January 2022 Longshore/Maritime Update (No. 272)
Notes from your Updater:
Best wishes to all of our readers for 2022.
On December 7, 2021, the Third Circuit held that the Chief Engineer of a Liberian petroleum tanker could be prosecuted in the United States under the Act to Prevent Pollution from Ships for maintaining an inaccurate Oil Record Book (including failing to report discharge of oily bilge water) in United States waters even though the entries in the book were made beyond the jurisdiction of the United States. United States v. Vastardis, No. 20-2040, 2021 U.S. App. LEXIS 36034 (3d Cir. Dec. 7, 2021) (Fuentes).
Those readers who enjoy the nuances of the several tests for navigable waters, the Equal Footing Doctrine, and ownership of submerged lands under waterways should read Judge Christensen’s decision in Montana v. Talen Montana, LLC, No. CV 16-35, 2021 U.S. Dist. LEXIS 234090 (D. Mont. Dec. 7, 2021).
In our April 2021 Update we advised that the Supreme Court granted the petition for a writ of certiorari in Servotronics, Inc. v. Rolls-Royce PLC, No. 20-794, on the issue “whether the discretion granted to district courts in 28 U.S.C. § 1782(a) to render assistance in gathering evidence for use in ‘a foreign or international tribunal’ encompasses private commercial arbitral tribunals.” The issue was fully briefed and oral argument was scheduled for October 5, 2021. In our October 2021 Update we noted that on September 8, 2021, counsel for Servotronics advised the Court that Servotronics anticipated filing a dismissal motion, and the case was removed from the Court’s argument calendar. It did not take long before the Supreme Court agreed to take up the issue again. On December 10, 2021, the Court granted the petition for a writ of certiorari in ZF Automotive US, Inc. v. Luxshare, Ltd, Alixpartners v. Fund for Protection of Investors’ Rights, Nos. 21-401, 21-518.
The fallout from the decision of the Supreme Court on the constitutionality of administrative law judges in Lucia v. SEC continues. On December 13, 2021, the en banc Fifth Circuit issued a 95-page decision, including concurring and dissenting opinions, holding that federal district courts have jurisdiction to hear a collateral attack that the administrative law judges in SEC prosecution were unconstitutionally insulated from the President’s removal power. See Cochran v. U.S. Securities and Exchange Commission, No. 19-10396, 2021 U.S. App. Lexis 36687 (5th Cir. Dec. 13, 2021) (Haynes).
On December 14, 2021, the Second Circuit issued an amended summary order in Red Hook Container Terminal, LLC v. South Pacific Shipping Co., Nos. 19-0287, 19-3185, 2021 U.S. App. LEXIS 37107 (2d Cir. Dec. 14, 2021) (holding that the vessel operator owed a penalty for cancelling its contract for stevedoring and terminal services, but the terminal was liable for conversion of the vessel owner’s property as its tariff was not applicable when there was a contract between the parties), with no substantive changes to the order. See December 2021 Update.
On December 15, 2021, the Supreme Court granted certiorari in LeDure v. Union Pacific Railroad Co. (No. 20-807) to clarify the standard for enforcing safety regulations in Federal Employers’ Liability Act cases (the Jones Act provides that the FELA applies to an action under the Jones Act).
On December 17, 2021, the Internal Revenue Service announced its standard mileage rates for 2022. Beginning on January 1, 2022, the standard mileage rate for the use of a car (also vans, pickups, or panel trucks) will be 58.5 cents per mile driven for business use (an increase of 2.5 cents). The mileage rate beginning on January 1, 2022 will be 18 cents per mile driven for medical purposes (an increase of 2 cents).
On the LHWCA Front . . .
From the federal appellate courts:
Pay the amount owed under the first IFC recommendation, even if the amount is reduced within 14 days by a subsequent recommendation; Rivera v. Director, OWCP (Ameri-Force), No. 20-60357, 2021 U.S. App. LEXIS 37797 (5th Cir. Dec. 21, 2021) (Elrod).
Ramon Rivera brought a hearing loss claim under the LHWCA against Ameri-Force and its insurer Signal Mutual, and Ameri-Force paid two weeks of compensation and disputed that it was the last responsible employer. The claims examiner held an informal conference and issued a memorandum recommending that Rivera had made a prima facie case against Ameri-Force and asking the parties to reach an agreement on disputed issues. Ameri-Force accepted the recommendation and advised that it would submit the report from a medical examination and asked the claims examiner not to include per diem payments to Rivera in his average weekly wage. A new claims examiner issued a recommendation on August 24, 2016, for a 35.31% binaural hearing loss (without waiting for the employer’s medical evidence) and including the per diem payments in the average weekly wage. When Ameri-Force asked for reconsideration and submitted the additional report, the claims examiner averaged the contentions of the parties and issued a supplemental recommendation on September 7, 2016. Instead of controverting the recommendation and requesting a formal hearing, Ameri-Force presented a settlement offer for the amount of the benefits, but for no attorney fees, that was rejected by Rivera. Ameri-Force then paid the amount owed under the supplemental recommendation within 14 days. Rivera filed a petition seeking an award of attorney fees under Sections 928(a) and (b), and District Director Duhon issued an order awarding fees at the rate of $235 per hour on the ground that Ameri-Force did not timely pay Rivera in accordance with the August 24 recommendation and Rivera recovered more than Ameri-Force was initially willing to pay after the August 24 recommendation. Ameri-Force appealed to the Benefits Review Board, which initially reversed the award on the ground that the September 7 recommendation rendered the August 24 recommendation moot and that Ameri-Force timely paid the amount recommended on September 7. Rivera moved for reconsideration, and the BRB remanded the case to the district director to consider whether Rivera was entitled to fees under Section 928(a). The BRB rejected the request for reconsideration under Section 928(b). Ameri-Force challenged the decision on Section 928(a), and the en banc BRB reversed the decision to remand on Section 928(a), but the BRB did remand for consideration of an award under Section 928(c). Rivera appealed to the Fifth Circuit, and Judge Elrod first addressed whether the appeal was timely as it was filed more than 60 days after the decision was made on Section 928(b). Judge Elrod noted that the initial order of the BRB on Section 928(b) remanded the case for consideration of Section 928(a). Thus, it was not a final order until the en banc BRB overturned the remand order with respect to Section 928(a). At that time, the decision became final as to the fee request under Sections 928(a) and (b) and became appealable. Judge Elrod began her analysis of Section 928(b) by stating that attorney fees can be awarded against the employer under Section 928(b) when there is an informal conference, a written recommendation is issued, the employer refuses to adopt the recommendation within 14 days, and the employee uses an attorney to achieve an award greater than the employer was willing to pay after the recommendation was issued. She concluded that all of the requirements were met in this case with respect to the August 24 recommendation. The replacement claims examiner issued a written recommendation after the informal conference, and the employer did not accept it and asked the claims examiner to reconsider. Counsel for Rivera ultimately obtained an award greater than what Ameri-Force was willing to pay after the recommendation (Ameri-Force paid the amount owed under the supplemental recommendation within 14 days of that recommendation, but that was less than the original recommendation and was not paid within 14 days of the original recommendation). After stating that the initial settlement offer was not an acceptance because it was conditioned on Rivera not seeking attorney fees, Judge Elrod addressed the decision of the BRB that the August 24 recommendation did not apply to the Section 928(b) analysis because the September 7 recommendation rendered it moot. Finding no legal authority that the subsequent recommendation rendered the first one moot and differentiating court orders (that must be followed) from recommendations from an informal conference (parties have no legal to duty to follow them), Judge Elrod held that “two active recommendations can overlap without creating a Catch-22.” Although the regulations do not contemplate the situation where a claims examiner issues a subsequent recommendation without another informal conference, Judge Elrod reasoned that the “regulations indicate that an employer must accept a recommendation within fourteen days even if the employer anticipates additional proceedings and determinations by the claims examiner (this was not a situation in which the employer agreed to abide by the report of an independent medical examination; the request for reconsideration was simply an objection to the recommendation). Judge Elrod rejected the employer’s argument that the recommendation was insufficient because it did not include a specific dollar amount for the average weekly wage or for compensation. She held that the statutory requirement for a recommended disposition is satisfied when the claims examiner recommends a proposed resolution “of any matter central to the question of how much compensation an employer owes to an employee.” Judge Engelhardt dissented from the decision to award attorney fees. He agreed that if the recommendation on reconsideration occurred more than 14 days after the initial recommendation (the period in which to accept the recommendation), a fee would be owed. However, the claims examiner issued the supplemental recommendation within 14 days with a different percentage and average weekly wage. He believed that the September 7 recommendation thus superseded the August 24 recommendation and triggered a new 14-day period for purposes of Section 928(b). As Ameri-Force paid the amount owed in the supplemental recommendation within 14 days, Judge Engelhardt believed that no fee was appropriate under Section 928(b).
From the federal district courts:
Federal court had removal jurisdiction over crane operator’s suit filed in state court with an in rem claim against the vessel, but the federal court declined to exercise supplemental jurisdiction over the suit after the in rem claim was dismissed; federal court did not have original admiralty jurisdiction over admiralty suit that was first filed in state court under the Saving to Suitors Clause; Finney v. Board of Commissioners of the Port of New Orleans, No. 21-1186, 2021 U.S. Dist. LEXIS 238412 (E.D. La. Dec. 14, 2021) (Brown); Johnlewis v. Apache Industrial Services, Inc., No. 21-504, 2021 U.S. Dist. LEXIS 245535 (E.D. La. Dec. 27, 2021) (Brown).
Darre Finney was working as a gantry crane operator for Ports America, assisting in the loading of the M/V CMA CGB BIANCA in the Port of New Orleans when the ship allegedly hit the dock and Finney was injured. Finney brought this suit in state court in Orleans Parish against the Port, the vessel (by serving the Secretary of State), and the vessel owner. The vessel and its owner removed the case to federal court in New Orleans, alleging that the federal court had exclusive admiralty jurisdiction under Section 1333 because of the in rem claim. Finney voluntarily dismissed the in rem and moved to remand the case to state court. The vessel owner moved to consolidate the removed case with a pending federal case in which the Port brought suit against the vessel, and opposed remand on the ground that jurisdiction is determined at the time of the removal. Chief Judge Brown first addressed the removal of the in rem claim and held that the 2011 Amendments to the Removal Statute made in rem claims removable without regard to citizenship, but that they did not make in personam claims removable (reasoning that in rem claims are civil actions over which the federal courts have original jurisdiction and that the Saving-to-Suitors Clause only applies to in personam claims). With that distinction, she followed the transformation theory that the in personam action (but not the in rem action) is transformed into a civil action and not an admiralty action, so there is no original admiralty jurisdiction over the action in federal court and it is not removable based on the federal court’s admiralty jurisdiction. Thus, Chief Judge Brown viewed the case as presenting a removable claim and a non-removable claim, and the Removal Statute permits jurisdiction over the non-removable claim as long as it is joined with a claim based on federal question jurisdiction (admiralty claims are not federal questions). Reasoning that the only basis for retention of the in personam claim was supplemental jurisdiction, Chief Judge Brown held that supplemental jurisdiction was not a basis for removal and that, even if it were, she would exercise her discretion to remand the case as there were no remaining claims over which the district court had original jurisdiction as the district court did not have original jurisdiction over the in personam admiralty claims. [Of course, the transformation theory used to support remand of admiralty suits brought in state court contradicts the Supreme Court in Romero: “All suits involving maritime claims, regardless of the remedy sought, are cases of admiralty and maritime jurisdiction within the meaning of Article III whether they are asserted in the federal courts or, under the saving clause, in the state courts.”]. Accordingly, although the in rem claim was removable, Chief Judge Brown held that the in personam claim was not removable and remanded it to state court.
Chief Judge Brown also applied the transformation rule in contradiction of the quoted language from Romero in the case brought by Andre Johnlewis against Apache Industrial under the Jones Act and general maritime law that was originally filed in state court in Houston, Texas. As Johnlewis is a Louisiana citizen and Apache is a Delaware corporation with its principal place of business in Texas, Apache removed the case based on diversity, and Johnlewis moved to remand based on the forum-defendant rule and also sought leave to amend to name Great Lakes Dredge and Dock Co. and Bollinger Shipyards (a non-diverse Louisiana company) as defendants. Johnlewis argued that the naming of Bollinger would defeat diversity and cause a lack of subject matter jurisdiction. Apache opposed the amendment and sought to transfer the case to the Eastern District of Louisiana, and Judge Hanen transferred the case. Chief Judge Brown in the Eastern District of Louisiana then addressed the amendment/remand issues and noted that the court need not remand a case when diversity is destroyed if there is an independent basis for jurisdiction. Despite the Supreme Court’s direction that all maritime claims are cases of admiralty and maritime jurisdiction, even though they are filed in state court under the Saving to Suitors Clause, Chief Judge Brown held that “federal courts do not have original jurisdiction when those claims are first filed in state court under the Savings to Suitors Clause.” Accordingly, she held that the federal court could not retain jurisdiction over the case. As the case could not be remanded by the Louisiana federal court to a Texas state court, Chief Judge Brown dismissed the case without prejudice (noting that Johnlewis had subsequently filed suit in Louisiana state court in the Parish of East Baton Rouge.
Longshore worker’s counsel was ordered to respect and not to impugn the culture of Chinese crewmembers of the vessel from which he fell and was injured; Green v. Cosco Shipping Lines Co., No. CV420-091, 2021 U.S. Dist. LEXIS Dec. 16, 2021) (Ray).
Romare J. Green was injured while serving as a longshore worker on the M/V CAMELLIA in the Port of Savannah when the handrail to the gangway collapsed and he fell to the dock. Although the Update does not generally address discovery disputes, it does bring conduct of counsel and parties to the attention of our readers when it is singled out by the courts. After ruling that junior officer crewmembers do not qualify as officers, directors, or managing agents of the defendant so as to be subject to deposition by notice to the defendant’s counsel, Magistrate Judge Ray addressed the vessel owner’s motion for a protective order restricting the conduct of the longshore worker’s counsel during depositions as he had asked questions of Chinese crewmembers that were demeaning to Chinese culture and the character of the deponents and that Magistrate Judge Ray characterized as harassing and threatening. Finding the justification that the questions were just part of a vigorous cross-examination to strain credulity, Magistrate Judge Ray held that the worker’s counsel may not impugn Chinese culture or suggest that the culture is to blame for allegedly negligent or improper acts, ask questions drawing distinctions between American and Chinese cultures with the implication that Chinese culture is inferior, suggest that deponents or the defendants do not care about the worker, ask questions about the god to which the deponents swear or about their religious beliefs, and that counsel shall show witnesses respect.
From the Benefits Review Board:
BRB reversed an award of disability benefits as a matter of law, without an appeal from the employer/carrier; carrier’s surveillance on the claimant was not a basis for a discrimination claim; Mockel v. SSA Terminals, LLC, BRB No. 20-0501 (Ben Rev. Bd. Nov. 29, 2021) (per curiam).
Our longsuffering readers know that we do not generally review decisions of the Benefits Review Board. However, there are two points from the Benefits Review Board’s opinion in this case that deserve mention. Robert Mockel injured his back in 2010, 2011, and 2015 while working for SSA Terminals as a mechanic. Mockel’s claims (for LHWCA benefits from the 2015 injury and for discrimination based on surveillance conducted by the carrier and for delaying his return to modified work after the 2015 injury) were tried to Administrative Law Judge Berlin. Judge Berlin found that Mockel suffered a lumbar sprain on May 20, 2015 that rendered him incapable of performing his usual modified work until June 9, 2015, that SSA did not offer him modified work until March 9, 2017, and that Mockel impeded SSA’s reasonable efforts to identify suitable alternative employment from September 12, 2016. He awarded Mockel temporary total disability benefits from May 21, 2015 to June 8, 2015 and permanent total disability benefits from October 29, 2015 through September 11, 2016 and from December 12, 2016 through March 9, 2017 (considering SSA’s failure to offer modified work and Mockel’s impeding of vocational efforts). Judge Berlin also found that SSA did not engage in any discrimination in violation of the LHWCA. Mockel brought this appeal to the Benefits Review Board, and the BRB rejected Mockel’s argument that his establishing of a prima facie case of total disability from May 21, 2015 to June 8, 2015 imposed a permanent burden on the employer to establish suitable alternate employment thereafter. Instead, the BRB held: “Once Claimant has been found capable of returning to his usual work, Employer no longer bears the burden to establish the availability of suitable alternate employment.” After affirming that Mockel was able to return to his usual modified work as of June 9, 2015, the BRB addressed the award of total disability benefits in favor of Mockel after June 9, even though SSA had not filed an appeal. Holding that the award of disability benefits after June 8, 2015 was erroneous as a matter of law, the BRB reversed the award of disability benefits after June 8, 2015. The BRB then considered Mockel’s argument that SSA’s use of surveillance carried out on Mockel by the carrier established discriminatory animus. The BRB noted that the surveillance was undertaken by the carrier prior to the 2015 accident in connection with the claim for medical benefits from the earlier injuries. SSA was unaware of the surveillance until after the 2015 accident, and the Board agreed that the surveillance did not reveal any intent or animus that SSA might have toward Mockel or LHWCA claimants (routine surveillance “is no more discriminatory than requiring an independent medical examination or compelling a claimant to provide sworn deposition testimony”). Therefore, the surveillance did not establish a prima facie case of discrimination. The Board agreed with Judge Berlin that there was a prima facie case of discrimination for the delay in SSA’s taking Mockel back to work after he was found to be able to return to modified duty. However, the BRB held that there was sufficient evidence in support of the finding that there was no pretext in SSA’s actions and that it did not discriminate against Mockel as it did not have a job requiring 40 hours of work (under the guarantee of the collective bargaining agreement) within Mockel’s restrictions and there were issues with respect to the restrictions that required clarification. Thanks to Laura Bruyneel with the Bruyneel Law Firm in San Francisco for bringing this case to our attention.
And on the maritime front . . .
