July 2022 Longshore/Maritime Update (No. 278)
Notes from your Updater:
According to the Internal Revenue Service, midyear increases in the mileage rates are “rare.” Nonetheless, the IRS has announced an increase in the mileage rates for the final six months of 2022. Effective on July 1, 2022, the rate for business mileage will increase from 58.5 cents per mile to 62.5 cents per mile, and the rate for medical or moving expenses will increase from 18 cents per mile to 22 cents per mile.
On May 25, 2022, Judge Gleason held that a shipment of frozen seafood from Alaska to Canada and then to the eastern United States violated the cabotage provisions of the Jones Act. Kloosterboer International Forwarding LLC v. United States, No. 3:21-cv-198, 2022 U.S. Dist. LEXIS 93483 (D. Alaska May 25, 2022).
On May 25, 2022, Judge Hanks held that the indemnity agreement in Chevron’s purchase agreement for Tenneco’s assets required Chevron to indemnify Tenneco’s successor even though the suit on behalf of the injured worker tried to disclaim any liability for the worker’s exposure to asbestos on offshore platforms within the asset purchase agreement. El Paso Energy E.S.T. Co., v. Chevron U.S.A. Inc., No. 4:20-cv-4250, 2022 U.S. Dist. LEXIS 93653 (S.D. Tex. May 25, 2022).
On June 6, 2022, the Supreme Court addressed the breadth of the exception to the Federal Arbitration Act for workers engaged in foreign or interstate commerce. Writing for the unanimous Court (Justice Barrett took no part in the decision), Justice Thomas held that the employment agreement of a ramp supervisor for Southwest Airlines who trained and supervised teams of ramp agents who load and unload cargo on and off airplanes fell within the exception and (like the agreements of seamen and railroad workers) was not enforceable pursuant to the FAA. [Note that there is no such exception under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards]. Southwest Airlines Co. v. Saxon, No. 21-309, 2022 U.S. LEXIS 2815 (June 6, 2022).
On June 6, 2022, the Supreme Court held that the Medicaid Act permits a state to seek reimbursement of medical payments it had made (past medical expenses) from the portion of the third-party liability settlement attributable to future medical expenses. Thus, Medicaid’s lien was not limited to the portion of the settlement attributable to past medical expenses. Gallardo v. Marstiller, No. 20-1263, 2022 U.S. LEXIS 2683 (June 6, 2022). (Thomas, joined by Chief Justice Roberts and Justices Alito, Kagan, Gorsuch, Kavanaugh, and Barrett, with Justice Sotomayer, joined by Justice Breyer, dissenting).
On June 7, 2022, the Ninth Circuit held that Leon Belaustegui, an entry-level longshore worker at Port Hueneme, California, who left his job to enlist in the Air Force and returned to work on the waterfront after nine years of active duty, could pursue a discrimination claim under the Uniformed Services Employment and Reemployment Rights Act against the International Longshore & Warehouse Union and the Pacific Maritime Association for the failure to reinstate Belaustegui to the position he was reasonably certain to have attained absent his military service. Belaustegui v. International Longshore & Warehouse Union, No. 21-55434, 2022 U.S. App. LEXIS 15611 (9th Cir. June 7, 2022) (Bress).
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, shortly before oral argument was to be presented, 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 petitions in ZF Automotive US, Inc. v. Luxshare, Ltd and Alixpartners v. Fund for Protection of Investors’ Rights, Nos. 21-401, 21-518. See January 2022 Update. The Justices heard oral argument on the petitions on March 23, 2022, and, on June 13, 2022, issued their unanimous opinion that the statute only reaches governmental or intergovernmental adjudicative bodies and not arbitral panels. ZF Automotive US, Inc. v. Luxshare, Ltd., Nos. 21-401, 21-518, 2022 U.S. LEXIS 2861 (U.S. June 13, 2022) (Barrett).
On June 14, 2022, Judge Holcomb held that the Coast Guard properly withheld names and addresses of individual vessel owners in response to the Freedom of Information Act request of Maritime Documentation Center Corp., which, according to Judge Holcomb, was seeking information “to solicit potential customers for its vessel registration services.” Maritime Documentation Center Corp. v. United States Coast Guard, No. 5:21-cv-489, 2022 U.S. Dist. LEXIS 107267 (C.D. Cal. June 14, 2022).
On June 16, 2022, the Thirteenth Court of Appeals of Texas held that the City of Ingleside, Texas can tax wharves, piers, docks, and similar structures that originate on land within the city and extend into adjacent waters of Nueces Bay and Corpus Christi Bay. City of Corpus Christi, Texas v. City of Ingleside, Texas, No. 13-20-00513, 2022 Tex. App. LEXIS 4071 (Tex. App.—Corpus Christi June 16, 2022) (Tijerina).
After passage in both houses of Congress on bipartisan votes, the Ocean Shipping Reform Act 0f 2022 was signed into law by President Biden on June 16, 2022. The text of the statute can be found at:
On June 21, 2022, Judge Wright held that United National Insurance Co. had a duty to defend L.A. Terminals, Inc. in two environmental contamination suits involving L.A. Terminals’ operations at a marine terminal and chemical storage facility owned by the City of Los Angeles, pursuant to four primary comprehensive general liability policies. Although United agreed to defend L.A. Terminals under a reservation of rights, Judge Wright held that L.A. Terminals was entitled to Cumis counsel because of the conflict of interest from the reservation of rights. Judge Wright granted partial summary judgment to L.A. Terminals but declined to award the attorney fees because L.A. Terminals did not produce the invoices, depriving United of the opportunity to challenge the reasonableness and necessity of the fees on the record. L.A. Terminals, Inc. v. United National Insurance Co., No. 8:19-cv-286, 2022 U.S. Dist. LEXIS 109986 (C.D. Cal. June 21, 2022).
On June 24, 2022, the Appellate Division of the Superior Court of New Jersey held that a suit over the timely performance of a contract to construct a liquified petroleum gas unloading and loading facility in Gibbstown, New Jersey should be stayed pending arbitration. Delaware River Partners, LLC v. Railroad Construction Co., No. A-2613-20, 2022 N.J. Super. Unpub. LEXIS 1134 (N.J. Super. App. Div. June 24, 2022) (per curiam).
On the LHWCA Front . . .
From the federal appellate courts:
Deckhand whose duties changed to working on vessel in shipyard after he was restricted to light-duty work was not a seaman because the tug being refurbished was not a vessel in navigation; Jarvis v. Hines Furlong Line, Inc., No. 21-5937, 2022 U.S. App. LEXIS 15609 (6th Cir. June 6, 2022) (Stranch)
Joseph Jarvis was a deckhand for Hines Furlong on its vessel M/V MAE ETTA HINES when he began suffering from a non-occupational illness and was restricted to light duty. He was permitted to continue his employment on the M/V WARREN HINES, which was undergoing a complete refurbishment in Paducah, Kentucky lasting 21 months. The assignment allowed Jarvis to be closer to home and medical treatment. Jarvis injured his back while working on the repairs on the WARREN HINES and brought this action in federal court in Kentucky against Hines Furlong as a seaman under the Jones Act and general maritime law. Hines Furlong moved for summary judgment that Jarvis was not a seaman as a matter of law because he was not assigned to a vessel in navigation. Jarvis responded that the status of the WARREN HINES was a fact question that should be decided by the jury as the vessel was put in the water after each time it was in dry dock and was moved to various locations in the yard by tugs. Judge Russell disagreed, ruling that the length of time the ship was incapable of use for maritime transportation and the fact that it could only be moved by harbor tugs rendered it out of navigation. Jarvis also argued that he had a substantial connection to an identifiable fleet of vessels because his assignment to the WARREN HINES was only temporary. However, Judge Russell noted that Jarvis was released for full duty and remained with the WARREN HINES until he sustained his back injury. Hines recognized that his assignment was to last for an indefinite period until he recovered, and Hines Furlong argued that the assignment was to last for an indefinite period until the refurbishment was complete. In either situation, the assignment was for an indefinite period and was therefore sufficiently permanent. Thus, Judge Russell evaluated the Jones Act status based on the assignment to the WARREN HINES and held that Russell was not a seaman. See October 2021 Update.
Jarvis appealed to the Sixth Circuit, and the court affirmed Judge Russell’s grant of summary judgment. Writing for the court, Judge Stranch reasoned that vessels undergoing minor repairs can be in navigation, but vessels undergoing major overhauls can be taken out of navigation. Thus, she questioned whether the work on the WARREN HINES was sufficient to be considered to be a major renovation, comparing the work on the WARREN HINES to the facts in the McKinley case from the Ninth Circuit (conversion of oil ship to a seafood processing ship) and the Wixom case from the Fifth Circuit (major repairs taking nearly three years and exceeding $25 million). As the circumstances with respect to the work on the WARREN HINES were comparable to those in McKinley and Wixom (extensive hull work, removal and replacement of the interior, and the crew not living on the vessel), Jarvis repeated the argument he presented to Judge Russell–that the WARREN HINES remained in navigation because it was placed into the water after each time it was on dry dock and it was moved to various locations in the shipyard while in the water. Judge Stranch answered that the fact that the WARREN HINES was placed in the water on occasions during its repair was insufficient to establish that it was used or capable of being used for maritime transportation. Considering the length of time it took to make the repairs, the extent of the work, and that the crew did not stay aboard the vessel, the Sixth Circuit agreed that the WARREN HINES was not a vessel in navigation at the time of Jarvis’s injury.
From the federal district courts:
Product defendants established defenses to death from mesothelioma of the wife of a pipefitter who claimed exposure to asbestos at naval shipyards; Hilster v. Air & Liquid Systems Corp., No. 2:20-cv-1537, 2022 U.S. Dist. LEXIS 95654, 95655, 95669, 95671 (W.D. Pa. May 27, 2022) (Horan).
Shirley Hilster claimed that she suffered from mesothelioma from exposure to asbestos on the work clothes of her husband, Charles Hilster, who worked as a pipefitter for naval shipyards. After she died from mesothelioma, her husband continued this suit against product suppliers in federal court in Pennsylvania. Four of the defendants filed motions for summary judgment, and William Powell and Eckel Industries were dismissed for lack of evidence of evidence that Charles was exposed to asbestos from a product supplied by these defendants. Buffalo Pumps and Warren Pumps were not liable for external asbestos flange gaskets and insulation as there was no evidence that these defendants required asbestos for their pumps to function. With respect to internal asbestos components, there was no evidence that Charles performed internal repairs to pumps. Additionally, both Buffalo Pumps and Warren Pumps established Boyle government-contractor defenses. Accordingly, the claims against these defendants were dismissed.
Defendants breached active control duty and duty to intervene under Scindia with respect to welder who was injured in the construction of a foot dock for boarding of vessels, but the judge declined to award punitive or bystander damages; Bommarito v. Belle Chasse Marine Transportation, No. 21-204, 2022 U.S. Dist. LEXIS 101192, 103830 (E.D. La. June 7, 10, 2022) (Fallon).
Bosit Bommarito, III, was injured while working as a welder’s helper on the crane barge OC 160, assisting in the movement of gangway segments in the construction of a foot dock to allow boarding of vessels. He brought this action as a seaman under the Jones Act and pursuant to Section 5(b) of the LHWCA, and his beneficiaries continued the action after he died from an overdose of pain medication. Bommarito’s employer, Belle Chasse Marine, moved for summary judgment on the seaman claims, arguing that his work as a welder’s helper was mostly land-based and his role on the crane barge did not involve traditional crew member duties. Judge Fallon believed that there were ambiguities and fact questions whether Bommarito satisfied the duration requirement of the test for seaman status, but he held that Belle Chasse had established that the work was land-based and not sea-based and failed the nature element of the seaman status test. When Bommarito’s work took him onto the vessel, Bommarito simply stepped aboard the vessel while it was secured to the dock. His work on the vessel was largely limited to discrete tasks, and he overwhelmingly did not sail with the vessel from location to location. As in the Fifth Circuit’s en banc Sanchez case, Bommarito’s work on the barge was almost always while it was moored at the dock, and, accordingly, he failed the nature element. With respect to the vessel negligence claim under Section 5(b) of the LHWCA, Belle Chasse argued that claim against it was in the capacity as employer and not as vessel owner. However, Judge Fallon found that there were different views of the nature of Bommarito’s work, which specific piece of equipment caused his injuries, and even which entity was the vessel owner and which entity was his employer. Considering it premature to determine whether the case involved liability in the capacity as owner or employer, Judge Fallon declined to grant summary judgment on the claim under Section 5(b) of the LHWCA. See April 2022 Update.
Judge Fallon held a two-day bench trial and issued his findings and conclusions. He held that Bommarito was covered under the LHWCA because he was constructing a dock adjacent to the Mississippi River that was intended to allow access to vessels moored on the navigable waters of that river. However, Bommarito’s claim fell within the exception to the exclusive liability provision in the Act with respect to the liability of defendants as owner of the crane barge OC 160. Judge Fallon found that the defendants breached the active control duty because the hook on the barge crane lacked a safety latch. Additionally, he found that the defendants breached the duty to intervene because the defendants’ project manager knew that the procedure being used by Bommarito and the crane operator for attaching hooks was unsafe and violated the defendants’ safety policies. Judge Fallon awarded $48,800 for Bommarito’s pain and suffering for the 122 days between the accident and his death, which Judge Fallon linked to the accident because the overdose was of pain medicine related to his injuries ($400 per day to reflect the multiple injuries he sustained and the severity of his pain), $450,000 for loss of society/consortium ($200,000 each for his two children and $50,000 for his mother, based on Bommarito’s remaining life expectancy of 25 years), $33,600 for loss of support, split between his children (for 50 months until the younger child reached the age of majority), funeral expenses of $7,815, and past medical expenses of $35,453.09 (total damages of $575,668.09) with prejudgment interest at 3.5%. Judge Fallon declined to award punitive damages (whether they are available in LHWCA cases is an open question in the Fifth Circuit) as there was insufficient evidence of gross negligence, and he declined to award bystander damages for Bommarito’s mother, who was present at his death, as she was not present at the scene of his injury.
