Notes From Your Updater:
The previous issue of this Update was the last one written by Tom Langan to his many loyal and long-suffering readers. He is enjoying his well-deserved retirement and was touched by the many emails he received from you. Tom was thankful for the assistance that you provided to him, and I would appreciate your continued assistance with cases or information that should be included in the monthly Updates. Please email me at firstname.lastname@example.org.
The Fifth Circuit has granted rehearing en banc from the decision of the panel of the Fifth Circuit in Latiolais v. Huntington Ingalls, Inc., 918 F.3d 406 (5th Cir. Mar. 11, 2019) (featured in the Update issued on April 1, 2019), denying removal of an asbestos exposure injury suit against a shipyard based on the Federal Officer Removal Statute. The grant of rehearing en banc is reported at No. 18-30652, 2019 U.S. App. Lexis 13795 (5th Cir. May 8, 2019).
The debate over the coverage of the Clean Water Act and its definition of “waters of the United States” continues. The Obama Administration issued a new regulation with a much broader definition of the waters of the United States (but excluding puddles and swimming pools), and the Trump Administration is in the process of narrowing that definition. In the meantime, the Supreme Court has agreed to hear argument on the question whether the CWA covers pollutants that are conveyed to navigable waters by a nonpoint source, such as groundwater in County of Maui, Hawaii v. Hawaii Wildlife Fund, No. 18-260. On May 28, 2019, Judge Hanks of the Southern District of Texas (an appointee of President Obama) declared that the final rule from the Obama Administration violated the notice and comment requirements of the Administrative Procedure Act. Texas v. United States EPA, No. 3:15-cv-162 (S.D. Tex. May 28, 2019).
On the LHWCA Front . . .
From the federal appellate courts:
Jurisdiction in Texas over longshoreman’s suit against foreign vessel manager for injury while unloading cargo in Texas. Carmona v. Leo Ship Management, Inc., No. 18-20248 (5th Cir. May 10, 2019) (Smith).
Jose Carmona was injured while unloading a cargo of pipes from a vessel docked outside Houston. The vessel was managed by a Philippine company (Leo Ship Management) that supplied and supervised the crew and arranged for repairs and maintenance of the ship but did not direct where it traveled. Cargo operations and the ship’s course were directed by the charterer. The cargo of pipes had been loaded outside the United States by a third party. Ship manager Leo did not solicit business in Texas and had never contracted with a Texas resident to render performance in Texas. Carmona sued Leo in state court in Houston, alleging negligence under Section 905(b) of the LHWCA, and Leo removed the case to federal court and moved to dismiss the action for lack of personal jurisdiction. As Leo did not control the itinerary and any contact with Texas was fortuitous or random, Judge Lake dismissed the case. On appeal, there was no dispute that the vessel, carrying employees of Leo, was docked outside Houston. The disagreement was whether the defendant’s contacts with Texas must be purposeful and whether its contacts were purposeful. Carmona contended that knowing and voluntary entry into the forum state, coupled with the commission of a tort in the state, is sufficient to support specific in personam jurisdiction. Thus, where the tortious act both occurred and caused injury within the forum, the court need not independently consider whether the conduct was purposefully directed at the forum state or whether the defendants purposefully availed itself of the forum state’s protections. The Fifth Circuit disagreed with that premise because purposeful availment is an essential element of in personam jurisdiction, even where the defendant committed a tort in the forum state. Thus, a defendant’s contacts with a forum and the purposefulness of the contacts are distinct inquiries. Tortious conduct within the forum ensures the existence of contacts, it does not always guarantee that such contacts were deliberate. Consequently, Leo had to purposely direct its activities to Texas or purposely avail itself of its protections. Although Leo did not choose the course of the vessel, it did purposely avail itself of Texas when its employees voluntarily entered Texas on the vessel. However, Carmona still had to establish that each of its claims arose out of Leo’s contacts with Texas. Although most of the claims arose from Leo’s conduct in Texas after the ship arrived (such as inspecting the pipes but failing to ensure that they were properly stacked for discharge), the claim of failure to load the pipes properly involved conduct outside the United Sates. Therefore, that claim was dismissed but the remaining claims were allowed to proceed in Texas.
Ninth Circuit affirms BRB and ALJ on average weekly wage and last employer decisions. Horton v. Specialty Finishes, LLC, Nos. 17-73335, 17-0168, 18-70089, 17-0168, 2019 U.S. App. Lexis 15764 (9th Cir. May 28, 2019) (per curiam).
Both the claimant and employer appealed the decision of the BRB, affirming Judge King’s decision that Specialty Finishes was claimant’s last responsible employer, but ruling that claimant’s yearly earnings from his prior employment were the “best estimate” of his future earning capacity for his average weekly wage. After working for 26 years as a rigger, coating vessels in shipyards, the work slowed down and claimant went to work for Specialty Finishes, injuring his back a week later. After treatment for about nine months, claimant was released either with restrictions or without depending on the medical provider. Claimant then went to work for a former employer, Industrial Marine, for about 3 ½ months, missing work on 15-20 days for back pain before he was laid off. Claimant later did landscape work for the Veteran’s Administration work rehabilitation program. With respect to the last responsible employer, the Ninth Circuit noted that once the claimant establishes a prima facie case against one employer, the burden is on that employer to prove that a different employer is responsible. Additionally, only the claimant and not an employer can invoke the Section 20(a) presumption. Claimant established a compensable injury with Specialty Finishes, and Specialty Finishes argued that claimant’s condition worsened while working for Industrial Marine. Based on claimant’s testimony that he was always in pain and that he did not reinjure his back while at Industrial Marine, Judge King found that claimant had established a prima facie case against Specialty Finishes and that Specialty Finishes did not carry its burden to rebut the presumption with its contentions against Industrial Marine. Citing the substantial evidence rule, the Ninth Circuit affirmed that decision, stating that a reasonable mind could have concluded that the pain was a natural progression of his initial injury, not a sign of aggravation. On the average weekly wage issue, claimant identified workers that he considered to be comparable, but Judge King ruled that they were not comparable because they were supervisors with a higher wage and more hours. Claimant asserted that he was willing to train as a supervisor, but his work history showed a long career working in a non-supervisory role. Judge King also rejected the wages of workers presented by Specialty Finishes as not being comparable. Therefore, Judge King accepted claimant’s earnings from his past two years of regular work in the industry as most representative of his wage earning capacity for his average weekly wage, and the Ninth Circuit affirmed the decision given the uncertainty as to the hours he would have worked had he not been injured.
From the federal district courts:
Vessel owner not liable to longshoreman when hatch cover fell on his head. Purvis v. Ceres Marine Terminals, Inc., No. CV417-211, 2019 U.S. Dist. Lexis 72773 (S.D. Ga. April 30, 2019) (Moore).
Albert Purvis sustained an injury while working as a lasher on Maersk Line’s vessel ANNA MAERSK while traversing through a manhole when the hatch cover of the manhole struck his head. It was his third time going through the manhole that day. Purvis argued that Maersk violated the turnover duty because the hatch cover was defective or, alternatively, the vessel crew must have opened the hatch cover and left it unlatched, an unreasonable hazard. Purvis did not visually inspect the cover, so he could not testify that the locking pin was up or down, and his testimony that something must have been wrong with the cover because it injured him was insufficient. Without any evidence of a defect in the hatch cover, there was no duty to warn. Similarly, there was no evidence that vessel crew opened the hatch or that an experienced stevedoring crew could not, by the exercise of ordinary care, have carried on cargo operations due to an open and unlatched hatch cover. Finally, there was no evidence that the defendant exercised active control over the longshore work so as to violate the active control duty or that the vessel crew became aware of any danger so as to invoke the duty to intervene. Judge Moore granted Maersk’s motion for summary judgment and dismissed Purvis’ claims.
Handing ladder to lasher and walking away presents triable issue of 905(b) negligence. Vargas v. APL Ltd., No. 15-cv-6981, 2019 U.S. Dist. Lexis 73686 (E.D.N.Y May 1, 2019) (Glasser).