From the federal appellate courts:
Appellate court reversed forum non conveniens dismissal of suit by American injured in vessel collision in Greece against the American owner of the vessel that caused the collision; Curtis v. Galakatos, No. 20-1846, 2021 U.S. App. LEXIS 35144 (1st Cir. Nov. 29, 2021) (Thompson).
Cindy Curtis, a resident of New York, brought this suit in federal court in Massachusetts against Nicholas Galakatos, a resident of Massachusetts, in connection with injuries suffered when the boat in which she was a passenger was involved in a collision in the Paros-Antiparos Strait in Greece with a boat owned by Galakatos. Galakatos was not in Greece at the time of the accident. His boat was being piloted by the gardener of his summer residence in Greece. The Greek Port Authority conducted an investigation, including taking statements from twelve non-U.S. citizens. The gardener/operator was arrested, and the criminal case against him is still ongoing. Galakatos moved to dismiss the American suit on the basis of forum non conveniens, and Judge O’Toole agreed that the case should be litigated in the courts of Greece. Although Curtis’s damages would be capped in Greece and she would not be entitled to a jury trial, those factors did not deprive her of the ability to have the claims fairly decided in Greece and did not outweigh the fact that much of the evidence was in Greece and the court would apply Greek law. See October 2020 Update. Judge Thompson, writing for the First Circuit, believed that Judge O’Toole clearly erred in striking the balance when weighing the private interest factors, which was an abuse of his discretion. Judge Thompson did not find error in the finding that the public interest factors weighed in favor of litigating in Greece. However, she disagreed that Galakatos had met his burden of showing that the witnesses were unavailable to testify in the United States and were relevant to the case. Although acknowledging that there is no blanket rule that the defendant must affirmatively demonstrate the unavailability and significance of foreign witnesses, Judge Thompson held that the defendant must produce enough information for the district court to balance the parties’ interests and that Galakatos had failed to meet that burden in this case (noting that Galakatos opposed Curtis’ motion for targeted discovery, arguing that the court had sufficient information to rule in his favor). Additionally, Judge Thompson believed that Judge O’Toole gave inadequate consideration to the physical and emotional burden on Curtis to return to Greece in the event her testimony was required. Giving a heavy presumption to Curtis’ choice of forum, Judge Thompson reversed the dismissal and remanded the case to proceed in Massachusetts.
Fifth Circuit overruled its Eckstein decision and held that the six-month time limitation to file a limitation of liability action is not jurisdictional; In re Bonvillian Marine Service, Inc., No. 20-30767, 2021 U.S. App. LEXIS 35665 (5th Cir. Dec. 2, 2021) (Engelhardt).
On January 19, 2019, Bonvillian’s vessel, M/V MISS APRIL, allided with the M/V MISS SADIE ELIZABETH, a crew boat docked in the Mississippi River near Port Sulphur, Louisiana. A crew member on the MISS SADIE ELIZABETH brought suit in Louisiana state court against Bonvillian on August 23, 2019, and Bonvillian filed this limitation action in Louisiana federal court on December 16, 2019. The crewmember and the owner of the MISS SADIE ELIZABETH filed claims in the limitation action and moved to dismiss the suit for lack of subject matter jurisdiction. The claimants filed a motion to dismiss the limitation action for lack of subject matter jurisdiction as being filed more than six months after written notice of a claim, citing the Fifth Circuit’s decision, In re Eckstein Marine Service L.L.C., in which the court held that the argument that the limitation action was not timely filed challenged the court’s subject matter jurisdiction. Following Eckstein, Judge Vitter dismissed the limitation action for lack of jurisdiction, and Bonvillian argued on appeal that the intervening decision of the Supreme Court in United States v. Kwai Fun Wong (considering time limitations in the Federal Tort Claims Act to be non-jurisdictional) required that the Fifth Circuit reconsider its decision in Eckstein about the time limitation in the Limitation Act. Giving respect to the prior decision and the Fifth Circuit’s Rule of Orderliness (one panel cannot overturn another panel’s decision absent an intervening change in the law), Judge Engelhardt held that “the Eckstein rule clearly runs afoul of Kwai Fun Wong and its family of Supreme Court cases, and this panel is behooved to adjust our Circuit’s stance accordingly.” Consequently, he held that the time limitation in the Limitation Act “is a mere claim-processing rule which has no bearing on a district court’s subject matter jurisdiction” and remanded the case to the district court (noting that the factual grounds with respect to the timeliness were hotly contested and that, because the court remanded on pure legal grounds, the panel refrained from discussing the factual disputes). Thanks to Gregory M. Burts of Brown Sims, P.C. in New Orleans, who recently authored an article calling for the Fifth Circuit to overturn Eckstein, for bringing this case to our attention.
Procedural errors led to overturning of original default judgment: good faith allegations for Rule B attachment supported subsequent default judgment when the defendant failed to answer after entering a Rule E(8) restricted appearance; Tango Marine S.A. v. Elephant Group Ltd., No. 21-10068, 2021 U.S. App. LEXIS 35780 (5th Cir. Dec. 3, 2021) (Southwick).
Grecian company Tango Marine chartered one of its vessels to Elephant Group to deliver cargo to Lagos, Nigeria. Tango alleged that the vessel was detained in Lagos for two and a half years as a result of Elephant Group’s failure to obtain proper permissions for the cargo and brought this Rule B attachment action in the federal court for the Northern District of Texas. Tango had difficulty serving Elephant Group and a default was entered after the court permitted service by email or mail. Elephant Group then filed a motion for an extension of time to file an answer and a notice of appearance. It also sought to have the default set aside, claiming that it was entering a restricted appearance under Supplemental Rule E(8) (appearing to contest the merits of the attachment). Judge McBryde set aside the initial default, and Elephant Group filed a motion to dismiss under Rule 12(b), arguing that the court lacked personal and subject matter jurisdiction and the allegations in the complaint were insufficient. Tango filed an amended complaint and a response to the motion to dismiss (arguing that the amended complaint cured the defects in the motion to dismiss). Elephant Group did not, however, file an answer to the amended complaint. Tango then requested the clerk enter a second default for failure to answer the amended complaint, and Elephant Group objected. After the clerk entered the second default, Elephant Group moved to have the second default set aside. Judge McBryde concluded that the failure to answer was willful, which was sufficient to allow the default, but he also ruled that Elephant Group failed to establish a meritorious defense. Accordingly, he entered a final judgment for $4,491,784.17. On appeal to the Fifth Circuit, Elephant Group argued that a default was inappropriate and that the district court never acquired personal jurisdiction over it. Tango argued that Elephant Group waived the personal-jurisdiction argument by not making the argument in its first filing and that the pleadings did establish personal jurisdiction. Writing for the Fifth Circuit, Judge Southwick noted that Elephant Group replied to the response to the motion to dismiss, but never filed an answer to the amended complaint. Although Judge McBryde considered the failure to answer to be willful, Judge Southwick doubted that was the proper description, choosing instead to label it as “[i]nadvertence” or “clumsiness.” He therefore considered whether Elephant Group had established a meritorious defense sufficient to set aside the default. Tango argued that Elephant Group waived its argument that the court lacked personal jurisdiction by failing to present that argument in its first responsive pleading. Judge Southwick reviewed Elephant Group’s initial motion to set aside the default and found language in the final pages that he considered sufficient to constitute a restricted appearance under Rule E(8), even though Elephant Group did “not drape its entire motion in the protection of a restricted appearance.” However, before filing the motion, Elephant Group’s counsel filed an application for admission pro hac vice and a motion for extension of time and entered a “joint Notice of Appearance.” Reasoning that these filings were insufficient to constitute a general appearance, Judge Southwick held that Elephant Group had made a restricted appearance that did not waive its challenge to the court’s personal jurisdiction. Judge Southwick then discussed whether there was personal jurisdiction over Elephant Group. Pursuant to Supplemental Rule B, Tango pleaded that Elephant Group was not present within the district in order to permit the attachment of property. Judge Southwick then cited the principle that it is the good-faith allegation that the attached property is present within the district that gives the court jurisdiction—not the successful attachment of the property. As there were good-faith allegations of assets owed to Elephant Group within the district, there was in personam jurisdiction over Elephant Group under Rule B and the default judgment was affirmed.
Insufficient allegations and lack of a domestic injury caused dismissal of fraud and RICO claims arising out of construction of superyacht in Canada; Worldspan Marine Inc. v. Comerica Bank, No. 20-11646, 2021 U.S. App. LEXIS 36751 (11th Cir. Dec. 13, 2021) (per curiam).
This case arose from a contract between Harry Sargeant III and Worldspan to build a superyacht at Worldspan’s facility in Canada. Sargeant paid Worldspan $11 million toward construction of the yacht that Worldspan alleged was illegally obtained by fraud. Sargeant then obtained a construction loan of $9 million from Comerica that it paid to Worldspan. The relationship between Worldspan and Sargeant deteriorated when Sargeant alleged Worldspan had overcharged about $2 million and Worldspan asserted that Sargeant said “that if Worldspan did not pay Sargeant $2 million within two months, he would destroy all the companies Barnett [Worldspan’s principal] was associated with and threatened to have Barnett killed.” Eventually, Worldspan brought this suit in federal court in Miami against Comerica, Sargeant, and a number of co-conspirators for fraud and violations of the federal and Florida Racketeer Influenced and Corrupt Organizations Acts. As the acts alleged in the amended complaint arose in connection with the construction of the superyacht in Canada, Magistrate Judge Louis recommended that the RICO allegations should be dismissed on the ground that Worldspan had not suffered a domestic injury. Magistrate Judge Louis then recommended dismissal of the remaining allegations because the “sprawling” complaint, although torrid, failed to sufficiently articulate the harm suffered as the result of the alleged conduct. On March 12, 2020, Judge Moreno adopted Magistrate Judge Louis’s recommendations and dismissed the amended complaint with prejudice. See April 2020 Update. The Eleventh Circuit affirmed the dismissal as within the discretion of the district court; however, the appellate court added that the complaint committed the “relative rare sin” of bringing “multiple claims against multiple defendants without specifying which of the defendants are responsible for which acts or omissions.”
Barge loading facility had the burden to establish that a barge that sank at its facility was unseaworthy at the time it took custody of the barge and failed in its burden of proof; Terral River Service Inc. v. SCF Marine, Inc., No, 21-30047 2021 U.S. Dist. LEXIS 37037 (5th Cir. Dec. 15, 2021) (Higginbotham).
SCF Marine delivered its barge to a loading facility operated by Terral River Service for the loading of rice, and the barge sank while secured at Terral’s facility. Terral brought this action against SCF Marine for salvage and other costs incurred by Terral. The barge took on water and partially submerged, damaging the rice cargo, resulting in the salvage operations by Terral. The sinking was caused by a fracture in the barge’s bow rake knuckle; however, several inspections prior to the incident, including one shortly before the sinking that was performed by an experienced Terral employee, revealed no such damage. The fracture seemingly revealed green paint marks, and Terral possessed at least two green barges in its fleet. Terral claimed that the fracture existed prior to Terral’s control of the Barge and was caused by SCF’s negligence. Judge Doughty excluded Terral’s expert witness Frank Budwine on the age of the hull fracture and excluded Terral’s expert witness Bob Bartlett that the fracture likely occurred before the barge was delivered, but he allowed Bartlett to testify that the green marks indicated that the fracture was likely caused by a collision with a green object. In light of the exclusion of Terral’s primary evidence that the damage occurred prior to their control of the barge, Terral argued that SCF bore the burden of proving that the barge was seaworthy at the time of delivery and that SCF could not prove such. However, Judge Doughty disagreed with Terral, concluding that Terral must prove that it suffered damages because the barge was unseaworthy and that SCF was negligent in its handling of the barge. Judge Doughty similarly found that Terral had no such evidence to prove that the fractured occurred while the barge was in SCF’s possession. See February 2021 Update. Terral filed an interlocutory admiralty appeal, and Judge Higginbotham, writing for the Fifth Circuit, first addressed the burden of proof of seaworthiness/unseaworthiness for the non-salvage claims brought by Terral. Analogizing to charter party cases where the charterer must prove that the shipowner breached the charter party by providing an unseaworthy vessel, Judge Higginbotham held that Terral, as the claimant, had the burden of proving that the barge was unseaworthy. Terral argued that the barge was the subject of a bailment and that the bailment shifted the burden to SCF Marine. However, the bailment cases involved suits by the bailor against the bailee. In this “somewhat unusual situation,” where the parties were reversed, Judge Higginbotham agreed with the district court that it is the barge loader who bore the burden of proving that the barge was unseaworthy at the time the barge loader took custody and control of the barge. Turning to the merits, Judge Higginbotham agreed that Judge Doughty properly excluded the expert testimony and that, without the testimony, Terral failed to establish that the hull was fractured prior to the barge’s delivery. Consequently, the Fifth Circuit affirmed the summary judgment on the non-salvage claims. Terral’s salvage claim did not depend on proof of when the fracture occurred and instead required evidence that there was a marine peril, service that was voluntarily rendered and not required by an existing duty or special contract, and success. As Terral had a duty of care as the barge’s bailee, it could not establish the second requirement for a salvage claim, and Judge Higginbotham affirmed the grant of summary judgment on the salvage claim.
From the federal district courts:
Evidence of statements and handout provided by a cruise ship’s nurse to a passenger was admissible; judge deferred ruling on the admissibility of opinions of treating doctors and prior incidents; references to the dog purchased by the passenger as a guide dog or seeing-eye dog were prohibited as the passenger did not need a guide dog or seeing eye dog; Vaughn v. Carnival Corp., No. 20-cv-23153, 2021 U.S. Dist. LEXIS 227508 (S.D. Fla. Nov. 29, 2021) (Bloom).
Tammy Vaughn sustained an eye injury on the CARNIVAL ECSTASY and brought this suit against the cruise line in federal court in Florida that included a count complaining of the acts of the shipboard nurse. The cruise line filed a motion in limine that sought to exclude a handout that Vaughn claimed was given to her by the nurse. The cruise line argued that the handout, which did not contain any information linking it to the cruise line, was not authentic and was hearsay. Noting that Vaughn testified that the nurse gave her the handout, that the nurse was acting in his capacity as the cruise line’s shipboard nurse, that the nurse admitted that the information in the handout was the advice given by the nurse, and that the nurse was allowed to give medical advice, Judge Bloom held that the handout was an opposing party’s statement, was not hearsay, and was admissible. Similarly, Judge Bloom held that statements allegedly made by the medical staff that the passenger did not need to see a doctor because her symptoms were caused by her seasickness patch were admissible. The cruise line objected to statements from the passenger’s treating physicians on causation because they failed to provide expert reports; however, as Judge Bloom could not determine at the motion stage whether the physicians’ opinions were formed and based on observations made during the course of treatment, she deferred ruling on the objection. She also deferred ruling on the cruise line’s objection to evidence of prior incidents (with the cruise line arguing that notice is not required for vicarious liability) as the passenger had not discovered any evidence of prior incidents. Finally, the cruise line sought to preclude references to the dog purchased by the passenger after the incident as a guide dog or seeing-eye dog. As the passenger continues to drive her car, goes to work without the dog, and does not rely on the dog while at home, Judge Bloom held that it would be unfairly prejudicial to the cruise line to allow the references. Judge Bloom allowed the passenger to introduce evidence that she purchased the dog after the incident and that she relies on the dog as a service animal in certain circumstances.
Paintings affixed by screws to walls of yacht were appurtenances that should be sold to pay lienors even though they did not belong to the named owner of the yacht; Rybovich Boat Co. v. M/Y BLUE STAR, No. 20-80136, 2021 U.S. Dist. LEXIS 227511 (S.D. Fla. Nov. 29, 2021) (Altman).
This case involves the claims of a yacht repairer that arrested the 143-foot yacht BLUE STAR for repairs and dockage. The captain and crew intervened, seeking wages, repatriation expenses, and expenses advanced on behalf of the yacht. The parties agreed to the sale of the yacht but disagreed on distribution of the sales proceeds. Judge Altman agreed that the ship repairer’s expenses for the custody of the yacht as well as its tenders and personal watercraft, the expenses to remove, store, and insure the yacht’s artwork, and the costs for the Marshal’s arrest were proper custodial services. Judge Altman also held that the ship repairer established a lien for the necessaries that were authorized by the captain and manager of the yacht and proven by invoices detailing the services. Judge Altman agreed that the captain had a maritime lien for necessaries for his continued care for the yacht after its crew and employer disappeared, but his evidence was insufficient to support the claim except for one expense. Therefore, Judge Altman held that the captain would have to establish the expenses at trial. Similarly, Judge Altman held that the crew members were entitled to a lien for their wages, but the evidence was insufficient to establish the amount that was owed. Finally, reasoning that the owner has a general obligation to repatriate seamen who find themselves adrift without a passage home, Judge Altman granted summary judgment to the seamen for their repatriation expenses. See August 2021 Update. After three auctions, the yacht was sold with a credit bid to the ship repairer, but most of the maritime liens were not paid and the plaintiffs asked that the court sell three tenders and 14 paintings that had been exhibited on the vessel (attached by screws to the wall) so that the proceeds could be used to pay the liens. The beneficial owner of the yacht contested the sale of the paintings and argued that he had purchased and enjoyed the paintings for years before he brought them onto the yacht and that they were not essential to the yacht’s ability to navigate. Additionally, he argued that the tenders and paintings had been exempted from the sale of the vessel–an agreement that they were not appurtenances. Judge Altman analyzed whether the paintings were essential to the vessel’s navigation, operation, or mission and reasoned that the disjunctive “or” meant that the paintings did not have to be related to the ship’s navigation or operation. As the vessel’s mission was to serve as a pleasure yacht, Judge Altman held that the paintings were appurtenances, even though they were easily removable. He also rejected the argument that the paintings could not be appurtenances of the vessel because the beneficial owner of the yacht (owner of the paintings) never transferred title to the company that actually owned the vessel. Judge Altman held that an item can be an appurtenance of the vessel regardless of who the actual owner may be. Finally, Judge Altman rejected the argument that the court had already decided that the paintings were not appurtenances to be sold by ordering the vessel sold without the paintings as the separate sale was part of an ongoing effort to maximize the amount recovered by selling the paintings separate from the vessel. Consequently, Judge Altman denied the owner’s motion to separate the artwork as a non-appurtenance of the yacht.
