February 2022 Longshore/Maritime Update (No. 273)
Notes from your Updater:
A panel of the Ninth Circuit held that a terminal’s RICO suit against the International Longshore & Warehouse Union and individual union workers for alleged overbilling on fraudulent timesheets required interpretation of the collective bargaining agreement under which the workers were employed. Therefore, the arbitration provision in the collective bargaining agreement applied to the RICO claims and the RICO suit was dismissed as the arbitration process was not exhausted under the Labor Management Relations Act. The Ninth Circuit declined to grant en banc consideration. See Columbia Export Terminal, LLC v. International Longshore and Warehouse Union, No. 20-35037, 2022 U.S. App. LEXIS 252 (9th Cir. Jan. 5, 2022) (Clifton). Judge Ikuta dissented from the panel opinion, and Judge Bennett authored a dissent from the denial of rehearing en banc that was joined by four judges).
Judge Stark remanded to state court the suit brought by the state of Delaware against a number of energy companies in the fossil fuel industry related to climate change. Judge Stark rejected the Outer Continental Shelf Lands Act as a basis for the removal, holding that the energy companies did not establish the damages would not have occurred “but for” the OCS operations. See Delaware ex rel. Jennings v. BP America Inc., No. 20-1429, 2022 U.S. Dist. LEXIS 2378 (D. Del. Jan. 5, 2022).
The Virginia Supreme Court affirmed the 4-year suspension of an associate member of the Virginia bar for bad faith and acting to commit a fraud on the court in litigation involving the treasure recovered from the S.S. CENTRAL AMERICA, which sank off the coast of South Carolina in 1857. See Robol v. Virginia State Bar, No. 210054, 2022 Va. LEXIS 2 (Va. Jan. 6, 2022).
Judge Feldman, who died after this decision, again remanded to state court a suit seeking to determine the oil and gas industry’s responsibility for damage to Louisiana’s coastal wetlands in Parish of Plaquemines v. Riverwood Production Co., No. 18-5217, 2022 U.S. Dist. LEXIS 4974 (E.D. La. Jan. 11, 2022). The issue in this opinion was whether federal jurisdiction existed under the Federal Officer Removal Statute based on the Latiolais decision of the Fifth Circuit. Although Judge Feldman acknowledged that the oil industry was intensely regulated during WWII and the defendants demonstrated compliance with federal regulation, he did not find that the defendants were acting under the direction of a federal officer.
In our May 2020 and October 2020 Updates, we discussed the decision of Judge Bloom to grant leave to Havana Docks to file amended complaints in its suits alleging that cruise lines trafficked in its property (confiscated by the Cuban Government in 1960), in violation of the Libertad Act/Helms-Burton Act. After the filing of the amended complaints, Judge Bloom rejected the motions to dismiss of MSC Cruises and Carnival Corp. in Havana Docks Corp. v. MSC Cruises SA Co., No. 19-cv-23588, 2020 U.S. Dist. LEXIS 163206 (S.D. Fla. Sept. 8, 2020) and Havana Docks Corp. v. Carnival Corp., No. 19-cv-21724, 2020 U.S. Dist. LEXIS 167216 (S.D. Fla. Sept. 14, 2020). On January 11, 2022, Magistrate Judge Louis addressed the motion of the cruise lines to strike Havana Docks’ jury demand and recommended that Havana Docks was entitled to a jury trial under the Seventh Amendment. See Havana Docks Corp. v. Norwegian Cruise Line Holdings, Ltd., No. 1:19-cv-23591, 2022 U.S. Dist. LEXIS 6077 (S.D. Fla. Jan. 11, 2022).
On January 13, 2022, the Eleventh Circuit vacated the OSHA citation issued to a facilities services company working for the City of Tampa on the boat dock of its Convention Center for failing to provide and require the use of personal flotation devices to an employee pressure washing the boat dock, concluding that substantial evidence did not support a finding that the employer had actual knowledge of the requirement that personal flotation devices were necessary. See C&W Facility Services, Inc. v. Secretary of Labor, OSHRC, No. 20-11789, 2022 U.S. App. LEXIS 1121 (11th Cir. Jan. 13, 2022) (William Pryor).
On January 19, 2022, Chief Judge Beaverstock held that a longshore worker in the Port of Mobile with a long history of disciplinary complaints could not establish gender discrimination with respect to her firing (she was reinstated during the grievance process after an unpaid suspension). See Watkins v. CSA Equipment Co., No. 1:20-cv-244, 2022 U.S. Dist. LEXIS 9226 (S.D. Ala. Jan. 19, 2022).
In our December 2019 Update, we discussed the “high profile labor dispute that led to the closing of Terminal 6 of the Port of Portland to ocean-going cargo for more than a year.” We advised that a jury in federal court in Oregon found in favor of ICTSI Oregon, Inc., that the International Longshore and Warehouse Union and Local 8 engaged in unlawful labor practices causing damages in the amount of $93,635,000, with 55% attributable to ILWU and 45% attributable to Local 8. In our April 2020 Update we advised that Judge Simon ordered a remittitur to $19,061,248. See ICTSI Oregon, Inc. v. International Longshore and Warehouse Union, No. 3:12-cv-1058 (D. Ore. Mar. 5, 2020). ICTSI rejected the remittitur, and Judge Simon denied the Union’s motion for judgment as a matter of law. Both parties appealed, with the Union challenging the denial of its motion for judgment as a matter of law, and ICTSI challenging the grant of a new trial conditioned on the acceptance of the remittitur. Concluding that it lacked jurisdiction over the appeal, the Ninth Circuit held that “the parties will have to continue their litigation in the district court, at least for now.” See ICTSI Oregon, Inc. v. International Longshore and Warehouse Union, Nos. 20-35818, 20-25819, 2022 U.S. App. LEXIS 1279 (9th Cir. Jan. 18, 2022) (O’Scannlain).
On January 20, 2022, a majority of a panel of the First Circuit struck down a section of the Maritime Drug Law Enforcement Act because it allowed the arrest and prosecution of foreigners on foreign vessels based on a concept of statelessness that conflicts with international law (vacating convictions for possession of cocaine with intent to distribute). See United States v. Dávila-Reyes, No. 16-2089, 2022 U.S. App. LEXIS 1638 (1st Cir. Jan. 20, 2022) (Lipez).
The litigation over the Biden Administration’s executive order pausing new oil and gas leases on public lands or in offshore waters continues. Louisiana and other states challenged the executive order in the Western District of Louisiana, and Judge Doughty temporarily enjoined officials in the Department of Interior from implementing the pause. See Louisiana v. Biden, No. 2:21-cv-778, 2021 U.S. Dist. LEXIS 112316 (W.D. La. June 15, 2021). After a new Record of Decision for Lease Sale 257 was issued on August 31, 2021 for the outer Continental Shelf of the Gulf of Mexico, environmental groups brought suit in the District of Columbia with respect to Lease Sale 257 based on lack of compliance with the National Environmental Policy Act and the Administrative Procedure Act. The State of Louisiana intervened in that suit and moved to transfer the case to the Western District of Louisiana, where the litigation over the executive order is pending. After denying Chevron’s motion to intervene, Judge Contreras declined to transfer the case as the blocks in Lease Sale 257 are on the outer Continental Shelf and are not within the Western District of Louisiana. See Friends of the Earth v. Haaland, No. 21-2317, 2022 U.S. Dist. LEXIS 10795 (D.D.C Jan. 20, 2022). On January 27, 2022, Judge Contreras vacated the Record of Decision for Lease Sale 257 and remanded it to the Department of the Interior.
In our August 2021 Update we advised that the Ninth Circuit held that Congress did not intend to create a private cause of action in the Rivers and Harbors Act that would permit a commercial charter business to contest landing fees charged by the City and County of San Francisco for South Beach Harbor. See Lil’ Man in the Boat, Inc. v. City and County of San Francisco, No. 19-17596, 2021 U.S. App. LEXIS 20953 (9th Cir. July 15, 2021) (Christen). The Ninth Circuit declined to grant rehearing en banc, and the charter business filed a petition for a writ of certiorari. On January 24, 2022, the Supreme Court denied the request for a writ of certiorari. See Lil Man in the Boat, Inc. v. City and County of San Francisco, No. 21-768.
At the same time as the Supreme Court declined to hear Lil Man in the Boat, the Court granted the petition for certiorari in Sackett v. Environmental Protection Agency, No. 21-454, limited to this question: Whether the Ninth Circuit set forth the proper test for determining whether wetlands are “waters of the United States” under the Clean Water Act, 33 U. S. C. §1362(7).
On January 27, 2022, the Texas Court of Appeals for the First District (Houston) rejected the appeal of five federally licensed ship pilots who unsuccessfully applied for state licenses to pilot ships to and from Galveston County ports and argued that certain provisions of the state statute regulating pilotage created an unconstitutional monopoly to the Galveston-Texas City Pilots Association (arguing that they were not considered for licensure because they did not join the Pilots Association). See Gant v. Board of Commissioners for Galveston County Ports, No. 01-20-00407-CV, 2022 Tex. App. LEXIS 603 (Tex. App.—Houston [1st Dist.] Jan. 27, 2022).
On the LHWCA Front . . .
From the federal district courts:
Marsha T. Roussell was diagnosed with mesothelioma that she attributed to exposure to asbestos from her father, who worked at Avondale Shipyard in 1957 and 1958. She brought suit against Avondale and other defendants, but later amended her complaint to add Hopeman Brothers as a defendant. Hopeman Brothers was a subcontractor for Avondale that sold and installed asbestos-containing wallboard in vessels under construction and repair at Avondale’s shipyard. Hopeman Brothers employed Roussell’s uncle, and Roussell expanded her claim to include asbestos exposure from her uncle’s work for Hopeman Brothers. Avondale removed the case based on the work done on federal ships by Hopeman Brothers for Avondale during the period Roussell’s uncle worked for Hopeman. After Roussell dismissed her claims against Hopeman Brothers, Roussell moved to dismiss Avondale’s federal contractor defense and to remand the case to state court. Judge Ashe did not have to decide if Avondale was able to assert a federal contractor defense on its own behalf because removal jurisdiction is determined at the time the petition for removal is filed. The fact that Roussell subsequently dismissed her claims against Hopeman Brothers did not cause the court to lose the jurisdiction it was granted at the time Hopeman Brothers was added and the case was removed. Accordingly, Judge Ashe denied the motion to dismiss the federal contractor defense and to remand the case.
Airlift USA, a non-vessel operating common carrier contracted with MSC Mediterranean, an ocean common carrier of cargo, for a shipment of granite slabs from India to New York. Airlift issued a bill of lading to the shipper, and MSC issued a bill of lading to Airlift. The shipper packed the slabs into wooden bundles that were placed in a container that was sub-leased to MSC. The container was delivered to the consignee’s facility in New Jersey where an employee of the consignee was injured while unpacking the slabs from the container. The worker brought suit in New Jersey state court against MSC, which settled with the worker for $730,000 and with the compensation carrier for $25,000. MSC then brought this action against Airlift, seeking indemnity based on the provisions in the bill of lading issued by MSC to Airlift. Clause 11.2 provided that MSC was not liable for loss or damage to the cargo caused by the manner in which the cargo was packed, stowed, stuffed, or secured in the container. Clause 11.4 provided that Airlift shall indemnify MSC against any loss, damage, liability, or expense whatsoever and howsoever arising caused by one or more of the matters referred to in Clause 11.2, including but not limited to damage to the container, other cargo, and the vessel. After rejecting the argument that the terms of the bill of lading did not extend past the ocean carriage, Judge Cronan addressed the issue whether the indemnity was limited to property damage or included the personal injury. Although Clause 11.2 instructed that MSC was not liable for damage to the cargo, the “matters” referred to in Clause 11.4’s reference to Clause 11.2 were broader than damage to the cargo. Judge Cronan reasoned that the only limitation was that the loss, damage, liability or expense must have been caused by a matter identified in clause 11.2. As poor packing of the container was a matter referenced in Clause 11.2, an injury resulting from the poor packing would fall within the indemnity in Clause 11.4. Airlift argued that the indemnity provision was not written sufficiently to cover the negligence of the indemnitee, MSC, as it did not refer to MSC’s own negligence. Judge Cronan disagreed and held that the language (any loss, damage, liability, or expense whatsoever and howsoever arising) was sufficient to indemnify MSC for its own negligence. Finding that the poor packing of the container was both a but-for and a proximate cause of the accident, Judge Cronan awarded MSC the amount paid in settlement plus $133,692.81 in attorney fees and costs to defend the personal injury suit and prejudgment interest (finding reasonable the hourly rate of between $315 and $330 for MSC’s attorney as well as rates of between $145 and $250 an hour for associates and $350 an hour for a colleague with 40 years of litigation experience).
