, could pursue a discrimination claim under the Uniformed Services Employment and Reemployment Rights Act against the International Longshore & Warehouse Union and the Pacific Maritime Association for the failure to reinstate Belaustegui to the position he was reasonably certain to have attained absent his military service. Belaustegui v. International Longshore & Warehouse Union, No. 21-55434, 2022 U.S. App. LEXIS 15611 (9th Cir. June 7, 2022) (Bress). On remand, Judge Aenlle-Rocha of the United States District Court for the Central District of California granted summary judgment in favor of the Pacific Maritime Association and the International Longshore & Warehouse Union on the ground that Belaustegui failed to establish his eligibility for an exemption to the five-year limit in the statute for the reason that his order to re-enlist was “because of a war or national emergency.” The Ninth Circuit agreed, holding that the summary judgment was proper because Belaustegui’s cumulative service exceeded five years. See Belaustegui v. International Longshore & Warehouse Union, No. 23-55094, 2024 U.S. App. LEXIS 28278 (9th Cir. Nov. 7, 2024) (per curiam).
For our readers who handle claims under the Black Lung Benefits Act, note that the Department of Labor announced on November 14, 2024, that it is closing its Johnstown, Pennsylvania office on December 20, 2024, and that the operations will move to the office in Mt. Pleasant, Pennsylvania. The announcement can be found at Effective December 20, 2024 – Johnstown, PA Office Closure | U.S. Department of Labor.
The United States Department of Labor announced the realignment of the Division of Federal Employees’, Longshore and Harbor Workers Compensation program, effective on November 22, 2024:
We are writing to inform you of the realignment of the Division of Federal Employees’, Longshore and Harbor Workers’ Compensation (DFELHWC) program. As you may recall, the Division of Federal Employees Compensation (DFEC) and Division of Longshore and Harbor Workers’ Compensation (DLHWC) operated as separate entities from 1927 to 2020, when the two programs were merged. After extensive analysis and valuable feedback from both internal staff and external customers, we have made the decision to restore the independence of the previously merged DFEC and DLHWC programs.
This realignment has been implemented in response to our ongoing efforts to improve service delivery and optimize operational efficiency and is aimed at better supporting both our claimants and our broader stakeholder community. By restoring the independence of the two programs, we expect several key benefits:
- Programmatic Autonomy: Restoring the autonomy of the DFEC and DLHWC will allow tailored management approaches for each program. Separate expertise for two programs of dramatically different size and mission will maximize efficient program management and resource allocation.
- Risk Management: Managing these programs separately will reduce the risk that challenges faced by one program may negatively impact the other. This separation will provide greater stability and continuity in service delivery.
- Stakeholder Engagement: As each program focuses on its specific stakeholder group, we expect stronger, more focused engagement efforts. This will foster better relationships and clearer communication strategies, ensuring that the needs of each program’s external partners are met more effectively.
This realignment will be supported by the following leadership teams:
Division of Longshore and Harbor Workers’ Compensation
- DLHWC Director: Antonio (Tony) Rios
- Acting DLHWC Director: Stephanie Brown
As Tony Rios is currently on detail assignment to OWCP’s Information Technology Project Management Office, Stephanie Brown will serve as the Acting Director of the DLHWC program.
Division of Federal Employees Compensation
- DFEC Director: Jennifer Valdivieso
- DFEC Deputy Director for Program and System Integrity: Tirzah Leiman-Carbia
- DFEC Deputy Director for Operations and FECA Claims Management: Sheila Case
- DFEC National Administrators of Field Operations: Zev Sapir and Kellianne Conaway
All other points of contact within DLHWC and DFEC will remain the same.
This realignment will take effect on November 22, 2024. Your day-to-day work with us will continue uninterrupted and will not be disrupted by this realignment. We greatly appreciate your continued partnership and value the input that many of you have provided as part of this process. If you have any questions or require further clarification, please don’t hesitate to reach out.
Thank you for your ongoing collaboration as we implement this important realignment. We look forward to our continued work together.
Nancy J. Griswold
Deputy Director
Office of Workers’ Compensation Programs
U.S. Department of Labor
200 Constitution Avenue, N.W., Ste S-3524
Washington, DC 22041
Stephanie S. Brown
Director, Division of Longshore and Harbor Workers’ Compensation
Office of Workers’ Compensation Programs
U.S. Department of Labor
200 Constitution Avenue, N.W., Ste S-3524
Washington, DC 22041
On the LHWCA Front . . .
From the federal appellate courts
Robert Tower worked at the Port of Seattle for 13 years as a senior operations manager for Total Terminals, during which he was exposed to loud marine operations. He underwent an audiogram in 2019, and his otolaryngologist (Dr. Alan Langman) diagnosed Tower with a 0% right monaural hearing loss and a 9.375% left monaural hearing loss. Based on the AMA Guides, Dr. Langman combined the figures to derive a 1.56% binaural hearing loss rating. As Tower also complained of a bilateral constant high pitch whine, Dr. Langman diagnosed Tower with bilateral tinnitus, and Dr. Langman added 2% to Tower’s converted binaural impairment rating for a total impairment of 3.56%. After Tower reported that he requires Ambien to sleep through the whining noise, Dr. Langman upgraded the tinnitus rating to 4% for a total rating of 5.56%. Although the AMA Guides require tinnitus to be added to “a measurable binaural hearing impairment,” Dr. Langman did not believe that this applied only to a measurable binaural impairment and could be added when there is a monaural loss that is converted to a binaural rating. Total Terminals and its insurer, Signal Mutual, paid benefits based on the 9.375% hearing loss in Tower’s left ear, and Tower sought benefits for 5.56% converted binaural hearing loss. Administrative Law Judge Clark granted summary decision to Total Terminals/-Signal Mutual based on the 9.375% left monaural hearing loss, holding that Tower was not entitled to additional compensation for tinnitus because he only had a ratable hearing loss in his left ear. Tower (joined by the Director) appealed to the Benefits Review Board, and the majority of the panel (Judges Rolfe and Gresh) vacated Judge Clark’s decision. The majority reasoned that the AMA Guides supported a bilateral tinnitus impairment by adding it to a binaural hearing loss rating, so Tower was entitled to an award under the section of the LHWCA pertaining to loss of hearing (Section 8 (c)(13) and not pursuant to the catch-all provision for unscheduled injuries (Section 8(c)(21)). The majority then held that under section 8(c)(13), the claimant does not have to have measurable hearing loss in both ears to be entitled to compensation for tinnitus and only needs to have measurable binaural impairment (using the monaural-t0-binaural conversion formula and adjusting it up for tinnitus). The majority reasoned that this calculation was the only way for a claimant with a monaural hearing loss to be compensated for tinnitus, “which can only be assessed atop a binaural measurement.” The majority vacated the order of Judge Clark and remanded the case for “an award of benefits consistent with this opinion.” Chief Judge Boggs dissented in part, stating that the 4% tinnitus rating should be added to the 9.375% monaural rating to reflect an award of 13.375% for the monaural impairment. Total Terminals/Signal Mutual moved for en banc reconsideration, which was denied, and Total Terminals/Signal Mutual appealed to the Ninth Circuit. The Director challenged the appellate jurisdiction of the Ninth Circuit, arguing that the remand from the BRB was not a final decision. Writing for the Ninth Circuit, Judge Bress noted that a remand order that does not resolve the merits of the case fails to satisfy the finality rule. However, when the remand order only leaves a ministerial act to be completed by the ALJ on remand, the “practical effect” of the remand order is final, and the order is subject to appellate review. As the only task on remand to the ALJ was “to enter an award based on the mechanical requirements of the statute, as the Board interpreted it,” Judge Bress held that the decision of the Board satisfied the finality requirement for appeal. The Ninth Circuit then addressed the merits of the appeal, and Judge Bress stated that the BRB appeared to have reached its conclusion “in part by reasoning backwards from the premise that this would be ‘the only way for a claimant with monaural hearing loss to be compensated for the related effects of his tinnitus.’” Judge Bress accepted that the AMA Guides permit the increase for tinnitus when the claimant has a ratable hearing loss in only one ear, but he explained that the “overarching reasoning” of the BRB was “irreconcilable with the plain text of the Longshore Act and longstanding precedent interpreting it.” Judge Bress held that the LHWCA is clear that monaural and binaural hearing losses must be compensated differently, joining the other circuits in “recognizing that monaural hearing losses must be compensated under § 908(c)(13)(A), even though the Guides direct that they be converted to binaural hearing impairments.” The Board declined, however, to apply this reasoning to claims involving tinnitus for which the Board held the loss must be measured pursuant to the AMA Guides. Judge Bress disagreed, answering that the BRB’s logic “assumes an equivalence between tinnitus and hearing loss” that is not supported by the language of the LHWCA or the AMA Guides. Section 8(c)(13) compensates for “loss of hearing,” and it “gives no indication that any other ear-related injuries, conditions, or impairments should also be compensated under that section.” As tinnitus “is not tantamount to a ‘loss of hearing’ in the first place, it has no bearing on whether a claimant has loss of hearing in one ear or two.” Thus, the BRB’s decision violated its well-settled rule (adopted by the Ninth Circuit) that a monaural impairment must be compensated under Section 8(c)(13)(A) and not as if it were a binaural impairment (by applying the AMA Guides’ monaural-to-binaural conversion formula). The Ninth Circuit vacated the Board’s decision, while expressing no view on whether tinnitus may be compensable under the catch-all provision of Section 8(c)(21).
From the federal district courts
James Sarjeant, who suffers from mesothelioma, brought this suit in the Superior Court of Alameda County, California against asbestos suppliers and vessel defendants in connection with exposure to asbestos that included work at Todd Shipyard. The case was removed by Foster Wheeler under the Federal Officer Removal Statute, and American President Lines moved to dismiss the claims for loss of consortium and punitive damages on the ground that they are not available to harbor workers and because the LHWCA limits damages to pecuniary losses. Judge Chhabria responded that Section 5(b) of the LHWCA is silent on the damages that are available, and the parties claimed that the court should look to federal maritime law to fill the gap. Thus, under Batterton, Judge Chhabria believed the issue was whether punitive damages and damages for loss of consortium were available under the general maritime law prior to the enactment of the statute. Judge Chhabria then stated that neither party had provided the court with sufficient legal analysis or historical context to answer the question. As it was the defendant’s burden for a motion to dismiss, he denied the motion without prejudice to raising the issue in a motion for summary judgment. See July 2024 Update.
Judge Chhabria then considered the motions for summary judgment of several of the defendants to determine whether there was evidence of Sarjeant’s exposure to asbestos in products of the defendants. Judge Chhabria granted the motion with respect to Metalclad as there was no evidence that Metalclad products were used at the Todd Shipyard during the years that Sarjeant worked there. With respect to Herrick, Vanderbilt, and Allied Fluid, Sarjeant submitted a declaration to establish his exposure that the defendants contested as a sham because it contradicted his deposition testimony. Judge Chhabria found the inconsistency between Sarjeant’s deposition testimony and affidavit to be clear and unambiguous with respect to Allied Fluid’s products and granted summary judgment to Allied Fluid. Although Judge Chhabria found the dispute with respect to Vanderbilt and Herrick products to be “questionable in terms of credibility,” and that it was difficult to imagine that Sarjeant’s later testimony “was anything other than a product of his lawyers feeding him the right answers,” he held that Sarjeant had presented sufficient evidence for the jury to decide (Judge Chhabria noted that “Sarjeant is in his eighties; he has been seriously ill during this litigation; he has had to deal with his wife’s death in July; and he is being asked to recall events from nearly 60 years ago”).
Opinion Reconsideration/Pierce, Roggli
Robert Stephen Sentilles claimed that his mesothelioma was caused by exposure to asbestos during his work as a yard clerk in the insulation shop at Avondale’s shipyard on the Mississippi River from 1969 to 1972. He also claimed that he was exposed to asbestos from his father’s clothes when his father worked at Avondale form the 1950s to the 1980s and brought the asbestos home on his clothes and person and that he was exposed to asbestos from his brother’s clothes when his brother worked at the shipyard (the brothers shared a bedroom in the family home, and Thomas left his clothes on the bedroom floor for their mother to do the laundry). Robert brought this action in Louisiana state court, and Avondale removed the case to the Louisiana federal court. Avondale moved for summary judgment on the ground that the LHWCA applied and that the claims were barred by the exclusive remedy provision of the LHWCA. Avondale argued that the situs and status tests of the LHWCA, as amended in 1972, were satisfied; that the take-home exposure claim from his brother’s employment was incidental to Robert’s own employment; and that, alternatively, the non-apportionment rule from the LHWCA applied since at least part of Robert’s exposure was covered by the LHWCA. Judge Ashe agreed with prior decisions from the Eastern District of Louisiana that the amended LHWCA was applicable and barred Robert’s occupational exposure claim, but he distinguished the decision of Judge Vance in Cortez v. Lamorak (see May 2022 Update, holding that the secondary exposure case was not barred by the LHWCA). Judge Ashe ruled that Robert and his brother were employed at the shipyard at the same time, that Robert’s exposure arose out of his employment at Avondale, and that the claim was covered under the LHWCA. Consequently, Judge Ashe dismissed Robert’s claims against Avondale. One of the other defendants in the suit then moved to certify the dismissal for an immediate appeal, and Judge Ashe agreed that the order should be certified and ordered a final judgment pursuant to Rule 54(b). See July 2022 Update.
After the Fifth Circuit’s decision in Barrosse rejected pre-emption of Louisiana state claims based on the LHWCA (see July 2023 Update), the parties agreed to a reversal, and the Fifth Circuit granted their motion on January 24, 2024. At the same time that Judge Ashe issued his decision with respect to the preemptive force of the LHWCA, Avondale moved for summary judgment on Sentilles’ claims for secondary exposure and with respect to his own exposure to asbestos after June 23, 1969, when he began working as an office clerk. Sentilles did not respond, and Judge Ashe granted summary judgment to Avondale. Two years later, on March 25, 2024, Sentilles filed a third amended complaint that included allegations related to the dismissed claims. Avondale moved for judgment on the pleadings, and Sentilles moved for reconsideration of the previous dismissal of his claim for exposure after June 23, 1969. Sentilles cited the testimony of the expert pathologist for defendant Pellerin Milnor (Dr. Victor Roggli) that Sentilles would have been exposed to above-background concentrations of asbestos while working at Avondale after June 1969 (contrary to Sentilles’ testimony that he was not exposed to asbestos while working as an office clerk after June 23, 1969). Avondale also filed a motion to preclude use of the opinions of Dr. Roggli and Pellerin Milnor’s industrial hygiene expert, Jennifer Pierce. Judge Ashe declined to grant reconsideration, reasoning that there was not a sufficient contradiction of Sentilles’ prior testimony that he was not exposed to asbestos after he began his office work, noting that Roggli’s testimony never mentioned that Sentilles’ work was indoors. Judge Ashe added that it was unfair for Sentilles’ to cite Roggli’s testimony as he was not designated as an expert by Sentilles, and the deadline for expert disclosures had long since passed. Accordingly, Judge Ashe excluded the expert testimony, declined to reconsider his prior decision, and granted Avondale’s motion for judgment on the pleadings.
Avondale engaged Christopher P. Herfel, a marine engineer and former Navy officer, to provide expert testimony to support its defenses of derivative sovereign immunity (Yearsley) and government contractor immunity (Boyle), and he issued reports examining the historic specifications, policies, practices, and knowledge of the Navy, Coast Guard, and MARAD regarding asbestos materials used on government vessels. Herfel opined that the government required asbestos-containing materials to be used on its vessels and that Avondale was required to act in “strict compliance” with that requirement. He also concluded from the government’s research that a private-sector shipyard, such as Avondale, could not have had greater knowledge of the hazards of asbestos than the federal government. Sentilles moved to exclude Herfel’s opinions based on a lack of qualifications and improper methodology, but Judge Ashe denied the motion. He found Herfel qualified from his decades of experience researching the government’s shipbuilding practices, particularly those related to the use of asbestos and that his opinions were relevant and reliable.
Sentilles also moved to exclude the opinions of James Shea, who was hired as an expert industrial hygienist by Avondale. Sentilles complained that Shea should have produced the handwritten calculations of Sentilles’ dosage exposure to asbestos that Shea made the night before his deposition. However, Judge Ashe answered that there was no surprise as all Shea did was write out the arithmetic based on the information provided in his report. Sentilles also argued that the report was based on assumptions not supported by the facts—that Sentilles washed his brother’s clothes. Avondale responded that Shea had to assume that Sentilles laundered his brother’s clothes in order to use the epidemiological data to calculate the take-home asbestos exposure because there is no data available for simply being around a person wearing asbestos-containing work clothing. Judge Ashe agreed that the discrepancy was easily explained to the jury, and he declined to exclude Shea’s testimony.
And on the maritime front . . .
From the United States Supreme Court
Authority to bind in vessel construction contracts. On November 4, 2024, the Supreme Court declined to grant a petition for a writ of certiorari in Harley Marine Services, Inc. v. Conrad Shipyard, L.L.C., No. 24-257, 2024 U.S. LEXIS 4488 (U.S. Nov. 4, 2024), involving a suit alleging breach of contracts to build two tugboats. Harley Marine Services presented the following question in its petition:
Whether the Fifth Circuit violated the fundamental principle of appellate review that a finding of fact is clearly erroneous if there is no evidentiary support for it in the record by affirming the trial court’s reimbursement and indemnification rulings even though there was no evidence that Franco Marine 1, L.L.C., Franco Marine 2, L.L.C. and Harley Franco had actual agency authority to bind Harley Marine Services, Inc. to the obligations in the subject vessel construction contracts with Conrad Shipyard, L.L.C.?
Maritime attachment procedure. On November 25, 2024, the United States Supreme Court declined to grant a petition for a writ of certiorari in Sikousis Legacy, Inc. v. B-Gas Ltd., No. 24-360, 2024 U.S. LEXIS 4804 (Nov. 25, 2024). Sikousis chartered a vessel to B-Gas Ltd. (now Bepalo LPG), which breached the agreement and resulted in an arbitration award in favor of Sikousis for $7.5 million. Bepalo declared insolvency, and Sikousis brought this action in federal court in California seeking to attach the BERICA, a vessel owned by Aframax, a company related to Bepalo/B-Gas. Judge Breyer permitted discovery so that Sikousis could try to establish an alter ego claim against Aframax, but he ultimately held that Sikousis had not elicited sufficient evidence to pierce Aframax’s corporate veil and that Sikousis could not recover against Aframax for Bepalo’s debt. He therefore vacated the attachment but stayed the order so that Sikousis could seek a stay in the Ninth Circuit. See February 2023 Update.
Sikousis appealed to the Ninth Circuit, which began by addressing the standard that applies to determine whether to continue pre-judgment attachments. Writing for the Ninth Circuit, Judge Bea noted that Supplemental Rule E(4)(f) does not provide the standard to measure the plaintiff’s burden, but that district courts in the Ninth Circuit and courts in other circuits had applied a “probable cause” standard requiring plaintiffs to demonstrate that the evidence “shows a fair or reasonable probability that Plaintiffs will prevail on their alter-ego claim.” Judge Bea reasoned that the plaintiff need not prove its case at the Rule E(4)(f) stage, which a higher standard, such as a preponderance of the evidence, would require. Therefore, the plaintiff meets his burden by establishing a reasonable probability of success as to each element of the claim (less than a preponderance but more than a mere possibility). Judge Bea then turned to Judge Breyer’s decision not to pierce the corporate veil of Bepalo, and he stated that federal courts apply federal common law when examining corporate identity. Judge Breyer applied that standard, and Judge Bea agreed that the evidence of control by minority shareholders supported the decision that Sikousis failed to carry its burden to demonstrate a reasonable probability of succeeding on its theory to pierce the corporate veil. Consequently, the Ninth Circuit affirmed the granting of the motion to vacate the attachment of the BERICA. See May 2024 Update.
The issue presented by Sikousis in its petition for certiorari was:
Whether a court exercising jurisdiction in an admiralty attachment case, whereby it must decide the ownership of the property seized based on the equitable principles referred to in Swift & Co. Packers v. Compania Colombiana Del Caribe, S. A., 339 U.S. 684 (1950), may apply hard-and-fast rules that limit or curtail its inquiry without first holding a hearing on the merits that addresses this issue?
Exclusion of expert testimony in toxic tort cases. On November 25, 2024, the United States Supreme Court declined to grant a writ of certiorari in Prest v. BP Exploration & Production, Inc., No. 24-485, 2024 U.S. LEXIS 4848 (U.S. Nov. 25, 2024). Kirk Prest operated a fishing and hunting charter business near Venice, Louisiana that was devastated by the spill from the Macondo/DEEPWATER HORIZON blowout. He chartered his boat to BP as part of the Vessels-of-Opportunity Program and helped with the cleanup, including wildlife search and rescue, oil search and reporting, and monitoring bird scare cannons, which exposed him to dispersants and crude oil (including being sprayed with dispersant from an aircraft). Prest brought an opt-out suit in federal court in Louisiana, asserting that he suffered both long-term and temporary health issues as well as emotional distress. BP moved to exclude the opinions of Prest’s experts on causation, Dr. Gerald Cook and Prest’s ophthalmologist, Dr. Robert Ross, and BP moved for summary judgment based on the lack of evidence of causation. Judge Ashe excluded the expert opinions and granted summary judgment on the exposure claims based on lack of expert evidence and on the emotional distress claim based on not working within a zone of danger. See December 2022 Update.
