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June 2021 Longshore/Maritime Update

June 4
2021

June 2021 Longshore/Maritime Update (No. 265)

Notes from your Updater:

The Benefits Review Board recently posted additional decisions at the website below. Published decisions have been posted through 2020. Unpublished decisions have been posted through April 2021.

https://www.dol.gov/agencies/brb/decisions

On the LHWCA Front . . .

From the federal appellate courts:

Appellate courts awarded fees in LHWCA and BLBA cases; Karst Robbins Coal Co. v. Director, OWCP, No. 19-3836, 2021 U.S. App. LEXIS 13616 (6th Cir. May 6, 2021)) (per curiam); Aegis Defense Services, LLC/Allied World Assurance Co. v. Martin, No. 19-70566, 2021 U.S. App. LEXIS 13692 (9th Cir. May 7, 2021) (per curiam); Manalapan Mining Co. v. Director, OWCP, No. 20-3240, 2021 U.S. App. LEXIS 14087 (6th Cir. May 12, 2021) (per curiam).

Opinion Karst

Opinion Aegis

Opinion Manalapan

In our May 2021 Update we reviewed the decision in Seachris v. Brady-Hamilton Stevedore Co., in which the Ninth Circuit reversed an award of attorney fees that reduced the requested hourly rate of Charles Robinowitz of $450 an hour to $349.85. In another Aegis appeal, the Ninth Circuit awarded Robinowitz his requested rate of $550 an hour and his paralegal the requested rate of $160 an hour. Cases under the Black Lung Benefits Act have resulted in quite different results with the Karst and Manalapan decisions awarding fees at the rates of $220 an hour and $300 an hour.

Injury to offshore worker in vehicular collision in Louisiana on his way to an OCS platform was covered under the LHWCA via the OCSLA; Owensby & Kritikos v. Director, OWCP, No. 19-60610, 2021 U.S. App. LEXIS 14410 (5th Cir. May 14, 2021) (Barksdale).

Opinion

James Boudreaux was employed by Owensby & Kritikos as an equipment-testing technician on facilities located both on land and on the outer Continental Shelf. His work involved operating a magnetic arm to scan storage tanks in which materials from drilling operations were deposited. The storage tanks were located primarily on the OCS (89% of his time was spent offshore in the year before his accident). Boudreaux was injured while driving from his home in Church Point, Louisiana, to Freshwater City, Louisiana, where Boudreaux would have been picked up for transportation offshore. Boudreaux sought benefits under the LHWCA, asserting that his work satisfied the substantial-nexus test enunciated by the Supreme Court in Valladolid. Administrative Law Judge Kennington held that Boudreaux’s work was directly related to OCS operations, and the Benefits Review Board affirmed his decision and his award of permanent and total disability benefits. Owensby did not contest that Boudreaux, who was being paid for his travel time, was in the course and scope of his employment. However, Owensby argued that the Benefits Review Board had mistakenly applied the but-for test (to determine whether the injury was sustained as the result of operations conducted on the OCS) that had been rejected by the Supreme Court when it substituted the substantial-nexus test. Nonetheless, Judge Barksdale, writing for the Fifth Circuit, found that the facts in this case established that Boudreaux satisfied the substantial-nexus test. Judge Barksdale found persuasive that Boudreaux was compensated for both time and mileage while traveling to the OCS and that he was transporting his testing equipment with him in his vehicle. This was different than the situation in the Baker case (denying coverage under the LHWCA) for a worker involved in construction of a module for an offshore platform, where the worker worked in the onshore fabrication yard and did not travel offshore.

Civilian personnel who claimed various illnesses from exposure to plutonium radiation while working on the cleanup of a military aircraft crash near Thule, Greenland in 1968 were denied LHWCA benefits under the DBA because they failed to establish a causal connection between their illnesses and their alleged plutonium exposure; Carswell v. E. Pihl & Sons, No. 19-1630 (1st Cir. May 27, 2021) (Thompson).

Opinion

This case arises from the crash in 1968 of a military aircraft carrying nuclear weapons near Thule, Greenland, releasing radioactive materials. Forty-two years later, some of the civilian personnel sought benefits under the Defense Base Act, claiming that they suffered various illnesses from their exposure to plutonium radiation during the cleanup (operation Crested Ice). Administrative Law Judge Odegard held a series of extensive hearings with fact and expert testimony and the participation of the Director (to safeguard the Special Fund in light of the bankruptcy of one of the employers). At the conclusion of the hearings Judge Odegard issued a 164-page decision finding that the workers did not establish a causal nexus between their illnesses and plutonium radiation. The Benefits Review Board and the First Circuit affirmed the decision. The claimants argued that it was error to allow the Director to participate in the case while it was pending before the ALJ and BRB, but the First Circuit disagreed and held that the Director may participate as a litigant before the ALJ and the BRB. On the merits, the First Circuit held that the claimants successfully established a prima facie case, triggering the Section 20(a) presumption. That presumption was rebutted by the expert medical evidence adduced by the employers’ physicians, and there was substantial evidence to support Judge Odegard’s decision (after reviewing the evidence as a whole) that the claimants did not establish a causal connection between their illnesses and the plutonium exposure. Consequently, the First Circuit denied the claimants’ petition for review. Thanks to Eric Richardson, Senior Client Services Manager for Gallagher Bassett in San Diego, for bringing this decision to our attention.

From the federal district courts:

Suit against parent company of DBA employer was removable, but the record was insufficiently developed to addresses defenses under the DBA and the combatant-activities exception; Cloyd v. KBR, Inc., No. H-20-3714, 2021 U.S. Dist. LEXIS 84812 (S.D. Tex. May 4, 2021) (Rosenthal).

Opinion

Service Employees International performed services for the United States Army at the Al Asad base in Iraq. Three employees of SEI were injured when Iran launched ballistic missiles at the base, allegedly in retaliation for the killing of General Qassem Soleimani. The workers brought suit against SEI’s parent company, KBR, in Texas state court, alleging that KBR was aware of the heightened risk of a strike but left the workers at the base in risk of substantial harm. KBR removed the case to federal court under the Federal Officer Removal Statute, and Chief Judge Rosenthal held that the claims satisfied the requirements for the statute and declined to remand the case. She then addressed the defenses asserted by KBR, whether KBR was also an employer of the workers under the “relative nature of the work” test so as to be entitled to the exclusive remedy in the Defense Base Act and the combatant-activities exception (designed to prevent courts in state tort cases from second-guessing military decisions). As the record had not been sufficiently developed at the early stage of proceedings, Chief Judge Rosenthal denied KBR’s motion to dismiss and set a date for KBR to file a motion for summary judgment.

State tort claim against an LHWCA carrier for intentional infliction of emotional distress in the handling of the LHWCA claim was preempted by the LHWCA; Gadsden v. Hartford Accident & Indemnity Co., No. 2:21-cv-903, 2021 U.S. Dist. LEXIS 86401 (D.S.C. May 5, 2021) (Gergel).

Opinion

James Gadsden claimed that he suffered an injury while employed as a longshore worker by ITS Technology and Logistics. Gadsden claimed that his employer’s LHWCA carrier, Hartford, delayed compensation payments to him or mailed them to the wrong address and stopped all payments to him after the Department of Labor recommended restoration of his weekly compensation. Arguing that hearings before an administrative law judge are delayed for months, he brought this action in federal court against the LHWCA carrier for intentional infliction of emotional distress. The carrier moved to dismiss the complaint for lack of subject matter jurisdiction, and Judge Gergel granted the motion. He cited the cases holding that the LHWCA provides a comprehensive scheme with a balance between the concerns of employers and employees. The LHWCA contains provisions addressing the failure to pay benefits and late payments, and those provisions preempt causes of action available under state law that provide extracontractual remedies against insurance carriers.

Court awarded attorney fees as sanctions for the defendant’s discovery failures; court declined to order the plaintiff to travel 1300 miles outside of the forum state for an IME; fact questions precluded summary judgment whether the worker was within the zone of danger; Carroll v. Genesis Marine, LLC, No. 19-13512, 2021 U.S. Dist. LEXIS 85910 (E.D. La. May 5, 2021) (Feldman).

Opinion

Michael R. Carroll, a tankerman employed by Gulfstar Industries, was charged with monitoring air pressure leaks on a barge owned by Genesis Marine at the International-Matex Tank Terminals dock in St. Charles Parish, Louisiana. Asphalt had been discharged from Genesis Marine barges, and a blowback procedure was being conducted with air being blown through hoses to clear the asphalt. Carroll was on the barge GM3806 when there was a rupture in the GM3804 that had become over-pressurized. Carroll saw air shoot up from the GM3804, and he felt the pressure change, but he did not fall and no object struck him. Carroll sought medical treatment for earaches and ringing in his ears, and he later complained of fatigue, irregular heartbeat, numbness/tingling, neck pain, muscle pain, dizziness/fainting, and eye trouble. He was also treated for anxiety, headaches, and PTSD. Carroll brought this suit against the owner of the vessel and dock in Louisiana state court, and the defendants removed the action to federal court. This opinion addresses three motions filed by defendant Genesis Marine. Magistrate Judge Douglas awarded Carroll attorney fees for moving to compel discovery from Genesis Marine. When Genesis Marine failed to provide written responses to Carrol’s discovery requests and ignored five requests for deposition dates, Carrol filed a motion to compel. Finding that counsel for Genesis Marine was not cooperating with the utmost professionalism and good faith, Judge Feldman overruled Genesis Marine’s objections to the Magistrate Judge’s award of attorney fees. Carroll objected to Genesis Marine’s scheduling of an independent medical examination in Denver, Colorado, which would require Carroll to board a plane during a pandemic and travel 1300 miles outside of the forum state, Louisiana. There was no dispute that Genesis Marine was entitled to the examination; however, the question was whether the scheduling in Denver was reasonable. Carroll offered to be examined in the district in which the suit was pending in Louisiana, and Magistrate Judge Douglas denied Genesis Marine’s motion to compel. Finding Carroll’s offer to be a reasonable accommodation, Judge Feldman agreed with the denial. Finally, Genesis Marine sought summary judgment that Carroll was not entitled to recover for emotional injury without physical contact unless he was in the zone of danger. Genesis Marine argued that Carroll was not in a dangerous area because he was on an adjacent barge 223.71 feet away from the rupture on the other barge. Carroll testified, however, that he was working much closer, 50 to 75 feet from the rupture, and Judge Feldman found that dispute to be sufficient to preclude summary judgment.

