June 2020 Longshore/Maritime Update (No. 253)
Notes from your Updater:
We have seen the Federal Officer Removal Statute in a number of contexts, including removal of asbestos-exposure cases by shipyards (February and March 2020 and July 2019 Updates), removal of cases in which jurisdiction was also alleged under the Outer Continental Shelf Lands Act (November 2019 Update), and removal of cases in which original admiralty jurisdiction was alleged (Lu Junhong v. Boeing Co., 792 F.3d 805 (7th Cir. 2015). After the Fourth Circuit declined the appeal of energy companies from the remand of the climate change suit filed by the Mayor and City of Baltimore (Mayor & City of Baltimore v. BP p.l.c., April 2020 Update), the energy companies filed a petition for certiorari (No. 19-1189), urging the Supreme Court to decide whether, in a case removed in part on the Federal Officer Removal Statute, the court of appeals may consider any issue encompassed in a district court’s remand order or whether the appeal is limited to the removability under that Statute. On May 26, 2020, the Ninth Circuit then ruled, like the Fourth Circuit, that the Federal Officer Removal Statute did not afford removal jurisdiction over a climate change suit filed by the County of San Mateo, California, declining to address the other grounds for removal, such as original admiralty jurisdiction and the OCSLA. County of San Mateo v. Chevron Corp., No. 18-15499 (9th Cir. May 26, 2020).
On May 26, 2020, Judge Marcia Morales Howard rejected a challenge to the United States Army Corps of Engineers’ proposal to dredge the Lower St. Johns River, holding that the Corps of Engineers adequately considered the environmental impact of the proposal in accordance with the National Environmental Policy Act. St. Johns Riverkeeper, Inc. v. United States Army Corps of Engineers, No. 3:17-cv-398 (M.D. Fla. May 26, 2020).
On the LHWCA Front . . .
From the federal appellate courts:
Fifth Circuit upheld ALJ’s award of compensation, rejecting the argument that impeaching the claimant’s credibility requires the ALJ to set aside his testimony; Island Operating Company, Inc. v. Director, OWCP, No. 19-60672 (5th Cir. Apr. 30, 2020) (Costa).
Henry Jones worked as a production operator on Island Operating’s platforms without serious injury for 25 years. On September 9, 2016, however, he was performing a physically demanding task when he felt the sudden urge to use the restroom. He had two bloody bowel movements, which he reported, but he did not mention the pain he felt in his low back and leg. Jones was diagnosed with anal fissures and was released to return to work, but he asked for FMLA leave so he could recover from his back pain. Almost a month after he stopped working, he notified Island Operating of his back problems, and he was diagnosed by Dr. Gunderson with degenerative changes in his spine and a ruptured disc. Dr. Gunderson later testified that Jones’ symptoms were related to an injury suffered on September 9. The LHWCA carrier, Louisiana Workers’ Compensation Corp., declined the treatment recommended by Dr. Gunderson and referred Jones to Dr. Romero for a second opinion. Although Dr. Romero confirmed the herniated disc and agreed that the herniation was likely caused by the manual labor or straining to have a bowel movement, the carrier still declined to pay LHWCA benefits to Jones. The case was tried to ALJ Rosenow who found the claim compensable, and the Benefits Review Board affirmed. Before the Fifth Circuit, the employer and carrier challenged the finding of causation, arguing that Jones’ complaints were not credible because he had repeatedly withheld information about his injury. While acknowledging the credibility issues raised by the employer and carrier, Judge Costa noted that impeaching a witness’s credibility does not automatically require the factfinder to set aside that testimony. Instead, the fact finder is allowed to give the appropriate weight to the testimony, accepting or rejecting it. In this case, ALJ Rosenow did not ignore the credibility issues and thoroughly explained why he concluded that the claim was compensable despite the credibility issues. Given the substantial evidence standard of review, Judge Costa held that the Fifth Circuit would not disturb the finding that Jones’s claim was compensable. Finally, Judge Costa noted that the Fifth Circuit could award attorney’s fees for work performed by Jones’s attorney with respect to the defense of the appeal to the Fifth Circuit and requested counsel to submit a motion detailing his work and the market’s hourly rate.
Shipowner did not breach turnover duty to longshore worker when the hazard was open and obvious and could have been avoided by a reasonably competent stevedore; Troutman v. Seaboard Atlantic Ltd., No. 19-10533 (11th Cir. May 13, 2020) (Martin).
Anthony Troutman was injured while working for Eller ITO to secure containers on the M/V SEABOARD ATLANTIC. His accident involved a walkway that ran along the bottom of Bay 28, located above Bay 32. Usually, cargo was loaded into the lower bay, Bay 32, before Bay 28. The tops of the containers in Bay 32 would then be higher than the walkway above and alleviate the risk of falling off the walkway. However, Eller ITO’s superintendent decided to load Bay 28 first because of a delay in readying the containers that were to be loaded into Bay 32. That meant that there was a drop of about six to eight feet from the walkway to the deck. There was no rope fence protecting workers on the walkway when Troutman began lashing the cargo loaded into Bay 28. While walking on the elevated walkway, Troutman tripped on loose lashing materials that had been left by another longshore worker, and he fell to the deck below. Troutman brought this suit against the shipowner for negligence under Section 905(b), and the shipowner moved for summary judgment on the ground that it had not violated the turnover duty because the condition of the walkway was an open and obvious hazard that Troutman could have avoided. Writing for the Eleventh Circuit, Judge Martin stated that the shipowner’s argument presented a case of first impression in the Eleventh Circuit: whether the turnover duty can be breached when the longshore worker was injured by an open and obvious hazard. She concluded that, generally, the shipowner does not breach the duty when the hazard was open and obvious and could have been avoided by a reasonably competent stevedore. In this case, the stevedore could have loaded the vessel with reasonable safety by loading the lower bay first or by having its employees stay off the walkway until after the lower deck was loaded. Thus, the shipowner was not negligent in allowing the walkway to exist in its exposed state. Troutman argued that the shipowner violated the turnover duty even though the hazard was obvious or avoidable, but Judge Martin answered that Troutman’s interpretation of the duty would violate the established principle that shipowners can rely on the expertise of the stevedore and longshore workers and would turn a negligence standard into a warranty to provide an absolutely safe vessel.
From the federal district courts:
Exclusive remedy provision of the LHWCA precluded state law wrongful death claims on behalf of workers killed on the dock during loading of a vessel; Yang v. Cheramie Marine, LLC, No. H-18-161, 2020 U.S. Dist. Lexis 86195 (S.D. Tex. May 14, 2020) (Hughes).
Lightering LLC hired two temporary workers (Blake Carlisle and Tai Chi Vong) through a staffing company, Express Services, to assist in loading a vessel in Galveston, Texas. The workers were killed when a land-based crane picking up cargo to be loaded on the ship fell on them while they were on the dock. These consolidated actions were brought in state court by Kao Lee Yang, surviving spouse of Vong, and Marcus Wilson, father of Carlisle, against several entities, including Lightering. Lightering removed the cases to federal court and moved for summary judgment on the ground that the LHWCA provided the exclusive remedy in place of the state wrongful death claims asserted by Yang and Carlisle against Lightering. Judge Hughes agreed that the LHWCA applied to the decedents as they were killed while loading cargo onto a vessel docked in Galveston. Judge Hughes then reviewed the borrowed servant factors and concluded that most of the factors, including the most weighty factor, control, favored Lightering. Therefore, he held that Lightering was the decedents’ employer and that the LHWCA preempted the wrongful death claims brought against Lightering under Texas law.
Shipyard’s removals of mesothelioma cases brought by employee and spouse of employee within 30 days of the Fifth Circuit’s Latiolais decision were timely; Bourgeois v. Huntington Ingalls Inc., No. 20-1002, 2020 U.S. Dist. Lexis 84888 (E.D. La. May 14, 2020) (Ashe); Broussard v. Huntington Ingalls, Inc., No. 20-836, 2020 U.S. Dist. Lexis 91999 (E.D. La. May 27, 2020) (Lemmon).