Brizo, LLC, owner of a 164-foot yacht, contracted with Eastern Marine Services, a commercial diver company, to clean the hull of its yacht. Eastern sent an email to the crew of the yacht that the cleaning would occur around June 26, 2017, but no precise date or time was provided to the crew. On June 27, 2017, Eastern Marine sent Luis Gorgonio Ixba to clean the hull of the yacht. He was allowed entrance to the marina where the yacht was moored and entered the water without notifying anyone on the yacht of his presence. Ixba did not use a diver flag to mark his presence in the water. Shortly thereafter, a crew member of the yacht began the process of activating a thruster on the yacht. He looked into the water and saw no bubbles and then activated the thruster, killing Ixba. Ixba’s estate filed suit against the vessel owner in state court, and the owner filed this limitation action in federal court. Brizo then filed a third-party complaint in the limitation action against several defendants, including the marina owner/operator and marina’s owners’ association. The vessel owner, marina owner/operator, and marina’s owners’ association filed motions for summary judgment, and Judge Rosenberg began her analysis of the motions by determining whether Ixba was covered under the LHWCA–as it provides the exclusive remedy against the vessel in Section 905(b) for workers covered under the Act. Although Judge Rosenberg considered hull-scrubbing scuba divers to fall within the coverage of the Act, Ixba’s estate argued that there was an exemption in the Act for recreational vessels. However, that exemption only applies when the worker is covered by a state workers’ compensation statute. Brizo presented evidence that the Florida workers’ compensation act did not apply, and it argued that the state statute provided that benefits are not payable for workers covered under the LHWCA. As the estate did not rebut the evidence or argument, Judge Rosenberg held that the state act was not applicable and that the LHWCA was applicable. Applying maritime law to the accident, Judge Rosenberg cited the Pennsylvania Rule (a party who violates a safety regulation has the burden of proving that his fault in violating the regulation could not have been a cause of the accident). As Ixba failed to comply with regulations requiring that a diver flag his location, Judge Rosenberg concluded that the vessel owner was entitled to summary judgment. Applying the Scindia duties, Judge Rosenberg held that the vessel owner owed Ixba no duty. The turnover duty and the duty to intervene are only triggered when the vessel has been turned over to the workers, but there was no turnover of the vessel in this case. Second, the premise of all of the Scindia duties is that the vessel crew is aware of the workers on the vessel, but Ixba was “invisible to the crew.” Judge Rosenberg concluded that the vessel owner owed no duty to an unannounced, invisible worker. Finally, the owner/operator of the marina and the marina’s owners’ association were granted summary judgment. Although Ixba was allowed access to the vessel, the marina owner/operator and marina’s owners’ association had no duty to protect him from the vessel merely for granting access. See March 2020 Update. The estate appealed the summary judgment granted to the vessel owner. Writing for the Eleventh Circuit, Judge Julie Carnes addressed whether the exception to the LHWCA (individuals employed to repair any recreational vessel) was applicable such that the Scindia duties would not apply. Brizo argued that the exclusion only applies when the worker is not subject to coverage under a state workers’ compensation act, and that the estate failed to demonstrate that the claim was covered under the Florida statute. Eastern had provided a sworn interrogatory response that Ixba was a truly self-employed independent contractor with no controlling employer, and the Eleventh Circuit agreed that, without contrary evidence, Ixba was not covered under the state act. Consequently, Ixba’s claim was not excluded from the LHWCA. Judge Carnes then addressed the Scindia duties owed to a worker covered under the LHWCA. The estate argued that Brizo violated the second Scindia duty—to exercise reasonable care to prevent injuries to workers in areas that are under the vessel owner’s active control; however, Judge Carnes held that the duty is applicable once the contractor’s operations have begun, and that requires that the vessel owner know that operations have begun. It was not sufficient that Brizo had been notified that the diver would arrive at some time in the next few days, otherwise Brizo would “be deemed to have been on perpetual constructive notice of the diver’s arrival.” She reasoned that the owner had a “rightful expectation” that “Ixba would not surreptitiously begin work and knowingly confront an unreasonably dangerous situation that could easily have been avoided.” Therefore, the Eleventh Circuit affirmed the summary judgment for Brizo. Finally, Judge Carnes held that even if the LHWCA did not apply and the general maritime law duty of reasonable care applied, the summary judgment was still appropriate as the owner lacked actual or constructive notice of the risk-creating condition and there was no notice that the diver was about to place himself in harm’s way under the hull of the ship. See December 2021 Update. The defendants then sought to recover their court costs, and Magistrate Judge Reinhart awarded costs that included transcripts for 28 depositions (including expedited service for two transcripts based on the necessity for a summary judgment response and an expert report), videographer fees for a corporate representative deposition, fees for interpreters, costs for service of process, and printing fees.
Barge owner Crounse delivered a barge to Mulzer Crushed Stone to clean the coal remnants in the barge after the coal was delivered to a power plant. Steven R. Smith, an employee of Mulzer, was operating a Bobcat skid-steer loader in the barge hold when the loader struck a scab sticking up from the floor of the hold (the scab was a break in the floor where a weld had broken apart). The scab was located under leftover coal debris that was about a foot deep and was not visible when Smith’s loader struck it. Smith’s seatbelt malfunctioned, and he was thrown into the safety bar and suffered injuries. Smith brought this suit against Crounse under Section 905(b) of the LHWCA, and Crounse moved for summary judgment, asserting that there was no evidence that the scab existed before the operation began, that the hazard, if it existed, was obstructed from the view of its deckhands by the coal, that Mulzer and Smith were aware of this type of hazard, and that it was the failure of the seatbelt and not a breach of the Scindia turnover duty that caused the injury. Smith answered that the accident occurred the first time he was near the defect, so it must have pre-existed, that Crounse failed to require inspection of the area by its deckhands and failed to provide regular maintenance that would discover the condition, that the scab had markings indicating it had been previously hammered into place (indicating a temporary fix), that the contract between the parties did not place a duty on Mulzer to inspect the barge for hazards, and that any contribution with respect to the seatbelt was an issue of comparative fault of Mulzer, that would not reduce the fault of Crounse under the decision of the Supreme Court in Edmonds. Chief Judge Pratt sided with Crounse, holding that Smith had not created a triable issue that a defect should have been known to Crounse in the exercise of reasonable care. Consequently, she granted summary judgment to Crounse.
And on the maritime front . . .
From the federal appellate courts:
Hsin Chi Su constructed several vessels with money obtained from a group of banks. The M.V. FORTUNE ELEPHANT, owned by F Elephant Corp. of which Su was president, incorporated an under-deck piping structure that was created by Su and patented in Japan, Korea, and China. Su did not transfer his patent to the corporation, but he allowed the corporation to use the technology free of royalty or license fees. When the vessel failed to generate sufficient revenue, F Elephant Corp. filed for Chapter 11 bankruptcy, and the vessel was sold. Su then brought suit against the corporation on the basis of unjust enrichment, seeking to recover from the sale proceeds to the extent they pertained to his patent rights. Among other holdings, Judge Hughes held that Su’s patent rights were distinct from the technology embodied in the vessel, and that no patent rights were sold, only the vessel. Accordingly, he was not entitled to recover from the sale of the vessel. In essence, “F Elephant did not profit from the sale of Su’s patent rights because no sale has occurred.” Su appealed to the Fifth Circuit, which agreed with Judge Hughes’s analysis. As the sale of the ship did not encompass the sale of any patents, the decision against Su was affirmed.
The seaman’s suit by Allen Taylor returns to the Update. Taylor, who had twice injured his back (including a herniated L5-S1 disc) before his employment as a seaman for B&J Martin, claimed that he injured his back while descending a flight of stairs on the F/V DUSTY DAWN when he stepped on a cigarette lighter left on the deck by an employee of the company for which B&J Martin was working. The fall resulted in damage to the same disc and required three surgeries. When the third surgery failed to alleviate his symptoms, Taylor’s physician declared that he had no further treatment options to offer and placed Taylor at maximum cure on March 19, 2019. Taylor then sought a second opinion, but that doctor advised on May 20, 2019, that he had nothing to offer from a surgical point of view and Taylor would have to continue to pursue relief via pain management. B&J Martin then stopped paying maintenance and cure on May 23, 2019. Taylor brought this action seeking to recover under the Jones Act and under the general maritime law for unseaworthiness and maintenance and cure (including punitive damages for the failure to pay maintenance and cure). Concluding that the medical opinions were clear that nothing could be done to improve Taylor’s condition, Judge Zainey found that Taylor reached maximum cure on May 20, 2019. Consequently, no further maintenance and cure payments were required. Judge Zainey then addressed B&J Martin’s McCorpen (willful concealment) defense and found that Taylor’s failure to disclose that he had injured his back on two prior occasions was sufficient to satisfy the concealment element of the defense. As the concealment was for the same area of his spine as the injury involved in this suit, Judge Zainey also found that the causal link element of the defense was satisfied. However, Judge Zainey found that there was a fact question whether the materiality element of the defense was satisfied. Although Taylor checked “No” to the question whether he had ever sustained any type of disability or injury, he left blank the boxes related to whether he had ever had an injury or medical problem with his back and whether he had ever experienced back pain. Judge Zainey questioned why B&J Martin would allow Taylor to work before Taylor answered these important questions if the answer to these questions was material to B&J Martin’s hiring of Taylor. Finally, as B&J Martin had dutifully paid maintenance and cure until Taylor reached maximum cure, Judge Zainey dismissed Taylor’s claim for punitive damages (see July and November 2019 Updates). The remaining claims were tried to Judge Zainey, and he concluded that Taylor, the captain of the F/V DUSTY DAWN, violated company policy by wearing Crocs that did not have slip resistant soles, and that he would not have slipped on the lighter had he been wearing proper footwear (crediting the testimony of the defendant’s expert in marine safety, Bob Borison). Judge Zainey found that the deck of the vessel had no defects or safety hazards; that the vessel was seaworthy; and that his employer had satisfied its duty to provide Taylor with a safe place to work (and was not negligent). Judge Zainey found that Taylor was 100% negligent in failing to wear the proper footwear. Addressing the final issue with respect to the McCorpen willful concealment defense to maintenance and cure, Judge Zainey reiterated that B&J Martin had satisfied two of the elements of a McCorpen defense, but he held that B&J Martin could not establish the materiality element of the defense because, by allowing Taylor to leave blanks on the medical questionnaire, B&J Martin did not rely on the information in the questionnaire in its decision to hire Taylor. See July 2021 Update. Taylor appealed to the Fifth Circuit, and the court affirmed Judge Zainey’s findings on Jones Act negligence and unseaworthiness. With respect to the seaworthiness issue, noting that the evidence showed that the non-skid coating was “probably the best” that B&J Martin’s expert had ever seen. The Fifth Circuit finally addressed Taylor’s claim that B&J Martin had not paid a medical bill based on a health insurance claim form and billing summary. As there was conflicting evidence showing that the defendant paid all of the medical bills, the court affirmed the denial of maintenance and cure.
Sara Herrera was employed as Chief Stewardess by 7R Charter along with Captain Bernard Calot, with whom she was romantically involved at the time and to whom she is now married. They were both on call 24/7 except when they were on vacation. 7R had purchased a tender for diving and fishing trips and had paid to have repairs, maintenance, and upgrades performed on the vessel. Herrera’s daughter and two friends came to visit, and Calot, Herrera, her daughter, and the friends took the vessel out for a sea trial. The owner had not instructed Calot to conduct a sea trial, and Calot had not asked for permission to conduct the sea trial or to take guests on the vessel. During the trip, the wake of a passing vessel struck the vessel, and Herrera was injured. Herrera brought suit in federal court in Florida against 7R Charter under the Jones Act, and her complaint did not include a demand for a jury trial. 7R Charter answered without a jury demand and moved for summary judgment that Herrera did not present a fact question whether she was acting in the course and scope of employment at the time she was injured. Concluding that the purpose of the trip was pleasure, Judge Williams concluded that Herrera’s presence on the vessel did not further 7R’s interests and granted summary judgment to 7R on the ground that Herrera was not acting within the scope of her duties for 7R. Noting the testimony of both Calot and Herrera that they were conducting a sea trial on the day she was injured, the Eleventh Circuit held that their testimony had to be credited at the summary judgment stage even if their testimony was self-serving and subject to questions on its credibility. The evidence presented a fact question (whether Calot and Herrera were acting in the course of their employment) that had to be resolved by a fact finder. See November 2019 Update. Nearly two years after filing suit, 7 R Charter filed an amended answer, and Herrera filed a demand for a jury trial. On remand from the Eleventh Circuit, Judge Williams granted 7R Charter’s motion to strike the jury demand and then held a bench trial in which she found in favor of 7R Charter on the Jones Act claim. On appeal, Herrera argued that her demand for a jury was timely under Rule 38 because it was filed within 14 days of 7R Charter’s amended answer or, alternatively, it was timely under Rule 39. Rule 38 allows a party to demand a jury trial on any issue triable of right by a jury no later than 14 days after the last pleading directed to the issue is served. She contended that the amended answer added new issues of fact by contesting that the accident was within the course and scope of her employment. The Eleventh Circuit disagreed. 7R Charter’s original answer denied the allegation that Herrera was in the course of her employment. Although the amended answer alleged new facts, the facts clarified the denials in the original answer and did not create a new fact issue. As the amended answer did not raise a new fact issue, there was no new deadline to demand a jury under Rule 38. In exercising her discretion whether to allow a jury trial under Rule 39, Judge Williams found that all five of the factors to be considered weighed in favor of denial of the jury trial. The 11th Circuit agreed that Judge Williams had discretion to consider the impact of COVID-19 on the scheduling of a jury trial and that she had discretion to consider that 7R Charter would suffer prejudice because trial preparation is different for a jury trial than for a bench trial. The appellate court also agreed with Judge Williams’ analysis that the delay in requesting the jury trial must be judged from the original complaint and not from the amended complaint that added no new issues. Therefore, the Eleventh Circuit did not disturb the denial of Herrera’s “belated” request for a jury trial. Shortly before the decision of the Eleventh Circuit, Magistrate Judge Becerra awarded 7R Charter $21,459.56 in costs for service of process, deposition transcripts, witness fees, copy costs, interpreter fees, and interest; however, Magistrate Judge Becerra declined to award costs for surveillance footage that was used at trial. See Herrera v. 7R Charter Ltd., No. 1:16-cv-24031, 2021 U.S. Dist. LEXIS 248275 (S.D. Fla. Dec. 29, 2021).
Hundreds of Back-End Litigation Option cases from the DEEPWATER HORIZON/Macondo Blowout are pending in the Northern District of Florida before Judge Rodgers. Judge Rodgers selected a dozen BELO plaintiffs who were assigned to clean up the spill on the beaches of Northwest Florida for a bellwether process that began with resolution of the issue of general causation. The workers proffered an expert, Dr. Patricia Williams, to establish general causation. BP moved for summary judgment on the claims, asserting that Dr. Williams’ opinions did not satisfy Daubert requirements and that summary judgment should be granted in favor of BP, and Judge Rodgers agreed. See December 2020 Update. The workers appealed to the Eleventh Circuit and first argued that Judge Rodgers erred by failing to conduct an evidentiary hearing with live testimony from Dr. Williams. The Eleventh Circuit, however, held that Judge Rodgers did not abuse her discretion in deciding the case without the hearing because Dr. Williams had sufficient opportunity to present her methodology on four occasions, two depositions and two expert reports. The appellate court then addressed Judge Rodgers’ enumeration of multiple basis for concluding that Dr. Williams’ opinions fell “woefully short” of the methodology by which an expert reaches a conclusion that is sufficiently reliable under Daubert, and the court found Judge Rodgers’ analysis to be “well-reasoned.” Moreover, the Eleventh Circuit was able to affirm on the ground that the expert testimony was unhelpful. Accordingly, as there was no expert testimony to establish general causation, the appellate court affirmed the summary judgment in favor of BP.
In North v. BP Exploration & Production Inc., No. 1:19-cv-209, 2022 U.S. Dist. LEXIS 8365 (S.D. Miss. Jan. 18, 2022) (Ozerden), Lawrence Andrew North brought a BELO claim for atopic dermatitis allegedly contracted as a result of his work in the cleanup of the Macondo oil spill. His lawyers sought additional time to designate a new expert, and North continued pro se after his attorneys withdrew, designating Dr. Patricia Williams as an expert. After being notified that Dr. Williams was no longer retained by North, BP moved to exclude the opinions of Dr. Williams, and for summary judgment. As North could not establish causal connection without expert testimony, Judge Ozerden granted summary judgment to BP.
