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July 2020 Longshore/Maritime Update

June 30
2020

July 2020 Longshore/Maritime Update (No. 254)

Notes from your Updater:

On June 1, 2020, Chief Administrative Law Judge Henley issued an order extending indefinitely the moratorium on in-person hearings where participants are physically in the same location and ordering that OALJ hearings be conducted by telephone or video unless the presiding ALJ grants a party’s motion for an in-person hearing based on compelling reasons. All previously scheduled hearings were converted to a telephone or video hearing with procedures for the hearing to be determined by order from the presiding ALJ. The parties may enter an agreement for a decision to be issued based on stipulations of fact or a stipulated record.

Order

The long running dispute between Ingalls Shipbuilding and the Venezuelan Ministry of Defense over the $200 million contract for repair of two military frigates (discussed in the June 2020 Update) has now resulted in the issuance of a final judgment, awarding Northrop Grumman (f/k/a Ingalls Shipbuilding) more than $137 million in accordance with an arbitration award in favor of Northrop Grumman. Northrop Grumman Ship Systems, Inc. v. Ministry of Defense of the Republic of Venezuela, No. 1:02-cv-785 (S.D. Miss. June 4, 2020) (Ozerden).

Judgment

June 5, 2020, marked the 100th anniversary of the enactment of the Merchant Marine Act of 1920, whose last section has come to be known as the Jones Act (after Senator Wesley Jones of Washington).

In our February 2020 Update, we discussed Judge Morgan’s decision in Ganpat v. Eastern Pacific Shipping, PTE, holding that service of process on the captain of a different vessel than the one on which the plaintiff-seaman contracted malaria was insufficient. The seaman sought reconsideration and limited discovery on the personal jurisdiction of the defendant, but Judge Morgan denied that request in her order issued on June 5, 2020.

The authority of the Director to appear in DBA cases pending before the OALJ and BRB is being challenged before the First Circuit by the claimants in Carswell v. E. Pihl & Sons, No. 19-1630. The claimants contend that the Director’s actions as a “party-litigant” “conflicted with his support role as claims administrator and nullified the LHWCA’s scheme for fair and efficient resolution.” The briefs of the claimants and the Director are linked. Thanks to Eric Richardson, Senior Account Manager, Carrier Practice, with Gallagher Bassett for bringing this argument to our attention.

Claimants’ brief

Director’s brief

The Ninth Circuit declined to grant rehearing en banc from its holding (May 2020 Update) that unauthorized settlements of third-party suits by the daughters of deceased ship repairers, which released all heirs, did not bar the widows’ LHWCA death claims pursuant to Section 933(g). Hale v. BAE Systems San Francisco Ship Repair, Inc., Nos. 18-72869, 18-73063, 2020 U.S. App. Lexis 19676 (9th Cir. June 24, 2020) (en banc).

On the LHWCA Front . . .

From the federal district courts:

Worker’s suit against terminal for failure to pay adequate wages for his work as a longshoreman was dismissed as incomprehensible; West-El v. Baker, No. 20-22194, 2020 U.S. Dist. Lexis 95856 (S.D. Fla. May 29, 2020) (Moreno).

Opinion

Edward Shane West-El, a Moorish American Aboriginal Indigenous Man and member of International Longshoremen’s Association Local 1416 of Miami, brought this action against the managing director for South Florida Container Terminals, asserting that he had not been properly paid for his longshore work. He invoked the jurisdiction of the court under The Treaty of Peace and Friendship of 1836 A.D. between Morocco and the United States, seeking to enforce rights based on the Universal Declaration of Human Rights 1948 and The Divine Constitution and By-Laws of the Moorish Science Temple of America. After a sua sponte examination of the complaint, Judge Moreno held that the complaint was incomprehensible and ordered that it be dismissed.

Defendant’s appearance in a longshore worker’s injury suit does not excuse the failure to serve the defendant; longshore worker was allowed jurisdictional discovery to ascertain the entity responsible for the vessel on which the longshore worker was injured; Kelly v. Hoegh Autoliners Shipping PTE, Ltd., No. 2:18-cv-8599, 2020 U.S. Dist. Lexis 103405 (D.N.J. June 12, 2020) (Mannion).

Opinion

Barbara Kennedy (Kelly in the style of the case), a longshore worker employed by Ports America, was injured on the M/V HOEGH MASAN while it was docked in Port Newark, New Jersey. The vessel transported vehicles across the ocean to the United States, and its crew removed tie downs for the vehicles before the longshore workers boarded to remove the vehicles. Kennedy tripped and fell over a tie that had not been properly stowed. Kennedy brought suit against various Hoegh entities under Section 905(b) of the LHWCA and eventually dismissed all of them except Hoegh PTE, a Singapore entity that owned the vessel. Hoegh PTE filed an answer, challenging service of process and personal jurisdiction. Magistrate Judge Mannion noted that Kennedy had not requested a summons to serve Hoegh PTE, and that more than 90 days had passed (actually six months). In deciding whether to dismiss the suit, Magistrate Judge Mannion found no good cause in the belief of Kennedy’s counsel that service was not required because Hoegh PTE had entered an appearance. However, as Hoegh PTE had participated in the litigation and would not be unduly prejudiced by allowing the plaintiff additional time to serve the summons, Magistrate Judge Mannion declined to dismiss the action and ordered the plaintiff to request a summons and have it served. Hoegh PTE also asserted that it was not subject to personal jurisdiction because it had chartered the vessel and was not involved in its daily operations. Although Kennedy had not established jurisdictional facts to establish anything other than that Hoegh PTE was the title owner of the vessel, Magistrate Judge Mannion found conflicts in the evidence presented by Hoegh PTE–whether the vessel was bareboat chartered (Hoegh PTE would not have possession and control) or time chartered (Hoegh PTE would retain possession and control). Therefore, Magistrate Judge Mannion allowed limited jurisdictional discovery to ascertain whether Hoegh PTE or a different Hoegh entity had control of the vessel so as to be subject to personal jurisdiction for the tort committed in New Jersey.

Hearing a bang in the containers being transported by the longshore worker’s hustler before the containers shifted and her trailer overturned did not establish negligence of the shipper who stuffed the containers; Forero v. APM Terminals, No. 18-13754, 2020 U.S. Dist. Lexis 107154 (D.N.J. June 18, 2020) (McNulty).

Opinion

Sunrise Metals exports scrap metal. It loaded metal into two containers that were transported to the APM Terminals’ facility, where longshore worker Doheny Forero was assigned to drive a hustler with the containers from the terminal to a ship. As she was turning, Forero heard a noise in one of the containers, prompting her to brake. The containers shifted and fell to the ground, overturning her trailer and injuring her. Sunrise Metals moved for summary judgment in Forero’s lawsuit, and Judge McNulty held that the bang that Forero heard did not raise an inference that Sunrise Metals had negligently loaded the containers. The containers had traveled by rail to the terminal, were stored at the terminal, and were then loaded by the terminal onto the trailer of Forero’s hustler. Any one of those steps could have altered the containers and caused the accident. Therefore, Judge McNulty held that Sunrise Metals was entitled to judgment as a matter of law.