LHWCA provided exclusive remedy against offshore platform owner/operator as borrowing employer; Pierce v. BP America Production Co., No. 21-548, 2022 U.S. Dist. LEXIS 102049 (E.D. La. June 8, 2022) (Morgan).
Darrell Pierce was employed by Danos and Curole as a Deepwater Operator assigned to the BP Atlantis Oil and Gas Platform (a semi-submersible structure that was permanently moored to the outer Continental Shelf in the Gulf of Mexico off the Louisiana coast). Pierce was injured when he tripped over a pipe connector and fell. The platform is owned by BP Exploration and BHP Billiton, and is operated by BP Exploration. BP Exploration contracted with Danos and Curole to supply laborers for the platform, and the contract provided that BP Exploration was to be considered to be the statutory employer of the workers provided by Danos and Curole. BP Exploration contracted with BP America as its general contractor for drilling and development work in the Gulf of Mexico. Pierce brought this suit in federal court in Louisiana against BP Exploration, BP America, and BHP Billiton under the Jones Act, general maritime law, and the Outer Continental Shelf Lands Act. The parties later stipulated that the Atlantis was not a vessel and that Pierce did not qualify as a seaman under the Jones Act. As the platform was attached to the seabed and performed oil and gas operations on the outer Continental Shelf, the OCSLA applied, and it was the law of the adjacent state, Louisiana, that applied to the claims against the defendants. As the LHWCA was applicable to the injury pursuant to its extension by the OCSLA, the defendants moved for summary judgment, arguing that Pierce was a borrowed employee of all of the defendants (contending that BHP Billiton was entitled to the same immunity as BP Exploration as its co-owner and joint venturer), and the LHWCA provided the exclusive remedy against them. Judge Morgan evaluated the nine factors enunciated by the Fifth Circuit on the borrowed servant issue and held that the defendants exercised authoritative control over Pierce’s work, that the work performed by Pierce was the defendants’ work, that Danos and Curole and the defendants had an agreement that the defendants would exercise control over Pierce, that Pierce worked for a year and a half under this situation, acquiescing to the arrangement, that Danos and Curole exercised little or no control over Pierce’s work and placed no restrictions on the defendants, that the defendants furnished the tools and equipment for Pierce’s work, that Pierce’s entire employment for Danos and Curole was for the defendants, that if the defendants were unsatisfied with Pierce’s work they could have had him removed from the platform, and that Pierce’s wages were paid by Danos and Curole but billed to the defendants. Thus, all of the factors favored borrowed servant status for BP Exploration and BP America. The final question was whether BHP Billiton was also entitled to tort immunity from the LHWCA. As BHP Billiton was a joint venture with BP Exploration with respect to the operations on the Atlantis, Judge Morgan concluded that BHP Billiton was also immune from liability under the LHWCA.
Shipyard worker’s state law claims against the shipyard were preempted by the LHWCA, and his intentional tort claims were also dismissed; Becnel v. Lamorak Insurance Co., No. 19-14536, 2022 U.S. Dist. LEXIS 107310 (E.D. La. June 16, 2022) (Lemelle).
James Becnel brought this suit against his shipyard employer, Avondale, and others for asbestos-related lung cancer based on exposure to asbestos and asbestos-containing products while Becnel was employed at the shipyard. After his death, his heirs filed an amended complaint that included a strict liability claim. The defendants removed the case at that time pursuant to the Federal Officer Removal Statute, and the heirs moved to remand the case, arguing that the removal was too late and should have been filed when it became evident from Becnel’s deposition that he worked on a Navy vessel. The defendants responded that the original action asserted negligence claims that were not removable until the en banc decision of the Fifth Circuit in the Latiolais case (see March 2020 Update). Agreeing that removal would have been unwarranted before the amendment and that the defendants had made a sufficient showing of a defense of federal contractor immunity, Judge Lemelle held that the defendants properly removed the case. See October 2020 Update.
Avondale and its insurers moved for summary judgment, arguing that the state tort claims asserted against Avondale were preempted by the LHWCA. Citing several decisions from judges in the Eastern District of Louisiana for support, Judge Lemelle held that Becnel’s lung cancer manifested itself at the time of his diagnosis in 2019, so the LHWCA, as amended in 1972, was applicable to his cancer claim. Accordingly, Becnel’s work as a tacker and shipfitter was covered under the LHWCA, and the exclusive remedy provision of the LHWCA barred the tort claims brought under state law against Avondale and its insurers. Judge Lemelle noted that the Fifth Circuit had not recognized an intentional tort exception to the exclusive remedy provision of the LHWCA, but the evidence was insufficient to establish an intentional tort claim under Louisiana law if there were such an exception (no evidence that Avondale consciously intended to harm Becnel or that his cancer was inevitable).
Ruling that shipyard worker’s state law claims against the shipyard were preempted by the LHWCA was certified for appeal; Sentilles v. Huntington Ingalls Inc., No. 21-958, 2022 U.S. Dist. LEXIS 109201 (E.D. La. June 21, 2022), certifying 2022 U.S. Dist. LEXIS 74502 (E.D. La. April 22, 2022) (Ashe).
Robert Stephen Sentilles claimed that his mesothelioma was caused by exposure to asbestos during his work as a yard clerk in the insulation shop at Avondale’s shipyard on the Mississippi River in 1969. He also claimed that he was exposed to asbestos from his brother’s clothes when his brother worked at the shipyard (the brothers shared a bedroom in the family home, and Thomas left his clothes on the bedroom floor for their mother to do the laundry). Robert brought this action in Louisiana state court, and Avondale removed the case to the Louisiana federal court. Avondale moved for summary judgment on the ground that the LHWCA applied and the claims were barred by the exclusive remedy provision of the LHWCA. Avondale argued that the situs and status tests of the LHWCA, as amended in 1972, were satisfied; that the take-home exposure claim from his brother’s employment was incidental to Robert’s own employment; and that, alternatively, the non-apportionment rule from the LHWCA applied since at least part of Robert’s exposure was covered by the LHWCA. Judge Ashe agreed with prior decisions from the Eastern District of Louisiana that the amended LHWCA was applicable and barred Robert’s occupational exposure claim, but he distinguished the decision of Judge Vance in Cortez v. Lamorak (see May 2022 Update, holding that the secondary exposure case was not barred by the LHWCA). Judge Ashe ruled that Robert and his brother were employed at the shipyard at the same time, that Robert’s exposure arose out of his employment at Avondale, and that the claim was covered under the LHWCA. Consequently, Judge Ashe dismissed Robert’s claims against Avondale. One of the other defendants in the suit then moved to certify the dismissal for an immediate appeal, and Judge Ashe agreed that the order should be certified and ordered a final judgment pursuant to Rule 54(b).
From the state appellate courts:
Appellate court reversed directed verdict on borrowed servant status that overturned a verdict in favor of an injured chassis mechanic; Patano v. New York Shipping Association, No. A-3869-19, 2022 N.J. Super. Unpub. LEXIS 1008 (N.J. Super. App. Div. June 8, 2022) (per curiam).
Philip Patano was employed as a chassis mechanic by Container Service of New Jersey (CSNJ), which repaired equipment for shipping lines in Newark near Port Newark/Elizabeth. CSNJ is a co-tenant at the facility with Marine Transport, a trucking company whose drivers transport shipping containers from the Newark location to other locations along the East Coast. Patano was injured when a genset (the power source for a refrigerated container) fell off a forklift on his foot. The forklift was being operated by Lawrence Giamella, an employee of Marine Transport. Patano brought this suit in New Jersey Superior Court against Marine Transport, and the case proceeded to a jury trial after the trial judge denied Marine Transport’s motion for summary judgment that Giamella was a borrowed servant of CSNJ. At the close of Patano’s case, Marine Transport moved for a directed verdict on the borrowed servant question, and the parties agreed that the issue would not be submitted to the jury and would be reserved for decision by the court after the verdict. Thus, in an unconventional manner, Patano and Marine Transport wanted the court to address whether Giamella was a borrowed servant (on the motion for directed verdict) rather than the jury. The jury returned a verdict that Marine Transport was 70% liable, and the trial court granted the directed verdict, concluding that Giamella was a borrowed servant of CSNJ (finding that CSNJ exercised both broad and on-the-sport control over Giamella), absolving Marine Transport of liability. The appellate court began by noting that the effect of the consent to having the judge decide the borrowed servant question on a motion for directed verdict was that the standard gave the benefit of the doubt to Patano by not allowing any fact finding or weighing of evidence and requiring all reasonable inferences be drawn in Patano’s favor. Thus, there just had to enough evidence to support a finding in Patano’s favor to overturn the directed verdict. Considering all inferences from the testimony (and absences of testimony) in favor of Patano, the appellate court found enough evidence that Marine Transport retained control over Giamella and obtained a financial benefit from the arrangement that the directed verdict had to be reversed (stating: “The judge was not free to rule on the motion based on what he believed the outcome should be based on the evidence.”).
Ports Authority did not waive sovereign immunity for injury to longshore worker resulting from the direction of traffic by a police officer; Bryant v. Georgia Ports Authority, No. A22A0500, 2022 Ga. App. LEXIS 293 (Ga. App. 3d Div. June 13, 2022) (Reese).
The sovereign immunity of the Georgia Ports Authority returns to the Update (see April 2022 Update addressing the denial of a sovereign immunity defense to a crane operator employed by the Georgia Ports Authority). Benjamin Bryant was working as a linesman for International Longshoremen’s Association Local 1414, tying the docking lines of the M/V MSC SPAIN at Container Berth 4 on the property of the Georgia Ports Authority. Francine Johnson, another worker employed by Local 1414, was driving a jockey truck to a vessel at a nearby berth, and Officer James Deloach of the Ports Authority Police Department allegedly waved her through the area where Bryant was working. Johnson drove over a slack heaving line, and the line wrapped around one of the wheels of the flatbed she was pulling. The line pulled tight and tripped Bryant, injuring him. Bryant brought this suit in state court in Chatham County, Georgia against the Georgia Ports Authority, and the Ports Authority moved to dismiss the complaint on the basis of sovereign immunity. Although Georgia has enacted a statute with a general waiver of sovereign immunity, the waiver does not extend to losses resulting from police or fire protection. The district court dismissed the case, and the appellate court affirmed, reasoning that directing traffic is a police function and that Deloach was executing his law enforcement duty in compliance with the policies of the Georgia Ports Authority.
And on the maritime front . . .
From the federal appellate courts:
Supreme Court declined to hear the decision from the Second Circuit in which the vessel operator was held to owe 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; Red Hook Container Terminal, LLC v. South Pacific Shipping Co., No. 21-1312, 2022 U.S. LEXIS 2713 (June 6, 2022), denying cert. to Nos. 19-0287, 19-3185, 2021 U.S. App. LEXIS 34781 (2d Cir. Nov. 23, 2021).
South Pacific Shipping Co., which operated a liner service to New York, entered into a five-year contract with Red Hook Container Terminal to provide stevedoring and marine terminal services. There was a falling out between the parties, and South Pacific opted not to renew the contract 90 days before the contract’s fifth year. The parties disputed whether a penalty was owed for the termination, and Red Hook seized South Pacific’s property pending payment of the disputed fees. The case was tried before Judge Nathan in the Southern District of New York, and she declined to award a penalty to Red Hook. The Second Circuit disagreed, holding that a fee for cancellation 90 days before the contract’s fifth year triggered a fee of $40,000, but not the fourth year’s fee of $80,000. Red Hook argued that it was entitled to hold South Pacific’s property until all outstanding fees were paid in accordance with the New York Terminal Conference Tariff. However, the Second Circuit agreed with Judge Nathan that the Tariff was not applicable as there was a contract between the parties. Thus, the appellate court affirmed the conclusion that Red Hook converted South Pacific’s property. And, to the extent the Tariff went into effect after the termination of the contract, Red Hook was still liable because it exceeded its authority under the Tariff by demanding fees to which it was not entitled. Finally, the Second Circuit disagreed with South Pacific’s argument that its recovery of the full value of the converted equipment was insufficient and that it should have been awarded the amount paid by South Pacific to lease the equipment during the conversion. The appellate court reasoned that the recovery for the lease payments would constitute a double recovery and that the value of the property was the “usual measure of damages for conversion.” See December 2021 Update.
The terminal filed a petition for certiorari presenting two questions:
- The Shipping Act of 1984, as amended, 46 U.S.C. 40501, allows a marine terminal operator to “make available to the public a schedule of rates, regulations and practices . . .,” and “[a]ny such schedule made available to the public is enforceable by an appropriate court as an implied contract without proof of actual knowledge of its provisions.”Whether as a matter of federal admiralty law a maritime terminal operator’s schedule of rates, established in accordance with 46 U.S.C. § 40501 and approved by the Federal Maritime Commission, should be enforced by a federal court as an implied contract when the parties’ prior, private contract had terminated and did not cover the long-term storage services provided?
- Under the rule established in Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), requiring a federal court in diversity to apply state substantive law to a state law cause of action, whether a federal court must apply the state’s substantive law barring a conversion claim where the court finds that such tort claim alleges and arises from the same facts alleged for a breach of contract claim also barred under federal maritime law?
On June 6, 2022, the Supreme Court declined to hear the case, denying the petition for a writ of certiorari.