Prest appealed to the Fifth Circuit, and the court began by discussing the exclusion of expert testimony on general causation. Prest acknowledged that Dr. Cook and Dr. Roth did not provide scientific evidence of the level of exposure to crude oil or dispersant that would cause his medical condition (in the general population). Instead, he argued that the judge should have applied a different standard based on the “unique circumstances” of this spill. The Fifth Circuit disagreed, stating that the district court would have erred if it had not applied the Fifth Circuit’s standard for evaluating expert evidence on causation. The Fifth Circuit also held that Prest’s argument that his lack of evidence of causation was because of BP’s failure to conduct biomonitoring of the workers and to preserve the data was flawed because it “puts the cart before the horse.” The court reasoned that the failure to conduct biomonitoring and preserve data had nothing to do with general causation “whether, per the scientific literature, exposure to a chemical can cause a specific injury in the general population.” Without that evidence of general causation, Judge Ashe correctly granted summary judgment on the exposure claims. Although Prest argued to the Fifth Circuit that expert testimony was not necessary for the claim for a temporary injury, the court noted that he had cited no authority for that proposition and held that the argument was thereby waived. With respect to the claim of emotional injury, Prest claimed that he had flashbacks and nightmares due to all that he endured related to the oil spill. As the emotional injuries pertained to the oil spill and not to being sprayed with dispersant, the Fifth Circuit affirmed the denial of the claim as Prest was not in the zone of danger (noting that the Fifth Circuit has not adopted that test for claims under the general maritime law). Finally, the appellate court denied Prest’s challenge to the decision not to amend the scheduling order and continue trial based on the fact that his doctor could not determine if his medical issues were the result of his cleanup work until those conditions stabilized. As the potential evidence related to specific causation, it was not relevant to the basis for summary judgment (lack of evidence of general causation), and there was no abuse of discretion in declining to allow the case to proceed. See November 2023 Update.
The question presented by Prest in his petition for certiorari was:
The admission of expert testimony in federal courts is governed by Federal Rule of Evidence 702 and this Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, Inc. 509 U.S. 579, 592, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993) and its progeny. In toxic tort cases, the Fifth Circuit requires plaintiffs to provide “scientific knowledge of the harmful level of exposure to a chemical” as a prerequisite to establishing general causation, even when extensive peer-reviewed epidemiological studies demonstrate that exposure to the toxic agent increases disease incidence in exposed populations.
The questions presented are:
- Whether a trial court may categorically exclude expert testimony in toxic tort cases solely because the expert cannot quantify precise exposure levels, even when substantial peer-reviewed epidemio-logical evidence demonstrates increased disease incidence in exposed populations and quantitative exposure data is unavailable or impossible to obtain.
- Whether the abuse of discretion standard of review remains appropriate when a trial court fails to conduct any substantive analysis of the reliability of expert testimony under Rule 702 and instead applies a categorical rule requiring quantitative exposure data in all toxic tort cases.
From the federal appellate courts
Roberto Elorreaga died from mesothelioma that he claimed was from exposure to asbestos while serving in the Navy on the USS RUPERTUS (machinist mate) and USS COWELL (fireman’s apprentice and electrician’s mate), and he and his wife (his beneficiaries were added after his death) brought suit in California state court against suppliers of asbestos products. The case was removed to federal court based on the Federal Officer Removal Statute, and defendant General Electric filed a motion to dismiss the claims for punitive damages and loss of consortium. The plaintiffs argued that punitive damages should be permitted based on the decision of the Supreme Court in Atlantic Sounding. Following the framework enunciated in Batterton, however, Judge Gilliam found no evidence that punitive damages were historically available in the claims asserted in this case, and he dismissed the punitive damage claims. As to the claim for loss of consortium, Judge Gilliam did not believe that Atlantic Sounding provided a basis for the court to decline to apply the existing rule in the Ninth Circuit from Smith v. Trinidad that loss of consortium damages are not available under the Jones Act or general maritime law, particularly in light of Batterton. Judge Gilliam did not, on a motion to dismiss, believe that it was appropriate to dismiss the claims brought under California law as it was not yet known for certain whether Elorreaga may have been exposed to asbestos while working on the land at a shipyard. See August 2022 Update.
As the plaintiffs had to prove that the specific products of the product defendants were a substantial factor in causing Elorreaga’s illness (under maritime law or state law), the defendants sought to exclude the testimony of several of the plaintiffs’ experts on the basis that their opinions addressed “every exposure” or “cumulative dose” causation. They argued that none of the experts provided opinions about the amount or duration of Elorreaga’s exposure attributable to their specific products. Judge Gilliam agreed that the Ninth Circuit had rejected the “every exposure” theory under the general maritime law (it undermined the substantial factor test and would permit imposition of liability on the manufacturer of any product containing asbestos to which the worker had the briefest of encounters). Consequently, he examined the expert opinions to determine whether they were based on the “every exposure theory.” Although none of the experts detailed the proximity, frequency, or regularity of exposure to a specific product, Judge Gilliam declined to exclude the opinions, reasoning that they were still helpful to the fact finder and noting that the plaintiffs would still have to introduce evidence from which the fact finder could infer that each product was a substantial factor in causing Elorreaga’s mesothelioma. However, to the extent an expert attempted to offer an “every exposure” opinion, Judge Gilliam advised that the testimony would be excluded.
The plaintiffs and some of the defendants filed cross-motions for summary judgment on the government-contractor defense from the Supreme Court’s Boyle case (the defendants argued that they simply complied with Navy specifications when supplying the products containing asbestos). The plaintiffs argued that the Boyle defense was based on preemption concerns with respect to state law claims that are not involved in a case brought under federal maritime law. Although the defendants cited cases in which the courts considered the government-contractor defense in the context of federal claims, Judge Gilliam answered that the courts simply applied Boyle without any analysis of the Supreme Court’s concerns about preemption. Therefore, Judge Gilliam granted partial summary judgment to the plaintiffs that the defense did not apply in this case because the claims were premised on federal maritime law (the defendants did not raise a Yearsley defense). Finally, several product defendants moved for summary judgment that the plaintiffs did not provide sufficient evidence of exposure to asbestos from their products and that any exposure was a substantial contributing factor. Judge Gilliam found fact questions on the exposure and that the evidence on the substantial factor issue was “not especially strong,” but sufficient to avoid summary judgment. See May 2023 Update.
Several defendants then moved the court to certify, for interlocutory appeal, the determination that the Boyle government contractor defense did not apply to the federal maritime law claims in the case. Judge Gilliam reasoned that the question was purely legal in nature and did not require any factual inquiry, that there were substantial grounds for difference of opinion on the issue, and that an immediate appeal would avoid the case proceeding to trial in which the defendants would have no opportunity to introduce evidence on a defense that could provide a complete defense. Therefore, Judge Gilliam agreed to certify the case for an interlocutory appeal on the government contractor defense and stayed the suit. See August 2023 Update.
The Ninth Circuit noted that Judge Gilliam focused on the Boyle decision in its analysis of the government contractor defense (describing the scope of displacement of state law by federal law for design defects in military equipment). The appellate court reasoned that Boyle is a preemption case and is inapplicable to the federal maritime claims asserted by the plaintiffs in this case. However, the Ninth Circuit held that the defendants could assert a government contractor defense under Yearsley (holding that if the “authority to carry out [a] project was validly conferred, that is, if what was done was within the constitutional power of Congress, there is no liability on the part of the contractor for executing its will”). As the Supreme Court has confirmed that the Yearsley defense provides a federal contractor with immunity against a federal claim, and as the Ninth Circuit has applied Yearsley immunity to federal maritime claims, the court held that Judge Gilliam erred by failing to address the application of Yearsley to the plaintiffs’ claims.
Jenos Patrick entered into an employment contract with Trident Seafoods to work as a seaman on the M/V SEATTLE ENTERPRISE. He brought this suit in federal court in Hawaii, seeking to recover for multiple injuries and for wages that he claims he was not paid. He brought claims for negligence under the Jones Act, unseaworthiness of the SEATTLE ENTERPRISE, infliction of emotional distress, an accounting with respect to the voyage on the vessel, and failure to pay wages. Citing the forum-selection clause in the employment contract, requiring that a suit be brought in the federal or state courts of King County, Washington, Trident moved to dismiss the case or, alternatively, to transfer the case to the federal court in King County, Washington (Western District of Washington). The response was due on May 12, 2023, and two days after the deadline, on May 14, Patrick filed a proposed stipulation between the parties, purporting to give him until May 15 to file the response. Patrick missed that deadline and filed a response on May 16, which the court struck on May 19, 2023. Patrick filed a motion to reconsider the striking of his response, arguing that his counsel was in poor health and the response was filed only 69 minutes after the deadline to which the parties stipulated (because he was trying to include a table of authorities). Patrick also argued that the court should issue a “Writ of Rachmones” or “Writ of Mercy” and should refer the case to the Hawaii Supreme Court to determine if there is a strong public policy in Hawaii regarding the treatment of seamen who are recruited and hired in Hawaii. Chief Judge Watson declined to grant reconsideration as none of the explanations given by Patrick “remotely fit” within the grounds for relief under the Local Rule, stating: “Patrick does not even recognize that Local Rule 60.1 exists or, for that matter, that any relevant legal principle governs the motion for reconsideration.” Chief Judge Watson noted that Patrick had not attempted to satisfy any of the grounds for reconsideration, which Chief Judge Watson surmised was the reason that Patrick relied on the Writ of Rachmones or Writ of Mercy (available “where there is no clear legal right to relief”). He stated: “There is certainly no legal right to relief here, and the Court will not create one simply to avoid the consequences of counsel’s actions.” Turning to the motion to dismiss, Chief Judge Watson agreed that Trident could use a motion to dismiss under Rule 12(b)(6) (as opposed to a motion based on improper venue under 28 U.S.C. Section 1406(a) or Rule 12(b)(3). Chief Judge Watson concluded that the forum-selection clause applied to all of the claims asserted by Patrick, and he found no reason not to enforce the clause on the record presented. Patrick argued that the dismissal of the case would be prejudicial because of the six-month time limitation in his employment contract to assert claims for unpaid wages or production shares. However, Chief Judge Watson cited the Supreme Court’s decision in Atlantic Marine that “such alleged prejudice is not a relevant consideration when ‘the plaintiff has violated a contractual obligation by filing suit in a forum other than the one specified in a valid forum-selection clause.’” Chief Judge Watson also rejected Patrick’s arguments about the inconvenience of the Washington forum as Patrick waived the right to challenge the preselected forum as inconvenient by his agreement to the forum-selection clause. Consequently, Chief Judge Watson granted the motion to dismiss and dismissed the case without prejudice. The next day, Patrick filed a notice of appeal to the Ninth Circuit. See July 2023 Update.
The Ninth Circuit assumed, without deciding, that a dismissal pursuant to Rule 12(b)(6) was a permissible mechanism to enforce a forum-selection clause. However, the appellate court believed it was an abuse of discretion in this case to dismiss the case without considering a transfer. The court noted that the employment contract required Patrick to bring an action for recovery of wages within 6 months, and an action in the selected forum would no longer be timely. In contrast, a transfer of the existing suit would simply move the timely claim to the proper venue. Therefore, the Ninth Circuit remanded the case to the district court to consider the alternative request to transfer the case.
Opinion on stay pending appeal
Opinion on administrative stay
This case involves three vessels, the CAPT. FRANK BECHTOLT (owned by Manson Construction Co.), the CIT-103 (owned by Caillou Island Towing), and the IDLER (formerly owned by T.W. LaQuay Marine). LaQuay bareboat chartered the BECHTOLT and the CIT-103 and contracted with John Bludworth Shipyard to assist in combining the three vessels into a single dredging unit for work along the Gulf Coast. LaQuay filed for bankruptcy and did not pay Bludworth for the work. Bludworth filed claims and asserted liens against the vessels in the LaQuay bankruptcy. However, when Bludworth learned that the BECHTOLT and CIT-103 were bareboat chartered, it brought this action in which it arrested the BECHTOLT, the CIT-103, and the IDLER. Caillou moved to vacate the arrest of the CIT-103 on the grounds that Bludworth did not provide necessaries to the vessel or rely on the credit of the vessel when it contracted with LaQuay, and because any lien against the vessel was extinguished by laches. Prior to the work of combining the vessels, the CIT-103 was an unpowered flat deck barge, but it has been converted into a booster barge (housing a booster pump that allows the dredge pump to operate more efficiently). Caillou argued that the work on the CIT-103 was to serve the BECHTOLT, so that the CIT-103 could be used as a platform for auxiliary equipment for the BECHTOLT. The work in modifying the CIT-103 and combining it with the other two vessels was for the purpose of the dredge project, not to serve the particular function of the CIT-103. Judge Bennett cited the Fifth Circuit for the view that a necessary is determined by “the need of the vessel.” Bludworth did not cite authority to support the argument that “modifications to one vessel so that it can be combined with separate vessels and serve the purposes of those vessels constitutes necessaries to create a maritime lien.” Finding that Bludworth did not provide necessaries to the CIT-103, Judge Bennett vacated the arrest. Bludworth sought summary judgment to enforce its maritime lien on the BECHTOLT, and Judge Bennett noted that Bludworth did a significant amount of work on the vessel besides connecting the BECHTOLT to the CIT-103. The work included blasting, coating, removal and modification of a ladder, adding sponsons, modifying the pump, adding swing winches, changing the fenders, adding anodes, replacing sea valves and strainers, repairing doors in the engine room, adding machinery guards on the generator, adding a new stairway, adding and modifying piping, and replacing hatches. Judge Bennett concluded that there were fact issues whether all of the work performed by Bludworth constituted necessaries (including an issue whether the work served the function of the BECHTOLT or perhaps a “new” vessel that the BECHTOLT “served to create.” Similarly, Judge Bennett found fact issues with respect to whether the work on the IDLER (converting it to a spud barge) constituted necessaries for that vessel. See October 2024 Update.
Bludworth filed an appeal and moved the Fifth Circuit to issue a stay of the order vacating arrest of the CIT-103 pending appeal, arguing that if the stay was not granted the dredging unit would be separated, greatly decreasing its value. Two members of the panel of the Fifth Circuit declined to grant the stay pending appeal (Judge Oldham would have granted the stay). In a published order issued on October 29, 2024, the panel agreed that Bludworth had not shown how the services it “provided to the CIT-103 (adding equipment and joining the three vessels) were to serve the needs of the CIT-103 itself rather than the dredging unit as a whole,” adding that “courts have denied maritime liens where the services provided ‘do not fit naturally into this list of traditional shore-to-ship goods and services.’” The panel distinguished the Supreme Court’s decision in THE JACK-O-LANTERN, holding that a contract to change a car float barge into an amusement steamer was maritime because the Court did not have to address whether there was a maritime lien for the work. In the absence of caselaw that clearly showed the district court’s analysis was wrong, and in the absence of a question that would have significant consequences beyond the two parties, the panel declined to grant the “extraordinary relief” of a stay pending appeal.
Bludworth then sought reconsideration of the order denying its request for a stay and requested a temporary administrative stay during the consideration of its motion for reconsideration. On October 31, 2024, the Fifth Circuit agreed to a temporary stay of the order vacating the arrest of the CIT-103 pending its decision on reconsideration.
On November 14, 2024, the panel substituted an order that granted a stay pending appeal and expedited the appeal to the next available oral argument panel. In its per curiam opinion, the panel addressed the issue whether it was proper “to consider only the prior function of the barge as opposed to considering how the work served a new function of the barge as part of a dredging unit.” The majority distinguished cases such as the NOR GOLIATH decision from the Fifth Circuit (tug owner did not have a lien on a heavy lift vessel for work towing barges back and forth to the heavy lift vessel), reasoning that the opinions did not undermine the principle that work performed to change the function of a vessel gives rise to a maritime lien as long as the changes do not amount to original construction. The majority accepted the district court’s focus that the work must benefit the function of the CIT-103; however, it answered that the work done to each vessel was to benefit the function of the new, triple-sized vessel, reasoning: “Had the modifications not been performed, the CIT-103 would have failed in its particular function.” The majority summarized that “regardless of whether the work on the CIT-103 itself was repairs under the principles established in JACK-O-LANTERN or is seen more generally as necessaries for the new function of the vessel, [Bludworth] has made a strong showing that it has a maritime lien on the CIT-103.” As Bludworth made a strong showing that it was likely to succeed on the merits, the panel issued a stay pending the appeal. Judge Oldham, who agreed from the outset that a stay should be granted, concurred to state his simple syllogism that Congress is presumed to adopt the interpretation of a term when it uses that term in a statute; the Supreme Court used the term “repair” in THE JACK-O-LANTERN to include conversion of a ship from one use to another; and Congress provided for a maritime lien for “necessaries” that include “repairs” in the CIMLA. Therefore, the conversion in this case gave rise to a lien for necessaries. Judge Willett dissented, contending that a necessary is determined “by the need of the vessel.” He disagreed with the conclusion that the court must consider necessaries with regard to the “particular function of the CIT-103” and what is necessary for that vessel. He agreed with Judge Hanks that the work on the CIT-103 was for the dredging efficiency of the three-part barge and not for any use by the CIT-103 itself. Judge Willett concluded: “The panel’s analysis of the murky waters of our maritime lien caselaw is certainly a plausible reading. But I am ‘not left with a firm conviction that [the district court’s] holding was erroneous,’ so I do not believe [Bludworth] has shown the likelihood of success necessary for a stay.”
The tanker AFRAMAX received a cargo of crude oil at the Houston Fuel Oil tank facility on the north side of the Houston Ship Channel and engaged two harbor tugs, the GASPARILLA and JESS NEWTON, to assist in the departure. During the departure, the AFRAMAX suffered a malfunctioning runaway engine that was stuck in the astern direction and the vessel struck mooring dolphins at the terminal on the opposite side of the Channel. Moments before the allision, the JESS NEWTON quit pulling on the AFRAMAX because a piling was “right between the ship and me.” The terminal operator brought suit against the interests of the AFRAMAX in federal court in Houston, and the AFRAMAX interests brought third-party claims against the operators of the harbor tugs. Judge Hanks held a bench trial in February 2023 and found that the AFRAMAX was 100% responsible for the allision and that the tugs were not responsible. See November 2023 Update.
The AFRAMAX interests appealed, arguing that Judge Hanks erred in not applying the presumption of liability from a failure of machinery or gear enunciated by the Second Circuit’s decision in Cranberry Creek Coal Co. v. Red Star Towing & Transportation Co., citing the mechanical failure of the JESS NEWTON’s winch. Without deciding whether the presumption is applicable in the Fifth Circuit, the court noted that Judge Hanks had found that the winch failure occurred after the allision. Thus, there was no reason to invoke the presumption, and the Fifth Circuit declined to disturb the judgment in favor of the tugs.
TWC Acqua Ltd. bought a marine insurance policy through its broker, RFIB Group, to insure TWC’s motor yacht ACQUA. The ACQUA was docked in Ft. Lauderdale when heavy rain created leaks in the yacht that resulted in water damage to the interior. TWC presented a claim but did not receive payment for the damage. TWC then brought this suit in federal court in Florida against RFIB for breach of contract. RFIB did not answer the complaint, and the clerk entered a default against RFIB. A week later, RFIB appeared and moved to set aside the entry of default, attaching a declaration from RFIB’s former counsel that TWC’s counsel consented to extensions of time to file a responsive pleading (however, RFIB’s former counsel did not file anything with the court concerning the extension). Judge Singhal declined to set aside the default, reasoning that FRIB had failed to show good cause because the agreements for an extension were not self-executing and required court approval, which was not sought by RFIB. RFIB also moved to transfer venue based on a forum-selection clause in the policy, but Judge Singhal denied the motion as moot. RFIB moved for reconsideration, arguing that TWC had “reneged” on its agreement in an act of “clandestine gamesmanship,” and TWC moved for entry of judgment. RFIB responded that it was not the insurer and could not be liable for breach of contract under the policy, but Judge Singhal declined to grant reconsideration as no motion for extension had been filed, and he granted judgment in favor of TWC as to liability for breach of contract but declined to award damages without more evidence. RFIB appealed, and the Eleventh Circuit first considered whether there was appellate jurisdiction as an interlocutory admiralty appeal under Section 1292(a)(3). The appellate court agreed that the default made a complete determination of RFIB’s liability as to TWC, so the court had jurisdiction over the appeal (the court had pendent appellate jurisdiction over the other orders of the district court). RFIB argued that the district court lacked subject matter jurisdiction because the policy contained a forum-selection clause specifying New York as the proper forum to hear a case under the policy. The Eleventh Circuit disagreed, reasoning that a forum-selection clause presents an issue of improper venue and does not divest the court of subject matter jurisdiction, which was proper based on the claim for breach of a maritime contract. The Eleventh Circuit did agree to set aside the default judgment because TWC’s complaint failed to plausibly allege a claim for breach of contract against RFIB. TWC’s complaint alleged that RFIB failed to investigate, respond to, and indemnify losses under the policy, and TWC attached a copy of the policy. However, the policy provided that RFIB is “Lloyd’s Broker” and that the underwriters are three Lloyd’s Syndicates. Accordingly, the Eleventh Circuit held that RFIB could not breach the policy in the manner that TWC alleged, and the appellate court reversed the default judgment and remanded the case with instructions to dismiss the complaint for failure to state a claim (without prejudice).