In Smith v. BP Exploration & Production, Inc., No. 19-12880, 2022 U.S. Dist. LEXIS 10316 (E.D. La. Jan. 20, 2022) (Ashe), Wallace Edward Smith’s proceeded pro se with his BELO suit. When he did not file an opposition to BP’s motion for summary judgment, Judge Ashe dismissed his claims with prejudice.
In Rubi v. BP Exploration & Production, Inc., No. 1:19-cv-481, 2022 U.S. Dist. LEXIS 15690 (S.D. Miss. Jan. 28, 2022) (Ozerden), Lourdes Rubi changed course and sought to base her BELO claim on newly developed scientific evidence from the study, Invisible Oil Beyond the Deepwater Horizon Satellite Footprint. She designated additional experts but had not presented expert opinions on the extent and duration of her alleged exposure. In the absence of expert evidence on causation, Judge Ozerden granted BP’s motion for summary judgment.
The extensive efforts to clean up the oil from the DEEPWATER HORIZON/Macondo blowout resulted in BP hiring hundreds of contractors, who hired thousands of workers. The exposure claims of those employees were brought against the response companies and against BP. In 2016, Judge Barbier ruled that the claims against the response companies were barred by derivative immunity from the Clean Water Act and discretionary function immunity from the Federal Tort Claims Act. The claims against BP were partly resolved in 2012 with the Medical Benefits Class Action Settlement Agreement. Conditions of clean-up workers that were diagnosed before April 16, 2012, were paid under a matrix set forth in the Agreement unless the worker opted out of the settlement. Workers who accepted the settlement and who had conditions diagnosed after April 16, 2012, were allowed to bring BELO lawsuits (Back-End Litigation Option). Having received thousands of claims and suits brought by clean-up workers, BP eventually sought contractual indemnity from the response companies. In our June 2020 Update, we discussed the opinion of Judge Barbier, who addressed two contracts, one with National Response Corp. and the other with O’Brien’s Response Management. The NRC contract only required NRC to indemnify BP to the extent that a claim was caused by NRC’s gross negligence or willful misconduct and gave NRC the protection of Responder Immunity law (BP was not entitled to indemnity for any amounts for which NRC would have no liability under the applicable Responder Immunity law). The O’Brien’s contract contained reciprocal indemnity provisions with respect to employees of the parties and required O’Brien’s to name BP as an additional insured on certain types of insurance policies to be maintained by O’Brien’s. Judge Barbier denied indemnity to BP with respect to the NRC contract, as NRC had been held to be immune to suits from the response workers; however, there were two different answers to the indemnity demands under the O’Brien’s contract. Judge Barbier began by denying indemnity for the BELO claims, which were brought pursuant to the terms of the 2012 Medical Settlement. As the O’Brien’s contract required that BP obtain the written consent of O’Brien’s before it settled any claims, BP’s agreement to the Medical Settlement violated the consent-to-settle provision of the agreement (BP also failed to give prompt notice of the claims, in violation of the contract with O’Brien’s). With respect to the opt-out claims that were not subject to the Medical Settlement, BP waited until March 2019 to tender the claims to O’Brien’s, almost five years after the opt-out deadline. As that violated the provision that BP provide prompt notice, Judge Barbier found that the delay violated the contract and amounted to prejudice as a matter of law (if prejudice was necessary). Finally, Judge Barbier held that BP was not an additional insured on O’Brien’s’ bumbershoot policies. The O’Brien’s contract required O’Brien’s to maintain four coverages, including workers’ compensation coverage, employer’s liability coverage, automobile liability coverage, and comprehensive general liability insurance with minimum limits of $2 million per occurrence and contractual liability coverage. The contract then provided that “all policies,” except the workers’ compensation policy, shall name BP as an additional insured. O’Brien’s did maintain the policies required under the contract, but it also maintained bumbershoot polices that afforded additional insured coverage when required by written contract. Judge Barbier noted that the contract did not provide that all insurance policies maintained by O’Brien’s, whether or not required in the contract, would name BP as an additional insured. Instead, the contract enumerated four coverages with specific limits and then stated that, with one exception, all policies would name BP. Judge Barbier considered this language to require only that the three types of insurance (in the amounts enumerated) would name BP as an additional insured. As there was no requirement that O’Brien’s maintain bumbershoot coverage, there was no requirement that BP be named as an additional insured on those policies. Therefore, there was no breach of contract for O’Brien’s’ failure to name BP on the bumbershoot policies.
The Fifth Circuit agreed with parts of Judge Barbier’s analysis and disagreed with other parts. Following the analysis of the Texas Supreme Court in its DEEPWATER HORIZON decision on the incorporation of underlying contractual requirements in insurance policies (between Transocean and BP), Judge Jones noted that the bumbershoot policies issued to O’Brien’s defined an assured to include anyone to whom the named assured was obligated by virtue of a written contract or agreement to provide insurance as is afforded by the bumbershoot policies. Accordingly, BP was an additional insured to the extent required by the BP-O’Brien’s contract. The bumbershoot insurers argued that the requirement for a minimum of $2 million in CGL insurance was not applicable to bumbershoot coverage and was satisfied by two underlying policies (CGL and contractor’s operations and professional services environmental insurance) that each had $1 million limits. Judge Jones disagreed and held that the court first had to consider what coverage was provided by the bumbershoot policies. As they provided CGL-type coverage, the court considered them to be CGL policies under the contract and BP was an additional insured. Judge Jones then reviewed the language of the contract to determine how much coverage was available to BP as an additional insured and concluded that the minimum amount required ($2 million) was the maximum amount to which BP was entitled. The next question was whether the two underlying policies with $1 million in coverage satisfied the requirement for $2 million in coverage. Judge Jones held that the policies were complementary with the contractor’s operations policy filling gaps in the CGL policy. Holding that the policies could not be combined to meet the minimum CGL requirement, Judge Jones ruled that they were only $1 million of the $2 million that was required, leaving BP covered for $1 million on the bumbershoot policies. Judge Jones then turned to the indemnity issues and agreed that BP’s entering of the Medical Settlement without the consent of O’Brien’s breached the control-of-defense and consent-to-settle provisions of the contract and that the breach was material. Therefore, O’Brien’s was not required to indemnify BP for the BELO claims. However, Judge Jones arrived at a different result for the claimants who opted out of the Medical Settlement and who could not bring BELO claims. A decision on whether BP breached the terms of the agreement required an inquiry as to what information BP possessed about each claim, what notice was reasonable under the circumstances, and whether BP could have provided notice to O’Brien’s for that claim. The indemnity claim was remanded to determine the factual record on the opt-out claims (over the dissent of Judge Graves, who would have denied indemnity to BP for materially breaching the indemnity agreement). Finally, Judge Jones addressed the decision on indemnity between BP and NRC. Judge Barbier denied indemnity because claims against NRC had been dismissed (the claimants had not established that NRC had disobeyed federal instructions). However, that did not mean that a claim might not arise where NRC did disobey federal instructions and a derivative immunity defense might not be applicable to NRC. Judge Jones noted that Judge Barbier had added in a footnote that NRC’s indemnity was voided by prejudice to NRC from the Medical Settlement. However, because NRC’s contract did not contain notice, control-of-defense, or consent-to-settle provisions, its obligations did not track those of O’Brien’s. Consequently, Judge Jones remanded BP’s indemnity claims against NRC for a claim-specific factual inquiry.
The bulk carrier M/V ARIS T struck three marine terminals and some vessels and barges during a passing and overtaking involving the LORETTA G and the ELIZABETH M. ROBINSON on the Mississippi River at the Hahnville Bar. An employee of one of the terminals, Antoine Morris, also brought an action for damages for injuries allegedly sustained as a result of the accident when he panicked, lost his footing, and fell on the dock. The vessel owners/operators all filed limitation actions. Judge Ashe tried the negligence and limitation-of-liability actions for ten days and the injury action for three days. In a lengthy, detailed opinion, he found the three vessels at fault, assessing 10% of the fault to the ARIS T and 45% each to the other vessels. He upheld limitation for the ARIS T (fund of $8,645,171.42), concluding that its fault was from its compulsory pilot, but denied limitation for Cenac, owner of the LORETTA G, and Genesis, owner of the ELIZABETH M. ROBINSON. Judge Ashe noted that the liability of the non-limiting vessels was joint and several. He then awarded property damages in accordance with the stipulations of the parties. Morris testified that he was standing on the dock when he received a radio communication that a ship had hit a different berth a mile away and warning him to be on the lookout. When he turned quickly he lost his footing and fell. He admitted that he panicked when he saw the distant vessel and tripped on his own feet. It was 3 ½ minutes from the time he tripped until the vessel reached a point abreast of the location where he fell, giving him plenty of time to evacuate. Morris did not report the incident, and a few days later went to see a family practitioner, but he did not report a fall consistent with his trial testimony. After engaging an attorney, Morris saw Dr. Liechty and reported that he was knocked down by the jarring force of the dock being struck by a vessel. He then saw Dr. David Axelrad, a psychiatrist and psychotherapist in Houston and gave an even more dramatic history. Dr. Axelrad diagnosed post-traumatic stress disorder and a traumatic brain injury that affected Morris’ ability to function, although he could not explain the mechanics of the injury. Judge Ashe denied any recovery for Morris, concluding that the negligence of the vessels was not a substantial factor in bringing about Morris’s alleged physical and mental injuries. Additionally, Judge Ashe held that Morris could not recover for his alleged emotional injury under the zone of danger theory as he was not in a zone of danger. See December 2019 Update. Writing for the Fifth Circuit, Judge Elrod addressed four appeals. After affirming the allocation of liability among the vessels, Judge Elrod considered the findings with respect to limitation of liability. She disagreed with Judge Ashe that the captain of the ELIZABETH M. ROBINSON was incompetent, but she agreed that its owner had privity or knowledge because it had not provided the captain with training on the Rose Point navigation system and the general manager approved the down-streaming maneuver without a tugboat assist. Judge Elrod also rejected the LORETTA’s arguments that there was no causal connection with respect to the faulty face-wire system of securing the tug because the line did not part until after the LORETTA was mostly past the ARIS T and that the captain of the tug was not actually talking to his girl friend on his cell phone at the time of the incident, finding evidence to the contrary in the record. Judge Elrod affirmed the finding that the ARIS T could limit liability because its fault was solely attributable to its compulsory pilot, concluding that the captain of the vessel was entitled to trust the pilot’s greater experience navigating at the Hahnville Bar. Finally, Judge Elrod considered the claim of land-based worker Morris that he was entitled to recover emotional damages because he was in the zone of danger, even though the berth on which he fell was not struck (he was 1000 feet from the ARIS T when he fell). Judge Elrod noted that the Fifth Circuit has repeatedly declined to adopt or preclude the zone of danger theory for general maritime law. However, in order to recover, the plaintiff would have to have been in immediate risk of physical harm. As the vessel was travelling less than 3 miles an hour and Morris would have had several minutes to leave the berth. Judge Elrod agreed with Judge Ashe that the accident was not a substantial factor in Morris’ fall, reasoning that his unreasonable and unforeseeable panicking was the cause of his accident.
Matthew J. Hersh and Joseph Carter claimed that they left New Port Richey, Florida on the evening of June 8, 2015, and drove across the state to night fish in Sebastian Inlet. They launched their small power boat, fished for a few hours, and then claimed that they struck Cavache’s dredge pipe on their return to the dock in the early morning hours of June 9, 2015. Although they claimed that the boat suffered a hole from the allision and that they were both injured, Hersh and Carter did not report the incident until after they returned to their hometown four days later. They brought this action against Cavache, alleging that the dredge pipe was not lit, that it was floating at the surface, and that they did not see the pipe before the allision. The plaintiffs sought to substantiate their claim with the testimony of a witness, discovered four years later, who was introduced to them as a “total coincidence” by the project manager of a construction company to whom the plaintiffs are in debt. Judge Martinez held a bench trial of the suit brought by Hersh and Carter against Cavache in the Southern District of Florida, and commented, “that’s a really stinky pie that is being cooked up.” He found the plaintiffs were not credible because the charges on their bank statement were inconsistent with their location, their GPS information contradicted their testimony, they did not report the accident that holed their boat nor seek treatment for their injuries for four days (after they returned home across the state), they had extensive charges at bars, restaurants, and a local tackle shop during the several days after the accident when they testified that that they were too injured to fish, even though the vessel was holed in the bottom and taking on water, they slept on the vessel after the collision and took the boat back out on the water to the area where they allegedly hit the pipe, and they refused to allow an inspection of the boat after reporting the accident. Judge Martinez concluded that the plaintiffs were presumably at fault under the Oregon Rule (allision between a moving vessel and stationary object) and that the plaintiffs were presumed to be entirely liable under the Pennsylvania Rule because they did not consult the Local Notices to Mariners nor did they operate their vessel with reasonable care. Judge Martinez rejected the argument of the plaintiffs’ counsel that “the totality of the coincidences at trial are so incredible as to render the tale credible.” However, the Eleventh Circuit noted that Judge Martinez stopped short of making an express finding that the accident did not occur as the plaintiffs described. As such, the appellate court reasoned that it could only affirm the finding that the plaintiffs were solely at fault if the district judge properly assessed the defendant’s alleged negligence. The plaintiffs argued that the Pennsylvania Rule should apply to Cavache because it violated rules and regulations governing the installation and marking of the dredge pipe that are designed to prevent allisions. Judge Martinez found that the plaintiffs failed to submit credible evidence to carry their burden, but he did not make specific rulings on whether the plaintiffs established violations. Accordingly, the Eleventh Circuit remanded the case to Judge Martinez for specific findings whether the plaintiffs established that an allision actually occurred and, if it did, whether Cavache violated rules subject to the Pennsylvania Rule, whether Cavache carried its burden to establish that a violation of the rules could not have contributed to the collision, and the allocation of fault if Cavache failed to carry its burden of proof.