Robert Bourgeois II brought suit in the district court of Orleans Parish against Huntington Ingalls (Avondale) and various asbestos suppliers, asserting that his mesothelioma was caused by exposure to asbestos while employed at Avondale’s shipyard. Bourgeois never boarded any vessels, but he delivered mail throughout Avondale’s main yard, including the insulation and welding departments. Avondale removed the case within 30 days of the Fifth Circuit’s en banc decision in Latiolais v. Huntington Ingalls (March 2020 Update), asserting that the Latiolais decision triggered the 30-day period to remove the case under the Federal Officer Removal Statute. Bourgeois argued that the time for removal was triggered ten months earlier based on his deposition testimony, but Judge Ashe disagreed. Before the en banc decision in Latiolais, there was a line of controlling decisions establishing that the case was not removable. The decision from the Fifth Circuit was therefore the “order . . . from which it may first be ascertained that the case is one which is or has become removable” under 28 U.S.C. § 1446(b)(3). Using similar analysis, Judge Lemmon declined to remand the suit brought by Betty Ann Broussard against Huntington Ingalls (Avondale), asserting that she contracted mesothelioma from exposure to asbestos from laundering the clothes of her ex-husband while he was employed by the shipyard working on the construction of Navy ships.
From the Benefits Review Board:
Failure to produce settlement agreements from the claimants’ third-party suit resulted in dismissal of their LHWCA claim; Pitre v. Huntington Ingalls, Inc., No. 20-0023 (Ben. Rev. Bd. May 8, 2020) (per curiam).
Longsuffering readers of the Update know that we do not ordinarily review decisions of the Benefits Review Board or Administrative Law Judges. However, the Pitre decision merits an exception for those who handle administrative and third-party claims involving workers covered under the LHWCA. Steward Pitre, a shipyard worker employed by Huntington Ingalls (Avondale), died from lung cancer, and his widow and children brought a tort suit against his employer and third parties on the ground that his death was caused by workplace exposure to asbestos. The claim against his employer was dismissed based on the exclusive remedy provision of the LHWCA, and the claimants settled their claims against the other defendants. The widow and children then brought this claim under the LHWCA against the decedent’s shipyard employer. The shipyard sought information about the settlements and filed a motion to compel production of the settlement agreements when the agreements were not produced. Administrative Law Judge Rosenow granted the motion to compel, but the claimants declined to produce the agreements, rejecting Judge Rosenow’s offer of a confidentiality order. Judge Rosenow then concluded that the claimants did not show good cause for failing to provide the shipyard with the settlement agreements and drew an adverse inference that the information would establish a defense pursuant to Section 33(g). Based on the adverse inference, Judge Rosenow dismissed the LHWCA claim, rejecting the claimants’ argument that Section 33(g) did not apply because the employer had notice of the settlements and because there was no evidence that the settlements were for less than claimants’ entitlement to compensation under the LHWCA as the compensability of the claims had not been ascertained. The claimants argued to the BRB that there was no evidence that Section 33(g) applied because there was no proof that the settlements in the tort claims related to the claim under the LHWCA. For example, the tort settlements included items such as pain and suffering that are not recoverable under the LHWCA. The BRB noted, however, that it was immaterial that the elements of damages in the tort claim are not the same as in the LHWCA claim. It is only necessary that both are based on the deceased employee’s death due to asbestos in order for Section 33(g) to apply. The employer must then show that a person entitled to compensation entered into a settlement for the same disability or death for which the employer is liable for benefits under the LHWCA and that the aggregate gross recovery was for less than the claimant’s entitlement under the LHWCA. In this case, the claimants’ refusal to comply with Judge Rosenow’s order prevented the employer from obtaining the information necessary for its defense. As the adverse inference drawn by the ALJ was a proper response to the failure to produce the settlement agreements, the BRB upheld the decision that the shipyard had established the elements of a Section 33(g) defense. The result was proper, even though the settlements were confidential, as they were relevant and the claimants did not show good cause for ignoring the order to produce them. Thanks to Frank J. Towers of Blue Williams, L.L.P., in Metairie, Louisiana, for bringing this case to our attention.
And on the Maritime Front . . .
From the federal appellate courts:
Cargo shippers were held to lack standing to challenge Puerto Rico’s security fee imposed on carriers unloading cargo in Puerto Rico where the fee was used to pay for the fast-track method of inspecting cargo containers; Dantzler, Inc. v. Empresas Berriós Inventory & Operations, Inc., Nos. 18-2087, 18-2089, 2020 U.S. App. Lexis 14066 (1st Cir. May 1, 2020) (Torruella).
After the Puerto Rico legislature enacted a statute for improved safety procedures in Puerto Rico’s ports, the Puerto Rico Ports Authority contracted for the technology to scan all inbound containerized cargo and then charged ocean carriers a fee for the use of the scanning facilities. A putative class of cargo shippers brought this action seeking to declare the fee to be violative of the United States Constitution and Puerto Rico law. The defendants argued that the cargo plaintiffs lacked standing to bring the action, and the First Circuit agreed. Although the shippers argued that the cargo carriers had been forced to become collection agencies against the cargo shippers, the shippers could not overcome the fact that the assessment was against the ocean carriers and there was no plausible argument for a direct injury to the shippers. Therefore, Judge Torruella ordered the dismissal of the case.
Timely performance of contract and payment in full of contract price did not establish that a bridge builder did not suffer a loss so as to prevent recovery from the DEEPWATER HORIZON Economic and Property Damages Settlement Agreement; BP Exploration & Production, Inc., v. Claimant ID 100179569, No. 19-30298 (5th Cir. May 6, 2020) (per curiam).
Johnson Bros. successfully built a bridge for the State of Louisiana and received the contract price for the completion. However, Johnson Bros. made a claim pursuant to the DEEPWATER HORIZON Economic and Property Damages Settlement Agreement, arguing that the blowout increased its costs, thereby causing a loss of profits that it would have earned if it were not for the blowout. The Claim Administrator awarded Johnson Bros. $2.5 million, and BP appealed, arguing that, similar to Individual Economic Loss claimants, Johnson Bros. was not eligible because it had not suffered an “actual loss” caused by the spill. Johnson Bros. was required to attest that it was injured by the disaster, and BP argued that Johnson Bros. had not plausibly attested that it was injured by the disaster as it had recovered the full contract price for the work. However, the Fifth Circuit rejected that argument on the ground that the explanation provided by Johnson Bros. with respect to the additional costs incurred was sufficiently plausible and BP had not presented any other potential cause for the reduced profits.
California suit against Tokyo Electric Power Co. by Navy service members who were exposed to radiation from the Fukushima Daiichi Nuclear Power Plant in Japan were dismissed on grounds of international comity; Cooper v. Tokyo Electric Power Co., No. 19-55295 (9th Cir. May 22, 2020) (Bybee).
On March 11, 2011, a 9.0-magnitude earthquake and large tsunami struck Japan, causing damage to the Fukushima Daiichi Nuclear Power Plant and releasing 300 tons of contaminated water into the sea. The United States rendered assistance with service members of the U.S.S. RONALD REAGAN and other vessels from the 7th Fleet’s Reagan Strike Force. Service members who were exposed to radiation brought this action in the federal district court for the Southern District of California, and the district court held that Japanese law applied and dismissed the case on the ground of international comity. Writing for the Ninth Circuit, Judge Bybee agreed that Japanese law applied to the case and, considering Japan’s strong interest in the case being litigated in Japan, affirmed the dismissal on grounds of international comity.
From the federal district courts:
Shipowner’s Agreement on Security with the United States to allow departure clearance for the owner’s vessel was not a maritime contract that afforded subject matter jurisdiction for the alleged breach of the agreement by the United States; Nederland Shipping Corp. v. United States, No. 19-1302, 2020 U.S. Dist. Lexis 76072 (D. Del. Apr. 27, 2020) (Andrews).