Court applied maritime law to suit on behalf of shipyard worker based on exposure to asbestos on ships and on land and found sufficient evidence of exposure to deny the pump manufacturer’s motion for summary judgment; In re Toy Asbestos, No. 19-325, 2021 U.S. Dist. LEXIS 91829 (N.D. Cal. May 13, 2021) (Gilliam).

Opinion

This is the first of three summaries in this Update of decisions addressing asbestos exposure claims in the maritime cases. Thomas H. Toy, Sr., died from mesothelioma that he claimed was related to exposure to asbestos-containing products and equipment manufactured by the defendants in the suit. He claimed the exposure occurred while he worked at the Hunters Point Naval Shipyard and the Treasure Island Naval Base. Warren Pumps filed a motion for summary judgment that Toy’s beneficiaries could not establish causation with respect to its pumps. Judge Gilliam first addressed whether maritime law applied, and he held that exposure on ships mixed with land-based exposure was sufficient to satisfy the locality prong of the test for admiralty tort jurisdiction as long as some portion of the exposure occurred on a vessel on navigable waters. Judge Gilliam was also persuaded by the cases holding that naval asbestos lawsuits satisfy the requirement that the defendant’s conduct bear a significant relationship to traditional maritime activity. Turning to the merits, Judge Gilliam accepted that Toy had not worked on the internal components of Warren pumps, but there was sufficient evidence of exposure to asbestos contained in products supplied by Warren that the judge denied the motion for summary judgment.

And on the maritime front . . .

From the United States Supreme Court:

Federal appellate courts may consider all grounds for removal jurisdiction when the defendant appeals an order of remand based on the Federal Officer Removal Statute; BP P.L.C. v. Mayor and City Council of Baltimore, No. 19-1189 (U.S. May 17, 2021) (Gorsuch).

Opinion

We reported in our November 2020 Update that the Supreme Court granted a writ of certiorari in BP P.L.C. v. Mayor and City Council Baltimore (No. 19-1189) (with Justice Alito not participating). The suit was brought by the Mayor and City of Baltimore against 26 multinational oil and gas companies, asserting that they were partially responsible for climate change. The oil and gas companies removed the case on numerous grounds, including the federal jurisdiction of the Outer Continental Shelf Lands Act, and the district judge rejected all the bases for removal and remanded the case. The only ground the defendants had to appeal the remand of the case was the Federal Officer Removal Statute, but the Fourth Circuit rejected that as a basis for removal, affirming the remand of the case to state court. The energy companies sought a petition for certiorari. The question presented was: Whether 28 U.S.C. 1447(d) permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court where the removing defendant premised removal in part on the federal-officer removal statute, 28 U.S.C. 1442, or the civil rights removal statute, 28 U.S.C. 1443. The Supreme Court answered that appellate review was not confined to the defendant’s arguments under the Federal Officer Removal Statute and the appellate courts may consider all of the grounds for removal raised by the defendant. Writing for seven members of the Court (Justice Sotomayor dissented), Justice Gorsuch remanded the case to the Fourth Circuit to consider all of the grounds for removal and not just the Federal Officer Removal Statute.

From the federal appellate courts:

Fifth Circuit judges called for en banc consideration on the application of Fifth Amendment due process for in personam jurisdiction in federal (admiralty) cases; Douglass v. Nippon Yusen Kabushiki Kaisha, No. 20-30382 (5th Cir. Apr. 30, 2021) (per curiam).

Opinion

In 2017, the ACX CRYSTAL, chartered by Nippon Yusen Kabushiki Kaisha (NYK Line), collided with the U.S. Navy destroyer USS FITZGERALD in Japanese territorial waters, killing seven sailors and injuring at least forty others. Two suits were filed against NYK Line in federal court in Louisiana on behalf of injured and deceased sailors, and Judge Africk dismissed the cases for lack of personal jurisdiction, holding that NYK Line was not subject to general jurisdiction in the United States (see July 2020 Update). On appeal, the Fifth Circuit began by analyzing Fed. R. Civ. P. 4(k)(2), which provides that in cases arising under federal law, federal courts have personal jurisdiction to the constitutional limit, provided that no state could exercise jurisdiction. That rule was drafted in response to the 1987 decision of the Supreme Court in Omni Capital, in which the Court affirmed the decision of the Fifth Circuit that the district court lacked jurisdiction over the defendants in a case arising under federal law when the federal law was silent as to service of process and the state long-arm statute did not reach the defendants. Thus, litigants were unable to bring an action under federal law against a foreign defendant who was outside the reach of the state long-arm statute. The effect of the amendment to the federal rule was that state courts remain subject to the 14th Amendment Due Process Clause in determining whether defendants are subject to personal jurisdiction in state courts, and the constitutional limits of personal jurisdiction in federal courts in cases arising under federal law are limited by the Fifth Amendment’s Due Process Clause. In the latter case, the court looks to the contacts of the defendant with the United States. As maritime law is federal law for purposes of Rule 4(k)(2) [but not, ironically, for purposes of federal question jurisdiction], the Fifth Circuit noted that the Fifth Amendment’s due process inquiry was applicable to the suits against NYK Line. The plaintiffs argued that the requirements of due process under the 14th Amendment differ from those in the Fifth Amendment, and they proposed a national jurisdiction test. They argued that the court should look to a defendant’s national contacts with the inquiry whether a foreign (non-U.S.) defendant who is not amenable to jurisdiction in any state court, was doing systematic and continuous business in the United States, and whether the claim in suit was related to that business. The plaintiffs reasoned that concerns over federalism, which have been critical in recent 14th Amendment due process cases such as Daimler AG v. Bauman, are not applicable in cases brought in federal court under federal law under Fifth Amendment due process, and the Fifth Circuit panel added that a distinction between the two due process clauses was supported by the limited constitutional rights of foreign defendants. Although the judges on the Fifth Circuit panel found the plaintiffs’ arguments to be persuasive, the Fifth Circuit had previously applied Daimler’s due process analysis for general jurisdiction to a case in which jurisdiction was based on Rule 4(k)(2). Following the Fifth Circuit’s rule of orderliness, the panel was bound by the prior decision. As Judge Africk had correctly applied the Fifth Circuit’s existing application of Daimler’s due process analysis for general jurisdiction, the panel affirmed that NYK Line was not subject to personal jurisdiction in this case. However, two of the members of the panel (Judges Elrod and Willett) concurred to state that the case presented “a good vehicle” for the court to grant en banc consideration of the due process standard for personal jurisdiction in cases under Rule 4(k)(2).

Eleventh Circuit judges invited the Supreme Court to wade in and let us know what it thinks of Wilburn Boat, holding that state law, not maritime law, applied to breaches of the captain and crew warranties in a marine insurance policy; Travelers Property Casualty Co. of America v. Ocean Reef Charters LLC, No. 19-13690, 2021 U.S. App. LEXIS 13526 (11th Cir. May 6, 2021) (Jordan).

Opinion

Travelers insured the M/Y MY LADY, a 92-foot Hatteras yacht. The policy contained two express warranties, a captain warranty that required the owner to employ a full-time professional captain approved by Travelers and a crew warranty that required the owner to have one full-time or part-time professional crew member aboard the vessel. The owner of the vessel, Ocean Reef Charters, had neither a captain nor crew member when Hurricane Irma headed toward Florida in September 2017. The operator could not engage the former captain and did his best to secure the yacht. The extra mooring lines he added were ineffective when a dock piling to which the port bow line was attached gave way when Irma struck. The yacht was holed and sank. Travelers brought this suit seeking a declaratory judgment that the breaches of the captain and crew warranties voided coverage under the policy, and the owner responded by arguing that the breaches were unrelated to the loss and that the policy was not voided because of the application of the Florida anti-technical statute (providing that breaches of warranty do not void the policy unless they increased the hazard by any means within the control of the insured). The owner asserted that it was the unforeseeable failure of the dock piling that caused the loss. The arguments presented the question, under Wilburn Boat, whether there was an entrenched rule of admiralty that express warranties in marine insurance policies must be strictly construed in the absence of a limiting provision in the policy. The district court held that there was such an entrenched rule and ruled that there was no coverage. The Eleventh Circuit then re-examined Wilburn Boat, noting how it has sown confusion and troubled maritime lawyers for more than 60 years. This was, in part, because the analysis in Wilburn Boat “rests on a flawed premise” that there was no established maritime rule requiring strict fulfillment of warranties in marine insurance policies when the Supreme Court and all major admiralty appellate courts in the United States had long accepted the literal performance rule. This resulted in inconsistent decisions in the lower courts, and Travelers cited cases from the Eleventh Circuit that breaches of a navigation limit warranty and the seaworthiness warranty bar coverage even when the breach is unrelated to the loss. Judge Jordan did not consider those decisions to establish that strict compliance with all warranties in marine policies is required, as that would be contrary to Wilburn Boat. Reviewing the cases addressing the captain and crew warranties, Judge Jordan declined to find an entrenched maritime rule and remanded the case to the district court to apply Florida law. Judge Jordan concluded [see the longer quote at the end of the Update] with this comment: “Maybe, just maybe, this case will prove tempting enough for the Supreme Court to wade in and let us know what it thinks of Wilburn Boat today.”