Wilfredo Vargas was injured while working as a lasher on the APL PEARL at a terminal in Elizabeth, New Jersey. Vargas brought claims for negligence pursuant to Section 905(b) of the LHWCA, and his wife, Amanda, brought common-law claims for loss of consortium, services, and society. In their motion for summary judgment the defendants challenged Amanda’s claims with arguments derivative to their attack on Wilfredo’s claims. Inexplicably, the judge stated that the parties had not briefed the question whether New York or New Jersey law applied to Amanda’s claims as the spouse of a longshoreman who brought his claims pursuant to Section 905(b) for negligence of a vessel. Vargas was injured when the Mate of the APL PEARL identified a container that needed to be lashed located on a pedestal of the ship about 10 to 12 feet high. Because a container was sitting on the hatch blocking the ladder that was welded to the ship, the Mate brought a straight aluminum ladder for Vargas and walked away. As it was the only way to access the pedestal, Vargas leaned the ladder against the wall of the pedestal and climbed up, but the ladder slid out from underneath him and he fell to the deck, crushing his leg. Vargas had not asked for help, and he and the Mate both violated safety policies involving securing the ladder–fall protection, and unassisted use of a ladder. The district court addressed the second and third Scindia duties—the active control duty and the duty to intervene. In this case, there was a fact question whether the vessel owner breached the active control duty because the Mate told him to lash the container, the Mate handed him a ladder, and the only way to reach the pedestal was by the ladder. The non-verbal command to use the ladder was sufficient control over the actual methods and operative details of the lasher’s work to implicate the active control duty. Although the breach of the defendant’s own procedures does not independently create a duty under Section 905(b), once the duty has been triggered, the vessel’s policies are relevant in determining whether the crew acted reasonably and breached the duty. The failure to adhere to the policies in this case was evidence from which a fact finder could find a breach of the active control duty. That left the question of whether the vessel’s breach proximately caused the accident. Vargas admitted that there were several things he could have done to avoid the accident, but that does not break the chain of causation if the plaintiff’s negligence was foreseeable to the defendant (based on the approach taken in the Restatement (Second) of Torts). As the court considered it foreseeable that Vargas would use the ladder as he did when the Mate walked away, the court denied the vessel owner’s motion for summary judgment on the active control duty. However, there was no evidence of any actual knowledge of the vessel crew that the lasher was not exercising reasonable care, so summary judgment was granted on the duty to intervene.
Judge rejects argument that vessel cannot close its eyes and claim that it did not have knowledge. Overton v. M/V Altro Donna, LLC, No. 18-6338, 2019 U.S. Dist. Lexis 74262 (E.D. La. May 2, 2019) (Africk).
Overton was a longshoreman who was injured on the vessel TOMORROW after the completion of discharge of cargo from the vessel. The discharge involved a barge that was moored alongside the TOMORROW by lines and cables that were laid across the deck of the TOMORROW and secured by the stevedoring crew. The cables and lines belonged to the stevedoring company. The longshoremen had placed yellow caution tape on the deck along the cables. There was no involvement of the crew of the TOMORROW in mooring the barge or in monitoring the cargo during the discharge. After the discharge was complete, Overton went to the deck of the TOMORROW to wait for the tug to arrive and remove the barge. While Overton was standing on the deck of the vessel, aware of the cable next to him, the tug pushed the barge upriver, causing the cable to move and strike Overton, causing him to fall and break both ankles. Overton brought a duty to intervene claim under the Scindia standards for Section 905(b). The crew of the TOMORROW denied any knowledge of the method of mooring or the way in which the tug picked up the barge. In response, Overton argued that the vessel owner cannot simply close its eyes to an obvious danger and then claim that it is not responsible because it lacked actual knowledge. The Scindia duty to intervene, however, requires actual knowledge, and without evidence of actual knowledge, Judge Africk granted summary judgment to the vessel owner.
LHWCA Section 905(b) does not provide for federal jurisdiction. Elder v. Cellcontainer No. 8 Corp., No. CV 19-2574, 2019 U.S. Dist. Lexis 75314 (C.D. Cal. May 3, 2019).
Patrick Elder brought suit in Los Angeles Superior Court for injuries he sustained when he fell from the gangway of Cellcontainer’s vessel. The defendants removed the case to federal court based on diversity and federal question jurisdiction. The allegations for diversity were insufficient, and the court addressed whether Section 905(b) of the LHWCA provides a basis for federal question jurisdiction. Although the Ninth Circuit has not ruled on this point, the district court was persuaded by the decisions of the Fifth Circuit that have held that Section 905(b) does not provide for federal question jurisdiction and remanded the case to state court.
Third-party action for indemnity should be heard in the main case. Angelle v. Spartan Offshore Drilling, LLC, No. 17-7707, 2019 U.S. Dist. Lexis 75597 (E.D. La. May 6, 2019) (Wilkinson).
The plaintiff brought suit as a Jones Act claim against the owner of an offshore jack-up drilling vessel and his employer, but the court held that the plaintiff was not a seaman and dismissed the employer from the suit. The vessel owner then moved for leave to bring a contractual indemnity action against the employer, and Magistrate Judge Wilkinson granted the motion, noting that the claim would complicate a trial in this case but that it would allow all claims to be brought in one suit, eliminating unnecessarily duplicative and costly litigation.
From the state courts:
Longshoreman recovers from stevedoring companies for mesothelioma. Craft v. Ports America Gulfport, Inc., No. 2018-CA-0814, 2019 La. App. Lexis 807 (La. App. 4 Cir. May 8, 2019) (Bartholomew-Woods)
Jerry Craft, who loaded and unloaded cargo from ships at the Port of New Orleans was diagnosed with mesothelioma at the age of 82. He brought suit against his stevedore employers in Louisiana state court for exposure to asbestos during his employment on the waterfront from 1953 to 1989. The case proceeded to trial against the stevedores that declined to settle, and the jury found the defendants negligent and awarded Craft $2,960,000. After the trial judge reduced the award to $986,666.68 based on credit for the settlements, the defendants filed post-judgment motions attacking the negligence finding and the award of $1 million for future medical expenses. The judge denied the first and granted the second. Craft and the defendants both appealed. Craft’s appeal asserted that the jury abused its discretion in awarding him only $1.6 million in general damages (past and future pain and suffering, disability, and loss of enjoyment of life. Acknowledging that Craft had suffered while undergoing several procedures and continually receiving chemotherapy since his diagnosis, the court declined to disturb the jury’s award of general damages. The court of appeal did, however, reverse the denial of future medical expenses of $1 million. Craft did not produce evidence of the amount of future medical costs, or the frequency or type of future medical treatment that was required. But he did present evidence from his physicians that he would need ongoing chemotherapy and palliative care for the rest of his life, and he presented evidence of the $360,000 in past medical expenses. The appellate court held that this was sufficient to support the jury’s award of $1 million for future treatment. The stevedoring companies also argued that Craft failed to establish a duty for stevedoring companies in the 1960s and 1970s regarding handling asbestos as there was no evidence that they knew or should have known of the effects of asbestos or that they violated any governmental regulations or industry standards. However, Craft presented the testimony of Professor Markowitz, an expert in the field of history with a subspecialty in occupational health, public health, and environmental health. He testified that there were articles published in the early 20th century on the dangers of asbestos and that by 1930 it was established that asbestos could cause disease or death for those who inhaled asbestos fibers. Concluding that the trial court did not commit manifest error in allowing the testimony of Professor Markowitz over the objection that he was a historian and not a qualified industry expert, the court of appeal upheld the negligence finding.
And on the Maritime Front . . .
From the federal appellate courts:
Failure to follow judge’s order results in dismissal of some claims but not others. In re Deepwater Horizon (Graham v. BP Exploration & Production, Inc.), 2019 U.S. App. Lexis 12904 (5th Cir. April 29, 2019) (Duncan).
This appeal involves personal injury claims arising from exposures during the clean-up of the Deepwater Horizon/Macondo oil spill. In its efforts to oversee the hundreds of thousands of claims (which the Fifth Circuit described as “herculean”), Judge Barbier created pleading bundles for various categories of cases and claims. Two groups of claims were the Lindsay Appellants and the D’Amico Appellants, which were put into the B3 bundle of claims. As the case progressed, Judge Barbier issued an order dismissing the B3 complaint and ordering plaintiffs who had filed a single complaint to complete a sworn statement by April 12, 2017 or their complaint would be dismissed with prejudice. For plaintiffs who had not filed individual suits or who simply filed a joinder in the B3 complaint, he order them to file an individual lawsuit or their claims would be dismissed with prejudice. The more than 800 Lindsay Appellants sought relief from the order, which was denied, but Judge Barbier granted them an extension to May 3, 2017 to comply. When they made no additional filing, their claims were dismissed with prejudice on July 18, 2017. The 17 D’Amico Appellants had filed three lawsuits, and believing that those qualified as individual suits, simply filed sworn statements. As they had not each filed a suit, Judge Barbier dismissed their claims with prejudice on July 18, 2017. Concluding that the actions of the Lindsay plaintiffs constituted contumacious conduct, the Fifth Circuit affirmed the dismissal with prejudice sanction for their claims. However, the Fifth Circuit held that the D’Amico plaintiffs were not guilty of contumacious conduct because they tried to comply with the order but simply made a mistake. As being wrong is different from willful conduct, the court held that dismissal of their claims with prejudice as a sanction was erroneous.