Judge apportioned negligence of seaman, tug, and dock for injury, awarded damages with a credit for payment of maintenance and cure after the seaman reached maximum cure, and declined to award indemnity under the charter party for the tug because of the linguistic discrepancy in the indemnity provision; Badeaux v. Eymard Brothers Towing Co., No. 2:19-cv-13427, 2021 U.S. Dist. LEXIS 227738 (E.D. La. Nov. 29, 2021) (Vance).
Clifton Badeaux, captain of Eymard Towing’s M/V PEARL C. EYMARD, slipped and fell while stepping onto the vessel from an adjacent spar barge that was serving as a dock. The spar barge was owned and operated by ARTCO, a subsidiary of ADM. Eymard Towing had entered into a time charter with ADM to use the PEARL C. EYMARD to move barges in the vicinity of ADM’s export facility in Destrehan, Louisiana. Eymard Towing, the owner, was required to maintain P&I insurance on the vessel with the “as owner” clause deleted as to the charterer, ADM, and its affiliates and related companies and with contractual coverage for the obligation of Eymard Towing to ADM. The charter required that the charterer and its affiliated or related companies be named as additional insureds. Eymard Towing procured P&I coverage for the vessel with Stratford Insurance. The policy provided that Eymard Towing could name as additional insureds others for whom Eymard Towing was performing work and also where required by contract provided the loss occurred during and as a result of the actual performance of the work. The policy also provided that the “as owner” clause would not apply. Badeaux brought suit against Eymard Towing, ARTCO, and ADM, and ARTCO, and ADM brought a third-party action against Stratford seeking defense and indemnity. In addressing the parties’ cross-motions for summary judgment, Judge Vance first had to determine the applicable law. Stratford’s policy contained a New York choice-of-law clause, and Judge Vance held that state law was applicable under Wilburn Boat (finding no established maritime rule on additional insureds). However, there was not a single connection with New York, and Judge Vance declined to apply New York law, choosing to apply Louisiana law, noting that Eymard Towing is a Louisiana corporation, doing business exclusively in Louisiana, the accident was in Louisiana, and Badeaux is a Louisiana citizen. Judge Vance found that the policy unambiguously included both ADM and ARTCO as additional insureds—companies (and their affiliates and related companies) for whom Eymard Towing was working, directly or indirectly). Judge Vance then addressed whether the liability of ARTCO and ADM was covered under the vessel’s P&I policy, noting the deletion of the “as owner” language that has produced so many disputes under the Fifth Circuit’s Lanasse case. That presented the question whether the liabilities were sufficiently vessel related, as the losses covered under the policy must be “in respect of” the covered vessel. Badeaux was not aboard the vessel when he was injured, but he was in the process of stepping onto the vessel when he slipped and fell. Judge Vance considered the policy wording to be ambiguous, even after applying rules of construction, so she held that the ambiguity would be resolved against the insurer. Accordingly, she concluded that an injury during the boarding of the vessel was in respect of the vessel and was covered. See November 2021 Update. With trial pending, ARTCO and ADM moved to sever their cross-claims for breach of contract and for defense and indemnity against Eymard Towing. Although Badeaux and Eymard Towing did not oppose the motion, Judge Vance denied the request, stating: “Now, on the eve of trial, ADM and ARTCO seek to prolong this litigation and punt their years-old claim farther down the road. In the interest of avoiding a piecemeal trial that invites delay and further procrastination, the Court denies the request to sever this claim.” See December 2021 Update. The full case was tried to Judge Vance on November 8 and 9, and she credited Badeaux’s account of the accident, finding that his right foot slipped on the surface of the spar barge as he was attempting to board the PEARL C. EYMARD and that the PEARL C. EYMARD was unseaworthy for lack of a safe means of boarding and departing from the vessel. Judge Vance also found that Eymard Towing was negligent under the Jones Act for failing to provide Badeaux with a reasonably safe place to work. Judge Vance then addressed ARTCO’s spar barge and found that the structure had been permanently converted to a dock and was not in navigation (attached to the river bottom with iron spuds). Although Badeaux did not explicitly assert his negligence claim against ARTCO under state law, Judge Vance applied Louisiana law and found ARTCO liable for general negligence and for custodial liability (lack of non-skid on the segment of the barge where Badeaux slipped). Judge Vance found no liability on ADM as the parent of ARTCO, but she found that Badeaux was guilty of comparative negligence in multiple ways—he failed to replace his heavily worn boots while walking in the rain on the spar barge, his failure to report unsafe conditions such as the lack of a non-skid coating, and his failure to maintain three points of contact during the boarding. Judge Vance apportioned fault 50% to Badeaux, 25% to Eymard, and 25% to ARTCO. Judge Vance found that Badeaux reached maximum cure on June 17, 2021, and that Eymard was entitled to a credit for maintenance and medical treatment that it paid after that date. Badeaux was initially treated with conservative medical care, including an epidural steroid injection, but then Dr. Sina Pourtaheri performed a kyphoplasty at the L-1 and L-2 levels of Badeaux’s back (injection of bone cement into fractured vertebrae), and later Badeaux was treated by Dr. Peter Liechty, who performed a spinal fusion from T-11 to L-3, and vertebral-body augmentations at T-12, L-1, and L-2, and later removed the titanium hardware in another surgery. Judge Vance awarded $174,235.57 for past wage loss, $783,489.17 for future wage loss, $250,000 for past pain and suffering, $250,000 for future pain and suffering, with no award for fringe benefits as Badeaux could perform sedentary work and no award for future medical treatment as it was 11 months from the last surgery and the recommendations in the life care plan were speculative and rejected. Judge Vance awarded pre-judgment interest at .2% on damages that were accrued as of the date of judgment. Thus, Badeaux was entitled to recover $728,862, half of the total damages, subject to a credit of $9,172.69 for the payments of maintenance and cure after Badeaux reached maximum cure. Finally, Judge Vance addressed the indemnity provision in the charter party between ADM and Eymard. Although the charter required Eymard to defend and indemnify ADM and its affiliated companies (which would include ARTCO), the defense and indemnity was regardless of the fault or negligence of the charterer (ADM). The provision did not say that the defense and indemnity extended to the negligence of affiliated or related companies, such as ARTCO. Based on the “linguistic discrepancy,” Judge Vance held that Eymard did not owe defense and indemnity to ARTCO for ARTCO’s negligence.
Allegation of borrowed servant status against defendant was sufficient to establish employment with respect to claim of improper joinder of Jones Act count, but conclusory allegation on the elements of seaman status required further development to determine if the case was removable; Willison v. Noble Drilling Exploration Co., No. 21-1520, 2021 U.S. Dist. LEXIS 227742 (E.D. La. Nov. 29, 2021) (Morgan).
Dale Willison was employed as a field engineer for Kongsberg Maritime. Kongsberg had a Master Service Contract (MSC) with Noble Drilling to provide services and products for Noble drilling vessels, and the contract required Kongsberg to indemnity Noble for injuries to Kongsberg employees. Willison was assigned by Kongsberg to perform repair services for Noble in Guyana, South America. Noble was responsible for transporting Willison from Louisiana to Guyana, which included a driver from Knight Rider Transportation to transport Willison from the airport. Willison was injured when the driver took evasive action to avoid a washing machine in the lane of travel, swerved into the oncoming lane of traffic, and had a collision with a taxi. Willison brought an action against Noble in Louisiana state court under the Jones Act and general maritime law, but Noble had filed for bankruptcy and the case was stayed. Willison added Kongsberg as a defendant in an amended petition, alleging that Kongsberg was liable for Willison’s claims against Noble because of the indemnity provision in the MSC. Willison and Noble reached an agreement in the bankruptcy proceeding by which Willison’s claims against Noble were discharged and the stay was lifted so that Willison could pursue Kongsberg for indemnity. Kongsberg then removed the state case based on diversity, arguing that the Jones Act claim was improperly pleaded and did not prevent removal. Kongsberg first argued that the Jones Act claim had been discharged and could not be a bar to removal; however, Judge Morgan ruled that the discharge did not bar Willison from asserting the same claims through indemnity. Kongsberg next argued that Willison could not maintain a claim under the Jones Act against Noble because he admitted in his petition that he was an employee of Kongsberg. Kongsberg also produced an affidavit that its field engineers were not employees of Kongsberg’s customers. However, Judge Morgan noted that Willison also alleged that he was the Jones Act employee of Noble and that Noble was required to establish that this allegation was undisputedly false. She did not consider the evidence sufficient to establish the falsity undisputedly. Finally, Kongsberg argued that Willison was not a seaman as a matter of law under the summary-judgment-like test used to evaluate claims of improper pleading of Jones Act claims. Willison alleged that he was assigned to work on vessels and was a seaman, but he did not allege facts concerning his connection to a vessel or vessels, but Kongsberg presented evidence that Willison spent less than 1% of his employment on Noble vessels. The conclusory pleading by Willison was insufficient, so Judge Morgan gave Willison the opportunity to submit evidence in support of his argument that he satisfied the seaman status test.
Forum-selection clause was unenforceable when its enforcement would result in a reduction of recovery from that allowed under COGSA; In re Hapag-Lloyd Aktiengesellschaft, No. 1:19-cv-5731, 2021 U.S. Dist. LEXIS 227982 (S.D.N.Y. Nov. 29, 2021) (Woods).
After a fire on the containership M/V YANTIAN EXPRESS caused damage to a number of cargo containers, Hapag-Lloyd brought this limitation action in the Southern District of New York. The vessel was carrying cargo from Asian ports to ports on the East Coast of the United States for slot charterers Ocean Network Express and Yang Ming Marine. As a vessel-owning common carrier, Ocean Network entered into service contracts and bills of lading with most of its customers for the carriage of its customers’ cargoes. The bills of lading contained a Singapore forum-selection clause, and the service contracts contained a New York arbitration clause. Cargo claimants and non-vessel-operating common carriers filed claims in the limitation action and brought third-party actions against Ocean Network. Ocean Network then moved to dismiss the third-party complaints based on the forum-selection clauses. Magistrate Judge Lehrburger first addressed the situation in which there was only a bill of lading with a Singapore forum-selection clause. He concluded that the clause was mandatory and binding on the cargo claimants. However, he also noted that if the clause were enforced, the court in Singapore would apply the limitation on liability in the 1976 Limitation Convention (to which the United States is not a party) that would limit the recovery to an amount substantially less than the recovery under the Carriage of Goods by Sea Act. As there was no dispute that litigation in Singapore would reduce the carrier’s liability for damage to the cargo, which would violate Section 3(8) of COGSA, Magistrate Judge Lehrburger recommended that Ocean Network’s motion to dismiss the third-party actions be denied. Magistrate Judge Lehrburger also considered the argument that the forum-selection clauses should not be enforced because it would frustrate the purpose of the Limitation Act to resolve all issues in a single proceeding. Magistrate Judge Lehrburger recognized that refusing to enforce the clauses on the basis of judicial economy would undermine the certainly that these clauses bring to international transactions, and he did not conclude that the complexity of the limitation proceedings was sufficient to render the clauses unenforceable. However, he noted that where the clauses were unenforceable under COGSA, the purposes of the Limitation Act were an additional basis against enforcement. Finally, with respect to the shipments in which there were both bills of lading (with forum-selection clauses) and service contracts (with arbitration clauses), Magistrate Judge Lehrburger did not have to address whether there was a conflict in the forum selection. The claimants had not sought to enforce the arbitration agreement and the clauses in the bills of lading were unenforceable. Therefore, the same result was reached for those cases as was reached in the cases in which there was only a bill of lading. See August 2021 Update. Analyzing the decision of the Supreme Court in the Sky Reefer case, Judge Woods agreed with and adopted the recommendations of Magistrate Judge Lehrburger in their entirety.
Rebuttable presumptions from The Pennsylvania and Oregon Rules were insufficient to grant summary judgment in allision case; SRK Holdings, Inc. v. Southern Towing Co., No. 3:20-cv-00110, 2021 U.S. Dist. LEXIS 228612 (S.D. Tex. Nov. 30, 2021) (Edison).
This case arises from the allision of a barge in tow of the tug LAURA ELIZABETH, owned and operated by Southern Towing, with a bulkhead owned by SRK Holdings in the Intracoastal Waterway near Bolivar, Texas. SRK brought this suit against SRK Holdings in state court in Galveston, and Southern Towing removed the case to the Galveston federal court where SRK Holdings moved for summary judgment that Southern Towing is liable as a matter of law for the damage to its bulkhead. SRK argued that it had established liability because Southern Towing is presumed to be at fault under The Oregon Rule (moving vessel is presumed to be at fault when it allides with a stationary object), and causation was satisfied by The Pennsylvania rule (burden is on a vessel that violates a statutory rule intended to prevent collisions that its fault could not have been a cause of the collision/allision) because of the Laura Elizabeth’s violations of several Inland Rules of Navigation. Southern Towing responded that summary judgment on liability was not appropriate because the area was not adequately lighted, the granite boulders of the bulkhead were unpermitted and protruding into the Intracoastal Waterway, and the captain of the tug acted reasonably under the circumstances. Reasoning that the presumptions from The Oregon and Pennsylvania Rules are rebuttable and that the parties had presented fundamentally different views of the evidence, Magistrate Judge Edison was “extremely reluctant to decide the outcome of an admiralty case based solely on rebuttable presumptions.” Concluding that there were genuine issues of material fact on negligence and causation, he recommended that the motion for summary judgment be denied.
Federal court had diversity jurisdiction over snap removal by forum defendant before service of process was properly made on the forum defendant; Chastain v. New Orleans Paddlewheels, Inc., No. 21-1581, 2021 U.S. Dist. LEXIS 228844 (E.D. La. Nov. 30, 2021) (Vitter).
Margaret Chastain, a citizen of Tennessee, was a passenger on the M/V CREOLE QUEEN as it cruised down the Mississippi River to the Chalmette Battlefield near New Orleans. Chastain was injured when she fell down an interior stairway and brought this suit in state court in St. Bernard Parish, Louisiana, against the owner of the vessel, New Orleans Paddlewheels. The deputy sheriff left the citation and petition for damages with an employee of the defendant after being told that the defendant’s agent for service of process was not in the office. Two weeks later, New Orleans Paddlewheels filed a notice of removal based on diversity jurisdiction (Tennessee plaintiff and Louisiana defendant). Chastain filed a motion to remand the case to state court, citing the provision in the Removal Statute (Section 1441(b)(2)) that prohibits removal in diversity cases by forum state defendants. New Orleans Paddlewheels argued that the forum defendant rule did not apply because the prohibition on removal is only “if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought” and New Orleans Paddlewheels was not properly served. This presented two issues for resolution by Judge Vitter. The first question was whether the defendant had been properly served with the citation, and Judge Vitter held that the service was not proper. The question was then raised whether the snap removal, before the defendant was properly served, allowed the forum defendant to remove the case. Chastain acknowledged that the Fifth Circuit has upheld federal jurisdiction over a snap removal in Texas Brine v. American Arbitration Association; however, Chastain argued that the decision only applied when non-forum defendants sought to remove a case prior to service on the forum defendant. In this case, it was the forum defendant who filed the notice of removal prior to service. New Orleans Paddlewheels cited a number of cases from district courts extending the analysis from Texas Brine to forum defendants, and Judge Vitter was persuaded that the conclusion in those cases was supported by the specific wording of the Removal Statute. As New Orleans Paddlewheels was not a party that was properly served, the forum defendant rule did not prohibit removal, and Judge Vitter denied the motion to remand. Thanks to Elton “Chip” Duncan of Duncan & Sevin in New Orleans for bringing this case to our attention.
Judge transferred cargo case based on the first-to-file rule despite the existence of a forum-selection clause in the bills of lading; BBC Chartering Carriers GmbH & Co. v. Fluence Energy, No. H-21-2235, 2021 U.S. Dist. LEXIS 229756 (S.D. Tex. Dec. 1, 2021) (Lake).
Fluence Energy sought to ship 250 containers of dangerous goods from Vietnam to San Diego, California. BBC Chartering issued a Booking Note to Schenker, a non-vessel operating common carrier for the shipment on the BBC FINLAND. BBC Chartering then issued bills of lading which contained an exclusive forum-selection clause for the federal court for the Southern District of Texas. The bills listed Schenker as the consignee. During the voyage the vessel encountered heavy weather and 87 containers were not delivered. Fluence arrested the BBC FINLAND when it arrived in San Diego, and the vessel was released on a bond of $8.85 million. The day after the in rem action was filed in California, BBC Chartering filed this complaint in federal court in the Southern District of Texas against Fluence Energy, seeking a declaratory judgment eliminating or limiting its liability. Fluence Energy moved to transfer the Texas suit to California based on the suit filed the day before in California (first-to-file rule). BBC Chartering responded that the litigation should remain in Texas based on the mandatory forum-selection clause. Judge Lake in the Southern District of Texas transferred the case, disagreeing that application of the first-to-file rule would re-write the parties’ agreement. Judge Lake explained that the issue whether the forum-selection clause bound the parties did not need to be addressed by the court in the second-filed action.
COGSA’s one-year statute of limitation applied to cargo’s claim asserting delivery at the wrong port, but the carrier had to establish when the delivery occurred in order to invoke COGSA’s limitation; Hapag-Lloyd Aktiengesellschaft v. Levy, No. 2:20-cv-11155, 2021 U.S. Dist. LEXIS 230363 (D.N.J. Dec. 1, 2021) (Martinotti).