Lori Lucas, who has skated her entire life, was injured while skating on the ice rink on the HARMONY OF THE SEAS when the skate of an adult male, who was skating backwards, came in contact with Lucas’s skate. Her suit against the cruise line in federal court in Florida was tried before Judge Scola, who found that the cruise line was not negligent. The cruise line did not prohibit backwards skating, and Judge Scola found that the policy of allowing backwards skating met industry standards. Judge Scola found that the other skater was traveling in the same direction as Lucas and contacted her when her skate extended out behind her and into his path. The touching was more from her turning and extending her skate into his path than it was from the backwards skating of the other skater. Her fall was within two seconds of the other skater’s turning around to skate backwards, so there would not have been time for the three crewmembers who were monitoring the ice to have stopped him even if they wanted to. See July 2020 Update. On appeal, Lucas argued that Judge Scola erred by placing the burden on Lucas to prove that the other skater would have followed a rule prohibiting backward skating if warned. She urged the court to apply a “heeding presumption” that the person receiving the warning would heed the warning. However, Lucas did not challenge the conclusion that the cruise line did not have a duty to prohibit or warn about backward skating and that, if there were such a duty, that the failure to prevent or warn about backward skating did not proximately cause the injury because Lucas turned into the path of the backward skater while she was trying to exit the rink and the cruise line did not have time to act after the skater turned around. Accordingly, there was no reason for the appellate court to address Lucas’ argument as there were independent grounds to affirm Judge Scola’s decision.
Serendipity at Sea’s 61-foot yacht M/Y SERENDIPITY was damaged by Hurricane Dorian while docked in the Bahamas. The vessel’s insurer, Underwriters at Lloyd’s, denied the claim, citing breach of the Captain Warranty, breach of a hurricane plan, and misrepresenting information in its insurance application. In our March 2021 Update, we discussed Magistrate Judge Strauss’s conclusion that Serendipity breached the captain warranty but that a trial was necessary to address the issue of increased risk. Lloyd’s engaged Thomas E. Danti as an expert for his experience as a seaman, officer in the merchant marine, commander in the Navy Reserve, yacht captain, professor of marine science, and instructor/dean at the Chapman School of Seamanship. He opined that the failure to employ a full-time licensed captain contributed to the loss of the vessel, there were favorable hurricane protection features in the agreed mooring location for the vessel in Part Canaveral, Florida, Automatic Identification System tracking showed numerous vessels departing the Bahamas before the Hurricane, and the SERENDIPITY was not prepared for hurricane season and that lack of preparation contributed to the loss. The owner moved to exclude Danti’s opinions for lack of qualification, reliability, and helpfulness. With respect to qualification, the owner argued that Danti is not an insurance expert; however, Magistrate Judge Strauss responded that Danti’s testimony is with respect to seamanship, for which is qualified. As to reliability, Magistrate Judge Strauss cited Danti’s extensive experience and knowledge on the subject matter that rendered his opinions reliable together with the significant information and explanation that supported his opinions with respect to the business of being a vessel captain and preparing vessels for hurricanes, not insurance coverage arguments. Finally, the matters on which he gave his opinions were beyond the purview of an average lay person and were therefore helpful. Consequently, Magistrate Judge Strauss denied the motion to strike. See April 2021 Update. The court ordered further briefing on the issue whether breach of Captain Warranty increased the hazard within the control of the insured, and Serendipity responded to the testimony of Captain Danti’s opinion about the increased hazard by rehashing issues that had already been decided, asserting that the warranty was ambiguous and had not been breached. As the hazard issue was not disputed, Judge Ruiz granted summary judgment in favor of the insurer. Serendipity appealed to the Eleventh Circuit, and neither the defendants, Underwriters at Lloyd’s of London and USI Insurance Services, LLC, nor the insured, Serendipity at Sea, LLC, objected to appellate jurisdiction (based on appeal from the judgment entered in a diversity case). The Eleventh Circuit noted that, with respect to syndicates of Lloyd’s underwriters, the plaintiff must plead the citizenship of each member. The pleading against Lloyd’s was sufficient in this case as it described each of the subscribers as a citizen of the United Kingdom. However, Serendipity and USI are limited liability companies, and the pleadings did not allege the citizenship of the members of both limited liability companies (laws under which it was created and its principal place of business). Accordingly, the Eleventh Circuit remanded the case to the district court to determine the citizenship of Serendipity and USI.
From the federal district courts:
Flyhopco, which provides dockage, repairs, and painting to marine vessels in Fort Lauderdale, Florida, contracted with the owner of the M/Y LADY LAURA to paint the hull of the vessel. The contract required the use of a special-order paint that Flyhopco purchased from the local distributor of International Paint. Flyhopco alleged that defects in the paint were discovered after the job was completed (insufficient solids in the composition of the paint). Flyhopco had to repaint the vessel at its own expense and brought this suit in federal court in Florida, originally against the vessel, then against the distributor, and finally, in its second amended complaint, against International Paint based on breach of a maritime contract. International Paint moved to dismiss the action because Flyhopco failed to allege the elements of a contract or a breach of contract. Judge Smith noted that Flyhopco failed to allege any of the terms of the alleged maritime contract or what term was breached. Consequently, Judge Smith dismissed the second amended complaint with leave to file a third amended complaint. However, Judge Smith warned that if the allegations were insufficient in that complaint the defendant could move for sanctions. The time to file the amended complaint passed without the filing, and Judge Smith dismissed the case on January 4, 2022.
Thirty-six passengers on the CARNIVAL GLORY brought this suit seeking to recover damages they claim to have sustained when the vessel allided with the docked CARNIVAL LEGEND in Mexico. The passengers filed a motion for partial summary judgment, seeking a finding that the cruise line was liable for negligence based on res ipsa loquitur. Aside from proving that the plaintiffs were passengers, however, they did nothing to establish the elements of res ipsa loquitur that the instrumentality was under the exclusive control of the defendant and that the mishap was of a type that ordinarily does not occur in the absence of negligence. Merely stating that the vessel was under the control of the defendant and that the allision would not occur in the absence of negligence fell “wide of the mark,” and Judge Scola denied the motion.
Sherri Britt brought this action against Carnival alleging that she was a passenger on the CARNIVAL GLORY and that she slipped and fell on an exterior staircase located between decks nine and ten. She asserted that the staircase was wet, unreasonably slippery, and had worn out and was missing non-skid tape. Britt said that there were no warning signs in the area, and that two crewmembers told her that other crewmembers had recently mopped the area. Britt elected to bring claims both for direct liability of the cruise line (for which she must prove notice to the cruise line) and for vicarious liability (notice on the part of the cruise line is not necessary for its vicarious liability for the negligent acts of its employees). The cruise line moved to dismiss the vicarious liability claim, and Judge Moore began by analyzing the action being alleged by Britt. Her claim was that individual crewmembers were negligent for failing to put caution signs in the area, failing to cordon off the wet area until it was dry, and failing to remain in the area to warn passengers, and the cruise line was vicariously liable for that negligence. Judge Moore disagreed that the passenger could bypass the notice requirement with this type of claim, holding that the passenger cannot maintain a vicarious liability claim arising from allegations that the cruise line’s employees negligently maintained the premises (negligent mopping) and failed to warn. He concluded that claims for negligent maintenance and failure to warn are limited to a theory of direct liability, which requires notice, and he dismissed the count of Britt’s complaint based on vicarious liability.
Skanska was engaged by the Florida Department of Transportation to rebuild the Pensacola Bay Bridge. During Hurricane Sally in September 2020, several barges used in the construction broke free and caused damage to the bridge and to other property. Numerous businesses and property owners brought suits in state courts and claims in the limitation proceedings brought by Skanska with respect to its barges. Several of the claimants moved to dismiss Skanska’s limitation action for lack of maritime jurisdiction and, alternatively, on the merits—asserting that Skanska could not establish that it was entitled to limitation of liability. Skanska moved to dismiss the claims of numerous businesses that sought to recover for economic loss resulting from the bridge being out of service (citing the Robins Dry Dock economic loss rule), as the businesses had not suffered any physical damage. The claimants conceded that the first prong of the admiralty jurisdiction test (locality) was met because the damage was caused by barges on navigable waters during the bridge construction. The claimants also did not take issue with the first part of the connection test that there was a potential to disrupt maritime commerce. The claimants argued that the general activity giving rise to the incident was not substantially related to traditional maritime activity, describing the activity as constructing a bridge. Judge Collier was persuaded by the Supreme Court’s characterization in Grubart (damage to buildings in downtown Chicago from work in the Chicago River driving pilings around a pier supporting a bridge). Judge Collier described the work performed by Skanska as “bridge construction and repair performed from vessels on a navigable waterway,” and he did not require that the work must result in an improvement to maritime activity. Finally, although the claimants asserted that the barges did not constitute vessels, they did so to argue that Skanska did not present a viable limitation action, not to argue that the court lacked admiralty jurisdiction over the damage to the bridge on navigable waters. Consequently, Judge Collier denied the motion to dismiss for lack of admiralty jurisdiction. Judge Collier then addressed the claimants’ motion to dismiss the complaint on the ground that Skanska could not establish that it was entitled to exoneration or limitation from liability. This argument included the contention that the barges were used as construction platforms and not vessels. Skanska countered that the barges were used for transportation purposes to and from the worksite and around the bridge area during the construction. Citing the decision of the Supreme Court in Stewart v. Dutra, Judge Collier noted that the primary use of the barges need not be transportation, and that the barge could lose its status as a vessel only if it were rendered incapable of transportation. He rejected the argument that the barges failed to qualify as vessels and found fact questions for trial as to the negligence and privity of Skanska. Judge Collier then addressed Skanska’s motion to dismiss the economic loss claims. Viewing the issue as relating to damages and not liability, he invoked the limitation procedure that the court would hear the liability and limitation issues first. If Skanska did not succeed on its limitation argument, then Judge Collier held that the resolution of the damages, including the application of the economic loss rule, would be addressed by the court tasked with determining damages under the saving-to-suitors clause. See August 2021 Update. Judge Collier held a bench trial of the liability and limitation issues in October 2021 and issued his decision on December 29, 2021. Judge Collier first began by reversing the burden of proof under the “Louisiana Rule” (when a moving ship strikes and damages a stationary object, the moving ship is presumed to be at fault). He then found that Skanska’s preparations for the hurricane were inadequate and that Skanska did not overcome the presumption. Similarly, he rejected Skanska’s claims that the hurricane was a vis major, which human skill and caution could not have prevented based on his finding that Skanska did not take reasonable precautions for the storm. Turning to limitation, Judge Collier found that Skanska’s negligence sprang from executive-decision-making that established privity or knowledge. Consequently, he dismissed the limitation proceedings and dissolved the injunction staying the many suits filed in state court.
Danny L. Vizinat, sustained an injury to his back on May 18, 2019 while working as a seaman on Dupre Marine’s vessel, M/V AMBRIE DUPRE. His doctors recommended that he undergo surgery for a fusion, but he had to lower his A1C level below 7.5 because he is a diabetic. By July 27, 2020, Vizinat had lowered his A1C level from 11 to 8.9, but the level climbed back to 9.3 on December 6, 2021. Dupre then invoked the rule of forfeiture and moved for partial summary judgment that it was no longer obligated to pay maintenance and cure for the willful failure to comply with the orders of Vizinat’s doctors for two years. Vizinat argued in response that he intended to lower his A1C level and have the surgery and that he was not prolonging his cure for an indefinite time. Judge Ashe recognized the strength of the argument that the situation could not go on indefinitely, but he did not believe that the records definitively established that Vizinat had rejected the prescribed program of diet and exercise. Instead, Judge Ashe believed that the program had just been less successful in the recent period. He concluded that the issue should be submitted to a fact finder on a fully developed record.
Mai Lis Bahr, a passenger on the Norwegian PEARL, slipped and fell on the gangway while existing the vessel at Skagway, Alaska, allegedly because of the wet and slippery condition of the gangway. She brought this action against the cruise line in federal court in Miami asserting that the cruise line was negligent for failing to maintain slip-resistant materials, failing to provide adequate railings, and failing to warn of inadequate railings and slip-resistant materials. The cruise line moved for summary judgment on the basis that it lacked notice of any hazard in the gangway, and Bahr first argued that it is not clear whether a notice requirement applies in a gangway case where there is a heightened standard of care. Judge Bloom noted that the Eleventh Circuit had referred to a high degree of care, but the appellate court had not held that the degree of care was actually different than the degree of reasonable care generally owed in maritime cases. Therefore, she held that notice was a requirement for an injury on a gangway. However, Judge Bloom found sufficient evidence of notice in this case. There were warning cones at the top and bottom of the gangway, but the cruise line argued that the purpose of the cones was to raise situational awareness rather than to warn of a wet floor. As the warning signs in this case stated, “Caution, wet floor,” Judge Bloom was not convinced by the cruise line’s argument and held that it had notice of the potentially hazardous condition of the gangway. See October 2021 Update. The parties then filed motions seeking to exclude each other’s experts and motions in limine. With respect to Dr. Joseph Sala, an expert in human factors hired by the cruise line, who opined about how human factors interact with the environment around them and how features and controls in place mitigate potential walking hazards, Judge Bloom held that the testimony could be helpful to the jury to determine what caused the fall. However, as Dr. Sala is not a doctor, he would be permitted to give non-medical opinion on human factors. Judge Bloom held that Dr. Marian Rosado, an expert neuropsychologist hired by the cruise line to testify about Bahr’s past, present, and future medical condition, used reliable methods and would be permitted to testify except on the credibility of Bahr, even though her opinions were drawn from her psychological evaluation (test results showing material discrepancies were admissible but not opinions on credibility). With respect to Bahr’s objection to the testimony of the cruise line’s neurologist, Dr. Jeffrey B. Gelblum (that he should not testify about Bahr’s ability to work), the cruise line agreed that he would be testifying about Bahr’s medical condition and not his ability to work. The cruise line objected to Bahr’s vocational counselor, Dr. Julianne Frain, but Judge Bloom ruled that Dr. Frain was qualified to give her vocational opinion, relying on her co-author’s medical opinion. The cruise line objected to the opinions of radiologist Dr. Andrew Walker, who reviewed Bahr’s MRIs but did not examine Bahr and did not disclose the methodology for his opinions. Judge Bloom held that his opinions would be limited to his observations, diagnosis, and treatment from the MRIs, which did not require a disclosure of the methods used, but he would not be permitted to testify about the causes of Bahr’s condition or to provide general statistics about TBI patients. Judge Bloom rejected the objection to Dr. Craig Lichtblau as a psychiatrist and brain injury expert, concluding that he relied on objective criteria recognized in the field and not just his own experience (although Bahr withdrew his opinion as to the need for lumbar fusion surgery). Similarly, Judge Bloom held that Dr. Nicholas Suite would be limited to his opinion on Bahr’s TBI and would not be permitted to opine about Bahr’s lumbar spine, cervical spine, and incontinence. Judge Bloom rejected arguments that Dr. Lawrence Salmansohn should not be allowed to testify about Bahr’s cognitive impairment on the ground that he did not review Bahr’s pre-incident records and relied on facts provided by Bahr and her husband, noting that the objection went to the weight and persuasiveness of the testimony, not its admissibility. With respect to Bahr’s human factors expert, Joellen Gill, who did not inspect the gangway, Judge Bloom held that her opinions as to the design of the gangway, marine-related safety, gangway handrails, and the need for gangway inspection documents were admissible, but that her opinion on Bahr’s conduct in reading a pamphlet was not helpful and her testimony about prior incidents was not admissible because the incidents were not substantially similar. Finally, Judge Bloom permitted the testimony of Bahr’s CPA, Oscar Padron, about Bahr’s damages, which was based in part on the testimony of experts Frain and Lichtblau, which Judge Bloom had held was admissible.