No recovery for seaman’s fall while wearing tennis shoes to fix the vessel’s engine. Dean v. Sea Supply, Inc., No. 18-31023, 2019 U.S. App. Lexis 12965 (5th Cir. April 30, 2019) (per curiam).
Vessel Captain Johnny Dean fell while working to fix the engine on the JESSICA ELIZABETH. He was wearing tennis shoes despite the vessel safety manual providing that he should be wearing safety-toed shoes or boots with slip-resistant soles. Dean claimed that his employer/vessel owner was negligent under the Jones Act and that the vessel was unseaworthy because of the broken engine and failure to have it fixed sooner. Following a three-day bench trial, Judge Eldon Fallon found Dean to be 100% at fault for failing to properly prepare for the conditions he knew he was likely to encounter while fixing the engine. The Fifth Circuit easily affirmed Judge Fallon’s findings on causation and fault, but Dean presented a new argument on appeal—that the design of the vessel was unseaworthy because the worker was required to stand in oily bilge while repairing the engine. Although the issue was waived, the Fifth Circuit held that a design, which forces a seaman to stand in oily bilge, does not always render the vessel unseaworthy. First, his placement of absorbent pads in the bilge minimized the dangers of slipping while he worked. More important, the district court found that Dean’s conduct was the sole cause of the accident. Thus, even if the vessel were unseaworthy, Dean could still not recover.
Award to Florida construction company from the BP Economic and Property Damages Settlement Agreement affirmed by the Fifth Circuit. BP Exploration & Production, Inc. v. Claimant ID 100212052, No. 18-30588 (5th Cir. May 7, 2019) (per curiam).
This is another appeal from the hundreds of thousands of economic loss claims filed in connection with the Economic and Property Damages Settlement Agreement from the DEEPWATER HORIZON/Macondo blowout. The question was whether equipment rental expenses for a Florida construction contractor should be considered as fixed or variable expense (fixed expenses are not subtracted from monthly revenue in calculating any reduction in variable profit during the compensation period). Agreeing with the decision not to classify the claimant as an excluded real estate developer and with the decision to treat the expenses as a fixed expense (increasing the recovery by more than $500,000), the Fifth Circuit affirmed the award of $6,163,089.80.
No award to golf course operator from the BP Economic and Property Damages Settlement Agreement. Claimant ID 100260597 v. BP Exploration & Production, Inc., No. 18-31134 (5th Cir. May 8, 2019) (per curiam).
The claim for economic losses of La Tour, operator of a golf course located southwest of New Orleans, in Zone C of the Deepwater Horizon Economic and Property Damages Settlement Agreement, was denied because the claims administrator would not remove from revenue the credit given a new member to purchase a home from a sister company that sells real estate bordering the golf course. The district court denied discretionary review over the decision, and the Fifth Circuit upheld that decision as within the discretion of the district court.
Marina/repairer liable for damage to vessel during Superstorm Sandy. National Union Fire Insurance Company v. Garpo Marine Services, Inc., No. 17-3286, 2019 U.S. App. Lexis 13870 (2d Cir. May 9, 2019) (per curiam).
This case involved the damage to and sinking of the dinner cruise boat STAR OF AMERICA at the staging dock of the Garpo Marine Services Marina when it was battered by Superstorm Sandy. The owners of the vessel delivered it to the marina/repairer the night before the storm for repair under an agreement that the boat would be hauled to land before the storm arrived (as found by the district court). The defendant did not haul the vessel to land or move it to a more secure pontoon dock (where other vessels were not damaged in the storm). After paying for the damage, the vessel’s insurer brought suit against the marina/repairer under several theories, including negligence as a bailee. As the case involved the storage and maintenance of a vessel, the court considered the case under its maritime jurisdiction. The district court held the defendant was liable as a bailee, and the Second Circuit affirmed. Agreeing that the oral agreement to repair the vessel created a bailment when the vessel was delivered to the marina/repairer, the court of appeals held that a presumption of negligence arose when the defendant returned the vessel destroyed. The defendant argued that there was no proper delivery to the marina/repairer because the owner tied up the vessel, locked the vessel, and took the keys, so the defendant did not have exclusive control of the vessel. The Second Circuit rejected that argument as the hauling process did not require any keys, so the bailment was effectively created when the vessel was left at the dock.
Doctor’s denial of recovery from BP Economic and Property Damages Settlement Agreement affirmed by Fifth Circuit. Claimant ID 100222322 v. BP Exploration& Production, Inc., No. 18-30241, 2019 U.S. App. Lexis 13952 (5th Cir. May 9, 2019) (per curiam).
Sarasota Health Group was founded by two doctors and a lawyer in Sarasota, Florida in 2000, but in March 2009 its assets were all purchased by one of the doctors, Michael Dattoli as Michael Dattoli, PLC. After the Deepwater Horizon/Macondo blowout in April 2010, Dr. Dattoli brought a business economic loss claim, but his claim was classified as that of a start-up business because it had been in existence for less than 18 months and was therefore subject to a more stringent causation standard that resulted in a denial of the claim. Dr. Dattoli contended that his underlying business operation continued essentially unchanged after the asset purchase, but the Fifth Circuit rejected that argument. The PLC was a distinct entity from its predecessor and had to be treated separately, even though it continued the same business.
Seaman’s motion to set aside judgment filed too late. Ghaleb v. American Steamship Co., No. 18-1742, 2019 U.S. App. Lexis 13928 (6th Cir. May 9, 2019) (Larsen).
Ghaleb brought a seaman’s suit for injuries, and the jury found for his employer on all three claims. The district court granted the seaman’s motion for judgment as a matter of law on Ghaleb’s claim of negligence per se (January 2016 Update), but the Sixth Circuit reversed and rendered judgment for the employer on the jury verdict (May 2017 Update). Five months after the reinstated verdict and nearly two-and-a-half years after the trial, Ghaleb moved to set aside the judgment on the ground that one of the employer’s trial witnesses gave testimony that was inconsistent with his deposition testimony and the employer had not supplemented its disclosures to reflect the change even though the defendant was aware of the change in testimony before trial. Although the motion had to be filed no more than a year after the entry of the judgment, the clock did not begin ticking until the movant should have been aware of the factual basis for the motion. Assuming that the reinstated jury verdict started his one-year filing window, the district court found the five-month gap between the reinstated verdict and the filing of the motion to be unreasonable, and the Sixth Circuit held that there was no abuse of discretion in that decision.
Construction contractor does not have to show amount of revenue it would have collected absent competitor for Zone D recovery in the BP Economic and Property Damages Settlement Agreement. BP Exploration & Production, Inc. v. Claimant ID 100283067, No. 18-31113, 2019 U.S. App. Lexis 14375 (5th Cir. May 15, 2019) (per curiam).
The claimant in the Economic and Property Damages Settlement Agreement was a construction contractor in Naples, Florida. As it was in economic loss Zone D, the claimant had to show both a decline in revenue in 2010 and one of the six factors which prevented its recovery of revenue in 2011. It would then be compensated for the profit it would have earned during the designated post-spill period. Claimant sought to satisfy the factor, entry of a competitor in 2011. Claimant contended that it was not required to establish an exact amount of lost profit, only that there was a specific factor out of its control and not the amount of revenue it would have collected absent that factor. Concluding that the appeals panel did not misapply the Settlement Agreement when it determined that the claimant did not have to demonstrate the amount of revenue it would have collected absent the factor, the Fifth Circuit affirmed the award (compare to Claimant 100324302 below).
Loss of a customer’s customer is insufficient for recovery in the BP Economic and Property Damages Settlement Agreement. BP Exploration & Production, Inc. v. Claimant ID 100315902 (McWhorter & Co.), No. 18-30801, 2019 U.S. App. Lexis 14408 (5th Cir. May 15, 2019) (Costa).