Ninth Circuit affirmed dismissal of a foreign dispute involving foreign parties and actions on grounds of forum non conveniens; Mayhem Crude, Inc. v. Borrelli Walsh Pte. Ltd., No. 20-15904, 2021 U.S. App. LEXIS 14190 (9th Cir. May 13, 2021) (per curiam).

Opinion

Mayhem Crude, a corporation organized under the laws of the Republic of the Marshall Islands, brought this action against Borrelli Walsh, a global restructuring, insolvency, and forensic accounting firm located in Singapore. The action sought recovery for damage in connection with the redelivery of Mayhem Crude’s crude oil tanker V8 STEALTH. The suit was brought in the Northern District of California where the vessel was redelivered. Borrelli Walsh moved to dismiss the suit for lack of personal jurisdiction and on the basis of forum non conveniens, and Judge Gilliam granted the motion on both grounds. The Ninth Circuit affirmed that the case should be dismissed for forum non conveniens as all of the actions and parties were foreign, the redelivery in California was not related to the issues in the suit, and Singapore, where a related proceeding was pending, was an adequate forum.

First Circuit disallowed the defendant’s 14(a) and 14(c) claims against the beneficial owner and agent of the plaintiff (vessel owner); Afunday Charters, Inc. v. ABC Insurance Co., Nos. 19-1112, 19-1114, 2021 U.S. App. LEXIS 14205 (1st Cir. May 13, 2021) (Kayatta).

Opinion

Afunday Charters purchased a yacht from Spencer Yachts, but the vessel ran aground and became a total loss. Afunday Charters brought suit against Spencer Yachts, alleging that Spencer Yachts negligently ran the ship aground. Spencer Yachts asserted a defense of negligence by agents of Afunday Charters—Afunday Charter’s owner, Anthony Norman Sabga, and Sean Alonzo, who was hired by Sabga. Spencer Yachts also filed a third-party complaint against Sabga and Alonzo under Rule 14(a) and 14(c). As the parties conceded that any fault on the part of Sabga or Alonzo would be attributed to Afunday Charters and would reduce Spencer Yacht’s liability to Afunday, Judge Gelpi dismissed the third-party complaint. A majority of the First Circuit affirmed, reasoning that any negligence by Sabga and Alonzo would reduce a damage award against Spencer Yachts whether by affirmative defense or third-party practice. Judge Barron dissented on the ground that the district court had failed to adequately address the allegation in the pleadings that the two men were acting for themselves and not for Afunday Charters.

Second Circuit affirmed dismissal of tort claims arising out of an alleged conspiracy to wrongfully abandon a vessel in Brazil for lack of admiralty jurisdiction Great Lakes Insurance SE v. American Steamship Owners Mutual Protection and Indemnity Association, Inc., No. 20-3057 (2d Cir. May 24, 2021) (per curiam).

Opinion

George and Efstathios Gourdomichalis purchased the M/V ADAMASTOS (with a market value of no more than $6 million) in the name of Adamastos Shipping and then used a financing scheme to mortgage the vessel for more than $24 million. Adamastos Shipping and the operator of the vessel, Phoenix Shipping, then insured the vessel for P&I and FD&D (freight, demurrage, and defense) coverage with the American Club. Adamastos Shipping chartered the vessel to Pacific Gulf, which subchartered the vessel to Intergis. Pacific Gulf and Intergis obtained insurance coverage through the Charterers P&I Club. While loading a cargo of soybeans in Rio Grande, Brazil, the Brazilian authorities noted no fewer than 42 deficiencies with the vessel, and the vessel broke free from her moorings and grounded (with almost 60,000 metric tons of soybeans aboard). The vessel did not return to the dock, remained under detention, failed to load the remainder of the cargo, and failed to complete the voyage, resulting in numerous claims against the vessel, including a claim for the value of the cargo of at least $18 million. Asserting that the vessel interests conspired to abandon the vessel in Brazil in order to avoid paying claims and that the American Club abandoned its obligations, as insurer of the vessel, to cover the claims, the Charterer’s Club brought this action based on prima facie tort, promissory fraud, civil conspiracy, unjust enrichment, and negligence. The defendants asserted that the court lacked admiralty tort jurisdiction over the claims, and Judge Abrams agreed. Judge Abrams first held that the tort did not occur on navigable water as the fraud (although related to a vessel on navigable water) occurred on land (the defendants were not on board the vessel or on navigable waters when they allegedly conspired to abandon the vessel or terminate its insurance). Although the ruling on navigable waters was sufficient to hold that the court lacked admiralty jurisdiction, Judge Abrams also addressed the question whether the connection part of the test for admiralty tort jurisdiction was satisfied. Judge Abrams reasoned that the general type of incident was the abandonment of a detained vessel on navigable water and the termination of the vessel’s insurance coverage, and he concluded that this incident did not have a potentially disruptive impact on maritime commerce as it would not obstruct the free passage of commercial ships on navigable waterways. Additionally, Judge Abrams did not consider that the abandonment of a detained vessel on navigable waters and the termination of the vessel’s insurance coverage had a significant relationship to traditional maritime activity. He therefore dismissed the complaint and declined to give leave for an amendment as additional pleading would be futile on the jurisdiction issue (see September 2020 Update). The Second Circuit agreed that Great Lakes’ claims did not satisfy the locality test and affirmed the dismissal. Consequently, the appellate court did not have to address the additional discussion from Judge Abrams on the issue whether the claims satisfied the connection prong of the test for tort jurisdiction.

Purchaser of vessel was entitled to appellate attorney’s fees under Florida law after affirmance of finding that the seller’s claims to the vessel were without substantial fact or legal support; Kosterlitz v. S/V KNOTTA KLU, No. 20-14462 (11th Cir. May 25, 2021) (per curiam).

Opinion

This case arises from discussions for the sale of the catamaran KNOTTA KLU. Michael Kosterlitz, seller, and Robert Libbey, Jr., purchaser, disagreed about whether there was actually a sale, and the issue of title was resolved when the Eleventh Circuit affirmed that there was an enforceable sale of the vessel. The Eleventh Circuit then remanded the case for an award of appellate attorney’s fees to Libbey based on the Florida civil-theft statute, which provides that the defendant is entitled to recover reasonable fees and costs upon a finding that the claimant raised a claim that was without substantial fact or legal support. Judge Magnuson awarded appellate fees of $51,609, and the Eleventh Circuit affirmed the award.

Claimants who did not file claims in the limitation action were allowed to seek reconsideration of the default order, but the court declined to set aside the default; In re GATX Third Aircraft Corp., No. 20-30277 (5th Cir. May 28, 2021) (per curiam).

Opinion

The owners of the M/V MISS SYLVIA filed this limitation action in 2016 after the vessel struck the M/V ATLANTIC GRACE in the Mississippi River in Plaquemines Parish, Louisiana. Several persons filed claims, and Judge Milazzo defaulted those who had not filed claims in May 2017. After two years of litigation, the parties to the limitation action settled all pending claims. Judge Milazzo entered a judgment on November 26, 2018, dismissing all claims asserted in the action with prejudice. In February 2019, several workers on the ATLANTIC GRACE filed federal actions against the shipowners in which they argued that they were known claimants and were entitled to direct notice pursuant to Supplemental Rule F (4), but their claims were rejected by the district court and Fifth Circuit (see May 2020 and December 2020 Updates). The workers then filed a motion on November 25, 2019, seeking relief from the final judgment in the limitation action pursuant to Rule 60(b). Judge Milazzo denied the motion, and the Fifth Circuit first had to address whether the claimants, who were not parties to the limitation action, had standing to file a Rule 60(b) motion. Recognizing the “unusual situation,” the Fifth Circuit held that the claimants had standing to seek relief. Although the parties disagreed over which order triggered the one-year time period for relief under Rule 60(b), the Fifth Circuit bypassed that question because the claimants’ arguments failed on the merits. The previous litigation determined that the claimants were not known to the shipowners before the default order in the limitation action. Additionally, there was no evidence of fraud, misrepresentation, or misconduct in not providing individual notice of the limitation action. Consequently, there was no basis for disturbing the orders in the limitation action. Thanks to Professor Michael Sturley of the University of Texas Law School for bringing this case to our attention.

From the federal district courts:

Judge reapportioned fault after Fifth Circuit reversed one of her two findings of comparative fault of the seaman; Knight v. Kirby Offshore Marine, LLC., No. 17-12456, 2021 U.S. Dist. LEXIS 80831 (E.D. La. Apr. 28, 2021) (Milazzo).