In another opinion, Judge Bloom addressed the parties’ motions in limine. She denied Bahr’s request to exclude evidence of Bahr’s attorneys referring Bahr to a doctor, noting that the doctors were not covered by the attorney-client relationship and the defendant may elicit evidence of a referral relationship. Judge Bloom reiterated her ruling about testimony on the credibility of Bahr, holding that Dr. Rosado’s beliefs about the credibility of Bahr were inadmissible, but she would be permitted to testify that the test results are not a true representation of Bahr’s cognitive ability given the inconsistencies. Bahr sought to exclude evidence of her and her family’s financial ability, but Judge Bloom held that her financial ability was in issue. Judge Bloom excluded evidence of Bahr’s breast augmentation and subsequent drainage of silicone breast implants as not relevant when the cruise line reserved the right to introduce it. The cruise line objected to introduction of six prior incidents, and Judge Bloom held that they were not substantially similar and were inadmissible. As Bahr did not provide timely disclosure of her claim for incontinence, Judge Bloom held that this evidence was inadmissible. Judge Bloom held that references to the cruise line’s superior resources, the disparity in resources between the parties, sending a message to the defendant, and the justness of the plaintiff’s case were inadmissible. Finally, Judge Bloom rejected the cruise line’s argument that evidence of billed charges was inadmissible because it did not reflect the amount paid by Bahr, as an improper attempt to avoid the collateral source holding of the Eleventh Circuit in Higgs v. Costa Crociere. See November 2021 Update.
The cruise line moved for clarification or reconsideration, and Judge Bloom first addressed the argument that the court should allow Dr. Rosado’s opinions on Bahr’s malingering and Dr. Rosado’s factual observations. Judge Bloom clarified that test results showing material discrepancies are not credibility determinations and are admissible. Similarly, Dr. Rosado could opine on how Bahr’s lack of effort and poor performance affected the test results. However, Dr. Rosado could not testify on Bahr’s intent or credibility as that would invade the province of the jury and was beyond the opinions contained in her report. Judge Bloom added that Dr. Rosado would be permitted to discuss factual observations that formed the basis of her opinion with respect to Bahr’s lack of effort, poor performance, and non-compliance with instructions. After Bahr withdrew the opinion of Dr. Lichtblau with respect to the need for lumbar fusion surgery, the cruise line sought clarification whether Dr. Lichtblau’s opinions on the cost of the surgery and the cost of future spinal care were admissible. Judge Bloom answered that testimony on the cost of the lumbar surgery would not be permitted, but Dr. Lichtblau would be allowed to testify about the costs associated with care of Bahr’s lumbar spine and mild TBI. Finally, Judge Bloom addressed the cruise line’s request that Dr. Sala, a human factors expert with a Ph.D. in psychology, be allowed to testify about non-medical psychological conditions (the cruise line agreed that Dr. Sala would not opine on Bahr’s sleep apnea). Judge Bloom agreed that Dr. Sala could testify about non-medical matters, including psychological conditions such as ADHD and the effects of ADHD medications.
Preble-Rish Haiti claimed that it was owed more than $27 million for fuel delivered to Haiti by vessel and consequential damages and commenced an arbitration in New York pursuant to the arbitration clause in the contracts between the parties. However, Preble-Rish sought security for the arbitration and tried to garnish/attach funds in the possession of BB Energy, located in Houston, that were designated for payment to Haiti. BB Energy invoked sovereign immunity on behalf of debtor Haiti, and Judge Ellison held that BB Energy had standing to assert Haiti’s defense that it was immune from prejudgment attachment/garnishment. The parties argued about whether there was admiralty jurisdiction, but Judge Ellison reasoned that the jurisdiction inquiry began and ended with the Foreign Sovereign Immunity Act because it is the sole basis for jurisdiction over foreign sovereigns, such as Haiti. Turning to the immunity issues, Judge Ellison first held that the arbitration provisions in the contracts between the parties demonstrated the intent to waive foreign sovereign immunity from suit. Judge Ellison then discussed the exception to the general rule in the FSIA that sovereigns are immune from prejudgment attachment and held that the exception was established because the property was used for a commercial activity in the United States, Haiti had agreed to provide security in the contracts, and the purpose of the attachment/garnishment was to secure satisfaction of a judgment and not to obtain jurisdiction. Therefore, Judge Ellison denied the motion to dismiss the attachment, but stayed the proceedings pending developments in the arbitration proceeding (whether the contracts were maritime in nature). See September 2021 Update. Judge Ellison gave Preble-Rish leave to amend its complaint to include maritime tort claims and then addressed whether the tort claims were maritime. Preble-Rish asserted that Haiti had wrongfully seized the MT AQUILA L, converted her shipment of fuel oil, and failed to pay for the oil. Reasoning that the wrongs took place on navigable waters at or near the coast of Haiti and that the conversion of the cargo of fuel oil had the potential to disrupt maritime commerce, Judge Ellison concluded that the court had admiralty jurisdiction. After a hearing, Judge Ellison deferred ruling on BB Energy’s motion to dismiss in which BB Energy argued that the FSIA barred the maritime tort claims. Judge Ellison ordered BB Energy to submit to written discovery and a corporate representative deposition. See November 2021 Update.
BB Energy appealed to the Fifth Circuit and sought a stay of discovery, arguing that the district court could not permit broad discovery without first determining whether sovereign immunity barred the garnishment action. Preble-Rish moved to dismiss the appeal for lack of jurisdiction. The Fifth Circuit agreed that unlimited jurisdictional discovery is not permitted as a matter of course when FSIA immunity has been claimed and that discovery orders are not, as a general matter, immediately appealable. However, when the defendant claims immunity, an order that declines to rule on the defense is appealable, and sovereign immunity may be raised by a garnishee holding property of a foreign sovereign. It was unclear in this case whether the order on discovery was to aid in the ruling on the motion to dismiss, which would be permissible, or whether the court was proceeding to discovery without resolving the sovereign immunity defense, which would be erroneous. Giving Judge Ellison the benefit of the doubt, the Fifth Circuit denied BB Energy’s motion to stay, trusting “that the district court will allow limited discovery only as to evidence that will elucidate whether BB Energy is entitled to dismissal on sovereign immunity grounds.” See December 2021 Update). After the decision of the Fifth Circuit, BB Energy refused to comply with Preble-Rish’s discovery requests, and Preble-Rish agreed not to pursue discovery until the sovereign immunity defense was adjudicated. The parties submitted supplemental briefing and Judge Ellison then ruled in the linked opinion on the sovereign immunity issue. BB Energy asserted that the tort claims of unjust enrichment, fraud and maritime fraud, and maritime conversion, were not subject to waiver of sovereign immunity under the contract that provided for arbitration in New York and that Haitian law does not permit arbitration against governmental entities. Judge Ellison rejected the latter argument based on collateral estoppel from the ruling of the New York state court that the government of Haiti had failed to establish that the arbitration provisions were illegal under Haitian law. Giving a broad interpretation to the language of the contracts for arbitration on disputes “under this Contract,” Judge Ellison held that the arbitration provisions were not limited to contract performance and that the tort claims were subject to arbitration. Accordingly, he held that Haiti had waived sovereign immunity by agreeing to arbitrate in New York and ordered BB Energy to submit to written discovery and a corporate representative deposition. On January 24, Judge Ellison filed an order staying the discovery pending the garnishee’s interlocutory appeal to the Fifth Circuit. See Preble-Rish Haiti, S.A. v. Republic of Haiti, LLC, No. 4:21-cv-1953, 2022 U.S. Dist. LEXIS 12045 (S.D. Tex. Jan. 24, 2022) (Ellison).
In the New York actions between the parties, discussed in the October 2021 Update, Preble-Rish filed an attachment action seeking to attach/garnish funds in a Citibank account in the name of a Haitian governmental agency. After discovering that the account was in the name of the central bank of Haiti, the attachment was supplemented, and the bank sought to intervene and to vacate the attachment. Preble-Rish did not argue that the bank had waived its immunity from attachment and instead argued that the bank did not hold the funds for its own account so that its immunity did not apply. However, Judge Castel held that Preble-Rish did not establish that the bank was acting solely as an intermediary facilitating a payment, noting that accounts that are used for mixed purposes are immune from attachment, even if used for commercial purposes. Consequently, Judge Castel vacated the attachment. Preble-Rish Haiti, S.A. v. Republic of Haiti, No. 21-cv-4960, 2021 U.S. Dist. LEXIS 167927 (S.D.N.Y. Sept. 3, 2021). On October 5, 2021, Judge Castel declined to grant a stay of the court’s order vacating the attachment pending appeal to the Second Circuit, but he did grant a temporary stay so that Preble-Rish could apply for a stay to the Second Circuit. 2021 U.S. Dist. LEXIS 191986 (S.D.N.Y. Oct. 5, 2021). The Second Circuit granted a temporary stay while the case was referred to a panel for adjudication. See PrebleRish Haiti, S.A. v. Republic of Haiti, No. 21-2469 (2d Cir. Oct. 18, 2021). In a separate proceeding in federal court in New York, Preble-Rish sought to recognize and confirm a partial final award of an international arbitration panel in its favor against the Republic of Haiti. Haiti did not appear at the hearing, and the arbitration panel issued a partial award, granting Preble-Rish $23,043,429.79 in pre-award security. In the linked opinion, Judge Castel rejected Haiti’s arguments that the award was illegal and unenforceable under Haitian law, that Haiti had not been given proper notice of the proceedings, that the arbitration panel was improper because two of the arbitrators are former partners of the firm representing Preble-Rish. Judge Castel confirmed the award and entered judgment in favor of Preble-Rish.
This litigation arises out of a collision on the Mississippi River above New Orleans between the M/V COOPERATIVE SPIRIT and the M/V RC CREPPEL, resulting in the loss of three crewmembers on the RC CREPPEL. There was a second collision between the M/V GLORY FIRST and a tow of the COOPERATIVE SPIRIT after the first collision. Limitation actions were filed on behalf of the three vessels, and various petitioners moved to strike the opinions of experts, Dr. Dan Smith and Captain John Sutton, presented in support of the seamen claims. The petitioners objected to Smith’s consideration of hedonic damages and other legally unrecognized items of recovery, arguing that he disregarded the factual nuances of various claimants, impermissibly opined on non-pecuniary damages, and employed a methodology that had been rejected in some courts (quantifying the intangible cost of human life). Reasoning that the court’s gatekeeper function on experts was designed to protect juries and was largely irrelevant in the context of the bench trial of an exoneration/limitation action, Judge Guidry declined to exclude the testimony of Dr. Smith and held that the petitioners could challenge his testimony through objections and cross-examination at trial. One of the petitioners challenged the opinion of Captain Sutton that inaccurate data, insufficient navigational equipment, and lack of training contributed to the initial collision, arguing that the opinion was based on speculation with no basis in fact. Judge Guidry disagreed, holding that the objection should be raised by cross-examination at trial and that the specialized knowledge of Captain Sutton might aid the court in understanding the evidence related to the collision. Finally, the claimants sought summary judgment that the owner of the COOPERATIVE SPIRIT was not entitled to exoneration or limitation of liability because of the “overwhelmingly negligent acts” attributable to it (claiming that the pilot was undertrained, inexperienced, accident prone, and distracted, that he improperly utilized navigational equipment, and that he violated certain Inland Navigation Rules. Judge Guidry answered that the claimants’ allegations did not meet the summary judgment standard as the facts were not undisputed. Therefore, he denied the summary judgment motion.
The claims of two workers, Timothy Pridemore and David Glover, who were injured from the capsizing of a police boat during a sea trial, are the subject of state and federal litigation. After litigation on sovereign immunity for the City of Norfolk was addressed by state courts in Virginia (August and November 2019 Updates). Pridemore and Glover brought suit against the City of Norfolk in federal court, and the City asserted that it was entitled to sovereign immunity. Reasoning that the United States Supreme Court has held that municipalities are not entitled to sovereign immunity for maritime claims, the district court rejected the City’s defense and the Fourth Circuit agreed, declining to limit or overturn the decision of the Supreme Court. The Fourth Circuit also rejected the City’s argument that it was entitled to immunity as an arm of the State as the State would not pay a judgment against the City in this case. The Fourth Circuit declined to address the question of whether the workers could proceed on their vicarious liability claims against the City (even though the police officer who was operating the vessel was entitled to qualified immunity) as the order was not a final order. See December 2020 Update. The City filed a third-party action against contractor Willard Marine, claiming that Willard Marine was required by contract to obtain insurance coverage and to name the City as an additional insured on the policies. Willard Marine moved to bifurcate the City’s third-party claim from the workers’ tort claims and Judge Young agreed to the bifurcation, reasoning that the tort claims were based on the conduct of the City and the third-party claim was based on the contract between the City and Willard Marine before the accident. As the claims are separate and independent and involve different evidence and witnesses, Judge Young agreed to try the contract claim after the tort claims.
James E. Kelly, Jr., was injured while serving as a crewmember on the military cargo vessel ANTARES in Baltimore, Maryland. The vessel was operated by Tote Services under a contract with the United States. Kelly brought this suit in federal court in Maryland, asserting claims against the United States and Tote Services under the Jones Act and general maritime law. The United States moved to dismiss the suit for lack of subject matter jurisdiction, arguing that Kelly’s sole remedy was against the United States and that he had failed to exhaust his administrative remedies against the United States under the Clarification Act. Kelly argued that he did not have to file an administrative claim because the Clarification Act did not apply to him (arguing that he was employed by Tote Services and not the United States). Judge Hazel disagreed, stating that the Clarification Act contains a legal fiction that employees of contractors who operate ships for the United States are employed by the United States and are subject to the statute. Judge Hazel added that it did not matter that Kelly was not on notice that he was an employee of the United States under the statute. As Kelly was required to exhaust the administrative process before filing the suit, Judge Hazel granted the motion to dismiss the case for lack of subject matter jurisdiction.