From the state courts:

Borrowed servant defense was held to be a legal question to be decided by the judge, but if there are fact questions on the individual factors, those factors must be submitted to the fact finder or they cannot support the defense; damages were awarded for loss of earning capacity, not wage loss; W&T Offshore, Inc. v. Fredieu, No. 18-1134 (Tex. June 5, 2020) (Blacklock).

Opinion

Wesley Fredieu was employed by Wood Group, which performs maintenance and service work on offshore drilling platforms in the Gulf of Mexico. Wood Group assigned Fredieu to work on W&T platforms, and Fredieu was injured while supervising workers who were painting and repairing handrails. Fredieu brought this suit for negligence against W&T, and W&T asserted that the LHWCA provided the exclusive remedy for Fredieu on the ground that Fredieu was a borrowed servant of W&T. The district court submitted the borrowed servant question to the jury as a single question–whether Fredieu was a borrowed employee of W&T–with instructions setting forth the factors from Ruiz v. Shell Oil. After the jury answered “no” to the single question and awarded damages to Fredieu for the negligence of W&T, the district judge determined that the submission of the ultimate issue to the jury was incorrect and then made fact findings on the Ruiz factors. Balancing the factors, the judge concluded that Fredieu was a borrowed employee of W&T and entered judgment in favor of W&T. The court of appeals reinstated the verdict in favor of Fredieu, holding that the borrowed-servant question could be a fact question that was submitted to the jury with the jury balancing the Ruiz factors. Seven justices of the Texas Supreme Court disagreed that the jury should be allowed to balance the Ruiz factors and decide the borrowed-servant defense as a fact question. The Court held that the ultimate decision of whether a worker is a borrowed servant (including the balancing of the Ruiz factors) is a legal question to be determined by the judge. However, the Court recognized that there might be fact questions on the individual Ruiz factors that require resolution by a fact finder so that they may then be balanced by the judge. It was, therefore, improper for the single issue to be submitted to the jury, and the district judge was correct to disregard the ultimate finding by the jury. The problem was that there were fact issues on several of the Ruiz factors, including the important factor of control. As W&T had the burden of proof of the borrowed-servant defense, W&T was required to secure jury findings on the disputed Ruiz factors. Unless the disputed factors could be resolved as a matter of law, the failure of W&T to ask for individual submission of those factors meant that they could not be weighed in favor of W&T. Considering the failure to obtain fact findings on the disputed Ruiz factors, the Court held that W&T did not  establish that Fredieu was W&T’s borrowed employee. Additionally, W&T objected to the award of $950,000 to Fredieu for loss of wage earning capacity as he had returned to work at a higher hourly rate than before his accident. Reasoning that the award is for loss of earning capacity and not loss of earnings, the Court noted that Fredieu was working fewer hours, had to travel and incur expenses, and that his work options in the future were limited because of his disability. Therefore, the Court held that the award was within the province of the jury.

And on the Maritime Front . . .

From the federal appellate courts:

Suit by residents of Texas and Louisiana for flooding of their property by the Sabine River was removable pursuant to the Class Action Fairness Act; Bonin v. Sabine River Authority of Louisiana, No. 19-40299 (5th Cir. June 4, 2020) (Jolly).

Opinion

After heavy rains led to flooding of the Sabine River (boundary between Texas and Louisiana), hundreds of property owners brought suit in Texas state court against various agencies and power companies, who removed the case to federal court as a mass action under the Class Action Fairness Act. The plaintiffs sought to invoke an exception to the mass action provision on the ground that all of the claims arose from an event or occurrence in the state in which the action was filed. The plaintiffs argued that all of their injuries occurred in either Texas or Louisiana. However, the Fifth Circuit held that the argument was a “patently untenable” construction of the statute as all of the claims must occur in the state in which the action was brought and some of the claims arose from flooding in Louisiana.

Claimant in limitation action obtained dismissal of the limitation action for want of publication even though the claimant received actual notice by mail; In re Prosper Operators, Inc., No. 19-30918 (5th Cir. June 4, 2020) (per curiam).

Opinion

Mitchell Navarre, an employee of Prosper Operators, was injured while performing work on a stationary platform in Sweet Lake, Louisiana, when he tried to jump from the platform to a boat. He brought suit against Prosper in state court in Cameron Parish, Louisiana, and Prosper then brought this action in federal court seeking limitation of shipowner’s liability. The district court issued an order approving the action and directing Prosper to notify known claimants of the limitation action and to publish notice of the action in the Lake Charles American Press for four weeks prior to April 14, 2017. Prosper sent two letters to Navarre, but Prosper failed to publish notice of the limitation action in the newspaper. Navarre then moved to dismiss the limitation action based on the failure to publish notice in the newspaper, and Prosper responded that Navarre had received actual notice of the action. Magistrate Judge Kay granted Prosper an extension of time to publish the notice, but Judge Cain vacated the magistrate judge’s order and dismissed the action. Concluding that the district judge did not abuse his discretion, particularly as Navarre’s state-court action was delayed by the failure to publish, the Fifth Circuit affirmed the dismissal of the limitation action.

Waterfront Commission of New York Harbor cannot sue New Jersey to stop its withdrawal from the Waterfront Commission Compact with New York; Waterfront Commission of New York Harbor v. Governor of New Jersey, No. 19-2459 (3d Cir. June 5, 2020) (Smith).

Opinion

When New Jersey unilaterally terminated its agreement to the Waterfront Commission Compact with New York after most of the workforce shifted from New York to New Jersey, the Waterfront Commission of New York Harbor brought suit against the Governor of New Jersey seeking a declaration that the Governor had violated the Compact and also seeking an injunction against enforcement of the New Jersey statute withdrawing from the compact and granting the New Jersey Division of State Police the Commission’s law enforcement functions on the New Jersey side of the Harbor. The district court granted a preliminary injunction preventing the Governor from withdrawal and then granted summary judgment in favor of the Commission. The Third Circuit reversed the decisions of the district court on the ground that the suit impinged on the sovereignty of the State of New Jersey. Therefore, the orders of the district judge were vacated and the case was remanded for dismissal.

Cruise line’s warning reflected notice of hazard sufficient to defeat its motion for summary judgment; Amy v. Carnival Corp., Nos. 18-14917, 19-10888 (11th Cir. June 16, 2020) (Wilson).