The claimant in the Economic and Property Damages Settlement Agreement was McWhorter & Co., an Alabama construction company that is located in the farthest zone from the spill, Zone D. The district court overturned a panel decision on an argument that the claimant contended was not raised by BP at any stage of the proceeding prior to the appeal to the district court. Regardless of whether the issue was properly raised, Judge Costa analyzed that the district court had authority to ensure that the settlement agreement was properly administered and it cannot be an abuse of discretion to try to fulfill that goal by considering arguments about its administration, even if not properly raised below. Turning to the merits, the claimant constructed Lowe’s Home Improvement Stores. However, the claimant did not contract with Lowe’s directly. It contracted with an affiliated company, McWhorter Properties, which contracted with Lowe’s. Seeking to establish that factors outside the control of the claimant prevented the recovery of revenues, claimant pointed to Lowe’s decision to halt construction of new stores. However, Lowe’s was not claimant’s customer; its affiliate was its customer. As the loss of a customer’s customer is not a factor recognized in the agreement, claimant failed to establish it was entitled to recover.
Cruise ship not liable when part of lighting machine above the dance floor fell on her head. Sutton v. Royal Caribbean Cruises Ltd., No. 18-10693, 2019 U.S. App. Lexis 14531 (11th Cir. May 16, 2019) (per curiam).
Jennifer Sutton was injured on the dance floor of a cruise ship when part of a lighting machine that was suspended above the dance floor fell on her head. According to the passenger’s expert, the machine required quarterly inspection and fell because bolts connecting bolts loosened over time. However, the cruise line had inspected the machine two months before the incident and there was no evidence of any similar incident. Without actual notice or a history of similar incidents, the district court granted summary judgment. The Eleventh Circuit affirmed, concluding that the expert opinion did not raise a genuine issue of material fact whether the cruise line was on notice that it needed to inspect the bolts. However, even if it did, the machine had been inspected less than a quarter of a year before the accident and there was no indication of any problem. The court of appeals also rejected use of res ipsa loquitur as there was no evidence of the element of that doctrine that the injury ordinarily would not have occurred without negligence.
Federal court abused discretion in not lifting limitation stay before dismissing complaint. In re Williams Sports Rentals, Inc., No. 18-15006, 2019 U.S. App. Lexis 14693 (8th Cir. May 17, 2019) (per curiam).
After plaintiff Willis was thrown into Lake Tahoe from a Wave Runner rented from Williams Sports Rentals, resulting in his drowning, Williams filed a limitation action in federal court. Declining to lift the stay, Judge Mendez gave the plaintiff three opportunities to amend the counterclaim in limitation before dismissing it with prejudice on the ground that further pleading would be futile. Noting that in single claimant situations, the discretion of the district court to maintain or dissolve the limitation injunction is narrowly circumscribed, the Ninth Circuit reversed the dismissal and directed the district court to conduct a proper inquiry whether the right to limit liability would be prejudiced by lifting the stay to allow the case to proceed outside the limitation action.
Seaman’s attorney allowed to withdraw and summary judgment based on lack of evidence of medical causation reversed. Gowdy v. Marine Spill Response Corp., No. 17-41198, 2019 U.S. App. Lexis 15395 (5th Cir. May 23, 2019) (Higginson).
James Earlton Gowdy claimed that he sustained an injury on defendant’s vessel when he stepped off the last rung of a ladder that was dangerously raised four feet off the deck with clutter around the ladder that caused him to have to jump to the left. He was originally represented by attorney Matthew Shaffer, but within three months of filing suit, Shaffer moved to withdraw as counsel, citing irreconcilable differences in the management of the litigation. Judge Hanks held a hearing at which Gowdy alleged that the defendant’s counsel prompted the withdrawal by presenting Shaffer with false and misleading information about a person with a similar name, James Edward Gowdy. Shaffer allegedly pointed at defense counsel at the conclusion of the hearing and told Gowdy, “Here’s the guy who sent us all this false information about you.” After Judge Hanks allowed the withdrawal, the defendant moved for summary judgment, citing medical evidence that his injury would not have occurred by stepping off the bottom rung of the ladder. Acting pro se, Gowdy opposed the motion on the ground that his medical changes occurred after the incident, arguing that the causation was something anyone can understand. Judge Hanks granted the motion because Gowdy did not have an expert to testify on medical causation, and Gowdy appealed both the order allowing withdrawal and the granting of the motion for summary judgment. Without any basis to challenge the veracity of Shaffer’s representation that there were irreconcilable differences over the management of the litigation, the Fifth Circuit affirmed the order permitting Shaffer to withdraw. Judge Higginson pointed out that Gowdy did not explain (nor does common sense) why information about a person unrelated to the case would cause an attorney to withdraw. On the causation issue, Judge Higginson noted that there are some situation where the Jones Act plaintiff must have expert testimony on causation, such as in cumulative trauma cases. However, expert testimony is not required in cases where the nature of the injury can be understood by lay fact-finders based on ordinary knowledge and experience (such as a broken leg suffered after being struck by an automobile). Holding that the causation from a foot injury that occurred after stepping from a ladder is closer to breaking one’s leg after being hit by a car than to developing cancer after years of toxic tort exposure, the Fifth Circuit overturned the summary judgment and ruled that the jury would decide causation. Judge Higginson did state that proximate causation is not necessary for a Jones Act negligence claim, and that the unseaworthiness claim, requiring proximate cause, only requires a causation inquiry that is different in degree, not in kind, from the Jones Act causation.
Denial of claim of Tampa Bay Buccaneers from the BP Economic and Property Damages Settlement Agreement affirmed by the Fifth Circuit. BP Exploration & Production, Inc. v. Claimant ID 100246928, No. 18-30375 (5th Cir. May 24, 2019) (Costa).
The Tampa Bay Buccaneers sought to recover in the BP Economic and Property Damages Settlement Agreement on the ground that it sustained a downturn in revenues in the three months after the spill compared to an upturn in the same months in the year after the spill. The upturn was the result of recording no monthly revenue from NFL Ventures in 2010 for those months but the recording of monthly revenue from NFL Ventures for the same months in 2011. The reason for the difference in attribution was that in 2011 there was a labor dispute that threatened the 2011 football season, so the income was recorded outside of the months of the football season in case there was a lockout. The Claims Administrator reallocated the revenue so that it was recorded in the same fashion as in all other years, but an Appeal Panel agreed with the Buccaneers and upheld the claim. Judge Barbier disagreed, finding the lockout explanation was “not persuasive” and the Fifth Circuit upheld the reallocation and consequent denial of the claim. The result was obvious from the first paragraphs of the opinion when Judge Costa noted that businesses with attenuated connections to the Gulf, such as nonprofits and law firms had received compensation and then noted that the Buccaneers went 10-6 in 2010 after the blowout and have not had a 10-win season since (the team went 3-13 in 2009).
Pollution insurer not liable for lightering and salvage operations on grounded oil barges without threat of discharge of oil. Starr Indemnity and Liability Co. v. Water Quality Insurance Syndicate, No. 18-1563 (2d Cir. May 29, 2019) (per curiam).
When two of its oil barges grounded in the Mississippi River, Genesis Marine successfully lightered the oil from the barges and refloated them. Genesis sought coverage under its P&I policy with Starr and its pollution liability policy with WQIS. Starr paid for the costs and brought a subrogation action against WQIS in federal court in New York. Judge Engelmayer held that coverage was not triggered under the WQIS policy because the grounding never posed a substantial threat of discharge under OPA 90, and the lightering and salvage costs were not incurred to mitigate a perceived threat of discharge, despite the testimony of the testimony of a Coast Guard officer that the Coast Guard considered there to be a substantial threat of discharge so long as the barges remained grounded with oil onboard. As there was evidence to the contrary and the officer’s testimony was not entitled to Chevron deference, the Second Circuit affirmed Judge Engelmayer’s decision that the WQIS policy did not afford coverage.
Road and bridge construction company does have to show required factor for Zone D recovery prevented recovery of revenues in 2011 in order to recover from Deepwater Horizon Economic and Property Damages Settlement Agreement. Claimant ID 100324302 v. BP Exploration & Production, Inc., No. 18-31221 (5th Cir. May 30, 2019) (per curiam).