The insurance and contractual issues in this case arise from the claims of Devin Barrios, an employee of Centaur, who was injured while offloading a generator from River Ventures’ vessel in connection with the construction of a concrete rail by Centaur on United Bulk Terminals’ dock in the Mississippi River. Barrios brought suit against River Ventures and Centaur, resulting in a judgment in favor of Barrios against River Ventures under Section 5(b) of the LHWCA. River Ventures sought indemnity and additional insurance (as a contractor of UBT) from Centaur pursuant to the Master Service Contract between Centaur and UBT that applied to the construction of the rail. The dispute raised the question whether the contract was maritime or subject to Louisiana law. In the wake of the decision of the Supreme Court in Kirby and the decision of the en banc Fifth Circuit in Doiron, Judge Milazzo applied a three-part test to determine if a non-oilfield contract is maritime: did the work performed under the contract involve maritime commerce, did it involve work from a vessel, and did the contract provide or did the parties expect that a vessel would play a substantial role in completing the contract. Applying the first prong of that test, Judge Milazzo held that the contract was a land-based contract so that Louisiana law applied, and the indemnity and additional insured provisions were invalid under the Louisiana Construction Anti-Indemnity Act. The Fifth Circuit disagreed with the three-prong test applied by Judge Milazzo and adopted the test proffered by River Ventures that, in order to determine if a mixed-services contract is maritime, the “contract (1) must be for services to facilitate activity on navigable waters and (2) must provide, or the parties must expect, that a vessel will play a substantial role in the completion of the contract.” Judge Smith rejected a separate initial test whether the contract involved maritime commerce as that is what the two prongs of Doiron, as extrapolated in Barrios, were designed to determine. Judge Smith then determined that the test was satisfied in this case as the dock was over the Mississippi River, and the vessels involved in the construction (and the accident) were on navigable waters. The contract also required substantial use of vessels as Centaur’s bid expressed that the price for the work was “significantly higher” because of the necessity of vessels in the project, and Centaur’s project manager admitted that the work could not have been done properly without a crane barge. The fact that Centaur’s workers, like Barrios, may have performed a majority of their work on the dock did not alter the conclusion that the parties expected a substantial role for vessels in the construction. See December 2019 Update.
On remand, River Ventures and its insurer, XL Specialty, and Centaur and its insurer, Travelers, disputed the insurance coverage for River Ventures under the Travelers P&I policy and whether Centaur breached the contract if the Travelers’ policy did not afford coverage to River Ventures. Travelers argued that the P&I policy excluded coverage for Barrios’ injury because it contained a crew/employee exclusion for “injury of any crew, seaman or other employee of the Assured regardless of whether they be employees of the Assured or any Additional Assured named in the Policy.” River Ventures argued that “the Assured” referred to the particular insured against whom a claim has been asserted and did not apply to Barrios’ claim against River Ventures. Travelers argued that “the Assured” referred to Centaur so that the provision excluded claims for injuries to Centaur employees against River Ventures. Judge Milazzo agreed with Travelers that the exclusion unambiguously excluded Barrios’ claim against River Ventures as he was an employee of Centaur. With that ruling, River Ventures argued that Centaur had breached the MSC because Centaur was required to obtain a P&I policy of “not less than the P&I SP-23 (revised 1/56) form of policy or its equivalent” and that form insures the crew and injuries to third parties without a crew/employee exclusion. Despite that language of the MSC, Centaur argued that there was no requirement to provide liability coverage for UBT or River Ventures for Barrios’ injury in the P&I policy because the MSC required Centaur to obtain a maritime employers liability endorsement to its workers’ compensation policy that would cover Centaur’s liability to its employees and crew. Considering the MSC provisions to be ambiguous, Judge Milazzo held that summary judgment was not proper on River Ventures’ claim for breach of contract against Centaur. See August 2021 Update.
River Ventures and XL appealed the ruling in favor of Travelers to the Fifth Circuit, arguing that the language of the exclusion in Travelers’ policy was ambiguous because it contained superfluous or redundant language, the interpretation suggested by Travelers conflicted with other provisions of the policy, and the interpretation conflicted with the requirements of the Master Service Agreement of which Travelers was aware because its additional insured provision incorporated the requirement from the Master Service Agreement. Substituting the names of the parties into the exclusion would provide that the policy excluded any crew, seaman, or other employee of Centaur, regardless of whether they be employees of Centaur or River Ventures. The Fifth Circuit recognized that the Exclusion “could have been written more efficiently” and that its use of “the Assured” was “certainly awkward.” However, the appellate court believed that the Exclusion unambiguously precluded coverage for all employee claims, regardless of whether the entity seeking coverage was the employer of the injured employee. As Barrios was an employee of Centaur, the court held that the Exclusion applied to preclude coverage for Barrios’ claim against River Ventures, even though Barrios was not an employee of River Ventures. To the extent that the Travelers policy did not afford the coverage required in the Master Service Contract, the court held that the policy controlled and remanded the case to the district court to address River Ventures’ claim against Centaur for breach of contract. See May 2022 Update.
On remand, Judge Milazzo held a bench trial on the claims of River Ventures and XL that Centaur breached its contract (to which River Ventures and XL were third-party beneficiaries) by failing to obtain a P&I policy that included crew/employee liability coverage that would extend to the claim of Barrios against River Ventures as an additional insured and member of the defined “UBT Group” [the MSC also required Centaur to provide excess/bumbershoot coverage following form to the primary policies]. Judge Milazzo previously found the requirement that Centaur obtain P&I coverage of “not less than the P&I SP-23” was ambiguous. Therefore, she allowed expert testimony on whether Centaur was required to obtain a P&I policy that included liability coverage for River Ventures (and its insurer XL) for injuries of employees or crew of Centaur. As there was crew coverage in the workers’ compensation/employers liability policy for Centaur (which did not extend to River Ventures), Judge Milazzo found that the parties could not have intended there to be duplicative crew coverage in the P&I and employers liability policies. Therefore, in order that there be no duplicative coverage for Centaur and UBT, she held that the parties intended there to be no coverage for the crew/employees on the P&I policy that afforded additional insurance protection to River Ventures and XL. She added that the requirement of the equivalent of the coverage in the SP-23 form, whose first coverage grant is for injury to any person, is subject to modification, and does not mandate coverage for injuries to any person if that person is a crew member. Judge Milazzo’s decision with respect to coverage on the P&I policy was likewise fatal to the claims of River Ventures and XL to coverage on the following-form excess/bumbershoot policy. See December 2023 Update.
River Ventures and XL appealed to the Fifth Circuit, which held that Judge Milazzo’s dismissal of their breach of contract claim was erroneous “because the plain meaning of the MSC supports River Ventures/XL’s interpretation.” The court reasoned that the language of the MSC, when afforded its ordinary meaning, obligated Centaur to obtain a P&I policy that included coverage for injuries to the crew/employees; however, the P&I policy procured by Centaur excluded that coverage. Judge Milazzo found that the requirement in the MSC was ambiguous as it also required Centaur to procure a worker’s compensation policy with a maritime employers liability endorsement that provided employer liability coverage for vessel-related injuries to Centaur employees, such as Barrios. Judge Milazzo reasoned that it was absurd to require double coverage for the same liability because the MEL and P&I policies have escape clauses that would nullify coverage under either policy. The Fifth Circuit noted that this reasoning was contrary to the decisions of the Fifth Circuit (applying Louisiana law under Wilburn Boat) that escape clauses are mutually repugnant so that both policies are liable for the claim. As the appellate court concluded that the MSC unambiguously obligated Centaur to procure a P&I policy that covered employee injuries, the court reversed Judge Milazzo’s ruling to the contrary. In light of Judge Milazzo’s finding that there was no breach of contract with respect to the primary policy, she found no coverage under the follow-form excess/bumbershoot policy that was also required under the MSC. Therefore, the Fifth Circuit reversed Judge Milazzo’s decision that there was no breach of contract with respect to the failure to procure additional insurance on the excess/bumbershoot policy.
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 and operated 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 in federal court in Louisiana, 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 did not accept the argument that there would be no privity if Willis established the negligence that he alleged because it 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 was 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 applied, 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. See December 2022 Update.
Judge Doughty next considered Barry Graham’s claim for contribution or indemnity against Shamrock Management and its insurer Aspen. Willis was a production operator for Fieldwood, but his payroll employer was Shamrock. Barry Graham did not have a contract directly with Shamrock, but it claimed that provisions of three contracts provided for the indemnity: (1) a brokerage agreement by which Kilgore brokered the TAMI to Barry Graham, (2) a master time charter between Kilgore and Fieldwood, and (3) a master services contract (MSC) between Shamrock and Fieldwood by which Willis was employed by Shamrock to work for Fieldwood. Shamrock and Aspen argued that Barry Graham was not a beneficiary under any of the contracts; that the LHWCA barred indemnity from Shamrock and Aspen (employer) to Barry Graham (vessel owner); and that the Outer Continental Shelf Lands Act provided for application of Louisiana law, which invalidated any indemnity obligation. As Judge Doughty had previously held that Willis’ claim arose under the OCSLA and that Louisiana law applied as surrogate federal law, he held that the LHWCA did not apply to void any indemnity provisions in the contracts. He then reviewed the contracts to determine whether they provided indemnity rights to Barry Graham against Shamrock/Aspen (in the absence of a contract directly between Barry Graham and Shamrock/Aspen). The MSC required that Shamrock indemnify Fieldwood and the “company group” for the injury to Willis, but the company group did not extend beyond Fieldwood, its related companies, officers, and employees. However, the MSC did provide for indemnity for third-party contractors of Fieldwood who have executed cross-indemnity similar to that in the MSC. As the complicated relationship for the charter of the vessel did not involve a contract between Fieldwood and Barry Graham, Barry Graham could not claim to be a subcontractor of Fieldwood so as to fall within the third-party contracts provision of the MSC. Accordingly, Judge Doughty held that Barry Graham had no right to seek indemnity, defense, or insurance coverage from Shamrock or Aspen. See February 2023 Update.
Barry Graham appealed to the Fifth Circuit, which reached the “counterintuitive result” that the contractor of an offshore oil platform operator was “required to indemnify a supply vessel, hired by a vessel brokerage firm, for injury the vessel caused to the contractor’s employee.” Writing for the Fifth Circuit, Judge Jones discussed the relevant contracts and the impact of anti-indemnity statutes. She began with the Shamrock-Fieldwood MSC. The MSC extended Shamrock’s indemnity obligation to Fieldwood and a Third Party Contractor Group for injuries to members of the Contractor Group. The Contractor Group included Shamrock and its employee Willis, so the issue was whether Barry Graham was part of the Third Party Contractor Group. The Third Party Contractor Group was defined to include contractors used or employed by Fieldwood in connection with the Work, including subcontractors of any tier. Although Barry Graham was part of the group as the company brokered by contractor Kilgore, Shamrock and Aspen argued that Kilgore was not used or employed in connection with the work in the MSC between Fieldwood and Shamrock. Judge Jones disagreed, noting that the Appendix listed services provided by Shamrock as including “CRANES: Operator/Rigger.” As Willis was working as a crane rigger while offloading Barry Graham’s vessel, Shamrock’s work was used in offloading the vessel chartered by Kilgore for Fieldwood. Judge Jones then addressed the additional reciprocity requirement that Shamrock’s indemnity obligation applied to the extent that the Third Party Contractor executed a substantially similar cross indemnification. She noted that the MSC only required that Third Party Contractors must execute cross indemnification and not that the entire Third Party Contractor Group must do so. Thus, only Kilgore was required to execute a similar cross indemnification, and not Barry Graham. Judge Jones then reviewed the Kilgore-Fieldwood Time Charter Agreement, which set forth Kilgore’s obligations that were essentially identical to Shamrock’s with the exception that the indemnity was a bit broader because it did not require other contractors to be used in connection with Kilgore’s work. Therefore, Shamrock was required to indemnify Barry Graham according to the terms of the MSC. Judge Jones then held that Louisiana law applied to the contract as surrogate federal law pursuant to the choice-of-law provision in the Outer Continental Shelf Lands Act. Maritime law did not apply of its own force because the contract was to provide services to facilitate the drilling or production of oil and gas on the platform, and a vessel was not expected to play a substantial role in the performance of the work. That meant that the Louisiana Oilfield Indemnity Act applied as it is not inconsistent with the LHWCA. The LOIA ordinarily voids indemnity and insurance provisions allocating losses caused by negligence of the indemnitee/additional insured. However, the Fifth Circuit has recognized the Marcel exception “when an indemnitee fully pays the indemnitor’s insurance premiums for the indemnitee’s coverage.” There were two questions with respect to application of the exception: (1) whether, as a matter of contract interpretation, Fieldwood’s payment of the Marcel premium was intended to cover Shamrock’s obligations to Barry Graham, and (2) whether, as a matter of first impression in [the Fifth Circuit], a third party contractor that does not pay the Marcel premium can avail itself of its principal’s payment of a Marcel premium made with the intent to cover that third party contractor.” The MSC provided that Fieldwood (on its behalf and on behalf of the Company Group) and Shamrock “may pay to each other’s insurer the premium required to extend all of their insurance policies to include for [Fieldwood’s] and [Shamrock’s] respective indemnities as required by this Contract.” It did not matter whether Barry Graham was part of the Company Group, and the parties agreed that they could pay Marcel premiums to extend the policies to include coverage for the respective indemnities. Judge Jones concluded that Fieldwood intended to pay the premium “to make enforceable Shamrock’s obligations to Barry Graham” under the LOIA. She then held that the third-party contractor does not itself have to pay the Marcel premium and can rely on the premium paid by its principal, reasoning that this result “hews closely to the rationale of Marcel.” She explained: “There is no shifting of the economic burden at which the [LOIA] is aimed when the principal pays the full premium for its contractor, so long as the indemnitor bears no part of that cost.” As no part of the cost of insuring Barry Graham was borne by Shamrock (as Fieldwood paid the premium to extend coverage for all of Shamrock’s indemnities as required by the MSC, the LOIA did not void Shamrock’s defense, indemnity, and insurance obligations to Barry Graham.
From the federal district courts
Richard C. Murphy, III, chartered a Cessna 402B from Airway Air Charter for a flight from Opa-Locka, Florida to Chub Cay, The Bahamas. The aircraft is owned by Venture Air Solutions and was operated by Airway Air Charter. Atlantic Aviation provided supplies and fuel. Murphy was the sole passenger, and the plane was piloted by Alex Gutierrez. The plane ran out of fuel during the flight, causing it to crash into the ocean. Murphy and his wife brought this suit in state court in Miami-Dade County, Florida, against Airway Air Charter, Venture Air Solutions, and Gutierrez, asserting claims under Florida law. The defendants moved to dismiss the case, arguing that the claims were governed by the Warsaw Convention (as updated by the Montreal Convention), not Florida law, and the plaintiffs filed an amended complaint based on the Warsaw Convention. The plaintiffs added Atlantic Aviation in a third amended complaint, and Atlantic Aviation removed the case based on federal question jurisdiction from the Warsaw Convention and admiralty jurisdiction. In federal court, the plaintiffs filed a fourth amended complaint, attaching the Charter Agreement. Airway Air Charter and Gutierrez moved to dismiss the fourth amended complaint, citing the liability waiver for injuries in the Charter Agreement. The plaintiffs responded that Airway Air Charter and Gutierrez had waived their right to raise the waiver as a defense by repeatedly failing to raise it as an affirmative defense in their answers to the previous complaints filed by the plaintiffs against them. Alternatively, the plaintiffs argued that the waiver was unenforceable under the Warsaw Convention. Airway Air Charter and Gutierrez argued that they did timely raise the waiver defense because they raised it in their first response to the fourth amended complaint, which was the operative pleading at the time. Judge Bloom rejected that argument as the Eleventh Circuit has held that an amended complaint does not automatically revive all defenses or objections that the defendant may have waived in response to a prior complaint. She held that Airway Air Charter and Gutierrez waived reliance on the waiver by failing to raise it as an affirmative defense when answering the complaint in state court. Judge Bloom also addressed the argument that the waiver was unenforceable and the defendants’ argument that the Warsaw Convention does not prevent the parties from entering into a different agreement limiting liability. Judge Bloom agreed that the parties can enter into agreements for different limitations on liability, but the agreements may only provide a limitation in excess of the cap on liability of $75,000. As the waiver in this case provided for a release of all liability, Judge Bloom held that the defendants had not shown that Murphy failed to state a claim based on the waiver provision. See May 2024 Update.
The parties filed several motions that were addressed by Judge Bloom. The defendants challenged the testimony of Murphy’s accident reconstruction expert, Mark Pottinger, that the aircraft most likely experienced dual engine failure as the result of fuel starvation when the pilot mismanaged available fuel by operating on the main fuel tanks until the fuel in those tanks was depleted. Although the defendants argued that Pottinger only held a single-engine private pilot’s license, not the multi-engine license required to fly the Cessna 402B, Judge Bloom noted that Pottinger had extensive qualifications from his education, training, and experience. The defendants next argued that Pottinger’s testimony should be excluded because the overwhelming evidence indicated the main tanks were fueled, but Pottinger opined the auxiliary tanks were fueled, and because his opinions were based on an unreliable Report of the Aircraft Investigation Authority of The Bahamas. However, Judge Bloom found sufficient support for Pottinger’s opinions, and the fact that the Report is inadmissible did not mean that his testimony was unreliable. Judge Bloom did agree that Pottinger could not testify that there was a violation of aviation regulations; however, he could testify as to the requirements of the regulations and about the evidence that may indicate those regulations were not followed. Judge Bloom also held that Pottinger’s opinion that Atlantic should have taken steps to preserve all video of the aircraft fueling, which deprived the accident investigators of valuable information, should be excluded because Pottinger’s experience and training did not demonstrate reliability of his opinions with respect to video footage and because his opinion was not probative of whether the defendant acted negligently in fueling the aircraft. Murphy sought to exclude the opinion of the defendants’ rebuttal expert, Keith O. Major, that the Report of the Bahamian Authority was inadmissible under Bahamian law. Judge Bloom agreed to strike that opinion because Murphy’s expert could rely on an inadmissible report in formulating his opinion and because Bahamian law was not applicable in this case. Judge Bloom next considered Murphy’s motion for summary judgment that the limitation of liability was unenforceable under the Warsaw Convention. The parties provided confusing briefing on whether the original Warsaw Convention or its subsequent protocols (the Hague Protocol or the Montreal Convention) applied. Murphy argued that the Hague Protocol applied because The Bahamas is not a party to the Montreal Convention, but the United States is a party to all three. As the flight was part of a round trip to/from the United States, Judge Bloom held that the Montreal Convention applies with its prohibition on agreements absolving a carrier from liability and its prohibition on limitation of liability of damages of $75,000 or less. Consequently, Judge Bloom held that the defendants could not rely on the limitation. Finally, Atlantic moved for summary judgment, arguing that any breach of duty in fueling the aircraft was not the proximate cause of the accident because the pilot bears the ultimate responsibility for the operation of the plane, including ensuring there is sufficient fuel. Judge Bloom believed, however, that the issue of proximate causation was properly left to the jury. See October 2024 Update.
In preparation for trial, Judge Bloom considered the parties’ motions in limine and held that the Bahamian Aircraft Accident Investigation Authority Report was admissible, once authenticated under the public records exception. She rejected the argument that the report was inadmissible under Bahamian law as the claims are governed by Florida law as well as the argument that the court should analogize the report to the inadmissibility of NTSB reports, answering that the report “is not a NTSB report.” Airway argued that evidence of Murphy’s emotional damages should be excluded based on the limitation in the Montreal Convention that a plaintiff cannot recover emotional damages unless they are “sufficiently connected to a physical injury.” Judge Bloom answered that to the extent Murphy could establish that he suffered emotional harm as a direct result of the physical injuries he suffered, the damages were recoverable.
Venture Air Solutions, owner of the plane, was sued for vicarious liability of the pilot and under a dangerous instrumentality theory. Venture sent Murphy a proposal for settlement that was unanswered, and Judge Bloom eventually granted summary judgment in favor of Venture. Venture then sought attorney fees and costs (pursuant to Florida’s statute providing for recovery of attorney fees, and Magistrate Judge Torres recommended an award of attorney fees because Venture prevailed on state as well as federal claims. Magistrate Judge Torres recommended an award of fees in the amount of $28,359.75, based on rates of $225 (partner) and $175 (associate).
The case was tried to a jury, and, on October 16, 2024, the jury found that Alex Gutierez and Airway were negligent, but that Atlantic was not negligent. The jury apportioned fault to Murphy (20%), Airway (40%), and Gutierrez (40%). The jury found damages in the total amount of $2,912,888, for past medical expenses ($12,888), past and future pain and suffering, disability, impairment, and disfigurement ($1,160,000), and mental anguish, inconvenience, and loss of capacity for the enjoyment of life as a result of the bodily injury ($1,740,000). Judge Bloom accordingly issued a final judgment against both Airway and Gutierrez. Airway and Gutierrez filed a motion for new trial and a notice of appeal.