Opinion

This case involves a fall by a three-year old passenger on the cruise ship LIBERTY.  The child either climbed over or fell through the rail on the overhang of a deck, landing on the deck below. The passenger’s mother brought this suit alleging negligent creation and maintenance of the guard rail and failure to warn of the danger posed by the rail. Judge Ungaro granted summary judgment on the creation/maintenance claim on the ground that the cruise line lacked notice of the risk-creating condition. She granted summary judgment on the warning claim on the ground that the danger was open and obvious. Writing for the Eleventh Circuit, Judge Wilson stated that notice was required for both claims, but the open-and-obvious defense had a different operation for the two claims. The cruise line may still be liable for maintaining a dangerous condition that is open and obvious, but it only has a duty to warn of dangers that are not open and obvious. With respect to the claim of negligent creation/maintenance for the guard rail, Judge Wilson noted that the cruise line had warned passengers not to climb up rails, try to sit on them, try to get selfies or lean over them because accidents can happen and “there have been passengers [who] have fallen off.” Judge Wilson did not believe that the warning was too generic with respect to the specific danger at issue and held that a reasonable jury could believe that the cruise line was aware of the dangers of a climbable rail. Although the cruise line also asserted lack of notice as a defense to the failure to warn claim, Judge Ungaro granted summary judgment to the cruise line on the basis that the condition was open and obvious. As the cruise line did not plead that defense in its answer or assert it in its motion for summary judgment, Judge Wilson held that Judge Ungaro erred in granting summary judgment based on the open and obvious condition of the rail.

D.C. Circuit affirmed the decision of the district court upholding higher rates for Great Lakes pilots for 2016; American Great Lakes Ports Association v. Schultz, No. 18-5167, 2020 U.S. App. Lexis 18856 (D.C. Cir. June 16, 2020) (Rao).

Opinion

The annual litigation over the rates for pilots for ships engaged in foreign trade on the Great Lakes returns to the Update (see April 2020 Update with respect to the 2018 rates). In this litigation, the commercial shipping and port interests on the Great Lakes challenged the pilot rates for the 2016 season as artificially inflated to the point that they would cause significant harm to the industry. The district judge upheld parts of the rule setting higher compensation targets for the pilots, but held that several parts of the rule were unsupported and remanded them to the Coast Guard without vacating the rule. Although noting that remand without vacatur is the exception to the general procedure when there is a remand, the appellate court held that the district court acted within its discretion, particularly in view of the disruption that would occur from reallocating rates paid several years ago.

Fuel provided to support vessels that transported the fuel to supply other vessels did not constitute necessaries for the support vessels and did not give rise to a maritime lien on the support vessels; Martin Energy Services, L.L.C. v. Bourbon Petrel M/V, No. 19-30612 (5th Cir. June 17, 2020) (Duncan).

Opinion

Martin Energy delivered fuel to three support vessels owned by CGG Services, which carried the fuel in their cargo tanks to refuel three other vessels that were working off the Louisiana coast. CGG originally purchased fuel directly from Martin Energy, but later it started buying fuel from O.W. Bunker, which arranged for the deliveries through Martin Energy. After O.W. Bunker filed for bankruptcy, CGG did not pay for the O.W. Bunker invoices, and Martin Energy brought this suit asserting in rem claims against the support vessels. The in rem claims were tried to Judge Fallon, who held that Martin Energy had a maritime lien on the support vessels. The Fifth Circuit disagreed with Judge Fallon and held that the fuel did not constitute necessaries for the support vessels. Although recognizing that fuel may qualify as a necessary under the Commercial Instruments and Maritime Liens Act, Judge Duncan noted that the fuel was not supplied to the support vessels as fuel to keep the vessels going. He reasoned that extending the concept of necessaries to cargo transported by a vessel would be an “unprecedented expansion” of the CIMLA, rejecting the argument that the fuel was necessary for the support vessels to perform their “particular function” of serving as “floating gas stations.”

Having a crew member at the cruise ship’s ice rink with the duty to watch the ice gave the cruise line sufficient notice of gouges in the ice to support a negligence verdict in favor of a passenger who fell on the ice; Lebron v. Royal Caribbean Cruises Ltd., No. 19-10115 (11th Cir. June 19, 2020) (Baldock).

Opinion

Edgardo Lebron was injured when he fell while ice skating on the ADVENTURE OF THE SEAS. He asserted two theories of negligence against the cruise line, but the theory involved in this appeal was that the cruise line failed to reasonably maintain the ice rink, resulting in a gouge in the ice that contributed to his fall. At the close of Lebron’s case, the cruise line moved for judgment as a matter of law on the basis that Lebron failed to prove that the cruise line had constructive notice of the gouge in the ice. After the jury returned a verdict finding that the cruise line was 65% negligent and that Lebron was 35% negligent, Judge Seitz granted the cruise line’s motion and entered judgment for the cruise line. The Eleventh Circuit reversed. Writing for the appellate court, Judge Baldock of the Tenth Circuit found sufficient evidence (but “by no means overwhelming”) of constructive notice. The evidence consisted of: 1) the cruise line knew that poorly maintained ice can lead to injury and had a crew member at the rink watching the ice; 2) Lebron’s daughter noticed that the ice had gouges and was flaky when she and Lebron started skating, approximately 10 to 15 minutes before his fall; and 3) although his daughter did not notify the cruise line of the condition of the ice, the passage of 10 to 15 minutes was sufficient to invite corrective measures. Therefore, the verdict was reinstated.

District court miscalculated amount of excavation required to repair damage from vessel grounding; Riverfront Development, Inc. v. Wepfer Marine, Inc., No. 19-6088, 2020 U.S. App. Lexis 20074 (6th Cir. June 26, 2020) (Murphy).

Opinion

While turning toward the Mississippi River in Wolf River Harbor in Memphis, Tennessee, the tug M/V LUCY WEPFER, pushing a barge loaded with concrete slurry, ran aground on the submerged southern tip of Mud Island, leaving two large gashes on the eastern shore of the island. Mud Island’s managing agent, Riverfront Development, brought this suit against the owner of the tug, and district judge Lipman held the tug owner liable and ruled that the proper measure of damages was restitutio in integrum (the cost to restore Mud Island to its previous condition). The damages included excavation of muck (sediment) in the holes and filling them with sand and/or limestone. The Sixth Circuit affirmed Judge Lipman’s decisions and award with one exception. When Judge Lipman calculated the amount of limestone fill for the holes, she used the figure of 12,000 cubic yards (which included a 20% contingency to compact the holes to grade level). However, she also used that figure for the removal of the muck/sediment when that was not the amount of sediment that had to be removed from the holes. The judgment was therefore reversed to enter an amended amount of damages.

From the federal district courts:

Matson Navigation was partially successful in its argument that the Maritime Administration violated the Administrative Procedure Act in approving the replacement of two vessels of a competitor operating in the Maritime Security Program; Matson Navigation Co. v. United States Department of Transportation, No. 18-2751, 202 U.S. Dist. Lexis 94794 (D.D.C. May 30, 2020) (Moss).

Opinion

Matson Navigation challenged the decision of the Maritime Administration to approve the replacement of two vessels operated by APL Marine and APL Maritime in the Maritime Security Program. Although the court was without jurisdiction to review one of the orders (exclusive jurisdiction in the court of appeals), Judge Moss did conclude that one order did not withstand scrutiny under the Administrative Procedure Act and permitted the parties to submit additional evidence and briefing on the question whether the court should remand the matter with or without vacatur.

Damages for death on excursion in Belize were limited by DOHSA; negligence allegations against cruise line related to the excursion were dismissed for failure to state a claim; Keiser v. Carnival Corp., No. 1:20-cv-20013, 2020 U.S. Dist. Lexis 97559 (S.D. Fla. June 1, 2020) (King).