Aleph Industries contracted with Hapag-Lloyd to transport shipments of used tires from ports in the United States to ports in India. While the shipments were in transit, Aleph learned that the government of India placed restrictions on the importation of used tires. Thus, Aleph alleged that it instructed Hapag-Lloyd to change the destination of the shipments from India to Pakistan but the shipments were still delivered to ports in India. Aleph incurred storage charges and could not satisfy the orders of its customers because the tires did not clear customs, and Aleph did not pay for the shipping services. Hapag-Lloyd brought this suit in federal court in New York against Aleph, and nearly a year later Aleph answered the suit and brought a counterclaim for breach of the agreement to ship the tires to Pakistan. Hapag-Lloyd moved to dismiss the counterclaim on the ground that it was time-barred by the one-year limitation for suit in the Carriage of Goods by Sea Act and that the complaint did not sufficiently state a claim under COGSA. Aleph argued that COGSA only covers claims for lost or damaged goods, but Judge Martinotti rejected that argument and held that COGSA also covers damages resulting from improper delivery. Aleph also argued that the statute of limitation never began to run because the goods were never delivered to their port of final destination, but Judge Martinotti held that the limitation period began to run when notice was provided of the delivery and a reasonable opportunity was provided for inspection or removal of the goods. However, Judge Martinotti found Hapag-Lloyd’s contention that all of the shipments were made prior to July 8, 2021, more than one year before the counterclaim was filed on July 8, 2021, to be insufficient to establish the dates of delivery. Therefore, he did not grant the motion to dismiss the counterclaim. Finally, Hapag-Lloyd argued that Aleph’s counterclaim failed to plead that it gave notice of the loss or damage as required by COGSA, but Judge Martinotti held that Aleph had pleaded a prima facie case under COGSA by asserting Hapag-Lloyd received the cargo in good condition, that Hapag-Lloyd failed to properly direct the goods, and that Aleph was unable to satisfy the orders of its customers as a result.
Seaman presented fact questions of Jones Act negligence and unseaworthiness for his back injury while lifting a box of French fries because of an understaffed galley department; Omar v. Key Lakes IV, Inc., No. 20-cv-11845, 2021 U.S. Dist. LEXIS 230501 (E.D. Mich. Dec. 1, 2021) (Friedman).
Abdulsalam Omar was employed as a second cook on the Great Lakes freighter, M/V GREAT REPUBLIC, operated by his employer, Key Lakes. He normally worked 12 ½ hours a day, beginning at 0500, but on the day of his accident he reported to work at 0200 so he could make space for a supply delivery in the galley. After working for approximately two hours, Omar felt a pop in his back while lifting a box of French fries. He brought this suit in federal court in Michigan against Key Lakes under the Jones Act and general maritime law, and Key Lakes moved for summary judgment (Omar did not respond with respect to his claim for maintenance and cure, so Judge Friedman considered that claim to be abandoned and granted summary judgment on it). Omar asserted that his employer was negligent and the vessel was unseaworthy because he was required to work too many hours in violation of the work-rest rule from 46 U.S.C. § 8104 that workers in the deck or engine departments of towing vessels on the Great Lakes may not be required to work more than 8 hours in one day or more than 15 hours in a 24-hour period except in an emergency. Key Lakes argued that the statutory requirement was not applicable as Omar worked in the steward department on a freighter, and that it was not on notice of any hazardous condition so as to be given the opportunity to correct it. Omar responded that the galley department was understaffed in violation of the collective bargaining agreement applicable to his employment, which would be notice to the employer, and that notice is not required for an unseaworthiness claim. As the collective bargaining agreement delineated four categories of duties within the steward’s department, it implied that a two-person galley (the number on duty at the time of the accident) was not fully staffed. Concluding that a reasonable jury could conclude that the galley was understaffed, Judge Friedman held that the negligence and unseaworthiness claims could not be resolved on summary judgment.
Maritime law does not provide awards for life salvage without property salvage; Curran v. Wepfer Marine, Inc., No. 1:20-cv-1229, 2021 U.S. Dist. LEXIS 230887 (W.D. Tenn. Dec. 2, 2021) (Anderson).
John F. Curran, III, was hired by Okie Moore Diving, a subsidiary of Wepfer Marine, to serve as a salvor on the STEPHEN FOSTER in an effort to raise and salvage equipment of a barge in the Mississippi River near Greenville, Mississippi. In the process of transporting the raised barge, a worker was struck by the handle of a winch, and Curran acted quickly to provide immediate trauma care to the worker. Senior management at Wepfer Marine recognized Curran’s effort as the reason that the injured worker recovered quickly and was able to return to work, and Curran was given additional responsibility as a safety officer for Okie Moore but with no additional pay. Curran brought this action in federal court in Tennessee against Okie Moore and Wepfer Marine seeking an award for the life-saving services he performed that were outside of the scope of the work he was hired to perform. The amount sought by Curran was a third of the $12 million that he claimed would have been spent for the care of the injured worker without Curran’s efforts. The defendants moved to dismiss the salvage claim, and Magistrate Judge York recommended that the salvage claim be dismissed. In adopting the recommendation, Chief Judge Anderson noted that maritime salvage law contains two principles in connection with saving of human life. When a person saves both life and property, the court may consider the act of saving the life to enhance the award for saving property. Additionally, if a set of salvors saves property while another set of salvors safes a life, the court may allow the life salvors to share in the award for property salvage. Otherwise, life salvors are not entitled to a salvage award. As there was no indication that Curran protected property while preserving the worker’s life or that his providing of medical aid was concurrent with a third-party’s property salvage, Chief Judge Anderson held that Curran was “out of luck on his claim.” [On December 9, 2021, Chief Judge Anderson reaffirmed his decision after noting that he had mistakenly stated in the opinion on December 2 that there was no objection to Magistrate Judge York’s recommendation.] In the interim, Magistrate Judge York imposed nonmonetary sanctions against Curran for failing “to make a reasonable inquiry into maritime law before filing his Complaint” which would reveal that “his salvage claim is frivolous.” Magistrate Judge York recommended that Curran must obtain express permission of the Court before accepting further filings and that a magistrate judge must certify that such filings are not frivolous.” On December 20, 2021, Chief Judge Anderson adopted the recommendation.
Suit for passenger’s death was timely when filed within a year of the appointment of his personal representative; DOHSA applied to death on the high seas despite misdiagnosis in territorial waters; Arnold v. Carnival Corp., No. 20-cv-22867, 2021 U.S. Dist. LEXIS 231060 (S.D. Fla. Dec. 2, 2021) (Torres).
Robert Hugh Arnold, Jr., and his wife, Elizabeth Ann Arnold, were passengers on the CARNIVAL BREEZE. Robert began to feel unwell while the vessel was docked in San Juan, Puerto Rico, and he was examined by the ship’s senior physician, who diagnosed him with high blood sugar, diabetes, and anxiety. He was discharged but suffered a cardiac arrest after the ship left port and was on the high seas. His death was later determined to have been caused by deep vein thrombosis of the left leg. Robert’s ticket provided that notice had to be given to the cruise line within 185 days after the date of death, and suit had to be filed within one year after the date of death. Elizabeth gave notice within 185 days of Robert’s death, but she did not file the suit until more than a year after the death but less than a year after she was appointed as the personal representative of the estate. The cruise line moved for summary judgment that the suit was untimely, and Elizabeth responded that the time to file suit was tolled by 46 U.S.C. § 30508(d), which provides that in the event the claim is for a minor, mental incompetent, or wrongful death, “any period provided by a contract for giving notice of the claim is tolled” until the earlier of the date a legal representative is appointed for the minor or incompetent or decedent’s estate or 3 years after the injury or death. The cruise line contended that the plain language of the statute only extended the notice requirement and not the time to file suit; however, Magistrate Judge Torres held that the reference to notice included all forms of notice, including the filing of a lawsuit. Consequently, he concluded that the time to file suit was tolled until the appointment of the legal representative and recommended that the suit be consiudered timely as it was filed within a year of the appointment. The cruise line also moved for summary judgment that the Death on the High Seas Act applied to Robert’s death, and Elizabeth replied that the wrongful act, the misdiagnosis of Robert’s pulmonary thromboembolism, occurred in Puerto Rico, which is American soil for DOHSA. However, Magistrate Judge Torres noted that the misdiagnosis did not culminate in an injury until Robert suffered the heart attack on the high seas. As the injury causing Robert’s death occurred on the high seas, Magistrate Judge Torres recommended that DOHSA apply to the wrongful death claim.
Judge rejected defenses and enforced a seaman’s arbitration agreement from a collective bargaining agreement that was incorporated into the seaman’s employment agreement; Munoz v. ROW Management Ltd., No. 21-61605, 2021 U.S. Dist. LEXIS 231067 (S.D. Fla. Dec. 2, 2021) (Dimitrouleas).
Roman Dario Palacios Holguin, a crew member employed as a doctor on the M/V THE WORLD, signed an employment agreement with ROW Management that incorporated the collective bargaining agreement between ROW and several Norwegian unions. Holguin’s widow brought this suit under the Jones Act, DOHSA, and the general maritime law against ROW in state court in Broward County, Florida, asserting that the vessel owner failed to provide Holguin with proper medical treatment and, as a result, Holguin took his own life. ROW removed the action to federal court based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), and Munoz asserted several defenses to enforcement of the arbitration provision. Judge Dimitrouleas held that Holguin’s signature on the employment agreement that incorporated by reference the collective bargaining agreement was sufficient to satisfy the requirement of a written agreement. Munoz argued, however, that the CBA had expired and was no longer in effect, but Judge Dimitrouleas noted that the CBA provided that it was automatically renewed absent timely written notice. Munoz contended that ROW had the obligation to establish that no party had terminated the CBA, but Judge Dimitrouleas rejected that placement of the burden on ROW in light of the “very limited inquiry” that the court conducts (nonetheless, ROW did present an affidavit establishing that the provisions of the CBA remained in place). Similarly, Judge Dimitrouleas rejected the argument that the agreement was not enforceable because ROW had not advised Holguin whether the CBA had been renewed. Munoz’ final argument was that ROW’s settlement of contractual claims with her waived ROW’s right to seek arbitration because the settlement agreement “invited” her to litigate the tort claims. The agreement provided that the payment was made to Munoz without prejudice to her right to pursue non-contractual claims at law or any other legal redress available and arising out of the incident. Judge Dimitrouleas did not believe that the language waived ROW’s right to compel arbitration. Consequently, he compelled arbitration and dismissed the suit.
Judge declined to extend stay in limitation action to the master of the vessel; Cox Operating, LLC v. ATINA M/V, Nos. 20-2845, 20-2871, 2021 U.S. Dist. LEXIS 231564 (E.D. La. Dec. 3, 2021) (Milazzo).
After the M/V ATINA allided with its offshore platform, Cox Operating arrested the vessel and named the vessel’s master as a defendant in the suit in federal court in New Orleans. The owner, bareboat charterer, and managers of the vessel then filed a limitation action in the same court, and the two suits were consolidated. The order in the limitation action stayed all claims against the vessel, her officers, and crew, and Cox Operating asked the court to modify the stay so that it could pursue its claim against the master of the vessel in the first suit. The vessel defendants responded that Judge Milazzo should use her inherent power over her docket to continue the stay against the master, arguing that it was a waste of time and effort to allow the claim to proceed against the master because he was not a party to the vessel’s P&I insurance and recovery against him was unlikely. Reasoning that the language of the statute was plain that the limitation act does not affect the liability of the master, Judge Milazzo declined to extend the stay to the master and ordered that Cox Operating could proceed with the claim against the master.
Hull policy on yacht was voided by insured’s misrepresentations; Certain Underwriters at Lloyd’s of London v. Coquelet, No. 20-61185, 2021 U.S. Dist. LEXIS 231947 (S.D. Fla. Dec. 3, 2021) (Smith).
Guillermo Coquelet purchased a 2002 seventy-foot Johnson yacht, the M/Y ISABELLA, and submitted an application for hull insurance on the vessel. In the application he stated that the vessel would not be chartered to others with or without a captain and that the vessel would not be used commercially or for business purposes. Lloyds issued a SeaWave Yacht Insurance Policy in the amount of $425,000 that included a provision that the policy was null and void from the inception in the event of nondisclosure or misrepresentation of material facts and that excluded claims when the vessel is used for other than private pleasure purposes or is chartered or used for reward of any kind. Despite the representations made in the application, Coquelet chartered the vessel for hire, including bareboat charters without a captain. The vessel was twice boarded by the Coast Guard and cited for violations with respect to its unlawful chartering. After the vessel was struck by a rogue wave en route to the Bahamas, it sank at its berth in the Bahamas, and Coquelet made a claim for the damage. Lloyds brought this declaratory judgment action in federal court in Florida and moved for summary judgment that the policy was void ab initio based on violation of the uberrimae fidei doctrine for the material misrepresentations and omissions on his application and for breach of the express warranty in the policy with respect to nondisclosure and misrepresentation. Finding that the policy was void under the general maritime uberrimae fidei doctrine and in accordance with the policy provision because of the misrepresentations that the vessel would not be chartered with or without a captain and that the vessel would not be used for commercial purposes, Judge Smith held that the policy was void from its inception and that Lloyds was entitled to summary judgment.
Open and obvious condition was not a bar to a passenger’s negligent maintenance claim; prior incidents were not sufficiently similar to provide notice, but warning signs and puddles in the area earlier were sufficient; failure to produce an expert medical report result in summary judgment on causation for injuries that were not readily observable; Harrell v. Carnival Corp., No. 19-22667, 2021 U.S. Dist. LEXIS 231950 (S.D. Fla. Dec. 3, 2021) (Martinez).
Sharon S. Harrell slipped and fell on a puddle of water at the bottom of the jacuzzi stairs on the Lido Deck of the CARNIVAL PRIDE. She claimed that as a result of the fall she suffered nerve damage to her left ankle resulting in ongoing pain and swelling with residual Complex Regional Pain Syndrome, depression, anxiety, and post-traumatic stress. She also claimed that her doctors later diagnosed her with a fracture in her ankle. Harrell brought this action against the cruise line in federal court in Miami for negligent maintenance, and the defendant moved for summary judgment on several grounds. The cruise line first argued that the puddle of water was open and obvious, but Judge Martinez rejected that argument because the open and obvious nature of a dangerous condition is a factor but not a bar to liability for negligently maintaining premises. With respect to notice of the risk, Harrell cited to nineteen cases where the cruise line was a named defendant and provided a brief description of the holding in each case. However, Harrell did not attempt to show the similarities between the situation in those case and her accident, and Judge Martinez held that the incidents were not proven to be sufficiently similar to establish notice. Judge Martinez did find sufficient evidence of notice from warning signs around the jacuzzi to be careful with wet decks and from puddles on the deck in the area when Harrell walked past the area earlier in the day. Finally, the cruise line argued that Harrell had proffered no expert testimony to prove that the cruise line’s breach was the proximate cause of her injuries. Although Harrell designated her doctor, Peter Moyer, as a testifying witness on causation, she did not provide an expert report from Dr. Moyer. Without that expert report, Harrell could not establish causation except as to readily observable injuries. Thus, the cruise line was entitled to summary judgment on the non-readily observable injuries, Harrell’s fractured ankle, nerve damage, Complex Regional Pain Syndrome, depression, post-traumatic stress disorder, and anxiety.
Passenger’s evidence established fact questions of notice and proximate cause to defeat the cruise line’s motion for summary judgment; Darby v. Carnival Corp., No. 19-21219, 2021 U.S. Dist. LEXIS 231951 (S.D. Fla. Dec. 3, 2021) (Goodman).
Kay Darby, who claimed to have lost her footing on a wet surface on the deck of the CARNIVAL VALOR, engaged Dr. Francisco De Caso to provide expert opinions about the cause of the incident. The cruise line filed a Daubert motion to exclude his opinions, and Magistrate Judge Goodman first held that De Caso did not have to have a degree in naval architecture, have studied marine engineering or shipbuilding, or have been involved in design of a cruise ship or the selection of flooring for a passenger vessel in order to qualify as an expert with respect to slip resistance of the surface of the deck of the vessel. The cruise line objected that De Caso should not be permitted to testify about authoritative codes or industry standards (relying on American Society for Testing and Materials International’s Standard Practice for Human Engineering Design for Marine Systems, Equipment and Facilities), but Magistrate Judge Goodman considered the objection to be a subject of cross-examination. Magistrate Judge Goodman recommended that De Caso be allowed to testify on slip resistance based on tests he conducted with a tribometer, rejecting the cruise line’s argument that the tribometer is not generally accepted by the scientific community and that it is an ineffective instrument to use to measure the risk of a slip or fall. However, Magistrate Judge Goodman agreed that De Caso should not be allowed to testify that the tribometer mimics significant biomechanical parameters of the human walking gait because he is not an expert in human factors. Magistrate Judge Goodman did not consider De Caso to be qualified to render opinions on lighting issues, and he did not believe that De Caso should be permitted to opine on the constructive knowledge of the cruise line as that invaded the province of the jury. See December 2021 Update. Magistrate Judge Goodman then addressed the cruise line’s motion for summary judgment. Darby alleged a single count of negligence with nineteen breaches. Instead of attacking the pleading as a shotgun pleading, the cruise line argued that it did not have actual or constructive notice of the risk-creating condition. Magistrate Judge Goodman did not find any evidence of actual knowledge of the cruise line, but he did find sufficient evidence of constructive knowledge based on prior substantially similar incidents, meeting minutes from the cruise line, the cruise line’s spill policies, the cruise line’s slip resistance standards, and the testimony of the cruise line’s corporate representative. The cruise line also sought summary judgment on the ground that Darby failed to establish a causal connection between her injuries and the cruise lines’ breach of duty. Although Darby responded as though the argument was that she could not prove that she suffered a physical injury from the incident, Magistrate Judge Goodman understood the argument as challenging whether the evidence demonstrated that the cruise line’s breaches of duty proximately caused Darby’s injuries. Noting that proximate cause is generally a fact issue to be resolved by the fact finder, Magistrate Judge Goodman found sufficient evidence of proximate causation as Darby testified that she did not see the liquid and would have gone around it if warned.
