June 2023 Longshore/Maritime Update (No. 289)
Notes from your Updater:
The Update reports the mileage rate announced by the Internal Revenue Service, and we note the rate for both business mileage and the rate for medical travel. The current rates (see January 2023 Update) are 65.5 cents per mile for business travel and 22 cents per mile for medical travel. Judge Rosenthal of the United States District Court for the Southern District of Texas addressed which rate should be used to reimburse medical travel in a maritime case involving the seaman’s remedy of maintenance and cure, holding:
“The court finds that Moran should be awarded mileage for travel to and from his doctors at the rate set by the IRS for miles driven to obtain medical treatment. The IRS sets this rate at 16 cents and 18 cents per mile for 2021 and 2022, respectively. The court finds this rate, rather than the business rate, is appropriate because travel for medical purposes relates to Signet’s cure obligations. Additionally, because maintenance does not cover automotive expenses, it would be inappropriate to reimburse Moran at a rate—such as the IRS business rate—intended to reflect all costs of operating a vehicle.” See Moran v. Signet Maritime Corp., No. H-21-4214, 2022 U.S. Dist. LEXIS 197000 (S.D. Tex. Apr. 17, 2023).
We have previously reported that Magistrate Judge Westmore of the United States District Court for the Northern District of California held that the biological opinion regarding the Coast Guard’s codification of Traffic Separation Schemes near the Port of Los Angeles/Long Beach, the Santa Barbara Channel, and the Port of San Francisco violated the Endangered Species Act and that the Coast Guard’s reliance on the opinion was arbitrary and capricious. See Center for Biological Diversity v. NOAA Fisheries, No. 4:21-cv-345, 2022 U.S. Dist. LEXIS 220920 (N.D. Cal. Dec. 7, 2022). Moving across the country, on March 31, 2023, Judge Hanes of the United States District Court for the Eastern District of Virginia held that the Maritime Administration violated the Endangered Species Act by failing to conduct a Section 7 consultation on its issuance of the 2018 James River Project grant (expanding marine highway routes for container shuttle service among four terminals in the Hampton Roads area) in order to determine whether the project is likely to jeopardize the continued existence of Atlantic sturgeon populations in the James River. See Center for Biological Diversity v. United States Maritime Administration, No. 4:21-cv-132, 2023 U.S. Dist. LEXIS 57232 (E.D. Va. Mar. 31, 2023). Back on the West Coast, the Center for Biological Diversity challenged the sufficiency of the review of the development and production plans submitted to the Department of the Interior (Bureau of Ocean Energy Management) with respect to the Beta Unit offshore platforms in the Pacific Ocean off Los Angeles and Orange Counties. On April 17, 2023, Judge Snyder of the Central District of California held that BOEM had a discrete and mandatory duty under the Outer Continental Shelf Lands Act to review the approved plans, which triggered a claim under the Administrative Procedure Act to compel action that was unlawfully withheld or unreasonably delayed, and that the OCSLA’s citizen-suit provision permitted the suit seeking compliance with the statutory duty to review the plans for the Beta Unit. See Center for Biological Diversity v. Haaland, No. 2:22-cv-6996, 2023 U.S. Dist. LEXIS 68791 (C.D. Cal. Apr. 17, 2023).
In our March 2023 Update, we reported that the Supreme Court declined to grant a writ of certiorari to consider the decision of the Fifth Circuit in Chevron USA, Inc. v. Plaquemines Parish (No. 22-715). That appeal involved cases filed in Louisiana state court by coastal Parishes against energy companies seeking to recover restoration costs for loss of land along the Louisiana Gulf Coast allegedly resulting from production practices carried out by the energy companies going back to World War II. The Fifth Circuit affirmed the remand of the cases to state court. The lengthy recitation of the issues presented to the Supreme Court was:
During World War II (“WWII”), the U.S. government recognized that it would need unprecedented quantities of oil to conduct and win the war and, accordingly, launched a massive government effort to secure sufficient supplies of this most critical war material. Invoking his war powers, the President created a new temporary agency—the Petroleum Administration for War (“PAW”)—to take all action necessary to meet the government’s oil needs. According to the government’s own account, the oil industry worked as “extensions of the government” and, under PAW’s direction, produced the billions of barrels of oil the United States required to prevail over the Axis powers.
More than 70 years later, Louisiana coastal parishes, joined by the state of Louisiana, filed this and 41 other cases in state court under a 1978 state law, alleging that oil companies should have employed more environmentally protective oil production practices going back for decades. The companies removed this and related cases to federal court because many of the challenged practices were undertaken by the companies during WWII while “acting under” PAW. The Fifth Circuit nonetheless ruled that the case should be remanded to state court. The Fifth Circuit reviewed the District Court’s decision without giving petitioners the benefit of inferences in their favor.