Opinion

Andrew Lee Knight was injured while serving as a crew member on Kirby’s tugboat M/V SEA HAWK. The vessel had a stern line that was used to secure the tug to a barge when entering and exiting port, and the line was replaced when the vessel left port. The captain ordered Knight and another crew member to change out the line when the vessel was at sea in four-foot seas with winds of 20 miles per hour (causing the vessel to roll). After the line was removed and placed on the deck next to the workers, Knight stepped on the line while he was installing the new line. He testified that the rocking of the tug caused him to lose his balance. Judge Milazzo held a non-jury trial and found Knight and Kirby were 50% negligent. Her basis for finding Knight at fault was that he failed to watch his footing while replacing the line and failed to move the line to a location on the boat where he would not have stepped on it. She found total damages of $344,000, of which $60,000 was for past and future pain and suffering. Knight challenged the award of comparative fault on the ground that he could not be found to be comparatively at fault as he was following an order at the time of his injury. The three members of the panel of the Fifth Circuit disagreed on the issue whether the statement in a prior case that a seaman may not be found comparatively at fault when injured while carrying out an order was dictum or applicable law (Judge Elrod dissented and would have held that Knight could not be found at fault for the injury he incurred while following orders). The majority held that a seaman cannot be found negligent for carrying out a specific order from his supervisor but may be found at fault for carrying out a general order. The majority defined a specific order as “one that must be accomplished using a specific manner and method and leaving the seaman with no reasonable alternative to complete the assigned task.”  As the order to change out the line was a general order, Judge Barksdale held that the district court was not precluded from finding Knight to be negligent. He then addressed each of the findings of negligence and concluded that Knight was an experienced tankerman who was familiar with rolling vessels and who knew that the line was on the deck while he was preparing the new line. As such, it was appropriate to find that Knight was negligent for failing to watch his footing. However, Judge Barksdale held that the finding of fault for placement of the line on the deck was clearly erroneous (the captain of the vessel watched the procedure and found no irregularities in the work). Consequently, the Fifth Circuit remanded the case to Judge Milazzo to find the percentages of fault for Kirby and Knight based on the single finding of comparative fault. (See January 2021 Update). On remand, Judge Milazzo reiterated her finding that Kirby was at fault for ordering replacement of the stern line in poor weather and her finding that Knight, an experienced seaman, was at fault for his foot placement. She struck any reference to Knight’s negligence in placement of the stern line and reapportioned fault 80% to Kirby and 20% to Knight.

Court reduced the vessel’s recovery on its claim against the shipyard by the custodia legis expenses awarded to the shipyard for the arrest of the vessel; Robert E. Derecktor, Inc. v. M/Y INDEPENDENCE, No. 15-cv-8257, 15-cv-9372, 2021 U.S. Dist. LEXIS 81461 (S.D.N.Y. April 28, 2021) (Briccetti).

Opinion

This opinion arises out of a dispute over the repair of the M/Y INDEPENDENCE by Robert E. Derecktor, Inc., which filed a demand for arbitration and brought an action arresting the vessel. The owner brought an action demanding repossession of the yacht and alleging breach of contract, negligence, gross negligence, breach of the warranty of workmanlike performance, fraud, and wrongful arrest. Derecktor was awarded $56,106.75 in the first phase of the arbitration, which was confirmed by the court, and the vessel owner was awarded $1,628,754 in the second phase of the arbitration. The owner sought to confirm that award, and Derecktor objected that the arbitration panel exceeded its authority and disregarded the law. Applying the extremely deferential standard for review, Judge Briccetti concluded that Derecktor had failed to carry its burden and confirmed the award in favor of the owner. (See February 2021 Update). Derektor then sought custodia legis expenses for maintaining the INDEPENDENCE during its arrest, and Judge Briccetti awarded Derecktor $248,969 for the expenses as a set-off from the arbitration award in favor of the vessel owner against Derecktor.

Court applied maritime law to product liability claims of Navy seaman who died from mesothelioma allegedly caused by exposure to asbestos from products on Navy vessels, but the court denied the claims for lack of evidence of causation for exposure to the defendants’ products; Gay v. A.O. Smith Corp., No. 2:19-cv-1311, 2021 U.S. Dist. LEXIS 82399 (W.D. Pa. Apr. 28, 2021) (Stickman).

Opinion

Carl E. Gay claimed that he suffered mesothelioma from exposure to asbestos while serving on Navy vessels. After he died, his daughter continued his suit against suppliers of products to the vessels that allegedly contained asbestos. Several manufacturer and distributor defendants moved for summary judgment, and Judge Stickman first determine what law applied to the claims. Concluding that the locality test and substantial relationship tests for admiralty jurisdiction were satisfied, Judge Stickman held that maritime law applied to the claims. Judge Stickman then considered whether the evidence established that the products were a substantial factor in causing Gay’s disease, as required by the general maritime law, and held that Gay’s daughter could not show that the defendants’ products were a substantial cause of his disease. Consequently, Judge Stickman granted the motions for summary judgment of several defendants (one of the several opinions is linked).

Passenger plausibly alleged claims for cruise line’s failure to provide medical treatment and for punitive damages; Hall v. Carnival Corp., No. 21-cv-20557, 2021 U.S. Dist. LEXIS 82047 (S.D. Fla. Apr. 29, 2021) (Bloom).

Opinion

Barbara Hall tripped over the threshold at the entrance to the shower in her stateroom on the CARNIVAL VALOR and sought treatment in the ship’s medical center. She alleged that she was refused care because the medical center did not accept her health insurance and she was unable to pay $500. Two days later she sought help under a compassion exception, but the staff again declined to treat her. She ultimately had to have surgery to insert a metal plate and screws and brought this action complaining of the cruise line’s failure to render first aid and seeking punitive damages for the cruise line’s wanton and outrageous conduct. The cruise line moved to dismiss the claim for punitive damages, but Judge Bloom denied the motion. First, she held that the allegations were sufficient to state a claim for negligence based on the failure to exercise reasonable care to a sick or injured passenger. Judge Bloom then addressed the split in the Southern District of Florida on the standard necessary for an award of punitive damages, whether punitive damages are available for wanton, willful or outrageous conduct or whether intentional misconduct is necessary. Judge Bloom sided with the cases holding that intentional misconduct is necessary for an award of punitive damages, but she held that the complaint plausibly alleged intentional misconduct on the part of the medical staff in failing to provide care to the passenger when the passenger demonstrated symptoms that needed to be attended to prevent further damage.

Court declined to resolve seaman exemption to the FLSA for offshore electricians by summary judgment; Hernandez v. Helix Energy Solutions Group, Inc., No. H-18-1588, 2021 U.S. Dist. LEXIS 82107 (S.D. Tex. Apr. 29, 2021); Way v. Helix Energy Solutions Group, Inc., No. H-19-334, 2021 U.S. Dist. LEXIS 82112 (S.D. Tex. Apr. 29, 2021) (Rosenthal).

Opinion Hernandez

Opinion Way

Helix provides offshore-drilling construction, inspection, maintenance, repair, and salvage services to the oil and gas industry. It pays its HV electricians and electro-technical officers on a day rate, and the workers brought suits seeking overtime under the Fair Labor Standards Act. Helix asserted the seaman exemption under the FLSA, and the workers argued that their work related primarily to servicing offshore oil and gas wells and not to aiding a vessel in transportation. Helix responded that the work related to the transportation of vessels because the plaintiffs worked on systems that kept vessels afloat and allowed them to be safely navigated. As there were fact disputes on the issue whether the plaintiffs spent a substantial portion of their working time on non-seaman duties, Chief Judge Rosenthal declined to resolve the issue by summary judgment.

Fact question on whether clear liquid on deck of cruise ship was open and obvious resulted in denial of cruise line’s motion for summary judgment; Radke v. NCL (Bahamas) Ltd., No. 19-cv-23915, 2021 U.S. Dist. LEXIS 83774 (S.D. Fla. May 3, 2021) (Bloom).

Opinion

Margaret Radke slipped and fell in a clear liquid on Deck 11 of the NORWEGIAN SKY. She had passed the area several times shortly before her fall. Earlier, a crewmember mopped the area, and a yellow trifold caution sign and towel were placed on the deck. When she returned, the caution sign and towel had been moved. Later, Radke returned and did not see any warning signs or crewmembers. The cruise line contended that the condition on the deck was open and obvious because Radke had seen the mopping, had seen a drink being thrown in the area, and had been advised by a passenger that the deck was wet. Radke responded that the conditions had changed when she returned to the area with the warning sign removed and the clear liquid not being obvious. Concluding that Radke could reasonably have concluded that the condition had changed and was no longer obvious, Judge Bloom denied the cruise line’s motion for summary judgment.

Palliative versus curative dispute required hearing to decide if seaman reached maximum cure for maintenance and cure claim; Galloway v. Moran Towing of Lake Charles, LLC, No. 6:20-cv-116, 2021 U.S. Dist. LEXIS 85523 (W.D. La. May 3, 2021) (Summerhays).

Opinion

Micah Galloway injured his back on the tug ELEANOR MORAN and brought this suit seeking remedies under the Jones Act and general maritime law. Based on the opinions of several examining physicians, his employer sought dismissal of the maintenance and cure claim on the ground that Galloway had reached maximum cure. The issue that raised the question was whether a spinal cord stimulator was palliative or curative. Galloway’s doctor testified that if a patient had chronic pain and the pain was relieved, you could argue that he had been healed with a change in his physiology. After the filing of the defendant’s motion, the stimulator was removed because it caused Galloway discomfort, leaving the only treatment still available as a nerve block, that the defendant argued was palliative, not curative. Although Judge Summerhays considered the dispute to present a close question, he held that an evidentiary hearing was necessary to address whether Galloway had reached maximum cure.