As the claimant’s road and bridge building work was in Zone D, the claimant had to show a decline in revenue after the spill and one of the specific factors outside the control of claimant that prevented the recovery of revenues in 2011. The claimant asserted that a competitor entered the market in 2011 and bid on at least two of the same projects in 2011 on which claimant also bid. The appeals panel denied recovery, noting that the claimant’s documentation was silent as to how the competitor prevented recovery of lost revenue for the claimant. The Fifth Circuit agreed that the appeals panel’s reading of the settlement agreement was correct—there must be evidence not only of one of the enumerated factors, but that the factor must have prevented the recovery of revenues in 2011. That does not mean that the claimant would have to show the amount of revenue it lost (compare to Claimant 100283067 above).
From the federal district courts:
McCorpen defense not decided on motion for summary judgment. Young v. Freeport McMoran Oil & Gas, Inc., No. 18-4464, 2019 U.S. Dist Lexis 72490 (E.D. La. April 30, 2019) (Zainey).
The vessel owner sought to invoke the McCorpen defense and have the court order that seaman Curtis Young should forfeit his maintenance and cure for willful concealment of his pre-existing back injury when he was hired. Judge Zainey was not persuaded that the McCorpen question should be decided on a motion for summary judgment and ruled that the defense would be decided as part of the trial on the merits (Judge Zainey advised that he was particularly concerned whether there was a sufficient connection between any withheld information and the injuries at issue in the lawsuit).
Misrepresentation voids insurance coverage under uberrimae fidei. Quintero v. Geico Marine Insurance Co., No. 0:18-cv-62093, 2019 U.S. Dist. Lexis 74422 (S.D. Fla. May 1, 2019) (Ungaro).
Alfred Quintero insured his 2008 Renegade Boats Runabout in Broward County, Florida with Geico Marine with a policy period from May 5, 2017 to May 5, 2018. On May 4, 2018, a Geico representative called Quintero to advise him that his policy was up for renewal and the automatic withdrawal from his credit card on file to pay for the next installment had been declined. Quintero told Geico that it should lower the amount owed or it would lose him as a customer, and he did not pay the installment that was due on May 5 for the renewal. On May 10, 2018, Geico sent Quintero a Notice of Policy Expiration effective as of May 5, 2018. On May 25, 2018 at approximately 7:28 a.m., Quintero called Geico “to pay his boat policy.” In order to reinstate the policy, Geico asked about the status of the boat and Quintero responded that the boat was sound and seaworthy, that the last time he physically saw the boat was “every day,” and that the location of the boat was: “It’s in my house.” Geico then reinstated the policy retroactive to May 5, 2018. Seven hours later, at 2:43 p.m., Quintero called the police to report the theft of his boat and trailer. At approximately 6:30 p.m. that day he called Geico to make a claim for the stolen vessel with a date of loss of May 25, 2018. The police report noted that video surveillance from a neighbor’s home showed that the vessel had been hauled away at 4:58 a.m. on May 25, 2018, three hours before Quintero called Geico to reinstate the policy. Geico responded by rescinding the policy ab initio because of his material misrepresentation when he called to reinstate the policy. The district judge noted that there would be no coverage under the general maritime uberrimae fidei rule that voids coverage when the insured fails to disclose a material fact, whether from mistake, negligence, or ignorance. The statements that he had physically seen the boat every day and that it was in his house were sufficient to void the policy pursuant to this doctrine. However, the parties to the policy may contract around uberrimae fidei by a provision that requires an intentional concealment or misrepresentation. In this case, the policy only required that the insured have omitted, concealed, or misrepresented a material matter before or after any loss. That did not add a higher standard than uberrimae fidei, so the court concluded that the policy was void ab initio.
Salvage contract does not bar pure salvage claim. Argos Ports (Houston) LLC v. Kirby Inland Marine, LP, No. H-18-0327, 2019 U.S. Dist. Lexis 74174 (S.D. Tex. May 2, 2019) (Lake).
This case presents an issue of salvage law that has not been resolved by the courts. Kirby Inland Marine owns a barge-fleeting facility on Greens Bayou in Houston where it maintains a fleet of barges owned by several third parties, including Ingram, Marquette, and Terral. There were 71 barges at the facility when Hurricane Harvey struck. Argosy Barge Lines maintained a terminal upstream from the Kirby terminal, and Kirby alleged that four of the Argosy barges broke free during the storm and resulted in 71 barges at the Kirby terminal breaking free, causing damages to the Kirby barges, to the Argos Ports (Houston) facility, and causing a damming effect to Greens Bayou that resulted in flooding and further damage to facilities along Greens Bayou. After the breakaway, Kirby contracted with T&T Salvage to conduct a salvage operation on all of the barges in the channel, including those owned by Ceres, Ingram, Marquette, and Terral. T&T assigned all of its salvage rights to Kirby as part of the salvage contract. When Argos Ports sued Kirby for damage to its facility, Kirby brought a third-party complaint against Argosy, blaming Argosy for causing the Kirby barges to become unmoored, and a third-party complaint against all of the barge owners seeking to recover a salvage award for rescuing their barges after the storm. Barge owner Terral responded by arguing that Kirby had no right to a salvage award because Kirby had contracted with T&T to rescue the barges, so Kirby could not satisfy the elements for a salvage award—specifically the requirement of a voluntary act. Kirby noted that there are two bases for salvage, pure salvage and contract salvage. If the vessel owner and salvor enter into a contract for salvage, the contractual undertaking is a defense to a pure salvage claim. Terral tried to invoke that defense in this case, asserting that, because Kirby had entered into a contract with T&T to perform the salvage, Kirby did not act as a volunteer in salvaging the barges. Judge Lake noted that Kirby’s claim sounded in pure salvage, not contract salvage. Although the services rendered by Kirby were not those traditionally contemplated by the general maritime law, they were still done voluntarily to rescue the barges. Therefore, the existence of the contract did not preclude Kirby from asserting a pure salvage claim against Terral and the other barge owners. Terral also moved to have the salvage claims tried separately from the claims involving the liability for the breakaways. As there are a number of common issues of law and fact, however, Judge Lake denied that motion.
Civil actions are not the place for criminal prosecutions. Spence v. Motor Vessel “Beast of Burden,” No. 3:19-835, 2019 U.S. Dist. Lexis 75908 (D.S.C. May 6, 2019) (Hodges).
Spence obtained title to an abandoned wreckage by order of a federal judge but complained that defendant John Tellam and others conducted operations within the area of the wreckage using the vessel BEAST OF BURDEN. In this suit, Spence asserted violations of federal criminal laws for plunder of a distressed vessel and conspiracy to plunder a distressed vessel. He also brought a common-law larceny action and an action in rem for forfeiture of the BEAST OF BURDEN. Magistrate Judge Hodges responded to each of the claims. First, private individuals do not have the right to pursue criminal charges against others by way of a civil lawsuit. With respect to the in personam common-law larceny action, the judge instructed that Spence was going to have to establish subject matter jurisdiction against Tellam, noting that for diversity Tellam would have to be a resident of a state that is diverse from Spence. Judge Hodges also instructed that Spence was not entitled to a forfeiture of BEAST OF BURDEN for violations of the criminal code because only the government can seek forfeiture. Finally, as to an in rem arrest of the vessel, the judge noted the substantial fees that will be necessary to arrest the vessel and that the vessel will have to be located within the district.
Note sent to registered agent for vessel owner insufficient to initiate six-month period to file limitation petition. In re Vulcan Construction Materials, LLC, No. 2:18-cv-668, 2019 U.S. Dist. Lexis 77365 (E.D. Va. May 7, 2019) (Doumar).
Robert Dervishian was injured while assisting with the mooring of barges at a terminal in Charles City, Virginia, allegedly by the fault of the tug Jeanie Clay, operated by Vulcan Construction. Just over six months before filing suit seeking $45 million, Dervishian’s lawyer served a letter of representation on Vulcan’s registered agent, advising of the representation of Dervishian in connection with his serious injuries due to the alleged negligence of Vulcan and advising, “A claim may be filed.” Vulcan did not file a petition for limitation of liability until after suit was filed, which was more than six months after the notice letter. The question was whether the notice was sufficient to trigger the six-month period during which the owner must file the limitation period under the Limitation of Liability Act. Judge Doumar held that the written notice was insufficient, so the limitation action was timely. First, the style and appearance of the note gave little indication of a potential legal claim or the nature of the claim. The note did not even contain letterhead indicating that it was sent from a law firm, and it was couched in tentative terms that a claim may be filed. Although it did blame Vulcan for negligence, it failed to quantify the claim in any manner to give some indication of the extent of injuries or the amount at issue. The court concluded that this was a cryptic and vague note designed to mislead.