The questions presented are: 1. Whether a private entity is “acting under” a federal officer for purposes of removal under 28 U.S.C. § 1442 when federal officials, through orders and regulations, direct the entity’s production of a product the government requires to respond to a national emergency. 2. Whether, in assessing federal-officer removal under 28 U.S.C. § 1442, both the district court and the court of appeals must accept as true all facts alleged by the removing party and draw all reasonable inferences in its favor.
After the Supreme Court declined to hear the petition from the energy companies, Judge Zainey of the United States District Court for the Eastern District of Louisiana issued an order remanding to state court the suit brought by Plaquemines Parish and the State of Louisiana against a host of energy companies. The energy companies argued that they had threaded the needle to satisfy the “acting under” requirement for federal officer removal because this case involved a World War II-era refinery contract. Judge Zainey was unpersuaded, answering that the refinery contract satisfied neither the acting-under or the related-to requirements (the energy company “may have acted under a federal officer when refining oil in Port Arthur, Texas but it did not act under a federal officer when producing that oil in Louisiana”). See Parish of Plaquemines v. Northcoast Oil Co., No. 18-5228, 2023 U.S. Dist. LEXIS 67290 (E.D. La. Apr. 18, 2023). Judge Morgan reached a similar result in Parish of Plaquemines v. Rozel Operating Co., No. 18-5189, 2023 U.S. Dist. LEXIS 81541 (E.D. La. May 10, 2023).
In addressing the question of whether a federal court had jurisdiction over the criminal prosecution of a bank owned by the Republic of Turkey for conspiring to evade United States economic sanctions against Iran, Justice Kavanaugh explained the decision of the Supreme Court in the SCHOONER EXCHANGE case, which “held that a district court lacked ‘jurisdiction’ over a suit claiming ownership of a French warship docked in a Philadelphia port.” Justice Kavanaugh stated that the Court has expressed: “SCHOONER EXCHANGE concerned principles of foreign sovereign immunity that ‘developed as a matter of common law.’” He added that “the common-law sovereign immunity recognized in SCHOONER EXCHANGE is a ‘rule of substantive law governing the exercise of the jurisdiction of the courts,’ not an exception to a general statutory grant of subject matter jurisdiction.” Turkiye Halk Bankasi A.S. v. United States, No. 21-1450, 2023 U.S. LEXIS 1667 (U.S. Apr. 19, 2023).
On May 1, 2023, the United States Supreme Court granted a writ of certiorari in Loper Bright Enterprises v. Raimondo, No. 22-451, 2023 U.S. LEXIS 1847, challenging the authority of the National Marine Fisheries Service to require fishing vessels to carry federal observers. The questions presented to the Supreme Court include the application of Chevron deference, and the Court granted the writ limited to the second question:
The Magnuson-Stevens Act (MSA) governs fishery management in federal waters and provides that the National Marine Fisheries Service (NMFS) may require vessels to “carry” federal observers onboard to enforce the agency’s myriad regulations. Given that space onboard a fishing vessel is limited and valuable, that alone is an extraordinary imposition. But in three narrow circumstances not applicable here, the MSA goes further and requires vessels to pay the salaries of the federal observers who oversee their operations—although, with the exception of foreign vessels that enjoy the privilege of fishing in our waters, the MSA caps the costs of those salaries at 2-3% of the value of the vessel’s haul. The statutory question underlying this petition is whether the agency can also force a wide variety of domestic vessels to foot the bill for the salaries of the monitors they must carry to the tune of 20% of their revenues. Under well-established principles of statutory construction, the answer would appear to be no, as the express grant of such a controversial power in limited circumstances forecloses a broad implied grant that would render the express grant superfluous. But a divided panel of the D.C. Circuit answered yes under Chevron on the theory that statutory silence produced an ambiguity that justified deferring to the agency. The questions presented are: 1. Whether, under a proper application of Chevron, the MSA implicitly grants NMFS the power to force domestic vessels to pay the salaries of the monitors they must carry. 2. Whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.
On May 1, 2023, Judge McElroy of the United States District Court for Rhode Island accepted Zeus Lines Management S.A.’s guilty plea of failure to maintain an accurate Oil Record Book for its vessel GALISSAS (failing to record the discharge of oily bilge water into the ocean), with an agreement for a total monetary fine of $2,250,000 (a criminal fine of $1,687,500 and a community service payment of $562,500). Two days later, she accepted the guilty plea of two of the crew members of the vessel. See United States v. Zeus Lines Management S.A., No. 1:23-cr-28 (D.R.I).