Judge agreed with Magistrate Judge to decline to grant an expedited trial of a seaman’s maintenance and cure claim; Morgan v. Ocean Warrior Fisheries, LLC, No. 1:20-cv-69, 2021 U.S. Dist. LEXIS 85194 (D. Me. May 4, 2021) (Levy).

Opinion

Randy Morgan was injured on August 30, 2019, while working on defendants’ fishing boat, OCEAN WARRIOR. Ocean Warrior Fisheries continued to pay Morgan his share of the vessel’s catch after he stopped working, but it did not make the payments as maintenance, and Morgan’s attorney demanded additional payments of $350 per week for maintenance. Morgan’s attorney also argued that Ocean Warrior had not paid all of the medical bills and that cure was owed for $40,000. Morgan then sought an expedited bench trial on his claims for maintenance and cure, wrongful failure to pay maintenance and cure, and for punitive damages, arguing that immediate payment was needed to defray significant financial hardship and to allow him to obtain medical treatment. Ocean Warrior responded that Morgan’s argument that he could not pay for medical treatment was disingenuous as he had already been paid $89,126.71, which was more than he was seeking, and that the bench trial would deny Ocean Warrior its right to a jury trial on the maintenance and cure claims. Morgan had demanded a jury trial on all of its claims, and continued to insist on a jury trial on the remaining claims that were not bifurcated. However, as Ocean Warrior had not forfeited its right to a jury trial on the maintenance and cure claims, Magistrate Judge Rich reasoned that the loss of its right to a jury trial was dispositive in favor of denial of the expedited trial. Moreover, Magistrate Judge Rich added that the duplication of fact and expert testimony in the two trials would be prejudicial to Ocean Warrior and that Morgan was not prejudiced because he had received more than he was claiming in maintenance and cure. See October 2020 Update. Chief Judge Levy agreed with the denial of an expedited trial, but he differed in part with Magistrate Judge Rich’s reasoning. Chief Judge Levy stated that Ocean Warrior did not have a right to have this case tried to a jury. Therefore, its consent was not required for Morgan to withdraw his request for a jury trial to obtain an expedited trial. However, Chief Judge Levy concluded that Magistrate Judge Rich did not abuse his discretion in concluding that bifurcation was inefficient and that bifurcation was not needed to avoid prejudice to Morgan. As the magistrate judge’s denial of a bifurcated trial was within his judicial discretion, Chief Judge Levy denied Morgan’s objection to his decision.

Specifications were not sufficiently precise to permit a government-contractor-immunity defense in a vessel allision case; loss of services claim did not include companionship; survival action claim for pain and suffering was denied because the decedent was not conscious; evidence was insufficient for punitive damages against tug owner; joint and several liability was not available for punitive damages; In re Crosby Marine Transportation, L.L.C., Nos. 17-14023, 18-4136, 2021 U.S. Dist. LEXIS 86795, 2021 U.S. Dist. LEXIS 91349 (E.D. La. May 6, 13, 2021) (Ashe).

Opinion Immunity Defense

Opinion Damages

The United States Army Corps of Engineers entered into a contract with BIS Services for a hurricane restoration project in Jefferson Parish, Louisiana, known as the Yankee Pond Project. The project required moving sediment from Lake Cataouatche through the Bayou Segnette waterway and depositing the materials in Yankee Pond to build up the marsh. BIS Services subcontracted with Crosby Dredging for dredging services, and Crosby Dredging subcontracted with Crosby Tugs for tug operations. The tug DELTA DUCK was assigned to push a barge through Bayou Segnette, but the captain of the tug decided to push the tow against the west bank of Bayou Segnette due to weather conditions, blocking about 35% of the Bayou. The tug did not display red and green navigational lights, and the barge displayed no white all-around light; however, the tug used its work lights to illuminate the tug and barge. At approximately 4:00 a.m., a 22-foot Fishmaster recreational vessel piloted by Chad Williams proceeded south in Bayou Segnette with passengers Angela Huggins, Anna Clark, and Samantha Randle. Crosby Tugs asserted that Williams had spent the night and early morning hours drinking alcohol and was impaired at the time the Fishmaster allided with the barge that was still pushed against the west bank of the Bayou. Huggins and Clark were injured, and Randle died from blunt force trauma to the head combined with drowning. Crosby filed this limitation action with respect to the DELTA DUCK and asserted a government-contractor-immunity defense, claiming that the Corps of Engineers had provided “extremely precise specifications” for the dredging operation in a 270-page document. Judge Ashe agreed that the Corps did approve certain specifications for the project, but the specifications regarding navigation hazards were not reasonably precise. The specifications did not include how Crosby should act to prevent marine collisions, and, in particular, did not address the lighting requirements for a barge pushed up against the bank of a bayou in mid-transit. As the Corps only provided general instructions on this matter, the methods chosen were within Crosby’s discretion and were not protected by the government-contractor-immunity defense. Crosby also challenged the damages being sought by the passengers on the recreational vessel. The decedent’s mother brought wrongful death and survival claims, and Crosby argued that her mother’s claims for loss of support and services must be dismissed because Randle did not provide her mother with financial support or regular household services. Randle’s mother argued that the claim for loss of services should include loss of companionship (the decedent “had her back” if her mother needed anything), but Judge Ashe held that loss of companionship was a separate item of damages and that the lack of pecuniary loss required dismissal of the claims for loss of support and services. Crosby also sought dismissal of the decedent’s survival action, arguing that there was no evidence that the decedent consciously suffered any pre-death pain. The decedent’s mother responded that the cause of death was both drowning and trauma, so the decedent must have been alive when she entered the water and drowned. Judge Ashe rejected that argument, however, as the decedent may have been alive when she entered the water, but the evidence did not establish that she was conscious. Crosby also moved to dismiss all of the claims for punitive damages, and Judge Ashe concluded that the evidence was insufficient to establish a callous disregard for the rights of others and dismissed the punitive damages claims. The claimants asserted that if the operator of the recreational vessel, Williams, was liable for punitive damages, then Crosby should be jointly and severally liable for the punitive damages as a joint tortfeasor. As Crosby was not held liable for punitive damages, Judge Ashe held that Crosby could not be jointly and severally liable for that particular kind of damages. Crosby also sought to dismiss Clark’s claim for wage loss after the date she returned to work. In the absence of evidence to support the claim after she returned to work, Judge Ashe dismissed Clark’s claim to that extent. Finally, Judge Ashe declined to grant summary judgment to the owner of the recreational vessel on the claimants’ claim of negligent entrustment, finding disputed issues of fact to be resolved at trial.

Communications from claimants’ counsel were insufficient to provide the tug owner with notice of the reasonable possibility of a claim in excess of the tug’s value and did not trigger the time to file a limitation action; S.D.S Lumber Co. v. Gregory, No. C20-5767, 2121 U.S. Dist. LEXIS 88105 (W.D. Wash. May 7, 2021) (Pechman).

Opinion

The limitation action brought by S.D.S. Lumber returns to the Update (see February 2021 Update). On March 21, 2018, S.D.S. Lumber’s tug DAUBY was towing barges down the Columbia River when it collided with a recreational vessel carrying Kevin and Jacob Gregory whose main outboard engine died. Kevin and Jacob Gregory were thrown into the river and rescued by nearby good Samaritans. They declined to go to the hospital when an ambulance arrived, but they contend that they later sought medical treatment. Counsel for Kevin and Jacob Gregory sent a letter to the president of S.D.S. Lumber on April 5, 2018, notifying him of the attorney’s representation and another letter a year later on April 10, 2010, advising of the continued representation of Kevin but not Jacob. On January 27, 2020, the current counsel for both claimants called counsel for S.D.S. Lumber and advised of the potential punitive damage claim and significant liability and followed up with a letter on January 28, 2020, reminding of the conversation and including a link to the Coast Guard report. The claimants filed suit in state court against S.D.S. Lumber on June 1, 2020, and disclosed that they would seek “garden variety” mental anguish claims and not claims for diagnosable mental injuries (advising that they would call no mental health professionals or present any mental health treatment records). They also sought to recover punitive damages. In a letter sent on May 5, 2020, the claimants valued their claims at $2,900,000. S.D.S. Lumber brought this limitation action on July 30, 2020 (they had to amend because the original action did not specifically state that S.D.S. Lumber was also seeking exoneration). The question, raised by the claimants’ motion to dismiss and the tug owner’s motion for partial summary judgment, was whether communications before January 30, 2020 (six months before the limitation action was filed) were sufficient to trigger the running of the six-month period to file the limitation action. In denying the motion to dismiss, Judge Pechman agreed with courts holding that the six-month period is a “claims processing rule, not a jurisdictional requirement.” Addressing the timeliness of the limitation action on the owner’s motion for partial summary judgment, Judge Pechman had to decide whether the letters, read together, provided notice that the claimants intended to present a claim and that the claim might reasonably exceed the limitation value of $1.7 million. She concluded that the letters did present a claim, but none of the communications, including the link to the Coast Guard report, provided information suggesting a reasonable possibility of a damages award in excess of $1.7 million. Consequently, Judge Pechman granted S.D.S. Lumber’s motion for partial summary judgment on the claimants’ statute of limitations defense.