Appellate court lacked jurisdiction to review remand order even though the district court had subject matter jurisdiction; Ballard v. Hilcorp Energy Co., No. 21-30632, 2022 U.S. App. LEXIS 15753 ( 5th Cir. June 7, 2022) (Higginson).
This case arose from an allision on Orange Barrel Bayou (between the Atchafalaya Basin and Duck Lake) in Louisiana involving a vessel in which Rachel Ballard was a passenger and a wellhead owned by Hilcorp Energy Co. Ballard brought this suit against Hilcorp Energy in state court in St. Martin Parish, Louisiana, and Hilcorp removed the case to the federal court in Louisiana based on diversity. Almost a year later, Ballard sought leave to file an amended complaint to name Facilities Automation (retained by Hilcorp to maintain and inspect the navigational aid lights on the wellhead) as a defendant. Ballard acknowledged that adding Facilities as a defendant would destroy diversity, but she stated that remand was not necessary because the court may exercise jurisdiction based on admiralty. The court granted leave to amend, and Ballard filed a motion to remand the case based on an absence of diversity jurisdiction. Judge Cain held that the court lacked subject matter jurisdiction over the case (contrary to the directive of the Supreme Court in Romero that all suits involving maritime claims, regardless of whether they are asserted in state court under the saving-to-suitors clause, are cases of admiralty and maritime jurisdiction), and he remanded the case to state court. Hilcorp and Facilities appealed the remand to the Fifth Circuit, citing the reversal of a remand by the Supreme Court in BP v. Mayor & City Council of Baltimore. Writing for the Fifth Circuit, Judge Higginson noted that the jurisdiction in the BP case was pursuant to the exception in the Federal Officer Removal Statute. As that statute was not applicable in this case, there was no exception to the non-removal of remand orders that are based on a lack of subject matter jurisdiction. As Judge Cain’s order was premised on a lack of subject matter jurisdiction, there was no appellate jurisdiction to review the order.
Economic loss rule from Robins Dry Dock did not bar insurer of dock owner, whose physical damage to a mooring dolphin was repaired by a contractor, from recovering economic loss from the vessel that struck the dolphin; XL Insurance America, Inc. v. Turn Services, L.L.C., No. 21-30520, 2022 U.S. App. LEXIS 16127 (5th Cir. June 10, 2022) (Wiener).
Plains Marketing hired Boh Bros. to construct a dock in the Mississippi River, including mooring dolphins. During the construction, the M/V AFFIRMED, owned by Turn Services, allided with one of the mooring dolphins (owned by Plains). Boh Bros. repaired the dolphin, and XL Insurance, which issued a builder’s risk policy that insured both Boh Bros. and Plains, reimbursed Boh Bros. for the cost of repair. XL Insurance also paid Boh Bros. $485,000, which Boh Bros. remitted to Plains for loss that was not physical damage to the dolphin. XL Insurance then sued Turn Services in federal court in New Orleans to recover the amounts paid, and Turn Services field a motion for summary judgment, asserting that Boh Bros. had no propriety interest in the dolphin and the claim was therefore barred by the economic loss rule from Robins Dry Dock. Judge Lemelle agreed and dismissed the suit. XL Insurance appealed to the Fifth Circuit, and Judge Wiener, writing for the court, was careful to note how “faithfully” the Fifth Circuit has applied the “pragmatic limitation” that the maritime negligence remedy does not permit recovery for economic losses without a physical injury to a proprietary interest. That was certainly the point in Robins Dry Dock where the charterer’s economic loss claim foundered because the charterer did not own the vessel that was damaged. In this case, however, Plains and Boh Bros. were both insured on the policy. Although Turn Services argued that the asserted responsibility of Boh Bros. to repair the dolphin did not equate to a proprietary interest in it, Judge Wiener held that the responsibility to repair was “enough to warrant applying the risk-shifting exception to Robins Dry Dock, “holding that Robins Dry Dock “was not implicated” by XL Insurance’s payment to Boh Bros. for the repair. The payment of $485,000 was admittedly for economic loss, and it was passed on to insured Plains, which had a proprietary interest in the dolphin. Therefore, Judge Wiener found no bar to recovery of economic loss by the party that had the proprietary interest in the damaged property.
Collecting workers’ compensation operated as an election of remedies that barred the BELO suit of a DEEPWATER HORIZON/Macondo clean-up worker; Causey v. BP Exploration & Production Inc, No. 21-11548, 2022 U.S. App. LEXIS 16614 (11th Cir. June 14, 2022) (per curiam).
Christopher Causey claimed that he suffered medical problems from exposure to chemicals and dispersants while working as a clean-up worker on the beaches of Escambia County, Florida after the DEEPWATER HORIZON/Macondo blowout. He joined in the Medical Benefits settlement and brought this Back-End Litigation Option suit in federal court in Louisiana (transferred to the federal court in Florida) for later-manifested physical conditions (chronic conjunctivitis and chronic dry eye syndrome). The Settlement Agreement provided that BELO plaintiffs must elect between compensation from BP for the later-manifested condition or a workers’ compensation remedy. Causey repeatedly answered “No” to whether he had filed a workers’ compensation claim related to his conditions or symptoms after the blowout or in the last ten years. As Causey signed a release and waiver of his workers’ compensation claim against his employer P2S for all injuries or illnesses incurred on or after July 4, 2010 or during his employment with P2s (a letter from his counsel described his symptoms as breathing problems, rash on hands and feet, nausea, sinus problems, hair loss, headaches, staph infection, and poor vision, and a conference with his doctor indicated he had been diagnosed with Optic Atrophy, dry eye syndrome, visual field loss, and toxic optic neuropathy), BP moved for summary judgment on the basis of election of remedies. Causey opposed the motion, arguing that there are fact disputes whether his chronic conjunctivitis and dry eye syndrome were the subject of the workers’ compensation claim and whether he was working for P2S at the time of his exposure. Judge Rodgers did not accept the explanations, stating that the “attempt to game the system cannot be tolerated and runs completely contrary to the express terms of the Settlement Agreement.” Accordingly, Judge Rodgers granted summary judgment based on election of remedies and dismissed the suit. Causey appealed to the Eleventh Circuit, and the appellate court summarily affirmed the dismissal for the reasons given by Judge Rodgers in her “well-reasoned opinion.”
Applying New York law in accordance with the policy’s choice-of-law clause, the Eleventh Circuit agreed that an all-risk insurer did not cover damage to the engine of the vessel even though the exact cause of the damage was unknown; Great Lakes Insurance SE v. Wave Cruiser LLC, No. 20-14517, 2022 U.S. App. LEXIS 16548 (11th Cir. June 15, 2022) (Jill Pryor).
Wave Cruiser’s sport fishing vessel HOOKM suffered a sudden and catastrophic failure of its port engine, causing severe damage to the engine block, crankshaft, camshaft, connecting rods, pistons, and internal components. The engines were properly maintained and serviced by professional marine diesel technicians, including a recent inspection that confirmed that the engines were mechanically sound. The failure occurred well before the next maintenance was scheduled and well within the lifespan of the engines. The vessel was insured on an all-risk marine insurance policy issued by Great Lakes Insurance. The insurer engaged an inspector to investigate the cause of the loss, and he opined that there was no evidence that the failure was caused by an external cause, but he could not determine with certainty what caused the internal failure. The insurer denied the claim and brought this action in federal court seeking a declaration that the policy did not afford coverage for the engine damage. As an all-risk policy covers all fortuitous losses that are not expressly excluded, Judge Graham first addressed whether the loss was from a fortuitous event (losses due to intentional conduct of the insured, inherent defect in the object damaged, fraud, and normal wear and tear are excluded). The insured met its burden on this issue (“not a particularly onerous one”) by the evidence of its proper maintenance and sudden failure within its expected life. The burden then shifted to the insurer to establish the exclusion in the policy for damage to the engines and mechanical parts unless caused by an accidental external event, such as collision, impact with a fixed or floating object, grounding, stranding, ingestion of a foreign object, lightning, or fire. The insured argued that because the precipitating cause of the damage was unknown, an external event could not be excluded. Judge Graham disagreed. The insured’s inspector could not opine what the internal cause was, but he did state that the cause was not external (addressing the possible external causes and advising why they were not the cause in this incident). Therefore, the exclusion barred coverage under the policy. See December 2020 Update.
Wave Cruiser appealed to the Eleventh Circuit, arguing that Judge Graham incorrectly placed the burden on it to prove that an external event caused the engine damage and by considering expert testimony from a lay witness. Before addressing these arguments, Judge Jill Pryor, writing for the appellate court, first discussed the applicable law. The policy contained a provision that disputes should be adjudicated according to well-established, entrenched principles of admiralty law, and, in the absence of such principles, in accordance with New York law. The enforceability of a choice-of-law provision was a question of first impression in the Eleventh Circuit, and Judge Prior followed the rule from other circuit courts that choice-of-law provisions are enforceable (unless unreasonable or unjust, which was not argued in this case). Under admiralty law, the insured has the initial burden to provide evidence that a fortuitous loss occurred within the policy period, and the burden then shifts to the insurer to demonstrate that an exclusion forecloses coverage. The disputed issue was how to allocate the burden when the insurer presented evidence that the loss was an engine failure but could not identify the specific cause of the loss. Finding no admiralty precedent on how to allocate the burden of proof for an exclusion like the one in this case, Judge Prior looked to New York law and held that Judge Graham did not err in placing the burden on the insured to prove that an external event caused the engine failure once the insurer established that there was an engine failure. Wave Cruiser then argued that the opinions of Great Lakes’ expert should not have been considered because he was not designated as an expert and his opinions were submitted as lay opinions. Judge Prior agreed with Wave Cruiser that Judge Graham abused his discretion in considering the lay opinion about the cause of the engine failure; however, she held that the error was harmless. She held that Great Lakes had carried its burden under the exclusion by showing that the loss was engine damage and that Wave Cruiser then had the burden to establish that an external event caused the engine failure. As the opinions submitted by Great Lakes had no effect on whether Wave Cruiser carried its burden, the error of considering the lay opinions was harmless.
Cruise line lacked notice of danger from prior incidents before modifications were made to threshold; submitting a warranty claim to the shipbuilder after numerous tripping incidents involving the threshold did not establish that the cruise line participated in or approved an improper design; Roberts v. Carnival Corp., No. 21-11792, 2022 U.S. App. LEXIS 16880 (11th Cir. June 17, 2022) (per curiam).
Debra Roberts brought this suit in federal court in Florida to recover for injuries she suffered from tripping over a fire safety door threshold on the cruise ship VISTA. Judge Moore granted summary judgment, concluding that the cruise line did not have constructive notice of the danger posed by the threshold, the cruise line did not have a duty to warn because the danger posed by the threshold was open and obvious, and there was no evidence that the cruise line participated in or approved of the design of the threshold. Roberts appealed to the Eleventh Circuit which described the threshold as a metal strip that runs across the width of a corridor to support a fire screen door. Roberts could see the silver, metal threshold, but she was distracted by the Dreamscape lighting apparatus and was not looking down. With respect to notice, twelve passengers tripped over the threshold between July 3, 2016 and April 1, 2017. The cruise line submitted a warranty claim to the shipyard because the threshold seemed to be a tripping hazard, and the threshold was replaced in the Fall of 2016. In February 2017, carpet was put down next to the threshold. Thereafter, there was no evidence of a tripping incident on the threshold until the accident sustained by Roberts in June 2019. There was no evidence of any incident involving distraction from the Dreamscape lighting, so the appellate court turned to the argument that the cruise line was on notice from the 12 prior tripping incidents, from the warnings that it gave to passengers near similar thresholds, and from the warranty claim it made for the threshold. As the threshold had been modified and as there had been no tripping incidents thereafter until Roberts’ fall, the Eleventh Circuit held that the evidence did not create a fact question of notice posed by the threshold at the time of Roberts’ fall (none of the prior incidents could be substantially similar after the modifications, even though the incidents involved the same threshold). The Eleventh Circuit did not have to address the summary judgment granted on the basis that the danger was open and obvious in light of the affirmance of the ruling that the claims for failure to warn/correct were defeated by the notice defense. The Eleventh Circuit then considered the determination of the district court that the cruise line had not participated in or approved the design of the threshold. Roberts argued that the cruise line’s acceptance of the repairs from its warranty claim constituted approval of the design. The appellate court disagreed, holding that acceptance of the modified threshold did not constitute participation in its design and could not overcome the testimony of the corporate representative that the cruise line did not participate in the design of thresholds.
From the federal district courts:
Judges dismissed opt-out suits brought by clean-up workers from the DEEPWATER HORIZON/Macondo spill who did not designate an expert on causation; judge declined to dismiss claims for mental health damages that were akin to pain and suffering; Gamble v. BP Exploration & Production, Inc., No. 17-3994, 2022 U.S. Dist. LEXIS 94493 (E.D. La. May 26, 2022) (Ashe); Plummer v. BP Exploration & Production, Inc., No. 17-4483, 2022 U.S. Dist. LEXIS 101186 (E.D. La. June 6, 2022) (Vitter); Coleman v. B.P. Exploration & Production, Inc., No. 17-4157, 2022 U.S. Dist. LEXIS 105694 (E.D. La. June 14, 2022) (Vance); Walker v. BP Exploration & Production, Inc., No. 17-3012, 2022 U.S. Dist. LEXIS 106512 (E.D. La. June 15, 2022) (Africk).
James Arnette Gamble opted out of the medical settlement entered into by BP and brought this action in federal court in Louisiana against BP, Transocean, and Halliburton, seeking to recover for medical conditions he alleged were related to toxic exposures to oil and dispersants while he was engaged in clean-up work in Alabama. He did not present an expert opinion on causation, and BP moved for summary judgment. In the absence of evidence of causation, Judge Ashe dismissed the suit.