Customs and Border Patrol denied departure clearance for Nederland Shipping’s NEDERLAND REEFER, requiring that the vessel remain in Delaware Bay. The United States and Nederland entered into an Agreement on Security pursuant to which Nederland posted a surety bond of $1 million. However, the ship was unable to leave the port for an additional 19 days because 13 members of the crew identified in the Agreement had not been granted the immigration status necessary to leave the ship, and the ship could not depart until they disembarked. The owner then brought this suit to recover damages against the United States, including a claim for breach of contract. However, Judge Andrews held that the Agreement did not convey jurisdiction, and it was not properly characterized as a maritime contract. Therefore, the federal court lacked jurisdiction over the claim for breach of contract.
More BELO lawsuits were dismissed for lack of expert evidence of causation; Baptiste v. BP Exploration & Production, Inc., No. 18-9270, 2020 U.S. Dist. Lexis 75374 (E.D. La. Apr. 29, 2020 ) (Feldman); Coy v. BP Exploration & Production, Inc., No. 19-10343, 2020 U.S. Dist. Lexis 76811 (E.D. La. May 1, 2020) (Lemelle); Rapalo–Garcia v. BP Exploration & Production Inc., No. 18-11465, 2020 U.S. Dist. Lexis 78959 (E.D. La. May 5, 2020) (Ashe); Torres v. BP Exploration & Production Inc., No. 18-12652, 2020 U.S. Dist. Lexis 79477 (E.D. La. May 6, 2020) (Barbier); Caballero v. BP America Production Co., No. 1:19-cv-305, 2020 U.S. Dist. Lexis 85070 (S.D. Miss. May 14, 2020) (Ozerden).
These are Back-End Litigation Option cases asserting personal injuries for exposure to oil and dispersants during spill response work after the DEEPWATER HORIZON/Macondo blowout. In accordance with the Medical Settlement Agreement, the workers are required to establish that their medical conditions were caused by exposure to oil and dispersants during their clean-up efforts. The courts have ruled that the workers must present expert opinions to carry their burden of proof. Toney Baptiste produced the Examination Report from Industrial Medicine Specialists, but the report did not contain a causation opinion. Therefore, Judge Feldman dismissed Baptiste’s suit. Similarly, as Marco Coy, Marvin Salmon Rapalo-Garcia, Manuel Torres, and Isabel Caballero failed to present expert evidence to prove their medical diagnoses or causation, Judges Lemelle, Ashe, Barbier, and Ozerden dismissed their claims.
Summary judgment was granted to the employer and vessel owner on a seaman’s Jones Act and unseaworthiness claims arising when the wire rope on another vessel snapped and injured the seaman; Ruiz v. Turn Services, LLC, No. 19-1400, 2020 U.S. Dist. Lexis 76808 (E.D. La. May 1, 2020) (Fallon).
Trevor Ruiz was working as a member of the crew of Turn Services’ M/V AFFIRMED, assisting in making up the M/V ALFRED P. CENAC, III, to the M/V AFFIRMED. A cable from the ALFRED P. CENAC, III, broke and struck Ruiz, causing injuries for which he sought recovery against Turn Services, Cenac Towing, and HWC Wire & Cable Co. Turn Services filed a motion for summary judgment on the Jones Act and unseaworthiness claims, and, in the absence of any evidence of negligence of the crew of the AFFIRMED or any defect in an appurtenance of the AFFIRMED, Judge Fallon dismissed the Jones Act and unseaworthiness claims against Turn Services.
BP was not entitled to contractual indemnity from oil spill responders or additional insurance from a responder’s bumbershoot policies in connection with suits against BP by clean-up workers after the DEEPWATER HORIZON/Macondo blowout; O’Brien’s Response Management, L.L.C. v. BP Exploration & Production Inc., No., 19-cv-1418, 2020 U.S. Dist. Lexis 78225 (E.D. La. May 4, 2020) (Barbier).
The extensive efforts to clean up the oil from the DEEPWATER HORIZON/Macondo blowout resulted in BP hiring hundreds of contractors, who hired thousands of workers. The exposure claims of those contractors were brought against the response companies and against BP. In 2016, Judge Barbier ruled that the claims against the response companies were barred by derivative immunity from the Clean Water Act and discretionary function immunity from the Federal Tort Claims Act, The claims against BP were partly resolved in 2012 with the Medical Benefits Class Action Settlement Agreement. Conditions of clean-up workers that were diagnosed before April 16, 2012, were paid under a matrix set forth in the Agreement unless the worker opted out of the settlement. Workers who accepted the settlement and who had conditions diagnosed after April 16, 2012, were allowed to bring BELO lawsuits (Back-End Litigation Option). Having received thousands of claims and suits brought by clean-up workers, BP eventually sought contractual indemnity from the response companies. This opinion addresses two contracts, one with National Response Corp. and the other with O’Brien’s Response Management. The NRC contract only required NRC to indemnify BP to the extent that a claim was caused by NRC’s gross negligence or willful misconduct and gave NRC the protection of Responder Immunity law (BP was not entitled to indemnity for any amounts for which NRC would have no liability under the applicable Responder Immunity law). The O’Brien contract contained reciprocal indemnity provisions with respect to employees of the parties and required O’Brien to name BP as an additional insured on certain types of insurance policies to be maintained by O’Brien. Judge Barbier easily denied indemnity to BP with respect to the NRC contract, as NRC had been held to be immune to suits from the response workers; however, there were two different answers to the indemnity demands under the O’Brien contract. Judge Barbier began by denying indemnity for the BELO claims, which were brought pursuant to the terms of the 2012 Medical Settlement. As the O’Brien contract required that BP obtain O’Brien’s written consent before it settled any claims, BP’s agreement to the Medical Settlement violated the consent-to-settle provision of the agreement (BP also failed to give prompt notice of the claims, in violation of the O’Brien contract). With respect to the opt-out claims that were not subject to the Medical Settlement, BP waited until March 2019 to tender the claims to O’Brien, almost five years after the opt-out deadline. As that violated the provision that BP provide prompt notice, Judge Barbier found that the delay violated the contract and amounted to prejudice as a matter of law (if prejudice was necessary). Finally, Judge Barbier held that BP was not an additional insured on O’Brien’s bumbershoot policies. The O’Brien contract required O’Brien to maintain four coverages, including workers’ compensation coverage, employer’s liability coverage, automobile liability coverage, and comprehensive general liability insurance with limits of $2 million per occurrence and contractual liability coverage. The contract then provided that “all policies,” except the workers’ compensation policy, shall name BP as an additional insured. O’Brien did maintain the policies required under the contract, but it also maintained bumbershoot polices that afforded additional insured coverage when required by written contract. Judge Barbier noted that the contract did not provide that all insurance policies maintained by O’Brien, whether or not required in the contract, would name BP as an additional insured. Instead, the contract enumerated four coverages with specific limits and then stated that, with one exception, all policies would name BP. Judge Barbier considered this language to require only that the three types of insurance (in the amounts enumerated) would name BP as an additional insured. As there was no requirement that O’Brien maintain bumbershoot coverage, there was no requirement that BP be named as an additional insured on those policies. Therefore, there was no breach of contract for O’Brien’s failure to name BP on the bumbershoot policies. Thanks to Jessica DeVivo, Senior Claims Specialist – Marine, with AXA XL, for bringing this case to our attention.
Lender did not cause diminution in value of yacht after foreclosure, but reasonableness of the sale of the yacht was not established on summary judgment; SunTrust Banks, Inc. v. Be Yachts, LLC, No. C18-840, 2020 U.S. Dist. Lexis 79074 (W.D. Wash. May 5, 2020) (Pechman).