Dock lessee had standing to bring claim against adjoining terminal for damages incurred by the dock lessee resulting from the collapse of its leased dock from dredging work at the adjoining terminal; Waterfront Petroleum Terminal Co. v. Detroit Bulk Storage, Inc., No. 19-13621, 2021 U.S. Dist. LEXIS 232482 (E.D. Mich. Dec. 3, 2021) (Cleland).
This case involves a dispute between the owner and lessor of adjoining facilities on the Detroit River. Vessels at the Detroit Bulk facility regularly extended in front of Waterfront’s neighboring property, blocking access to a portion of the property where Waterfront operated its own bulk dock, but Detroit Bulk’s employees did not trespass on Waterfront’s dock. Waterfront argued that, as a riparian owner, it had the right to prohibit Detroit Bulk from mooring a ship on the bottomlands only a few feet from the edge of its bulk dock. Applying state law, Judge Cleland held that the docking of vessels that overhang the property line but are not tied to a neighbor’s wharf does not automatically constitute a trespass as a matter of law; however, he did rule that the court would consider a number of factors to determine if an injunction should be issued, including the historical use of the property, the effect of the proposed use on the watercourse, the safety of the proposed use, the local custom regarding dock usage, and any harm caused by the obstruction of other riparian rightsholders. See September 2021 Update. Detroit Bulk brought a counterclaim against Waterfront, alleging that Waterfront’s negligent dredging activity resulting in a dock failure at the facility that Detroit Bulk leases and impaired and interfered with its operations. Waterfront moved to dismiss the counterclaim on the ground that Detroit Bulk did not have standing or was not the proper party to bring the claim as it was not the owner of the dock. Judge Cleland first addressed whether a commercial lessee has standing to pursue a claim against a tortfeasor for costs the lessee incurred as the result of damage that restricted the lessee’s use of leased real property. Finding it plausible that Detroit Bulk had suffered its own injuries from the collapse, separate from the injuries suffered by the property owner, Judge Cleland held that Detroit Bulk had sufficient standing to bring the counterclaim. With respect to whether Detroit Bulk was the proper party to bring the counterclaim, Judge Cleland looked to Michigan law, which recognizes that leaseholders have a leasehold interest in the property. Reading the counterclaim as asserting damages that Detroit Bulk incurred as lessee, separate and distinct from those of the owner, Judge Cleland declined to dismiss the counterclaim.
Presence of crew members in the passenger’s cabin did not establish constructive notice of protruding metal from the cabin door; Saris-Szyfter v. MSC Cruises S.A., No. 20-cv-62183, 2021 U.S. Dist. LEXIS 233457 (S.D. Fla. Dec. 6, 2021) (Dimitrouleas).
Jolanta Saris-Szyfter, a passenger on the MSC MERAVIGLIA, cut her foot on a small piece of metal protruding from the bottom right outside corner of her cabin door. She brought this action against the cruise line for negligence, and the cruise line moved for summary judgment on the ground that there was no evidence of the defendant’s actual or constructive notice of the dangerous condition. Saris-Szyfter argued that the cruise line had constructive notice because housekeeping crew members visited the cabin at least three times, implying that the crew members should have seen the hazard before the injury. Judge Dimitrouleas rejected the argument that the mere presence of employees in the subject area established constructive notice. Considering the small and concealed nature of the piece of metal, Judge Dimitrouleas considered the passenger’s argument to be based on conjecture and he granted summary judgment to the cruise line.
Lack of expert testimony was fatal to vessel owner’s claim against shipyard for damage to vessel after repair work at the shipyard; Mullin v. Bayline, Inc., No. 19-11028, 2021 U.S. Dist. LEXIS 233855 (D. Mass. Dec. 7, 2021) (Bowler).
Scott Mullin took his vessel, M/V DOUBLE TROUBLE, to Bayline’s facility in New Beford, Massachusetts for replacement of the port engine and the exhaust manifolds and risers on the port and starboard engines. After the work was completed, Mullin navigated the vessel back home to Westport, Massachusetts (along with Andrew Keith). During the voyage, Mullin discovered water in the engine room, and the vessel was escorted to Tripp’s Marina in Westport Harbor where an employee found a plug that was supposed to be fastened to a riser on the manifold (water was coming out of the riser where the plug was supposed to be secured). Mullin brought this suit against Bayline for negligence, breach of contract, and breach of the warranty of workmanlike performance, alleging that the vessel was a constructive total loss because of Bayline’s work, and both Mullin and Keith sought mental anguish. Bayline moved for summary judgment on all counts on the ground that the plaintiffs had not designated any experts and that expert testimony was necessary to establish a causal connection between the defendant’s conduct and the damage/injuries. Magistrate Judge Bowler agreed that the plaintiffs had not established that it was poor work by Bayline rather than poor design, poor manufacture, poor maintenance, or abuse by another that caused the problem. Consequently, Magistrate Judge Bowler granted summary judgment on Mullin’s claims. As Keith died and it was unclear whether his representative or successor had been appointed and properly served, Magistrate Judge Bowler gave the parties two weeks to set out their positions on the succession, but she noted that this was not an opportunity to proffer additional arguments on summary judgment.
Time charterer did not have a duty to vet the owner and was not liable for damages from the vessel’s allision with a docked barge; In re M/V YOCHOW, No. 4:18-cv-4678, 2021 U.S. DIST. LEXIS 234778 (S.D. Tex. Dec. 8, 2021) (Ellison).
This is a limitation action brought by the owner and manager of the M/V YOCHOW, which allided with the barge OSG 243 that was moored at a dock in the Port of Houston. The YOCHOW was owned by Grande Famous Shipping, which entered into a ship management contract with Beikun Shipping and time chartered the vessel to China Navigation Co. (New York Produce Exchange form). Judge Ellison heard motions for summary judgment of several of the parties and issued rulings on them. He granted the motion of OSG, denying the claim of the YOCHOW interests that OSG’s docked barge was not properly lighted. Judge Ellison rejected the testimony of the Captain of the YOCHOW that neither he nor the compulsory pilot on the YOCHOW saw the barge, as the pilot’s testimony, video evidence, and an email from the Coast Guard Marine Safety Specialist established that the barge was illuminated prior to the incident. Judge Ellison concluded that the lack of expert testimony, coupled with the presumption of fault from The Oregon, caused there to be no genuine issue of material fact regarding the negligence of OSG. The YOCHOW interests also contested the allegations of unseaworthiness asserted against the YOCHOW, arguing that the warranty of seaworthiness only applies to claims of crew members. Citing cases in which the Fifth Circuit analyzed evidence of unseaworthiness proffered by non-seamen limitation claimants, Judge Ellison denied the YOCHOW interests’ argument. Additionally, as he was going to have to hear evidence of negligence, Judge Ellison declined to dismiss the claims of gross negligence on the part of the YOCHOW. Finally, Judge Ellison addressed the arguments of the Port of Houston, whose dock was damaged from the allision, that the YOCHOW was liable to the Port for breach of the Port’s tariff. As the YOCHOW owner and manager had not signed the berth application (containing the terms and conditions of the tariff), and as the charterer of the vessel was the party who received the services of the Port, Judge Ellison dismissed the Port’s claims for breach of contract against the YOCHOW owner and manager. See August 2020 Update. On September 15, 2020, however, Judge Ellison granted reconsideration and sustained the Port’s motion for summary judgment that the YOCHOW was subject to the Port’s tariff. The application of the Port’s tariff was raised again when OSG, owner of the docked vessel that was exonerated of fault, moved for summary judgment on the contract claims presented by the Port against OSG. The Port cited Subrule 059 that provided for liability for “Users causing damage” to Port property or facilities. As the Port presented “no evidence to indicate that the Barge served as anything other than a big metal bumper” between the YOCHOW and the dock, Judge Ellison held that Subrule 059 could not be the basis for contractual liability of OSG. The Port also cited Subrule 052(5)(a), which provided that Users are responsible for all damages or injury to Port property or facilities occurring during the occupation or use, without regard to who caused it. Judge Ellison did not apply that provision to OSG as it conflicted with Subrule 059. Additionally, the context of the Subrule and the evidence militated in favor of a narrow reading. After OSG filed its motion, the YOCHOW sought to reconsider the ruling from a year earlier that the tariff applied to the YOCHOW. Judge Ellison did not find a sufficient reason for giving the YOCHOW a “third bite at the apple,” noting that it appeared that YOCHOW had “read OSG’s Motion and regretted not making the argument.” However, if he were to consider the argument, Judge Ellison did not consider it to be sufficiently persuasive to qualify for reconsideration. See December 2021 Update. Judge Ellison then considered the motion for summary judgment of China Navigation that it was not liable for damages to the dock. He first addressed the language of the charter and held that the charter reserved navigation to the owner. As there was no evidence that China Navigation directed the operations of the vessel or meddled in its procedures, Judge Ellison rejected the dock’s theory that China Navigation should be considered the de facto owner of the YOCHOW. Judge Ellison then considered the decisions holding that the charter’s duties do not stem solely from the charter (contract principles) but also arise from independent principles of tort law. The dock asserted that China Navigation was negligent for chartering the vessel without vetting the owner’s finances or the vessel’s safety protocols, but Judge Ellison declined to extend a duty to the time charterer to vet the owner’s financial stability or safety protocols in the traditional time charter context.
Two contracts between the parties with different indemnity agreements prevented a decision on indemnity for the claim of a seaman injured during unloading of cargo from a vessel; In re Adriatic Marine, LLC, No. 20-1488, 2021 U.S. Dist. LEXIS 235639 (E.D. La. Dec. 9, 2021) (Barbier).
Pioneer Production Services provided four marine riggers to Adriatic Marine to assist in unloading cargo from Adriatic Marine’s vessel, M/V CARIBOU. Dontrelle Davis was assisting two of the riggers when his hand/glove became ensnared in the hook of the crane/cargo, which lifted Davis off the deck before he fell back to the deck. Adriatic Marine filed this limitation action with respect to the M/V CARIBOU, and Pioneer filed a claim in the action seeking indemnity based on a 2015 contract between Pioneer and Adriatic Marine with reciprocal indemnity provisions (such that Adriatic Marine would indemnify Pioneer for the injury to an employee of Adriatic Marine). Pioneer moved for summary judgment that it was entitled to indemnity, and Adriatic Marine responded that Pioneer did not return a signed copy of the agreement until after the accident. Adriatic Marine argued that the 2013 agreement between the parties remained in effect and that agreement required Pioneer to indemnify Adriatic Marine. Describing the evidence put forth by the parties in the form of emails and declarations as “thin,” Judge Barbier held that additional discovery was necessary as to the course of conduct between Pioneer and Adriatic Marine whether there was a meeting of the minds.
State DTPA claims against yacht seller were not successful, but they were not frivolous and malicious for an award of attorney fees; Hatteras/Cabo Yachts, LLC v. M/Y EPIC, No. 4:17-cv-25, 2021 U.S. Dist. Lexis 236968 (E.D.N.C. Dec. 9, 2021) (Britt).
Hatteras entered into a sales contract with Spisso as agent for Acquaviva to construct a yacht. After Spisso filed suit for breach of contract and warranties, the parties entered into a settlement agreement for a purchase/sale of another yacht. The day after Spisso arrived to take possession, the yacht (EPIC) caught fire with him and his guests onboard, and the vessel was returned to shore where it remained in custody of Hatteras. Hatteras offered to repair the damage, but Spisso refused to take possession, and Hatteras incurred costs for which it brought suit against the yacht and Acquaviva. Acquaviva (and Spisso as an intervenor) brought a fifteen-count counterclaim against Hatteras and two other entities, and the claims were tried to Judge Britt. Spisso argued that he had justifiably revoked his acceptance of the EPIC and could not be liable for necessaries after title had transferred back to Hatteras. Finding that the attempt to revoke acceptance was objectively unreasonable, Judge Britt held that Spisso and Acquaviva were liable for the necessaries for which Hatteras provided sufficient evidence in support. Concluding that the Hatteras express limited warranty for the EPIC met the legal requirements necessary to disclaim implied warranties of merchantability and fitness under North Carolina law, Judge Britt rejected Spisso’s implied warranty claims. Noting that the claim for the fire on the vessel did not constitute a claim for breach of the express warranty, Judge Britt held that the only express warranty claim was for repair or replacement of defective parts or materials, and there was no evidence of the cost of repairing the EPIC’s alleged defective fire system. Judge Britt also declined to find that Hatteras was negligent, that it had wrongfully possessed or converted the EPIC, that it had violated an implied covenant of good faith and fair dealing under North Carolina law, or that it had committed a deceptive trade practice under North Carolina law. Therefore, Judge Britt entered judgment in favor of Hatteras for the value of the necessaries it had provided. See November 2021 Update. Having prevailed on the deceptive trade practice claim under North Carolina law, Hatteras, as the successful counterclaim defendant, sought to recover attorney fees under the North Carolina statute, which gives the presiding judge discretion to award fees if the party bringing the action should have known that the action was frivolous and malicious. Reasoning that the claims survived a motion to dismiss and a motion for summary judgment and that the counterclaim plaintiffs did present evidence in support of their claim at trial, Judge Britt could not conclude that the counterclaim plaintiffs knew or should have known that the claims were frivolous and malicious and declined to award attorney fees.
Maritime law, and not the Florida statute imposing a highest degree of care standard against the operator of a vessel, applied to an injury on a vessel caused from a large wave; In re AMI Professional Group, Inc., No. 8:21-cv-1866, 2021 U.S. Dist. LEXIS 236626 (M.D. Fla. Dec. 10, 2021) (Barber).
Deloris Henson was a passenger on the SALTY DOLPHIN III on a sightseeing tour near Sister Keys/Longboat Key, Florida. She claims that she was injured when the CRUISING CS, operated by Joseph Curley, created a large wake that caused her to be thrown to the deck of the SALTY DOLPHIN III. The owner of the SALTY DOLPHIN III brought this limitation action, and Henson asserted claims against the owner of the SALTY DOLPHIN III and claims against Curley that included a count for violation of Section 327.32 of the Florida Statutes, providing that operators of vessels in Florida must exercise the highest degree of care in order to prevent injuries to others. Curley moved to dismiss the count on the ground that it imposes a higher duty of care than is allowed under the general maritime law. Judge Barber agreed that maritime law applied and supplied the proper standard of care. Consequently, he dismissed the count based on the Florida statute.
Two BELO suits were dismissed for lack of causation after the opinions of the worker’s experts were stricken; one BELO suit survived BP’s motion for summary judgment; Saavedra-Vargas v. BP Exploration & Production, Inc., No. 18-11461, 2021 U.S. Dist. LEXIS 237476 (E.D. La. Dec. 13, 2021) (Fallon); Johnson v. BP Exploration & Production, Inc., No. 20-1329, 2021 U.S. Dist. LEXIS 241034 (E.D. La. Dec. 17, 2021) (Ashe); Maas v. BP Exploration & Production, Inc., No. 2:20-cv-51, 2021 U.S. Dist. LEXIS 243077 (M.D. Tenn. Dec. 21, 2021) (Crenshaw).
Antonio Saavedra-Vargas brought this Back-End Litigation Option suit against BP to recover for injuries he claimed resulted from exposure to oil, dispersants, and other harmful chemicals in the clean-up effort from the DEEPWATER HORIZON/Macondo blowout. Saavedra-Vargas proffered over a dozen expert witnesses, but Judge Fallon excluded the testimony of the experts based on deficiencies in their testimony or unjustified tardiness in designating them as experts. BP moved for summary judgment that Saavedra-Vargas was unable to establish causation without expert testimony, and Saavedra-Vargas asked for a continuance to allow him to designate experts out of time. The problem with that argument was that Saavedra-Vargas did not identify any witness that he sought to designate whose testimony had not already been stricken. As the case had been progressing for more than three years with multiple continuances, Judge Fallon declined to grant a continuance and granted summary judgment for lack of evidence of causation.
Charles Johnson designated three doctors in his BELO suit, and BP filed Daubert motions to exclude the testimony of each doctor together with a motion for summary judgment. Johnson did not oppose the three Daubert motions, and, instead of opposing the motion for summary judgment, asked for an extension of 60 days to obtain new defense counsel and experts. Considering the withdrawal of experts to be a concession that Johnson could not prove his case, Judge Ashe declined to grant Johnson a “do-over” at the eleventh hour as the case had been continued several times and Johnson had already had one extension to reply to the four motions. Consequently, Judge Ashe granted summary judgment to BP and dismissed the suit with prejudice.
John Maas claimed that he was exposed to Corexit dispersants around 12 hours per day while working on the cleanup of the spill and that he suffers from asthma and reactive airways disease as a result. Maas provided reports from Dr. Charles Wray and Dr. Veena Antony, and Chief Judge Crenshaw held that the opinions were sufficient to establish both general causation and specific causation. BP argued that Maas never provided the dose of Corexit to which he was exposed, so the experts could not establish specific causation. However, Chief Judge Crenshaw found the combination of evidence of exposure to Corexit for 12 hours per day for two months in an unspecified dose together with a differential diagnosis that excluded other possible sources of Maas’s conditions was sufficient to establish causation. Finally, Chief Judge Crenshaw rejected BP’s objection that the reports of the doctors should be stricken because they were prepared by Maas’s counsel as the doctors testified that the reports contained their “actual views.” Accordingly, Chief Judge Crenshaw denied BP’s motion for summary judgment.
Economic loss rule barred negligence claim by vessel’s insurer against the vessel’s manufacturer; the effect of the limited warranty on the insurer’s warranty claims could not be decided on a motion to dismiss; Everest National Insurance Co. v. Sunseeker International Ltd., No. 20-20045, 2021 U.S. Dist. LEXIS 237923 (S.D. Fla. Dec. 13, 2021) (Moreno).