Edna Plummer opted out of the medical settlement and brought this action in federal court in Louisiana seeking to recover for medical conditions that she alleged were related to her exposure to harmful chemicals near her residence in Pascagoula Mississippi. She did not designate an expert on causation, but she asserted that BP had provided causal connection by the Specified Physical Conditions Matrix that accounted for medical conditions that reasonably could arise from exposure to oil, dispersants, and decontaminants from the DEEPWATER HORIZON/Macondo blowout and cleanup efforts. She also pointed to the Declaration of Dr. Jessica Herzstein in prior litigation, stating that the medical literature supported the inclusion of the conditions listed in the Matrix. Noting the requirements with respect to both general and specific causation, Judge Vitter rejected Plummer’s arguments as the evidence she cited failed to meet her burden with respect to specific causation.
Charles Coleman opted out of the medical settlement and brought this action in federal court in Louisiana seeking to recover for medical conditions allegedly resulting from exposure to oil and chemicals during his work on the cleanup of the DEEPWATER HORIZON/Macondo spill. Coleman did not designate an expert to provide testimony to establish causation, and BP moved for summary judgment. As Coleman could not prove causation without expert testimony, Judge Vance dismissed the suit.
Allen Walker is a scuba diver who engaged in underwater photography and videography during and after the DEEPWATER HORIZON/Macondo oil spill. Walker brought this suit against BP based on alleged misrepresentations that the waters of the Gulf of Mexico were safe. Walker alleged that he had numerous medical problems related to his exposure to oil and chemicals in the water and that he suffered from depression and anxiety due to the hardship of his ordeal with his medical problems. BP moved for summary judgment based on lack of evidence of medical causation, and Walker responded with the reports of Dr. Gerald Cook on general and specific causation. BP responded that the reports were only sufficient to establish specific causation on the claim of chronic dermatitis, but Walker argued that expert evidence was not necessary because the other conditions were temporary and acute. To the extent the conditions were temporary, such as coughing or runny eyes and nose, Judge Africk held that there were fact questions that were within the knowledge of a juror without expert testimony. To the extent that the conditions were chronic, Judge Africk held that expert testimony on specific causation was necessary and lacking except as to the chronic dermatitis. Although the parties did not address with sufficient specificity the issue whether expert testimony was necessary to support damages for mental health conditions, including depression and anxiety, Judge Africk held that the claims were similar to mental pain and suffering claims that do not require expert support, and he denied summary judgment for those claims.
Promise to provide funds, a bond, or a letter of undertaking is not adequate security for a limitation action; In re Settoon Towing, LLC, No. 22-1483, 2022 U.S. Dist. LEXIS 95320 (E.D. La. May 26, 2022) (Milazzo).
The owners and operators of the M/V PHILOMENE P. PERERA and the M/V ARCHIE C. SETTOON brought this action in federal court in Louisiana seeking to limit liability after a suit was filed in Louisiana state court on behalf of lessees of oyster beds who claimed damages to their leases. The Petitioners asked the court to accept as security their promise to pay into the registry of the court the value of their interest in the vessels and pending freight or to post a bond or a letter of undertaking. Reasoning that the promise to pay, particularly a promise signed by counsel without a surety or evidence of authority to bind the petitioners, was insufficient to create a limitation concursus, Judge Milazzo declined the motion seeking an order approving security. After the case was transferred to Judge Fallon and the owners filed letters of undertaking, Judge Fallon issued the order approving security and restraining claims.
Magistrate Judge set aside verdict of jury that declined to find the cruise line negligent for the injury of a passenger who was sitting on the lower bed in his room when the upper stowed bunk deployed and struck him on the head based on the Magistrate Judge’s incorrectly allowing the cruise line to show the jury an unauthenticated, unduly prejudicial cell phone video; Ewing v. Carnival Corp., No. 19-20264, 2022 U.S. Dist. LEXIS 95911 (S.D. Fla. May 27, 2022) (Goodman).
Eric Ewing was sitting on the lower bed of his room on the CARNIVAL ECSTASY when the upper stowed bunk bed deployed, striking him on the top of the head. In the summary judgment motions and responses, Ewing asserted a claim of active negligence of the cruise line for failing to lock the bunk or to check that the bunk was locked prior to the passenger’s injury. He claimed that the cruise line was vicariously liable for that negligence and that it was not necessary that he prove that the cruise line was on notice of the dangerous condition. He also brought a claim of res ipsa loquitur. Based on the decision of the Eleventh Circuit in Everett v. Carnival Cruise Lines, Magistrate Judge Goodman held that there is no exception to the notice requirement for “a created-by-defendant or active-negligence-by-employee or vicarious-liability theory.” Thus, regardless of how Ewing pleaded his negligence case, he still had to establish actual or constructive notice of the condition by the cruise line. As the cruise line had a procedure to check bunk beds and make sure that the locking mechanism was activated, it was aware of the danger created by upper bunk beds. Combined with the fact that the ship’s carpenter had previously repaired the locks on two upper bunk beds, there was “adequate (although barely) evidence to withstand summary judgment” on the notice issue. Magistrate Judge Goodman did reject the claim of res ipsa loquitur as Ewing could not establish that the accident does not ordinarily occur in the absence of negligence (screws which loosen over time could have caused the bed to fall). See August 2020 Update. The case was tired to a jury before Magistrate Judge Goodman, and the jury returned a verdict on October 28, 2021, finding that the cruise line and cabin steward were not negligent. Magistrate Judge Goodman entered a final judgement on the verdict on November 19, 2021, and Ewing filed a motion for new trial that asserted several errors during the trial. See December 2022 Update.
Admitting he made a mistake during the trial, Magistrate Judge Goodman ordered a new trial. Ewing’s expert, forensic engineer Dr. Srinivas Kadiyala, testified that the bunk would not have fallen on Ewing’s head if it was locked and latched and that he believed the bunk was not locked. He did not believe that Ewing had opened the lock because it had a tamper-resistant key. Magistrate Judge Goodman allowed the cruise line to cross-examine Kadiyala with a cell phone video showing a burly security guard prying open a lock, but there was no evidence authenticating the video or explaining when, where, or how it was made. Reasoning that the video essentially accused Ewing of perpetrating a fraud (a defense that was not pleaded) with no evidence to support the accusation and no evidence of similarity of the video to Ewing’s bed, and considering that the video was unfairly prejudicial to Ewing and that an adequate curative instruction was not given, Magistrate Judge Goodman felt compelled to correct his error by ordering a new trial.
Judge allowed passenger who brought suit against a cruise line for a fall on the cruise ship to amend his complaint to add a claim for serving him excessive alcohol after the cruise line produced receipts for more than 30 drinks; Tittle v. Carnival Corp., No. 21-cv-23647, 2022 U.S. Dist. LEXIS 96011 (S.D. Fla. May 27, 2022) (McAliley).
Gary Tittle brought this suit against a cruise line for his fall on a liquid substance on the Lido Deck of the Carnival SUNRISE. More than two months after the deadline for amendment of pleadings, Tittle moved for leave to file an amended complaint to add a claim that the cruise line over-served him alcohol on the day of his accident. Tittle argued that he had good cause for the late amendment because it was not until the cruise line produced the sign-and-sail receipts, reflecting more than 30 charges at the vessel’s bars on the date of the accident (11 of which were consumed between approximately 5:45 p.m. and 11:45 p.m.), that he realized that he was over-served. Although the cruise line asserted that Tittle knew he was consuming alcohol, Magistrate Judge McAliley answered that it was not reasonable to assume, when considering these facts, “that Plaintiff necessarily remembered the amount of alcohol he consumed on the date of the accident.” As there was still sufficient time within the discovery period, Magistrate Judge McAliley permitted the amendment.
Something must have caused the bunk in which a seaman was sleeping to fall from the wall, so the employer’s motion for summary judgment on Jones Act negligence and unseaworthiness was denied; In re Chem Carriers Towing, LLC, No. 21-1025, 2022 U.S. Dist. LEXIS 96363 (E.D. La. May 31, 2022) (Brown).
Kai Hollingsworth was injured when the bunk where he slept broke free from the wall of the M/V SAM L. HAYS on June 10, 2020. Hollingsworth’s lawyer notified the owner of the vessel, Chem Carriers, of his representation on September 21, 2020, and requested medical records and demanded maintenance and cure. Chem Carriers provided medical records reflecting Hollingsworth had small bulging discs in his lumbar and cervical spine. Hollingsworth filed suit in Louisiana state court on December 2, 2020, and Chem Carriers filed this limitation action in federal court in Louisiana on May 27, 2021, within six months of the state suit but not within six months of the correspondence with Hollingsworth’s counsel. Hollingsworth moved to dismiss the suit for lack of jurisdiction or, alternatively, for summary judgment that it was not filed within six months of notice. Chem Carriers responded that there was no indication that the value of any potential claim could reasonably exceed the $1.57 million value of the vessel. Chief Judge Brown initially noted that, pursuant to the Fifth Circuit’s recent Bonvillian Marine case, the court had subject matter jurisdiction because the timeliness of the filing did not divest the court of subject matter jurisdiction. Thus, she considered the motion for summary judgment. Chem Carriers had paid less than $9,000 in medical expenses and less than $6,000 in maintenance at the time the state suit was served (.009% of the value of the vessel). Chief Judge Brown considered that the small amount paid raised a genuine fact dispute whether Chem Carriers could reasonably have believed that the claim could exceed the value of the vessel. Accordingly, she declined to grant summary judgment on the timeliness of the limitation action. See May 2022 Update.
Based on the testimony of Hollingsworth that he had slept in the bunk 86 times and was unaware of any deficiencies in the bunk and the testimony of Chem Carriers’ HS&E Director that he performed a safety audit of the vessel less than two months before the accident and noted no deficiencies in the bunk, Chem Carriers moved for summary judgment. It argued that there was no evidence that it knew or should have known of an alleged defect in the bunk for a negligence claim or that the bunk was not reasonably suited for its intended purpose for an unseaworthiness claim (the mere fact that there was an accident does not establish unseaworthiness). Hollingsworth responded that the HS&E Director merely looked at the bunk and did not inspect it and that Hollingsworth’s expert would testify that an inspection would have revealed a defect that caused the accident (although Chem Carriers noted that the expert had never been on the vessel and had only seen pictures of the bunk room). Reasoning that, “[c]learly something caused the bunk to come loose from the wall and citing the opinion of Hollingsworth’s expert that the failure arose from a defect, Chief Judge Brown held that there were fact issues that precluded summary judgment on the negligence and unseaworthiness claims.
Notice provision in fuel supply contract barred contract claim for damage from off-spec bunkers, and the maritime tort claims for damage from the bunkers also failed; ADMIntermare v. Kamca Trading S.A., No. 20-cv-1223, 2022 U.S. Dist. LEXIS 99053 (S.D.N.Y. June 2, 2022) (Oetken).
ADMIntermare time chartered the M/V SFL YUKON, and it also entered into an agreement with Kamca Trading to supply bunkers to the vessel. Kamca obtained the fuel from Glencore, and the fuel that Kamca delivered from Glencore was defective and off specification, resulting in engine failure on the YUKON. The vessel owner initiated an arbitration against ADMIntermare, and ADMIntermare brought this suit in federal court in Texas (transferred to New York) seeking to recover against Kamca and Glencore on the basis of breach of contract/warranty, misrepresentation, negligence, product liability, contribution, indemnity, and equitable subrogation. Kamca moved to dismiss the claims, and Judge Oetken granted the motion. With respect to the contract/warranty claim, Kamca’s general terms and conditions required ADMIntermare to give notice to Kamca within 21 days of any quality issues (notice was given in 27 days). ADMIntermare argued that it should have a reasonable time to notify the seller after discovering the breach (under the UCC), but Judge Oetken declined to apply that rule in this maritime dispute and instead considered whether the provision was “manifestly unreasonable.” Reasoning that the 21-day period was not manifestly unreasonable, Judge Oetken dismissed the contract/warranty claims. He also dismissed the negligent misrepresentation claim as that theory cannot be the basis of liability where the defendant’s sole legal duties to the plaintiff arose out of the contract. Judge Oetken dismissed the negligence and products liability claims based on the Robins Dry Dock economic loss rule as ADMIntermare did not have a sufficient proprietary interest in the vessel. Judge Oetken dismissed the contribution and indemnity claims, noting that under the maritime law each tortfeasor must pay the damages attributable to its actions. Judge Oetken dismissed the equitable subrogation claim as it is only available after full payment of the debt and ADMIntermare had not yet paid for any damage to the vessel. Glencore also moved for a dismissal, and Judge Oetken dismissed all of the claims against Glencore for the same reasons as he gave for the dismissal against Kamca, except he dismissed the misrepresentation and warranty claims because Glencore did not provide any information to ADMIntermare on which it could have relied and because there was no privity between Glencore and ADMIntermare. See April 2022 Update.
As Kamka was successful in the suit, it sought an award of attorney fees. The contract provided that the buyer was required to pay attorney fees to the seller in an action brought by the seller to enforce the contract. However, the action in this case was brought by the buyer, not the seller. Giving strict construction to the provision (citing New York law), Judge Oetken held that Kamca was not entitled to attorney fees because it had not brought the action.
Fact questions prevented summary judgment on the negligence of one vessel in collision, but generic rhetoric was insufficient to create a fact question on the negligence of the other vessel; Eliminator, Inc. v. Southern Belle Fishing, LLC, No. 2:20-cv-208, 2022 U.S. Dist. LEXIS 99759 (M.D. Fla. June 3, 2022) (Chappell).