Be Yachts and Edward Balassanian borrowed $1.8 million from SunTrust Banks in 2013 to purchase the yacht, JUST BE. When they defaulted on the loan in 2016, SunTrust repossessed the yacht and hired Nielsen Beaumont Marine to manage the repossession. Nielsen Beaumont Marine hired Marine Lender Services to move the yacht to its dock in Seattle and care for the yacht. Several employees of Balassanian noticed mold, dirt, and steamy windows when visiting the yacht, and SunTrust hired Balassanian’s preferred surveyor to conduct a survey. The surveyor reported that the yacht was well kept and in above average condition with a fair market value between $1.5 million and $1.7 million. Nielsen Beaumont Marine appointed a sales broker to arrange for the sale of the yacht, and after about a year and a number of offers that fell through, the vessel was finally sold for $1,050,000. SunTrust sought the deficiency on the loan, and Be Yachts and Balassanian counterclaimed for damages for failure to use reasonable care in the preservation of the yacht and failure to hold a commercially reasonable sale. Judge Pechman concluded that the owners could not demonstrate that the alleged lack of care diminished the value of the yacht and granted summary judgment to SunTrust on the owners’ counterclaim for failure to preserve the yacht. However, she found fact questions as to the commercial reasonableness of the sale because the broker hired to handle the sale was not licensed and there was evidence that the broker had not appropriately advertised the yacht.
Seaman’s Jones Act and unseaworthiness claims were barred by the three-year statute of limitations, but his maintenance and cure claim was subject to laches; seaman’s punitive damage claims based on Jones Act negligence and unseaworthiness were dismissed; Rogers v. Estate of Ashlock, No. 3:19-cv-96, 2020 U.S. Dist. Lexis 79464 (D. Alaska May 6, 2020) (Gleason).
David Allen Rogers claimed that he suffered an injury on the DUTCH HARBOR in June 2015 when a refrigerator/freezer fell on him, resulting in a hernia. He asserted that his employer declined to provide medical treatment and maintenance and that his employer insisted on his continuing to work. Rogers then claimed that he re-injured his hernia on January 6, 2018, when he fell on the deck of the DUTCH HARBOR. He brought this action against his employer on July 3, 2019, seeking to recover for negligence under the Jones Act and for unseaworthiness and maintenance and cure under the general maritime law in connection with both incidents and he sought punitive damages on all of his claims. Rogers’ employer moved for summary judgment that the 2015 claims were barred by the three-year statute of limitations in 46 U.S.C. § 30106, and the court agreed that the Jones Act and unseaworthiness claims from the 2015 incident were barred. However, Judge Gleason held that the statute did not apply to the maintenance and cure claim and that it was subject to laches (the employer did not raise a laches defense, and Judge Gleason did not decide whether laches would bar the maintenance and cure claim related to the 2015 incident). Rogers’ employer also asked the court to dismiss the punitive damages claims based on the Jones Act and unseaworthiness, and Judge Gleason agreed, noting that those claims fell within the Supreme Court’s Batterton case, but that the claim for punitive damages for willful failure to pay maintenance and cure was still available under Townsend.
Court found no grounds to sanction Jones Act employer for waiting to disclose the seaman’s medical records of pre-existing injuries until after the seaman’s deposition; Domingue v. Jantran, Inc., No. 4:18-cv-199, 2020 U.S. Dist. Lexis 79741 (N.D. Miss. May 6, 2020) (Virden).
Marilyn Domingue brought this action under the Jones Act and general maritime law for back and neck injuries she claimed to have sustained on her employer’s johnboat. In her disclosures and discovery responses she denied any prior neck or back injuries. When her employer filed its initial responses to discovery requests it did not have any information or documents on her prior injuries, but it later received documents for prior injuries and did not supplement its discovery responses until after taking the seaman’s deposition on February 12, 2020, which was still within the discovery period. At the deposition, the employer confronted Domingue with medical records from before the johnboat accident for what appeared to be the same injuries she alleged in the johnboat accident. Domingue moved for sanctions and to strike the pre-accident records on the ground that the delay in responding to her discovery was done in order to surprise her at her deposition. Domingue did have to concede that she had failed to disclose the records in her own discovery responses, but she asserted that the failure was due to memory loss occasioned by the johnboat accident. The employer responded that the records were impeachment evidence that was produced before the discovery deadline and that they were the seaman’s own records, not evidence actively created by the defendant. Judge Virden concluded that any failure on the part of the defendant was harmless. She held that there were “no grounds” to sanction an “untimely” disclosure of the plaintiff’s own records when taking into account the plaintiff’s own failure to disclose the relevant evidence.
Diver who suffered compression sickness while working on a tunnel under the Suez Canal who spent 45% of his employment on marine construction projects was not a seaman, and the federal court lacked jurisdiction over his suit; Southard v. Ballard Marine Construction, Inc., No. C19-5971, 2020 U.S. Dist. Lexis 80022 (W.D. Wash. May 6, 2020) (Settle).
Nicholas J. Southard was employed by Ballard Marine as a commercial diver. He asserted that he alternated between wet-diving underwater on marine construction projects involving his employer’s vessels and dry-diving tunnel projects in which he was classified as a Compressed Air Worker. He took as many tunneling jobs as were available because he could make more money in a week as a Compressed Air Worker than he could diving for a month. In January and February 2017, Southard was assigned to a multi-week saturation dive on a tunneling project on dry land beneath the Suez Canal in Egypt (building two highway roads connecting Egypt and the Sinai Peninsula). Southard claimed that he sustained decompression sickness and distal small fiber neuropathy, and he brought a suit in federal court in Washington for negligence under the Jones Act and for maintenance and cure and unearned wages under the general maritime law. Ballard Marine asserted that there was no federal jurisdiction under the Jones Act or general maritime law, and Judge Settle agreed. Judge Settle first addressed whether Southard was a seaman based on the claim that 45% of Southard’s work for Ballard was diving from Ballard Marine’s vessels. Although Judge Settle considered that work to satisfy the test for seaman status, Judge Settle did not consider it to count toward the 30% rule of thumb as that work was intermittent and his tunneling work was a different “basic assignment” with different “essential duties.” Thus, Judge Settle concluded that Southard’s essential duties changed sufficiently that only the tunneling assignment was relevant. As he lacked a substantial connection to Ballard Marine’s vessel during the tunneling assignment, Southard was not a seaman and the Jones Act did not afford federal jurisdiction for the suit. Finally, as the injury occurred wholly on land, Southard’s claims failed the locality test, and there was no basis for admiralty jurisdiction. Judge Settle did give Southard leave to amend to attempt to cure his jurisdictional allegations.
Mortgagee for first preferred ship mortgage can pursue guarantors after default while the mortgagor is in bankruptcy; WesBanco Bank, Inc. v. JENNY LYNNE, No. 4:18-cv-184, 2020 U.S. Dist. Lexis 81109 (S.D. Ind. May 8, 2020) (Pratt).
Marine Builders, Inc. borrowed $955,000 from WesBanco and executed a first preferred ship mortgage on the JENNY LYNNE. The loan (together with interest, collection costs, and attorney’s fees) was guaranteed by David W. Evanczyk, David A. Evanczyk, and Byron S. Evanczyk. Marine Builders defaulted on the note and sought bankruptcy, but WesBanco pursued the guarantors while the bankruptcy was pending, moving for partial summary judgment. The guarantors argued that WesBanco’s motion was premature because Marine Builders had not been given time to resolve the debt through the sale of the JENNY LYNN in the bankruptcy proceeding. Judge Pratt rejected that argument as it would extend the benefit of the bankruptcy stay to parties who are not entitled to its benefits and would defeat the purpose of obtaining a personal guarantee. Judge Pratt also rejected arguments that there were disputed facts on the amount of the debt and attorney’s fees and entered partial summary judgment against the guarantors.
Executrix for deceased seaman could not bring a survival action for the seaman’s Jones Act and unseaworthiness claims when there were no statutory beneficiaries under the Jones Act; Smith v. Omega Protein, Inc., No. 1:19-cv-13, 2020 U.S. Dist. Lexis 83377 (S.D. Miss. May 12, 2020) (Guirola).