Maricopa Capital brought this action against Certain Underwriters at Lloyd’s seeking to recover for damage to the port and starboard engines of a 1989 70-foot Magnum motor vessel. The case was tried to a jury in November 2019, and the Underwriters asserted a defense of a lack of a sworn proof of loss in accordance with this provision in the policy: “. . . and shall file with the Assurers or their representative a sworn proof of loss and proof of interest and/or receipted bills in case of a partial loss, within ninety (90) days from date of loss.” Judge Graham denied the Underwriters’ motion for a directed verdict, and the jury returned a verdict finding that the damage to the starboard engine was covered and awarded damages of $182,818.82 (reduced by $62,500 for the deductible and an amount paid by the Underwriters). After the trial, Judge Graham reconsidered and determined that the language of the policy was unambiguous. He held that the insured was required to submit a sworn proof of loss (regardless of whether it was requested by the insurer) and that the insured was also required to present a proof of interest and/or receipted bills in case of a partial loss. Based on the placement of the conjunction “and” Judge Graham held that a sworn proof of loss was required in every case. As a sworn proof of loss was not filed, Judge Graham held that Maricopa materially breached the condition in the policy. As there were issues whether the Underwriters suffered prejudice from the failure to provide the proof of loss, Judge Graham held that a new trial was required on the issue of prejudice (with the insured bearing the burden of proving that the breach did not prejudice the insurer).
Brian Matzkow claimed that he was injured while serving as a crewmember on the pilot boat NEW JERSEY while transferring stores from the launch boat YANKEE to the NEW JERSEY. Matzkow brought this action against his employer and owner of the pilot boat and launch boat under the Jones Act and general maritime law. The transfer occurred at sea, and Matzkow alleged that he was injured when the boats spread apart and then came back together and contacted each other. Matzkow submitted the expert testimony of Captain Richard P. Martucci for his claim that the defendant was negligent and that the vessels were unseaworthy. The defendant moved to disqualify Martucci and for summary judgment on the negligence and unseaworthiness claims. The defendant pointed out that Martucci relied on standards set forth by SOLAS, the ISM Code, OSHA, and the Coast Guard Recreational Boating Guides that were not applicable, but Judge Reyes held that Martucci’s process of arriving at his liability opinions based on his experience and his understanding of non-binding authorities was not objectionable, but it must be made clear at trial whether any of the codes was binding on the vessels. Judge Reyes then denied the motion for summary judgment, finding disputed facts with respect to negligence for proceeding with the vessel-to-vessel transfer of stores in rough open water and failure to make appropriate adjustments to the stores that were not broken down and with respect to unseaworthiness for lack of proper training and oversight, unsafe work practices related to the transfer of stores, and insufficiency or lack of equipment.
Eric and Sarah Watson delivered their rare 1962 Chris Craft Constellation to Latitude Marine for storage in advance of work to repair holes in the vessel’s hull. Disputes arose between the parties, and the Watsons brought this suit, pro se, against several employees of Latitude Marine in connection with their actions related to the vessel during its storage on land. The Watsons moved for an expedited stop to a sale or destruction of the vessel, and Chief Judge Martinez responded by ordering the Watsons to file an amended complaint as the face of the complaint did not establish the subject matter jurisdiction of the court. The Watsons did not allege an adequate basis for federal question jurisdiction, and Chief Judge Martinez found the amount in controversy for diversity to be unclear. Although the Watsons were seeking $1.45 million, Chief Judge Martinez responded that the amount in controversy appeared to be limited to the value of an unseaworthy boat (a further problem with diversity is that both the plaintiffs and defendants appear to be from Washington). The contractual and tortious allegations were based on the storage of the vessel on dry land, outside the scope of navigable waters, and Chief Judge Martinez concluded that the allegations did not invoke the admiralty jurisdiction.
In 2008, Randolf Cherewick purchased a new 27-foot Boston Whaler, which he named the ARTEMIS. He purchased a Boatowners Policy from State Farm for 2015 that was in effect when he brought his vessel to Oceanside Marine Center in Oceanside, California for repairs and when the vessel was taken for a sea trial to test the repairs that had been made. The vessel was being docked when the electronic controls malfunctioned, causing the port bow of the ARTEMIS to allide with a concrete piling, causing a gouge in the bow. While Oceanside Marine was taking the vessel to the yard to repair the allision damage, the port aft side of the vessel was scratched by a protruding screw. Cherewick brought a suit against Oceanside Marine in San Diego Superior Court and also brought this suit in San Diego Superior Court against State Farm, which denied the claim based on an exclusion in the Boatowners Policy for damage caused by repairing, renovating, servicing, or maintenance. State Farm removed the case to federal court and moved for summary judgment. Reasoning that a sea trial is an integral part of the repair and servicing of a vessel, Judge Benitez held that the first incident was excluded by the repair exclusion. Judge Benitez suspected that he could end his discussion by holding that the repair exclusion also applied to the second incident as the damages were ultimately attributable to the allision during sea trials but were made worse during the removal of the vessel as a result of the allision, but he also addressed other exclusions and held the exclusion for wear, tear, deterioration, and marring, for inadequate maintenance, and for failing to properly preserve property after a loss also precluded coverage. Consequently, Judge Martinez also dismissed Cherewick’s claims for bad faith and for punitive damages.
Emigdio Antonio De Gracia was allegedly injured while working as an Inventory Manager for Admiral Management on Coco Cay, Bahamas. He was employed by Admiral Management under an employment agreement that designated the law of The Bahamas as the governing law and that contained an arbitration clause administered by the American Arbitration Association under its International Center for Dispute Resolution Procedures. De Gracia initiated arbitration against his employer, Admiral Management, and he brought this suit against Royal Caribbean in Florida state court. Royal Caribbean removed the suit to federal court based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and moved to compel arbitration. As Royal Caribbean was not a party to the employment contract, it invoked the Florida doctrine of equitable estoppel to permit it to enforce the arbitration agreement against De Gracia. Judge Huck recognized the decisions permitted a nonparty to force arbitration if the applicable contract law allows it. The problem was that the employment agreement provided that it was governed by Bahamian law and Royal Caribbean did not establish that Bahamian law recognizes the doctrine of equitable estoppel in the context of enforcement of an employment agreement. Consequently, Judge Huck denied the motion to compel arbitration.
Jason Parkman was injured on August 25, 2018, while working for Helmerich & Payne on a fixed platform on the outer Continental Shelf off the Louisiana coast. He received LHWCA compensation within a month of his accident and continued to receive LHWCA benefits. More than a year after the accident, on November 20, 2020, Parkman filed suit against Helmerich & Payne, W&T Offshore, Baker Hughes, and Halliburton, asserting claims under Louisiana law (through the Outer Continental Shelf Lands Act) and, alternatively, under the Jones Act and general maritime law as a seaman. Parkman claimed to be assigned to a vessel, but he did not name the vessel, give its location, state his position on the vessel, or state how the vessel contributed to the accident. The case was removed to the federal court for the Middle District of Louisiana, where Parkman filed a motion to declare that his claims were timely. Citing the Cormier decision from the Fifth Circuit (holding that the voluntary payment of benefits under the LHWCA interrupts prescription against all solidary obligors), Judge deGravelles rejected the defendants’ efforts to distinguish the case or to overturn it as wrongly decided and held that Parkman’s claims were timely filed. (See July 2021 Update). Judge deGravelles then addressed the arguments of the Helmerich & Payne defendants that Parkman’s “substantial certainty” claim under Louisiana law was barred by the exclusive remedy provision of the LHWCA. Judge deGravelles noted that the Fifth Circuit has never held that there is an exception to the exclusive remedy for intentional torts, but several district courts in the Fifth Circuit and Louisiana state courts have held that an employee may maintain an intentional tort claim against the LHWCA employer as long as there is a specific intent to injure the worker. Judge deGravelles then reasoned that if the court were to consider such an exception, the allegations would have to be far more specific than the conclusory allegations alleged by Parkman in this case. Consequently, Judge deGravelles dismissed the state claim against the employer defendants for failure to state a claim. (See August 2021 Update). Challenges to Parkman’s pleading continued when Halliburton moved to dismiss Parkman’s vague allegations against Halliburton or, alternatively, Halliburton moved for a more definite statement. As Parkman did not name the vessel, give its location, state his position on the vessel, or state how the vessel contributed to the accident, Judge deGravelles dismissed the Jones Act and general maritime law claims against Halliburton. With respect to the allegations of negligence, Parkman itemized fifteen specific acts and omissions that he cited against all of the defendants as causing his accident. Although Judge deGravelles noted that the allegations could be more specific as to the role and conduct of each defendant, he agreed with Parkman that the roles and actions of the defendants were in their possession and that more specific information could be obtained through discovery. Therefore, he denied the motion to dismiss or for a more definite statement with respect to the negligence action against Halliburton. See September 2021 Update.
Baker Hughes Energy Services then filed a motion for summary judgment, admitting that Baker Hughes Oilfield Operations provided services on the Helmerich & Payne rig but attaching a declaration that Baker Hughes Energy Services provided no services or personnel on the rig at the time of the incident or at any time before the accident. Parkman admitted that he had no evidence to dispute the claim of Baker Hughes Energy Services, but he asked to court to defer ruling on the motion for summary judgment until he could depose a corporate representative for Baker Hughes. Baker Hughes responded that Parkman had not set forth a plausible basis for believing that the sought-after facts would preclude summary judgment. Judge deGravelles allowed Parkman to take the deposition of Baker Hughes Energy Services limited to testing the facts set out in the declaration. Judge deGravelles stated that if the facts in the declaration were confirmed, he expected Parkman to voluntarily dismiss the defendant or that the motion for summary judgment would be unopposed.
Kathryn Birren and her daughter Mandy Birren brought this suit against Royal Caribbean for injuries they sustained on the HARMONY OF THE SEAS. They alleged that the elevator doors on deck 6 closed abruptly, striking Kathryn’s arm and forcing her to collide with Mandy. The cruise line responded with twelve affirmative defenses, and the passengers moved to strike seven of the defenses. Before addressing the sufficiency of the pleading, Judge Bloom first had to resolve what standard to apply in assessing the sufficiency. She noted that there are two schools of thought on the sufficiency of pleading defenses and that the Eleventh Circuit has not resolved that split in authority. Comparing the language in Rule 8 (a), (b), and (c), Judge Bloom held that affirmative defenses are not subject to the heightened pleading standard enunciated by the Supreme Court in the Twombly and Iqbal decisions. She then reviewed the defenses asserted and denied the motion to strike as to the allegations of comparative fault, pre-existing conditions, and superseding cause. Judge Bloom also declined to strike the defense that the passengers failed to state a cause of action upon which relief can be granted, treating it as a denial. She did strike the defense that the action was governed by the terms and limitations of the passenger ticket, as limitations on liability are not enforceable against negligence claims. She struck the defense of a set-off for money paid from third parties for medical expenses, reasoning that it was inconsistent with the Higgs case from the Eleventh Circuit; however, she granted the cruise line leave to replead the defense in accordance with the Higgs case. See September 2020 Update.
The cruise line preserved and produced a total of 11 minutes and four seconds of closed-circuit television footage. That included the incident plus 8 minutes and 28 seconds before the incident and 2 minutes and 30 seconds after the incident. The passengers moved for sanctions for spoliation of evidence because the cruise line preserved less than 10 or 15 minutes of footage before the incident and five minutes of footage after the accident. The passengers argued that they were prejudiced by not having footage showing that the doors to the elevator were closing too quickly for at least 15 minutes before the accident—sufficient time to establish notice of the dangerous condition to the cruise line. After reviewing the video, Magistrate Judge Louis noted that the quick closing of the doors did not occur in the first five minutes of the produced footage and only began shortly before the passengers stepped on the elevator and then repeatedly thereafter. Accordingly, Magistrate Judge Louis held that the cruise line had preserved a reasonable amount of footage and no sanctions were appropriate. In the linked opinion, Judge Bloom concluded that Magistrate Judge Louis’ order was well reasoned and correct in holding that the cruise line had provided sufficient footage, did not act in bad faith, and took reasonable steps to preserve the necessary video footage.
Markel American Insurance provided insurance coverage for Mark Lindstrom’s 36-foot Cape George Cutter sailboat. Lindstrom retained Islands Marine Center to haul the vessel out of the water and store it at Island Marine’s facility at Lopez Island, Washington. Islands Marine hauled the vessel out of the water, but, while the vessel was stored on land, it toppled over and fell from its supports. Markel American Insurance made payments to Lindstrom and brought this subrogation action in federal court in Washington against Islands Marine for breach of a maritime contract to haul out, block, and store the vessel (breach of the warranty of workmanlike performance), breach of bailment for the vessel, negligence, and violation of the Washington Consumer Protection Act (seeking treble damages). Markel American Insurance based the jurisdiction of the court on admiralty (for the contract and negligence actions) and supplemental jurisdiction over the Washington Consumer Protection Act claim. Damages were believed to be limited to a repair estimate of $46,355.99, which Chief Judge Benitez noted, sua sponte, is less than the threshold for diversity jurisdiction. Noting that the damage occurred on land so as to lack locality for the tort claim and that the contract was primarily related to storage of the vessel on land and not to commerce or transportation on the water, Chief Judge Benitez stated that he believed that the court lacked admiralty jurisdiction. Accordingly, he ordered the parties to explain why the court had subject matter jurisdiction. Compare the analysis of the contract for storage of the vessel on land and damage to the vessel on the land in Markel American Insurance Co. v. Islands Marine Center, Inc. with the tort and contract claims arising from the storage of a vessel on land in Watson v. Roff [discussed above] and the contract of marine insurance for a vessel and damage to the vessel on the land in Great Lakes Insurance SE v. Crabtree [discussed below].
New York police officer Steven C. Eckert brought this action against the City of New York under the Jones Act and general maritime law for injuries he sustained to his back while pulling a dead body from the East River onto LAUNCH 22. The crew had been notified that a person had jumped off the Throgs Neck Bridge into the East River, and, after locating the body, Eckert and officer Adam Gonzalez pulled the body onto the vessel’s swim platform. The work took several minutes because of the weight of the body and waves rocking the boat, and Eckert kept working after his back began hurting because the body had not been fully brought onto the boat. Eckert argued that the City was negligent and the vessel was unseaworthy because the City had not installed equipment on the boat that would have limited the strain on his back and had not adequately trained him. The City moved for summary judgment on the Jones Act and unseaworthiness counts, but Judge Engelmayer found sufficient evidence from the conflicting expert reports of the parties that the snatch-and-grab method to retrieve the body, without equipment to provide back support, exerted too much pressure on the crewmember’s back, and that design defects in the vessel made it impossible for the two officers to work together. He also found sufficient evidence of inadequate staffing (lack of a supervisor for the operation) and lack of training on how to prevent low back injuries and with respect to placement of the body on the swim platform. As Eckert obtained relief on his maintenance and cure claim, Judge Engelmayer granted summary judgment to the City on that claim.