This case arises from the collision of two shrimping vessels, the MISS AMY J and the SOUTHERN BELLE II, in the Gulf of Mexico. When the vessels were about five miles apart, the captain of the SOUTHERN BELLE was alerted of the MISS AMY by the vessel’s automatic identification system. He tried to contact the MISS AMY, but he received no response. Accordingly, he reduced speed on the SOUTHERN BELLE and adjusted its course. The captain of the MISS AMY was also alerted to the risk of collision, and he made three course adjustments. Despite the efforts to avoid collision, the bow of the SOUTHERN BELLE collided with the wheelhouse of the MISS AMY, and this litigation ensued with claims and counterclaims. Those at interest for the SOUTHERN BELLE sought summary judgment that the MISS AMY was negligent and that the SOUTHERN BELLE was not negligent. The SOUTHERN BELLE sought to invoke the Pennsylvania Rule presumption of causation for violations of several navigational rules (Rule 5, lookout, Rule 7, determining the risk of collision, and Rules 16 and 18, keeping out of the way of the SOUTHERN BELLE as it was fishing at the time of the collision). As the parties presented conflicting views of the collision, Judge Chappell found fact issues that had to be resolved on the conduct of the MISS AMY and whether the SOUTHERN BELLE was fishing. However, with respect to the argument that the evidence was insufficient to establish that the SOUTHERN BELLE was negligent, Judge Chappell considered the contentions of the MISS AMY to be “generic rhetoric” that the SOUTHERN BELLE owed a duty based on prudent seamanship and statutory rules, and the judge required more than allegations to demonstrate that the SOUTHERN BELLE did not take sufficient action to avoid the collision. Therefore, she granted summary judgment that the SOUTHERN BELLE was not negligent.
After striking some of the opinions of the plaintiff’s liability expert, the judge granted summary judgment on the injury claims of the captain’s guest from the unauthorized use of the tug’s skiff, leaving only the theory of apparent authority; Garcia v. Vitus Energy, LLC, No. 3:20-cv-249, 2022 U.S. Dist. LEXIS 100103, 100929 (D. Alaska June 6, 2022) (Kindred).
Vitus Energy owns and operates the tug JACKIE M together with the skiff used to guide the tug and take depth soundings. Christina Garcia met Kevin Dewitt, captain of the tug, at a bar in Dillingham, Alaska, and they agreed to meet the next Friday. Garcia testified that Dewitt did not appear intoxicated when he arrived at the bar on Friday and that he drank one beer at the bar. Dewitt left his wallet on the tug, so Dewitt and Garcia took the skiff back to the tug, retrieved the wallet, and got back in the skiff to return to Dillingham. It was dark and hard to see, and Dewitt struck a sandbar, resulting in injuries to himself and Garcia. After Dewitt was unsuccessful in pushing the skiff off the sandbar, he called the crew of the tug, which hoisted the skiff onto the tug. The tug’s engineer called the Chief Strategic Officer of Vitus Energy, and the crew dropped Dewitt and Garcia at the dock in Dillingham where they were met by EMTs and the local police. Dewitt and Garcia received medical treatment and then went to Garcia’s apartment where Garcia claims he took out a half-consumed bottle of alcohol from his jacket pocket. Garcia brought this suit against Vitus Energy in federal court in Alaska based on diversity, and Vitus Energy moved to exclude the opinions of Garcia’s liability expert, Captain James T. Cushman. With respect to Cushman’s opinions on the intoxication and mental and physical ability of Dewitt, Judge Kindred noted that, as an expert on the maritime industry, Cushman was unqualified to testify on these issues (particularly because he did not know how much alcohol Dewitt consumed). Judge Kindred then struck the opinions of Cushman on negligence, vicarious liability, and unseaworthiness as they are ultimate issues in the case and Garcia was not asserting an unseaworthiness claim (although he did not strike the opinion on whether Dewitt was “on duty” at the time of the grounding. Judge Kindred allowed Cushman’s opinions on the condition of the skiff and the training provided by Vitus Energy, but he struck Cushman’s opinions on Dewitt’s state of mind (the jury is in as good a position as the expert to discern what was in Dewitt’s mind). Judge Kindred then addressed Vitus Energy’s motion for summary judgment, beginning with Garcia’s contention that Alaska law applied to her claims brought under the diversity jurisdiction. Reasoning that the incident satisfied both the locality and maritime nexus requirements for admiralty jurisdiction, Judge Kindred held that maritime law provided the substantive standard for Garcia’s claims. After declining to apply the sham affidavit rule to the affidavit provided by Garcia in response to the motion for summary judgment, despite concerns expressed by Judge Kindred about whether the affidavit was a sham, Judge Kindred granted summary judgment on the count of negligence per se for violating an Alaska statute by operating the skiff under the influence of alcohol. Incorporating principles of Alaska law and common law as admiralty judges have not consistently applied the doctrine of negligence per se, Judge Kindred held that Garcia had not produced admissible evidence that Dewitt was under the influence at the time of the grounding (no proof of a level of impairment rendering him incapable of operating the skiff as a reasonably prudent person not under the influence), and he dismissed the count. As to the count of negligent entrustment, there was evidence that Vitus Energy permitted the crew to use the skiff to travel to and from Dillingham, but there was no evidence that Vitus Energy entrusted the skiff to Dewitt with reason to know that he would use it in a manner involving unreasonable risk of injury to himself or others. Therefore, Judge Kindred dismissed the count for negligent entrustment. As there was no evidence that Vitus Energy was on notice of unfitness of Dewitt, and as Dewitt was aware of the company policy prohibiting passengers in the skiff for personal reasons, Judge Kindred dismissed the claims for negligent hiring, training, and supervision. As there was no evidence that Dewitt was acting within the scope of his employment when he violated company policy for personal reasons or that he was engaging in conduct over which Vitus Energy had control, Judge Kindred dismissed the claim of vicarious liability based on respondeat superior and for direct liability for actions taken outside the scope of employment. As to apparent authority, Judge Kindred granted summary judgment with respect to actions of Vitus Energy ratifying Dewittt’s actions; however, Judge Kindred gave Garcia a narrow path to recovery, denying summary judgment on apparent authority due to Dewitt’s position as captain of the tug. Finally, Judge Kindred granted summary judgment on Garcia’s claim for punitive damages as Dewitt was not acting in the scope of employment and Vitus Energy did not ratify or approve his conduct.
Judge ordered charterer to provide information and documents to owner to enforce settlement agreement that required return of logbooks; Rose Marine LLC v. Sottosanti, No. 3:21-cv-523, 2022 U.S. Dist. LEXIS 100378 (D. Ore. June 6, 2022) (Acosta).
The owner of the 92-foot GOLDEN ROSE chartered the vessel to the defendants for six months and brought this action against the defendants for failing to make payments, failing to maintain insurance, and for damaging the vessel. The parties entered into a settlement agreement that included a term for the defendants to return all logbooks pertaining to the vessel to the owner. The defendants did not return the logbooks, arguing that they searched for them and did not find them. The owner sought damages of $25,000, but reduced the demand to $5,000 after receiving information from the defendants. There was disagreement about what the parties meant by logbooks as the owner died. The charterer stated that he kept a personal logbook and had receipts for repairs and expenses. Noting that the settlement agreement did not provide a specific penalty for failing to return the logbooks, Magistrate Judge Acosta ordered the charterer to share the information in his personal logbook as well as the receipts and declined to award the $5,000 sought by the owner, but he did direct the owner to submit a petition for fees in accordance with the provision in the settlement agreement for the award of fees to enforce the agreement.
Owner and manager of recreational charter boat were exonerated of liability for drowning of charterer’s guest; claims of parents of the decedent against the captain for loss of society and negligent infliction of emotional distress were dismissed; In re Wilson Yachts, LLC, No. 1:20-cv-3452, 2022 U.S. Dist. LEXIS 100964 (D. Md. June 6, 2022) (Rubin).
Sail Away managed the charters of the sailing vessel, SEVEN DAY WEEKEND, for the vessel owner, Wilson Yachts, pursuant to a Charter Management Agreement. Sail Way chartered the SEVEN DAY WEEKEND to Samuel Brew with a one-day Bareboat Charter Agreement, giving Brew full control and authority over the management of the vessel and making him responsible for the navigation of the vessel. If Brew was not competent to navigate the vessel, he was required to hire and pay for a captain. Steven Michael Coffman was selected to captain the vessel. Brew was accompanied on the vessel by his two guests, brothers Jerry and James Astriku. The charter began at the Liberty Marina in Edgewater, Maryland. In the afternoon, while the vessel was anchored in the Rhode River in Maryland, the brothers wanted to swim (although they did not know how to swim, so Captain Coffman secured a flotation device on James. Jerry then jumped into the water with an improperly secured flotation device and drowned. Wilson Yachts brought this action seeking exoneration/limitation of liability in federal court in Maryland, and James Astriku and the parents of Jerry Astriku made claims in the suit against Wilson Yachts, Sail Away, and Captain Coffman, and Jerry also made claims on his own behalf for negligent infliction of emotional distress. Wilson Yachts moved for summary judgment that it was entitled both to limitation and exoneration, and Judge Rubin first addressed limitation. As the acts of negligence identified by the claimants were cabined to the conduct of Captain Coffman, Judge Rubin considered whether the owner had privity or knowledge with Captain Coffman’s acts/omissions. Concluding that Captain Coffman’s acts were not chargeable to the owner for privity, that Wilson Yachts had no knowledge of the events leading up to the casualty, and that there was no dispute as to the credentials of Captain Coffman to captain the vessel, Judge Rubin held that Wilson Yachts was entitled to limitation of liability. Wilson Yachts also argued that it was entitled to exoneration because the vessel was bareboat chartered to Brew and Wilson Yachts was consequently not responsible for the acts of the Captain. Although the charter gave Brew full authority for the management of the vessel, the claimants argued that they had no “real” control over the Captain because if they terminated the Captain they would be stuck in the middle of the water. Judge Rubin rejected that argument as the contract language was not ambiguous about the control given to the charterer. Finally, Judge Rubin rejected the argument that Captain Coffman’s acts constituted unseaworthiness as the vessel owner does not owe a warranty of seaworthiness to passengers. Therefore, Wilson Yachts was entitled to exoneration. Judge Rubin also rejected the argument that Captain Coffman was acting on apparent authority for Sail Away and, consequently, granted summary judgment on the claims against Sail Away. Captain Coffman argued that Astriku’s parents were not entitled to recover loss of society as they were not dependents. In response, the parents sought to recover under Maryland law. Applying maritime law and finding that the parents were not dependent, Judge Rubin granted partial summary judgment on the claim for loss of society. Captain Coffman also challenged James’ claim of negligent infliction of emotional distress (because he witnessed his brother’s drowning and became hysterical). James was fitted with a flotation device and was in the water when James jumped in and drowned. While climbing back on the vessel, James bruised his elbow and knee (but did not seek medical attention). The injury was not part of any rescue effort. As James did not suffer emotional harm because of his minor bruises and because he was not fearful that he would drown (he was properly fitted with a flotation device), Judge Rubin dismissed James’ claim for infliction of emotional distress.
Dispute between crawfisherman and property owner satisfied the nexus requirement for admiralty jurisdiction; Thibodeaux v. Bernhard, No. 6:21-0061, 2022 U.S. Dist. LEXIS 101853 (W.D. La. June 7, 2022) (Joseph).
This dispute arose in Lost Lake, across the Atchafalaya River from Butte Larose in St. Marin Parish, Louisiana. Devin Thibodeaux, a commercial crawfisherman, was harvesting his crawfish traps in water over property owned by Kenneth Bernhard, whose son Adam Bernhard manages the property, when Bernhard intercepted and collided with the skiff occupied by Thibodeaux. Bernard declared that Thibodeaux was trespassing, and ordered him to retrieve his traps, exit the property, and never return. Bernard then summoned a sheriff’s deputy who issued a citation to Thibodeaux for criminal trespass. Thibodeaux brought this action in federal court under the admiralty jurisdiction, asserting a conversion claim under Louisiana state law. Bernhard moved to dismiss the case for lack of admiralty jurisdiction, claiming that Thibodeaux did not sufficiently allege the location of the incident for the locality portion of the test for admiralty jurisdiction, nor did he allege how the actions of the defendant had a connection to traditional maritime activity. Magistrate Judge Whitehurst agreed that the allegations were insufficient, but she gave Thibodeaux an opportunity to amend the complaint to provide more specific allegations on the elements of the test for admiralty jurisdiction. See October 2021 Update.
After Thibodeaux filed an amended complaint and Bernhard again moved to dismiss the complaint for lack of admiralty jurisdiction, Magistrate Judge Whitehurst classified the incident as interference with the plaintiff’s ability to harvest crawfish from their traps with the potential to disrupt maritime commerce, but she recommended that the case be dismissed because the general character of the activity giving rise to the plaintiff’s claims (described as harassment, verbal accosting, declaration of trespass, and ordering the plaintiff to leave the property) was not sufficiently related to traditional maritime activity. Judge Joseph found the characterization to be deficient in two important respects—it failed to encompass the allegation that the plaintiff was forcefully intercepted and stopped, an alleged intentional obstruction of a navigable vessel, and it failed to account for the reason for the conduct—impeding the plaintiff from freely navigating in the waterway while conducting commercial crawfishing. Judge Joseph instead described the defendant’s activities as “alleged physical obstruction of a navigable vessel, verbal threats, and other intimidating actions designed to impede commercial fishing and navigation. Accordingly, Judge Joseph concluded that the maritime nexus test was satisfied and remanded the matter to Magistrate Judge Whitehurst to make factual findings on whether the locality test was satisfied.
Attorney malpractice claims of economic loss claimants from the DEEPWATER HORIZON/Macondo blowout were not untimely, but their fraud claims were insufficient under Rule 9(b); Henry v. Maxum Indemnity Co., No. 20-2995 c/w 20-2997, 20-2998; 2022 U.S. Dist. LEXIS 102048 (E.D. La. June 7, 2022) (Vitter).