Everest National Insurance Co. insured Frederico Michanie’s Sunseeker Manhattan 65-foot cruiser, which was manufactured and sold by defendant Sunseeker. The vessel began taking on water while traveling off the coast of Miami and nearly sank. Everest paid for the damage and brought this suit in federal court in Miami against Sunseeker, alleging that a defect in the air conditioning raw/sea water circulation system caused a leak that damaged the vessel’s interior and components outside of the air conditioning raw/seawater circulation system. Everest brought counts for negligence and breach of warranty, and Sunseeker moved to dismiss all of the counts. Sunseeker argued that the negligence count was barred by the economic loss rule, but Everest argued that the economic loss rule did not apply because the damages were to property other than the defective component. Judge Moreno rejected the argument as the product supplied by Sunseeker was the vessel, not just the air conditioning raw/seawater circulation system. As the damage was to the vessel provided by Sunseeker, the economic loss rule barred the negligence claim. Sunseeker also argued that its limited warranty precluded the warranty claims asserted by Everest; however, Judge Moreno held that the court could not interpret the terms of a contract at the motion-to-dismiss stage. Accordingly, he denied the motion to dismiss the warranty claims but held that they could be raised at the summary-judgment stage.
Limitation court had admiralty jurisdiction over injury to passenger on the deck of whale-watching vessel; conditional stipulations to lift the stay were insufficient; value of the vessel did not include the owner’s P&I policy or the owner’s other vessels (just because vessels are insured on the same policy does not make them a flotilla); In re Epic Cruises, Inc., No. 2:21-cv-08134, 2021 U.S. Dist. LEXIS 239365 (C.D. Cal. Dec. 13, 2021) (Blumenfeld).
Ana Maria Hernandez was a passenger on the 65-foot M/V AZURE SEAS seated on the main deck while the vessel was on a whale watching tour at sea. She claims that the captain came on the intercom and advised that whales had been spotted. He then increased the speed of the vessel, without warning, to chase down the whales, and Hernandez was thrown from her chair causing her injuries. The owner of the AZURE SEAS brought this limitation action after Hernandez filed an action in state court in Los Angeles, and Hernandez filed a claim in the limitation action together with a number of motions that were addressed by Judge Blumenfeld. Hernandez first sought to dismiss the action under the “ancient and anachronistic Limitation of Liability Act” for lack of admiralty jurisdiction. She argued that this “run-of-the-mill” injury case did not have the potential to disrupt maritime commerce as nobody was thrown overboard, the vessel did not capsize, and no deckhand was injured. Judge Blumenfeld considered the argument to be “perplexing” as the injury did disrupt maritime commerce by causing the vessel to cut short its trip and return to port. He also disagreed that Hernandez had to be thrown overboard, citing authority that harm by a vessel in navigable waters as satisfying the requirement for a potential disruption to maritime commerce. Finally, Judge Blumenfeld characterized the activity in this case as navigation of vessels, which is “a paradigm example” of traditional maritime activity. Consequently, he held that the court had admiralty jurisdiction for the limitation action. Judge Blumenfeld then addressed Hernandez’s motion to lift the stay so she could pursue her action in state court. Although she did file stipulations that she argued were sufficient under the Ninth Circuit’s requirements with respect to single-claim cases, Judge Blumenfeld noted that she continued to condition her stipulations (such as arguing that the limitation court did not have jurisdiction and contesting the limitation fund). Therefore, he denied her motion without prejudice so that she could file proper stipulations. Hernandez next argued that the value of the owner’s $1 million P&I insurance should be included in the limitation fund as well as the value of the owner’s other two vessels. She argued that the “freight” on the vessel should be construed to mean its passengers, which, by extension, would include the liability insurance on the passengers. Judge Blumenfeld denied the motion as “wholly unsupported by authority,” and then likewise rejected the argument that other whale watching vessels owned by the owner of the AZURE SEAS should be included as a flotilla (Hernandez argued that they are a flotilla because they are covered by the same insurance policy).
Appeal divested the district court of jurisdiction to consider motion to compel transfer of commercial use permit; Barnes v. Sea Hawai’i Rafting, LLC, No. 13-2, 2021 U.S. Dist. LEXIS 238446 (D. Haw. Dec. 14, 2021) (Kay).
The saga of Chad Barry Barnes’ injury claims against Sea Hawai’i Rafting, his employer and owner of the TEHANI, and the owner of Sea Hawaii, Kristin Henry, returns, again, to the Update. The bankruptcy court allowed Barnes to proceed with his in rem claims against the TEHANI and his in personam claims against Sea Hawaii, and Barnes was awarded $279,406.12 in maintenance and cure plus attorney fees and costs. Barnes was unable to collect because of Sea Hawai’i’s insolvency, and Barnes sought to pursue the only asset of Sea Hawai’i (other than the vessel), the commercial use boating permit. Henry had the permit transferred to another entity, and Judge Kay imposed sanctions on Henry, concluding that the transfer of the permit diminished the value of the vessel and the ability of Barnes to collect damages. Finding the value of the permit to be $40,000, Judge Kay imposed sanctions in that amount. Barnes was not satisfied with the sanctions order and appealed that decision to the Ninth Circuit along with several other orders. The Ninth Circuit ruled that it had jurisdiction over the decision from the bench trial of the maintenance and cure trial and affirmed Judge Kay’s decision. That included the calculation of the award, the holding that Henry was not a defendant in that trial, and the decision to exclude two of Barnes’ witnesses from testifying as expert witnesses because Barnes did not timely disclose those witnesses. The Ninth Circuit held that it had jurisdiction over the issue whether the commercial use permit for the TEHANI was an appurtenance of the vessel for the in rem liability of the TEHANI for the maintenance and cure claim, and the court affirmed Judge Kay’s holding that the permit was not an appurtenance of the vessel as the permit was issued to the owner and was not transferrable with the vessel. Although there were proceedings in both the district court and the bankruptcy court, the Ninth Circuit held that the district court had exclusive jurisdiction over the TEHANI (in rem) and did not err in its disbursement of funds in that proceeding. Finally, the Ninth Circuit held that the bankruptcy court did not err in discharging Henry, noting that post-petition conduct by Henry was not subject of the discharge. As Henry did not pay the sanctions in accordance with the payment plan set forth by Judge Kay, Barnes filed a motion to compel transfer of the commercial use permit, for a writ of replevin, and for injunction relief. The problem with motion was that Barnes had filed an appeal of the ruling with respect to the permit. As the appeal divested the district court of jurisdiction to rule on Barnes’ motion, Judge Kay denied the motion.
One-year limitation period in passenger’s ticket was applicable and was reasonably communicated to the passenger; the passenger had a meaningful opportunity to be informed of the limitation, and equitable tolling did not prevent her suit against the cruise line from being barred by the ticket limitation; Williams v. Carnival Corp., No. 1:21-cv-22630, 2021 U.S. Dist. LEXIS 238752 (S.D. Fla. Dec. 14, 2021) (Moore).
Ethelen Williams, a Texas resident, brought this action against Carnival Corporation in state court in Galveston, Texas, seeking to recover for injuries she sustained on the CARNIVAL VISTA. The cruise line removed the case to the federal court for the Southern District of Texas based on diversity jurisdiction and original admiralty jurisdiction, and moved to transfer the case to the federal court for the Southern District of Florida based on the forum-selection clause in the cruise ticket contract. Williams raised a number of defenses to the transfer, including unconscionability, but Judge Brown rejected them and held that the forum-selection clause was valid and enforceable. He then considered the public interest factors and held that this case did not present unusual circumstances that would defeat the application of the clause. Judge Brown reasoned that the courts in Texas and Florida were equally busy and equally able to apply the maritime law, and he had little doubt that the judges in Florida would be able to apply Texas law if it applied to her claims. See September 2021 Update. Once the case arrived in Florida, the cruise line moved for judgment on the pleadings (converted to a motion for summary judgment) that the case was time-barred by the one-year limitation period in the ticket contract. Williams responded that the case, filed in her home state of Texas, was timely under the Texas statute of limitations (2 years) or, alternatively, under the maritime statute of limitations (3 years). Judge Moore held that maritime law, not Texas law, applied to the tort on a vessel in navigable waters, and then addressed Williams arguments that the contractual limit was unenforceable and that the court should equitably toll the limitations period because she notified the cruise line of her intent to pursue claims during the one-year period. Judge Moore concluded that the physical characteristics of the ticket contract reasonably communicated the terms of the limitation clause to Williams and that Williams had a meaningful opportunity to be informed of the terms of the clause. Finally, Judge Moore held that Williams did not establish the extraordinary remedy of equitable tolling. The cruise line did not mislead Williams into allowing the limitation period to expire, and no inequitable event occurred that prevented Williams from filing the action within the contractual limitation period. This was not a situation where a suit was timely filed and that timely filing could be used to toll a late filing. Judge Moore granted summary judgment that the suit was untimely.
Testimony of captain of assist tug was not sufficient to establish as a matter of law that the tug did not contribute to the allision of the assisted flotilla; In re Marquette Transportation Co. Gulf Island LLC, Nos. 6:18-cv-1222, 2021 U.S. Dist. LEXIS 238989 (W.D. La. Dec. 14, 2021) (Summerhays).
The M/V RANDY ECKSTEIN, a tug owned by Marquette Transportation, was towing six barges in the Lower Atchafalaya River near Morgan City, Louisiana. Due to the conditions of the river, the Coast Guard requested that Marquette engage a tug for assistance, and it was supplied the M/V JOSSETT by C&J Marine Services. Later, the Coast Guard specified that another tug was necessary, and C&J obtained the MISS ELIZABETH from its owner and operator, 40K Marine and Central Boat Rentals. The starboard lead barge of the RANDY ECKSTEIN flotilla allided with a drydock owned by LAD Services, and an employee of LAD, John Williams, was injured in the allision. The owners of the RANDY ECKSTEIN, JOSSETT, and MISS ELIZABETH filed limitation actions that were consolidated. Marquette filed a bond for the amount of tug, RANDY ECKSTEIN, $2,684,000. LAD filed a claim for property damage to the drydock and for indemnity for the maintenance and cure payments made to Williams, and Williams filed a claim for his personal injuries. Marquette sought partial summary judgment that the flotilla doctrine did not apply and that the amount of the limitation fund should be limited to the value of the tug and should not include the six barges it was towing. Its argument was based on the fact that there was no contractual relationship between Marquette Transportation and either Williams or LAD. Judge Summerhays noted the “pure tort” exception to the flotilla rule that the owner need not tender all vessels involved in the incident under a single command and owned by the same person when the shipowner owes no duty to the claimant based on consent. “Stated differently, when the alleged damage is inflicted tortiously and there is no contractual or consensual relationship between the offending vessel and the injured party, the pure tort exception applies and the vessel owner need only surrender the value of the actively responsible vessel.” As neither Williams nor LAD alleged any contractual or consensual relationship with Marquette Transportation, Judge Summerhays held that the flotilla doctrine did not apply and that the limitation fund was limited to the fair market value of the RANDY ECKSTEIN plus its pending freight. See July 2021 Update. The owner and operator of the MISS ELIZABETH then moved for summary judgment that there was no evidence that any act or omission of the MISS ELIZABETH contributed to the allision. They argued that the captain of the MISS ELIZABETH was ordered by the captains of the lead tugs to push on the starboard bow of the lead barge of the RANDY ECKSTEIN until the flotilla was caught by the current in the river. Asserting that the MISS ELIZABETH did as it was ordered, its owner and operator argued that it did not contribute to the allision. Williams opposed the motion, citing the testimony of the captain of the MISS ELIZABETH that he backed off when the vessel became endangered by the current. Judge Summerhays reviewed the testimony of the captain and considered it to be inconsistent on the question whether he completed his push as instructed or whether he aborted the operation earlier than planned because the vessel had become caught in the current. The captain’s attempts to clarify that he did not prematurely abort the job did not avoid the fact question that precluded summary judgment.
Vessels do not have to be contractually engaged to a third party to be part of a common enterprise for the flotilla doctrine; In re Board of Commissioners of the Port of New Orleans, No. 20-780, 2021 U.S. Dist. LEXIS 239261 (E.D. La. Dec. 15, 2021) (Morgan).
Oscar Meza and Dennis Virgil were injured while working as deckhands on the anchor-handling barge, M/V W.T. HOGG, during a dredging operation in the Mississippi River. The owner of the W.T. Hogg, the Board of Commissioners of the Port of New Orleans, filed this limitation action in federal court in Louisiana, and Meza and Virgil filed claims and moved for an increase in the limitation fund to include the flotilla of vessels owned by the Board that were involved in the dredging operation (the dredge EDWARD “NED” REED, the tender M/V CAPTAIN POWER, the non-propelled anchor barge, SKIDDER BARGE, the self-propelled push boat/anchor handling barge, M/V W.T. HOGG, and floating pipeline segments). The vessels were owned by the Board and were under a single command. However, the Board of Commissioners argued that the vessels were not subject to the flotilla doctrine because they were not contractually engaged in a common enterprise (working pursuant to any contract). Although the Fifth Circuit has repeatedly stated that the flotilla rule applies when vessels are contractually engaged in a common enterprise, Judge Morgan noted that the cases did not hold that the flotilla doctrine was inapplicable unless the vessels were contractually engaged to a third party to complete a common venture. As the vessels were working together in pursuit of the common venture of dredging the Mississippi River, a statutory obligation of the Board of Commissioners to maintain proper depths at all wharves and landings of the Port of New Orleans, Judge Morgan held that the Board of Commissioners must post security equal to the value of all vessels and floating equipment comprising the dredging unit. The workers asked that the increased value be in the amount of the agreed value in the insurance policies for the vessels. Judge Morgan disagreed and held that the agreed value is one factor that may be considered, but the fair market value of a vessel and any pending freight is what must be provided as security. She added that courts consider contemporaneous sales, depreciated replacement cost minus cost of repairs, and the opinions of marine surveyors and engineers. Judge Morgan ordered the parties to meet and confer in an attempt to agree on the value of the vessels and property, and if they are unable to agree the Board of Commissioners must obtain a survey of the fair market value.
Late claim was allowed in limitation action; Crescent Towing & Salvage Co. v. M/V JALMA TOPIC, Nos. 21-1331, 21-1390, 21-1953, 2021 U.S. Dist. LEXIS 239262 (E.D. La. Dec. 15, 2021) (Morgan).
The M/V JALMA TOPIC was traveling up the Mississippi River when its rudder stuck to port and the vessel allided with a barge and dock structure owned by Crescent Towing along with vessels owned by Cooper/T. Smith. The owner of the JALMA TOPIC filed a limitation action in federal court in New Orleans, and the owner notified everyone known to have a claim and provided notice to others in the New Orleans Times Picayune. Several claims were filed, and Judge Morgan entered a default against those who had not filed claims after the deadline passed for the filing of claims. Within two weeks of the default order, Gawain Schouest, port captain for Cooper/T. Smith, sought leave to file a claim for injuries he sustained while helping to secure the barge facility. Considering whether Schouest had shown cause under Rule F(4), Judge Morgan noted that discovery was ongoing and the parties would not be prejudiced by the late claim, that Schouest did not have actual notice of the proceeding until after the default; that Schouest was not a party who received written notice of the limitation action, did not subscribe to or ready the Times Picayune on its website, and that his home had been damaged by Hurricane Ida, which disrupted his electricity, internet service, and cellphone service. Judge Morgan found that the equities weighed in favor of allowing Schouest to file a late claim.
Duty of ordinary care, not a heightened standard of care, applied in passenger’s negligence suit against cruise line; Henry v. Celebrity Cruises, Inc., No. 21-20148, 2021 U.S. Dist. LEXIS 239703 (S.D. Fla. Dec. 15, 2021) (Graham).
Joseph Henry brought this suit in federal court in Florida alleging that he was a passenger on the defendant’s cruise ship REFLECTION and that he slipped and fell on a wet gangway. He brought negligence counts based on negligent failure to maintain and negligent failure to warn, arguing that a heightened standard of care was applicable based on language from decisions of the Eleventh Circuit that the ship owes passengers a special duty of care as a common carrier. The cruise line moved to dismiss the counts alleging a heightened standard of care, citing the later decision of the Eleventh Circuit holding that an ordinary reasonable stand of care applies (with an exception for vicarious liability). As the allegations were based on the conduct of the cruise line and not vicarious liability, Judge Graham held that the ordinary care standard applied, and he dismissed the claims that were based on a heightened standard of care.
Judge resolved disputes over cancellation of oral charter party and awarded damages to the vessel owner; American Tugs, Inc. v. 3HD Supply, LLC, No. 20-23095, 2021 U.S. Dist. LEXIS 239711 (S.D. Fla. Dec. 15, 2021) (Scola).
Pedro Rivera, owner of American Tugs, agreed with Humberto Diaz for the use of American Tugs’ tug EL MORRO and barge SOFIA to deliver construction materials for a 2 ½ year period. Rivera and Diaz discussed a number of terms, agreeing on a day rate and mobilization fee. Rivera sent Diaz a BIMCO agreement with a 90-day termination clause, and Rivera advised Diaz that he should have a 60-day cancellation provision in his contract with his client. The parties never signed an agreement but the vessels worked for Diaz, and Diaz initially paid invoices. There were disputes about the capacity for the barge, and Rivera agreed to reduce the day rate retroactive to the beginning of the charter. Six months after the inception of the agreement, Diaz decided not to continue working the way the parties had been working and told Rivera that he could have his equipment on that day. Diaz did propose working on a different basis. American Tugs brought this suit against 3HD Supply for amounts owed under the charter, including hire for 90 days after the termination. Judge Scola held a non-jury trial to determine the length and termination provisions, whether the barge’s capacity and equipment failures constituted a breach of the agreement, and which party was responsible for port charges following termination of the agreement. Finding Rivera as more credible, Judge Scola resolved the disputes in favor of American Tugs and held that the oral charter party was an enforceable maritime contract, that American Tugs did not breach the agreement, that 3HD owed ninety days’ hire after the termination of the contract, and that 3HD owed the port expenses after the termination.