Opinion

Sandra Keiser, a passenger on the CARNIVAL VISTA, ingested water while participating in a snorkeling excursion in Belize that was booked through Carnival. She was taken ashore where she began coughing up blood, foaming at the mouth, and ultimately collapsed. When she was not offered aid, she was taken to a hospital where she died. This suit, brought by her estate and family members, sought damages for loss of companionship and guidance, mental anguish, and loss of earning capacity. Carnival argued that the Death on the High Seas Act was applicable and barred recovery of non-pecuniary losses. The plaintiffs argued that her death occurred on land, after the excursion, and therefore her death did not occur on the high seas. Judge King responded that the cause of action under DOHSA accrued when the wrongful act or omission was consummated in an actual injury, not at the point where previous or subsequent negligence actually occurred. Thus, even though she succumbed on land, her injury in the water triggered DOHSA, and her claims for non-pecuniary damages were dismissed. Judge King also ruled that the complaint failed to allege a claim for negligence. The plaintiffs’ allegations that Carnival failed to operate safe excursions and insure that the excursions provided adequate medical response would effectively render cruise lines insurers of their passengers’ safety. Additionally, the complaint failed to allege that Carnival had notice of any dangerous condition or engaged in any negligent conduct after Ms. Keiser was taken ashore.

Cruise line found not liable for injury to passenger who fell on the ship’s ice rink in a collision with passenger who was skating backward; Lucas v. Royal Caribbean Cruises, Ltd., No. 19-20914, 2020 U.S. Dist. Lexis 97568 (S.D. Fla. June 1, 2020) (Scola).

Opinion

Lori Lucas, who has skated her entire life, was injured while skating on the ice rink on the HARMONY OF THE SEAS when the skate of an adult male, who was skating backwards, came in contact with Lucas’s skate. Her suit against the cruise line was tried before Judge Scola, who found that the cruise line was not negligent. The cruise line did not prohibit backwards skating, and Judge Scola found that the policy of allowing backwards skating met industry standards. Judge Scola found that the other skater was traveling in the same direction as Lucas and contacted her when her skate extended out behind her and into his path. The touching was more from her turning and extending her skate into his path than it was from the backwards skating of the other skater. Her fall was within two seconds of the other skater’s turning around to skate backwards, so there would not have been time for the three crewmembers who were monitoring the ice to have stopped him even if they wanted to.

Fact that passenger was an experienced fisherman who was aware of slippery conditions on the deck of the vessel was not enough for summary judgment on an open and obvious defense; In re Matocha, No. 2:19-cv-365, 2020 U.S. Dist. Lexis 96956 (W.D. La. June 2, 2020) (Cain).

Opinion

Michael Blanco was injured on his third charter fishing trip on the M/V LOUISIANA LIMITS. He claimed that he slipped in a layer of mud that was covering the deck, resulting in a collapsed lung and tear in his aorta. The owner filed this limitation action, seeking to limit liability to the value of his interest in the vessel ($11,500), and then moved for summary judgment on the ground that the condition of the deck was open and obvious. Blanco testified that when the sun came out after the pre-dawn departure, he could see that the deck was covered with mud. He admitted that water and fish slime would accumulate on the deck in the natural course of fishing, that there were towels on board, and he knew he should mop up slick conditions on the deck. Other passengers recalled mud or other slippery substances on the deck and an accumulation of water that was too great to be removed with the towels. Faced with the differing testimony, Judge Cain declined to grant summary judgment on the open and obvious condition of the deck as he found discrepancies on the exact nature of the hazard of the deck, its origin, and Blanco’s ability to remedy or avoid it.

Seaman’s allegations against third party were insufficient to survive a motion for judgment on the pleadings, but he was given an opportunity to replead; Sevin v. D&S Marine Services, LLC, No. 19-13352, 2020 U.S. Dist. Lexis 97580 (E.D. La. June 3, 2020) (Barbier).

Opinion

Carl Sevin allegedly suffered a back injury while working on the M/V ANNA MICHAEL, owned and operated by D&S Marine. Sevin brought this action against D&S and against Kirby Inland Marine, with his only allegation against Kirby that his accident occurred while he was working with a rope provided by Kirby. He provided no other details about Kirby, the rope, or the accident. Kirby filed a motion for judgment on the pleadings, and Judge Barbier agreed that the conclusory allegations were insufficient to establish that Kirby had a duty or breached it with respect to Sevin. Kirby argued that leave to amend would be futile as Sevin had already answered interrogatories with no information on how the rope was defective or inadequate. Judge Barbier first noted that extrinsic evidence was not relevant to a motion to dismiss; however, he also answered that this was not the case where the answers demonstrated that liability was legally or factually impossible. Therefore, Judge Barbier gave Sevin the opportunity to correct the deficiencies in his complaint and warned that failure to correct them would result in dismissal with prejudice.

Another BELO lawsuit was dismissed for lack of expert evidence of causation; Swafford v. BP Exploration & Production, Inc., No. 19-9541, 2020 U.S. Dist. Lexis 97578 (E.D. La. June 3, 2020) (Ashe).

Opinion

This is a Back-End Litigation Option case asserting personal injuries for exposure to oil and dispersants during spill response work after the DEEPWATER HORIZON/Macondo blowout. In accordance with the Medical Settlement Agreement, workers are required to establish that their medical conditions were caused by exposure to oil and dispersants during their clean-up efforts. The courts have ruled that the workers must present expert opinions to carry their burden of proof. As Andre Swafford failed to produce an expert report, Judge Ashe dismissed his suit.

NYK Line held not subject to general jurisdiction in the United States under the Fifth Amendment in a suit by injured American sailors in connection with a collision in Japanese waters; Alcide v. Nippon Yusen Kabushiki Kaisha, No. 19-13691, 2020 U.S. Dist. Lexis 98025 (E.D. La. June 4, 2020) (Africk); Douglas v. Nippon Yusen Kabushiki Kaisha, No. 19-13688, 2020 U.S. Dist. Lexis 98038 (E.D. La. June  4, 2020) (Africk).

Alcide Opinion

Douglas Opinion

The plaintiffs in these cases are Navy sailors on the USS Fitzgerald who were injured in a collision with the ACX Crystal (chartered to NYK Line) in Japanese territorial waters. The sailors alleged that NYK Line was subject to general jurisdiction in the United States under the Fifth Amendment as this is a maritime case. The question was therefore whether NYK Line had sufficient contacts with the United States to satisfy Fifth Amendment due process. NYK Line’s consolidated revenue that originated from its North American entities from 2017 to 2019 was more than a billion dollars a year. NYK Line is a frequent litigator in the US, maintains a bank account in the US, employs 24 of its 1,732 employees in the US, maintains logistics centers and warehouses and conducts business with companies in the US, and can be fairly regarded as sustaining continuous and systematic contacts with the US. However, the test is whether those contacts render NYK Line “essentially at home” in the US. Considering the contacts with the US in the context of NYK Line’s worldwide activities, Judge Africk held that the contacts were only a small part of NYK Line’s worldwide activities. Therefore, he held that NYK Line was not subject to general jurisdiction in the US. The sailors have already filed their notices of appeal. Thanks to Matthew Ammerman of Houston for bringing these cases to our attention.