After the DEEPWATER HORIZON/Macondo blowout, several attorneys formed a joint venture to solicit and engage subsistence claimants (Gulf Coast residents who harvested fish and seafood in the coastal area for their dietary consumption). Three groups of claimants (Henry, Billiot, and Pierce) brought suits in Louisiana state court after their claims were denied, naming the attorneys and their insurers. The cases, which asserted causes of action for malpractice and fraud, were removed to federal court based on diversity, and the attorneys and insurers filed motions to dismiss the suits because of peremption/prescription under Louisiana law and for failure to sufficiently plead fraud under Rule 9(b). The peremption/prescription issue required Judge Vitter to consider the Mississippi choice-of-law provision in the contracts between the claimants and attorneys. Applying Louisiana choice-of-law principles in the cases removed from Louisiana state court under the diversity jurisdiction, Judge Vitter held that the choice-of-law provision applied to contract claims and not to tort claims arising out of the contractual relationship. As Louisiana law views peremption/prescription as procedural in nature, Judge Vitter applied Louisiana’s one-year prescriptive period for tort actions (and not the statute for legal malpractice claims that applies only to attorneys licensed in Louisiana because none of the attorneys were licensed in Louisiana). As the tort statute only accrued when the claimants had constructive knowledge of the alleged legal malpractice, and as the limitation periods were extended in response to the COVID-19 pandemic, Judge Vitter held that the malpractice claims were not time-barred. However, the fraud pleadings failed to contain specific details of the who, what, when, where, and how of the alleged fraud. Consequently, Judge Vitter held that the fraud pleadings failed to satisfy the standard for pleading fraud under Rule 9(b). As the claimants had been on notice of the deficiencies in their fraud allegations for more than a year and had not sought to correct them, Judge Vitter dismissed the fraud claims with prejudice and without leave to amend. For the same reasons, Judge Vitter dismissed the fraud claims against the insurer defendants but declined to dismiss the malpractice claims. Finally, Judge Vitter considered the motion of the insurer defendants to consolidate a fourth suit by subsistence claimants (Gaudet v. Nations). The Gaudet suit was brought as a class action and involved allegations of malpractice and fraud in connection with the untimely filing of or failing to file subsistence claims. The claimants opposed consolidation, arguing that the claims in the consolidated Henry, Billiot, and Pierce actions involved claims of malpractice and fraud after the subsistence claims were filed—during the post-review process. Finding no risk of inconsistent adjudications if the cases were tried separately, different stages of preparedness of the suits, and a risk of confusion by the jury, Judge Vitter declined the motion to consolidate the Gaudet suit with the previously consolidated Henry/Billiot/Pierce actions. See April 2022 Update.
The plaintiffs moved for reconsideration based on newly discovered evidence in discovery, but Judge Vitter held that reconsideration under Rule 59(e) was unavailable because no final judgment had been issued. She considered the request under the more flexible standard under Rule 54(b) and noted that leave to amend was denied in the first order because of the dilatory motive of the plaintiffs, their repeated failure to cure deficiencies in the pleadings, and the undue delay that would be caused. Nothing in the motion for reconsideration addressed that analysis. The focus of the motion was the newly discovered evidence, but Judge Vitter held that an amendment based on that evidence may be futile as well. Accordingly, she declined to reconsider her previous ruling.
Fishing vessel was unseaworthy but the liability of its owner for the murder of a seaman was limited to the value of the vessel, its catch, and its scalloping permit; In re Captain Juan, Inc., No. 19-cv-10719, 2022 U.S. Dist. LEXIS 10219 (D. Mass. June 8, 2022) (Saris).
First Mate Javier Rangel Sosa was murdered (stabbed twelve times with a fishing knife by another crew member, Franklin “Freddy” Meave Vazquez) on the F/V CAPTAIN BILL HAVER, a scallop fishing vessel owned by Captain Juan, Inc. while the vessel was fishing on the Georges Bank, east of Nantucket Island. The owner filed this limitation action in federal court in Massachusetts, and Sosa’s widow filed a claim under the Jones Act and general maritime law (unseaworthiness). Judge Saris conducted a three-day bench trial and found that the captain had worked with Vazquez twice before and that Vazquez had been a good worker who did not appear to be argumentative, violent, or on drugs. At the beginning of the trip, Vazquez got along with the crew and did his work. However, Vazquez was likely on heroin, and one crew member saw Vazquez in the bathroom with lines of something on the sink that looked like drugs, but he did not tell the captain. Vazquez frequently visited the bathroom on the trip and began to engage in odd behavior. After complaining that he had hurt his knee (but refusing to show the captain his knee), Vazquez hit one crew member in the back of the head with a five-pound sledgehammer and then proceeded to stab and slice Sosa with a ten to twelve-inch fishing knife that was part of the equipment on the vessel. The captain was able to subdue Vazquez, but Sosa died from his wounds. The crew was hired by the captain, and there was a dispute whether the captain was aware that Vazquez was using drugs, but Judge Saris found the captain’s testimony that he would not hire anyone that he knew was using drugs to be more credible. Vazquez was initially found to be incompetent to stand trial and was committed for almost two years before he was declared competent to stand trial in his criminal case. He then pleaded guilty to second degree murder. Judge Saris found that the F/V CAPTAIN BILL HAVER was unseaworthy because of the unprovoked stabbing of Sosa a dozen times with a knife, which established that Vazquez had a vicious and savage disposition beyond the usual standards of the calling. Sosa’s widow argued that the owner failed to carry its burden to show that it did not have privity or knowledge because the officers of the company did not testify at trial. Judge Saris rejected that argument, however, because the hiring of Vazquez was performed by the captain, and she found that he did not know of any drug use by Vazquez. Sosa’s widow then argued that the captain should have taken steps to determine whether the crew used drugs, such as drug tests, but Judge Saris held that it was not unreasonable for the captain to rely on his prior experience with Vazquez as the basis for hiring him. Accordingly, Judge Saris held that the owner’s liability would be limited to the value of the vessel and the value of the scallops at the end of the voyage. Judge Saris then considered whether to include the owner’s scalloping permit in the limitation fund, noting that the decisions addressing whether a permit is included are surprisingly sparse. Noting that the vessel cannot fish without the permit on board and that permits count as appurtenances for the purpose of securing credit, Judge Saris held that the value of the permit ($5 million) should be included in the limitation fund.
Employee of contractor on offshore platform presented fact question of direct liability of the platform owner; judge declined to grant summary judgment to the worker on medical causation; Olivier v. Exxon Mobil Corp., No. 18-cv-568, 2022 U.S. Dist. LEXIS 103005 (M.D. La. June 9, 2022) (Dick).
Billy D. Olivier was employed by Weatherford as an Operator/Roustabout to perform work in connection with the plugging and abandonment of Exxon Mobil’s Lena Platform. He claimed that his foot slid and his heel popped into an unmarked and uncovered hole in a skidbeam that was used as a walkway on the platform. He brought this suit against Exxon Mobil in federal court in Louisiana for negligence under Louisiana law (the law applicable under the Outer Continental Shelf Lands Act for the platform located on the outer Continental Shelf off the Louisiana coast). As the contract between Exxon Mobil and Weatherford provided that Weatherford was an independent contractor, Exxon Mobil filed a motion for summary judgment that it was not liable for the acts of the independent contractor, Weatherford. However, Chief Judge Dick reasoned that the independent contractor defense did not prevent direct liability claims against the platform owner for premises/custodial liability. Finding sufficient evidence to establish a fact question on the direct liability claims, Chief Judge Dick denied summary judgment to Exxon Mobil. Citing the opinion of Exxon Mobil’s retained medical expert, Olivier moved for summary judgment on medical causation. Citing the myriad cases holding that the question of medical causation should be decided by the jury (along with the evidence of Olivier’s treatment before the accident), Chief Judge Dick declined to grant summary judgment on medical causation.
Herbert H. Mullinex was a Machinist Mate in the United States Navy who claimed that he was exposed to asbestos while assisting in shipbuilding and repair on vessels docked on navigable waters at the shipyard. He brought this suit in state court in the Circuit Court of Newport News, Virginia against John Crane, Inc. for failing to warn that products it supplied contained asbestos. The suit was removed to federal court (based on the Federal Officer Removal Statute), and the amended complaint asserted claims under both Virginia law and within the admiralty jurisdiction. John Crane moved to dismiss the admiralty claims, and Judge Jackson denied the motion. Judge Jackson first concluded that the locality test was satisfied because Mullinex alleged exposure on ships on navigable waters, and it did not matter whether the exposure was on ships that were docked or at sea. Judge Jackson also concluded that both prongs of the connection test were satisfied. He found that there was a disruptive effect on maritime commerce because injuries to workers on Navy ships from defective products, and labor shortages resulting therefrom, could create unsafe working conditions that could disrupt the Navy’s ability to protect commercial ships. Finally, Judge Jackson concluded that there was a substantial relationship to traditional maritime activity as the replacement of asbestos-containing gaskets was essential for the proper functioning of the ships. See May 2020 Update.
After Herbert Mullinex died, his widow, Patricia Mullinex, was substituted in the suit on behalf of Herbert’s estate, seeking recovery for Herbert’s pain and suffering as well as his medical expenses. John Crane then filed a motion to dismiss the claim for survival damages, arguing that the general maritime law does not provide a survival remedy. Patricia argued, however, that the survival remedy available to the estate of seamen under the Jones Act (in actions against their employer) should apply to actions of the estate of seamen against non-employers under the general maritime law. Judge Jackson considered the three-part test enunciated by the Supreme Court in Batterton to determine whether damages are available under the general maritime law. Finding no clear historical pattern of awarding survival damages under traditional maritime law, he concluded that the estate was not entitled to survival damages under the first prong from Batterton. Under the second prong from Batterton, Judge Jackson considered whether parallel statutory schemes required the award of survival damages. As the Death on the High Seas Act does not allow recovery for survival damages, and as the Jones Act does not provide for their recovery against non-employers, Judge Jackson held that the second prong from Batterton did not support the estate’s claim. Finally, reasoning that Congress was well aware of the remedy limitations it established with the Jones Act and DOHSA, Judge Jackson found no policy considerations that compelled the award of survival damages under the third prong from Batterton. Accordingly, he held that the estate did not present a viable survival claim for the seaman’s pain and suffering and medical expenses.
Negligence of rent-a-captain was attributed to the vessel owner, not the W-2 employer; Garner v. Pontchartrain Partners, LLC, No. 20-1179, 2022 U.S. Dist. LEXIS 104720 (E.D. La. June 13, 2022) (Lemmon).
Jerode Garner was injured on the M/V MARY JANE, which transported rocks in connection with the construction of breakwater jetties to protect Grand Isle, Louisiana. The captain of the vessel was a W-2 employee of Z.E. Services, and his salary and benefits were provided by that company. However, he was assigned to work on the vessel, owned by Pontchartrain Partners, pursuant to an agreement that the captain called a rent-a-captain arrangement. Garner brought this suit in federal court in Louisiana against both Z.E. Services and Pontchartrain Partners, and Z.E. Services moved for summary judgment on the basis that the captain was a borrowed servant of Pontchartrain Partners so that Pontchartrain Partners, and not Z.E. Services, was liable for the acts/omissions of the captain. Judge Lemmon considered the borrowed servant factors from the Fifth Circuit’s Ruiz case and held that Pontchartrain Partners exercised control over the captain’s work, that the work being performed was for Pontchartrain Partners, that there was an agreement under which the services were to be administered and approved by Pontchartrain Partners, that the captain agreed to the work arrangement requiring him to report to Pontchartrain Partners, that the captain’s employment was not terminated with Z.E. Services but he had little communication with Z.E. Services during the work, that the vessel and lodging were provided by Pontchartrain Partners, that the captain had worked for Pontchartrain Partners for three months, that Pontchartrain Partners had the right to terminate the captain’s work at the jobsite, and that Pontchartrain Partners ultimately paid for the captain’s services. As the factors supported borrowed servant status with Pontchartrain Partners, Judge Lemmon granted summary judgment to Z.E. Services.
Passengers failed to establish causation against cruise line for their COVID-19 claims; Toutounchian v. Princess Cruise Lines, Ltd., No. 20-3717, 2022 U.S. Dist. LEXIS 105581 (C.D. Cal. June 13, 2022) (Fischer).
Farah and Mohammed Toutounchian were passengers on the DIAMOND PRINCESS on a cruise that embarked from Yokohama, Japan on January 20, 2020. On February 1 or 2, 2020, the cruise line was informed that a passenger who had disembarked in Hong Kong on January 25 tested positive for COVID-19 after disembarking. Japanese authorities tested 31 passengers on February 4, and ten were positive. The passengers who tested positive were disembarked, and the remaining passengers were quarantined in their cabins for 14 days. On February 7, Mohammed began to experience symptoms of COVID-19, and he tested positive for COVID-19 on February 11. Farah tested positive on February 14. They were removed from the ship and were hospitalized in Japan, and they brought this suit against the cruise line in federal court in California, asserted that they have ongoing problems from the virus. The cruise line moved for summary judgment, arguing that the passengers did not produce any expert evidence that the actions of the cruise line caused them to contract COVID-19 on the ship. Noting that the passengers did not present any admissible expert testimony on causation (where or when they contracted the virus), such as an opinion on the incubation period for the virus so as to establish whether the passengers could have contracted COVID-19 between February 1 (the last date on which Farah and Mohammed had disembarked) and February 7 and 13, when they began experiencing symptoms (or February 11 and 14 when they tested positive), their claims were speculative—they could have contracted the virus on the ship or at one of the ports they visited. Therefore, she granted summary judgment and dismissed the suit.