On May 8, 2023, Judge Robart of the United States District Court for the Western District of Washington entered a default judgment in favor of a seaman who stepped on a stair that gave way, causing him to fall and injure both knees. The seaman sought damages of $214,474 for wages and penalty wages, maintenance and cure, punitive damages, lost earnings, pain and loss of enjoyment, and attorney fees, and Judge Robart awarded $73,924.50. See Waters v. Mitchell, No. 21-cv-87, 2023 U.S. Dist. LEXIS 80211 (W.D. Wash. May 8, 2023).
On May 15, 2023, the Eleventh Circuit considered the appeal of a cruise line of a decision remanding to state court a claim of unjust enrichment under state law that was brought by a company that agreed to produce shows on the defendant’s cruise ships. The cruise line argued that the state claim was actually a federal copyright claim and was removable under the doctrine of complete preemption. The Eleventh Circuit agreed with the district court that the Copyright Act did not completely preempt the unjust enrichment claim and remanded the case to state court, stating: “That claim belongs in state court.” See Poet Theatricals Marine, LLC v. Celebrity Cruises, Inc., No. 21-10410, 2023 U.S. App. LEXIS 11836 (11th Cir. May 15, 2023) (per curiam).
On May 17, 2023, Judge Talwani of the United States District Court for the District of Massachusetts rejected claims of Nantucket Residents Against Turbines who objected to the approval of an offshore wind project off the coast of Martha’s Vineyard and Nantucket by the U.S. Bureau of Ocean Energy Management and the National Marine Fisheries Service. See Nantucket Residents Against Turbines v. United States Bureau of Ocean Energy Management, No. 1:21-cv-11390, 2023 U.S. Dist. LEXIS 86176 (D. Mass. May 17, 2023).
On the LHWCA Front . . .
From the federal appellate courts
Christine Nelson, an African American female, was a longshore worker in Charleston, South Carolina for several stevedoring companies that are members of the South Carolina Stevedores Association. She is a member of Local 1422 of the International Longshoremen’s Association. She brought this suit in federal court in South Carolina against the South Carolina Stevedores Association and International Longshoremen’s Association Local 1422 for harassment, hostile work environment, and retaliation (based on pervasive sexual harassment toward women in the workplace). Adopting the recommendation of Magistrate Judge Baker, Judge Norton dismissed her claims on the ground that the defendants were not her employers for purposes of liability under Title VII and, alternatively, that no reasonable jury could find in her favor on the merits of her Title VII claims. Nelson appealed to the Fourth Circuit, and the appellate court held that Judge Norton correctly ruled in favor of the defendants on the merits (not having to decide whether the Union or Stevedores Association were employers). Therefore, the court affirmed the dismissal of her claims. Nelson’s requests for panel rehearing and rehearing en banc were denied on May 9, 2023.
From the federal district courts
In our May 2023 Update, we discussed Judge Barbier’s decision in Ragusa v. Louisiana Guaranty Insurance Association, No. 21-1971, 2023 U.S. Dist. LEXIS 51215 (E.D. La. Mar. 27, 2023). In that case, Judge Barbier addressed an asbestos-exposure suit that was removed to federal court by the shipyard defendant based on the Federal Officer Removal Act. After the claims against the shipyard were dismissed, Ragusa moved to remand the remaining claims to state court as the claims that were the basis for removal were no longer in the suit. Judge Barbier declined to remand the suit, exercising supplemental jurisdiction because the suit had been pending in federal court for several years, and the court had expended significant juridical resources on multiple dispositive motions. The suit by Fiffie against Taylor Seidenbach presented an analogous procedural context. Alvin Fiffie alleged that he contracted mesothelioma from exposure to asbestos while working at Avondale’s shipyards. He brought suit in Louisiana state court against Avondale and a several product suppliers (his daughter substituted for Alvin after his death), and Avondale removed the case to federal court. After the plaintiff settled with Avondale and dismissed it from the suit, the plaintiff moved to remand the case to state court. Judge Vance reached a different result than Judge Barbier. She considered the situation in Ragusa to bear little resemblance to Fiffie’s case. In contrast to Ragusa, Judge Vance had not issued substantive orders in the matter or expended significant judicial resources. Although the scheduled trial was only three months away, Judge Vance noted that federal courts routinely remanded cases near the trial date after the federal claims were dismissed. Finding no reason to depart from the “general rule” that the court should dismiss the state claims after the federal claims are eliminated, Judge Vance remanded the remaining claims to state court.