John Fairley worked as a fisherman for Omega Protein for 24 years. He was injured on August 10, 2015, when his left hand, arm, and shoulder were pulled into the fishing net’s hydraulic power block. On November 10, 2015, his doctor determined that he had reached maximum cure and that he could return to full duty without restrictions. Omega Protein paid him maintenance and cure through that date. He planned to return to work in April 2016, when the menhaden fishing season reopened, but he was diagnosed with cancer (unrelated to his injury) and sought long-term disability. Fairley did not made a demand for further maintenance and cure until he filed this lawsuit on August 23, 2018, seeking to recover under the Jones Act as well as for unseaworthiness and maintenance and cure. After Fairley died (unrelated to his accident), his niece, Alethea Smith, was appointed executrix of Fairley’s estate and was substituted as the plaintiff in this suit, seeking to recover on a survival action on behalf of Fairley’s estate. Noting that the Jones Act (by its incorporation of the FELA) provides a right of action that survives to the personal representative for the benefit of designated classes of beneficiaries (spouse, children, parents, and next of kin dependent on the employee), Omega Protein argued that there were no eligible beneficiaries, and, therefore, the estate could not maintain a survival action. Smith argued that the statutory limitation on beneficiaries did not apply where the injury was not the cause of death, but Judge Guirola held that the statute did not make such a distinction. As there was no eligible beneficiary for whom damages could be recovered, the estate could not maintain the survival action under the Jones Act. The analysis under the Jones Act was likewise fatal to the survival action under the general maritime law for unseaworthiness. Although the Fifth Circuit has recognized the existence of a maritime survival action (the Supreme Court has yet to do so), that action did not predate the Jones Act. Following Miles and Higginbotham, Judge Guirola held that the maritime law could not enlarge the class of beneficiaries determined by Congress in the Jones Act. As a final point, Omega Protein sought summary judgment that no maintenance and cure was owed based on its payment of maintenance and cure until Fairley’s doctor found that he had reached maximum cure. However, the estate produced evidence that Fairley’s hand and wrist could have benefited from additional medical treatment. As the evidence presented a fact question, Judge Guirola declined to grant summary judgment on the maintenance and cure claim.
Res judicata precluded second suit by seaman for maintenance and cure after seaman was found to have reached maximum cure, but the seaman was given leave to amend to allege that a cure was now available for her condition; Jackson v. NCL America, LLC, No. 19-25115, 2020 U.S. Dist. Lexis 87346 (S.D. Fla. May 14, 2020) (Torres).
Crewmember Dorothy Jackson slipped and fell on an onion peel on NCL’s vessel and had multiple surgeries between 2013 and 2016. Based on the testimony of her treating physician, she was found to have reached maximum cure and NCL was ordered to reimburse the cost of surgery at the rate allowed for NCL’s network providers. Thereafter, Jackson argued that she was no longer at maximum cure and brought this action seeking reinstatement of maintenance and cure. NCL argued that res judicata barred the subsequent action. Magistrate Judge Torres noted that a seaman may bring successive maintenance and cure actions, but res judicata can be a bar when the later suit seeks the same relief that was sought in the first action. Thus, the question was whether Jackson was seeking the same relief that was involved in the prior action. Magistrate Judge Torres reasoned that the complaint did not attempt to differentiate the allegations in the second suit from those in the prior suit. In response to NCL’s motion to dismiss, Jackson sought to clarify that she was seeking relief for conditions subsequent to 2016, but Magistrate Judge Torres held that a plaintiff may not amend her complaint by a response to a motion to dismiss. Consequently, Magistrate Judge Torres held that Jackson’s complaint would be dismissed based on res judicata. However, Jackson was permitted to file an amendment to assert that there was medical treatment currently available that would cure her condition so that she would allege a different claim than the one she presented in the prior suit in which she was held to have reached maximum cure.
Complaint for limitation of liability was timely when filed within six months of receipt (but not mailing) of written notice; court rejected the claimant’s request to deny the injunction/stay order before the time for filing claims expired; In re LeBeouf Bros. Towing, LLC, No. 20-1314, 2020 U.S. Dist. Lexis (E.D. La. May 14, 2020) (Morgan).
Daniel Goss brought suit in the district court of East Baton Rouge Parish, Louisiana, seeking to recover for exposure to fumes on the GONSOULIN 523. Goss’s counsel mailed notice of his claim (dated September 11, 2019) on September 13, 2019, and LeBeouf Bros. received the written notice on September 17, 2019. LeBeouf then filed its limitation action on March 16, 2020, which was within six months of its receipt of the notice but not within six months of the mailing. Goss moved to dismiss the limitation action as untimely, but Judge Morgan held that the plain language of Supplemental Rule F(1) provides that the six-month period commences upon “receipt” of a claim in writing. Consequently, she held that the limitation action was timely. Goss also argued that Judge Morgan should not enter the injunction restraining prosecution of claims, which is required by Rule F, because he was the only claimant. Following the procedure used by the judges of that court, Judge Morgan held that the stay should be issued and remain in force until the expiration of the deadline to contest the limitation petitioner’s right to exoneration or limitation of liability.
Court enforced Marseille forum-selection clause in passenger’s contract with French cruise ship operator in connection with cruise from Argentina to Antarctica; Jones v. Ponant USA LLC, No. 19-cv-3041, 2020 U.S. Dist. Lexis 85176 (S.D.N.Y. May 14, 2020) (Buchwald).
Kimberly Moffatt Jones made reservations to take her daughter, two sons (one of whom is autistic), and her autistic son’s therapist on a round-trip luxury cruise on Ponant’s vessel Le SOLÉAL from Ushuaia, Argentina, to Antarctica at a cost of $125,028. She then chartered a private jet at the cost of $355,000 for the round trip from California to Argentina because her autistic son is unable to fly commercially. The vessel suffered damage to its propeller prior to the cruise, and the port of departure changed to Concepcion, Chile, and was then delayed. Jones and her entourage returned on the private jet without sailing on the cruise, even though the vessel did depart the next day. Ponant returned the fare of $125,028, and Jones brought this action in New York for the cost of the chartered flight. Ponant moved to dismiss the action based on the forum-selection clause in the General Sales Terms and Conditions that were incorporated in the booking. The terms provided that French law would govern the contract and included a forum-selection clause stating that “only the courts in the area of the Marseille District Court, France, have jurisdiction to hear any proceedings initiated against” the cruise operator. Judge Buchwald concluded that the clause had been reasonably communicated to Jones and that the use of the word “only” made the clause mandatory. However, Jones argued that her claims of negligent and intentional misrepresentations did not depend on the contractual relationship of the parties and were not subject to the forum-selection clause. Judge Buchwald rejected that argument as the language (any proceedings initiated against the operator) was broad enough to encompass the asserted claims and because a forum-selection clause should not be defeated by artful allegations growing out of the contractual relationship that plead claims not based on the contract. Judge Buchwald found no grounds sufficient to overcome the presumptive validity of the clause and dismissed the case without prejudice for refiling consistent with the clause.
Federal district court upheld admiralty jurisdiction over suit by dredging contractor against the United States for breach of contract despite objection from the United States that exclusive jurisdiction was in the Court of Federal Claims; J-Way Southern, Inc. v. United States, No. 19-12423, 2020 U.S. Dist. Lexis 85066 (D. Mass. May 14, 2020) (Saris).
Therefore, she analyzed the contract, reasoning that its purpose was to dredge a navigable waterway and then deposit sand on a beach. Although dredging a navigable waterway has been considered a traditional maritime activity, facilitating maritime commerce, a contract to nourish beaches with dredge sand, to protect them from erosion, has been held to be non-maritime. Although the United States argued that large portions of the contract did not involve dredging, Judge Saris concluded that the primary purpose of the contract was to facilitate maritime commerce so that the court had admiralty jurisdiction over the suit. However, she certified the order for an interlocutory appeal.
Court affirmed sanctions against seaman’s employer and counsel for inappropriate objections and improper instructions to the Rule 30(b)(6) deponent; REC Marine Logistics, LLC v. Richard, No. 19-11149, 2020 U.S. Dist. 85606 (E.D. La. May 15, 2020) (Africk).