Great Lakes provided hull insurance for the S/V BRANDISON, owned by Bryan and Bethea Crabtree. The vessel was damaged in a fire at the Cracker Boy Boat Works in Riviera Beach, Florida, and Great Lakes denied coverage, claiming that the policy was a temporary binder, that the policy expired because the Crabtrees did not provide required materials, and that the Crabtrees made material representations in their application. Great Lakes brought a declaratory judgment action in federal court in Montana and voluntarily dismissed the suit when the attorney for the Crabtrees agreed to accept service in Florida. Great Lakes then brought suit against the Crabtrees in federal court in Florida and dismissed that action as well. Great Lakes then sued the Crabtrees in federal court in Montana, again, and the judge transferred the case to the federal court in Florida. While the federal actions were proceeding, the Crabtrees filed suit against Great Lakes in the circuit court in Miami-Dade County, Florida. The Crabtrees filed counterclaims in the federal action for breach of contract and extracontractual remedies under Montana and Florida law. Great Lakes based its federal action on admiralty jurisdiction and moved for a bench trial on its claims and those of the Crabtrees. Judge Altman agreed that the insurer’s suit on the policy on the vessel was based on a maritime contract and was within the admiralty jurisdiction. The Crabtrees argued that they were entitled to a jury trial on their counterclaims because Great Lakes was only pursuing a declaratory judgment in its complaint and the Crabtrees were pursuing damages against Great Lakes. Judge Altman did not believe that distinction made any difference as the counterclaim arose out of the same operative facts and marine policy that are at issue in the declaratory judgment action, and the Rule 9(h) designation by the plaintiff trumps the jury trial sought by the defendant in a counterclaim arising out of the same facts. Judge Altman also disagreed with the insured’s argument that Great Lakes had raced to the courthouse to deprive the Crabtrees of their right to a jury trial and was engaged in gamesmanship, citing the statement of the Montana judge that it was the Crabtrees who appeared to be engaged in gamesmanship with their agreement to accept service in Florida. Finally, Judge Altman noted that the Crabtrees implied, but “to their credit, they never explicitly argue,” that the court could not exercise admiralty jurisdiction because the fire occurred on land. Judge Altman noted that admiralty jurisdiction over contracts is implicated by the nature of the contract (marine insurance) and not by the location where the boat was damaged by the fire (contract jurisdiction is “conceptual” and not “spatial” as with respect to torts). Accordingly, Judge Altman granted Great Lakes’ motion for a bench trial of the case.
Creative Lifting Services brought this complaint in federal court in Tennessee against Steam Logistics, asserting that it hired Steam Logistics to ship a crane from Italy to Houston, Texas. Creative Lifting argued that Steam Logistics hired a shipping agent that used insect-infested wood to support the crane during shipment, which caused the crane to be rejected at the port of Houston and returned to Italy. Steam Logistics then arranged for re-shipment to Houston, but Creative Lifting did not pay for the shipment. Creative Lifting alleged violations of the Tennessee Consumer Protection Act, misrepresentation, breach of contract provisions as set forth in the bill of lading, and negligently procuring subcontractors. Steam Logistics answered that the crane was packaged by the seller of the crane, not a contractor of Steam Logistics, and counterclaimed for the cost of the re-shipment. Steam Logistics sought judgment on the pleadings and on its counterclaim, and Judge Greer agreed that Creative Lifting’s allegation that Steam Logistics engaged in unfair and deceptive acts in failing to procure a competent shipping company was insufficient to plead a TCPA claim with sufficient particularity under the heightened pleading standard of Rule 9(b). The incorporation of the bill of lading was insufficient to plead a TCPA or misrepresentation claim when Creative Lifting did not allege which provisions constituted misrepresentations. Similarly, the allegation of failure to hire a non-negligent shipping company was insufficient to plead nonperformance amounting to a breach of contract. The negligence claim failed because Creative Lifting failed to allege that Steam Logistics owed it a duty outside the contract. Judge Greer granted Creative Lifting Services leave to amend to re-plead its causes of action. With respect to the counterclaim, Creative Lifting Services pleaded affirmative defenses that mirrored the allegations in its complaint. However, applying the law in the Sixth Circuit, Judge Greer held that affirmative defenses may be pleaded in general terms and do not require factual development. Therefore, the defenses gave sufficient notice that Steam Logistics was not entitled to judgment on the pleadings.
Maritech, a vessel chartering company based in Anchorage, Alaska, brought this action against Bay Weld, a custom boat manufacturer based in Homer, Alaska, asserting that Bay Weld negligently retrofitted the M/V LIGHTNING with a defective control system, resulting in the vessel’s allision with a fuel dock in Cordova, Alaska. Maritech filed a motion for summary judgment, and Bay Welding moved to strike the Declarations of Brian Edmondson and Enrico Ferroni that were submitted by Maritech in support of its motion. Maritech moved to strike the affidavits of Eric Engebretsen and Michael Stockburger, that were filed by Bay Weld in support of its response to the motion for summary judgment. Edmondson is the sole member of Maritech, and Ferroni is the managing member of Stillwater Marine, which performed repair work on the vessel. Neither was designated as a retained expert, and Bay Weld argued that their opinions were inadmissible lay witness testimony under Rule 701. Judge Gleason held that Edmondson’s opinions, based on his experience while onboard the vessel, would not be stricken, but she struck his opinions that were based on the conclusions of others and that were not based on any evaluation or perception of Edmondson. Judge Gleason allowed Ferroni’s opinions about causation, whether work was performed as promised, and on the performance of equipment, but she held that his opinions on some specifics of software were sufficiently technical and specialized and were not permissible under Rule 701. Bay Weld argued that Engebretsen, owner and operator of Bay Weld, and Stockburger, employed by Bay Weld to assist in the retrofit, were qualified to testify as experts under Rule 702 (asserting that both had decades of experience in vessel repair, retrofit, and renovation). Judge Gleason agreed that their experience was sufficient to qualify them as experts, and she then addressed the argument that the judge should exercise her inherent power to disqualify Engebretsen as an expert because of his financial conflict of interest as the owner and operator of Bay Weld. Concluding that the integrity of the legal system could be protected by cross examination, Judge Gleason declined to strike Engebretsen as an expert.
This litigation arises from the collision between Marquette’s vessel, the KIEFFER BAILEY, which was proceeding down the Mississippi River near Chalmette, Louisiana, and Navigation Maritime’s vessel, the STRANDJA, which was un-anchoring in the river. The starboard anchor of the STRANDJA was still on the river bottom, causing the vessel to swing in front of the KIEFFER BAILEY. Marquette brought this action against Navigation Maritime in federal court in New Orleans, and Navigation Maritime filed a counterclaim. Marquette answered the counterclaim and filed a third-party action against Crescent Towing, owner of the tug that was assisting the STRANDJA, the M/V PROVIDENCE. Marquette also filed a third-party complaint against Robert Johnson, the compulsory pilot on the STRANDJA. Marquette filed a motion for summary judgment that the STRANDJA was not restricted in her ability to maneuver under Inland Rule 18, which requires that power-driven vessels keep out of the way of vessels that are restricted in their ability to maneuver. Rule 3(g) provides that a vessel restricted in its ability to maneuver is “a vessel which, from the nature of her work, is restricted in her ability to maneuver as required by these Rules and is therefore unable to keep out of the way of another vessel.” The STRANDJA was not engaged in any of the enumerated examples of restrictions on maneuverability, such as laying pipeline and dredging, but its owner argued that a vessel with an anchor down is “very restrained” in its maneuverability. Citing an Eleventh Circuit case explaining that “restricted in her ability to maneuver” is a “term of art” based on work activities that restrict a vessel’s ability to maneuver, Chief Judge Brown found that heaving anchors is not “work” as defined by Rule 3(g). Consequently, she granted partial summary judgment that the STRANDJA was not restricted in her ability to maneuver under Rule 18. Crescent Tug also moved for summary judgment as its tug followed all orders of the STRANDJA, and the pilot of the STRANDJA confirmed that the tug did not contribute to the collision. Therefore, Chief Judge Brown granted summary judgment to Crescent Towing. Johnson then filed a motion for summary judgment in which he admitted that there were a number of contested facts; however, he claimed that, accepting Marquette’s assertions as true, Marquette had not satisfied the clear and convincing standard for a finding of gross negligence under Louisiana law. Marquette argued that the state requirement for clear and convincing evidence was preempted under the Supremacy Clause, but Chief Judge Brown did not address the question or whether specific acts were sufficient to constitute gross negligence. Instead she held that whether the evidence was clear and convincing of gross negligence was the province of the finder of fact. Accordingly, she denied the motion for summary judgment.
Nikola Bogicevic, a waiter on the SEABOURN OVATION, suffered two injuries in his service of the vessel and commenced an arbitration proceeding with the American Arbitration Association in accordance with the provisions of the collective bargaining agreement that was incorporated into his employment agreement. The AAA sent a letter notifying Seabourn of its obligation to pay the filing fee and to provide a copy of the agreement concerning arbitration by November 1, 2021. Seabourn did not pay the fee or provide the agreement by November 1, and the case was administratively closed on November 5, 2021 pending receipt of the payment. Seabourn paid the filing fee on November 15, 2021, and the Case Filing Specialist asked Bogicevic to confirm that he wanted to move forward with the arbitration. Bogicevic declined and filed this action against the cruise line in federal court in Washington under the Jones Act and general maritime law on November 22, 2021. Seabourn moved to compel arbitration pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Federal Arbitration Act, and Judge Robart concluded that the dispute and agreement fell within the Convention. Bogicevic argued that the arbitration clause was not enforceable because the cruise line had breached the employment agreement by failing to pay the arbitration fee prior to the payment deadline. Judge Robart agreed that a party can lose the right to compel arbitration by an order of default or the permanent termination of the arbitration proceedings based on nonpayment. However, there was no order of default. In the absence of an order of default or the permanent termination of the arbitration proceedings, Judge Robart believed that the issue whether there was a material breach of contract should be delegated to the arbitrator to decide in view of the delegation clause in the arbitration agreement. Consequently, Judge Robart granted the motion to compel arbitration.
The cross-motions for summary judgment in this case arise out of bareboat charters of the dredge EDWARD G and the dredge tender CRISTI between owner Eagle E&R and charterer Specialty Diving. Specialty Diving encountered problems with both vessels and incurred expenses and filed a lien on the EDWARD G for repairs. The CRISTI sank, resulting in the death of a deckhand. Eagle brought this action and argued that Specialty Diving’s lien was invalid because of a no-lien provision in the charter party and because a bareboat charterer cannot place a lien on the vessel (arguing that, as owner pro hac vice, the bareboat charterer is considered the owner under the general maritime law). Specialty Diving responded that the arguments were not applicable because the lien resulted from Eagle’s breach of contract. As there were significant fact disputes about the repairs and whether there was a breach of contract, Judge DuBose declined to decide the lien questions on Eagle’s motion for summary judgment. In response to Specialty Diving’s indemnity claim for sums paid as a result of the sinking of the CRISTI based on the sole fault of Eagle, Eagle argued that an award would be improper subrogation by Specialty Diving’s insurer, which paid the amounts, against Eagle as an insured under the policy. Specialty Diving tried to save the argument by claiming for its deductible and uninsured costs, but in the absence of evidence of the amounts, Judge DuBose granted summary judgment on the indemnity counterclaim. Finally, Specialty Diving moved for summary judgment on its defenses that the charter parties were void ab initio because they were procured by fraud and misrepresentations. Although noting that fraud in the inducement merely renders the instrument voidable and not void, Judge DuBose found the fact disputes presented by the parties prevented resolution of the defenses in a summary proceeding.
This case arises from the collision of a “Barefoot Warrior Style” ski boat operated by Kameron Duquette, son of the vessel’s owner, Michael Duquette, with a Bayliner Marine boat that was owned and operated by Dante Lopez. Passengers on both boats were injured, and a passenger on the ski boat died. Gregory David Erickson, an injured passenger on the Bayliner, and Rodney W. Blake, a relation of the deceased passenger on the ski boat, brought suits in California state court, and both suits named Michael Duquette as a defendant. Michael Duquette then filed this complaint for limitation of liability, and Dru Jackson, a passenger in the ski boat, filed an answer, a counterclaim, and a third-party claim against Kameron Duquette and Dante Lopez. Michael Duquette moved to strike the counterclaim, the jury demand of the counterclaim, and the jury demand of the third-party complaint. Finding no prejudice in simply considering the counterclaim as a claim, Chief Judge Mueller declined to strike the counterclaim (requiring a complete repleading). Although recognizing that the pleading was “unfortunately poorly named,” Chief Judge Mueller held that the case could proceed with the counterclaim deemed to be Jackson’s claim. Jackson did not oppose the striking of the jury demand on his third-party complaint, and Chief Judge Mueller struck that jury demand. However, Jackson argued that he was the only claimant and his right to a jury trial should be preserved under the saving-to-suitors clause. Chief Judge Mueller declined to strike the demand, suggesting that Jackson follow the process for stipulations in a single-claimant situation. In a separate order, Magistrate Judge Newman addressed the motion of Michael Duquette for a default order against persons who had not filed a claim in the limitation action. Magistrate Judge Newman noted that Duquette argued that he had nothing to do with the vessel at the time of the accident and ordered Duquette to present supplement briefing on how he could obtain a default judgment in a shipowner’s limitation of liability action while denying involvement in the vessel and whether, if a default were entered, he could later deny any interest in the vessel as against the answering claimants. See July 2021 Update. After Magistrate Judge Newman granted the default order, Blake filed a motion for leave to file a late claim, and Magistrate Judge Newman recommended that the claim be allowed. Chief Judge Mueller agreed. Although the claim was filed approximately nine months after the deadline, the delay was not outside of the time permitted in other cases and the action was still in its early stages and did not require an amendment to the existing case schedule. Duquette argued that allowing the claim would prejudice claimant Jackson (otherwise the sole claimant), but Jackson did not object, and Chief Judge Mueller held that Duquette did not have standing to object on behalf of Jackson. Finally, Chief Judge Mueller considered the argument that Blake showed good cause for the late filing through the mistake of counsel. Blake’s counsel argued that he believed his state suit would be removed to the federal court and satisfy any requirement that Blake file a claim in the limitation action. Chief Judge Mueller considered the attorney error to be sufficient cause and allowed the late claim (defaulting everyone other than Blake and Jackson).