When the plaintiff accepted her counsel’s threat to withdraw as her attorney, it was not the same as the attorney voluntarily withdrawing; plaintiff’s counsel was entitled to a fee based on quantum meruit; Ford v. NCL Bahamas Ltd., No. 17-cv-24404, 2020 U.S. Dist. Lexis 100067, (S.D. Fla. June 5, 2020) (Louis).

Opinion

This dispute arises from the suit brought by the mother of an injured passenger on a cruise ship. The mother, a registered nurse, wanted to be heavily involved in the litigation, but that involvement resulted in friction with her attorney, particularly in scheduling depositions. After a heated exchange, the attorney stated that “perhaps” the plaintiff needed new lawyers. The next day he responded that he found an email from the plaintiff to be “grossly insulting and patently false” and demanded she retract her accusations “or he would file a motion to withdraw as her attorney.” The plaintiff did not retract her email and instructed the attorney to cease all action on the case. She then accepted his withdrawal and resignation. The plaintiff settled her case with the help of new counsel, and her former counsel intervened and sought a fee of $240,200 based on 480.4 hours of work at an hourly rate of $500. The first question was whether the attorney voluntarily withdrew from representation, forfeiting his right to a fee. Although the plaintiff argued that his threat to withdraw was essentially a notice of his decision to withdraw unless she retracted her email, Magistrate Judge Louis disagreed. The attorney did not follow up with a motion to withdraw when the plaintiff declined to retract her accusations, and it was her act of discharging him in response to his threat to withdraw that terminated the representation. Finding that the attorney had added value to the plaintiff’s case, Magistrate Judge Louis held that the attorney was entitled to a fee based on quantum meruit. The plaintiff did not dispute the number of hours or hourly rate requested, and Magistrate Judge Louis held that the hourly rate was reasonable for the skill and experience of the attorney is the south Florida market. The attorney did not, however, keep contemporaneous records of his work and estimated the hours he expended. Reviewing the hours, Magistrate Judge Louis found that 63.8 hours out of the 480.4 hours sought were reasonable, rejecting the remainder as duplicative, clerical, administrative, traveling, research, attendance at public events, and matters for which the description was inadequate to assess the value that the task contributed to the case. Therefore, she awarded a total of $31,900, noting that it would be paid from the portion of the settlement awarded to the plaintiff’s current attorneys and not from the plaintiff’s portion of the settlement.

Singer was allowed to bring claims against the cruise line for violation of federal and state discrimination statutes for failing to hire him because of his depression; Schultz v. Royal Caribbean Cruises, Ltd., No. 18-24023, 2020 U.S. Dist. Lexis 98949 (S.D. Fla. June 5, 2020) (Torres).

Opinion

Wisconsin resident Samuel Schultz applied for employment as a singer as part of an opera program on the AZAMARA JOURNEY, scheduled for a 14-week voyage from Singapore to Stockholm from March 25, 2018, to June 29, 2018. The cruise line gave Schultz a job offer conditioned on his successful completion of a medical examination under the guidelines of the International Labour Organization. The examination included a session with a psychiatrist as Schultz suffered from major depression since he was 9 years old and had survived a suicide attempt in 2011. Although the psychiatrist wrote that the risk of harm to Schultz or others was low and the risk of suicidal ideation was low, the cruise line’s chief medical consultant concluded that Schultz was not fit for duty under the ILO guidelines, finding that his depression was persistent or reoccurring. The cruise line then withdrew its employment offer, and Schultz filed this action seeking relief under the Americans With Disabilities Act and the Florida Civil Rights Act. The cruise line argued that the laws of Malta (flag of the ship) governed the internal management and affairs of the foreign vessel, but Magistrate Judge Torres disagreed. As Schultz’ offer was withdrawn before he served on the vessel, his entire (brief) employment with the cruise line had been in rehearsals within the United States. As he was not complaining of an employment decision on a foreign-flag vessel in international waters, Magistrate Judge Torres held that the ADA and FCRA applied to his claim.

Suit against Boat Harbor that is operated by the State based on impounding and sinking the plaintiff’s boat was dismissed on the ground of sovereign immunity; Keller v. Ala Wai State Boat Harbor, No. 19-489, 2020 U.S. Dist. Lexis 99994 (D. Haw. June 8, 2020) (Kobayashi).

Opinion

Larry Keller brought this action against Ala Wai State Boat Harbor for impounding and sinking his vessel, SAMOOR. As the Boat Harbor is owned and operated by the state of Hawaii, the defendant moved to dismiss the suit on the ground of sovereign immunity. As Keller did not invoke any exception to sovereign immunity, Judge Kobayashi dismissed the suit and declined to grant leave to amend as it would have been futile.

Failure to give timely notice to insurer barred coverage for damage to vessel;  Sunderland Marine Insurance Co. v. C Services, LLC, No. 19-20269, 2020 U.S. Dist. Lexis 10274 (S.D. Fla. June 10, 2020) (Otazo-Reyes).

Opinion

Sunderland issued an insurance policy for C Services’ vessel MATHILDA beginning in 2012 through its authorized underwriter, Yachtinsure, which communicated with C Services through C Services’ broker. The policy renewed annually, and in 2014 there was a fuel leak when a fuel pipe broke, but the insured paid for repairs because the cost was less than the deductible. The insured did not report the incident at that time, but the insured did report the change in Captain for the vessel, and the 2015 renewal listed the new Captain as a named operator on the Policy. In 2015, the vessel was not accelerating normally and was exuding more smoke than usual. The insured learned in January 2016 that the engines’ cylinders were corroded. The vessel was moved to a dry dock in March 2016, and the engines were removed. In July 2017, the engines and generators were transferred to a secure area in Summerland Key, Florida, and the insured notified its broker that it was going to make an insurance claim. The broker notified Yachtinsure on August 15, 2017, and Yachtinsure requested a Claim Declaration form be presented. The completed Claim Presentation form, referencing the date of the incident as December 2015, was returned on September 14, 2017, four days after Hurricane Irma struck the Florida Keys as a Category 4 hurricane, causing further damage to the engines and rendering them unsalvageable. Sunderland brought this declaratory judgment action, asserting, inter alia, that there was no coverage due to delayed notice. The insured sought to create a fact question, alleging that the Captain (now deceased) had given notice to the insured’s broker in March 2016, but there was no documentation to support that claim and the insured’s broker was not the “captive” agent of the insurer. Magistrate Judge Otazo-Reyes therefore concluded that the insured failed to give timely notice, a condition precedent to coverage. The insured then contended that the insurer failed to establish a causal connection between breach of the notice provision and the claimed loss based on the Florida “anti-technical” statute. However, the insured did not rebut the presumption of prejudice arising from its late notice so as to avoid the denial of coverage.

Two and a half months was not sufficient passage of time to order an interlocutory sale of an arrested vessel; Nassau Maritime Holdings Designated Activity Co. v. M/V PACIFIC SKY, No. 2:20-cv-355, 2020 U.S. Dist. Lexis 105562 (W.D. La. June 15, 2020) (Cain).