Judge apportioned fault from the collision near Singapore between the U.S.S. JOHN S. MCCAIN and the Liberian vessel ALNIC and denied limitation to the owner of the ALNIC; In re Energetic Tank, Inc., No. 1:18-cv-1359, 2022 U.S. Dist. LEXIS 107103 (S.D.N.Y. June 15, 2022) (Crotty).
The collision between the destroyer U.S.S. JOHN S. MCCAIN and the Liberian merchant vessel M/V ALNIC MC, resulting in the deaths of ten sailors and injuries to more than 40 others, returns to the Update (see January, February, April, and November 2020 Updates). Both ships were bound for destinations in Singapore, and they collided approximately 24 nautical miles from the Singapore mainland. The claimants sought to apply the test set forth by the Supreme Court in Jones Act cases in Lauritzen v. Larsen, 345 U.S. 1 (1953) (as expanded by the Court in Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970)). However, Judge Crotty held that the Lauritzen/Rhoditis test was unsuited to deciding a choice-of-law question involving a collision halfway around the globe involving a U.S. Navy warship based in Japan and a Liberian-flagged vessel. Although there was a dispute between Malaysia and Singapore over sovereignty of the area in question, Judge Crotty applied Singapore law to the collision based on the fact that the vessels were both headed to Singapore and were in the Singapore Traffic Separation Scheme.
Judge Crotty split the trial of the case into two phases and tried the liability issues in five days in November 2021. In a 70-page opinion, Judge Crotty apportioned 80% of the fault to the JOHN S. MCCAIN and 20% of the fault to the ALNIC. He then addressed whether the owner of the ALNIC was entitled to limit its liability to $16,768,480. As the owner engaged Stealth Maritime to manage the vessel, Judge Crotty looked to its privity or knowledge “as a proxy” for the owner. In this case, Stealth Maritime was aware of deficient staffing practices and other “risky behavior” and “allowed ALNIC—one of the worst vessels the Stealth Marine Superintendent had ever audited—to again travel through one of the busiest shipping lanes in the world.” This was sufficient to establish privity or knowledge. However, Judge Crotty noted that the Limitation Act, as amended, broadens the privity or knowledge for seagoing vessels to the master at or at the beginning of the voyage. Finding that the captain planned, before the voyage, to understaff the bridge, Judge Crotty ruled that there was additional support for denying limitation to the owner of the ALNIC. Applying Singapore law, Judge Crotty held that the United States should recover 20% of its damages and the owner of the ALNIC should recover 80% of its damages, with those damages offset. He awarded prejudgment interest in accordance with Singapore law. Going forward, Judge Crotty held that the wrongful death and injury claims for the sailor-claimants would proceed with a Phase II trial, and he reserved the questions whether the sailor-claimants would be entitled to a jury and whether the owner of the ALNIC would be entitled to contribution from the United States.
Sabrina Bolden brought his suit alleging that she was injured while a passenger on the CARNIVAL CONQUEST after a portion of the gangway flipped up and struck her ankle while she was embarking the vessel. The complaint alleged that the cruise line was on notice of the dangerous condition, but Bolden did not include specific facts because, in the absence of gangway inspection records or incident reports from the cruise line, it was not possible for Bolden to allege with precision exactly how long the gangway hinge had been loose or how many prior incidents had occurred. As the complaint failed to contain facts to establish notice, Judge King held that dismissal without prejudice was the appropriate remedy.
Judge retained claim under the Florida Deceptive and Unfair Trade Practices Act (without the fee shifting provision) in dispute over vessel modifications but dismissed the claims for negligence and fraudulent inducement based on the economic loss rule; My Buddy Davis, LLC v. Starboard Yacht Group, No. 0:22-cv-60542, 2022 U.S. Dist. LEXIS 107606 (S.D. Fla. June 16, 2022) (Moore).
The owner of the BUDDY DAVIS contracted with Starboard Yacht Group to install Seakeeper stabilizers, Humphree interceptors, and an Optimus steering system on the vessel. The equipment was not installed, and the vessel was in drydock for more than six months. The vessel owner then brought this action against Starboard Yacht Group in federal court in Miami, asserting claims for breach of a maritime contract, violations of the Florida Deceptive and Unfair Trade Practices Act, negligent repair, and fraudulent inducement. Starboard Yacht Group moved to dismiss all of the claims except the claim for breach of contract and to dismiss the demand for a jury. Applying maritime law, Judge Moore noted the distinction drawn in prior cases in which judges held that maritime law does not wholly preempt claims under the Florida statute (the defendant did not argue why the substantive portions of the statute conflicted with maritime law), but he did hold that the state claim was barred as to its request for attorney fees under the statute. Although the vessel owner argued that the claim for fraudulent inducement was separate from the claim for breach of a maritime contract, Judge Moore reasoned that the claim was inextricably tied to the contract claim. Holding that the maritime economic loss rule applied to the claim, Judge Moore dismissed it (and the negligence claim that the vessel owner withdrew) with prejudice. The vessel owner withdrew its jury demand (the case was brought under the admiralty jurisdiction), and Judge Moore granted the motion to strike the demand.
Seaman’s punitive damages claims, except with respect to maintenance and cure, were dismissed; Burton v. Weeks Marine Inc., No. 2:22-cv-1111, 2022 U.S. Dist. LEXIS 108656 (W.D. La. June 16, 2022) (Cain).
Anthony Burton brought this suit in federal court in Louisiana, seeking to recover for an injury to his hand on a barge owned by Weeks Marine. Burton sought punitive damages for the defendant’s willful and wanton failure to pay sufficient maintenance and cure, the defendant’s gross negligence or recklessness, and the unseaworthy condition of the vessel. Weeks Marine moved to dismiss the punitive damage claims, and Judge Cain agreed that the claims for punitive damages arising from negligence and unseaworthiness (not maintenance and cure) were barred by the decisions of the Supreme Court and Fifth Circuit, and he dismissed those claims with prejudice.
Waiver of subrogation in charter party (MSA) precluded P&I carrier from recovery of maintenance and cure payments; Jones v. Select Oilfield Services, LLC, No. 20-1177, 2022 U.S. Dist. LEXIS 108114 (E.D. La. June 17, 2022) (Morgan).
James Michael Jones was employed as a seaman by Select Oilfield Services to work on its lift boat, L/B SELECT 102. Select entered into a time charter with Cox Operating for Cox to use the lift boat in connection with operations on a platform owned by Cox. Jones brought this suit in federal court in Louisiana against Select and Cox. Select’s protection and indemnity insurer, Certain Underwriters at Lloyds, paid maintenance and cure to Jones and intervened in the suit, seeking to recover the payments from Cox based on the negligence of Cox. Cox moved for summary judgment on the claim by Lloyds, arguing that Lloyds had waived subrogation in accordance with the terms of the Master Service Agreement between Select and Cox and the terms of the P&I policy. The insurance exhibit to the MSA required Select to cause its insurers to name Cox as an additional insured and provide a waiver of subrogation in favor of Cox, and the P&I policy gave Select the privilege to name those for whom work was performed as additional insureds and to waive subrogation against them, except that the provisions were not applicable for a vessel that was not actually engaged or involved in the intended operations at the time of loss. Lloyd’s argued that the exception applied because Jones was injured on the Cox platform, not the lift boat. However, Cox’s head of purchasing and asset procurement described the contracted services as providing the lift boat to assist with Cox’s operations in the Eloi Bay Field, and Lloyds agreed with the description. Thus, Judge Morgan held that the exception did not apply and that Lloyds had no right to recover because it had agreed to waive its rights of subrogation. Lloyds has filed a notice of appeal.
Some of the opinions of a passenger’s liability expert survived the cruise line’s motion to strike; Jay v. Royal Caribbean Cruises Ltd., No. 20-cv-25052, 2022 U.S. Dist. LEXIS 108558 (S.D. Fla. June 17, 2022) (Damian).
Melvin Jay, a passenger on the SYMPHONY OF THE SEAS, brought this action in federal court in Florida seeking to recover for injuries he sustained when he fell while stepping on the last step of the gangway while disembarking the vessel. The one count in his amended complaint asserted that the cruise line was negligent in allowing the gangway to be used by the passenger when it was in a wet and slippery condition. Jay engaged Frank Fore, a civil engineer to provide expert opinions in support of the liability of the cruise line, and the cruise line moved to strike the opinions on two grounds. First, the cruise line argued that the opinions included theories that were not asserted in the amended complaint and that the cruise line was prejudiced because discovery was almost closed at the time the opinions were provided. The cruise line did not, however, explain how the theories were inconsistent and advised that it planned to serve motions in limine for the “alternative” theories of liability. Magistrate Judge Damian held that the decision on this argument could wait until the motions in limine were filed. Magistrate Judge Damian agreed with other judges in the Southern District of Florida that Fore was qualified to give expert opinions and then addressed the issue whether Fore used proper scientific methodology to support his opinions that the gangway was wet and that it did not meet the minimum coefficient of friction in applicable guidelines. Reasoning that Fore’s opinion that the gangway was wet was based on watching CCTV footage and reviewing photographs of the scene at the time of the incident, and was based on common sense rather than scientific methodology or testing, Magistrate Judge Damian agreed that the opinion was not sufficiently reliable to satisfy Daubert. She disagreed with the cruise line, however, that the opinion on the friction coefficient was not reliable as based on inapplicable standards and based on tests conducted two years after the accident, holding that the objections went to the weight of the opinion and were the subject of cross-examination. Finally, Magistrate Judge Damian held that four statements in the opinion would not be helpful to the jury or were legal conclusions: that the CCTV video footage showed that it had been raining and that gangway had not been covered and was wet; that Jay’s foot suddenly and without warning slipped, and, because the cruise line chose not to install handrails on the lower transition ramp, Jay was unable to regain his balance and fell (although Fore could take the lack of a handrail into consideration as part of his analysis whether there was a violation of industry standards); that the probable substantial contributing causes were various acts of the cruise line (legal conclusions that invaded the province of the jury); and that the reasonable probability was that Jay would not have slipped if certain actions had been taken (legal conclusion).
Passenger’s bare assertion that cruise line could not support its affirmative defenses was insufficient for a motion for summary judgment; passenger did not establish that res ipsa loquitur applied to falling bed in passenger’s cabin; Baez v. MSC Cruises, S.A., No. 1:20-cv-22732, 2022 U.S. Dist. LEXIS 109512 (S.D. Fla. June 20, 2022) (Louis).
Bettina Baez, a passenger on the MSC ARMONIA, claims that she was injured in her cabin on the vessel when, while sitting on her bed, the Pullman bed above fell onto her head. She brought this suit against the cruise line in federal court in Florida, asserting that the cabin steward failed to lock the bed in an up and closed position. After she filed an amended complaint, Baez moved for summary judgment on several of the affirmative defenses asserted by the cruise line. Magistrate Judge Louis noted that several of the challenges made by Baez were that the defenses lacked factual support, and he answered that the bare assertion that the defendant cannot present evidence to support its affirmative defenses is “never enough” for summary judgment. The argument is actually a motion to strike affirmative defenses, and the time had long since passed to challenge the sufficiency of pleading. Baez also moved for summary judgment on the theory of res ipsa loquitur, arguing that the falling of the bed was the kind of event that occurs due to someone’s negligence and that Baez did not contribute to the accident. The cruise line, however, argued that the bed was accessible to hundreds of passengers before Baez and was analogous to a cabin bathroom and a deck chair that have been held not to satisfy the exclusive control requirement for res ipsa loquitur. The cruise line also argued that Baez failed to rule out competing possible causes that were not supportive of the negligence of the cruise line. Concluding that Baez failed to meet her burden to show the exclusive control of the cruise line or to rule out alternative causes, Magistrate Judge Louis denied summary judgment to Baez on the application of res ipsa loquitur.
Owner of bareboat chartered crewboat was not liable to worker who alleged seaman claims for negligence and unseaworthiness of crewboat; Lewis v. A B C Insurance Co., No. 6:20-cv-720, 2022 U.S. Dist. LEXIS 109576 (W.D. La. June 21, 2022) (Cain).
Claboryan Lewis claimed that he sustained injuries while transferring from a platform located off the coast of Louisiana onto the crewboat SPEEDY P. He brought suit as a seaman against the owner of the vessel, Rivertec Enterprises, the bareboat charterer of the vessel, Yellow Fin Marine, and other companies that were involved in operations on the platform. Rivertec moved for summary judgment on the ground that it had bareboat chartered the vessel and had no control over its operation. Judge Cain agreed and dismissed the negligence cause of action accordingly. With respect to unseaworthiness, Lewis was unable to identify any condition of the vessel that caused his accident, and Judge Cain dismissed that claim as well.
Boating accident on Bayou D’Arbonne did not occur on navigable waters, and state law barred the injury suit arising from the accident; Newbold v. Kinder Morgan SNG Operator LLC, No. 3:21-cv-929, 2022 U.S. Dist. LEXIS 109946 (W.D. La. June 21, 2022) (Doughty).
John Newbold and his nephew Jason Rodgers were fishing in Bayou D’Arbonne in Louisiana in a 14-foot flat-bottom aluminum boat owned by Rodgers. Rodgers turned the boat westward into an intersecting waterway and it struck a “Do Not Anchor or Dredge” pipeline sign, the top of which was located six inches below the water surface. Newbold was thrown from the boat and died from his injuries. The intersecting waterway was two 50-foot pipeline right of ways that were owned by Kinder Morgan and SNG Operator. Newbold’s beneficiaries brought this suit in Louisiana state court against Kinder Morgan and SNG Operator, and the defendants removed the suit to the Louisiana federal court based on diversity. The defendants moved for summary judgment, arguing that Louisiana law applied and Louisiana’s recreational use statutes barred any recovery. This argument required a finding that the case did not fall within the admiralty jurisdiction and that admiralty law did not apply The defendants presented evidence that the pipeline sign was located in an area of wetlands with perennial emergent grassy vegetation that can tolerate semi-permanent, but not permanent flooding. The area is subject to seasonal flooding from the Ouachita River, but the area of the sign was 58 feet from the location where vegetation stopped, and 67% of the time the base of the pipeline sign was on dry land. Reasoning that a waterway is navigable if, in its ordinary condition, trade and travel may be conducted over it in the customary modes of trade and travel on water, Judge Doughty held that the area could not be used for navigation in its ordinary condition because it was dry 67% of the time and was outside of the navigable waters of Bayou D’Arbonne. As Louisiana law applied, Judge Doughty dismissed the claims with prejudice.