Opinion Mobil Equatorial Guinea and Swire Pacific
Corey Berard, a citizen of Louisiana, claims that he was employed by Delmar Systems to work as an anchor handler on the PACIFIC DOLPHIN, a vessel owned by Swire Pacific Offshore, while the vessel was operating in Equatorial Guinea in support of the DEVELOPMENT DRILLER II. He alleges that he was injured when he was struck by a rope while a winch drum was being secured, causing him to be thrown into an unsecured chain locker. Berard brought this suit in federal court in Louisiana against several defendants, including Exxon Mobil Corp., which he claimed was the owner or owner pro hac vice of the DEVELOPMENT DRILLER II. He pleaded claims under the general maritime law and Section 5(b) of the LHWCA. In his amended pleadings, Berard also named Mobil Equatorial Guinea as the party that engaged Berard’s employer, and he asserted that Exxon Mobil was the parent company of Mobil Equatorial Guinea. Exxon moved to dismiss the claims against it for failure to state a claim, agreeing that its subsidiary, Mobil Equatorial Guinea, is the entity that chartered the PACIFIC DOLPHIN from Berard’s employer, Delmar Systems, to provide the anchor-handling services but arguing that Berard failed to allege the facts that would establish liability on Exxon. Noting that there was nothing in the amended complaint to tie Exxon to the events at issue other than the claim that it was the parent company of Mobil Equatorial Guinea, Judge Jackson held that the “threadbare” claims against Exxon would be dismissed for failure to state a claim. Berard alleged that Swire Pacific is a Singapore company and that Mobil Equatorial Guinea is a Delaware corporation. He based jurisdiction in Louisiana on the claim that Mobil Equatorial Guinea contracted with his employer, Delmar Systems, based in Lafayette, Louisiana, to provide the services on the PACIFIC DOLPHIN in the operations in Equatorial Guinea. Mobil Equatorial Guinea and Swire Pacific moved for dismissal based on lack of in personam jurisdiction. Bernard did not attempt to establish general jurisdiction over the foreign companies, and Judge Jackson held that there was no identifiable contact between Swire Pacific and Louisiana. The only contact between Mobil Equatorial Guinea and Louisiana was the contract with Delmar Systems, but Judge Jackson noted that a contract with an out-of-state party does not automatically establish minimum contacts with the other party’s home forum. Judge Jackson dismissed Swire Pacific, but he agreed to allow Berard to conduct limited jurisdictional discovery to determine whether Mobil Equatorial Guinea purposefully established minimum contacts with Louisiana.
Robert Jehle was a petroleum surveyor who was tasked with performing an inspection on a barge moored to the Marathon Dock in the Mississippi River. He alleges that the dock operator, PSC Group, placed a movable gangway to provide access to the barge from the dock but failed to properly secure it. Jehle claims that he was walking across the gangway when he fell and landed on the barge. Jehle brought this suit against PSC Group in federal court in Louisiana, basing jurisdiction on admiralty, diversity, the LHWCA, and the Admiralty Extension Act. PSC moved for judgment on the pleadings that the court lacked admiralty jurisdiction, and Jehle conceded that there was no admiralty jurisdiction, but he responded that he had state a claim under state law based on diversity jurisdiction. Judge Vance agreed that the court lacked admiralty jurisdiction. PSC Group acknowledged that the “situs” element of the test for admiralty jurisdiction was satisfied as Jehle suffered his injury on the vessel on navigable waters. However, she concluded that the “status” element was absent. She reasoned that the maritime law does not impose a duty on a dock owner to provide a means of access to a vessel for the crew members and that, absent a maritime status between the parties, the dock owner’s duty to the vessel’s crew is defined by state law. As there was no maritime tort, Judge Vance concluded that there was no admiralty jurisdiction over Jehle’s claim. Judge Vance also rejected application of the Admiralty Extension Act as it extends admiralty jurisdiction to injuries caused by a vessel on navigable waters even though the injury occurred on the land. Ironically, as Jehle’s injury occurred on the barge and not on the land, the Admiralty Extension Act did not apply and his negligence claim was governed by state law. Judge Vance also rejected the LHWCA as a basis for federal jurisdiction. She noted that the LHWCA provides a tort remedy when jurisdiction already exists and cannot serve as a basis for federal jurisdiction. Finally, Jehle argued that there was diversity jurisdiction, but he failed to allege facts to support diversity. Judge Vance gave Jehle leave to amend his complaint to add jurisdictional allegations to support diversity.