This case arises from the allision in the Neches River in Texas between the GAS ARES, a liquefied petroleum gas carrier that was operated by KSS Line, and the SABINE, a tug owned and operated by Graham Offshore and Seabulk Towing. The GAS ARES was transiting inbound to load a cargo of liquefied petroleum gas at the Sunoco Logistics berth in Nederland, Texas, and was being conned by a state-licensed pilot with the assistance of an escort tug, the HAYLEY MORAN. The SABINE was moored at the Motiva Dock 1 with its engines turned off, secured side-by-side to the tug FLORIDA. As the GAS ARES approached the Motiva terminal, it slowed to avoid disrupting a nearby pipeline removal project, and the wind pushed the GAS ARES toward the docks. THE GAS ARES sounded multiple blasts from its whistle, and the captain of the SABINE, Arthur Wolford, headed to the wheelhouse where he observed the GAS ARES headed toward the SABINE. He rang the general alarm and told his crew to hold on for impact. The GAS ARES allided with the SABINE, the FLORIDA, and the dock, and Wolford claims that he was injured. Wolford filed suit in state court in Jefferson County, Texas against Seabulk Towing and others, and Seabulk Towing and Graham Offshore filed this action in federal court in Texas, seeking exoneration/limitation of liability. Seabulk Towing and Graham Offshore then filed a motion for summary judgment in the federal limitation action, arguing that they should be exonerated because there were no actions by them, the SABINE, or Wolford that caused or contributed to the allision, and that the sole cause was the fault of the GAS ARES. Wolford and KSS Line responded that Seabulk Towing/Graham Offshore had an inadequate number of crew, did not have appropriate policies concerning being on watch, and failed to enforce their policies for monitoring radio communications and standing watch. They argued that had the SABINE designated a crew member to be on watch in the wheelhouse to perceive dangers (such as an out-of-control vessel), they may have had time to move the vessel out of the way, evacuate the vessel, or more effectively brace for impact, citing Seabulk’s policy requiring a proper lookout when the vessel is underway or at anchor with the officer of the watch in the wheelhouse. The policy also required the person on watch when the vessel is docked to monitor the radio channel required by the dock, channel 16 or 13, and the VTS frequency for the area. Wolford was on watch, but he was also “on rest” because the SABINE was set to begin a job after midnight. The parties disputed whether the policies applied to the situation in which the SABINE was docked and was not standing by at the service of the facility and whether Graham Offshore and Seabulk Towing ensured compliance with the International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers and the Inland Navigation Rules. Accordingly, Judge Crone concluded that there were fact questions concerning the SABINE’s duty to maintain an appropriate and effective watch at the time of the allision, and she declined to exonerate Seabulk Towing and Graham Offshore. See October 2024 Update.
Wolford and KSS Line filed claims in the Seabulk limitation action, and Wolford moved to bifurcate the proceeding so the issue of liability of Seabulk and the privity or knowledge of Seabulk would be tried in the federal proceeding and then damages and apportionment of fault (together with the fault of additional parties) would be tried in state court if the federal court denied limitation. Although Seabulk argued that bifurcation was inappropriate because all parties had not stipulated to the procedure, Judge Crone answered that Seabulk’s argument pertained to lifting the stay, and Wolford was not seeking to lift the stay. Judge Crone balanced the interests of the parties and the efficiency of the different positions, and she held that the court would grant Wolford’s motion in part. She held that the court would try the liability and unseaworthiness of all of the vessels and apportion liability among Seabulk, KSS Line, and Wolford (reasoning that deciding apportionment of fault in the damages phase would be inefficient). Then, if limitation is denied, Wolford would be permitted to remain in federal admiralty court or pursue his damage claim in state court with a jury.
Harbor Dredging contracted with Central Boat Rentals to charter barges for a dredging project in Texas for Stolt Tankers. After Central Boat’s invoices remained unpaid, it brought this suit in federal court in Louisiana against Harbor Dredging, which filed a third-party complaint against Stolt Tankers pursuant to Rule 14(c) (demanding judgment for both Harbor Dredging and Central Boat Rentals against Stolt Tankers). Harbor Dredging’s counsel withdrew, and Harbor Dredging failed to enroll new counsel. Central Boat Rentals then sought leave to file an amended complaint naming both Harbor Dredging and Stolt Tankers as defendants as an oblique action under the Louisiana Civil Code that provides: “If an obligor causes or increases his insolvency by failing to exercise a right, the obligee may exercise it himself, unless the right is strictly personal to the obligor.” The statute adds: “For that purpose, the obligee must join in the suit his obligor and the third person against whom the right is asserted.” Central Boat Rentals contended that it is an aggrieved obligee entitled to bring an oblique action against Stolt Tankers. Magistrate Judge Dossier reasoned that in order for Central Boat Rentals to proceed with the amendment, it would have to establish that maritime law is silent on the availability of an oblique action, that Louisiana law fills that gap, and that Central Boat Rentals properly pleaded an oblique action. Stolt Tankers argued that maritime law is not silent because Rule 14(c) sets forth the maritime practice for impleader (which had been invoked by Harbor Dredging on behalf of Central Boat Rentals). However, Central Boat Rentals noted that maritime impleader is not interchangeable with an oblique action because maritime impleader does not allow Central Boat Rentals to step into Harbor Dredging’s shoes to pursue Harbor Dredging’s claims against Stolt Tankers. As maritime law is silent on the oblique action, Magistrate Judge Dossier believed it was appropriate to look to state law to fill the gap. With respect to the law to fill the gap, Magistrate Judge Dossier noted that the contract between Harbor Dredging and Stolt Tankers contained a choice-of-law provision for Texas law and that if Central Boat Rentals wants to step into the contractual shoes of Harbor Dredging, it can only do so through Texas law (although she added that, in the absence of the choice-of-law provision, maritime law would apply Texas law to the work in Texas by a Texas company for a company with its principal office in Texas). As Texas law would fill the gap, Magistrate Judge Dossier held that the amendment based on Louisiana law was futile and should be denied. See September 2024 Update.
Central Boat Rentals then filed a second motion for leave to amend its complaint. Central Boat Rentals did not seek reconsideration. Instead, it sought, again, to plead an oblique action under Louisiana law but this time to add a claim for the appointment of a receiver, under Texas law, to act on behalf of Harbor Dredging to pursue a claim against Stolt. Magistrate Judge Dossier rejected the amendment, reasoning: “There is no apparent reason Central Boat could not have sought to raise a claim for the appointment of a receiver in its first motion to amend, nor that it could not have argued that, should the Court hold Texas law to apply, it could still assert a Louisiana oblique action via Rule 64 or Rule B.”
Janaid Rakiep is a citizen of South Africa and was employed by Southey Mauritius as a Level 1 Rope Access Technician. His work was subcontracted to Inspectram to perform an over water inspection of a seawater reject line on the Stampede tension leg platform owned by Hess and located in the Gulf of Mexico in the Green Canyon Area of the outer Continental Shelf, south of Fourchon, Louisiana. During the inspection, Rakiep went into an uncontrolled descent, striking his leg on a clamp before the descent was arrested. Rakiep brought this suit in federal court in Louisiana, based on jurisdiction under the Outer Continental Shelf Lands Act, against Hess, Inspectram, and Southey Mauritius, alleging that the Southey crew improperly secured the Petzl I’D (device used to secure the primary rope at the anchor point) and failed to use a stopper knot behind the anchor point I’D. Rakiep asserted that Inspectram was responsible as the borrowing employer and that Hess failed to adequately review the work scope and job analysis and failed to ensure independent double checks and functional testing. He sought compensatory damages for negligence and punitive damages for gross negligence. Hess moved to dismiss the claims against Hess for failure to state a claim under Louisiana law, applicable to the tension leg platform via the OCSLA. Applying Louisiana law, Magistrate Judge Currault noted that the duty of exercising reasonable care for the safety of persons on the premises does not require the owner to intervene in and correct the work practices selected by independent contractors. Rakiep argued that Hess failed to perform adequate pre-job safety planning and review and that it jointly controlled the work scope and job safety analysis, allowing the job to proceed with inadequate equipment and inadequate process. However, Magistrate Judge Currault held that the allegations were insufficient to plausibly allege that Hess retained operational control over the work or that it had an independent duty to intervene in Southey’s work. Thus, the complaint was insufficient to establish a duty for Hess to an employee of the subcontractor of an independent contractor. Magistrate Judge Currault granted the motion to dismiss, but granted Rakiep leave to file an amended complaint. Magistrate Judge Currault also dismissed the claim for punitive damages, noting that Louisiana law does not generally permit imposition of punitive damages and that the allegations did not fall into any of the exceptions for which punitive damages are recoverable.
Tammy Manzy, a passenger on the CARNIVAL MARDI GRAS, alleges that she was walking with family members into the Limelight Lounge on Deck 7 of the ship when she slipped and fell due to a small step-up that she could not see because of inadequate lighting and an optical-illusion effect from the deck. She brought this suit against the cruise line in federal court in Florida. The cruise line moved to dismiss the complaint, asserting that Manzy improperly conflated direct and vicarious liability and failed to plausibly plead notice of the cruise line that is required for a direct liability claim. Manzy responded that she had only pleaded a vicarious liability claim, and Judge Damian agreed that the complaint did not “explicitly” plead a direct liability claim. Thus, the issue was whether Manzy sufficiently stated a claim for vicarious liability. Manzy asserted that crewmembers working in the Limelight Lounge turned down the lights so low that the bad lighting caused her injury. Although not requiring that Manzy identify the crewmember by name, she did state that Manzy must identify a specific employee who was responsible. As Manzy’s claim involved the conduct of multiple agents of the principal, not identifiable by the plaintiff, it was “exactly the sort of claim that must be brought under a theory of direct liability.” Judge Damian concluded that Manzy’s allegation that “Carnival employees working at the Limelight Lounge” were responsible for her injuries was insufficient to sustain a vicarious liability claim. Therefore, Judge Damian dismissed the complaint but granted leave for Manzy to file an amended complaint.
This case involves a cargo of electrical wire harnesses scheduled to be transported from Barcelona, Spain to Charleston, South Carolina for shipper Mahle Behr Charleston. Mahle Behr engaged Kuehne + Nagle, a non-vessel operating common carrier for the carriage, and Kuehne + Nagle issued four sea waybills for the cargo. One of the containers fell into the water while it was being loaded in Barcelona, and cargo insurer HDI Global paid for the damage. HDI Global brought this suit in federal court in New York against Kuehne + Nagle, and the defendant moved for summary judgment based on the package limitation in the Carriage of Goods by Sea Act. The parties agreed that the package limitation applied; however, they disagreed as to the number of COGSA packages. HDI Global argued that there were 480 packages based on the listing in the waybills of 480 packages under the heading “Number of Packages” (there were 480 cartons). Kuehne + Nagel argued that there were 24 COGSA packages because the waybills described that the packages were “into” 24 pallets. Although HDI Global argued that the list of the number of packages was dispositive, Kuehne + Nagel argued that there was plain contrary intent with the statement that the packages were “into” 24 pallets. As neither party provided satisfactory evidence of the contemporaneous understanding of the document consistent with the wording or significant evidence of industry practice, and as the case was set for a non-jury trial, Judge Liman declined to decide the issue on a motion for summary judgment and awaited “further elucidation” at the bench trial. See October 2024 Update.
Judge Liman asked the parties to advise if they were prepared to stipulate to liability so that trial could proceed with respect to the package limitation, but Kuehne + Nagel declined to stipulate to liability and advised that it had no objection to a bench trial on application of the package limitation. Judge Liman gave HDI Global leave to file a motion for summary judgment on liability and concluded that a bench trial on the package limitation would further convenience and promote efficiency. Accordingly, the court agreed to conduct a bench trial on application of the package limitation. HDI Global also moved for reconsideration of Judge Liman’s order finding a fact question with respect to the number of packages, arguing that the Second Circuit’s Seguros decision was dispositive with its holding that the number appearing under the heading “NO. OF PKGS” determines the limit of liability under COGSA. Judge Liman reiterated that the reasoning in Seguros applies unless the number is plainly contradicted by contrary evidence of the parties’ intent. In this case, the language that the packages were “into” 24 pallets reflected a contrary intent, and Judge Liman denied the motion for reconsideration.
Accelerant Specialty Insurance issued a marine insurance policy covering the yacht LIFE DOESN’T SUCK, owned by KKS Marine II. The yacht’s port engine overheated, and KKS presented a claim on the policy. Accelerant Specialty denied the claim and brought a declaratory judgment action against KKS in federal court in California based on the court’s admiralty jurisdiction and identifying the claim pursuant to Rule 9(h). KKS answered and filed a counterclaim, asserting that the court had supplemental jurisdiction over the counterclaims pursuant to Section 1367(a) and requesting a jury trial. Accelerant moved to strike the jury demand, and KKS argued that a jury was available because the court had supplemental jurisdiction and because there was diversity between the parties. Judge Battaglia noted that there is a lack of consensus in the federal courts as to whether a defendant bringing a compulsory counterclaim in an admiralty action is entitled to a jury trial. In this case, the counterclaim only asserted supplemental jurisdiction, not diversity. KKS argued that it was not required to plead diversity in its counterclaim and that the issue was whether the court had jurisdiction based on diversity. As KKS did not allege an independent jurisdictional ground for its counterclaim, Judge Battaglia held that its demand did not defeat Accelerant’s election to proceed in admiralty with a bench trial. Judge Battaglia did grant leave for KKS to file an amended answer and counterclaim, and it did make that filing with a demand for a jury trial and an assertion that the counterclaim was brought pursuant to the court’s diversity jurisdiction.
Lilly Williams was injured on a chartered boat operated by Baywatch Boat Rentals Tours & Charters, d/b/a Captain Joe’s Boat Rentals Tours and Charters. Captain Joe’s was insured under a policy issued by Great Lakes Insurance. Williams brought a suit in Florida state court against Captain Joe’s, seeking to recover for her injuries, and Great Lakes brought an action in federal court in Florida against Captain Joe’s, seeking a declaration that it did not have a duty to defend or indemnify Captain Joe’s in connection with Williams’ injury. Great Lakes and Captain Joe’s entered into a settlement in which Great Lakes paid Captain Joe’s $150,000, and Captain Joe’s released Great Lakes from all liability under the policy (including bad faith), agreed that the policy would be void from its inception, agreed that the policy would not respond to the Williams claim, agreed that Captain Joe’s would not assign any rights against Great Lakes to anyone, and agreed that Captain Joe’s would defend and indemnify Great Lakes from any claims by Williams. Williams and Captain Joe’s settled the injury suit by entering into a $800,000 consent judgment, and Williams agreed not to execute against the assets of Captain Joe’s and to seek satisfaction of the judgment from the legal action against Great Lakes. Williams demanded that Great Lakes satisfy the consent judgment and filed a civil remedy notice accusing Great Lakes of acting in bad faith, and Great Lakes brought this action against Williams and Captain Joe’s, seeking a declaratory judgment that the policy was void ab initio and that Great Lakes did not commit bad faith. Williams moved to dismiss the complaint and argued that the settlement agreement, pursuant to which Captain Joe’s agreed that the policy was void, was not binding on her. Magistrate Judge Reid responded that the argument was not suitable for disposition on a motion to dismiss. The only relevant inquiry was whether the plaintiff is entitled to a declaration of rights, but Williams was asking the court to reach the merits. Magistrate Judge Reid found a viable case or controversy based on the consent judgment and Williams’ seeking to collect on the judgment from Great Lakes (together with her allegations of bad faith). Williams also argued that Great Lakes’ collection of premiums after it was on notice of the claim demonstrated that Great Lakes forfeited its right to rescind/void the policy. Noting that the allegations were beyond the four corners of the complaint, Magistrate Judge Reid held that the argument was improper for a motion to dismiss. Williams next argued that the retroactive attempt to cancel the policy violated the cancellation provisions of the policy, but Great Lakes replied that the parties did not agree to cancel the policy; they agreed that it was void ab initio. Reasoning that contract interpretation is typically inappropriate for a motion to dismiss, Magistrate Judge Reid declined to resolve the issue on a motion to dismissal. Finally, Williams argued that the counts seeking a declaratory judgment on the bad faith claims were premature, but Magistrate Judge Reid answered: “It is unclear how Williams can assert that there is no justiciable controversy regarding good faith while simultaneous initiating a [civil remedy notice], which is the prerequisite to filing a bad faith claim.” Therefore, Magistrate Judge Reid recommended denial of Williams’ motion to dismiss.
Lorrie Watt, a passenger on the MS NIEUW AMSTERDAM, asserts that she was sexually assaulted by Gede Sukrantara, a member of the vessel’s crew, during a massage at the ship’s Greenhouse Spa and Salon. Watt brought this suit in federal court in Washington against four defendants for the cruise ship and One Spa World, with counts for negligence and strict liability. The cruise line defendants and the spa operator moved to dismiss the complaint, arguing that it recited a collection of general facts but failed to connect the facts to the elements of the causes of action, instead simply incorporating all of the allegations by reference so that the defendants did not have adequate notice of the facts supporting each cause of action. Judge Lasnik did not find the incorporation of facts into the two causes of action to hide the nature or basis of the claims being asserted, but he did conclude that the use of the undifferentiated word “defendants” or the phrase “Holland America” was confusing, particularly when Watt sued four entities but only described three of them. Judge Lasnik noted that Watt alleged that all of the described entities operated the vessel, employed Ms. Sukrantara, and had responsibility for hiring, training, and supervising Ms. Sukrantara. Judge Lasnik added that a negligence claim under maritime law must allege notice to the defendant of the risk-creating condition, but the allegations in the complaint indicated that the defendants first learned that Ms. Sukrantara posed a danger two weeks after the assault. Therefore, Judge Lasnik dismissed the complaint and gave Watt leave to file an amended complaint to correct the deficiencies.
Garrett Michael Cherry drowned while trying to recover a hammer that had fallen near the propeller of the Dredge GENERAL MACARTHUR when the vessel was docked and undergoing repair/modifications at Conrad Shipyard. The owner of the dredge filed this limitation action in federal court in Texas, and beneficiaries of Cherry filed claims in the limitation action and moved to lift the stay so that they could pursue their claims in state court. Conrad Shipyard was brought in as a third-party defendant, and it answered the third-party complaint, but it did not file a claim in the limitation action for contribution or indemnity. The vessel owner opposed lifting the stay, arguing that Conrad Shipyard was a potential claimant; however, Magistrate Judge Edison noted that it was not enough to allege that Conrad Shipyard was a potential claimant as it had appeared and had not filed a claim. Magistrate Judge Edison denied that Conrad was a potential claimant after answering and not filing a claim, stating: “That argument strains credibility. Petitioner cannot deprive Claimants of their choice of forum by simply filing a third-party complaint in this limitation proceeding.” As the claimants filed the required stipulations to protect the vessel owner’s limitation rights, Magistrate Judge Edison lifted the stay in the limitation action.
The collision between the destroyer U.S.S. JOHN S. MCCAIN and the Liberian merchant vessel M/V ALNIC MC, resulting in the deaths of ten sailors and injuries to more than 40 others, returns to the Update (see January, February, April, July, and November 2022, April 2023, and August 2024 Updates). Both ships were bound for destinations in Singapore, and they collided approximately 24 nautical miles from the Singapore mainland. The claimants sought to apply the test set forth by the Supreme Court in Jones Act cases in Lauritzen v. Larsen (as expanded by the Court in Hellenic Lines Ltd. v. Rhoditis). However, Judge Crotty held that the Lauritzen/Rhoditis test was unsuited to deciding a choice-of-law question involving a collision halfway around the globe involving a U.S. Navy warship based in Japan and a Liberian-flagged vessel. Although there was a dispute between Malaysia and Singapore over sovereignty of the area in question, Judge Crotty applied Singapore law to the collision based on the fact that the vessels were both headed to Singapore and were in the Singapore Traffic Separation Scheme.
Judge Crotty split the trial of the case into two phases and tried the liability issues in five days in November 2021. In a 70-page opinion, Judge Crotty apportioned 80% of the fault to the JOHN S. MCCAIN and 20% of the fault to the ALNIC. He then addressed whether the owner of the ALNIC was entitled to limit its liability to $16,768,480. As the owner engaged Stealth Maritime to manage the vessel, Judge Crotty looked to its privity or knowledge “as a proxy” for the owner. In this case, Stealth Maritime was aware of deficient staffing practices and other “risky behavior” and “allowed ALNIC—one of the worst vessels the Stealth Marine Superintendent had ever audited—to again travel through one of the busiest shipping lanes in the world.” This was sufficient to establish privity or knowledge. However, Judge Crotty noted that the Limitation Act, as amended, broadens the privity or knowledge for seagoing vessels to the master at or at the beginning of the voyage. Finding that the captain planned, before the voyage, to understaff the bridge, Judge Crotty ruled that there was additional support for denying limitation to the owner of the ALNIC. Applying Singapore law, Judge Crotty held that the United States should recover 20% of its damages, and the owner of the ALNIC should recover 80% of its damages, with those damages offset. He awarded prejudgment interest in accordance with Singapore law. Going forward, Judge Crotty held that the wrongful death and injury claims for the sailor-claimants would proceed with a Phase II trial, and he reserved the questions whether the sailor-claimants would be entitled to a jury and whether the owner of the ALNIC would be entitled to contribution from the United States. Both the United States and Energetic Tank filed interlocutory appeals.
After issuing a correcting order, nunc pro tunc, with respect to damages and certifying the decision for appeal pursuant to Rule 54(b), Judge Crotty addressed the contribution claim brought by the owner of the ALNIC against the United States in connection with the claims of the sailors on the JOHN S. MCCAIN. Judge Crotty set forth the issue: The sailor-claimants brought suit against the owner of the ALNIC but not against the United States. Under admiralty law, a tortfeasor, such as the owner of the ALNIC, which pays more than its apportioned share of an injured party’s damages, may generally seek contribution from the other tortfeasors. However, the United States, which was found to be 80% at fault, is a sovereign with sovereign immunity. Although Judge Crotty previously held that Singapore law applied to the substantive issues of liability and damages, the question was presented whether Singapore law would incorporate American sovereign immunity law to bar the contribution claim. Judge Crotty noted that federal sovereign immunity is a jurisdictional matter, and he could apply American sovereign immunity principles even though foreign law provided the applicable substantive law for the case. One jurisdictional bar is the Feres–Stencel doctrine, which provides sovereign immunity against certain claims by military service members (and claims for contribution/indemnity with respect to those claims). The owner of the ALNIC argued that the United States waived its claim to sovereign immunity through the Public Vessels Act and the Suits in Admiralty Act. However, Judge Crotty held that both statutes incorporate an exception to their waiver of immunity: the Feres–Stencel doctrine. Reasoning that Feres and Stencel are directly on point, and declining to overrule the cases as wrongly decided, Judge Crotty dismissed the contribution claim for lack of jurisdiction.