Cannot support a default judgment without specifics. Orient Express Container Co. v. Verde Textile USA Corp., No. 18-CV-5847, 2019 U.S. Dist. Lexis 78491 (S.D.N.Y. May 9, 2019) (Oetken).
Orient Express carried a shipment of goods from China to Long Beach, California, but the consignee failed to pick up the goods and Orient put them in storage. The bill of lading gave Orient a lien on the cargo for all sums due under the contract as well as the costs of recovering such sums and attorney fees. After giving the consignee notice of the charges and that it would sell the goods to pay for them, Orient instituted this action and moved for a default judgment when the consignee did not answer. Although the court agreed that Orient was entitled to conduct a public or private sale of the goods to recoup the amounts that it was owed, the court could not determine those amounts because the affidavit only identified that Orient had incurred $17,857.00 in expenses, $1,218.70 in interest, and $7,000 in attorney fees. Without details for the storage fees, an articulated basis for the calculation of the interest, and timesheets or affidavits attesting to the attorneys’ hourly rates and number of hours, the court could not declare what amounts to award.
Arbitration agreement in marine insurance policy is enforceable under the FAA. Gray v. Ace American Insurance Co., No. 8:18-cv-2912, 2019 U.S. Dist. Lexis 78438 (M.D. Fla. May 9, 2019) (Jung).
ACE and its insured disputed whether damage to the bottom of its insured’s vessel that caused the vessel to sink and capsize was due to the striking of a submerged object or delamination due to a hull defect. When the insured brought suit, ACE invoked the arbitration clause in its policy, and the insured declined to arbitrate, contending that Florida law and not the Federal Arbitration Act applied. The insured argued that the FAA must yield to Florida law because (under a Wilburn Boat analysis) the McCarran-Ferguson Act protects state insurance regulation from federal encroachment. However, Judge Jung ruled that no Florida insurance statute was cited that impaired, invalidated, or superseded the FAA, so he stayed the case and directed the parties to arbitration.
Tankerman who stepped on stern line during its replacement recovered under the Jones Act. Knight v. Kirby Offshore Marine, LLC, No. 17-12456, 2019 U.S. Dist. Lexis 79040 (E.D. La. May 10, 2019) (Milazzo).
Andrew Knight was injured on the tug SEA HAWK during the towing of a barge from Washington to Alaska (with several stops during the voyage). During a storm while the vessel was in port, the stern line used to secure the barge when entering and exiting ports (but not in open water) became chafed. The Captain could have ordered the replacement of the line while the vessel was in port but waited until the vessel was at sea. After the chafed line had been placed on the deck and Knight was placing a new line onto the winch, he stepped on the old line and rolled his ankle. This resulted in several surgeries, including removing a piece of healthy tendon and inserting it into Knight’s ankle with a screw and washer, the subsequent removal of the screw and washer, and the removal of scar tissue. After Knight was found to be at maximum medical improvement, he did not submit any applications for work for any type of job. Holding a bench trial, Judge Milazzo found that Knight was a Jones Act seaman, that the Captain of the tug was negligent for ordering Knight to change the stern line while the vessel was in four-foot seas when he could have ordered its replacement at a safer time, that Knight was negligent for failing to watch his footing while replacing the line and failing to move it to a location where he would not have stepped on it, and that Knight and the Captain were each 50% at fault. Judge Milazzo found that any unseaworthiness was not the proximate cause of Knight’s injuries because his injuries were not the reasonably probable consequence of the existence of the chafed stern line. Judge Milazzo awarded $60,000 for Knight’s past and future pain and suffering and $103,037 for his after-tax loss of earnings until he reached MMI. She found that he could no longer work as an offshore tankerman, but he could work as an onshore tankerman, earning 75% of his prior earnings, resulting in an award of future wage loss of $180,581. His total damages of $343,618 were reduced by his comparative fault to $171,809, and she added prejudgment interest on his past damages because the case was tried as an admiralty case to the bench.
Failure to winterize yacht causes sinking to be excluded from insurance coverage. Progressive Insurance Co. v. Burke, No. 7:18-cv-293, 2019 U.S. Dist. Lexis 79666 (W.D. Va. May 10, 2019) (Dillon).
William Burke’s yacht sank at the dock in Virginia in early January 2018 because water in the raw-water inlet froze and expanded, causing the strainer bowl of the air conditioning system to crack and break free, allowing water to flow unimpeded into the vessel. Burke insured the vessel with Progressive, which asserted two exclusions. The first excluded losses that resulted from the vessel not being properly winterized in accordance with the manufacturer’s specifications, subject to local customs. Although two experts stated that Burke had not winterized the vessel in accordance with the manufacturer’s specifications (including draining water and replacing it with antifreeze), Burke and his son testified that they winterized the vessel in accordance with local customs. The court found this sufficient to create a fact question on the winterizing exclusion, but not with respect to the exclusion for failing to maintain the vessel in a seaworthy condition, including following all customary and manufacturer-recommended maintenance guidelines. As Burke did not follow the recommended maintenance guidelines for winterizing the vessel (not limited by local custom), the loss was not covered.
Plaintiff not subject to arbitration provision in defendant’s insurance policy.
McCullough v. Royal Caribbean Cruises, Ltd., No. 16-cv-20194, 2019 U.S. Dist. Lexis 79338 (S.D. Fla. May 10, 2019) (Gayles).
Lynn McCullough fell from an improperly secured zip line and was rendered a quadriplegic on a shore excursion in St. Lucia during a Royal Caribbean cruise. After an arbitration resulted in a judgment in her favor against the excursion company defendants, she brought a bad faith claim against the Hong Kong AIG entity that issued a liability policy to the excursion defendant, and AIG moved to compel arbitration pursuant to the New York Convention, citing the arbitration clause in the defendant’s policy. AIG argued that the plaintiff stood in the shoes of the defendant/insured for purposes of the bad faith insurance claim, so the plaintiff should be subject to the policy’s arbitration clause. The plaintiff contended that her bad faith action for failing to settle within policy limits was a common law tort that was separate from any claim under the insurance contract. As non-signatories are not bound to arbitration agreements under the Convention, Judge Gayles sided with the plaintiff and held that she could not be compelled to arbitrate. However, the bad faith claim was premature and the case was stayed until coverage under the policy was established.
Who controls an arrested vessel when the debtor files bankruptcy? Howard Bank v. M V “Mothership,” No. ELH-18-3378, 2019 U.S. Dist. Lexis 79965 (D. Md. May 10, 2019) (Hollander).
This case involves the intersection of admiralty and bankruptcy when a bank sought to foreclose its preferred ship mortgage on the M/V MOTHERSHIP, and its owners then filed for bankruptcy. Everyone agreed that the ship needed to be sold to stop the custodial charges, but the admiralty court had custody of the ship and the bankruptcy court had issued a stay. The admiralty judge blinked first and vacated the order for sale of the vessel and released control over the vessel to the bankruptcy court.
Judge punts on seaman status rather than address fleet rule on summary judgment. Redmond v. Yachting Solutions, LLC, No. 2:17-cv-292, 2019 U.S. Dist. Lexis 80222 (D. Maine May 13, 2019) (Singal).
Redmond was injured on a rough ride while working on a Summer Services program for Yachting Solutions in which YS offered a full array of care for its clients’ vessels, including fueling and maintenance. YS employees used two boats owned by YS to access the private boats owned by its clients and occasionally to transport clients. During the sixty days of his work, Redmond worked on 22 client-owned vessels. YS moved for summary judgment that Redmond was not a seaman because the 22 client-owned vessels were not a fleet under common ownership or control, and his work on his employer’s vessels was insufficient for him to be a seaman. Declining to follow the cases holding that common control is not satisfied by operational control (stating that they are distinguishable and not binding on him), Judge Singal held that the legal question of whether on the specific facts presented in this case any client-owned vessels may be considered under the fleet rule would have to be resolved on a fully developed factual record and not by summary judgment.