Opinion

Nassau Maritime arrested the M/V PACIFIC SKY on April 3, 2020, to foreclose a preferred ship mortgage on the vessel (covering the vessel and four other vessels) with a balance and interest due of more than $124 million. A little over a month later, on May 12, 2020, Nassau Maritime moved for an interlocutory sale, arguing that the vessel required excessive and ongoing custodial fees of $75,000 to $85,000 per month compared to the value of the vessel of $20-24 million. Judge Cain reviewed the factors required for an interlocutory sale and held that the first factor, the vessel was subject to deterioration by being detained, was not satisfied because the owner had a full crew onboard, performing all necessary maintenance to insure the vessel remained in good condition. Nassau Maritime argued that it was now hurricane season, and the vessel was exposed to peril. The fact that there was a full crew onboard, however, allowed the vessel to move to a safe berth in the event of a hurricane. With respect to the criteria that the expenses were disproportionate and that there was an unreasonable delay in securing the release of the vessel, Judge Cain did not consider the expenses to be excessive at this point in view of the fact that the vessel had only been under arrest for less than two and a half months. Noting that we are in the middle of a global pandemic and economic downturn, Judge Cain declined to order an immediate interlocutory sale and ruled that Nassau Maritime could re-urge its motion if the vessel is not released in the next 8 weeks.

Allegations of negligence in providing maritime transportation services, gross negligence, breach of contract, and breach of implied warranty of workmanlike service survived motion to dismiss; Goodloe Marine, Inc. v. Caillou Island Towing Co., No. 8:20-cv-679, 2020 U.S. Dist. Lexis 105399 (M.D. Fla. June 16, 2020) (Barber).

Opinion

Goodloe Marine’s dredge PERSEVERANCE and idler barge sank while in tow of the defendants’ tug, CHARLES J CENAC. Goodloe Marine then brought this six-count complaint, and the defendants moved to dismiss or to strike irrelevant allegations. The defendants objected to the phrase, maritime transportation services, in the negligence counts, arguing that transportation or affreightment is distinguishable from towing. While agreeing with that distinction, Judge Barber declined to dismiss or strike the portions of the negligence counts using the term, maritime transportation services, which was used in the parties’ contract, as it was clear that Goodloe Marine was suing for negligence in towing as opposed to transportation or affreightment. Although the complaint did not set forth the specific facts that constituted gross negligence, Judge Barber considered the allegation that the defendants were “so reckless or wanting in care as to constitute a conscious disregard or indifference to life, safety, or rights of persons and property exposed to such conduct” as sufficient to put the defendants on notice of the claim against them. Noting that the cause of action for damage to a tug is ex delicto and not ex contractu, the defendants objected to the count alleging breach of contract. Judge Barber noted that Goodloe had alleged negligence counts (ex delicto), but this count alleged damages not for damage to the tug but for the tow not being delivered to the contracted destination. Therefore, he considered the breach of contract count to be sufficient. Finally, the defendants objected to the count asserting a breach of the warranty of workmanlike service. Citing the divergent lines of cases whether the tower owes a warranty of workmanlike service or only a negligence duty, Judge Barber declined to dismiss the count and advised that the parties may revisit the issue through summary judgment after developing facts to determine whether the warranty may apply to the defendants’ conduct.

Lack of expert evidence resulted in dismissal of passenger’s suit against cruise line for medical negligence; Yvon v. Carnival Corp., No. 1:19-cv-24173, 2020 U.S. Dist. Lexis 107827 (S.D. Fla. June 18, 2020) (Ungaro).

Opinion

Kourtney D. Yvon, a passenger on the CARNIVAL DREAM, began to experience pain and swelling in her lower legs while on a shore excursion. She asserted that the ship’s onboard medical team was negligent in failing to properly diagnose and treat her, which exacerbated her condition and caused significant injury. When Yvon failed to designate any expert witnesses, the cruise line moved for summary judgment and Judge Ungaro granted the motion. Judge Ungaro held that, without expert evidence, Yvon was unable to show that the defendant breached any applicable medical standard of care in treating and diagnosing her.

Exchange of emails in contentious litigation resulted in enforceable settlement, but the settlement did not include claims against the plaintiffs’ attorney arising out of litigation conduct; Lane v. Powell, No. 17-12356, 2020 U.S. Dist. Lexis 108272 (D. Mass. June 19, 2020) (Saris).

Opinion

This “contentious” maritime wrongful death and personal injury action arising from the sinking of the fishing vessel ORIN C returns to the Update (April 2020 Update) after an exchange of emails resulted in a settlement of the case. Before that, however, counsel had accused each other, the parties, the defendants’ insurer, and the plaintiffs’ expert of unlawful conduct, including defamation and criminal witness intimidation. When the defendant’s attorney submitted a proposed release, the plaintiffs’ attorney argued that it must also cover all future claims arising out of litigation conduct, including defamation claims against the attorneys or claims involving the expert witness. The defendant then sought to enforce the settlement without such language, and Judge Saris held that the exchange of emails did support an enforceable settlement for all present claims as well as claims against the defendant’s insurer, but it would not include litigation conduct, such as releases of the attorneys. The plaintiffs have filed a notice of appeal.

Cruise ship’s violation of its inspection policy for bathrooms and its awareness that the inspection policy prevents accidents was not sufficient to establish notice of water on the bathroom floor on which the passenger slipped; Prather v. NCL Bahamas Ltd., No. 19-21832, 2020 U.S. Dist. Lexis 108473 (S.D. Fla. June 19, 2020) (Louis).

Opinion

Jennifer Prather slipped in a slippery wet substance on the floor of the public restroom outside the casino on the NORWEGIAN SKY and brought this suit against the cruise line for negligence. In response to the cruise line’s motion for summary judgment on the ground of lack of notice of the slippery floor, Prather established that the cruise line had a Restroom Inspection Policy to clean the public restrooms every 30 minutes; it failed to follow that policy as demonstrated by security cameras outside the restrooms that reflected no entry by ship’s crew in the thirty minutes before her fall; and its management believed that the inspection policy prevents accidents. However, Magistrate Judge Louis held that this evidence was insufficient to establish that the cruise line should have known that a dangerous condition was present in the restroom at the time of the passenger’s fall. Magistrate Judge Louis also declined to find evidence of constructive notice to the cruise line from 9 previous reports of clogged toilets, including one involving a similar restroom on the NORWEGIAN SKY that involved a passenger who slipped on a wet substance on the floor, stating that the evidence did not show that the cruise line should have known that toilets were clogging and overflowing on the NORWEGIAN SKY prior to the plaintiff’s accident. Consequently, Magistrate Judge Louis recommended that summary judgment be granted to the cruise line.

Lien for necessaries does not include legal fees and costs, late fees on overdue payments, or prejudgment interest at the rate set forth in the contract; Robbie’s of Key West v. M/V Komedy III, No. 4:10-cv-10193, 2020 U.S. Dist. Lexis 111139 (S.D. Fla. June 23, 2020) (Moore).