Court allocated sale proceeds, insurance payments, and expenses among vessel’s owners in Rule D partition sale; Chase v. Folz, No. 19-80476, 2021 U.S. Dist. LEXIS 88874 (S.D. Fla. May 7, 2021) (Smith).

Opinion

David Chase, Bruce Folz, and John Nobile purchased a 42-foot catamaran, QUE SERA SERA, for $153,000, but Chase no longer wanted to be an owner after suffering an injury. When he could not find a buyer for his interest in the vessel, Folz brought this partition action under Supplemental Rule D, and the vessel was sold for $45,000. Chase settled with Folz, and the dispute between Chase and Nobile was tried to Judge Smith. Judge Smith concluded that each of the purchasers acquired a one-third interest in the QUE SERA SERA as tenants in common. He then held Chase responsible for a third of the expenses of the vessel, awarded Chase his portion of insurance proceeds for damage to the vessel (concluding that Nobile and Folz improperly signed Chase’s name on the insurance checks), and awarded Nobile his share of the sale price for the vessel. Judge Smith declined to award attorney fees to Nobile on the ground that each party in an admiralty case bears his own fees unless fees are otherwise authorized by contract or statute.

Letter to vessel owner’s insurer seeking Med Pay benefits and advising that the injured party intended to pursue the tortfeasor/s was insufficient to trigger the six-month period to file a petition seeking limitation of liability; In re Staughton, No. C20-725, 2021 U.S. Dist. LEXIS 88104 (W.D. Wash. May 7, 2021) (Coughenour).

Opinion

On March 25, 2017, Lance Staughton’s vessel, BAT OUT OF HELL, collided with Lee Skene’s vessel, BALANCE, during a sailboat race, resulting in an injury to Matthew Walker, a crew member on the BAT OUT OF HELL. Staughton filed a protest with the race’s Protest Committee, and the Committee determined that BALANCE caused the accident and that BAT OUT OF HELL was not at fault. That decision was affirmed by the Appeals Committee. In May 2017, Staughton informed his insurer, Geico Marine, of the collision and injury, and in March 2018, Walker’s attorney sent a letter to the Geico Marine adjuster requesting payment of the Med Pay benefits under the Geico Marine policy and advising that “[we] intend to pursue the full claim for our client against the tortfeasor/s.” The attorney added that Walker was not presenting a bodily injury claim to the policy at that time. Geico responded by paying the Med Pay and asserting its subrogation rights. Walker’s attorney replied that the BALANCE was not accepting responsibility and was contending that Staughton was the liable party. In March 2020, Walker filed a personal injury lawsuit against Skene and Staughton in state court in King County, Washington, and in May 2020, Staughton brought this limitation action. Walker moved to dismiss the action as untimely for not being filed within six months of the correspondence from his attorney, and Judge Coughenour considered the motion based on the standard for a motion to dismiss as that is more favorable to Walker. Walker argued that his attorney’s communication provided notice of a reasonable possibility of a claim against Staughton with the language that he would pursue the full claim against the tortfeasor/s and his note that Skene’s insurer denied responsibility and blamed Staughton. Judge Coughenour found that argument unpersuasive as the subject of the communications was the Med Pay benefit that is not subject of limitation of liability (a bodily injury claim was not being made against the policy at that time). The communications lacked the degree of specificity to provide notice that Walker was bringing a claim against Staughton. As insufficient notice was provided more than six months before the limitation action was filed, Judge Coughenour denied the motion to dismiss the suit.

Magistrate Judge declined to allow the defendant to withdraw from its stipulation on Navionics data and declined to rule, a week before trial, whether state law on comparative negligence or the Pennsylvania Rule applied to an overboard drowning death; Reed v. Maersk Line, Ltd., No. 3:19-cv-238, 2021 U.S. Dist. LEXIS 87728 (S.D. Tex. May 7, 2021) (Edison).

Opinion

Christopher Reed drowned when his fishing boat in Galveston Bay was allegedly rocked by the wake from the container ship M/V MAERSK IDAHO, which was proceeding up the Houston Ship Channel, and Reed was thrown overboard. An important issue in the case was the elevation change in Reed’s boat from the wake of the passing vessel, and the parties obtained navigation data from three devices. Reed’s cell phone was synchronized to the GPS navigation system on the boat, uploading data to a Navionics cloud-based server. Reed’s widow provided the data to Maersk, including latitude, longitude, speed, heading, and elevation change, and, after the parties had roughly three months to review and analyze the data, they stipulated that the data accurately represented the positions/speeds of the vessels. After the discovery period ended, Maersk asked the court to limit the stipulation to latitude, longitude, and speed, and Reed objected that her experts had relied on the stipulation with respect to the elevation change and it would prejudice her if the stipulation were withdrawn. Maersk’s counsel argued that “in his long and illustrious career as a professional mariner and top-flight admiralty lawyer,” he had never encountered a ship’s navigation system that provided information about the altitude of a ship—until now. Magistrate Judge Edison found it “hard to sympathize” with the defendant’s claim that it was not aware of the altitude data when the information was unquestionably included and there was no attempt to conceal it. He therefore declined to set aside the stipulation. Maersk also argued that the court should apply the Texas proportionate responsibility rule (plaintiff’s comparative fault of 51% bars recovery) to this maritime case as the decedent was a non-seaman in state waters, and that the Pennsylvania Rule applied to alleged violations of state and federal law by the decedent; however, Magistrate Judge Edison held that these issues should be raised at the trial that was scheduled to begin a week later (the case has been tried to Judge Brown).

Court found triable fact questions in Navy seaman’s suit against manufacturers of products allegedly containing asbestos under the general maritime law and that the sophisticated purchaser defense did not apply in maritime asbestos claims; Miles uniformity principle applied to prevent Navy seaman (and his wife) from recovery of loss of consortium or punitive damages; Spurlin v. Air & Liquid Systems Corp., No. 3:19-cv-2049, 2021 U.S. Dist. LEXIS 87994 (S.D. Cal. May 7, 2021) (Battaglia).

Opinion

Dale M. Spurlin claimed that he developed mesothelioma from exposure to asbestos-containing equipment while serving on Navy ships. He brought this action against the manufacturers of equipment allegedly containing asbestos, and the manufacturers moved for summary judgment on the grounds that they had no duty to warn of product hazards, there was no proof of causation, they were insulated from liability by the government-contractor-immunity defense, and Spurlin was not entitled to punitive damages. Judge Battaglia first addressed the applicable law and held that maritime law applied to the claims. The defendants then asserted that their products did not require incorporation of asbestos and that the Navy required incorporation of asbestos parts. Judge Battaglia rejected that the involvement of the Navy was relevant to the question whether the products required incorporation of asbestos for the duty question. Therefore, Judge Battaglia proceeded to analyze whether the products in this case required incorporation of asbestos. With the exception of one defendant, whose product was not shown to be on the vessels, Judge Battaglia found that all of the products required incorporation of asbestos and that there were triable issues whether the defendants had reason to know that the integrated product was likely to be dangerous to its intended users and that the users would not realize the danger. Consequently, Judge Battaglia held that the defendants owed a duty and he then addressed the causation evidence and found sufficient evidence of product-specific exposure to deny summary judgment. As there were fact questions whether the defendants knew more about the dangers of their equipment than the United States did but did not warn the United States, there were triable issues on the application of the government-contractor immunity defense. The defendants also moved to dismiss Spurlin’s (and his wife’s) claims for loss of consortium and punitive damages based on the Miles uniformity principle. Although Spurlin did not bring a Jones Act claim, he would not have been entitled to recover these elements of nonpecuniary damages if he had. Concluding that the Jones Act is a parallel statutory scheme that provides an appropriate benchmark in assessing the damages in this case, Judge Battaglia held that Spurlin and his wife were not entitled to recover loss of consortium or punitive damages. Turning to Spurlin’s motion to dismiss the defendants’ sophisticated purchaser defense, Judge Battaglia agreed with a previous decision holding that the sophisticated purchaser defense is not available under maritime law in cases involving asbestos.

Court granted motion to stay limitation action pending the conclusion of criminal proceedings where the discovery in the civil action overlapped with that of the criminal action. In re James Gang Charters, LLC, No. 8:20-cv-1859, 2021 U.S. Dist. LEXIS 88321 (M.D. Fla. May 10, 2021) (Honeywell).   

Opinion

Jesse Mayer was charged with boating under the influence manslaughter for the alleged striking and killing of Robert J. Krysztofowicz, Jr. on August 30, 2019. Mayer was allegedly operating the JAMES GANG, owned by James Gang Charters, LLC, while intoxicated when the incident occurred. James Gang Charters filed this limitation action and then sought to stay the limitation action pending the conclusion of the criminal proceedings against Mayer. Judge Honeywell granted the motion due to the overlap of issues in the criminal and civil proceedings and in the interests of judicial efficiency and economy. Judge Honeywell reasoned that because both cases involved the death of Krysztofowicz and because the invocation of Mayer’s Fifth Amendment privilege prevented the discovery of certain potentially incriminating evidence, it was appropriate to stay the civil proceedings.

Costs were awarded to both sides when both were entitled to recover from the other; Versilia Supply Service SRL v. M/Y WAKU, No. 18-cv-62975, 2021 U.S. Dist. LEXIS 90196 (S.D. Fla. May 11, 2021) (Strauss).