Criticism of crewmember background checks is not a sufficient pleading of negligent hiring in connection with an alleged assault on a passenger; negligent supervision claim was insufficient for lack of pleading of awareness of crewmember’s dangerous propensity; pleading of failure to warn of the high risk of sexual assaults on the cruise ship was sufficient to support a claim of negligent infliction of emotional distress; Doe v. Royal Caribbean Cruises Ltd., No. 20-25152, 2021 U.S. Dist. LEXIS 239719 (S.D. Fla. Dec. 15, 2021) (Scola).
A passenger on the LIBERTY OF THE SEAS brought this action against the cruise line asserting that she was sexually assaulted by a crewmember of the vessel. The cruise line moved to dismiss various counts of her complaint, and Judge Scola addressed the sufficiency of her pleading. As the passenger failed to plead facts establishing that the cruise line was put on notice of the harmful propensities of the employee, Judge Scola dismissed the counts of negligent hiring, retention, and supervision. Although Judge Scola was skeptical that a failure to warn of the risk of sexual assault on its vessel was a proximate cause of the sexual assault in this case, he did not dismiss the failure-to-warn count on the ground that it was duplicative of the passenger’s count of strict liability for sexual assault. Judge Scola dismissed the claim of negligent misrepresentation under the heightened pleading standard of Rule 9(b) for lack of allegations of the timing of the purportedly false statements and lack of allegations that the cruise line should have known it made materially false statements. As Judge Scola could not conclude that the cruise line’s alleged negligent warning of the risk of crime on the vessel put the passenger in immediate risk of physical harm, Judge Scola dismissed the count of negligent infliction of emotional distress. Judge Scola declined to dismiss the count alleging negligent security. The cruise line argued that the count was duplicative of the count of strict liability for an assault on a passenger, but Judge Scola held that the pleading alleged negligence separate from the assault, such as failure to have sufficient cameras, failure to enforce training on sexual harassment, and failure to thoroughly investigate reports of sexual harassment. With respect to the count alleging intentional infliction of emotional distress, Judge Scola noted that the cruise line could be held strictly liable for the sexual assault. Therefore, he reviewed the allegations asserted by the passenger of the conduct of the crewmember and held that the claims for the crewmember’s actions were sufficient to constitute intentional infliction of emotional distress. Consequently, he held that the count could stand against the cruise line. Finally, Judge Scola ruled that citations in the complaint to The Pennsylvania Rule were legal arguments that did not have any place in a complaint and he ordered that they be struck. He permitted the passenger to file an amended pleading in accordance with his order. See August 2021 Update. The passenger filed her second amended complaint (pleading negligent security, negligent hiring and supervision, strict liability for sexual assault, negligent and intentional infliction of emotional distress, and negligent failure to warn) and then, three weeks after the deadline to amend, sought leave to file a third amended complaint to add a claim of negligent misrepresentation. She claimed that she learned through discovery that the cruise line made misrepresentations to the passenger regarding the whereabouts of the assaulting crewmember and his remaining on the vessel, which caused the passenger emotional distress and physical symptoms from the emotional distress. Judge Scola rejected the request to add the negligent misrepresentation claim as it did not connect how the misrepresentations caused emotional distress when she discovered that the representations were not true months later after the cruise was over. Additionally, she did not cite any authority supporting a duty of the cruise line to inform her of the crewmember’s whereabouts. The passenger also sought leave to add allegations to the emotional distress pleadings that the cruise line did not report the incident to law enforcement agencies. The allegations did not, however, rise to the level of outrageous conduct as the conduct did not expose the passenger to continued sexual abuse or interfere with an ongoing criminal investigation. As the amendment would be futile, Judge Scola declined to permit it. See November 2021 Update. The cruise line then moved to dismiss several counts in the passenger’s second amended complaint. The passenger argued that the cruise line was liable for negligent hiring because of an inadequate investigation into the crewmember’s background. The passenger cited the testimony of the cruise line from another case that it performed checks using Lexis/Nexis but that such a search would not produce information on the crewmember who is a citizen of India because the sexual offense registry in India is not available to the public. Judge Scola found the allegation that the cruise line would not have hired the worker if it had conducted a sufficient background check to be insufficient because there was no allegation what sort of check would have yielded different information or that a better check was available (dismissing the count with prejudice). Judge Scola also found the allegation of negligent supervision to be insufficient (dismissing the count with prejudice). The passenger asserted that the crewmember was unfit and violating the anti-fraternization policy when he delivered a pot of coffee that had not been ordered to the passenger’s room., but Judge Scola found no authority that the cruise line had a duty to monitor all orders made for room service in real time. Finally, Judge Scola addressed the claim for negligent infliction of emotional distress and held that the claims for negligent hiring and supervision did not support this claim for the reasons already discussed. However, Judge Scola held that the passenger did sufficiently allege that the cruise line failed to warn of the known dangers of crime and sexual assaults on its vessels (the passenger alleged that she would not have taken the cruise had she known of the high risk of being sexually assaulted).
Yacht owner’s failure to comply with hurricane preparation plan voided coverage on marine policy for damage during hurricane; Simpson v. Aspen American Insurance Co., No. 3:21-cv-1031 (N.D. Fla. Dec. 15, 2021) (Wetherell).
Stephen Simpson owns a 51-foot yacht, NO ULTIMATUM, that was moored in Pensacola, Florida. Simpson insured the yacht with Aspen, which required Simpson to have a hurricane preparation plan for the safety of the yacht in the event of a hurricane. The Plan submitted by Simpson provided that the yacht would be hauled out by MarineMax and stored on land in the event of a hurricane. The Plan stated that “non-compliance may result in claims being denied.” When Hurricane Sally struck Pensacola, the yacht was not hauled out, was docked at a marina, and suffered damage. Aspen denied coverage based on the breach of the Plan, and Simpson brought this action in federal court in Pensacola against Aspen and MarineMax (for failing to haul out the yacht). Aspen moved to dismiss the complaint, and Judge Wetherell held that, although the Policy only required the Plan, the Plan unequivocally provided that non-compliance may result in denial. Although the Plan used the permissive term “may,” Judge Wetherell held that it would defy common sense and be an absurd interpretation of the policy to hold that Simpson was not required to comply with the Plan. Simpson argued that non-compliance with some express warranties in marine insurance policies will not result in loss of coverage if the breach is unrelated to the loss, but the Policy provided that New York law applied, and New York law requires strict compliance with the Plan. Nonetheless, Judge Wetherell held that it would be difficult to argue that non-compliance with the Plan played no part in the loss or that it did not increase the risk to Aspen. Judge Wetherell did note that Simpson was not without a remedy—to pursue MarineMax as he did in a separate count in the complaint. Accordingly, Judge Wetherell dismissed the action against Aspen.
Judge required more than an affidavit from the vessel owner to dismiss or transfer a seaman’s suit to the venue where the vessel owner contended the accident occurred; Poiroux v. Trawler Becky Lyn, Inc., No. 21-1815, 2021 U.S. Dist. LEXIS 240215 (E.D. La. Dec. 16, 2021) (Lemmon).
Wesley Poiroux, an Alabama citizen, was serving as a crew member on the shrimping vessel F/V LADY TIFFANY, owned by Trawler Becky Lyn, an Alabama company. The vessel departed on a shrimping expedition into the Gulf of Mexico from Bayou LaBatre, Alabama, and returned to Bayou La Batre to avoid Hurricane Ida. Poiroux alleged that the shrimping was in the Gulf of Mexico adjacent to the coast of Louisiana and that he was injured when he fell on a hose on the deck as the vessel was being prepared for the return to Alabama. Poiroux brought suit against the vessel owner in federal court in Louisiana, asserting claims under the Jones Act and general maritime law, and the vessel owner moved to dismiss the suit for lack of personal jurisdiction and venue or, alternatively, to transfer the case to Alabama. The owner submitted the affidavit of the company owner, stating that he had tracked the vessel during its voyage and that it never entered Louisiana waters. Noting that for both jurisdiction and venue the location of the accident was dispositive, Judge Lemmon reasoned that the case presented the bare allegation from the seaman and the unsupported self-serving affidavit from the defendant. She advised that the vacuum could be resolved through discovery, such as AIS tracking data, vessel logs with g.p.s. data, or trip tickets indicating where shrimp were caught. Consequently, she gave the parties 60 days to conduct discovery directed to personal jurisdiction and venue after which the motion could be re-urged.
Judge denied contract claims and apportioned fault for sinking of drydock during tow;Western Towboat Co. v. Vigor Marine, LLC, No. C20-0416, 2021 U.S. Dist. LEXIS 240537 (W.D. Wash. Dec. 16, 2021) (Martinez).
Vigor Marine sold its three-section drydock, constructed in 1956, to a shipyard in Mexico to be scrapped. Vigor then contracted with Western Towboat to tow the drydock from Seattle, Washington to Ensenada, Mexico, using the tug OCEAN RANGER. A surveyor noted significant corrosion but opined that the drydock was appropriately prepared and rigged for the tow in an extended configuration with the bow and stern sections attached. The surveyor did require that the tow avoid heavy head or beam seas to avoid pitching or rolling. The Navy operating manual for the drydock provided that the bow and stern sections should be detached and docked on the center section, and Vigor’s sales contract required that the three sections be detached and carried on a heavy-lift ship. During the tow the drydock began taking on water and listing, and the tug headed toward San Francisco Bay to seek assistance. After communicating with the Coast Guard, the tug concluded it was unsafe to enter San Francisco Bay in the event the drydock sank. The Coast Guard approved the tow entering Monterey Bay where the drydock sank .92 miles inside the Monterey Bay Marine Sanctuary. The National Oceanic and Atmospheric Administration informed Vigor, Western Towing, and the Mexican shipyard of their liability under the NMSA for damages from the sinking in the sanctuary, and Western filed this action against Vigor, seeking recovery for its services under its towing agreement, and a declaratory judgment against the United States exculpating it of liability in any forthcoming enforcement action under the NMSA. Chief Judge Martinez first held that the court lacked subject matter jurisdiction, based on lack of ripeness and standing, of the action against the United States as NOAA has not taken any final action against the parties. Chief Judge Martinez then turned to the claims between Western and Vigor. He denied Vigor summary judgment that Western had breached the towing agreement by failing to adequately perform its duties when it proceeded into Monterey Bay and stood by while the drydock sank in a marine sanctuary as the contract did not contain a requirement that the tug keep the tow in a safe place to sink. Chief Judge Martinez then addressed the knock-for-knock indemnity provisions in the towing agreement and held that claims arising out of or relating to damage to a party’s own property could not be recouped (such as Vigor’s loss of the drydock); however, that did not bar Vigor from recouping costs incurred as a result of Western’s negligent injury to third parties. With respect to Vigor’s claim that Western was negligent, Chief Judge Martinez declined to find that the last clear chance doctrine or The Pennsylvania Rule applied; however, he concluded that Western breached its duty of prudent seamanship as a matter of law when it allowed the drydock to sink in the marine sanctuary. Although Western objected that its crew was unaware that the drydock was inside the sanctuary and was unaware of the legal, environmental, or economic consequences of the sinking in the sanctuary, Chief Judge Martinez held Western was negligent as a matter of law with respect to its lack of cognizance of the vessel’s position with respect to the sanctuary. Western moved for reconsideration with respect to the awareness of the tug’s crew of the sanctuary. Chief Judge Martinez recognized that there were factual disputes whether the crew knew that the tug had entered a sanctuary, but it was their failure to be aware of the hazards presented by the sanctuary to a tug together with their lack of positional awareness that led to the finding of negligence. Additionally, Western argued that it was not negligent for the tug to release the line on the drydock while it was in the sanctuary as it was necessary to save the life of its crew in the emergency presented by the sinking drydock. Chief Judge Martinez responded that it was not the response to that emergency that was the source of the fault but the failure to exercise prudent seamanship in entering the sanctuary with a sinking drydock. See July 2021 Update. Chief Judge Martinez conducted a bench trial of the case, and on the final day of trial, Western argued that Vigor was not entitled to recover damages on its counterclaim against Western because Vigor’s insurers paid for a portion of the damages Vigor incurred from its exposure to liability under the NMSA. After holding that Vigor was a real party in interest and could maintain the counterclaim, Chief Judge Martinez addressed the question whether the collateral source rule applied when Vigor had been partially reimbursed for its losses and there was a waiver of subrogation in the towing agreement. Concluding that the payments were not “benefits from a wholly independent source which Vigor had the foresight to arrange,” Chief Judge Martinez held that the collateral source rule did not apply and that Vigor could not recover to the extent it had been paid by its insurers. See November 2021 Update. On December 16, 2021, Judge Martinez issued his findings of fact and conclusions of law from the bench trial on the cross motions of Western and Vigor for breach of contract and Vigor’s counterclaim for maritime negligence from the sinking of the drydock in the Sanctuary. Judge Martinez concluded that neither party could prevail on the claims for breach of contract, allocated fault for the sinking of the drydock as 60% to Vigor and 40% to Western, and awarded Vigor 40% of the $100,000 expended by Vigor to cooperate with NOAA. Western’s argument that it was entitled to recover the hire under the Tow Agreement was subject to an exception for loss arising from the negligence of Western. As Western’s negligence contributed to the sinking of the drydock, Judge Martinez held that Western was not entitled to recover the contractual hire. Judge Martinez denied Vigor’s counterclaim for breach of contract based on Western’s failure to render reasonable assistance when the drydock became disabled, rejecting the argument that the entry into the Sanctuary with the sinking dock breached the contract, noting that the contract only required that Western either proceed to the nearest safe port or stand by the tow, and the standing by could occur in the Sanctuary. Comparing the fault of the parties, Judge Martinez found Western to be negligent in voyage planning and navigating into the Sanctuary with the sinking drydock. However, he considered that Vigor’s fault saddled Western with a nearly impossible task of managing the unwieldy drydock that should not have been certified as suitable for tow under the circumstances. Consequently, he reduced Vigor’s recovery by 60%.
Seaman did not establish a curative advancement in the multiple back surgeries and was bound by the court’s prior finding of maximum cure; Jackson v. NCL America, LLC, No. 19-cv-25115, 2021 U.S. Dist. LEXIS 241516 (S.D. Fla. Dec. 16, 2021) (Torres).
Dorothy Jackson was injured on November 16, 2012, when she slipped on an onion peel while working as a crew member on the M/V PRIDE OF AMERICA. She brought suit against her employer, and after a bench trial the court entered judgment in her favor on her cure claim, but limited the recovery to the rate that the defendant would have paid for a physician in its network of providers. Although Jackson’s physician declared that she had reached maximum cure in 2016 and Judge Williams found that Jackson had reached maximum cure in 2016, she filed an amended complaint in 2020, seeking to recover for surgeries on her back that were performed in 2017 and 2019. Jackson’s employer moved to dismiss the amended complaint on the ground that the complaint did not allege that there was an available treatment that could cure her condition. Although the complaint was unclear whether there was an advancement in medical knowledge or if the treatment was unavailable at the time of the previous trial, Magistrate Judge Torres held that the allegations were sufficient to withstand a motion to dismiss (“Plaintiff has done just enough to survive a motion to dismiss”). See January 2021 Update. Jackson’s employer then filed a motion for summary judgment that no maintenance and cure was owed, and Magistrate Judge Torres explained that a seaman is entitled to seek the resumption of benefits after reaching maximum cure if there is a new treatment that is “both the result of a new advancement in medical science and curative in nature.” Magistrate Judge Torres rejected the argument that the back surgeries represented an advancement in medical science that was not available to Jackson in 2016 as her doctor testified that the surgeries had been around since the 1980s. Magistrate Judge Torres also rejected the argument that Jackson could bring serial actions for maintenance and cure as it comes due as that rule does not apply when the seaman has been determined to have reached maximum cure. Consequently, Magistrate Judge Torres recommended that the employer’s motion for summary judgment be granted.
Safety Hierarchy is an unreliable methodology for use in a premises liability case and did not support unscientific expert opinions; cruise line was entitled to summary judgment on claims with respect to hazardous condition of balcony door except for the duty to maintain; maritime law does not recognize a claim of negligence premised on the defendant’s general policies and operations that are unconnected with a specific accident, nor does it recognize a claim of vicarious liability for negligent maintenance that would bypass the notice requirement; Quashen v. Carnival Corp., No. 1:20-cv-22299, 2021 U.S. Dist. LEXIS 241507 (S.D. Fla. Dec. 17, 2021) (Moore).
Kirsten Quashen was a passenger on the CARNIVAL INSPIRATION. She and her boyfriend went to the cabin of friends that had a balcony. The balcony door had a warning sign on the interior side of the door that said: “CAUTION OPEN DOOR CAREFULLY AS STRONG WINDS MAY CAUSE DOOR TO CLOSE.” The door had a closing mechanism with a hydraulic piston and a spring control. Quashen went onto the balcony as the ship was leaving port with no wind and later went back to the balcony at a time when she claimed the wind was blowing. When she re-entered the cabin, the door closed on her finger. Although Quashen’s boyfriend initially believed the wind caused the door to close quickly, she later realized that the closing mechanism on the door was broken. There was a prior incident in which the door in this cabin closed on the finger of a passenger, and repairs were made on the door at that time. Quashen brought this action against the cruise line in federal court in Miami with claims for failure to maintain, failure to warn, negligent training and supervision, negligent medical care, and vicarious liability for medical personnel. Judge Moore found sufficient evidence in the motion for summary judgment and response to conclude that there was a dispute whether the door stopper was functioning properly and that the functionality of the door stopper coupled with high winds were the cause of the door closing on Quashen’s finger. Judge Moore then addressed the cruise line’s motion to exclude the expert opinions of Quashen’s expert, S. Wayne Sanders. The methodology on which Sanders based his opinions is the “Safety Hierarchy”—assess the hazard, assess safer options, consider engineering controls, consider administrative controls, and consider personal protective equipment. Judge Moore considered application of the Safety Hierarchy to be problematic in premises liability cases, but he also held that Sanders had not identified how he applied the Safety Hierarchy in support of his liability opinions. Judge Moore found “that the so-called ‘Safety Hierarchy’ is an unreliable methodology for use in the field of premises liability and the Court will not allow it to serve as a trojan horse for Sanders’s unscientific opinions—particularly in light of the fact that there is almost no evidence that he even applied the theory to the facts of this case.” Although the cruise line argued that the prior incident was dissimilar to Quashen’s injury, Judge Moore found sufficient evidence of a defective condition and notice to the cruise line for a negligent maintenance claim; however, Judge Moore rejected the argument that the cruise line could be liable for failing to take actions to reduce or eliminate foreseeable risks before they manifest themselves as dangerous conditions as maritime law “does not support a stand-alone claim based on Defendant’s ‘mode of operation’ unconnected to Plaintiff’s specific accident.” Judge Moore also held that the negligent maintenance claim could not proceed on a theory of vicarious liability that would bypass the notice requirement of a hazardous condition. With respect to the duty to warn, Judge Moore held that the sign sufficiently warned of the hazard with respect to high winds. Hazards of a crushed finger from the closing of the door were open and obvious, and Judge Moore reasoned that “placing one’s hand on a door jamb while the door is closing poses an obvious risk of injury and an objectively reasonable person would not do so.” Finally, Judge Moore dismissed the counts for negligent hiring and training and negligent medical care for lack of evidence.