Having addressed the allocation of fault, Judge Crotty turned to the determination of damages. Although he held that Singapore law governed the substantive aspects of the case, he agreed with the parties that the issue whether a jury would decide the damages was governed by federal law. Judge Crotty noted the conflict between the concursus of claims in a limitation action and the Saving-to-Suitors Clause, which preserves common law remedies that include the right to a jury trial and the balance whereby an independent basis for jurisdiction, such as diversity, may provide for the right to a jury. As limitation was denied to the owner of the ALNIC, the issues were whether the requirements for diversity jurisdiction were satisfied for the claimants and what was the effect of the Death on the High Seas Act. Judge Crotty found that there was diversity over the claims and then addressed the effect of the application of DOHSA, which, according to the Supreme Court in Tallentire, was designed to “provide a uniform and effective wrongful death remedy for survivors of persons killed on the high seas.” In contrast to the decision of the Seventh Circuit in In re Lion Air Flight JT 610 Crash (discussed in our September 2024 Update), that the presence of diversity did not give the claimants the right to a jury trial in federal court on DOHSA claims (there were no survivors and, consequently, no injury claims), Judge Crotty was persuaded that there was an exception to the non-jury result when there is a wholly independent jurisdictional predicate and an independent cause of action. In this case, the wrongful death claimants did not allege any independent causes of action that would entitle them to a jury trial. However, claims were also brought by injured claimants, who did not allege a cause of action under DOHSA, and there was diversity jurisdiction for their claims. As the wrongful death and injury claims arose from the same accident, Judge Crotty held that a jury trial should be held on both the wrongful death and injury claims based on principles of judicial economy.
The Second Circuit heard appeals from Energetic and the plaintiffs and affirmed the rulings on apportionment of liability of liability and sovereign immunity; however, the appellate court declined to rule on the plaintiffs’ appeal of the decision on choice of law, finding it to be a non-appealable collateral order. Writing for the Second Circuit, Judge Walker first addressed the jurisdiction over the several appeals. As to the decision in Phase I, apportioning fault, Judge Walker agreed that the district court properly certified the case for an interlocutory appeal under Rule 54(b). He also agreed that there was appellate jurisdiction over the dismissal of Energetic’s contribution claim as an interlocutory admiralty order under Section 1292(a)(3), but he did not believe that the appeal by the plaintiffs of the decision on the application of Singapore law was appealable. Judge Walker agreed with Judge Crotty that Singapore law applied in determining liability for the collision, although he stated that the elements of negligence were substantially the same under Singapore law and United States maritime law. Judge Walker then turned to the merits of Energetic’s challenge to the apportionment of fault and rejected all of its arguments, affirming Judge Crotty’s apportionment of fault (20% to the ALNIC and 80% to the JOHN S. MCCAIN). Judge Walker then addressed Energetic’s appeal of the decision that it must pay the full amount of the Plaintiffs’ damages even though the ALNIC was only 20% at fault, with no right of contribution or indemnity against the United States. Energetic argued that the Feres doctrine should not apply to a suit under the Public Vessels Act or the Suits in Admiralty Act, but Judge Walker responded that the Second Circuit had already applied the doctrine to claims against the United States under the Public Vessels Act and the Suits in Admiralty Act, despite the immunity waivers in those statutes. Judge Walker recognized that some jurists have criticized the Feres doctrine, but he concluded: “It is not for us to say that the United States’s assertion of immunity here goes too far.”
Meanwhile, in the district court, Judge Preska addressed the standing to assert claims by the beneficiaries of Kevin Bushell, an officer in the Navy who served on the MCCAIN and was killed on the high seas as a result of the collision. Jennifer Simon, Kevin Bushell’s widow, and Karen Bushell, Kevin Bushell’s mother, both filed claims in the limitation action filed in federal court in New York by the owner of the ALNIC, and Jennifer Simon filed a petition in Maryland state court that resulted in her being substituted for Karen Bushell as the personal representative of the estate. Jennifer Simon then filed a motion in the limitation action to confirm her status as the personal representative so that she could recover damages on behalf of all of the dependents of her late husband, and Karen Bushell responded by not opposing Jennifer Simon’s confirmation as personal representative but requesting that Karen Bushell be allowed to maintain her own claim for damages in her individual capacity. Judge Preska noted that, under the Death on the High Seas Act, only the personal representative may bring the wrongful death suit, and the personal representative has a fiduciary duty to bargain for the rights of all beneficiaries. Thus, other beneficiaries generally lack standing to maintain their own wrongful death claims. However, Judge Preska did recognize an exception that allows a beneficiary to intervene in the case if the beneficiary can establish that his/her interests are at odds with those of the personal representative. Therefore, Judge Preska considered whether there was a conflict of interest between Karen Bushell and Jennifer Simon that would allow Karen to maintain a separate wrongful death claim. Judge Preska reasoned that Jennifer Simon had an incentive to maximize the size of recovery on behalf of all of the beneficiaries, but she also had an incentive to maximize the portion of that recovery that she receives and to minimize the portion received by the other beneficiaries. Consequently, Judge Preska concluded that there was a conflict of interest, and he allowed Bushell to maintain a separate claim in her individual capacity.
The parties then turned their attention to the issues for the trial on damages. Judge Crotty held that Singapore law applied to the determination of liability and damages, and the owner of the ALNIC sought to use the Guidelines for the Assessment of General Damages in Personal Injury Cases during the trial on damages. The Guidelines is a compendium of damage awards published by the courts in Singapore that the courts use to determine damages. A group of plaintiffs objected to the use of the Guidelines at the trial, and the owner of the ALNIC responded that it did not intend to introduce the Guidelines or even to call on expert on Singapore law to testify about the Guidelines. However, the owner advised that it intended to use the Guidelines to fashion jury instructions. Based on the representations of the owner, Judge Preska agreed that the Guidelines would not be introduced into evidence. However, Judge Preska noted that the jury’s determination of damages is an issue of substantive law that may require reference to the precedent of damage awards under Singapore law. The plaintiffs made a thinly veiled attack on the prior ruling on applicable law, arguing that under Singapore law, the calculation of damages is procedural. Judge Preska refused to lead the court into the “‘bog’ of renvoi” (referring to the “situation in which a court applying foreign law, as is the case here, would apply a rule of the foreign law that would ‘refer back to the law of the forum state, thus creating an endless cycle in which the conflicts provisions of each state point to the application of the other state’s law”). Judge Crotty held that Singapore law was the law applicable to determine substantive issues of liability and damages, and Judge Preska added that calculation of damages is an issue of substantive law under United States maritime law. Therefore, the New York court could import Singapore law on damages without referring back to United States substantive law. Consequently, Judge Preska held that the Guidelines “will guide, if not govern” the instructions to the jury on the calculation of damages. See October 2024 Update.
The wrongful death claimants filed a motion for reconsideration of Judge Preska’s decision permitting the owner of the ALNIC to propose jury instructions that include the Guidelines for the Assessment of General Damages in Personal Injury Cases published by the Singapore courts. Judge Preska reiterated that she had rejected the argument that the court should not apply Singapore damages law (including the Guidelines) because Singapore courts categorize the damages quantification as procedural, rather than substantive. She noted her reasoning that refusing to apply the Guidelines would lead the court into renvoi—referring to the law of the forum state and back to Singapore law. The claimants pointed out that renvoi arises in situations in which a court’s choice-of-law analysis results in applying a foreign forum’s conflict-of-laws rules, thereby creating an endless cycle of applying each forum’s conflicts analysis. Judge Preska agreed that the claimants were correct that the court would not apply Singapore conflicts principles; however, refusing to apply Singapore damages law would lead the court into a feedback loop between United States federal law and Singapore law. Judge Preska agreed with Judge Crotty’s “sound choice-of-law analysis” that the substantive law of Singapore applies in this case and that issues of damages must be determined according to substantive law of Singapore law or there would be no law to apply. She explained: “Determining damages is a matter of substantive law in the forum state. But because the Court may not apply the substantive law of the forum state in the instant case, it may not apply federal damages law. If the Court then could not apply Singapore damages law because it cannot apply Singapore ‘procedural’ law, which forum’s law would the Court be left to follow in determining damages? There would be none.” Judge Preska did issue some clarifications. She explained that the owner of the ALNIC may propose instructions that incorporate the Guidelines, but that did not mean that the final instructions would include the relevant portions of the Guidelines. She added that it is the province of the jury to calculate damages, but it is a question of law whether an award has surpassed any upper limit on damages. Finally, she advised that, in light of the fact that the Guidelines provide ranges for damage awards under Singapore law, “a party may file for a remittitur after each bellwether trial if the party perceives the jury’s award to a claimant to be out of the range permitted by the applicable Guideline.”
MV Lady B, LLC purchased the M/Y LADY B, an 85-foot Pacific Mariner, on July 14, 2022 as a charter yacht and brought the vessel to Rolly Marine’s shipyard in Fort Lauderdale, Florida for repairs on August 2, 2022. The parties executed several documents about the vessel and crew, but the documents did not identify the scope of the work or contain many details of the parties’ rights and obligations. The parties agreed that the scope of work was expanded, but they disagreed about the extent of the work to be performed. The vessel owner removed the vessel from the shipyard on December 23, 2022, and the shipyard argued that the removal deprived it of the opportunity to complete the work or to perform its quality control check to ensure that the work was completed. The vessel owner argued that the work was defective, not incomplete, and it had to be redone. The owner argued that the defective repairs rendered the vessel unable to be chartered because it had a smell that the owner could not eliminate. After a join inspection, the shipyard sought to exercise a right to perform warranty work, but the owner declined to return the vessel to the shipyard. After the owner paid $917,330 to the shipyard, it paid $428,228.96 to other contractors to correct the allegedly defective repair. The owner then brought this suit in federal court in Florida for breach of a maritime contract and breach of the warranty of workmanlike performance, seeking to recover repair costs, delay costs, lost charter income, and diminution in value. The shipyard argued that the claims were barred by the failure to give the shipyard the opportunity to cure any defects and that the owner was not entitled to recover damages for lost charter income and diminution in value. With respect to the argument for a right to cure, Judge Cohn noted that the contractual documents did not contain an express provision providing the shipyard with an opportunity to cure defective work before removal of the vessel. Therefore, Judge Cohn considered whether he should imply a right to cure. Although the shipyard cited common-law cases involving construction contracts, Judge Cohn did not find support for an implied right to cure outside of that context. As there was nothing in the documents that gave rise to an inference that a party could not seek damages without providing an opportunity to cure, Judge Cohn declined to bar the owner’s claims on this basis. With respect to damages for loss of market value, Judge Cohn noted that the doctrine of restitutio in integrum applies in maritime cases and limits the damages for vessels that are not a total loss, to the reasonable cost of repairs. The owner argued that there is an exception to the rule when the vessel cannot be repaired to its pre-loss condition, but the owner failed to show that eliminating the smell was prohibitive or cost prohibitive. Therefore, Judge Cohn granted summary judgment that the owner was not entitled to recover post-repair loss of value. Finally, the shipyard argued that any damages for lost charter income were speculative because the owner had no history of charter income. It was true that the owner had purchased the vessel shortly before bringing the vessel to the shipyard for repair; however, the owner had contracted with a broker who contracted for charters of the vessel for the following summer. Judge Cohn considered the evidence of lost charters to be sufficient to create a fact question to preclude summary judgment on loss of charter income.
Magistrate Judge denied vessel owner’s late amendment seeking punitive damages against its insurer for violating state law in denying its claim; Ocean Reef Charters, LLC v. Travelers Property Casualty Co. of America, No. 23-cv-81222, 2024 U.S. Dist. LEXIS 186411 (S.D. Fla. Oct. 9, 2024) (Reinhart).
Travelers insured the M/Y MY LADY, a 92-foot Hatteras yacht. The policy contained two express warranties, a captain warranty that required the owner to employ a full-time professional captain approved by Travelers and a crew warranty that required the owner to have one full-time or part-time professional crew member aboard the vessel. The owner of the vessel, Ocean Reef Charters, had neither a captain nor crew member when Hurricane Irma approached Florida in September 2017. The operator could not engage the former captain and did his best to secure the yacht. The extra mooring lines he added were ineffective when a dock piling to which the port bow line was attached gave way as Irma struck. The yacht was holed and sank. Travelers brought this suit seeking a declaratory judgment that the breaches of the captain and crew warranties voided coverage under the policy, and the owner responded by arguing that the breaches were unrelated to the loss and that the policy was not voided because of the application of the Florida Anti-Technical Statute (providing that breaches of warranty do not void the policy unless they increased the hazard by any means within the control of the insured). The owner asserted that it was the unforeseeable failure of the dock piling that caused the loss. The arguments presented the question, under Wilburn Boat, whether there was an entrenched rule of admiralty that express warranties in marine insurance policies must be strictly construed in the absence of a limiting provision in the policy. The district court held that there was such an entrenched rule and ruled that there was no coverage. The Eleventh Circuit then re-examined Wilburn Boat, noting how it has sown confusion and troubled maritime lawyers for more than 60 years. This was, in part, because the analysis in Wilburn Boat “rests on a flawed premise” that there was no established maritime rule requiring strict fulfillment of warranties in marine insurance policies when the Supreme Court and all major admiralty appellate courts in the United States had long accepted the literal performance rule. This resulted in inconsistent decisions in the lower courts, and Travelers cited cases from the Eleventh Circuit that breaches of a navigation limit warranty and the seaworthiness warranty bar coverage even when the breach is unrelated to the loss. Judge Jordan did not consider those decisions to establish that strict compliance with all warranties in marine policies is required, as that would be contrary to Wilburn Boat. Reviewing the cases addressing the captain and crew warranties, Judge Jordan declined to find an entrenched maritime rule and remanded the case to the district court to apply Florida law. Judge Jordan concluded with this comment: “Maybe, just maybe, this case will prove tempting enough for the Supreme Court to wade in and let us know what it thinks of Wilburn Boat today.” See June 2021 Update.
Travelers did not seek a writ of certiorari to find out what the Supreme Court thinks of Wilburn Boat today, and on remand, Judge Ruiz applied the rule from Florida law that the breach of warranty does not void the coverage unless it increased the hazard that the vessel would suffer the loss. Travelers cited the testimony of its expert, Captain Joseph Ahlstrom, to show that breaches of the captain and crew warranties caused or contributed to the loss of the vessel during Hurricane Irma. However, Captain Ahlstrom was designated as a rebuttal expert, and Judge Ruiz held that a party cannot rely on a rebuttal expert to avoid summary judgment. Rejecting evidence from witnesses who were not licensed captains (its underwriter, its adjuster, and the owner of the vessel), Judge Ruiz held that Travelers had failed to carry its burden to establish the defense, and the owner was entitled to summary judgment. See December 2021 Update.
On appeal, Travelers argued that it only had to show that the lack of a full-time captain generally makes vessels more susceptible to damage from hurricanes and that Florida law does not require that the insurer prove that the insured’s noncompliance with the captain warranty actually caused this incident. Travelers also argued that it did not have to introduce expert testimony about what would have been different if the insured had complied with the warranty and that it could satisfy its burden with hybrid fact-witness expert testimony. Finally, Travelers argued that Judge Ruiz erred in refusing to allow Travelers to use the testimony of its rebuttal expert to avoid the insured’s motion for summary judgment. Writing for the Eleventh Circuit, Judge Tjoflat held that Travelers was wrong on all of its arguments. He reviewed Florida cases and held that, in order to meet its burden under Florida’s Anti-Technical Statute, the insured must show that the breach of the warranty had a material effect on the loss in the circumstances of the specific incident. Judge Tjoflat also held that a lay witness may not competently offer an opinion on what a captain would have done with the MY LADY if a captain had been in charge, answering: “There is no such thing as ‘hybrid fact-expert witness testimony’ in the sense that Travelers claims.” Travelers’ witness, who was not disclosed as an expert, could discuss the weather and observations that he made. However, that would still leave the jury speculating about what a captain would have done differently in the specific circumstances of the case. As to the rebuttal expert, Travelers had the burden of proof, so, if the case went to trial, Travelers would have to establish that the lack of a captain had a material effect on the loss of the vessel. It could not use the rebuttal expert to carry that burden. After Travelers rested, the insured would move for judgment as a matter of law, which the court would have to grant. Therefore, Travelers had no legally sufficient case. Finally, Judge Tjoflat noted that Travelers had not filed a motion to redesignate its rebuttal expert as an expert for its case in chief, which sank its argument that Judge Ruiz erred in refusing to allow Travelers to use the opinion of its rebuttal expert to oppose the insured’s motion for summary judgment. Seeing “no need to give Travelers another bite at the apple,” the Eleventh Circuit affirmed the grant of summary judgment to the insured. See July 2023 Update.
After Ocean Reef obtained a judgment in excess of its insurance policy limits, its insurer, Travelers, paid the full judgment plus interest. Ocean Reef then brought this bad faith claim against Travelers under Florida law, seeking compensatory damages, punitive damages, attorney fees, and costs. The court previously held that the First Amended Complaint did not plead a plausible claim for punitive damages, and Travelers moved to dismiss the punitive damage allegations in the Second Amended Complaint. Magistrate Judge Reinhart noted that the allegations merely recited the elements of a statutory unfair claims settlement practice but did not provide factual detail to support the allegations. He added that the assertions did not “exclude the equally plausible conclusion that Travelers has acted negligently rather than with the higher mens rea needed for punitive damages.” Ocean Reef argued that it had sufficiently pleaded a general business practice, but Magistrate Judge Reinhart responded that an allegation of “similar bad faith conduct” is a legal conclusion, and two other instances of conduct are insufficient to plausibly allege a general business practice. He added that an allegation that an insurer failed to properly investigate a claim does not necessarily imply willful, wanton, or malicious behavior or a reckless disregard for the rights of the insured. Finally, Magistrate Judge Reinhart rejected the request in a footnote to the response that Ocean Reef should be given another opportunity to amend. Accordingly, Magistrate Judge Reinhart recommended that the punitive damage claim be dismissed and advised that Ocean Reef would have to file a motion for leave that attached a proposed amended pleading. Ocean Reef did not object to the recommendation. See April 2024 Update.
Ocean Reef then sought leave to file a Third Amended Complaint to add a claim for punitive damages, and Magistrate Judge Reinhart wrote a detailed lesson on the rules for pleading under the Federal Rules of Civil Procedure. He began with the requirements for bringing a suit and then explained the pleading threshold in Rule 8. He noted that the well-pled allegations frame the issues to be litigated and that the plaintiff is not entitled to discovery solely for the purpose of developing unpled claims. Magistrate Judge Reinhart also discussed amendments to pleadings, including what is necessary under Rule 16 when the deadline for amendments in the scheduling order has passed. Ocean Reef argued that it satisfied the good cause requirement for an amendment after the deadline in the scheduling order because it had diligently litigated the case despite Travelers’ repeated delays and because Travelers would not be prejudiced by allowing Ocean Reef to add a claim for punitive damages. Travelers responded that all of the facts cited by Ocean Reef as a basis to seek punitive damages (except one) were known to Ocean Reef when it filed its complaint, and Magistrate Judge Reinhart added that Ocean Reef had not cited a case that failure to obtain discovery was good cause for an amendment after the deadline and that the evidence cited by Ocean Reef was not related to the business practices that were the subject of the punitive damage claim. And, even if Ocean Reef had shown that it acted diligently enough to establish good cause, Magistrate Judge Reinhart concluded that the amendment would be futile because it would not survive a motion to dismiss for failure to state a claim. Magistrate Judge Reinhart explained that Ocean Reef had not plausibly alleged that Travelers’ general business practices involved willful, wanton, and malicious behavior or recklessly disregarded the rights of any insured. He added that it was not clear until the decision of the Eleventh Circuit in May 2021 that the Anti-Technical Statute applied to maritime claims, and the only instances cited by Ocean Reef of conduct violating rights of a policyholder were before that decision. Thus, there was not a plausible claim for punitive damages, and it would be futile to allow the amendment. Accordingly, Magistrate Judge Reinhart denied the motion for leave and held that no further amendments would be permitted.
Tammy Knieling was employed as a chef and mate on the sailing vessel SOMEWHERE HOT, owned by William Poston and captained by Don Fung Fook. After purchasing the SOMEWHERE HOT, Poston ran charters on the vessel in the Virgin Islands, with Fook as the captain. Knieling claims that on July 3, 2021, Fook negligently instructed her to let out the dinghy line and that her hand became entangled between the line and the cleat. She sustained an injury to her left middle finger and rope burns on both hands, and a medical student who was a guest on the vessel cleaned the wound and wrapped it in a compression wrap. Knieling made an appointment at a medical center on July 9, 2021, the last day of the charter, and the doctor advised her to go to the emergency room where she was diagnosed with an avulsion fracture of her finger. She was given home exercises because she is often out to sea, and she scheduled her follow-up appointment around her charter schedule. Her pain continued in 2023, and she had laser treatment and injections to improve the quality of the scar and pigmentation. Her doctor continued to order physical and occupational therapy. Knieling brought this suit in 2022 in federal court in the Virgin Islands against Fook and Poston, alleging claims for Jones Act negligence, maintenance and cure, and unseaworthiness, seeking compensatory and punitive damages for each count. The defendants moved for summary judgment on the claim for maintenance and the claim for punitive damages for failure to pay maintenance and cure, and Knieling moved for summary judgment on her claim for maintenance and cure. The defendants argued that Knieling was provided food and lodging on the SOMEWHERE HOT until her employment was terminated in August 2021, she never requested maintenance or time off, she said she was “good to go” without limitations, and she continued to work on other vessels after she left the service of the SOMEWHERE HOT. The defendants added that her doctor said that her fracture was healed in August 2021, she stopped attending physical therapy in September 2021, she stopped seeing a doctor for more than a year, and her doctor said her injuries were permanent. The defendants argued that treatment thereafter was palliative, not curative. Knieling cited her testimony that she was precluded from performing certain tasks and was, accordingly, incapacitated. She argued that she had not reached maximum cure, had returned to work out of necessity, and was entitled to maintenance at the rate of $91.30 per day. Based on the conflicting argument and evidence, Magistrate Judge Miller held that there were fact questions that precluded summary judgment on the claim for maintenance and cure (Magistrate Judge Miller also noted that Knieling had resided in Florida since December 2021, and her attorney had not provided any evidence of her food and lodging expenses in Florida). As to the claim for punitive damages for willful failure to pay maintenance and cure, the defendants argued that they had immediately agreed to pay medical expenses and later declined to pay when the treatment was palliative. Reasoning that the defendants are entitled to investigate and require corroboration of the claim, Magistrate Judge Miller found no basis for an award of punitive damages and granted summary judgment with respect to that claim. See July 2024 Update.