Opinion

This action, resulting from the freezing of assets of the beneficial owner of the M/Y WAKU, a yacht registered in the Cayman Islands that was sold for $20,575,000 at a judicial auction, returns to the Update. In a nonjury trial, Judge Cohn addressed the lien claims that were asserted against the vessel. Crewmembers brought wage claims based on their contracts that were governed by the law of the vessel’s flag. Applying the law of the Cayman Islands, Judge Cohn held that the crew members had liens for unearned wages, repatriation expenses, unpaid vacation days, and penalty wages. He also found that the claims were inflated and reduced the amounts awarded. Judge Cohn did not find that any severance was allowed under the agreements signed by the crew or under Cayman Islands law. Judge Cohn awarded judgment on the counterclaim against the captain of the vessel for conversion as the captain had removed appurtenances, equipment, furnishings, and supplies that were the property of the vessel and denied the claim of the company beneficially owned by the captain for necessaries (based on credit card balances) because there was no evidence establishing what was purchased to support the credit card balances. (See February 2021 Update). The vessel’s beneficial owner then sought costs from the captain for the successful counterclaim, and Magistrate Judge Strauss recommended that costs be assessed in the amount of $19,844.30 for deposition transcripts, $2,101.68 for trial transcripts, $130 for costs of service, and $7,530.47 for the bond for the vessel. (See May 2021 Update). This award involves the costs on account of the success of both the defendants and the captain, which resulted in a judgment in favor of the defendants in the amount of $69,399.87 and the judgment obtained by the captain against the defendants in the amount of $24,803.70. As both parties were successful, Magistrate Judge Strauss awarded costs to both, including costs of $6,773.85 to the captain for deposition transcripts, trial transcripts, and service and filing fees.

Marina was not held liable in civil contempt for violating the court’s order to make a sunken vessel immediately available for removal as it was unclear what was required to the make the vessel available for removal; National Liability & Fire Insurance Co. v. Rick’s Marine Corp., No. 15-cv-6352, 2021 U.S. Dist. LEXIS 90391 (E.D.N.Y. May 12, 2021) (Hurley).

Opinion

Adam Weinstein purchased the 39-foot pleasure boat, PELAGIC, in June 2014 for $300,000 and operated the vessel until November 2014 when he delivered it to Rick’s Marine for repairs, winterizing, and storage for the winter. The PELAGIC was launched on May 8, 2015 and sank a few hours later due to a hose on the seacock valve that became loose because it had been overtightened. Rick’s Marine denied that it was responsible for the overtightening, and Weinstein asserted that Rick’s should have detected the problem during the winterization. Weinstein’s insurer, National Liability, paid Weinstein the face value of its insurance policy, $290,000, and National Liability and Weinstein brought this suit against Rick’s Marine, which counterclaimed for damage to its dock, unpaid repairs on the vessel, and storage costs. With the aid of the presumption of negligence from the bailment of the vessel, Judge Hurley found that the sole cause of the sinking was the negligence of Rick’s Marine. He then awarded $290,000 to National Liability against Rick’s Marine, but held that Weinstein had failed to establish that the value of the vessel at the time of the incident was greater than its insured value and denied Weinstein any recovery for the damage to the vessel. Finding that the repairs had been completed before the sinking, Judge Hurley entered judgment in favor of Rick’s Marine against Weinstein for the cost of the repairs, and he awarded Rick’s Marine judgment against National Liability for the cost of storage of the vessel after the incident at the rate Rick’s Marine had been charging before the incident. As Weinstein had transferred the vessel to National free of liens after payment of the policy limit, National Liability was granted indemnity from Weinstein for the storage charges. As Rick’s Marine was found solely responsible for the sinking, Rick’s Marine’s claim for damage to its dock from the sinking was denied. (See April 2020 Update). Judge Hurley also ordered Rick’s Marine to immediately make the PELAGIC available from the marina at National Liability’s expense. The repair and storage fees were paid to Rick’s Marine in March 2020, but Rick’s Marine did not release the PELAGIC until July 31, 2020. National Liability then filed a motion seeking to hold Rick’s Marine in civil contempt. There were no additional damages from the delay, so National Liability sought fees and costs of $16,989.90 for bringing the motion. Rick’s Marine presented excuses for the delay in turning over the vessel to National Liability, and Judge Hurley found the excuses to be problematic. However, in order to issue a finding of civil contempt, the first requirement is a clear and unambiguous order. Judge Hurley did not consider the order to be sufficiently clear in this case to permit a contempt finding as it did not set forth how the vessel was to be made available. Therefore, he denied National Union’s motion for contempt as well as Rick’s Marine’s request for fees.

Court had admiralty jurisdiction to enforce arbitration agreement in charter party; provision for “arbitration to be in NY” was sufficient for court to compel arbitration; Spliethoff Transport B.V. v. Phyto-Charter Inc., No. 20-cv-3283, 2021 U.S. Dist. LEXIS 91559 (S.D.N.Y. May 13, 2021) (Oetken).

Opinion

Spliethoff brought this action seeking to compel Phyto-Charter to submit to arbitration and to appoint an arbitrator on Phyto-Charter’s behalf. Phyto-Charter argued that it did not conclude an agreement to arbitrate and the court lacked jurisdiction to order arbitration. Judge Oetken rejected the jurisdiction argument, however, as it is not the agreement to arbitrate that confers jurisdiction but the underlying dispute. As Spliethoff properly invoked the court’s admiralty jurisdiction over the charter party dispute, the court had admiralty jurisdiction to enforce the arbitration provision. The charter provided: US/NY law to apply with ga/arbitration to be in NY, small claims procedure to apply for claims usd 100,000 or less.” Phyto-Charter argued that the provision did not include an agreement to arbitrate, but Judge Oetken disagreed, stating that the dispute (valued at $500,000) was in excess of the small claims procedure and therefore fell within the New York arbitration provision. Judge Oetken ordered Phyto-Charter to appoint an arbitrator or agree to Spiethoff’s selection as a single arbitrator.

Cruise passenger failed to establish personal jurisdiction over offshore excursion operator for injury in Curacao; Snyder v. Royal Caribbean Cruises Ltd., No. 20-21429, 2021 U.S. Dist. LEXIS 91614 (S.D. Fla. May 13, 2021) (Cannon).

Opinion

Karen and Todd Snyder, passengers on the FREEDOM OF THE SEAS, purchased tickets from the cruise line for an excursion in Curacao called Speedboat Adventure and Snorkel that was operated by Adrenaline Tours. They claimed to have suffered injuries when the Adrenaline Tours driver operated the boat at an unreasonably fast speed in rough waters. The Snyders brought this action in federal court in Miami against the cruise line and excursion operator, and the excursion operator moved to dismiss the case for lack of personal jurisdiction. As the excursion operator was a Curacao company and its alleged negligence occurred in Curacao, the Snyders argued that the court had personal jurisdiction based on the contract between the cruise line and excursion operator in which the excursion operator consented to jurisdiction in state or federal court in Miami/Dade County. However, that contract limited the consent to actions brought by the parties to the agreement and the passengers were not parties or third-party beneficiaries of the contract. Consequently, Judge Cannon dismissed the case against the excursion operator for lack of personal jurisdiction.

Tanker’s time charterer could not obtain summary judgment with respect to the tanker’s allision; unseaworthiness claims of non-crewmembers against the owner and operator of the tanker were dismissed; pilot’s testimony that the assisting tugs for the tanker satisfactorily performed all orders was insufficient to grant summary judgment that the tugs satisfied their duty of care; vessel that was struck by the tanker and broke free was not liable for the allision and property damage, but was not entitled to summary judgment on the injury claims of its seamen; Archer Daniels Midland Co. v. M/T AMERICAN LIBERTY, Nos. 19-10525, 19-10925, 10-11813, 19-12748, 2021 U.S. Dist. LEXIS 92193 (E.D. La. May 14, 2021) (Fallon).

Opinion Marathon

Opinion American and Crowley

Opinion Bisso

Opinion Associated

These decisions arise from a casualty on the Mississippi River in which the tanker AMERICAN LIBERTY lost power, allided with the cargo ship AFRICAN GRIFFON and two barges (injuring workers on one of the barges). The barges then broke loose and ultimately allided with Archer Daniels Midland’s elevator grain facility and vessels that were located at and near the ADM facility. Owners of three of the vessels filed limitation actions, and injury and property damage claims were filed in the limitation actions. Judge Fallon issued four decisions on the merits on May 14, 2021. Marathon Petroleum, time charterer of the AMERICAN LIBERTY, moved for summary judgment that, as the time charterer, it had no responsibility for the navigation of the vessel. Judge Fallon denied the motion as Marathon was time charterer, owner of the dock from which the vessel had just departed, and owner of the destination dock in Tampa, Florida. There were questions of fact on the role Marathon may have played in the departure of the vessel from the dock at nighttime in high river stages and on Marathon’s authority over the crew and to collect penalties for increased fuel consumption and late departures/arrivals. The owner and operator of the AMERICAN LIBERTY sought to dismiss the unseaworthiness claims of injured workers who were not crew members on the AMERICAN LIBERTY. As the non-crew do not have unseaworthiness claims, Judge Fallon dismissed those claims and held that the workers must prove negligence. The owners of the two Bisso tugs that were assisting the AMERICAN LIBERTY as it departed the dock sought summary judgment based on the testimony of the federally licensed pilot on the AMERICAN LIBERTY, who testified that the tugs complied with all of his orders. However, Judge Fallon ruled that the pilot’s testimony was insufficient to establish as a matter of law that the tugs had satisfied their duty of care, although he cautioned that the claimants faced a “significant hurdle” in proving independent negligence on the tugs. Finally, Judge Fallon addressed claims involving the crane barge DON D, which was tied off to another vessel and broke free when the vessels were struck by the AMERICAN LIBERTY. Associated Terminals, which claimed to be the operator of the crane barge, sought summary judgment on the claims of its crew, who argued that the operator of the crane barge failed to train the crew on how to safely evacuate the vessel,  failed to provide the crew with a reasonably safe means to evacuate the vessel, and failed to position the crane in such a way that the crew could see inbound traffic, in violation of the Inland Navigational Rules. Judge Fallon held that there were fact questions on these theories that required a trial to resolve. However, Judge Fallon did grant summary judgment to the operator of the crane barge for property damage to the ADM facility as there was no evidence that the negligence of the operator caused the allision or the vessel to break free. Judge Fallon also denied the claimants’ motion for summary judgment (seeking to dismiss the limitation action brought by the operator of the crane barge for lack of status as owner pro hac vice) as Judge Fallon ruled that Associated presented sufficient evidence of its exclusive control over the vessel.