Evidence of exposure to defendant’s product necessary for maritime products liability case. In re Asbestos Litigation (Gustavson and Rogers v. Air & Liquid Systems Corp.), Nos. 17-1472 and 1570, 2019 U.S. Dist. Lexis 80525, 81309, 81838 (D. Del. May 13, 14, 15, 2019) (Fallon).
These cases involve the claims of mesothelioma and lung cancer as a result of exposure to asbestos-containing materials during the workers’ service in the United States Navy. The court applied maritime products liability law to the Naval/sea-based claims and noted that mere presence of a defendant’s product somewhere at the work site is insufficient. Instead, the plaintiff must establish by testimony or circumstantial evidence that there was exposure to defendant’s product for some length of time. As that evidence was absent in this case, summary judgments were granted.
Jones Act duty to provide safe place to work defeats summary judgment for employee injured on drilling vessel. Johnston v. Transocean Offshore Deepwater Drilling, Inc., No. 18-491, 2019 U.S. Dist. Lexis, 81015, 81018 (E.D. La. May 14, 2019) (Morgan).
Johnston was employed by Spencer Ogden to work on a Transocean rig and was injured while helping a Transocean employee to open the doors of the power slips when the tugger cable became taut and snapped back, hitting him in the head. Judge Morgan issued two opinions. First, Johnston moved for summary judgment that he was not comparatively negligent based on the testimony of the floor hand that he could not recollect anything that Johnston did wrong that contributed to the accident and the testimony of the floor hand’s supervisor that Johnston did not appear to have played any part in causing his own accident. There was also a video of the incident, which Judge Morgan viewed. Transocean responded that Johnston failed to check that the doors were unlocked, that he was standing in the line of fire, and that he had a responsibility to ensure that the locks or pins were disengaged before the doors were opened. This was sufficient for Judge Morgan to find genuine issues of material fact to preclude summary judgment. Second, as his employer had no employees on the floor other than Johnston, it moved for summary judgment on the ground that there was no evidence connecting it to any condition on the vessel that was owned and operated by Transocean. Citing the Jones Act duty to provide a safe place to work, Judge Morgan denied the motion. There were fact questions to be resolved whether the employer sent the seaman to work on the vessel without inspecting its equipment for hazards and without determining if the vessel personnel were appropriately qualified, competent, and trained to do their jobs. However, as the employer did not own the vessel, Judge Morgan granted summary judgment to the employer on the unseaworthiness claim.
Attorneys’ fees and interest awarded after judgment for vessel repairs. RSDC Holdings, LLC v. M.G. Mayer Yacht Services, Inc., No. 16-3573, 2019 U.S. Dist. Lexis 81017 (E.D. La. May 14, 2019) (Ashe).
After succeeding in recovering for unpaid vessel repairs, M.G., Mayer Yacht Services sought attorneys’ fees and interest. Although maritime disputes are subject to the American Rule with respect to attorneys’ fees, the maritime contract between the parties contained a fee-shifting provision that allowed the repairer to recover an award of fees and costs. Using the lodestar method, the court approved hourly rates of $300 per hour for an attorney with over 40 years of experience in maritime law, $225 per hour for an attorney with over six years of experience, and $200 and $185 per hour for attorneys with at least 3 years of experience and rejected all of the defendant’s objections to the fees that were sought., The court also awarded interest at the applicable contract rate of 18%, rejecting the argument that it was necessary to have an affidavit from a financial professional or showing of how the interest rates were calculated because the interest was based on a simple calculation using the contract rate.
Shotgun pleading with inconsistent allegations must be repleaded. Wilson v. NCL Bahamas Ltd., No. 18-25203, 2019 U.S. Dist. Lexis 81050 (S.D. Fla. 2019) (Goodman).
The amended complaint in this case on behalf of more than 175 plaintiffs alleged that the cruise line knowingly decided to sail its vessel with more than 4,000 passengers directly into the path of a massive bomb cyclone, for which the plaintiffs brought claims of negligence and negligent infliction of emotional distress and compensatory and punitive damages. The cruise line moved for a dismissal on the ground that the amended complaint was an impermissible shotgun pleading because it was based on nearly 30 separate and discrete alleged failures even though many of them were not duties owed as a matter of law. Additionally, the amended complaint inconsistently alleged different standards of care (reasonable care and heightened degree of care). Instructing the plaintiffs’ counsel that the standard is reasonable care, the court ordered the filing of another amended complaint with clarity on the standard of care and what breached that standard of care. The court then gave additional advice that the complaint should omit photographs, maps, diagrams, or other graphic material in its body. Although the court advised that such material could be included in exhibits, the court noted that the preferred practice is to refrain from attaching them as exhibits. The court denied the cruise line’s motion to dismiss the allegations of intentional misconduct as they were sufficiently plausible to not warrant dismissal.
Seaman chooses whether a Jones Act case is tried to a jury. Ruiz v. Turn Services, LLC, No. 19-1400, 2019 U.S. Dist. Lexis 82511 (E.D. La. May 15, 2019) (Fallon).
Ruiz filed this Jones Act claim under the federal court’s admiralty jurisdiction and federal question jurisdiction under the Jones Act, invoking Rule 9(h). In response to the employer’s request for a jury trial, the seaman moved to strike the request in order to have a trial to the bench. Noting that when the seaman brings his Jones Act claim in admiralty or based on federal question jurisdiction, only the seaman can choose a jury trial, Judge Fallon struck the employer’s request for a jury trial.
Employer liable for medical expenses under the Jones Act after successful McCorpen defense. Luwisch v. American Marine Corp., No. 17-3241, 2019 U.S. Dist. Lexis 82756 (May 16, 2019) E.D. La. 2019) (Morgan).
After a trial in which she found that the seaman intentionally misrepresented or concealed material facts so as to establish a McCorpen defense but the defendant was liable for negligence under the Jones Act and unseaworthiness under the general maritime law, Judge Morgan was presented with two questions with respect to the past medical expenses. Ruling that the denial of cure had no effect on the Jones Act recovery, she held that the seaman could recover his past medical bills in the Jones Act/general maritime law claim. Second, although the collateral source rule does not apply in maintenance and cure claims, it does apply to the Jones Act/general maritime law claims. Thus, any payments made for the medical bills by the seaman’s attorney or any other third party did not result in a reduction of the recovery for past medical expenses.
Marina liable for injury involving rented boat without limitation of liability. Palla v. LM Sports, Inc., No. 2:16-cv-2865, 2019 U.S. Dist. Lexis 83805 (E.D. Cal. May 17, 2019) (Mendez).
LM Sports operates a marina on Lake Tahoe that rents vessels to customers for use on the lake. One of the rented vessels was being used for tubing and was being operated by Garcia. After plaintiff Palla fell off her tube, Garcia circled around to pick her up and attempted to put the boat in neutral but inadvertently pulled the throttle through neutral and into reverse, catching Palla’s legs in the propeller blades. The court held a ten-day bench trial on liability and limitation of liability and found the operator of the boat 80% at fault and the marina 20% at fault. The court found LM Sports to be liable because it had a duty to warn the entire customer group of all potential risks they were likely to encounter. LM Sports did present a “spiel” on the dock to vessel operators before the customers boarded the boat, but it did not warn the passengers of the dangers of propeller strikes. In a pleading twist, the defendant tried to invoke the Oregon Rule, the Pennsylvania Rule, and res ipsa loquitur to avoid the finding of liability. The court rejected application of the Oregon Rule (presumption of fault when a vessel allides with a stationary object) as there is no authority for classifying humans as stationary objects. The court also declined to extend the Pennsylvania Rule (presumption that a vessel in violation of a statutory rule designed to prevent collisions was a cause of the collision) to situations that were not collisions or navigational accidents. Additionally, the court also rejected application of res ipsa loquitur to defend itself from a claim of negligence or shift liability to a co-defendant. Finally, the court denied limitation of liability to the marina because it was aware that the safety spiel was not being presented to passengers.
Arbitration award to drilling company confirmed despite allegations of bribery and bias of arbitrator. Vantage Deepwater Co. v. Petrobras America Inc., No. 4:18-cv-2246, 2019 U.S. Dist. Lexis 83766 (S.D. Tex. May 17, 2019) (Bennett).