Opinion

Robbie’s of Key West arrested the M/V KOMEDY III for necessaries for dock space and storage and then sought a default judgment when no claim of owner was filed. Chief Judge Moore entered the default, but he ruled that the plaintiff was not entitled to recover against the vessel in rem for the legal fees and costs incurred in enforcing the maritime lien as they are not part of the maritime lien, even though the contract with the vessel owner provided for attorney’s fees (holding that the contract does not bind the vessel). Chief Judge Moore also held that late fees on payments due were not part of the lien, but state taxes on the storage charges were part of the lien. Finally, Chief Judge Moore agreed that the lien should include prejudgment interest, but not at the 18% rate set forth in the contract. He found that the appropriate rate for prejudgment interest was the same rate applied to post-judgment interest by federal statute.

McCorpen defense was established for maintenance and cure claim of seaman with a history of neck and back injuries despite the absence of a pre-employment physical or medical interview and despite the seaman being found fit for duty six months before he was hired; Parchmont v. Complete Logistical Services, LLC, No. 18-9056, 2020 U.S. Dist. Lexis 112182 (E.D. La. June 24, 2020) (Milazzo).

Opinion

Perry Parchmont alleged that he injured his neck and back while moving a lift bag across the deck of a vessel and brought this action seeking to recover for negligence under the Jones Act and for unseaworthiness and maintenance and cure under the general maritime law. The defendants asserted a McCorpen defense for willful failure to disclose multiple neck and back injuries. Judge Milazzo noted that when the employer does not require a pre-employment physical or medical interview, the seaman must disclose his prior illness or injury when, in his opinion, the shipowner would have considered it a matter of importance (although concealment does not require a finding of subjective intent). In this case, Parchmont had been working in the industry for ten years and should have known that employers are interested in a worker’s neck and back injuries. In fact, he had undergone such examinations and been asked about his medical history. Although Parchmont submitted a document that declared that he was fit for duty six months before he applied for employment, Judge Milazzo did not consider that document to create an issue of fact whether he should have known that his prior injuries were a matter of importance six months later, particularly when Parchmont continued to treat for neck pain after he passed that physical. Consequently, Judge Milazzo found that the intentional concealment element was satisfied.

Court declined to award attorney’s fees for removal of case based on admiralty jurisdiction or to allow amendment to the vessel owner’s limitation petition to plead facts necessary to support absence of fault; Estate of Umar v. Bensch, Nos. 18-cv-1414, 19-cv-35, 19-cv-559, 2020 U.S. Dist. Lexis 112297 (W.D.N.Y June 26, 2020) (Sinatra).

Opinion

In our February 2020 Update we discussed the recommendations of Magistrate Judge McCarthy to remand the injury case (boating accident on the Niagara River) that was removed based on the federal court’s admiralty jurisdiction and to dismiss the vessel owner’s limitation action for failure to plead sufficient facts to support limitation of liability. The vessel owner objected to the recommendations, and Judge Sinatra agreed that the injury case should be remanded and that the limitation action should be dismissed without giving leave to the owner to amend it (concluding that the amendments did not correct the deficiencies noted by the Magistrate Judge). However, Judge Sinatra disagreed that attorney’s fees should be awarded with respect to the removal (thus agreeing with the Fifth Circuit, which has held that there is an objectively reasonable basis for removal of admiralty cases).

Seaman was required to replead his complaint to allege employment and vessel ownership/operation; Felarise v. Dann Ocean Towing, No. 8:20-cv-544, 2020 U.S. Dist. Lexis 112982 (M.D. Fla. June 26, 2020) (Barber).

Opinion

Roland Felarise, Sr., was employed as a relief captain on the M/V ALLIE B, a towing vessel owned and operated by Dann Ocean. Dann Ocean was working with Great Lakes Dredge to deepen a portion of the Charleston South Carolina Harbor Entrance Channel. Great Lakes owned or operated a spider barge or fleet of spider barges that worked with the ALLIE B. When the weather deteriorated, other vessels in the operation put to sea, but the ALLIE B stayed at the worksite, tied to a spider barge. During the heavy weather, the ALLIE B crashed against the spider barge and Felarise was injured. Felarise brought this suit seeking to recover for negligence under the Jones Act and for unseaworthiness and maintenance and cure under the general maritime law. He asserted that he was employed by Dann Ocean to work on vessels owed and/or operated by Dann Ocean and/or Great Lakes and claimed that the defendants owed him a non-delegable duty to provide a safe place to work and seaworthy vessels. Although the first count, alleging Jones Act negligence had to be dismissed because it did not contain any factual allegations to support the conclusory pleading that the defendants breached their duty to the seaman, Judge Barber also noted that the count had to be repleaded because it did not allege that Great Lakes was his employer or that he was a borrowed servant of Great Lakes. Although Felarise argued that he was allowed to pursue Jones Act claims against multiple defendants, Judge Barber held that he had to actually plead the facts to establish that employment. The second count also had to be dismissed because it improperly combined negligence and unseaworthiness claims, but Judge Barber also noted that Felarise had not alleged that he was injured aboard a vessel owned or controlled by Great Lakes. Alleging that he was ordered to remain at the worksite with the ALLIE B at the direction of Great Lakes was not an allegation that Great Lakes was operating the ALLIE B.

From the state courts:

Expert testimony was necessary to establish fault of a marina for boats that were carried away by the storm surge during Superstorm Sandy and caused damage to the plaintiff; Constantinopoulos v. Morgan Realty & Development, LLC, No. A-4593-17T4, 2020 N.J. Super. Unpub. Lexis 1125 (N.J. Superior, App. Div. June 12, 2020) (per curiam).

Opinion

George Constantinopoulos owns a house in Monmouth Beach near an estuary of the Shrewsbury River, across the estuary from Channel Club Marina. He asserted that his home was damaged by two boats that were placed on concrete blocks or jack stands at the Marina that were not secured by ropes and were carried away by the storm surge during Superstorm Sandy. All 54 boats that were stored on land at the Marina were carried away, but no boats at a nearby marina that were tied together in a spider web fashion and then to a bulkhead and other objects were carried away from that location. Long past the deadline to produce expert reports and a month before trial, Constantinopoulos submitted an expert report opining that the Marina was grossly negligent. Finding no valid legal basis for submission of the late report, the judge barred testimony from the expert. The case did not go to trial, however, as the judge held that Constantinopoulos had received more money for his house from other sources than he was seeking from the defendants and could not receive any further damages in this suit. The court of appeals affirmed the dismissal of the case but on the ground that expert testimony was necessary. Although boats in other marinas did not leave the property, that fact had no bearing on the negligence of the Marina. Constantinopoulos did not establish whether the storm surge, wind conditions, types of boats, and geography were comparable to his situation. As that information was beyond the knowledge of jurors, an expert was necessary.

Seaman’s attorney was ordered to disgorge legal fees from his unconscionable attorney employment agreement; Izen v. Laine, No. 14-18-216-CV, 2020 Tex. App. Lexis 4519 (Tex. App.—Houston [14th Dist.] June 18, 2020) (Zimmerer).