Magistrate Judge Douglas sanctioned REC Marine and its counsel in connection with the Rule 30(b)(6) deposition of REC Marine in which REC Marine’s attorney interrupted the questioning 145 times, presenting 106 objections, including 52 speaking objections, instructing the witness not to answer 16 times, and asking questions to the witness 11 times during the questioning from Richard’s attorney. Magistrate Judge Douglas ordered REC Marine and its counsel to pay the attorney’s fees of a second deposition of a properly prepared witness as well as fees for the preparation of the motion for sanctions (April 2020 Update). REC Marine and its counsel contested the sanctions order, but Judge Africk agreed that the sanctions were warranted. The lawyer argued to Judge Africk that his behavior was “abnormal” and was the result of “continuing serious illness, mental and physical fatigue.” However, the lawyer did not present that argument to Magistrate Judge Douglas, and Judge Africk held that it was waived.
Court denied sanctions for arguments made by bunker supplier that were not colorable but were not made in bad faith; China Shipping Container Lines Co. v. Big Port Service DMCC, No. 15-cv-2006, 2020 U.S. Dist. Lexis 88065 (S.D.N.Y. May 15, 2020) (Freeman).
The dispute between China Shipping and Big Port Service over the supply of bunkers to China Shipping’s vessel returns to the Update after the Second Circuit gave effect to a judgment in Singapore and enjoined the efforts of the bunker supplier to arbitrate the dispute (April 2020 Update). Big Port Service continued to seek arbitration after the Singapore court held that there was no contract between the parties and therefore no arbitration clause. Although Magistrate Judge Freeman found that several of the supplier’s contentions lacked any factual or legal basis and could not be considered to be colorable, she held that it takes more than the presentation of unsupported arguments to demonstrate an intent to harass or that are sufficiently egregious to qualify as bad faith. Citing cases where sanctions were denied for poor legal judgment for an objectively frivolous case and poor practice of relying on an argument that had been rejected in a similar action, Magistrate Judge Freeman denied the request for attorney’s fees.
Iron worker who was injured on a barge while engaged in replacing a bridge failed the duration and nature elements of the seaman status test, and his conclusory affidavit was insufficient to create a fact question to prevent removal of his Jones Act suit; Gates v. American Bridge Co., No. H-20-418 (S.D. Tex. May 16, 2020) (Rosenthal).
William Gates was employed as an iron worker by American Bridge Co., which was constructing a replacement bridge over the San Bernard River in Brazoria County, Texas. He slipped and fell on a barge owned by American Bridge and brought this action in state court under the Jones Act and general maritime law. American Bridge removed the case to federal court, asserting that the Jones Act claim was improperly pleaded because Gates failed both the duration and nature elements of the substantial connection test for seaman status. Gates then moved for remand of the case to state court. American Bridge admitted that the project required the use of barges, which were maneuvered into place by tugs, but the barges do not have a standing crew. The iron workers performed fabrication and welding work, primarily on land and on the bridge, but they also worked on floating equipment, such as securing a barge when it was repositioned and rigging a hopper to the excavator to deposit debris on shore. Other than those tasks, Gates was responsible for spreading crushed rock across the bank and roadway. Gates was injured while helping to tie off a small barge (composed of Flexifloats) that was holding the excavator being used in the removal of debris from the demolition of a pier of the bridge that was being replaced. Based on his employment records, the affidavit from American Bridge established that, since his date of hire, Gates had spent no more than 7.9% of his work time on vessels. Gates responded with an affidavit that he spent approximately one-third of his time (more than the 30% rule-of-thumb for substantiality) on the water on vessels. Additionally, he testified that the fabrication work was finished a week or two before his injury and he was reassigned to work on the barge, so the duration element should be measured from that time forward. Using a summary judgment-like procedure to determine if the Jones Act allegation was improperly pleaded, Chief Judge Rosenthal rejected the conclusory testimony that Gates spent a third of his time on vessels, as he did not explain how he calculated that percentage or identify other evidence to support its accuracy, in contrast to the specific evidence from American Bridge based on cost and task codes used to track Gates’s time. Chief Judge Rosenthal also rejected the argument that there had been a change in assignment for Gates as he did not receive a new position, title, or job duties, and there was no evidence that the reassignment was permanent. Chief Judge Rosenthal also concluded that Gates’s connection to the barge was not substantial in nature (based on Papai’s analysis that the nature test must concentrate on whether the employee’s duties take him to sea). Gates was not involved in operating or navigating the barges and was not cross-trained in tasks related to the maintenance or function of the barges. Gates’ testimony that he spent a third of his time on vessels simply did not establish a substantial connection with a vessel in navigation as a seaman. As the motion to remand was denied, Chief Judge Rosenthal ordered American Bridge to file a motion for summary judgment.
When the vessel construction contract contained forum-selection clauses for different venues, one mandatory and one permissive, the court enforced the mandatory clause; US Workboats, LLC v. Windserve Marine, LLC, No. 7:20-cv-19, 2020 U.S. Dist. Lexis 88814 (E.D.N.C. May 18, 2020) (Boyle).
The dispute between US Workboats and Windserve arose over a contract to build a 20-meter windfarm service vessel. On January 2, 2020, US Workboats filed a complaint against Windserve in the superior court of Onslow County, North Carolina. Windserve removed the case to the United States District Court for the Eastern District of North Carolina on January 30 and then filed suit that same day against US Workboats in the United States District Court for the Eastern District of New York. US Workboats cited the forum selection clause of the contract providing, “Both parties hereby consent exclusively to venue in and jurisdiction of Onslow County Superior Court should any dispute arise.” US Workboats argued that the case should be remanded to state court because the forum-selection clause constituted a waiver of Windserve’s right to removal from the designated court. Windserve, however, argued that venue was proper in the Eastern District of New York based on another forum-selection clause in the contract, providing, “The parties agree that the jurisdiction for any litigation arising out of this Contract, including the proper interpretation of this Contract, shall be the United States District Court for the Eastern District of New York.” Chief Judge Boyle analyzed the clauses and noted that one was mandatory and one was permissive. Mandatory clauses contain language of exclusion, and the use of the term “shall” in the New York clause is not mandatory. However, the use of the term “exclusively” in the North Carolina clause is mandatory. Enforcing the mandatory forum-selection clause, Chief Judge Boyle held that Windserve waived its right to remove the case from the mandatory venue in the Onslow County Superior Court and ordered the case remanded.
Passenger’s injury claim was barred by the one-year limitation in the Passage Ticket Contract; Chessen v. American Queen Steamboat Operating Co., No. 4:19-cv-174, 2020 U.S. Dist. Lexis 86676 (S.D. Ind. May 18, 2020) (Magnus-Stinson).
Donna Chessen, a passenger on one of American Queen’s cruise ships, was injured on October 17, 2017, when she tripped on a tablecloth while getting up from a table. A month later she engaged counsel, who sent a letter of representation to American Queen dated November 15, 2017. The firm thereafter had conversations with a representative of American Queen, who advised that any litigation would have to be brought in Indiana as required by the Passage Ticket Contract. The firm retained local counsel, who brought this suit in federal court in Indiana on August 15, 2019. American Queen filed a motion for summary judgment that the suit was barred by the one-year limitation in the ticket, and Chessen responded that the one-year limitation was not applicable because the limitation was not reasonably communicated to Chessen. She argued that the limitation was buried on page 8 of the ticket on the 27th of 40 lines of capitalized text and that the contract was not mailed to her until ten days before the cruise began. She also pointed out that American Queen had not advised her counsel of the time limitation for suit when it mentioned the forum-selection clause. Judge Magnus-Stinson reasoned that the contract contained an IMPORTANT NOTICE at the top of the first page of text in bold capital letters that the contract contained limitations concerning liability for injury or death. Six pages later, the text contained a heading, CARRIER’S LIABILITY, that contained the time limitation. Judge Magnus-Stinson concluded that these provisions weighed in favor of American Queen as to the first element of the reasonable communication test—the manner in which the crucial language is presented in the ticket. With respect to the second element—extrinsic factors surrounding the purchase and subsequent retention of the ticket—Chessen had a reasonable opportunity to review the terms and conditions. She also had a strong incentive to review the provision after suffering a serious injury. Finally, she engaged counsel within a month of the incident, and counsel was aware of the limitation on the forum in the ticket. Judge Magnus-Stinson stated: “The responsibility to familiarize themselves with the provisions of the Contract was on Mrs. Chessen and her counsel.” Judge Magnus-Stinson therefore dismissed the suit as time-barred.