From the state appellate courts
Ronald A. Foster, Jr. and Ashley Foster were married in 2014 and were separated at the end of 2019, resulting in Ronald bringing this divorce proceeding in North Carolina. Ronald was employed by Academi N.K.A. Constellis Group as a security specialist and was injured in Afghanistan in 2015. He settled his claim under the Defense Base Act extension of the LHWCA for a total of $585,000 (which included $35,000 for medical benefits). He transferred the settlement proceeds to a Swiss bank account in his name, and he made payments from the account for marital expenses prior to the divorce. He also used the settlement funds in the Swiss bank account to purchase golf simulation equipment, a Vizio Smart TV, and real property in the name of Foster Capital. The district court in the divorce suit awarded the unspent amount of the settlement in Ronald’s Swiss bank account to Ronald along with the golf simulation equipment, Vizio Smart TV, and real property purchased in the name of Foster Capital. Ashley appealed, arguing that the award during the marriage was marital property because Ronald had not proven that it was intended to compensate him for economic loss after the separation. The appellate court disagreed, noting that the district court had found that the marital portion of the settlement was $154,226.24 (based on Ronald’s average weekly wage) and that the marital portion of the settlement had been expended during the marriage by funds transferred from the Swiss bank account that contained the settlement proceeds. As settlement funds in the Swiss account in Ronald’s name had not been comingled with marital property; as the golf simulation equipment, TV, and real property were purchased from that account; and as the portion of the award attributable to the marriage was exhausted with payments from the settlement in the Swiss bank account; the purchases and remainder of the Swiss bank account belonged to Ronald.
Richard W. Lewis, Jr. died from malignant mesothelioma that was allegedly caused from asbestos exposure while he worked at maritime and non-maritime employers. He started work as an insulator in the late 1970s, working for a year for Todd and Lockheed Shipyards in Washington (exposed to asbestos-containing insulation). He spent the next 30 years (1980 to 2010) working as an insulator at land-based industrial facilities in Western Washington, where he had additional exposure to asbestos-containing products in work that was subject to the Washington Industrial Insurance Act. Lewis was diagnosed with mesothelioma in May 2018, and he and his wife (Diane J. Lewis) brought suit in Washington state court against asbestos manufacturers and third parties. The Lewises reached settlements with some of the defendants and dismissed their lawsuit without the prior written approval of the shipyard employers. After Richard died, his wife filed an application for surviving spouse benefits under the state workers’ compensation act with the Washington Department of Labor and Industries. Neither Richard nor Diane filed a claim for benefits under the LHWCA related to his mesothelioma. The Department of Labor and Industries issued an order finding that Richard’s death was due to mesothelioma resulting from exposure to asbestos in the course of his employment, that he was exposed to asbestos in the shipyards and was a maritime worker, and that, as a claim was not filed under the LHWCA and they recovered a third-party settlement, he was barred from coverage under the state statute. Diane appealed the order, and the industrial appeals judge held that she might only have been entitled to a temporary award of benefits, but she had specifically waived that claim. The Board denied her petition for review, and she appealed to the Pierce County Superior Court. The judge found that Diane was eligible for benefits under the LHWCA for her husband’s death but that she forfeited the right to receive those benefits under Section 33(g) of the LHWCA on account of the unauthorized third-party settlements. In accordance with the 1988 amendment to the state act, as interpreted by the Washington courts, the federal remedy was exclusive, except that she was entitled to temporary benefits under the state act until it was determined whether the state or federal statute was applicable. Diane argued that the limitation for temporary benefits did not eliminate her claim for permanent surviving spouse benefits, but the court of appeals disagreed, holding that the plain language of the Washington law permitted the termination of benefits when it was determined that an LHWCA-covered worker or beneficiary was no longer entitled to benefits under the LHWCA as a result of a third-party settlement. Diane also argued that the interpretation of the statute unconstitutionally chilled her right to a jury trial by discouraging LHWCA-covered workers (and spouses) from exercising their right to sue third parties. She argued that she faced a Hobson’s Choice of whether to collect benefits under the LHWCA or to pursue her third-party action. That Hobson’s Choice, however, was from the LHWCA and not the state statute. The state statute merely allowed her to receive temporary state benefits until the state agency rendered a decision as to the liable insurer and properly terminated benefits. Finally, Diane argued that she was denied due process under the Fourteenth Amendment because an entire class of workers and beneficiaries was denied benefits under the state statute. However, the court responded that LHWCA-covered workers and land-based workers are not similarly situated (LHWCA-covered workers have access to the LHWCA, and land-based workers have access to state benefits). Consequently, Diane’s request for permanent surviving spouse benefits under the Washington statute was denied.
And on the maritime front . . .