Magistrate Judge Miller held a bench trial from June 3 to June 6, 2024, and announced her findings of fact and conclusions of law. She concluded that Knieling was employed by Poston, who was responsible for any negligence of Captain Fook under the Jones Act. Knieling argued that Fook was negligent for not providing gloves to her to use when handling lines, but Magistrate Judge Miller did not find any applicable law or safety regulation requiring use of gloves for the routine task of letting out a dinghy line. Magistrate Judge Miller found it was not credible that Fook had not explained or demonstrated how to let out the dinghy line, and she added that Knieling had properly performed the task the day before. However, Judge Miller did find that Fook did not act with reasonable care when he instructed Knieling to let out the line while the vessel was moving at an unsafe speed, and that Poston was liable under the Jones Act. Magistrate Judge Miller awarded Knieling $9,599.41 for past unpaid medical expenses and no future medical expenses as Knieling did not testify that she intended to schedule any future treatment. Magistrate Judge Miller awarded $15,000 for past and future pain and suffering. Magistrate Judge Miller did not find that the vessel was unseaworthy, reasoning that the lack of gloves did not render the method of work improper and that a single act of operational negligence was not unseaworthiness. With respect to maintenance, Magistrate Judge Miller observed that there was no clear finding of maximum cure, particularly in August or September of 2021 as Poston claimed. However, she has not had an appointment after May 2023, and Magistrate Judge Miller considered that her treatment would be palliative and not curative. Knieling never took off time from work to heal and made it clear that she did not want to miss any charters. She has continued to work as a chef after leaving the SOMEWHERE HOT (she worked on the SOMEWHERE HOT until she had a falling out with the captain) and has done well on other ships. Accordingly, Magistrate Judge Miller did not find any obligation to provide maintenance. Magistrate Judge Miller did not find any unreasonable failure to pay medical bills as there were issues with the amounts due and Poston offered to pay $2,000 to cover outstanding bills. Additionally, Poston had a reasonable basis to believe that it did not owe maintenance and cure after 2021 based on its belief that Knieling had reached maximum cure. As Poston was already liable for the medical bills under the Jones Act, Magistrate Judge Miller awarded nothing to Knieling on the claim for maintenance and cure. See September 2024 Update.
Fook and Poston moved for a new trial or a modified judgment, arguing that the liability finding was predicated on an error of fact (that the vessel was exiting the mooring field when the captain testified that the vessel was still in the mooring field), that Knieling was exclusively liable for her injury, and that the judgment was based on unreliable and inadmissible testimony. Magistrate Judge Miller rejected each reason. She answered that the vessel was still in the mooring field when it was exiting the field, that the defendants did not prove that Knieling was negligent or that the delay on her part in executing the task contributed to her injury, and that the defendants did not explain how it was unfair that the court rely on the testimony of the plaintiff’s expert because he did not listen to the testimony adduced at trial.
Voile Partners entered into a Dockage and Repair Contract with Flyhopco d/b/a Bradford Marine to provide repair and other services for its 130-foot vessel OUR WAY at the Bradford Marine facility on the New River waterway in Fort Lauderdale, Florida. Bradford berthed the vessel in Slip C 14, which was covered by a concrete roof, and it erected scaffolding that left the vessel dead in the water and unable to be moved. After a heavy rainfall on April 13, 2023, water levels on the New River rose by 4 feet, and the mast of the OUR WAY contacted the concrete roof, causing extensive damage to the vessel. Voile Partners presented a claim to the vessel’s insurer, AIG, in the amount of $239,921.33 for repair of the vessel, and AIG brought this subrogation action against Bradford Marine in federal court in Florida, asserting claims for breach of the implied covenant of good faith and fair dealing, breach of contract, breach of the warranty of workmanlike performance, and gross negligence/willful misconduct. Bradford Marine moved to dismiss the complaint, arguing that the complaint failed to state a claim for breach of the implied covenant of good faith and fair dealing and that the other counts were based on internally inconsistent allegations. AIG argued that the covenant was implied in every maritime contract and that the defendant breached the covenant by failing to exercise its discretion to move the vessel. Judge Dimitrouleas explained that, as “the implied covenant may not replace expressly bargained for contract terms, the implied duty of good faith comes into play in discretionary actions only where the contract is silent as to any standards to be used in exercising that discretion.” In this case, the contract provided that Bradford Marine “may, at any time without advance notice, shift or cause to be shifted the Vessel” and that it “may, in its sole discretion, select alternate docking methods.” As the contract did not lack standards and gave the sole discretion regarding movement to Bradford Marine, the defendant was entitled to decline to move the vessel. Therefore, Judge Dimitrouleas held that AIG could not maintain a claim for breach of an implied covenant of fair dealing. With respect to the inconsistent allegations in the other counts, Bradford Marine noted that AIG alleged on the one hand that the damage occurred from normal spring tides while on the other hand alleging that there were unexpected tides and a storm of “biblical proportions.” However, Judge Dimitrouleas noted that Bradford Marine cited no binding precedent that inconsistent allegations were a basis to dismiss the complaint. As AIG pleaded the elements of the causes of action, Judge Dimitrouleas held that the internal inconsistencies were insufficient to dismiss the counts.
“This case presents a triad of elements familiar to many insurance disputes: fire, water, and policy coverage.” Rafael Luquis-Guadalupe insured his 28-foot vessel, DESCALZA, with Aspen American Insurance. On May 22, 2024, there was a fire on the vessel while it was docked at the Salinas Marina in Salinas, Puerto Rico, and the fire spread to boats owned by Ira Myerson and Cynthia Casanova. Aspen brought this suit in federal court against Luquis-Guadalupe, seeking a declaration that the policy was void due to misrepresentations. Myerson and Casanova moved to intervene in Aspen’s declaratory judgment action, arguing that their interests were directly affected by the outcome of the suit as their ability to recover depended on the validity of the insurance policy. Judge Antongiorgi-Jordan reviewed the elements for an intervention of right and agreed that the intervenors had a concrete, protectable interest in the validity of the insurance policy. She also agreed that disposition of the coverage action may impair or impede the intervenors’ ability to protect their interest. However, she did not believe that the existing defendant (vessel owner) could adequately represent the intervenors’ interests. The intervenors argued that the defendant would not be looking out for their interests and might settle with Aspen and leave them without recourse. Judge Antongiorgi-Jordan rejected that argument because Puerto Rico law prohibits insurers from annulling a liability policy by agreement with the insured after occurrence of an injury or damage to a third person. As the interests of the intervenors were adequately represented by the defendant, Judge Antongiorgi-Jordan denied their motion to intervene.
Lariana Pollard, a passenger on the CARNIVAL CONQUEST, slipped and fell in a slippery substance on the gangway while disembarking the vessel and brought this action against the cruise line in federal court in Florida, asserting claims for negligent inspection and maintenance of the gangway, negligent failure to warn of the slipping hazard, and negligent failure to offer assistance. The cruise line moved to dismiss the complaint for failure to sufficiently allege notice of the danger, and Pollard responded (1) it had rained earlier in the day and there was sufficient time after the rain ended to take corrective measures, and (2) there had been similar cases to establish that the cruise line had notice of the slipping hazard. Judge Martinez rejected the first response as it was pleaded as a conclusion without supportive factual allegations (she failed to identify the substance, the length of time it was present, whether there were anti-slip protections, and whether any crewmembers were present). Judge Martinez then addressed the three instances of falls on slippery substances on gangways at destination ports. Pollard merely cited the incidents and did not make any attempt to connect them to her fall on the gangway to the CONQUEST (weather conditions, length of time, presence of crewmembers, non-slip conditions). Therefore, there was no basis to conclude that the prior incidents were sufficient to provide constructive notice. Accordingly, Judge Martinez dismissed the complaint with leave to amend.
This case arises from a collision in the Mississippi River between Boothville and Fort Jackson, Louisiana involving the MISS LISA, owned by Tony Riley, and the CAPT HAGEN, owned by Penn Maritime. Riley and the deck hand on the MISS LISA, Allen Burns, brought this suit in federal court in Louisiana against the owner of the CAPT HAGEN, alleging that the CAPT HAGEN, proceeding downriver, crossed over and collided with the MISS LISA, which was traveling upriver. The owner of the CAPT HAGEN moved for summary judgment, arguing that there was no evidence that the vessel breached any duty. Judge Papillion cited the judicially recognized point-bend custom that has long governed the meeting of vessels in the lower Mississippi River and noted that the Automatic Identification System data reflected that the CAPT Hagen was in compliance with the point-bend custom. Therefore, he concluded that the plaintiffs had failed to present evidence that the CAPT HAGEN breached any duty, and he granted summary judgment and dismissed the suit.
Teresa Neeper, a passenger on the CARNIVAL SUNSHINE, slipped and fell on a slippery substance on the deck of the Lido Deck of the vessel that she claims resulted from a mixture of sunscreen oil and water that leaked from the hot tub. Teresa brought this suit against the cruise line in federal court in Florida with a count for maintaining the dangerous condition of the deck and a count for failure to warn. The cruise line moved to strike the declaration of Teresa’s husband, David, and for summary judgment. In his declaration, David stated that he first noticed the water coming from the hot tub when he walked through the area more than an hour before Teresa fell. He added that “anyone could tell just by looking at the large volume of water that had come from the hot tub[,] that the amount of water had taken much longer than an hour to accumulate.” The cruise line moved to strike the declaration because Teresa did not serve disclosures and waited to identify David as a witness until responding to interrogatories. At that time she only stated that he was present at the time of the incident and had knowledge of her injuries and how they affected her life. The cruise line also objected that his statement about the timing of the accumulation was not based on personal knowledge and violated the sham affidavit rule (a “desperate attempt to create an issue of material fact”). Judge Bloom declined to strike the entire declaration, noting that David had been identified as having been present at the incident and the cruise line was not harmed by the extent of the identification. Judge Bloom also held that there was no violation of the sham affidavit rule with respect to the contradiction of Teresa’s testimony that she had not seen the water because “it is entirely possible that Plaintiff was not as observant as her husband.” Judge Bloom did agree to strike the statement about the accumulation of the puddle as it was speculative and not based on personal knowledge. The cruise line moved for summary judgment on the basis that Teresa did not establish that the cruise line had notice of the dangerous condition and because the failure to warn was not the proximate cause of Teresa’s injury. The cruise line argued that no one reported the puddle/stream, and there were no employees in the immediate area of the puddle. The cruise line added that the puddle was colorless; there were no footprints around the puddle; and Teresa did not see the water while she was lounging in her pool chair. However, Judge Bloom found sufficient evidence of notice because David testified that he noticed the leak more than an hour before the incident (sufficient time to give notice to the cruise line); because there were employees at the Red Rum Frog Bar (a few steps away from the area where she fell), and a reasonable juror could conclude that they should have known about the water in the vicinity; and because Teresa testified that the running water had formed a “pretty large” puddle, supporting an inference that the water had accumulated for a sufficient time to provide notice. The cruise line also argued that there was no proximate cause for the claim of failure to warn because Teresa saw the puddle before stepping into it. Judge Bloom noted that the precise testimony was that Teresa observed water on the deck in a pretty large puddle where the questioner was pointing with the mouse in the deposition. Judge Bloom agreed with the cruise line that Teresa was identifying water in the area where she fell; however, the record was unclear whether she saw the water soon enough to appreciate the danger before stepping into it (open and obvious condition). Judge Bloom reasoned that mere knowledge of a puddle is not evidence that the specific area was slippery, as some floors are dangerously slippery when wet and others are perfectly safe. Therefore, Judge Bloom could not say that there was not a fact question whether the condition was open and obvious so as to defeat the claim for failure to warn.
ExPert Oil & Gas owns a hydrocarbon product processing facility in Lake Salvador, Louisiana that was damaged as a result of Hurricane Ida. ExPert purchased a Marine Cargo and Equipment Insurance Policy issued by HDI Global Specialty, American Internation Group UK, and Renaissance Re Syndicate, and a dispute arose as to the damages covered under the policy. After finding the language of the policy to be ambiguous as to whether the policy provided scheduled or blanket coverage, Judge Milazzo considered the issue whether the policy afforded coverage for a barge moored to the platform in light of the provision in the policy excluding “watercraft, unless forming part of scheduled equipment.” ExPert argued that the barge was no longer a watercraft because it was permanently affixed adjacent to the platform, had been permanently removed from navigation, and was no longer capable of operating as a vessel. Citing the Supreme Court’s decision in Lozman and the definition in the Oxford English Dictionary, Judge Milazzo reasoned that “it cannot be reasonably questioned that a watercraft is a craft for use in or on water.” The facts presented established that the oil storage barge was installed to serve as a permanent storage tank and was permanently moored on location by driving pilings on all four sides of the parge, pinning it on location and prohibiting its movement (effectively placed inside an immovable cage where it could float up and down with the tide but could not move laterally). There was a permanent walkway running from the platform to the barge and permanent load lines to transfer hydrocarbons. When the storage barge was full, the hydrocarbons were pumped into a transportation barge to be towed to shore, The barge was permanently affixed from April 2019 until the end of August 2021 when Hurricane Ida caused the pilings to be torn from the seabed and the barge to break free. Based on these facts, Judge Milazzo held that the storage barge met the “plain and commonly accepted” definition of a watercraft. She explained that it was affixed and was not being used for transportation, but it was still capable of transportation as reflected in the fact that it floated several miles away after it broke free from its cage. Accordingly, she held that the loss of the barge was excluded from the policy.
Trade West Construction contracted with the Army Corps of Engineers to repair the Coos Bay North Jetty in Coos County, Oregon, and the Miller Act required Trade West to provide a payment bond to secure the project’s contracts. Trade West obtained a performance bond and a payment bond through Endurance Assurance. Trade West entered into a bareboat charter and a towage agreement with Curtin Maritime for the use of the freight barge LOST PT. and tug DEBRA C with an addendum to the towage agreement to give Trade West access to Curtin Maritime’s loading yard and dock. During the project, the LOST PT. suffered damage, and Curtin Maritime alleges that Trade West breached the agreements by returning the barge in a damaged condition and by failing to pay outstanding invoices for the services of the tug and barge. Curtin Maritime brought this suit in federal court in Oregon against Trade West for breach of contract and against Endurance, as surety, for liability under the Miller Act (seeking outstanding costs of labor and materials furnished to Trade West for use in the repair). Endurance moved to dismiss the suit against it on the ground that the costs sought by Curtin Maritime were incurred after the breach of contract and were not in furtherance of the federal project. Judge McShane began by holding that Curtain Maritime had alleged a Miller Act claim against Endurance with its allegations that the services of the tug, barge, and loading yard were labor and materials for the project, that Trade West failed to make full payment for the labor and materials, and the claim arose under the Miller Act. Judge McShane then addressed the amounts that Curtain Maritime could recover and noted that costs for labor and materials actually expended on a project are recoverable from the surety, but lost profits are not. This distinction requires the court to determine what is recoverable under the contract and under the Act. Trade West argued that Curtain Maritime was not entitled to recover costs assessed after Trade West stopped using the services of Curtain Maritime and that Curtain Maritime was not entitled to recover for damage to the barge because Curtain maritime breached the charter by failing to provide a barge fit for the purpose contemplated in the charter and by failing to accept redelivery of the barge. Endurance argued that the cost of repair was not recoverable because the barge is a capital asset and not a “material” under the Miller Act and because the repairs were for the benefit of Curtain Maritime on future projects. Judge McShane reviewed the cases and held that Curtain Maritime could recover costs to repair the barge if the damage occurred during the project as the charter provided for liability for the repair, and that provision was consistent with the Miller Act’s intent to protect those whose labor and materials go into public projects. As there was a dispute about the cause of the damage, Judge McShane held that the claim for the cost of repair could proceed. Judge McShane did agree that the damages incurred after Trade West stopped using the barge on redelivery were not recoverable as they represented a combination of costs for services not rendered and lost profits. However, Curtain Maritime could seek to recover damages from Endurance for the labor and materials actually expended on the project (that does not mean that Curtain Maritime may not recover damages from Trade West for breach of contract for the amounts that are not recoverable from Endurance). The same result was reached for the post-breach ongoing charter hire while the barge was being restored to its prior condition.
Floatin’ Aweigh, owner of the yacht ZEN, entered into an agreement with Bay Marine of Chicago that included winterization and storage of the ZEN. Floatin’ Aweigh asserts that the vessel sustained damages from a fire and other acts, and that the vessel’s insurer, GEICO, failed to pay for the losses. Floatin’ Aweigh (and its sole owner Thomas M. Dogan) brought this suit in state court in Porter County, Indiana, against Bay Marine and GEICO, and GEICO removed the case to federal court based on diversity and admiralty jurisdiction. Citing the forum-selection clause in its Terms and Conditions that designates state or federal court in Green Bay, Wisconsin as the forum in which legal action must be brought, Bay Marine moved to dismiss the suit or transfer venue. Judge Van Bokkelen began by stating that the contract for storage and winterization of the yacht was a maritime contract, and he held that maritime law applied because the contract was not inherently local. He then noted that the Rental Agreement provided that the tenant certified that the printed matter on both the front and back of the agreement had been read and that the terms and conditions “set forth herein” were fully understood. However, the document and attachments did not contain the terms and conditions with the forum selection clause, and Judge Van Bokkelen held that the reference to the terms and conditions “set forth herein” did not put Floatin’ Aweigh on notice that there were terms beyond those that were included. Therefore, Judge Van Bokkelen held that the parties did not agree to a forum-selection clause, and he declined to dismiss or transfer the case. Bay Marine also argued that Floatin’ Aweigh’s fraud claim was insufficiently pleaded under the heightened requirements of Rule 9(b), but Judge Van Bokkelen held that the allegations that Bay Marine falsely represented that services had been performed, falsely represented the condition of the vessel, attempted to hide its improper work, and changed access to the marina to delay discovery of the damages were sufficient to avoid dismissal.
L3Harris entered into a fixed-price subcontract with BAE Systems to provide ship repair services to the U.S.S. VICKSBURG (BAE Systems was the prime contractor with the U.S. Navy). Beginning in March 2020, L3Harris’ performance of the subcontract was impacted by the COVID-19 pandemic, as BAE Systems directed L3Harris to continue performing the work, resulting in additional costs from COVID-19 testing, increased sick leave, protective measures, increased cleaning processes, and inefficiencies caused by social distancing. L3Harris claimed that its costs increased by $863,315.45 due to the pandemic. L3Harris also claimed that BAE Systems engaged in acts and omissions that interfered with the performance of the subcontract. L3Harris then brought this suit in federal court in Virginia against BAE Systems for the increase in expenses related to COVID plus costs related to the constructive changes to L3Harris’ performance due to BAE Systems’ conduct. BAE Systems filed a partial motion to dismiss, asserting that the claims for pandemic and delay-related expenses were not compensable because the subcontract was a fixed-price subcontract and L3Harris was only entitled to reimbursement if BAE Systems ordered changes to the scope of the work. L3Harris responded that the pandemic was an excusable delay so that compensation for the costs was allowed under a constructive acceleration theory (work is ordered to comply with the original deadline despite excusable delay being present). Although BAE Systems argued that L3Harris did not establish that BAE Systems had required L3Harris to meet the original schedule despite excusable delay, Magistrate Judge Krask held that L3Harris had sufficiently alleged, with reasonable inferences, that BAE Systems directed L3Harris to perform within the existing schedule, despite excusable delay, and that L3Harris had incurred increased costs as the result. Therefore, Magistrate Judge Krask declined to dismiss the claim for pandemic-related expenses. BAE Systems also sought dismissal of several claims based on constructive changes to the scope of the work under the subcontract. However, the basis of the claims was not a change in the scope of the work but, instead, claims that BAE Systems and its contractors committed acts or omissions that caused L3 Harris to encounter delays and increased costs. Although L3Harris argued that delays could constitute constructive changes to the work, Magistrate Judge Krask declined to hold that delay-related claims were compensable as constructive changes to the scope of the work, and he dismissed those claims. See December 2023 Update.