Deceased seaman’s estate could recover against non-employer entities for the seaman’s pre-death pain and suffering and for loss of social security income and loss of household services; spouse and adult children who were not dependent on the seaman could not recover in their own capacity; McAllister v. McDermott, Inc., No. 18-361, 2020 U.S. Dist. Lexis 87908 (M.D. La. May 19, 2020) (Dick).
James T. McAllister asserted that he developed mesothelioma from exposure to asbestos while serving as a machinist mate on vessels in service of the United States Navy. He brought this suit against suppliers of products containing asbestos, and his wife and sons continued the suit after his death. One of the suppliers moved for partial summary judgment on the damages that are available to McAllister’s beneficiaries, and the beneficiaries conceded that non-pecuniary damages were unavailable in the wrongful death action. They argued that the decedent’s pain and suffering during his lifetime were included within the pecuniary damages that were recoverable in the survival action, and Judge Dick agreed. McAllister’s spouse, who lived with McAllister in Louisiana until his death, and his adult sons, who live in Florida, sought to recover for pecuniary losses, including loss of his social security retirement and loss of household services, such as assisting with household chores and maintenance, handling the finances, and assisting with the care of an elderly aunt. However, in their interrogatory answers they denied being dependent on McAllister. Accordingly, Judge Dick held that damages for loss of income and household services could only recovered by McAllister’s spouse as executrix of his estate.
Court found sufficient question whether the Jones Act applied to a foreign injury and remanded a suit that was removed based on improper joinder of the Jones Act claim; Procell v. ENSCO Inc., No. H-20-526, 2020 U.S. Dist. Lexis 89707 (S.D. Tex. May 20, 2020) (Rosenthal).
Courtney Procell, a Louisiana resident, was injured while working on a jack-up rig owned by ENSCO International in the Persian Gulf. He was employed by ENSCO Ltd. Procell brought this suit in state court in Houston, Texas, against ENSCO International, a Swiss company, ENSCO Ltd., a Cayman Islands company, and ENSCO Inc., a Texas company, asserting claims under the Jones Act and under the general maritime law (unseaworthiness and maintenance and cure). The defendants removed the case based on diversity, asserting that the forum defendant, ENSCO Inc., had no liability and was improperly joined, and that the Jones Act did not apply so that the Jones Act claim was improperly pled and was not a bar to removal. The defendants argued for an extension of the improper-joinder doctrine (traditionally applicable to non-diverse defendants) to avoid the bar to removal of diversity cases brought against forum defendants. Although Chief Judge Rosenthal agreed with the defendants that Procell had not shown that he could establish a cause of action against ENSCO INC., she declined to rule on this issue as there was another reason to remand the case. Analyzing the Lauritzen–Rhoditis factors, she concluded that two factors, one important and one unimportant, pointed to the application of United States law, two factors, one of which was entitled to significant weight (base of operations), pointed to application of Saudi Arabia law, one factor pointed to the application of the law of Liberia, and one factor pointed to application of the law of Switzerland. Although considering the question to be a close one, Chief Judge Rosenthal found a reasonable basis for predicting that Procell might establish liability under the Jones Act. Therefore, as the Jones Act was not improperly pleaded, she remanded the case to state court.
Attorneys’ fee intervention in dispute over repair of ships was dismissed after 11 years of inaction; Northrop Grumman Ship Systems, Inc. v. Ministry of Defense of the Republic of Venezuela, No. 1:02-cv-785, 2020 U.S. Dist. Lexis 89555 (S.D. Miss. May 21, 2020) (Ozerden).
Venezuela’s Ministry of Defense engaged the Scruggs Law Firm and Podhurst Orseck to represent it in a dispute with Northrop Grumman Ship Systems (formerly Ingalls Shipbuilding and now Huntington Ingalls) over a $200 million contract for the repair of two military frigates. Settlement negotiations between the firms and Huntington Ingalls resulted in an announcement that the case settled and a dismissal of Huntington Ingalls’ claims. The Ministry then sought to vacate the settlement on the ground that Scruggs did not have the authority to settle. When the district court declined to set aside the settlement, the Fifth Circuit vacated the settlement agreement and remanded the case to the district court. The firms then withdrew as counsel and intervened, seeking to recover $20,000,000. In the 11 years since the remand from the Fifth Circuit, Podhurst Orseck filed nothing in support of its claim, did not respond to 27 orders requesting status reports from the parties, did not participate in any telephonic conferences, and did not respond to the Ministry’s motion to dismiss its intervention. Finding a clear record of delay and contumacious conduct warranting dismissal of the claim, Judge Ozerden dismissed the claim of Podhurst Orseck without prejudice.
Court allowed discovery to determine whether the owner of a tug seeking to limit liability was the owner pro hac vice of the barges being towed for purposes of the flotilla rule; In re Marquette Transportation Co. Gulf Island LLC, Nos. 6:18-cv-1222, 18-cv-1238, 18-cv-1250, 2020 U.S. Dist. Lexis 90528 (W.D. La. May 22, 2020) (Hanna).
This limitation action arose from an allision between a tug, owned by Marquette, and a drydock in the Lower Atchafalaya River. The owner of the drydock sought discovery to add the value of the barges in tow of the tug to the limitation fund based on the flotilla rule. The tug owner argued that the barges were owned by separate, but affiliated entities, and did not qualify as a flotilla owned by the same person. The drydock owner, however, argued that the flotilla could include vessels owned and operated by the same entity and sought discovery to determine if the tug owner was the operator/owner pro hac vice of the barges. Judge Hanna agreed with the drydock owner and ordered the tug owner to provide information on the ownership and value of the barges being towed by the tug, including information on the operation and control over the barges. Note: the opinion did not address why the flotilla rule would apply to a tort claim where no contractual obligations were involved, based on the distinction drawn by the Supreme Court in Sacramento Navigation Co. v. Salz, 273 U.S. 326 (1927); Liverpool, Brazil & River Plate Steam Navigation Co. v. Brooklyn Eastern District Terminal, 251 U.S. 48 (1919).
Company that operated taxicab in which the seaman was injured was not liable for the acts of its driver, who was an independent contractor, but could be liable for negligent hiring and training of the driver; Lewis v. Gaskin, No. 2:17-cv-1424, 2020 U.S. Dist. Lexis 91799 (W.D. La. May 26, 2020) (Cain).
Jerell Lewis, a tankerman on the BOB DEERE, was injured when the taxi in which he was a passenger collided with another vehicle. Lewis brought this action against his employer, Genesis Marine, for negligence under the Jones Act, and he brought negligence claims under Louisiana state law against the driver of the cab, Taylor Gaskin, and the operator of the cab, Gulf Coast Services. Genesis Marine, which paid maintenance and cure to Lewis, also brought a cross-claim against Gulf Coast. Asserting that Gaskin was an independent contractor, Gulf Coast, moved for summary judgment on the claims brought by Lewis and Genesis Marine. Concluding that Gaskin was not an employee of Gulf Coast, Judge Cain dismissed the vicarious liability claims asserted against Gulf Coast. However, Judge Cain also concluded that Gulf Coast had a duty to ensure the proper training and hiring of independent contractors, such as Gaskin, and he denied summary judgment on the claims of Lewis and Genesis Marine asserting those theories for recovery.