This case arises from Petrobras’s attempt to terminate the drilling contract for the ultra-deepwater drilling, TITANIUM EXPLORER. An arbitration panel in Houston awarded Vantage $615.62 million for the early termination, and Petrobras objected to confirmation of the award on three grounds. Petrobras argued that one of the arbitrators had conflicts of interest because one of his former law clerks was a partner at the firm representing Vantage, and the arbitrator showed bias during the proceedings. However, the standard to overturn an award is high, and the law clerk had no involvement in the proceedings and there was no clear bias in the proceedings or decision. Petrobras objected that it was not granted subpoenas to witnesses for testimony that the contract was obtained by bribery, but that did not preclude Petrobras from acquiring voluntary depositions from the witnesses nor did it preclude Petrobras from obtaining documents from them or calling them to trial. Finally, Petrobras argued that the award provided no foundation for the finding of liability. However, it is not enough that the arbitrators made an error, even a serious one. Petrobras had to show that the arbitrators exceeded their powers. The award set forth the basic reasoning, and that was all that was necessary. In response to Vantage’s motion to confirm the award, Petrobras argued that confirming an award on a contract procured through bribery would violate the public policy of the United States. Judge Bennett rejected that argument, however, as it does not violate public policy to enforce an award against parties who were alleged to have engaged in misconduct in the formation of a contract, particularly when that contract was later ratified. Thus, the award was confirmed.
Insurer choice of non-jury trial in declaratory judgment action upheld. Geico Marine Insurance Co. v. Baron, No. 6:19-cv-159, 2019 U.S. Dist. Lexis 84962 (M.D. Fla. May 21, 2019) (Smith).
Henry Baron and his family were spear fishing from their 32-foot Sea-Vee Cruiser in the waters of the West End of Grand Bahama Island when Baron was struck by an uninsured boater, resulting in amputation of his left arm. Asserting that there was no uninsured boater coverage for the accident because there was no collision between the vessels, and there was no medical payments coverage because the accident did not occur on the boat or while boarding/leaving the boat or while water skiing, Geico denied Baron’s claim and filed a declaratory judgment action in federal court. Geico asserted admiralty jurisdiction for the complaint, and Henry filed a counterclaim asserting that the action for damages exceeded $75,000 and that jurisdiction was proper because Geico had filed the suit invoking the court’s admiralty jurisdiction. Under these circumstances, Judge Smith held that Baron had no right to a jury trial. By electing to proceed as an admiralty claim under Rule 9(h), Geico was able to preclude Baron from invoking the right to a jury trial that may otherwise have existed.
Bankruptcy court cannot sell a vessel where the admiralty court had previously obtained jurisdiction over the vessel. Barnes v. Field, No. 16-230, 2019 U.S. Dist. Lexis 86112 (D. Hawaii May 22, 2019) (Kobayashi).
The long history of the maintenance and cure claim of Chad Barnes for the injuries he sustained in 2012 on the M/V TEHANI continues (See April 2018 Update). Barnes originally filed an admiralty action against the vessel and its owners and operators, who later filed bankruptcy actions. Eventually, the bankruptcy court ruled that it could not sell the vessel free and clear of Barnes’s maintenance and cure lien but that it could sell the vessel subject to the lien. The district court disagreed. Applying the rule that the court which first obtains jurisdiction is entitled to retain it without interference, the court held that the admiralty court had exclusive control over the vessel and that the bankruptcy court could not sell the vessel subject to the lien.
Evidence sufficient that seaman reached maximum medical improvement. Giroir v. Cenac Marine Services, LLC, No. 18-3595, 2019 U.S. Dist. Lexis 86955 (E.D. La. May 23, 2019) (Feldman).
Giroir claimed that he suffered a back injury in 2015 and a knee injury in 2017 while working as a relief captain with Cenac. Judge Feldman earlier granted summary judgment on the Jones Act, unseaworthiness, and maintenance and cure claims with respect to the back injury. This opinion primarily addresses the 2017 maintenance and cure claim for the knee injury and the assertions that there was no injury in the service of the ship and, alternatively, that Giroir reached maximum medical improvement and all maintenance and cure was paid. Giroir presented at the emergency room on November 22, 2017, asserting knee and ankle paid with an onset an hour pior to arrival. He alleged in his complaint that the incident occurred on November 22, but the vessel’s logs reflected that he departed the vessel on November 20. Giroir changed his version to reflect that the injury was on November 20, and he supported that with the statements of two co-workers. Cenac did pay for a total knee replacement, and the treating surgeon testified that that Giroir reached MMI on April 17, 2018, although he never drafted any report indicating that Giroir was at MMI. Instead, he stated that he could return to work in the capacity as a pilot on that date, releasing him at medium capacity. The doctor last saw Giroir in April 2018, expecting his knee to continue to improve for a year from the surgery in December 2017. Reviewing this evidence, Judge Feldman held that it supported a finding that Giroir reached MMI on December 11, 2018, one year after the date of his surgery. As Giroir presented no evidence that he had undergone any treatment to improve his condition since then, Judge Feldman held that Giroir reached MMI on December 11, 2018 and dismissed the maintenance and cure claim as Cenac had paid maintenance and cure through that date. Judge Feldman also dismissed Giroir’s pleading for negligence under the general maritime law as a seaman does not have a claim against his employer for negligence under the general maritime law.
From the state courts:
$2 million verdict for passenger who filed suit after time limit in boarding pass is affirmed. Golden Isles Cruise Lines, Inc., v. Lowie, No. A19A0291, 2019 Ga. App. Lexis 232 (Ga. App., 2nd Div., April 29, 2019).
Robert Lowie was injured in a fall on Golden Isles’ gambling boat EMERALD PRINCESS 2 in coastal Georgia. In order to work on the vessel’s bow thruster, a hatch cover in the deck had to be removed to provide access to the crew. In his walk through before the vessel sailed, one of the captains discovered the open hatch and ordered a crew member to stand watch and to put some chairs around the hatch to prevent anyone from falling through the hole. The crew member put a chair on one side of the hole and a stool on the other, but the crew member left his post when Lowie boarded the boat and was on his way to the cashier’s cage when he fell down the hatch and suffered multiple fractures in his back and was ultimately diagnosed with chronic pain syndrome. The adjuster for Golden Isles visited Lowie and his wife and told them that Golden Isles was definitely negligent and that there was “no need to go out and get an attorney.” The adjuster continued to tell them that they were going to be taken care of, providing reimbursements until the one-year limitation period to file suit contained in their boarding pass had expired. Lowie was then advised that there would be no more reimbursements. He sued Golden Isles one year and three months after his fall. In response to Golden Isles’ motion for summary judgment, the trial court held that Lowie had offered convincing evidence that he had actually relied on representations from Golden Isles in deciding not to hire an attorney or to file suit and that reliance was to his detriment. Therefore, the court held that Golden Isles was estopped from relying on the limitations period in the boarding pass. The case went to trial, and the jury found Grand Isles 100% negligent and awarded Lowie $2.2 million. The court of appeals agreed that the doctrine of equitable estoppel may be used to bar inequitable reliance on contractual limitations and that Lowie established all of the elements necessary to create an estoppel. Turning to the merits, the court of appeal applied the maritime duty of reasonable care and rejected Golden Isles’ argument that Lowie should have noticed the hatch opening because it was large, visible, and smelled of diesel. Even though Lowie was a frequent patron, the hatch was normally closed and covered by carpet. Crediting Lowie’s testimony that he did not see any light or smell any diesel, the court of appeals declined to reweigh the evidence and affirmed the verdict.
Kenneth G. Engerrand
Brown Sims, P.C.
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This cause presents a situation where there was no attempt to prescribe general rules. On the contrary, the manifest purpose was to permit any State to alter the maritime law and thereby introduce conflicting requirements. To prevent this result the Constitution adopted the law of the sea as the measure of maritime rights and obligations. The confusion and difficulty, if vessels were compelled to comply with the local statutes at every port, are not difficult to see. Of course, some within the States may prefer local rules; but the Union was formed with the very definite design of freeing maritime commerce from intolerable restrictions incident to such control. The subject is national. Local interest must yield to the common welfare. The Constitution is supreme.
Justice James Clark McReynolds in Washington v. W.C. Dawson & Co. 264 U.S. 219, 228 (1924) (declaring unconstitutional federal legislation seeking to preserve a state workers’ compensation remedy to longshore and harbor workers).
Please note that these opinions and statements are my own analysis of the cases that are discussed. They do not represent the position of Brown Sims, P.C. or any organization to which I belong or that I represent. Under no circumstances should these opinions and statements be considered legal advice. If you want legal advice, please consult an attorney.
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