The case proceeded to trial, and Magistrate Judge Krask issued his opinion with 103 pages of findings of fact and conclusions of law. L3Harris sought $863,315.45 for constructive acceleration as a result of the pandemic (constructively accelerating performance by instructing L3Harris to continue performing during the excusable delay caused by the pandemic). It sought $1,009,813 for constructive change in the subcontract by requiring L3Harris to provide out-of-scope personnel to direct BAE to perform tasks to which L3Harris took exception. L3Harris sought damages of $747,767.44 based on the assertion that BAE breached the subcontract by failing to provide welding and other structural support services in a reasonable time frame. It sought damages of $216,474.16 on the ground that BAE breached the subcontract by failing to provide adequate government-furnished material in a reasonable and timely manner. Finally, L3Harris sought damages because BAE breached its implied duties to avoid hindrance, provide access to the worksite, act in good faith, and exercise its discretion reasonably. Magistrate Judge Krask found that L3Harris did prove a claim for constructive acceleration for which he awarded damages of $5,757.06. He found that L3Harris failed to prove its claim for a constructive change for alleged out-of-scope structural support work and that L3Harris failed to prove that BAE breached its performance obligation providing structural work. Magistrate Judge Krask did find that BAE breached its obligation to timely deliver government-furnished material on some occasions, but that L3Harris failed to prove damages resulting from the breach. Finally, Magistrate Judge Krask declined to find breach of implied duties by BAE. Therefore, Magistrate Judge Krask ordered BAE to pay damages to L3Harris of $5,757.06.
Victoria Burns, a passenger on the CARNIVAL PARADISE, was walking near the Burrito Restaurant and Guy’s Burger Joint Restaurant on the ship when she slipped and fell on a slippery surface. She brought this suit against the cruise line in federal court in Florida, and the cruise line moved to dismiss the complaint for failure to sufficiently plead notice. Burns argued that she adequately pleaded notice because the crew was mopping and squeegeeing the floors at or near this location at or about and just prior to the time that Burns was injured and by pleading that the cruise line should have known of the condition because passengers and crew traverse the area carrying food and drinks or because its employees in fact caused the wet, foreign, or transitory substance on which she fell. Judge King disagreed, answering that the allegation was conclusory and lacked specificity. He reasoned that the defendant has actual notice of the condition when its employee creates the dangerous condition; however, the pleading did not clearly state that the crewmember created the condition. Judge King explained that the allegations required the court to make assumptions with respect to notice. Burns did not state specifically where the crewmember was mopping. Judge King added that the mere pleading that the area was highly trafficked by passengers and crew carrying food and drinks lacked factual support as to how long the condition had existed. Therefore, Judge King dismissed the complaint with leave for Burns to amend it to sufficiently allege notice.
Shaniqua Belmontes, a passenger on the CARNIVAL LIBERTY, was startled by a cockroach in her stateroom, tripped over a chair, hit the desk, and fell to the floor (there is a picture of the cockroach in her amended complaint). After her fall, she saw cockroaches nesting behind the lighting panel in the room. When she boarded the vessel the day before, it appeared as though the room had not been cleaned as there were dirty towels, sheets, and feminine sanitary pads in the room, and she reported the condition of her room. Belmontes brought this suit against the cruise line in federal court in Florida, asserting that the cruise line had notice of the dangerous condition based on the presence of cockroaches behind the lighting panel and claiming the cruise line should have known that cockroaches are one of the most frightening pests in the world. The cruise line moved to dismiss the complaint for lack of sufficient pleading of notice, and Judge Gayles agreed that most of the allegations were conclusory and failed to establish how the cruise line should have known of the presence of cockroaches. Although Belmontes complained about the dirty condition of her room, the lack of cleanliness did not put the cruise line on notice of the existence of cockroaches. Belmontes also failed to allege how long the cockroach had been in the room or to identify prior incidents involving cockroaches. Therefore, Judge Gayles dismissed the complaint without prejudice.
Quentin M. Brown was engaged to work as a wiper on the M/V PRESIDENT WILSON. Brown alleges that he was subject to “relentless, exhausting, and damaging emotional and physical advances” from Yasin Berber, a reefer technician aboard the ship. Brown claims that his supervisors and other crew members were aware of and witnessed this conduct and that he was eventually sexually assaulted by Berber. Brown then reported the assault to the Chief Engineer, Captain, and designated shoreside supervisor, all of whom failed to act, after which he experienced retaliatory harassment. Berber was allowed to remain on the ship for the next voyage, but Brown was required to pay for and take a psychological evaluation. Brown filed suit in federal court in California, claiming constructive discharge and bringing claims against American President Lines under the Jones Act, under the general maritime law for unseaworthiness, under Title VII of the Civil Rights Act, and for intentional and negligent infliction of emotional distress. He brought claims against Berber for the intentional tort of sexual assault, battery, harassment, and intentional and negligent infliction of emotional distress. American President Lines and Berber moved to dismiss the claims. American President Lines argued that it did not have notice of any of Berber’s alleged conduct before the “single unrepeated” assault and that it was not vicariously liable for Berber’s actions that were not taken in the course of his employment. Brown did not contest the argument on the course of employment, but he argued that he had pleaded sufficient notice of conduct that was allegedly witnessed by supervisors that would put the employer on notice. Consequently, Chief Magistrate Judge Ryu declined to dismiss the Jones Act count. American President Lines argued that the assault was not sufficiently “savage and vicious” to cause the vessel to be unseaworthy. Chief Magistrate Judge Ryu disagreed, reasoning that the allegation that Berber “forcibly insert[ed] a finger inside [Brown]’s anal area” did not fall “within the usual and customary standards of the calling” and was sufficient to support the unseaworthiness claim. As Brown did not allege that he was actually discharged or resigned from his employment, Chief Magistrate Judge Ryu dismissed the claim of sex discrimination under Title VII (with leave to amend), but she found the claim for retaliation to be sufficiently pleaded. American President Lines argued that Brown had not sufficiently pleaded that the work environment or the employer’s conduct after notice of the alleged assault was extreme and outrageous so as to support the claim for intentional infliction of emotional distress. The employer argued, in particular, that sexual harassment and assault are not within the scope of employment. However, the cases cited by American President Lines did not examine agency liability in the context of a claim for intentional infliction of emotional distress. Therefore, Chief Magistrate Judge Ryu held that the argument should be presented in a motion for summary judgment on a fuller legal and factual record. As American President Lines did not analyze the claim for negligent infliction of emotional distress under the general maritime law’s zone of danger test, Chief Magistrate Judge Ryu denied the motion to dismiss that claim without prejudice. Turning to Berber’s motion, Brown agreed to dismiss the claim for negligent infliction of emotional distress. Berber argued that the claim for intentional infliction of emotional distress could not be sufficiently extreme and outrageous because Brown argued that the actions were within the course of employment (“conduct within the course and scope of one’s employment might be negligent, but such conduct cannot be outrageous and extreme”). Berber cited no authority for that argument, and, taken as true, Chief Magistrate Judge Ryu held (as she had ruled with respect to the employer) that the allegations were sufficient to state a claim. Finally, Berber argued that the claim for sexual assault, battery, and harassment contained three separate claims with distinct elements. Chief Magistrate Judge Ryu agreed that in an amended complaint, Brown should present each of the torts as a separate claim for relief instead of lumping them together. See September 2023 Update.
American President Lines then filed a motion for summary judgment. With respect to the claim for Jones Act negligence. Chief Magistrate Judge Ryu noted that there are two grounds for employer liability—(1) if the assault was committed by the seaman’s superior for the benefit of the ship’s business and (2) if the assault was foreseeable and the officers failed to prevent it. Chief Magistrate Judge Ryu did not believe the first ground was met because Berber was not acting as Brown’s superior and because his higher rank was not the equivalent of supervisory authority for purposes of vicarious liability under the Jones Act (and Berber was not exerting authority over Brown). As to the second ground, American President Lines argued that Brown failed to show that American President Lines was on notice of the potential assault. Brown did not report Berber’s harassing conduct, and there was no evidence that any of the ship’s officers was aware of any of the interactions between Brown and Berber or that the co-workers understood that Brown was uncomfortable because of sexual harassment from Berber. Chief Magistrate Judge Ryu also explained that acts such as standing close to other and putting a hand on the arm or back was insufficient to put American President Lines of Berber’s propensity to commit a sexual assault. Concluding that Brown had not established that the assault was foreseeable, Chief Magistrate Judge Ryu dismissed the Jones Act claim. However, she reached a different result with respect to the unseaworthiness claim. Although American President Lines argued that the assault was only a “brief moment of contact” and did not demonstrate a “vicious nature” for Berber, Chief Magistrate Judge Ryu held that Berber’s act could constitute rape, which is “well outside” the “usual and customary standards of the calling.” After holding that Brown had presented sufficient evidence to support his retaliation claim under Title VII, Chief Magistrate Judge Ryu addressed Brown’s claims for intentional infliction of emotional distress. In the first place, Chief Magistrate Judge Ryu held that American President Lines could not be held vicariously liable for Berber’s acts because his tortious conduct was not within the scope of his employment, rejecting the assertion that he was acting within the scope of his employment merely because he was on duty. This left the conduct of American President Lines’ supervisors who were acting within the scope of their employment when they failed to respond to Brown’s harassment complaint. Although American President Lines required Brown to be in the same room with Berber at least twice a day, this did not amount to extreme or outrageous conduct, particularly in light of the fact that Brown’s complaint was vague and non-specific and there was no further assault. Therefore, Magistrate Judge Ryu dismissed the claim for intentional infliction of emotional distress (as well as the claim for negligent infliction of emotional distress to which Brown did not file an opposition).
HC&D, a Hawaiian company, purchased a freight barge from Cashman Equipment to use in transporting concrete in Hawaii. The Purchase and Sale Agreement contained a Boston, Massachusetts forum-selection clause. Prior to executing the Agreement, Precision NDT & Consulting (a Louisiana company with its office in Patterson, Louisiana) inspected the barge in Louisiana and prepared a Hull Diminution Survey for the barge, demonstrating its seaworthiness. HC&D allegedly relied on the report for its purchase. After the sale, the barge was towed from Amelia, Louisiana to California, where a visual inspection revealed the barge to be flooded and holed out. HC&D, which spent almost $4 million to repair the barge, brought this suit in federal court in Massachusetts against Cashman Equipment and Precision NDT, and Precision NDT asserted that the complaint should be dismissed for lack of personal jurisdiction. HC&D then moved to transfer the case to Louisiana in its entirety. Judge Woodlock found that Massachusetts had personal jurisdiction over Cashman Equipment, but that there was no personal jurisdiction over Precision NDT in Massachusetts. Instead, he found that there was personal jurisdiction over Precision NDT in the Western District of Louisiana, and that there was also personal jurisdiction over Cashman Equipment, which conducts a meaningful amount of business in Louisiana and has a business address there. Accordingly, the Western District of Louisiana could be an appropriate venue for both defendants. That conclusion presented the issue whether to transfer all or a portion of the case. Giving effect to the forum-selection clause, Judge Woodlock agreed to sever HC&D’s claims against Precision NDT so that the claims against Cashman Equipment would remain in federal court in Massachusetts and the claims against Precision NDT were transferred to the Western District of Louisiana. See November 2023 Update.
Cashman Equipment moved to dismiss the complaint for failure to state a claim, citing the clause that the vessel was being sold and purchased in tis current condition, “AS IS-WHERE IS.” Judge Burroughs held that HC&D had, despite the “as is” clause, sufficiently pleaded facts to support its claims for fraud and fraudulent inducement based on representations related to the purchase of the barge. She explained that the clause was a general disclaimer that did not contradict the many specific representations made about the barge by Cashman Equipment. However, Judge Burroughs agreed to dismiss the claim for negligent misrepresentation, reasoning that “intentional misconduct . . . justifies judicial intrusion upon contractual relationships in order to prevent the wrongdoer from securing contractual benefits for which he has not bargained,” but the “as is” clause barred a claim for negligent misrepresentation. Finally, as HC&D asserted that it was deceived from its headquarters in Hawaii, Judge Burroughs dismissed the claim for violation of Massachusetts’ unfair practice statute despite the fact that the contract designated Massachusetts law to apply and the fact that Cashman Equipment was headquartered in Massachusetts.
Mallory Ware was diagnosed with lung cancer that he attributes to exposure to asbestos and toxic welding fumes on drilling rigs and other locations operated by defendants on land and offshore. He brought suit in state court in Orleans Parish, Louisiana against Marathon (and other oil companies and premises owners) and various manufacturers, sellers, suppliers, contractors, and distributors, asserting that he was exposed to asbestos-containing products and toxic welding fumes when he worked as a welder and hammer operator on offshore rigs and in industrial facilities. Marathon removed the case to federal court based on jurisdiction under the Outer Continental Shelf Lands Act and moved to dismiss the complaint for failure to state a claim. Ware responded that he had sufficiently alleged claims for negligence and strict liability against Marathon as a premises defendant because he was exposed to asbestos dust and welding fumes while working at Marathon’s premises; that Marathon failed to warn him of the risk of welding fumes; and that Marathon was in control or custody of dangerous chemicals. Ware candidly admitted that he “did not supply the when and where of Marathon’s alleged actions,” but he contended that Marathon was in a better position to know the specifics to support his allegations from its records for the locations where Ware worked. Judge Papillion held that the complaint sufficiently described the underlying claims to allow Marathon to prepare an answer. He added that “additional information sought by Marathon regarding the specifics of Ware’s claims against it can be illuminated by discovery.” In denying the motion, Judge Papillion stated that he saw “no purpose in ordering Ware to provide a more definite statement when commencing discovery will better unveil the facts that Marathon seeks.”
Pedero Sanders claims that, while serving as a seaman on the dredge JS CHATRY, operated by Weeks Marine, he tripped and fell over a D-ring while retrieving supplies from a shack on land (Sanders asserts that the supply shack is pulled into place at the worksite using D-rings that are supposed to be buried). Sanders brought this suit in federal court in Louisiana against Weeks Marine under the Jones Act and general maritime law, seeking to recover economic loss and medical expenses as well as mental anguish, pain and suffering, bodily impairment and disfigurement, punitive damages, and attorney fees. Weeks Marine moved to dismiss the claims for nonpecuniary damages that are not available to a Jones Act seaman (specifically, mental anguish and bodily impairment/disfigurement) and the claim for unseaworthiness (as the accident occurred on land). Weeks Marine also moved to exclude or limit the opinions of Sanders’ safety expert, Robert Borison, and his economic loss expert, Max Lummis. Judge Ashe agreed with Weeks Marine’s damage arguments, dismissing the claims for mental anguish (but not pain and suffering), bodily impairment and disfigurement, and any other nonpecuniary damages (excluding those related to his claim for maintenance and cure). In support of his unseaworthiness claim, Sanders argued that the land-based shack was put in place by the crew of the dredge without conducting a job safety analysis, which was evidence of an improperly trained crew—an unseaworthy condition. Judge Ashe disagreed with Weeks Marine that the unseaworthiness remedy was foreclosed simply because the accident occurred on land; however, he noted that no appurtenance of the ship was involved in the accident. As to the claim of an unseaworthy crew, Judge Ashe responded that Sanders testified that it was a shoreside crew that set up the shack, and he added that the lack of a job safety analysis is not evidence of an incompetent crew. Therefore, Judge Ashe granted summary judgment on the unseaworthiness claim. Turning to the experts, Borison opined that Weeks Marine failed to provide Sanders with a safe place to work because it did not remove or bury the D-ring. Judge Ashe agreed with Weeks Marine that the tripping hazard from the D-ring was not highly technical or hard to understand and was within the common understanding of the jury. Therefore, he excluded Borison’s opinions. Finally, Weeks argued that Lummis’ opinions about Sanders’ future lost wages should be excluded because he doubly accounted for inflation (he increased Sanders’ wages by .83% per year and then applied a .56% discount rate). Weeks Marine also argued that Lummis should not be permitted to testify to lost wages beyond Sanders’ statistical work-life expectancy of 61 years because there was no evidence that he would work longer. Sanders responded that it was proper to increase Lummis’ wages by .83% to account for both individual and broad societal forces or, alternatively to use a revised calculation with no wage growth but a modified discount rate. Judge Ashe agreed that Lummis’ calculation doubly accounted for inflation because the increase was based on a statistical wage growth rate developed by the Bureau of Labor Statistics that is inflation-adjusted. That analysis violated the Fifth Circuit’s Culver II decision that allowed consideration of wage increases as a result of factors other than inflation. As the calculations were “wrong as a matter of law,” Judge Ashe held that they must be excluded. However, in the interest of justice, he gave Lummis 14 days to amend his report using proper methodology, and he gave Weeks Marine 14 days to obtain an amended report as well as the opportunity to re-depose Lummis. As to the work-life expectancy, Judge Ashe held that Lummis could testify as to lost wages up to ages 62 and 70 if Sanders first presents evidence that he would work past his statistical work-life expectancy. See November 2024 Update.
Weeks Marine took Sanders’ deposition and asked him questions about his participation in recreational activities after his accident and he denied going fishing, driving a four-wheeler, and shooting. In his errata sheet, however, he changed the answer, “No,” to “I’ve tried; its just not the same due to the pain.” Weeks Marine moved to strike the changes on the errata sheet as an impermissible “attempt to substantively change his testimony from stating under oath that he has not participated in a certain activity since his accident to that he has ‘tried’ but cannot due to his injuries.” Judge Ashe noted that the courts have taken two approaches to substantive changes in deposition answers. The majority rule permits changes even if they contradict the original answer or lack a convincing explanation, allowing cross-examination to address the change. The minority view is to limit corrections to substantive errors in transcription with the reasoning that Rule 30(e) “cannot be interpreted to allow one to alter what was said under oath. If that were the case, one could merely answer the questions with no thought at all then return home and plan artful responses. Depositions differ from interrogatories in that regard. A deposition is not a take home examination.” Judge Ashe applied the majority rule and declined to strike the changes on the errata sheet. He did add that Weeks Marine was not without recourse. He held that the remedy was to keep the original answers and the changes and to allow Weeks to impeach Sanders with the two sets of answers.
Aries Marine owned the liftboat RAM XVIII, which was sent to house workers who were working on a platform in the West Delta region of the outer Continental Shelf off the coast of Louisiana (the workers were employed by Fluid Crane and United Fire). The vessel jacked up, and a construction crew worked until the next day when the vessel began to list and sank. Aries filed a limitation action in federal court in Louisiana, and seven workers on the rig filed claims against Aries under Section 5(b) of the LHWCA. Aries moved for summary judgment that it was entitled to exoneration of liability or, alternatively, limitation of liability. Judge Africk found a fact dispute whether the captain of the liftboat performed a preload before jacking up to ensure that the leg pads for the vessel were on stable ground and would not punch through the seabed. If the preload was not performed, Judge Africk concluded that the failure would constitute negligence under the vessel’s active control, in violation of the duty enunciated by the Supreme Court in the Scindia case. Turning to the limitation issue, Judge Africk noted that with respect to seagoing vessels, the privity or knowledge of the master at or before the beginning of the voyage is imputed to the owner. Aries did not dispute that the liftboat was a seagoing vessel (the accident did occur on the outer Continental Shelf more than 12 nautical miles from the coast). Thus, to the extent there was negligence of the captain before the voyage, it would be imputed to the owner. Judge Africk also cited evidence that the owner allegedly provided an unqualified captain whom it had failed to adequately train, and he declined to grant summary judgment as to limitation of liability. The vessel owner also moved to dismiss the punitive damage claims brought against it under Section 5(b) of the LHWCA on the ground that punitive damages are only recoverable against a third-party tortfeasor by a longshore worker who is injured in state territorial waters (and for lack of evidence of willful and wanton conduct). Judge Africk noted that the Fifth Circuit has not decided the question of whether punitive damages may be recoverable under Section 5(b), and he declined to grant summary judgment on the punitive damage claim. See February 2023 Update.
Fugro USA was hired to assist in positioning the liftboat by providing GPS positioning and performing a sonar scan for debris or obstructions on the sea floor. It provided plats that showed where prior vessels had been placed in the area, but the images Fugro provided only showed the impressions left by vessels that Fugro had helped to position. Therefore, it was possible that there were holes and impressions in the area that were not reflected in the data provided by Fugro to Aries. Fugro moved for summary judgment on the negligence claims asserted against it, noting that the claimants had placed the blame for the listing of the liftboat on Aries’ captain’s failure to conduct a preload (or on the conducting of an improper preload). In response to Fugro’s motion for summary judgment, the claimants argued that Fugro owed them a duty to advise the captain that there could be additional can holes in the area, that there were dark spots on the sonar images that might be additional can holes, and to exercise stop work authority when one leg of the liftboat penetrated deeper than had been expected. Judge Africk assumed for the motion that Fugro had a duty, but he could not find causation for any of the alleged failures, reasoning that, ultimately, the accident occurred because, as the claimants alleged, the captain failed to properly preload the vessel. The claimants’ expert confirmed that when the failure of the vessel occurs after the preloading, the preload was not adequate. As the preloading was not the responsibility of Fugro, Judge Africk dismissed the claims against Fugro.
Fieldwood, the owner of the platform, chartered the liftboat to provide worker housing in support of operations taking place on its platform. Fieldwood moved for summary judgment on the ground that, as the time charterer, it had no control over the vessel and assumed no liability for the negligence of the crew. Judge Africk noted that time charterers owe a “hybrid duty” arising from contract and tort to avoid negligent actions within the sphere of activity over which they exercise at least partial control. He added that a time charterer may be liable for directing the vessel to encounter natural hazards, such as dangerous weather or sea conditions. The claimants argued that Fieldwood was negligent by directing the liftboat to be positioned on the east side of the platform when it knew the conditions were hazardous and by limiting the scope of the marine surveyor (Fugro) to not include geo-technical data. As the claimants’ expert opined that it was likely that either soil samples existed for the location or that penetrations were known by Fieldwood, which, if credited, would permit a finding that Fieldwood had notice of the hazardous conditions and contributed to the failure, Judge Africk denied summary judgment to Fieldwood.