From the United States Supreme Court
Decision on Waters of the United States for the Clean Water Act
We reported in our April 2023 Update that, on March 19, 2023, Judge Brown of the United States District Court for the Southern District of Texas issued a preliminary injunction blocking the Biden Administration’s revised definition (that would have taken effect on March 20, 2023) of the Waters of the United States within the Clean Water Act (Judge Brown noted that the Supreme Court heard oral argument in the Sackett case involving the proper test to determine the extent of Waters of the United States). The injunction applies in the states of Texas and Idaho as Judge Brown declined to grant a nationwide injunction. See Texas v. United States EPA, No. 3:23-cv-17, 2023 U.S. Dist. LEXIS 45797 (S.D. Tex. Mar. 19, 2023). On April 12, 2023, Judge Hovland of the United States District Court for the District of North Dakota issued a preliminary injunction blocking the implementation of the new definition in 24 states. See West Virginia v. U.S. EPA, No. 3:23-cv-32 (D.N.D. Apr. 12, 2023). The Sixth Circuit also issued an administrative stay of enforcement of the rule during the briefing and consideration for motions seeking an injunction filed by the Commonwealth of Kentucky and several private-sector organizations. See Kentucky v. United States Environmental Protection Agency, Nos. 23-5343/5345 (6th Cir. Apr. 20, 2023) (per curiam) (discussed in the May 2023 Update). On May 10, 2023, the panel of the Sixth Circuit granted the motions for an injunction pending appeal of both Kentucky and the private-sector organizations. See Kentucky v. United States Environmental Protection Agency, No. 23-5343/5345 (6th Cir. May 10, 2023).
On May 25, 2023, the Supreme Court issued its decision in Sackett v. United States EPA, No. 21-454, 2023 U.S. LEXIS 2202.
Michael and Chantell Sackett purchased a “soggy” vacant lot (just over half an acre) in 2004 in a residential subdivision near Priest Lake, Idaho. As described below, the lot has no surface water connection to any body of water. In 2007 (more than 15 years ago), the Sacketts obtained the necessary local permits and prepared to build their residence on the lot, placing sand and gravel fill on the lot. They received an administrative compliance order from the Environmental Protection Agency, stating that the property contained wetlands that qualify as waters of the United States under the Clean Water Act, and they would have to remove the fill and restore the property (the order threatened the Sacketts with penalties of more than $40,000 per day if they did not comply). The north side of the lot is bounded by a county-owned road, and on the other side of the road is a drainage ditch. On the south side of the lot, across another road, is a row of houses that fronts Priest Lake. There is no surface water connection between the Sacketts’ lot and the roadside ditch or between their lot and Priest Lake. The Sacketts’ plans to build their residence were put on hold because the EPA demanded, on pain of large monetary penalties, that the Sacketts obtain a time-consuming and costly permit from the Army Corps of Engineers before they started construction. The Sacketts brought this action in federal court in Idaho, challenging the authority of the EPA to regulate their homesite. The district court initially dismissed the action on the ground that there was no final agency action, but, after affirmance by the Ninth Circuit, the Supreme Court reversed that decision and held that there was a final agency action that was subject to judicial review. Addressing the merits of the Sacketts’ claim on remand, the district court upheld the EPA based on the “significant nexus” test enunciated by Justice Kennedy in his concurring opinion in Rapanos (significant nexus to navigable waters). As the case was making its way through the second set of appeals, the EPA abruptly withdrew its compliance order (12 years after it was issued). The Ninth Circuit held that the withdrawal of the compliance order did not moot the appeal, but the appellate court agreed with the EPA that the Sacketts’ lot contains “adjacent wetlands,” and those wetlands, in combination with wetlands in the region, bear a “significant nexus” to Priest Lake. The Supreme Court again granted the Sacketts’ petition for certiorari. The Court unanimously reversed the Ninth Circuit (although 4 Justices concurred in the judgment). Writing for five members of the Court, Justice Alito noted that the EPA interpreted the waters of the United States as all waters that could affect interstate or foreign commerce as well as wetlands adjacent to those waters. Adjacent was defined to mean not just bordering but also “neighboring.” Following Justice Kennedy’s concurring opinion to make the majority in Rapanos, the EPA asserted jurisdiction over “wetlands ‘adjacent’ to non-navigable tributaries when those wetlands had ‘a significant nexus to a traditional navigable water.’” The EPA found a significant nexus to exist when the wetlands, either alone or in combination with similarly situated lands in the region, “significantly affect the chemical, physical, and biological integrity of those waters.” For the Sacketts’ lot, the “wetlands” on the lot are in the same neighborhood as an unnamed tributary on the other side of a 30-foot road that feeds into a non-navigable creek, which feeds into Priest Lake, which is an intrastate body of water that the EPA designated as traditionally navigable. To establish the significant nexus, the EPA lumped the lot together with a nearby wetland complex so that, taken together, there was a significant effect on the ecology of Priest Lake. As Justice Alito explained, the EPA’s interpretation of waters of the United States “means that a staggering array of landowners are at risk of criminal prosecution or onerous civil penalties.” With that background, Justice Alito turned to the language of the CWA: waters of the United States. Noting