Affirmative defense was stricken for failing to follow the Eleventh Circuit rule on the recovery of medical expenses; Donaldson v. Carnival Corp., No. 20-23258, 2021 U.S. Dist. LEXIS 92182 (S.D. Fla. May 14, 2021) (Scola).

Opinion

Lisa Donaldson, a passenger on the Carnival DREAM, brought this suit seeking to recover for her injuries on the vessel, and the cruise line asserted an affirmative defense that “any award of damages to the Plaintiff, in any, should be reduced by any collateral source payments paid to and/or received by the Plaintiff. Plaintiff’s damages as to past medical expenses, if any, must be limited to the amounts paid and accepted by Plaintiff’s treating physicians.” In accordance with the Eleventh Circuit’s decision in Higgs v. Costa Crociere, Magistrate Judge Torres recommended, and Judge Scola agreed, that the defense be stricken because the defendant is permitted to introduce evidence regarding the actual amounts paid by the plaintiff for her medical care, but the defense that the damages must be limited to amounts paid and accepted is unavailable as the plaintiff is entitled to recover the amount determined by the jury to be reasonable based on all relevant evidence, including the amount billed, the amount paid, and expert testimony or other evidence of what is reasonable. Neither Magistrate Judge Torres nor Judge Scola would entertain arguments that Higgs was improperly decided (for a discussion of collateral source issues in the maintenance and cure context, see Collateral Source Issues in Maintenance and Cure Claims, 42 Tulane Mar. L.J. 1 (2017)).

Captain’s inattention on personal call while operating push boat during shifting operation resulted in findings of negligence and denial of limitation of liability because shore-based managing officials knew that captains operated vessels while using their cell phones for personal calls; In re Savage Inland Marine, LLC, No. 1:19-cv-536 (E.D. Tex. May 17, 2021) (Truncale).

Opinion

Justin Wood was injured while working as a seaman for Savage Inland Marine at Savage’s Fina Fleet on the Neches River near Orange County, Texas. Wood was injured when he was struck in the face by a mooring line released from an open chock on a barge that was being secured. Wood was working with Jeremy Turner, an employee of Blessey Marine and a crewmember of the M/V CAPT. PAUL E. LORD, a push boat that was captained by Niles Shoemaker. Turner instructed Captain Shoemaker to move forward, which put Wood and Turner in the line of fire when the mooring line on an open chock came loose. Captain Shoemaker was not on his personal cell phone at the time of the accident, but a personal call distracted him from observing Wood and Turner as they completed the rigging. Savage, Blessey, and another party filed actions seeking limitation of liability, which were consolidated in this proceeding. Savage settled with Wood, and the determination of liability and privity or knowledge was tried to Judge Truncale. Judge Truncale found that Blessey was 70% at fault and imposed 30% fault to settling party Savage. He found that Wood was not guilty of any comparative fault. As Blessey’s shoreside management was aware that Blessey personnel violated its cellphone policies during operations, Judge Truncale held that Blessey’s privity or knowledge was sufficient to deny its petition for limitation of liability.

Trial was required to determine if catering services to everyone on a vessel were necessaries; material barges were necessaries to a heavy lift vessel, but services of the tugs that moved the barges were not; Arc Controls, Inc. v. M/V NOR GOLIATH, No. 1:19-cv-391 c/w No. 1:19-cv-935, 2021 U.S. Dist. LEXIS 92879, 93204 (S.D. Miss. May 17, 2021) (Guirola).

Opinion Entier

Opinion material barges and tugs

These decisions involve the question whether services performed in connection with a vessel used in the decommissioning and salvaging of an offshore platform are necessaries. Epic Companies sought to decommission an abandoned oil platform and chartered the M/V NOR GOLIATH, a ship equipped with a crane, to perform heavy lifts for the construction/deconstruction work. The vessel was arrested by a company that had not been paid for necessaries, and other parties filed interventions asserting liens for necessaries on the NOR GOLIATH. Entier provided catering services for the vessel and filed a motion for summary judgment that included the invoices specifying the catering services for those on the vessel, including its crew and visitors and guests on the vessel. That raised the question whether catering for those who were required for the decommissioning project (but were not members of the crew of the vessel) contributed to the mission of the vessel to perform heavy lifts. As that question could not be answered from mere submission of the invoices, Judge Guirola declined to grant summary judgment to Entier for the total amount of its invoices. MARMAC sought to enforce a lien for supplying material barges to the project, claiming that the barges were necessary to the NOR GOLIATH because it could not complete a lift and move on to the next lift without a barge for the lifted material. Judge Guirola agreed and held that MARMAC was entitled to partial summary judgment, but he drew the line with the contention that the services of the tugs that moved the barges were necessaries. Although the claim was “seductive,” Judge Guirola held that the beneficiaries of the services of the tugs were the material barges, not the NOR GOLIATH.

From the state courts:

Vessel owner had no duty to warn passenger that boats move on the water or that a cabin hatch door was open; Kitzmiller v. Schroeder, No. 81335-8-I, 2021 Wash. App. LEXIS 1079 (Wash. App. May 3, 2021) (Coburn).

Opinion

Kirk Schroeder of Seattle owned a 23-foot sailboat and connected with Susan Kitzmiller through a sailing group. They sailed to Poulsbo, Washington, for a multi-day gathering of sailboats in Liberty Bay for an Independence Day weekend. On arrival, Schroeder tied his boat to a group of sailboats in the Bay (a “raft up”). During the next evening, Kitzmiller was seated on the port side of the vessel taking pictures of the fireworks with her cell phone when the boat rocked or moved and she fell through the open cabin hatch door to the lower cabin. Kitzmiller brought this action against Schroeder and argued, based on an expert report, that Schroeder was negligent because he did not provide Kitzmiller with a pre-departure safety orientation and because he should have advised her to move to a safer sitting area. Schroeder moved for summary judgment on the ground that he had no duty to warn Kitzmiller that boats move on water or that the cabin hatch door was open as these were open and obvious dangers. The district court agreed and dismissed the case. Writing for the Washington Court of Appeals, Judge Coburn rejected Kitzmiller’s argument that the open and obvious defense would import concepts of state premises liability law into the general maritime law and affirmed the dismissal of the case.

Thanks to Katherine E. Kaplan for her help in preparing this Update.

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

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Quote:

By not squarely addressing Wilburn Boat in the 65 years since its issuance, the Supreme Court has left the lower federal courts at sea without a rudder or compass. If we were writing on a blank slate, we would consider holding that there should be a uniform maritime rule regarding the effect of a breach of an express warranty in a marine insurance policy—and from there determine what that uniform rule should be. See generally De Lovio v. Boit, 7 F. Cas. 418, 443, F. Cas. No. 3776 (C.C.D. Mass. 1815) (Story, J.) (noting the “advantages resulting to the commerce and navigation of the United States, from a uniformity of rules and decisions in all maritime questions”); 1 Benedict on Admiralty § 111 (7th rev. ed. 2020) (explaining that the “fundamental purpose” of the grant of admiralty jurisdiction was to “preserve adequate harmony and appropriate uniform rules relating to maritime matters” and to “bring them within the control” of the federal government); Goldstein, The Life and Times of Wilburn Boat, 28 J. Mar. L. & Com. at 557 (“[T]he uniformity idea has long antecedents regarding marine insurance.”).

The slate, however, is not blank. It is covered in graffiti, and we must somehow make sense of the layers of paint. . . .

In the 1975 edition of their treatise on admiralty law, Grant Gilmore and Charles L. Black, Jr., wrote that “[i]t is utterly impossible to be at all sure . . . how the Supreme Court will at last resolve the[ ] perplexities and contradictions” created by Wilburn BoatSee Gilmore & Grant, The Law of Admiralty, at 70. Since then, more than 45 years have passed, yet we are no closer to an answer. Maybe, just maybe, this case will prove tempting enough for the Supreme Court to wade in and let us know what it thinks of Wilburn Boat today. As they say, “[h]ope springs eternal . . . .” Alexander Pope, An Essay on Man, Epistle I, l. 95 (1733).

Travelers Property Casualty Co. of America v. Ocean Reef Charters LLC, No. 19-13690, 2021 U.S. App. LEXIS 13526 (11th Cir. May 6, 2021) (Jordan).

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© Kenneth G. Engerrand, June 4, 2021; redistribution permitted with proper attribution.

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