Judge Africk then considered the contracts between the parties for their indemnity obligations. Fieldwood entered into Master Service Contracts with both Fluid Crane and United Fire (employers of the claimants) by which Fluid Crane and United Fire agreed to indemnify Fieldwood for injuries to employees of Fluid Crane and United Fire. The indemnity extended to Fieldwood’s contractors (such as Fugro and Aries) if they entered into contracts with Fieldwood to extend indemnity (for injuries to their employees) to subcontractors of Fieldwood (such as Fluid Crane and United Fire). Fieldwood and Fugro entered into a Master Service Contract by which Fugro agreed to provide similar indemnity to Fieldwood and its contractors. Likewise, Fieldwood and Aries entered into a Master Service Contract by which Aries agreed to provide similar indemnity to Fieldwood and its contractors. Therefore, the contracts between Fieldwood, on the one hand, and Aries, Fugro, Fluid Crane, and United Fire, on the other hand, contained provisions by which each party agreed to indemnify the others for injuries to its own employees. Consequently, Fluid Crane and United Fire were obligated to indemnify Fieldwood, Aries, and Fugro for the claims brought by the employees of Fluid Crane and United Fire if the indemnity provisions were valid under applicable law. The validity required a determination of whether Louisiana law or maritime law applied. If maritime law applied, the agreements were valid. If Louisiana law applied, the indemnity was invalidated by the Louisiana Oilfield Indemnity Act. Judge Africk applied the requirement from the Fifth Circuit’s Doiron case (whether the contract provided or the parties expected that a vessel would play a substantial role in the performance of the contract) to determine whether the contracts were maritime or not. The contracts at issue were the contracts between Fieldwood and Fluid Crane and United Fire to perform work on Fieldwood’s platform. Although Aries and Fugro were involved with the role of the liftboat, that expectation was not relevant to the contracts between Fieldwood and Fluid Crane and United Fire. Judge Africk distinguished cases in which the contract documents provided for the use of a vessel. In this case, “Aries and Fugro may have expected the vessel to play a substantial role in the completion of the work, but the same cannot be said of Fluid Crane and United Fire.” Therefore, Judge Africk concluded that Louisiana law applied, and he denied indemnity from Fluid Crane and United Fire to Aries and Fugro. He did not, however, hold that the LOIA invalidated the requirement for payment of defense costs when the indemnitee was found to be free from fault. Thus, if Aries were ultimately found free from fault, it would be entitled to reimbursement of its defense costs. Judge Africk had granted summary judgment on liability in favor of Fugro, so Fugro was entitled to recover its defense costs. Fluid Crane requested that Judge Africk order the defense costs be split evenly between Fluid Crane and United Fire, despite the fact that only one of the seven claimants was an employee of United Fire. Judge Africk agreed that, under Louisiana law, the defense obligation was incapable of division. Therefore, he ordered that the defense obligation be divided in equal portions between Fluid Crane and United Fire. See March 2023 Update).
One of the workers employed by Fluid Crane, Gilberto Gomez Rozas, was an undocumented immigrant who was not authorized to work in the United States. During his deposition and in discovery, Rozas repeatedly invoked the protection against self-incrimination in the Fifth Amendment, refusing to answer questions related to his citizenship and personal history. Aries argued that his claim should be dismissed with prejudice because Rozas had perpetrated a fraud on the court (and to deter future parties from similar conduct). In the alternative, Aries sought a sanction that Rozas be precluded from recovering past and future lost earnings at United States’ wage rates. Judge Africk noted that the party invoking the Fifth Amendment cannot hope to gain an unequal advantage against the party he has chosen to sue and that the defendant should not be required to defend against a party who refuses to reveal the very information that might absolve the defendant of liability. Thus, the Fifth Circuit has enunciated a balancing test that dismissal is appropriate only when less burdensome remedies would be an ineffective means of preventing unfairness to the defendant. In this case, Rozas did not commit perjury or provide false documents, but his invocation of the Fifth Amendment during depositions and discovery impeded Aries’ ability to investigate the claim for damages. Consequently, Judge Africk decided that the lesser sanction of precluding Rozas from seeking future wage loss awards at United States’ rates was the appropriate sanction. With respect to past wage loss, Rozas testified that he had not been working, and it had been four years since he prepared tax returns. The parties did not brief the issue of extending the sanction to past wage losses, so Judge Africk did not address the issue of past wage losses at this time. See April 2023 Update.
Aries moved for reconsideration of the decision on the contractual allocations involving Aries, Fugro Marine, United Fire, and Fluid Crane that was discussed in the March 2023 Update. Aries, Fugro, United Fire, and Fluid Crane were parties to contracts with Fieldwood that contained indemnity provisions that were enforceable under the general maritime law but that were unenforceable under Louisiana law. Applying the Fifth Circuit’s Doiron test, Judge Africk held that the contracts with United Fire and Fluid Crane were not maritime because there was no evidence that United Fire and Fluid Crane expected the vessel RAM XVIII would play a substantial role in the completion of the contract. Aries asked Judge Africk to reconsider that decision, arguing that Judge Africk erred by not considering Fieldwood’s expectations as to the use of the RAM XVIII. Judge Africk agreed that the expectations of Fieldwood were relevant (as it was a party to each of the contracts), but he answered that Aries did not cite any authority that the expectations of one party could establish that the parties expected that a vessel would play a substantial role. Thus, further discussion of Fieldwood’s expectations would not have changed the court’s analysis. Aries also argued that Judge Africk had added a third prong to the Doiron test—”did the vessel in fact play a substantial role in the completion of the contract?” Judge Africk disagreed, stating that the decision was based on the expectations of the parties and not on the use of the vessel (he noted that the actual use was only relevant, according to Doiron, when the parties’ expectations were unclear). Consequently, Judge Africk denied Aries’ motion for reconsideration. See June 2023 Update.
United Fire also sought reconsideration of Judge Africk’s decision to divide the defense costs equally between United Fire and Fluid Crane despite the fact that six of the seven claimants were employees of Fluid Crane and only one was an employee of United Fire. United Fire cited an opinion from Judge Vance of the United States District Court for the Eastern District of Louisiana that, absent a clear agreement to the contrary, insurers who owe a co-equal duty to defend must share the cost equally. However, United Fire did not identify any portion of the contracts that constituted a “clear agreement” to share defense costs in an unequal proportion, so Judge Africk held that relief was not available for arguments that had been previously considered and rejected (Judge Africk was not impressed with the analogy to seven individuals who had dinner together and split the bill for the appetizer so that each paid 6/7 of the cost, reasoning that defense costs “cannot be divided amount the claimants in the same manner that an appetizer would be shared among diners”).
As Fluid Crane and United Fire were the employers of the workers who were injured when the RAM XVIII capsized in the Gulf of Mexico, their LHWCA carriers (American Longshore Mutual Association and the Louisiana Workers’ Compensation Corp.) paid benefits under the LHWCA for their injuries. ALMA and LWCC then brought subrogation claims to recover the benefits paid from the defendants. Fieldwood, Aries, and the plaintiffs moved for summary judgment, arguing that ALMA and LWCC had agreed to waive their rights of subrogation pursuant to the terms of the Master Services Contracts between Fieldwood and Fluid Crane and United Fire. Judge Africk noted that the policies provided for waiver of subrogation when required by written contract, so he considered the requirements of the underlying contracts. The waiver in the MSCs extended to the “Company Group,” which was defined to include Fieldwood and its “invitees.” ALMA and LWCC argued, however, that Aries and the plaintiffs also fell under the definition of “third Party Contractor Group,” which would render the language of the indemnity and insurance sections of the contracts superfluous because all parties and contractors/subcontractors would be members of the Company Group. Fieldwood answered that there was no prohibition against an invitee satisfying another definition in the contract and that this interpretation would not lead to circular indemnity or absurd results. Therefore, Judge Africk addressed whether Aries and the claimants were, in fact, invitees, citing Louisiana law that defines an invitee as a person who goes onto premises with the expressed or implied invitation of the occupant on business of the occupant or for their mutual advantage. Fieldwood argued that it was the occupant of the platform (one who has possessory rights in, or control over, certain property or premises) and the RAM XVII (a time charterer is an occupant of the vessel because the vessel is under the ultimate direction, control, and command of the time charterer). It also argued that Fluid Crane and United Fire were invited by Fieldwood to the platform to work by their contracts and that they, and their employees, who performed the work that benefited Fieldwood, were, therefore, invitees. Judge Africk agreed that the employees of Fluid Crane and United Fire were invitees of Fieldwood and that LWCC and ALMA were required to waive subrogation in favor of the claimants. With respect to Aries, Fieldwood argued that the RAM XVIII, owned by Aries, was invited to erect itself within the boundaries of Fieldwood’s mineral lease to assist in the platform work, so Aries qualified as an invitee. Although Aries argued that no employee of Aries ever stepped foot on the platform, it did not dispute that the vessel was attached to the platform via a walkway and that its presence benefitted Fieldwood. Having concluded that Aries and the workers were invitees so that subrogation was waived, Judge Africk considered the validity of the waiver under Louisiana state law, which he had previously held was applicable to the contracts so as to invalidate the indemnity provisions. Citing the Fontenot decision from the Louisiana Supreme Court, Judge Africk noted that a waiver of subrogation provision does not violate the Louisiana Oilfield Indemnity Act if the contract does not also require indemnity. As there was unenforceable indemnity in this case, Judge Africk held that the statute did not void the waiver of subrogation (there was no evidence of payment for a “Marcel” Endorsement that would create an exception to the LOIA). Consequently, the subrogation claims of ALMA and LWCC were dismissed. See July 2023 Update.
ALMA and LWCC filed motions for reconsideration of the granting of Fieldwood’s motion for summary judgment on their subrogation claims as LHWCA carriers. LWCC argued that, notwithstanding the waiver of subrogation, it had a claim for an offset, pursuant to Section 33(f) for the net tort recovery of plaintiff Glenn Gibson. Fieldwood did not disagree with the legal proposition asserted by LWCC, but it argued that LWCC had insufficiently raised the argument in a single paragraph in its opposition with no citation to facts or legal authority, resulting in waiver of the contention. Judge Africk agreed that “LWCC’s briefing on this issue was less than clear;” however, he acknowledged that dismissal of the claim for an offset would be “legal error.” Therefore, he amended the granting of summary judgment to reflect that the order did not affect LWCC’s claim for an offset pursuant to Section 33(f). ALMA moved for reconsideration that it was not conclusively established that the vessel was attached to the platform via a walkway and that Aries did not meet the definition of an “invitee” under applicable precedent. Judge Africk, however, did not believe that the arguments were sufficient to grant reconsideration, and he denied them. Like LWCC, ALMA argued that it retained the right to claim an offset pursuant to Section 33(f). Fieldwood reiterated the argument that ALMA’s claim was waived, but, as Fieldwood did not contest the legal basis for the argument, Judge Africk granted the same relief to ALMA, that it retained the right to assert an offset against the LHWCA claim pursuant to section 33(f). See September 2023 Update.
ALMA appealed the dismissal of its intervention to the Fifth Circuit, presenting these issues:
- Whether Aries Marine is an “invitee” of Fieldwood within the definition
of the “Company Group” in the applicable Master Services Contract when
there is a genuine issue of material fact as to whether Aries Marine physically entered a premises controlled by Fieldwood?
- Whether the Fluid Crane Claimants qualify as “invitees” of Fieldwood within the definition of “Company Group” in the applicable Master Services Contract despite also qualifying as members of the “Contractor Group”?
- Whether the applicable Master Services Contract and ALMA insurance policy included an obligation on the part of Fluid Crane (Employer) and ALMA (Insurer) to waive subrogation in favor of Fieldwood, Aries Marine, and the Fluid Crane Claimants?
- Whether the Louisiana Oilfield Indemnity Act invalidates any purported waiver of subrogation in favor of the Fieldwood Group?
After hearing oral argument, the Fifth Circuit affirmed (without a written opinion) Judge Africk’s decision that the waiver of subrogation was not invalidated. See May 2024 Update.
Back in the district court, Aries filed a second motion for reconsideration of Judge Africk’s order granting in part and denying in part the motions for summary judgment filed by Aries, Fugro, United Fire, and Fluid Crane (holding that United Fire and Fluid Crane do not owe Aries contractual indemnity for the claims brought by Fluid Crand and United Fire employees because the indemnity provisions are unenforceable under Louisiana law). Aries asked the court to reconsider the conclusion on the ground that the decision of the Fifth Circuit in Earnest v. Palfinger was an intervening change in controlling law that confirmed that the contracts were maritime and that the indemnity provisions are valid under maritime law [an argument that was unsuccessfully made in the Offshore Oil Services case that is discussed in the November 2024 Update]. Aries argued that courts should employ a conceptual rather than a spatial analysis, (2) that courts should focus on what is considered “classically maritime” in evaluating the role of a vessel under a Doiron analysis, and (3) that the location of the work being performed under a contract is inconsequential under Doiron. Judge Long first noted that Judge Africk’s order was interlocutory and that, under Rule 54(b), Judge Long had the authority to revise the decision even in the absence of new evidence or an intervening change in or clarification of the substantive law. He did caution, however, that a successor judge should “carefully and respectfully consider the conclusions of prior judges before deciding to overturn them.” Nonetheless, Judge Long was not persuaded that he should alter Judge Africk’s ruling. He did not believe that the panel’s ruling in Earnest had changed the en banc ruling in Doiron that was applied by Judge Africk, and he added that any clarification of Doiron would not compel a conclusion that the contracts in this case are maritime. Judge Long explained that Judge Africk’s ruling correctly concentrated “on the contracting parties’ expectations.” The rulings did not rest on where the work was conducted, and there was no indication that Judge Africk would have reached a different result if he had considered what was “classically maritime” in evaluating the role of the vessel. As Judge Long was not convinced that the analysis in Earnest would have caused Judge Africk to conclude that the contracts were maritime, Judge Long declined to reconsider the ruling that the indemnity was invalid under Louisiana law.
Glenn E. Daulton, Inc., entered into a bareboat charter party to charter its barges to Pontchartrain Partners. Pontchartrain paid charter hire for three years but then stopped paying, and Glenn E. Daulton brought this suit in federal court in Kentucky to recover charter hire and the cost of repair for damage to the barges. Pontchartrain did not present evidence that the amounts sought for hire were incorrect, and Magistrate Judge King awarded $215,460.09 to Glenn E. Daulton for the unpaid hire. Glenn E. Daulton also sought $73,304.50 for repair costs to restore the barges to their pre-charter condition, and Pontchartrain contested the amount of the costs. Magistrate Judge King noted that the charter party established a procedure for the charterer to dispute the cost of repairs, securing an additional surveyor to independently evaluate the repairs and their cost. The charter party also provided that the charterer was responsible to expeditiously arrange and pay for the repairs and that time was of the essence. Instead of following the procedure, Pontchartrain forced Glenn E. Daulton to bring this suit, and Magistrate Judge King held that Pontchartrain had waived any argument as to the reasonableness of the repair claim “by breaching the Charter dispute procedure and covenant to expeditiously arrange for repairs.” As the charter party provided for recovery of attorney fees by the prevailing party, Magistrate Judge King ordered Glenn E. Daulton to submit a separate motion for the fees and costs incurred in this matter.
Tyrone Green, a passenger on the CARNIVAL VALOR, was pushing his walker ahead of him as he entered the Grand Buffet on the vessel when one of the walker’s wheels caught on a raised edge, causing him to lose his balance and fall. Green brought this suit against the cruise line in federal court in Florida, and the cruise line moved to dismiss the complaint for failing to sufficiently allege notice and failing to properly plead the cruise line’s duty. The complaint alleged that the section of flooring was badly worn and one of its edges was turned up as though from warping, causing the otherwise level floor to have a raised edge that was a tripping hazard. The cruise line argued that the allegations did not establish how long the condition had existed so that the cruise line would have notice of the dangerous condition. Magistrate Judge Goodman disagreed, citing the allegations that the condition appeared to have been caused by wear and tear over time. Given the time it takes for flooring to become worn and warped, the complaint asserted that the cruise line had sufficient time to have repaired it. Therefore, Magistrate Judge Goodman concluded that the allegations were sufficient to plead constructive notice of the cruise line, and he recommended denial of the motion on this ground. The cruise line also argued that Green misstated the duty owed by the cruise line as one of “reasonable care;” however, the duty has been described by the Eleventh Circuit as “ordinary reasonable care under the circumstances.” Green argued that there was no legal difference between reasonable care and reasonable care under the circumstances, but Magistrate Judge Goodman recommended that the complaint be dismissed with leave to amend to properly plead the duty as set forth by the Eleventh Circuit.
From the state courts
Thomas Peak was employed by the Washington State Department of Transportation as an oiler on the Washington State ferry M/V TILLIKUM. Peak and the relief chief, Michael Fleetwood, were involved in fueling the ferry when Fleetwood slipped on a mat and injured his knee. Later that evening, Peak was descending stairs when he slipped at the top of the stairs and slid down the stairs on his back (reporting in his accident report that he slipped on the mat at the top of the stairs). Peak brought this suit against the Department of Transportation under the Jones Act and general maritime law, and the Department of Transportation moved for summary judgment on causation. The Department of Transportation argued that Peak testified that he did not know what caused him to slip and fall down the stairway and that he did not remember the mat slipping out from under him. In response to the motion for summary judgment, however, Peak submitted his declaration that his report after the accident was an accurate description of how he was injured. He also submitted a declaration from Fleetwood that the mat was inadequately secured, giving it a propensity to slide, and that when he viewed the mat after Peak’s accident it had moved from the position it was in when Fleetwood fell. The district court granted the Department of Transportation’s motion, but the court of appeals disagreed, believing that Peak had presented a fact question whether an unsecured mat contributed to Peak’s fall. Therefore, Peak’s negligence and unseaworthiness claims would have to be resolved by the jury. With respect to maintenance and cure, Peak admitted that his doctors determined that he reached maximum cure, that his last visit to the doctor for his back was in 2021, and that the Department of Transportation had paid his medical bills and maintenance to the point at which he reached maximum cure. However, he argued that summary judgment was inappropriate because his vocational counselor stated that Peak would require future treatment for his injury (40 to 60 visits “involving chiropractic, massage and/or acupuncture” although the physician who had recommended the treatment did not believe that the treatment would improve Peak’s chronic injuries but would help with flareups). As there was no evidence that Peak had not reached maximum cure, the appellate court held that the district court did not err in dismissing the claim for maintenance and cure. See September 2024 Update.
The Department of Transportation moved for reconsideration, and the panel denied the motion but withdrew its prior opinion and filed a substituted opinion. The appellate court reached the same result as in the first opinion, reversing the dismissal of the Jones Act and unseaworthiness claims, but affirming the dismissal of the claim for maintenance and cure.
Shelly Moench-Kelly was injured when she stepped off the Circle Line Pier 83, located at West 42nd Street and 12th Avenue (by the Hudson River) and onto a gangway leading to Circle Line’s sightseeing cruise ship that was docked at the Pier. The gangway had rollers under the ramp’s shore side, allowing it to roll and bob along with the movement of the water. As Moench-Kelly stepped off the gangway onto the ship, the gangway bobbed upward and she lost her footing, causing her to fall to the deck of the vessel. Moench-Kelly brought this action against Circle Line in state court in New York, asserting that Circle Line was negligent because she was not given any warning about the moving condition of the gangway and no crew member assisted her in the boarding. Circle Line moved for summary judgment, contending that it fulfilled its duty of reasonable care and that any dangerous conditions were open and obvious. Moench-Kelly submitted the affidavit of her expert, Robert E. Moro, that Circle Line departed from the applicable standard of care, and Circle Line responded with the opinion of its expert (Rik F. Van Monmouth) that the gangway cannot be secured in an excessively rigid manner as that would induce unexpected and sudden movement from the motion of the vessel and that the gangway functioned as any similar gangway would be expected to function. Describing the opinions of Moro as legal conclusions that did not raise an issue of fact, Judge Goetz turned to the argument that Circle Line should have warned of the dangerous condition, Moench-Kelly testified that she was aware of any guidance that the crew member could have given her when she stepped onto the gangway. Accordingly, Judge Goetz granted summary judgment and dismissed the suit.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
1990 Post Oak Blvd
Suite 1800
Houston, TX 77056
O 713.629.1580
New Orleans
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Suite 2900
New Orleans, LA 70130
O 504.569.1007
Gulfport
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Suite B #214
Gulfport, MS 39507
O 228.867.8711
Miami
2801 SW 149th Ave
Suite 120
Miramar, FL 33027
O 305.274.5507
Quote:
Nor can we construe the [LHWCA] to embrace supposedly better policy than its text reflects. In effect, Tower and the Director are asking us to expand § 908(c)(13)(B) to include persons with monaural hearing loss and another impairment, in this case tinnitus, on the theory that tinnitus interferes with the activities of daily life. But such an expansion is a task for Congress, not the courts. We sympathize with claimants who experience tinnitus, which can be a nuisance, a major aggravation, or much worse. But we are powerless to disrupt Congress’ decision to set Longshore Act compensation for hearing loss based on whether one or both of a claimant’s ears experience a “loss of hearing,” as opposed to any other number of alternative schemes it might have chosen.
Total Terminals International, LLC v. Director, OWCP, No. 23-179, 2024 U.S. App. LEXIS 25655, at *23 (9th Cir. Oct. 11, 2024) (Bress).
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© Kenneth G. Engerrand, November 26, 2024; redistribution permitted with proper attribution.