that the statute chose the word “waters” and not “water,” Justice Alito concluded that the plurality opinion from Rapanos (not Justice Kennedy’s concurring opinion) correctly held that waters encompasses “only those relatively permanent, standing or continuously flowing bodies of water ‘forming geographic[al] features’ that are described in ordinary parlance as ‘streams, oceans, rivers, and lakes.’” He reasoned that this analysis aligned the meaning of waters of the United States with the term that the phrase defined in the CWA: “navigable waters” (how can a soggy residential lot be considered to be navigable waters?), and it was in accord with the use of the term waters elsewhere in the CWA. That did not mean that no wetlands could ever be “waters,” for example when the wetlands are “indistinguishably” part of a body of water that satisfies the definition for waters of the United States. Justice Alito turned to the plurality in Rapanos, which explained that waters of the United States “may fairly be read to include only those wetlands that are ‘as a practical matter indistinguishable from waters of the United States,’ such that it is ‘difficult to determine where the ‘water’ ends and the ‘wetland’ begins.’” There would have to be a continuous surface connection to bodies that are waters of the United States in their own right with no clear demarcation between the waters and the wetlands (for example, coastal wetlands with an unimpaired connection with the open sea). Accordingly, Justice Alito held that the CWA extends only to wetlands that are, as a practical matter, indistinguishable from waters of the United States. That requires that the adjacent body of water constitute waters of the United States (a relatively permanent body of water connected to traditional interstate navigable waters) and that the wetland have a continuous surface connection with that water, making it difficult to determine where the “water” ends and the “wetlands” begin. Justice Alito then addressed the EPA’s argument that the Court should defer to the EPA’s interpretation as set forth in its recent definition of waters of the United States. Justice Alito disagreed, concluding that the EPA’s interpretation was inconsistent with the text and structure of the CWA. He also rejected the argument (adopted by the concurring Justices, Justice Kagan, joined by Justices Sotomayor and Jackson, and Justice Kavanaugh, joined by Justices Sotomayor, Kagan, and Jackson) that Congress implicitly ratified its interpretation of “adjacent” wetlands when it amended the CWA in 1977 to include the reference to “adjacent” wetlands. As the wetlands on the Sacketts’ property are distinguishable from any possibly covered waters, the Supreme Court reversed the judgment of the Ninth Circuit.
From the federal appellate courts
In our April 2023 Update, we reported that the United States Supreme Court granted the petition for a writ of certiorari filed by Great Lakes Insurance in Great Lakes Insurance v. Raiders Retreat Realty Co., No. 22-500. The Supreme Court agreed to hear this question: Under federal admiralty law, can a choice of law clause in a maritime contract be rendered unenforceable if enforcement is contrary to the “strong public policy” of the state whose law is displaced? The Supreme Court will review the decision in which the Third Circuit reasoned that the principle of generally enforcing choice-of-law provisions in marine insurance contracts “is not altogether separate” from the regime for forum-selection clauses. Holding that the framework enunciated in Bremen and Shute extends to the choice-of-law provision in the policy issued by Great Lakes in that case, the Third Circuit remanded the case to the district court to consider whether Pennsylvania has a strong public policy that would be thwarted by application of New York law.
Contractual choice-of-law was also an issue in the litigation between Martin Andersson and the insurer for his vessel, Great Lakes Insurance. Andersson, who lived in Massachusetts, purchased a marine insurance policy from Great Lakes for his catamaran, MELODY. The vessel sustained catastrophic damage when it struck a breakwater near the Port of Boca Chica in the Dominican Republic, and Great Lakes declined to pay for the cost of salvage or repair because Andersson had failed to keep the vessel in a seaworthy condition and had sailed outside the bounds of the policy’s navigational limits. Great Lakes brought its first action in federal court in Massachusetts seeking a declaratory judgment that it owed no coverage under the policy, and Andersson counterclaimed for breach of contract and for bad faith under Massachusetts law. Great Lakes moved to dismiss the bad faith count of the counterclaim, arguing that New York law, which does not afford a bad faith action, was applicable by a choice-of-law clause in the policy. The clause provided that “any dispute arising hereunder” would be adjudicated under entrenched principles of federal admiralty law, “but where no such well established, entrenched precedent exists, this insuring agreement is subject to the substantive laws of the State of New York.” Andersson argued that New York law applied to the contract claim, but Massachusetts law applied to extra-contractual claims (the bad faith claim). Judge Hillman rejected that argument, however, citing the cases holding that New York law applies to all claims arising from the performance under the contract and subsequent coverage disputes, which includes bad faith claims. He then addressed Andersson’s argument that Massachusetts public policy rendered the choice-of-law clause unenforceable and held that application of New York law, rather than Massachusetts law, would not conflict with any entrenched principle of maritime law and that New York did not lack a substantial relationship to the parties or transaction. Consequently, he applied New York law and dismissed the bad faith count of the counterclaim. See July 2021 Update.