Opinion

Brian Laine was seriously injured while working for his employer Big Inch Marine Systems in a Louisiana marine fabrication yard. Laine liked working for Big Inch, and Big Inch took care of him after his injury. Laine and Big Inch negotiated a settlement consisting of two lump sum payments ($60,000 and $75,000) plus an annuity of $1,100 a month, with cost of living adjustments and payments continuing for a minimum of 30 years. Big Inch recommended that Laine consult with an attorney regarding the proposed settlement document, and Laine engaged an attorney in Houston, Texas, who made a few comments, but the agreement was signed without change. When the attorney and Laine met, they discussed an action against a potentially liable third party in Louisiana. Laine and the attorney then signed an agreement by which Laine gave a 35% interest in all settlement payments, including the settlement with Big Inch, as the attorney explained that the payments from the Big Inch settlement would be used to finance the litigation in Louisiana against the other parties. The attorney drafted a pro-se petition against the third parties so that it would be filed within the Louisiana one-year statute of limitations while the attorney found counsel in Louisiana to handle the suit. The attorney engaged the services of a Louisiana lawyer to handle the suit with an agreement to pay him 60% of the 35% contingent fee. Laine paid the Houston attorney 35% of the lump sum payments made by Big Inch and 35% of the annuity payments until the Louisiana suit was voluntarily dismissed without any recovery. Laine stopped making the payments on the ground that there was no longer any litigation that needed to be financed. The attorney then sued Laine in state court in Houston, seeking to recover his percentage of the continuing annuity payments, and Laine counterclaimed against the attorney, asking for a disgorgement of the fees paid to the attorney on the ground that the contract was unconscionable. The case went to trial, but the district court granted Laine’s motion for a directed verdict that the agreement was unconscionable and ordered disgorgement of the amounts that had been paid ($70,126.13). On appeal, the attorney argued that it was not unconscionable to combine the pursuit of different defendants under a single fee agreement and divide the cost of that combined litigation among all of the recoveries. Writing for the court of appeals, Justice Zimmerer agreed that it might be acceptable to combine the recoveries when none of the defendants had settled before the lawyer was retained. However, Justice Zimmerer held that it was not acceptable to take a contingent fee on a settlement that was already reached before the attorney began his representation. As there was no risk in the work on the Big Inch settlement, Justice Zimmerer held that it was unconscionable and a violation of public policy for the attorney to collect a 35% contingent fee on the Big Inch settlement “disguised as the payment of the expenses incurred in separate litigation against the Louisiana third-party defendants.”

Beneficiaries and estate of Navy sailor who died from exposure to asbestos could not recover nonpecuniary damages except for the sailor’s pain and suffering prior to death; Andrews v. John Crane, Inc., No. 14-18-573-CV, 2020 Tex. App. Lexis 4535 (Tex. App.—Houston [14th Dist.] June 18, 2020) (Zimmerer).

Opinion

Garland Dale Pepper died from mesothelioma that he claimed resulted from exposure to asbestos in the products of defendant, John Crane, Inc. Pepper estimated that 80% of the work in which he was exposed was done while his ship was under weigh, either in territorial waters or on the high seas, and 20% was while the ship was in dry dock. Applying maritime law, the district court denied recovery, holding that the plaintiffs could not recover nonpecuniary damages, including pain and suffering, and settlement credits exceeded the maximum recovery for pecuniary losses. The plaintiffs appealed, and Justice Zimmerer first held that John Crane had not waived the right to assert that maritime law applied by not asserting it in its original answer or in other pleadings until its answer to an amended petition, just over a month before the case was originally set for trial. However, Justice Zimmerer disagreed with the ruling on damages. He considered the effect of the Death on the High Seas Act on seamen’s remedies and held that the absence of a survival remedy in DOHSA cases (Dooley v. Korean Air Lines) was not applicable to seamen. Justice Zimmerer affirmed that the plaintiffs could not recover nonpecuniary damages under maritime law; however, he held that the plaintiffs could recover damages for Pepper’s pre-death pain and suffering in their survival action.

Louisiana barge owner’s contract with a Texas energy company for operations in Louisiana did not establish personal jurisdiction in Texas for a Jones Act suit brought by an employee injured on its inland barge in Louisiana; Baywater Drilling, LLC v. Ratliff, No. 01-19-706-CV, 2020 Tex. App. Lexis 4624 (Tex. App.—Houston [1st Dist.] June 23, 2020) (Hightower).

Opinion

Benjamin Ratliff was injured while serving as a floorman on Baywater Drilling’s inland barge rig, BAYOU BLUE, which was operating in Terrebonne Parish, Louisiana. Ratliff brought this suit under the Jones Act in state court in Galveston, Texas, against his employer, Baywater Drilling, and against Hilcorp Energy, which hired Baywater Drilling to perform the workover operation. Baywater Drilling filed a special appearance to challenge the jurisdiction of the Texas court, arguing that it was a Delaware corporation with its principal place of business in Houma, Louisiana, that it had no offices in Texas, owned no property in Texas, did not work in Texas, and trained its employees and worked in Louisiana. Ratliff responded that Baywater Drilling solicited work from Texas companies and that the Daywork Drilling Contract under which Baywater Drilling was working was with Hilcorp Energy, a Texas company, such that the operations were being directed from Texas. That contract contained a forum-selection clause for Harris County (Houston), Texas. Baywater Drilling answered that the suit did not involve a breach of contract and instead dealt with the Louisiana injury based on Baywater Drilling’s actions in Louisiana. Although the lower court denied the special appearance, the appellate court disagreed. Justice Hightower reasoned that merely contracting with a Texas resident does not satisfy the requirement for minimum contacts, nor does soliciting work from Texas constitute “suit-related conduct” with a substantial connection to the state. The partial performance of the contract in Texas by each party did not constitute purposeful contact in Texas when the tortious conduct resulting in Ratliff’s injuries occurred in Louisiana. Justice Hightower did not find any help in the forum-selection clause of the contract. As the claims were outside the scope of the clause, Baywater Drilling did not consent to jurisdiction of Texas courts for this particular dispute.

Thanks to Monica Markovich for her help in preparing this Update.

Kenneth G. Engerrand
President
Brown Sims, P.C.

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Quote:

“We can never forget that the rule of law is the law of rules.” Williams v. Taylor Seidenbach, Inc., 958 F.3d 341 (5th Cir. 2020) (Oldham, Smith, Costa, and Duncan, J.J., dissenting) (citing Antonin Scalia, The Rule of Law as a Law of Rules, 56 U. Chi. L. Rev. 1175 (1989)).

This is an email for anyone interested in up-to-date longshore and maritime cases and news. Please invite others to join. They may do so by sending an email message to LongshoreUpdate+subscribe@groups.io. Content will be in the form of summaries of recent court decisions, commentary, and (where possible) links to the decisions. Generally, updates will be limited to once a month. Anyone working in the longshore/maritime environment should find this useful. To unsubscribe at any time, just send an email message to LongshoreUpdate+unsubscribe@groups.io.

© Kenneth G. Engerrand 2020; redistribution permitted with proper attribution.

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