Captain of a yacht was subject to personal jurisdiction in Massachusetts in a suit by the vessel owner when he traveled to Massachusetts and negotiated his contract with the owner in Massachusetts; as that oral contract could be performed within one year, the court held that it was not subject to the Massachusetts statute of frauds; JLB LLC v. Egger, No. 1:19-cv-11890, 2020 U.S. Dist. Lexis 93152 (May 28, 2020) (Burroughs).
JLB LLC purchased a 68-foot yacht and then sought a captain to deliver the vessel from Florida to Massachusetts. Responding to an online post from Christian Egger, the owner called Egger, and Egger came to Massachusetts to interview the owner. The parties orally agreed that Egger would sail the yacht to Massachusetts in time for a corporate event on the vessel in Massachusetts, that the owner would rent an apartment for Egger and his family for the summer, that the owner would pay Egger a salary of $85,000 per year, and that Egger would continue to perform responsibilities onshore and offshore after delivery of the vessel to Massachusetts. In violation of the agreement, Egger allegedly diverted the vessel to go fishing, failed to perform maintenance, and often drank on the vessel. The owner fired Egger before the vessel reached Massachusetts, and Egger threatened to file a notice of lien with the Coast Guard or to arrest the vessel. The owner then brought this suit against Egger in federal court in Massachusetts for damages and injunctive and declaratory relief. After several unsuccessful attempts to serve Egger, the owner left a copy of the complaint at Egger’s home and sent a copy by Federal Express for which Egger’s wife signed. Egger argued that the Massachusetts court lacked personal jurisdiction in the case, but Judge Burroughs held that the court had specific jurisdiction because the initial contacts with Massachusetts were the first steps in the “train of events” that resulted in the alleged breach of contract. Similarly, she held that venue was proper in Massachusetts as the events that led to the claim, including the contract negotiations, the offer, and subsequent communications between the parties were in or from Massachusetts. As leaving the complaint at Egger’s last and usual place of abode and signed-receipt mail are proper means of service under Massachusetts law, Judge Burroughs held that service was proper on Egger. Finally, Judge Burroughs rejected application of the Massachusetts statute of frauds to the oral contract as the Massachusetts statute only applies to contracts which, by their terms, cannot be performed within one year, and it was possible that the contract could have been performed within a year. Note: in reaching the conclusion that the state statute of frauds did not apply to the contract, the court did not address decisions holding that state statutes of frauds do not apply to maritime contracts. E.g., Kossick v. United Fruit Co., 365 U.S. 731 (1961); Union Fish Co. v. Erickson, 248 U.S. 308 (1919).
From the state courts:
Florida did not have personal jurisdiction over a German shipbuilder in an action brought by a seamstress injured on a cruise ship off the coast of Denmark; Meyer Werft GmbH v. Humain, No. 3D19-1737, 2020 Fla. App. Lexis 6105 (Fla. App. 3d Cir. May 6, 2020) (Lindsey).
Jocelyne Humain was hired as a seamstress by Cintas Corp. to make and repair uniforms on Royal Caribbean’s OVATION OF THE SEAS. She was injured while the ship was at sea off the coast of Denmark when she tripped over electrical cords under her desk. She brought suit against Royal Caribbean and Cintas in the Circuit Court for Miami-Dade County and then amended her complaint to add Meyer Werft, the shipbuilder. She asserted three counts against the shipbuilder, Jones Act negligence (as an employee of Meyer Werft), unseaworthiness of the vessel, and, alternatively, negligence in her capacity as a passenger. Meyer Werft filed a special appearance, supported by an affidavit that it is a German company with its principal place of business in Germany, that it constructed the OVATION OF THE SEAS in Germany pursuant to a contract signed in Germany, that it did not employ Humain, that it was not engaged in the operation of cruise ships, that it did not build or repair any part of the vessel in the United States, and that no vessel owned by Meyer Werft has ever called at any port in the United States. Circuit Judge Zilber denied the special appearance, but the court of appeal reversed. Writing for the appleate court, Judge Lindsey noted that Meyer Werft contested all of the jurisdictional allegations in the complaint by sworn declaration, shifting the burden of proof to Humain to establish the minimum contacts necessary for personal jurisdiction. As Humain failed to establish either that the cause of action arose from any of Meyer Werft’s activities in Florida (to establish specific jurisdiction) or that Meyer Werft had continuous and systematic contacts with the state (to establish general jurisdiction), Judge Lindsey reversed the denial of the special appearance and ordered the circuit judge to dismiss the case.
Court rejected worker’s suit against union and employer group for declining his request to perform longshore work as a casual laborer; Johnson v. Pacific Maritime Association, No. A152300, 2020 Cal. App. Unpub. Lexis 3065 (Cal. App. 1st Dist. May 18, 2020) (Jackson).
Roderick Johnson applied to be a casual longshore worker in San Francisco pursuant to the procedure set forth through the San Francisco Joint Port Labor Relations Committee (JPLRC) (acting on behalf of the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union, Local 10 (ILA)). However, he twice failed to comply with requests of the JPLRC and was disqualified from being processed as a casual laborer. Claiming that he had been personally promised, on more than one occasion, that he would be employed as a casual laborer, Johnson brought suit against the PMA and the ILA for promissory estoppel and fraud. Although he originally brought the action pro se, he later obtained counsel. After a year and a half, a contested case hearing was held. Johnson sought a continuance that the defendants opposed on the ground that Johnson and his counsel had not diligently litigated the case. The judge denied the continuance and found no triable issues of fact on the promissory estoppel and fraud claims, dismissing the action against the defendants. Johnson challenged the dismissal on the ground that the judge should have continued the case, but the appellate court noted that Johnson’s own admissions negated the merits of his case. Johnson admitted in his deposition that there was no actual promise of employment and that he understood that he would have to undergo a process that included an interview, strength and agility test, physical examination, drug and alcohol screening, and safety training. Johnson also admitted that he had not been interviewed, taken any of the required tests or screenings, and had not appeared for mandatory orientation, even though his failure to attend would disqualify him from processing for the position. As such, even if there had been a promise, there was no reliance on the promise. As the elements of his claim were refuted by his own admissions, a continuance would have been a futile and unwise expenditure of judicial resources. Consequently, the appellate court affirmed the dismissal of Johnson’s claims.
Port operator was enjoined from blockading access to a terminal operator’s storage tanks pending a decision on the merits with respect to the applicability of a Terminal Usage Fee to petroleum discharged from vessels at the terminal; Buckeye Partners, L.P. v. GT USA Wilmington, LLC, No. 2020-255, 2020 Del. Ch. Lexis 191 (Del. Ch. May 20, 2020) (Laster).
Buckeye Partners leases a dock from the operator of the Port of Wilmington, Delaware, where petroleum is discharged from ships and is piped to fuel storage tanks on property adjacent to the Port. Buckeye’s customers then pick up petroleum from the storage area in tanker trucks. Buckeye has paid a volume-based fee for the petroleum pursuant to its lease for the dock, but the operator of the Port asserted that it had the right to additionally collect from Buckeye a Terminal Usage Fee (assessed on stevedores) based on the volume of cargo loaded and unloaded at the Port’s docks. When Buckeye Partners declined to pay the Terminal Usage Fee, the operator of the Port blockaded the road providing access to Buckeye’s tanks. Buckeye then brought this action against the operator of the Port and sought a preliminary injunction preventing the operator from blockading access to Buckeye’s tanks pending the outcome of the litigation. Concluding that Buckeye had shown a reasonable probability of success on the merits, Vice Chancellor Laster enjoined the operator from preventing Buckeye and its customers from accessing the tanks pending a final ruling on the merits in this litigation.
Thanks to Allen Hemphill for his help in preparing this Update.
Kenneth G. Engerrand
Brown Sims, P.C.
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“[I]t is of interest to note that Article VII of the Laws of Oleron required that the master take an ill seaman to shore and provide him lodging, candlelight and a woman to attend him. In this respect, perhaps the lot of the ancient but ill mariner may have been more pleasant than that of the modern counterpart.”
Sidney Ravkind, More on Maintenance, 24 S. Tex. L.J. 533, 533 (1983) (footnotes omitted).
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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