Bunker supplier was entitled to attachment of bank account despite vessel arrests and partial recovery on its invoices; Peninsula Petroleum Far East Pte. Ltd., No. 4:22-cv-337, 2022 U.S. Dist. LEXIS 110218 (S.D. Tex. June 22, 2022) (Hanks).
Peninsula Petroleum sold bunkers to Crystal Cruises for its cruise ships CRYSTAL SYMPHONY and CRYSTAL SERENITY. When Crystal defaulted on payment, Peninsula Petroleum began efforts to collect but was still owed more than $600,000 plus interest and attorney fees. The efforts included multiple efforts to arrest the vessels, but they were diverted except in the Bahamas, where Peninsula Petroleum joined in an arrest but recovered nothing because there was only sufficient money from the sale of the vessels to pay the mortgagee. Peninsula Petroleum brought this Rule B attachment action in federal court in Texas based on a bank account, and Crystal moved to vacate the attachment, arguing that equitable vacatur was appropriate because Crystal was subject to suit in federal court in Florida and because the vessels had been arrested in the Bahamas. Construing the equitable vacatur doctrine narrowly, Judge Hanks held that the federal court in Texas was not adjacent to the federal court in Florida and that Peninsula Petroleum had not obtained sufficient security from the sale of the vessels in the Bahamas from which Peninsula Petroleum had recovered nothing. Consequently, Judge Hanks declined to vacate the attachment.
Suit arising out of oil and gas operations on the OCS was removable even though it only alleged claims under the general maritime law; Broussard v. Gulf Offshore Logistics, LLC, No. 22-890, 2022 U.S. Dist. LEXIS 111885 (E.D. La. June 23, 2022) (Fallon).
Toby Broussard brought this suit in Louisiana state court seeking to recover for injuries he sustained while employed as an instrument technician on a rig located on the outer Continental Shelf off the coast of Louisiana. He only brought claims under the general maritime law and not under the Outer Continental Shelf Lands Act. Asserting that the injury occurred on a fixed platform, the defendants removed the case to federal court in Louisiana based on federal question jurisdiction from the OCSLA. Broussard moved to remand the case, but Judge Fallon denied the motion, noting that the plaintiff does not have to invoke the OCSLA in order for the statute to apply. If the requirements of the OCSLA are met, removal is proper, and, even if maritime law applies, it does not displace the federal question jurisdiction from the OCSLA. As Broussard’s employment furthered mineral development on the OCS, the court had federal question jurisdiction, and Judge Fallon held the removal was proper.
Failure to establish causation resulted in dismissal of claim against cruise line for medical malpractice and negligent hiring, retaining, and training of onboard doctor; Breaux v. NCL (Bahamas) Ltd., No. 20-21226, 2022 U.S. Dist. LEXIS 112199 (S.D. Fla. June 24, 2022) (Altman).
Sylvia Breaux was a passenger on the cruise ship BREAKAWAY. While the vessel was docked in Cozumel, Mexico, Breaux went ashore for sightseeing and shopping. She fell in a crowded restaurant and hit her head and arm (she had excruciating and sharp pain in her hand and arm, and her arm and hand were black). She returned to the ship and was examined by Dr. Maria Lee, a board-certified physician in emergency medicine in her home country of the Philippines. After taking X-Rays, Dr. Lee diagnosed a strain and put her arm in a splint with instructions for Breaux to follow up with an orthopedist when she got home. That follow up reflected that her elbow was dislocated and her arm was fractured in several places. Breaux brought this suit in federal court in Florida based on negligence of the doctor and negligent hiring, retaining, and training. The cruise line moved for summary judgment, and the parties disputed the applicable standard of care, with the cruise line contending that the standard of care at sea is different than on land. Judge Altman did not have to address that issue as he held that there was no evidence that Breaux’s injuries were caused by the medical treatment as opposed to the fall in the restaurant. Breaux argued that she suffered unnecessarily for four days before she received curative treatment, reasoning that the causal link of having a bone out of joint and the pain it causes is readily apparent to a lay person. Judge Altman agreed, but that argument missed the point. The question was not whether a lay person could link pain to the dislocation. The question was whether a lay person can link a portion of that pain to the doctor’s misdiagnosis (which did not exacerbate her injury) as opposed to the fall. This ruling was also fatal to the claim for negligent hiring, retention, and training, as those theories require some underlying tortious conduct. As there was no tortious conduct without evidence of causation, all of the claims were dismissed.
From the state courts . . .
Appellate court reversed interim order requiring payment of maintenance and cure based on informal procedure and not the rules of civil procedure; God’s Blessing Ltd. v. Salas, No. 3D22-420, 2022 Fla. App. LEXIS 3745 (Fla. App. 3d Dist. June 1, 2022) (Logue).
Kathy Salas brought this action in state court in Miami-Dade County, Florida seeking to recover as a seaman for injuries on the defendants’ vessel. She brought an emergency motion to reinstate maintenance and cure that was unverified and that contained pages of unauthenticated documents. It did not take the form of a motion for a temporary injunction, summary judgment, or other procedure authorized by the Florida Rules of Civil Procedure. Judge Johnson granted the motion, citing the inherent authority of the court, and the shipowners appealed. Salas argued that a trial court sitting in admiralty may grant interim maintenance and cure based on representations in a simple motion to compel that is not subject to procedures established in the rules of civil procedure (citing federal district court cases awarding interim maintenance in informal circumstances). Writing for the state court of appeals, Judge Logue declined to adopt that case law in Florida, noting that many federal courts have rejected the argument that admiralty courts can adopt informal procedures that are not recognized by the rules of civil procedure. Recognizing that state procedure is applicable in admiralty cases in state court, Judge Logue held that Salas was required to follow the rules of civil procedure and the order was reversed (without prejudice to filing a motion that complies with the rules).
State courts enforced seaman’s “venue-selection agreement” as a forum-selection clause; Risher v. Marquette Transportation Co. Gulf Inland, LLC, No. 05-21-00289-CV, 2022 Tex. App. LEXIS 3868 (Tex. App.—Dallas June 8, 2022) (Garcia).
Westley Risher claimed that he was injured while serving as a seaman on a Marquette vessel and brought this suit in state court in Houston, Texas. Marquette filed a limitation action in federal court in Houston, and the stay was lifted under the single-claimant rule. Marquette then moved to dismiss the state suit based on a “venue selection agreement” in his employment contract that provided that personal injury actions against Marquette be brought in the federal court for the Western District of Kentucky or the McCracken County Circuit Court in Paducah, Kentucky. Risher argued that the contractual provision was a venue-selection agreement that was unenforceable under Texas law. Judge Dollinger dismissed the case without prejudice, and Risher appealed. The appeal was transferred to the Dallas Court of Appeals based on a docket-equalization order, and, Justice Garcia, writing for the appellate court, first noted that the state court would apply substantive maritime law but follow state procedure. Although reasoning that not all clauses can be neatly labeled as forum-selection or venue-selection clauses, Justice Garcia cited a Texas case that concluded that an agreement contained a forum-selection clause because the choice in that case to select a county in the State of Florida as the proper venue necessarily implied that Florida was selected as the forum for the suit. Similarly, the selection of the two venues for suit in Kentucky included a selection of Kentucky as the forum for the suit. As Texas courts routinely enforce forum-selection clauses unless they are unreasonable or against a strong public policy, Justice Garcia agreed that the district judge was required to dismiss the suit filed in Texas state court.
Foreign worker injured on MODU in Spain could not bring an unseaworthiness action against the vessel owner based on the Tower Amendment to the Jones Act, resulting in reversal of verdict from Texas jury trial; Diamond Offshore Drilling, Inc. v. Black, No. 14-19-00905-CV, 2022 Tex. App. LEXIS 4009 (Tex. App.—Houston [14th Dist.] June 14, 2022) (Hassan).
William Black, a resident of the United Kingdom, was injured while working on board a mobile offshore drilling unit, the OCEAN VALIANT, while it was docked in Spain. The rig is owned by Diamond Rig Investments, and he was employed by Diamond Offshore Drilling (Bermuda) pursuant to an employment contract that required Black to bring any claims against Diamond Bermuda in the courts of Bermuda. Black brought this suit in Texas state court against Diamond Rig, its parent company, Diamond Drilling, and other subsidiaries of Diamond Drilling, asserting claims under the Jones Act, the general maritime law, and the laws of the United Kingdom. The defendants moved to dismiss the case for forum non conveniens, and the district judge granted the motion. The court of appeals reversed, however, for all of the defendants except Diamond Bermuda, reasoning that the claims against the non-signatories did not arise from the employment agreement. The case proceeded to a four-day jury trial, and the court granted a directed verdict on the Jones Act claim (based on the Tower Amendment to the Jones Act that bars claims under the Jones Act or general maritime law for foreign workers injured on vessels in foreign waters). The jury apportioned liability with 52% to the parent company, Diamond Drilling, 28% to the vessel owner, Diamond Rig, and 20% to Black (assessing damages at $2.75 million). Diamond Drilling argued on appeal that the claim against it was improperly submitted to the jury as a Jones Act claim (after the Jones Act claim was dismissed) because the submission omitted proximate cause and replaced it with “cause, in whole or in part” (the Jones Act standard). As the defendant did not object to the submission, the argument was waived and was not preserved for appeal. Additionally, the submission differed from a Jones Act submission and was based on a general negligence theory of recovery. Accordingly, the court of appeals considered whether there was sufficient evidence for the imposition of a duty—whether Black had a sufficient relationship with the parent company to support the imposition of a duty. Although Black pleaded English law claims as an alternative to the Jones Act and general maritime law, he did not comply with the Texas rule requiring proper notice before trial, leaving him with Texas law for the duty. Agreeing that the evidence established that Diamond Drilling assumed responsibility as the contractor for the vessel and employed the crew in some capacity, the appellate court held that there was a sufficient basis for the jury to impose liability on parent company Diamond Drilling. There was no basis for such a finding of a duty on behalf of the owner of the OCEAN VALIANT, Diamond Rig, and the appellate court agreed that it could not be liable for unseaworthiness under the general maritime law because of the Tower Amendment to the Jones Act. Therefore, the appellate court rendered judgment that the rig owner was not liable. As the jury could have apportioned liability differently between the parent company and Black had the rig owner not been included in the apportionment question, the court of appeals reversed the award against the parent company for a new trial.
Appellate court affirmed denial of warranty claims of catamaran purchaser against Texas dealer and French builder, declining to apply French law, and rejected misrepresentation claims based on disclaimer of reliance in Purchase Agreement; Scherer v. Texas Coast Yachts, LLC, No. 01-20-00412-CV, 2022 Tex. App. LEXIS 4306 (Tex. App.—Houston [1st Dist.] June 23. 2022) (Hightower).
John Scherer, who helped establish an oilfield company in West Texas, decided to buy a catamaran to sail from Texas to the Caribbean and East Coast after retiring. He purchased a 44-foot Helia sailing catamaran manufactured in France by Fountaine Pajot from a yacht dealership, Texas Coast Yachts. Claiming that a number of defects were not fixed in accordance with the yacht’s warranty, Scherer brought suit in state court in Galveston, Texas against Texas Coast and Fountaine, including a wide array of causes of action under Texas law and French law. Judge Foley held that Scherer could not pursue claims under French law, and the jury found in favor of the defendants on the Texas claims. Scherer pleaded warranty claims under federal (Magnuson-Moss Warranty Act) and state law, and Judge Foley submitted them to the jury as one question on the ground that state and federal law were not materially different. The jury found no breach of warranty on that submission, but Scherer argued that the decision not to submit the claim for legal guarantees under French law was error. Agreeing with Judge Foley, the court of appeals held that the liability elements of French law were not materially different than the Texas warranty claims that were rejected by the jury. Moreover, Scherer’s failure to challenge Judge Foley’s decision that Texas had the most significant relationship to the transaction was an independent basis for the decision not to apply French law. With respect to Scherer’s claims of negligent misrepresentation, the jury found that the claims were barred by the provision in the Purchase Agreement disclaiming reliance. Scherer challenged that finding on appeal, arguing that the intent to disclaim reliance is a question of law for the court. Although the Texas Supreme Court has held that this issue is decided as a question of law, the court of appeals held that any error in submitting the issue to the jury was harmless as the disclaimer of reliance in the Purchase Agreement was clear and unequivocal and binding on Scherer. Therefore, the appellate court affirmed the judgment denying Scherer’s claims.
Kenneth G. Engerrand
President, Brown Sims, P.C.
1177 West Loop South
Houston, TX 77027
1100 Poydras Street
New Orleans, LA 70163
2304 19th Street
Gulfport, MS 39501
4000 Ponce De Leon Blvd
Coral Gables, FL 33146
In his opinion setting aside the jury verdict, discussed above, Magistrate Judge Jonathan Goodman quoted American poet Ogden Nash: “When you’re wrong, admit it. When you’re right, shut up.”
Ewing v. Carnival Corp., No. 19-20264, 2022 U.S. Dist. LEXIS 95911 (S.D. Fla. May 27, 2022).
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