Passenger failed to establish that the deck of the cruise ship was wet where she allegedly fell or that the cruise line had notice that the deck was wet; Sterling v. Carnival Corp., No. 1:21-cv-20198, 2021 U.S. Dist. LEXIS 242308 (S.D. Fla. Dec. 18, 2021) (Moore).
Suraya Sterling, a passenger on the CARNIVAL CONQUEST, claimed that she fell on the wet deck near the Monet Restaurant. Sterling did not know what substance caused her to fall and no one saw her fall, but she claimed that her two traveling companions told her that the deck was wet in the area where she fell. The Monet Restaurant was closed at the time of fall, and a bar waitress testified that she found Sterling on the floor in the Renoir Restaurant and that Sterling did not know where she fell. Sterling checked N/A on the Passenger Injury Statement for the location of the incident. Sterling did not identify the location of the accident as the Monet Restaurant until the letter of representation from her attorney. Sterling was described in the ship’s medical records as intoxicated, uncooperative, and disoriented, but she claims that she noticed that her shirt was wet. She brought this negligence action against the cruise line in federal court in Miami, and the cruise line moved for summary judgment, arguing that there was no report of a wet deck, no evidence of how the deck came to be wet, no evidence of how long the deck was wet, and no evidence of prior incidents at the Monet Restaurant. The cruise line also asserted an intoxication defense to which Sterling responded that if she was intoxicated it was because the cruise line overserved her alcohol. Judge Moore did not have to address the intoxication defense as he concluded that the evidence that Sterling slipped on a wet deck was too speculative and there was no evidence of the cruise line’s notice of a wet deck. Sterling did argue that the cruise line did not produce CCTV video footage of the area where she fell, but Judge Moore noted that she did not establish that the location where she allegedly fell was monitored by a CCTV camera and that the court had already denied her motion to compel.
Towing company was entitled to summary judgment that the barge-owning defendant breached the towing contract and was liable for the full amount of invoices without reduction; Cardinal Marine, LLC v. Corbett Aggregate Co., No. 16-07833, 2021 U.S. Dist. LEXIS 243232 (D.N.J. Dec. 21, 2021) (Quraishi).
Cardinal Marine entered into a Marine Towing Services Agreement with Corbett Aggregate to provide the services of a tug to tow Corbett’s barge loaded with sand or topsoil from Salem, New Jersey to ports in New York Harbor. The Agreement had a one-year term beginning in March 2015. There were disputes between the parties, and Corbett advised in December 2015 that it was cancelling the agreement. Cardinal Marine brought this action seeking to recover for unpaid invoices and for cancellation of the agreement, and Corbett counterclaimed for consequential damages for hiring substitute vessels and trucks to transport its cargo. Cardinal Marine filed a motion for summary judgment, and Judge Quraishi agreed to give effect to the provision in the Agreement that it would be construed in accordance with maritime law as applicable and otherwise according to New Jersey law. After holding that counsel could authenticate documents used to support the motion, Judge Quraishi turned to the claim that Corbett was liable for breach of contract. Corbett asserted that Cardinal Marine had failed to provide vessel surveys, but Judge Quraishi noted that the surveys referenced were for the barge, not the tug. As Corbett owned the barge, its surveys would have been in its possession, and Cardinal Marine could not be faulted for failing to provide the surveys. Although Corbett made “bald accusations” of unseaworthiness of the tug, Cardinal Marine did make deliveries until the Agreement was cancelled, and Judge Quraishi held that Cardinal Marine was entitled to payment of the full amount of the invoices for the shipments. Similarly, the insufficient allegations of negligence of Cardinal Marine did not overcome the contractual allocation of liability for replacement of towing gear, and Judge Quraishi held that Cardinal Marine was entitled to recover for replacement of towing gear. Turning to Cardinal Marine’s claim for damages for Corbett’s termination of the contract, Judge Quraishi held that Corbett had no right to terminate the contract even if Cardinal Marine failed to perform in accordance with the Agreement (the Agreement gave Cardinal Marine the right to terminate but not Corbett). As to whether Cardinal Marine should have mitigated its damages by offering the tug for hire after the termination of the Agreement, Judge Quraishi held that this argument related to the extent of damages that would be addressed separately as the motion for summary judgment was only for liability. Finally, Judge Quraishi agreed with Cardinal Marine’s argument for dismissal of Corbett’s counterclaim for consequential damages and dismissed the claim as the Agreement contained a provision that neither party would be liable to the other for consequential, special, or indirect damages arising out of the performance or non-performance of the Agreement.
Exculpatory clause prevented recovery for contaminated bunkers; VL8 Pool, Inc. v. Glencore Ltd., No. 20-cv-2053, 2021 U.S. Dist. LEXIS 245803 (S.D.N.Y. Dec. 27, 2021) (Carter).
Glencore obtained contaminated marine fuel from Valero that it sold to fuel suppliers and vessels around the world. VL8 alleged that Glencore sold contaminated fuel to VL8, which caused damages to vessels in Panama to which VL8 supplied the fuel. While the vessel claim against VL8 was proceeding in arbitration, VL8 brought this suit in federal court in New York against Glencore for breach of contract and warranty, negligence and product liability, and indemnity and contribution. The court initially ruled that the contractual limitation of liability/exculpatory clause in the General Terms and Conditions for the sale barred the contractual, warranty, negligence, and strict liability claims. VL8 then filed an amended complaint with additional allegations for the contractual and warranty claims, asserting that Glencore was guilty of gross misconduct because it had actual or constructive knowledge that marine fuel stored at its facility was contaminated. Citing New York law that upholds exculpatory clauses unless “the misconduct for which it would grant immunity smacks of intentional wrongdoing,” Judge Carter found none of the allegations suggested that Glencore engaged in explicit conduct that was fraudulent, malicious or prompted by sinister intention. Accordingly, he dismissed the contract and warranty claims. Turning to the indemnity and contribution claims, Judge Carter found multiple grounds for dismissal of the indemnity claim, finding that it was non-justiciable when VL8 had not yet incurred any liability, that VL8 had not proven it was free from negligence, and that VL8 had not alleged any contractual indemnity. As contribution requires some negligence of the party from which contribution is sought and as VL8 chose not to allege negligence in in its amended pleading, Judge Carter held that VL8 was not entitled to seek contribution.
Extrinsic evidence demonstrated that the Hurricane Questionnaire/Plan formed part of the policy on the vessel that was damaged by Hurricane Sally, and the breach of the warranty that the vessel would be moored at the Orleans Marina voided the policy; Great Lakes Insurance, S.E. v. Gray Group Investments, LLC, No. 20-2795, 2021 U.S. Dist. LEXIS 246393 (E.D. La. Dec. 28, 2021) (Vance).
Gray Group’s vessel, HELLO DOLLY VI, was damaged during Hurricane Sally while the vessel was moored in Pensacola, Florida. Gray Group completed an application form for insurance provided by Great Lakes together with a Hurricane Questionnaire/Plan. The application and the plan provided that the vessel would be moored at the Orleans Marina from July 1 to November 1 of the policy year. The plan also provided requirements for protection of the vessel when a storm was approaching. The plan stated above the signature line that the insured agreed that the declaration and warranty in the plan were incorporated into the insurance policy in their entirety. The policy incorporated the application into the policy. Great Lakes declined to pay for the hurricane damage to the HELLO DOLLY VI and brought this declaratory judgment action in federal court in New Orleans. Gray Group moved to dismiss the complaint on the ground that the plan was not a policy warranty because it was not incorporated into the policy, and also on the ground that it did not breach the provisions in the plan. Great Lakes then filed a cross-motion for judgment. Judge Vance denied both motions. Applying New York law in accordance with the choice-of-law clause in the policy and in the absence of an entrenched admiralty rule, Judge Vance held that there was ambiguity whether the plan had been incorporated into the policy. The policy incorporated the application, and the plan was submitted at the same time as the application. However, the term “application” was not defined, and the plan did not provide that it was part of the application. Although the plan expressly provided that it was part of the policy, Judge Vance considered the insured’s argument that only the application was incorporated into the policy to be sufficiently “plausible” that she would not decide the case on the pleadings. Although it was undisputed that the insured did not comply with four requirements in the plan (the vessel was not moored at the Orleans Marina, the vessel was not fully manned, the vessel was not evacuated to a safe harbor, and its anchor was not deployed), Gray Group argued that it did not violate the plan because the yacht was in Pensacola and the plan only applied when the vessel was moored at the Orleans Marina (or in South Florida). Judge Vance considered the interpretation that the plan would vanish when the yacht was in Pensacola to be “absurd” and held that the insured was not entitled to judgment on the pleadings that it did not breach the requirements of the plan. Finally, based on these rulings, Judge Vance ordered the insured to answer discovery requests regarding the completion of the application of insurance and the insured’s compliance with the terms of the plan. After discovery, the parties filed cross-motions for summary judgment, and Judge Vance sided with Great Lakes. Considering the extrinsic evidence, Judge Vance held that it was clear that the plan was a critical component of the application for insurance so that it was incorporated into the policy. She concluded that the requirement of New York law (that the instrument must identify the referenced document beyond all reasonable doubt in order to be incorporated by reference) was satisfied. Judge Vance then addressed whether the plan was breached and held that the location provision was susceptible of multiple reasonable meanings. It did not require that the vessel literally remain in place at the Orleans Marina for the entirety of the season. Considering extrinsic evidence, Judge Vance held that the provision referred to where the vessel would be moored for the majority of the period from July 1 to November 1. As the vessel was in Florida the entire time and was not moored at the Orleans Marina at any time during the period, Judge Vance held that Gray Group had breached the requirement in the plan. Interpreting the provision as a warranty under New York law, the breach voided the policy ab initio, and Gray Group was not entitled to coverage for the loss of the HELLO DOLLY VI.
Owner of pleasure craft was found liable for damages to fishing net struck by the pleasure boat during a thunder storm on Lake Erie; Whites Landing Fisheries, Inc. v. Towles, No. 3:20-cv-2740, 2021 U.S. Dist. LEXIS (N.D. Ohio Dec. 28, 2021) (Zouhary).
Eddie Towles took his family and another family on his 34-foot twin motor pleasure boat (the FLOORED) toward a beach on Lake Erie for swimming on Father’s Day. A severe thunderstorm overtook the vessel, and during very poor visibility the boat struck a black rope that entangled the propeller. Towles cut the rope and was able to navigate back to shore with one motor. White’s Landing, the owner of the fishing net that was struck by the FLOORED, brought suit in the Municipal Court of Sandusky, Ohio, and Towles removed the case to the federal district court for the Southern District of Ohio based on the court’s original admiralty jurisdiction. Towles filed a counterclaim for damage to the vessel, alleging improper placement and flagging of the White’s Landing’s nets, with causation established by The Pennsylvania Rule. “What began as a small-value claim over a Father’s Day boating accident” then “turned into a protracted federal case, complete with a bench trial on liability and damages.” After hearing disputed testimony, Judge Zouhary did not find that the nets were improperly flagged and anchored and instead found that it was the negligence of Towles that caused the accident. He awarded White’s Landing $7,570.50 in damages (plus interest from the date of the initial complaint), but he did not award attorney fees for bad faith and did not find that the decisions of Towles for failure to heed storm warnings, post a lookout, or heed the properly placed markings were sufficient to constitute gross negligence for an award of punitive damages.
From the state appellate courts:
Transfer of case involving death in South Lake Tahoe from the Alameda County Superior Court to the South Lake Tahoe Branch of the El Dorado County Superior Court was overturned by the California Court of Appeal; Willis v. Superior Court, No. A 162776, 2021 Cal. App. Unpub. LEXIS 7968 (Cal. App. 1st Dist. Dec. 20, 2021) (Richman).
The death of Raeshon Willis in a jet-ski accident in South Lake Tahoe returns to the Update (June 2019, November 2019, December 2019, and August 2020 Updates). Williams, an employee of Zip, Inc. and Berkeley Executives, was on a work trip with fellow employees Thomas Smith and Kai Petrich. As part of a team-building activity, Smith and Williams were riding together in Lake Tahoe on a wave runner that was rented from Williams Sports Rentals. Smith was operating the wave runner when it hit a wave and Williams was thrown overboard and drowned. Williams Sports Rentals filed a limitation action as the owner of the wave runner, and Willis’ mother sought to lift the limitation stay. Judge Mendez declined to lift the stay, and the Ninth Circuit ordered Judge Mendez to reconsider his analysis. Instead of lifting the stay, however, Judge Mendez ruled that the owner of the jet ski should be exonerated and dismissed the case. The Ninth Circuit then ordered Judge Mendez to lift the stay, and Judge Mendez considered that order to be “unequivocal.” Although agreeing to lift the stay, Judge Mendez did address whether trial of the limitation question should proceed in federal court or await trial of the liability issue in the state court (based on efficient use of judicial resources). As the Sacramento federal courthouse was closed to the public until further notice, Judge Mendez held that the limitation action should be stayed until the completion of the suit in state court. Willis’ mother had filed a suit in state court in Alameda County against Zip, Inc., Berkeley Executives, Smith, and Petrich. After the limitation stay was dissolved, his mother added Williams Sports Rentals as a defendant. Williams twice moved to transfer the case from the Alameda County Superior Court to the South Lake Tahoe Branch of the El Dorado Superior Court, and the judge transferred the case, concluding that trial in El Dorado County would be vastly more convenient than trial in Alameda County (the principal place of business of Zip and Berkeley and the residence of Smith and Petrich). The Court of Appeal, however, held that the trial court abused its discretion in granting the transfer because Williams had not carried its burden to show that both the convenience of witnesses and the ends of justice would be promoted by a transfer. The lower court had found that it “cannot determine what delay might result from changing venue,” and that was insufficient to satisfy the requirement that the ends of justice would be promoted by the transfer. Consequently, the appellate court issued a peremptory writ of mandate directing the superior court to vacate its order transferring the case.
Himalaya Clause in passenger’s ticket did not extend forum-selection clause to indirect supplier and was not sufficiently communicated to the passenger; AquaChile, Inc. v. Williams, No. 4D21-1453, 2021 Fla. App. LEXIS 15944 (Fla. 4th DCA Dec. 22, 2021) (per curiam).
Dawn Williams alleged that she became ill after she was served contaminated fish on a cruise ship. She claimed that the fish was originally sourced by AquaChile and ultimately sold to the cruise line. Williams brought this suit in state court in Broward County, Florida against AquaChile and other companies in the supply chain, and AquaChile moved to dismiss the action, asserting that Broward County was an improper venue pursuant to the passage ticket between Williams and the cruise line. The ticket contained a Himalaya Clause in section 2(b) that contained the definition of “carrier” and extended the rights and defenses of the carrier to its “agents, independent contractors, concessionaires and suppliers.” AquaChile argued that it was a “supplier” of the cruise line and entitled to the benefit of the Miami-Dade County forum-selection clause. The appellate court found two reasons not to apply the forum-selection clause. First, the court considered the language of the Himalaya Clause and held that it did not reflect an intent to extend the carrier’s defenses to AquaChile. Although the court did not hold that the Himalaya Clause only applied to direct suppliers, the court did not believe it should extend to “an indefinite chain of indirect suppliers, like AquaChile, that have little to no relationship” with the carrier. Additionally, the court held that the extension of the defenses in the ticket to AquaChile was not reasonably communicated to Williams. The court reasoned that AquaChile was engaged in the non-maritime business of farming and selling fish and that a passenger would not expect the ticket to cover that business. The court added that the first page of the ticket contained an “important notice” to pay particular attention to section 3 and sections 9 to 11. The forum-selection clause was contained in section 9 and was printed in all-capital letters. The definition of carrier and Himalaya Clause, however, were in section 2 and the type and location did not call the passenger’s attention to them. Accordingly, the court held that the defendant that was the source of the fish could not enforce the forum-selection clause as a “supplier” of the fish.
Kenneth G. Engerrand
President, Brown Sims, P.C.
1177 West Loop South
Houston, TX 77027
1100 Poydras Street
New Orleans, LA 70163
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Of the Panama Canal, Theodore Roosevelt said at the time of its construction, “No single great material work which remains to be undertaken on this continent is as of such consequence to the American people.” Over fifty miles long and completed over 100 years ago, the Panama Canal changed the nature of trade in the Western Hemisphere. And as with any piece of infrastructure, great or small, work continues today.
Robert N. Scola, Jr., Grupo Unidos por el Canal, S.A. v. Autoridad del Canal de Panama, No. 1:20-cv-24867, 2021 U.S. Dist. LEXIS 236109 (S.D. Fla. Dec. 9, 2021).
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