Sergio Valdivieso, a resident of Florida, brought this suit in state court in Houston, Texas against BP and others for injuries he sustained as a clean-up worker after the DEEPWATER HORIZON/Macondo blowout. He claimed injuries to his shoulder, arm, back, and neck from lifting boom and exposure to chemicals in the oil and dispersants while working on a fishing boat in Bataria Bay in Louisiana state waters. BP removed the case to the federal court in Houston, and the case was transferred to Judge Barbier, who was handling the multidistrict litigation arising from the blowout. Valdivieso dropped his exposure claim, and BP moved to dismiss the complaint on the ground that it did not own or bareboat charter the vessel on which he was injured and, as time charterer, it assumed no liability for the negligence of the crew or the unseaworthiness of the crew. Valdivieso responded with documents that he claimed demonstrated that BP had exercised enough direction over his salary, payment, direction, supervision, and employment to be consider his Jones Act employer. Judge Barbier considered the documents but found that they did not help Valdivieso’s case against BP. Thus, he did not covert BP’s motion to a motion for summary judgment and dismissed Valdivieso’s claims against BP as they did not assert a plausible claim for BP’s liability. See July 2021 Update. The dismissal of BP left the Jones Act and general maritime claims against the other defendants, and the case was returned to the federal court in Houston. All but one of the remaining defendants moved to dismiss the case based on lack of personal jurisdiction in Texas or, alternatively, to transfer the case to Florida as Valdivieso and all of his physicians are located in Florida, the defendants are residents of Florida and are not residents of Texas, and the injury did not take place in Texas. As the local interest in adjudicating local disputes weighed in favor of transfer to Florida, Judge Hittner transferred the case to the Northern District of Florida.
After Grupo entered into a contract to provide services and equipment to locate two aircraft that crashed into Venezuelan waters, Grupo entered into a contract with the defendants to supply some of the needed equipment, including a suitable vessel, using the BIMCO Supplytime 2005 form. Grupo paid more than a million dollars without any mobilization from the defendants, who continued to demand more than a million additional dollars (even though the quoted price was $650,000), leading to Grupo suing for breach of contract plus causes of action for fraud, and violations of the Alabama Deceptive Trade Practices Act. Grupo moved for a default judgment, asserting the application of Alabama law, but Magistrate Judge Nelson noted that maritime law should apply to the contract even though Grupo had brought the case pursuant to the diversity jurisdiction and not admiralty jurisdiction. See September 2019 Update. Two years later, the case was tried in a bench trial to Chief Judge Beaverstock. Chief Judge Beaverstock found in favor of Grupo on its claim for breach of a maritime contract, found that Energy Subsea’s managing member, Oddgeir Ingvartsen controlled Energy Subsea in such a manner as to make it a mere instrumentality of himself so as to be jointly and severally liable, that the claim for unjust enrichment failed in light of the contract between the parties, and that Energy Subsea and Ingvartsen were liable for fraud. The defendants claimed that the economic loss rule (a party may not recover economic loss in a tort claim that is not associated with a physical loss) barred recovery on the fraud claim, but Chief Judge Beaverstock held that the claim of fraud in the inducement was an exception to the economic loss rule. As compensatory damages, Chief Judge Beaverstock awarded $1,727,000. With respect to the punitive damages for fraud, Chief Judge Beaverstock concluded that Grupo paid $616,046.32 more than the original contact amount because of the fraud, and he trebled that amount under Alabama law ($1,848,138.90). Therefore, his award against Energy Subsea and Ingvartsen was in the amount of $3,575,138.90. See November 2021 Update. The defendants moved for a new trial or to amend the judgment, and Chief Judge Beaverstock rejected arguments that there was insufficient evidence to pierce the corporate veil of Energy Subsea, that the damages were excessive, and that the trial was unfair because defense counsel was required to participate remotely after being in close proximity to a person who exhibited signs of COVID-19 infection. Chief Judge Beaverstock also rejected a reiteration of arguments that were presented at trial and that were addressed in the judgment.
Kholkar Vishveshwar Ganpat claimed that he contracted malaria while serving as a crewmember of the M/V STARGATE and brought this suit against Eastern Pacific under the Jones Act and general maritime law. Ganpat served Captain Owen Bona on the M/V BANDA SEA while the ship lay at anchor in the Mississippi River just below New Orleans, asserting that Captain Bona was a managing agent of Eastern Pacific. Eastern Pacific objected to the service, arguing that Captain Bona was an employee of Ventnor Navigation, not Eastern Pacific. Ganpat responded that Eastern Pacific was the manager of the STARGATE and that Captain Bona was a borrowed servant or managing agent of Eastern Pacific. As there was no evidence that Captain Bona was employed by Eastern Pacific, the question presented was whether he could be considered a managing agent of Eastern Pacific. However, the evidence established that Captain Bona was not involved in any aspect of Eastern Pacific’s business that related to the vessel on which the cause of action arose. Judge Morgan declined to conclude that service could be made on a foreign corporation that was not transacting business in Louisiana through a non-employee captain of a vessel on which the accident did not occur who had no control over any operations of the defendant in the forum state. (See February 2020 Update). Judge Morgan gave Ganpat several extensions to properly serve Eastern Pacific. Finally, more than a year later, Ganpat filed a proof of service, an affidavit from a process server in Singapore who stated that he handed the summons and complaint to Eastern Pacific’s receptionist, who signed and affixed the company stamp to the summons. Eastern Pacific challenged the sufficiency of the service, and Judge Morgan held that the service complied with Rule 4(f)(2)(A) in that it was accomplished by a method prescribed by the laws of Singapore for service in that country in its courts of general jurisdiction. See September 2021 Update. After service was accomplished, Judge Morgan addressed Eastern Pacific’s argument that the case should be dismissed on the basis of forum non conveniens because Ganpat is a resident and citizen of the Republic of India, Eastern Pacific is a Singapore company with its principal place of business in Singapore, Ganpat experienced symptoms of malaria while the vessel was on the high seas sailing from Gabon to Brazil, he was hospitalized and treated for malaria in Brazil, and was repatriated to India where complications arose. Judge Morgan assumed there was an adequate alternative forum available in India, but she held that Eastern Pacific did not meet its burden of proof with respect to the private interest factors or the public interest factors. Judge Morgan noted, with respect to the private interest factors, that the witnesses were spread across the world. Although many of the crew reside in India, there were others in Romania, Ukraine, Bulgaria, the Philippines, Russia, and Turkey. There were medical witnesses from Brazil and India as well as witnesses with respect to the provisioning of the ship in Savannah before it sailed to Africa. There were also possible witnesses from Nigeria where the owner of the vessel and employer of Ganpat were located. Similarly, with respect to the public interest factors, Judge Morgan found no clear “home” for the dispute involving multiple international contacts. Factoring into the analysis the dilatoriness of Eastern Pacific’s filing of the motion (the longer the case was pending in the United States, the less the defendant can claim inconvenience in the United States), Judge Morgan could not conclude that Eastern Pacific had met the heavy burden of demonstrating that the public and private interest factors weighed in favor of dismissal, and denied the motion to dismiss. The facts were not developed sufficiently for Judge Morgan to decide whether Indian law applied in the context of Eastern Pacific’s motion to dismiss the suit for failure to state a claim under Indian law (there were disputes about which entities owned and employed Ganpat). Accordingly, Judge Morgan held that a determination of the applicable law was premature.
R&R Yacht brought suit in Florida state court against the insurer of its vessel, M/Y RISK & REWARD, asserting that the insurer failed to pay for damage to the vessel. The insurer filed a motion to compel arbitration in the state action and then removed the case to federal court based on diversity. The insurer then asked the federal court to enforce the provision in the policy that any dispute relating to a claim under the Policy “may be resolved by arbitration.” R&R Yacht argued that the use of the word “may” instead of the word “shall” made the provision permissive and that arbitration could not be compelled without its consent. Judge Singhal disagreed, holding that the agreement gave either party the option to require arbitration. As R&R Yachts did not argue that the dispute was not within the scope of the agreement or that the insurer had waived the right to arbitrate, Judge Singhal ordered the case be arbitrated and closed the suit.
After Erwin Metius and his wife separated in August of 2016 and he moved out of their jointly owned home, Metius lived in an apartment until he purchased the motor yacht HAPPY HOURS and then terminated the lease on the apartment. In the Boat Questionnaire that he completed while applying for insurance on the yacht with Progressive, he answered “No” to the question whether the vessel was used as a primary residence. Progressive issued the policy, and five months later, on the evening of December 28, 2017, when Metius turned on the heat, it triggered an electrical fire that burned the yacht to the waterline and burned a neighboring vessel and caused damage to the dock. During the investigation, Metius told Progressive that he purchased the vessel as he needed to find somewhere else to live after separating from his wife and that the vessel seemed like a cost-effective way to live (he only took the vessel out of its slip once since he purchased it). Progressive denied the claim based on violation of the provision that there was no coverage for injury or damage arising out of an accident while using the watercraft as a primary or permanent residence and based on the policy’s fraud or misrepresentation provision and filed this declaratory judgment action in New Jersey federal court. Judge Martini found the term “primary residence” to be unambiguous, referring to the main, principal place where the insured lives. Considering that Metius purchased the boat so he could dock it near his office in Jersey City and that he spent more nights on the vessel than anywhere else, Judge Martini concluded that Metius was using the vessel as his primary residence at the time of the fire. Consequently, Judge Martini held that Progressive appropriately denied coverage under the primary residence exclusion and the fraud/misrepresentation provision.
McArthur Griffin brought suit in Louisiana state court seeking to recover against several defendants for injuries he sustained on the DUSTIN DANOS. The defendants removed the case to federal court, and Gulf Offshore Logistics and GOL, LLC moved for summary judgment on the ground that Griffin did not properly allege claims against them under the Jones Act and general maritime law because they were not his employer or the owner/operator of the DUSTIN DANOS. As the evidence from REC Marine and Gulf Offshore/GOL demonstrated that Griffin was employed by REC Marine, Judge Jackson dismissed the Jones Act and maintenance and cure claims against Gulf Offshore/GOL with prejudice. Similarly, with respect to the unseaworthiness of the vessel, the evidence reflected that Offshore Transport Services was the owner and REC Marine was the operator. Accordingly, Judge Jackson dismissed the unseaworthiness claims against Gulf Offshore/GOL with prejudice. Finally, Judge Jackson addressed Griffin’s argument that Gulf Offshore/GOL owed a duty to Griffin under the general maritime law in the capacity as ship manager/commercial manager. As Griffin failed to present evidence demonstrating that these defendants had control over the vessel, Judge Jackson likened the defendants to vessel brokers who are not liable when they simply act as a middleman between the vessel owner and vessel operator. Consequently, he dismissed with prejudice the third-party negligence claims against Gulf Offshore/GOL under the general maritime law.
This case arises out of an allision near Morgan City, Louisiana, which was investigated by the Coast Guard. The investigation including taking statements of witnesses, and the statements were included in the Coast Guard’s investigative file. Marquette Transportation, owner of the RANDY ECKSTEIN, moved to exclude the Coast Guard investigative file at trial and to prohibit experts from relying on findings contained in the file, based on the statute providing that no part of a report of a marine casualty investigation, including findings of fact, opinions, recommendations, deliberations, or conclusions is admissible in a civil proceeding. One of the parties objected that the statute did not prevent admission of statements from fact witnesses taken during the investigation. Reasoning that the statements of witnesses were not a report, findings, opinions, recommendations, deliberations, or conclusions, Judge Summerhays held that the use of the witness statements as evidence at trial was not prohibited by the statute. He deferred ruling, however, on the issue whether experts could rely on the findings contained in the investigative file.
From the state appellate courts:
In January 2014, a Navy helicopter caught fire and crashed into the high seas of the Atlantic Ocean during a training exercise, resulting in the deaths of three service members and injuries to two others. This suit was brought in Texas state court under the Death on the High Seas Act and the general maritime law against the private contractor that maintained the helicopter. The district court dismissed the suit for lack of subject matter jurisdiction, holding that questions of military judgment rendered the case nonjusticiable. The court reasoned that adjudicating the claims would require the court to evaluate the Navy’s procedures and decisions on maintenance. The court of appeals affirmed, but the Texas Supreme Court disagreed that the issues presented in this case were incapable of judicial management without interfering with the military’s judgment. Justice Bland began by noting that, under the Texas Constitution, Texas courts decline to exercise jurisdiction over questions committed to the executive and legislative branches under the political question doctrine. In applying the doctrine, the court evaluates the degree to which the case requires a review of military decisions and whether the review interferes with constitutionally protected questions of military strategy and judgment. Although recognizing that military control over the details of a contractor’s work may implicate military decisions, Justice Bland concluded that the Navy left discretion to the contractor in performing the maintenance and determining whether the helicopter was safe for flight. Justice Bland then addressed whether the Navy was partially responsible for the accident, calling the Navy’s judgment into question. Evaluating that judgment required mechanical, not military, expertise, and it was within the competence of the state court to apply negligence standards to a helicopter crash. As nothing about the Navy’s actions necessitated an examination of specific military expertise and judgment, Justice Bland held that the political question doctrine did not deprive the state court of jurisdiction over this case. As a final note, the contractor argued that the responsibility of the Navy should be submitted to the jury under McDermott v. AmClyde on the theory that a party’s immunity should be considered as a pre-settlement of liability. The Texas Supreme Court declined to express an opinion on that argument.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
1177 West Loop South
Tenth Floor
Houston, TX 77027
O 713.629.1580
New Orleans
1100 Poydras Street
39th Floor
New Orleans, LA 70163
O 504.569.1007
Gulfport
2304 19th Street
Suite 101
Gulfport, MS 39501
O 228.867.8711
Miami
4000 Ponce De Leon Blvd
Suite 630
Coral Gables, FL 33146
O 305.274.5507
Quote:
In denying an award for life salvage, Chief Judge S. Thomas Anderson of the Western District of Tennessee stated:
Consequently, although it may be of little comfort, Plaintiff’s claim regarding salvage does not merit a reward. Plaintiff’s only recompence is the knowledge that he acted in accordance with the demands of moral obligation and sound professional practices.
Curran v. Wepfer Marine, Inc., No. 1:20-cv-1229, 2021 U.S. Dist. LEXIS 230887 (W.D. Tenn. Dec. 2, 2021).
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