After discovery was closed and the deadline to amend pleadings had passed, Great Lakes sought leave to amend its complaint to add a claim that Andersson violated the policy’s Named Operator Warranty. Judge Hillman denied the motion as untimely and unfairly prejudicial to Andersson, and Great Lakes filed an interlocutory appeal that the First Circuit dismissed for lack of jurisdiction. After the denial of its motion to amend, Great Lakes brought a second action against Andersson, presenting the claim it sought to add by the late motion for leave to amend in the first suit. Andersson moved to dismiss the second suit based on res judicata, and Great Lakes responded that res judicata was not applicable because the denial of the motion to amend was not a final judgment on the merits of the claim sought to be presented in the amendment. Judge Hillman disagreed with Great Lakes, citing case law that denial of leave to amend constitutes res judicata on the merits of claims that were the subject of the proposed amended pleading. Reasoning that allowing the second suit would result in the same prejudice and inefficiency that were cited by the court in denying the amendment in the first suit, Judge Hillman dismissed the second suit (adding that the remedy for Great Lakes was an appeal of the denial of leave to amend in the first suit at the conclusion of that suit). Andersson also sought sanctions for filing the late motion to amend and the second suit, but Judge Hillman denied the motion without substantive discussion. See October 2022 Update.
Back in the original suit, Great Lakes moved for summary judgment on its claims for declaratory judgment, and Andersson moved for partial summary judgment on its claim for breach of contract. The issue presented by both motions was whether Great Lakes established that the MELODY was unseaworthy as required by maritime law and the policy. Judge Hillman cited Judge Brown’s Spot Pack case for the two warranties, the warranty of seaworthiness at the instant the policy attaches and the negative warranty that the owner will not knowingly send the vessel to sea after the policy inception in an unseaworthy condition. Great Lakes argued that the vessel was unseaworthy when the policy attached because it lacked updated maps. However, finding no cases holding that lack of current maps voided an insurance policy from its inception, Judge Hillman concluded that the first warranty was not breached. Great Lakes did cite cases in which a vessel was held unseaworthy because of deficient charts, but Judge Hillman noted that the cases required knowledge of the captain that the maps were not sufficient for the intended journey. The intended voyage in this case was from Aruba to Sint Maarten. However, weather and the seasickness of a crewmember took the boat near the Dominican Republic where it was decided that repairs should be made. Although the Dominican Republic was a potential point of refuge for the voyage, Judge Hillman did not believe it was reasonably foreseeable that the vessel would end up there. Consequently, he did not find that the vessel was unseaworthy for failing to have a current chart for the waters where the vessel grounded. Turning to the policy’s express warranty of seaworthiness “at all times,” Great Lakes argued that the failure to have current charts for Florida, a destination listed in the policy, rendered the vessel unseaworthy. However, Judge Hillman considered the seaworthiness warranty to require the vessel to be adequate for the voyage she undertakes, not for every area covered by the policy. Accordingly, he did not believe the policy warranty was breached, and he granted summary judgment to Andersson on his claim for breach of contract. See April 2023 Update.
Andersson filed an interlocutory admiralty appeal under Section 1292(a)(3) of Judge Hillman’s decision dismissing the bad faith count of Hillman’s counterclaim. Andersson argued that Great Lakes engaged in unfair claim settlement practices in violation of Massachusetts law, and Great Lakes argued that Massachusetts law did not apply because of the provision in the policy that “any dispute arising hereunder” would be adjudicated under entrenched principles of federal admiralty law, “but where no such well established, entrenched precedent exists, this insuring agreement is subject to the substantive laws of the State of New York.” Writing for the First Circuit, Judge Montecalvo noted the grant of certiorari with respect to the application of the public policy of the state whose law was displaced by the choice-of-law provision, but she did not delve into that issue as the question on appeal was whether to apply Massachusetts or New York law to the bad faith claim pursuant to the provision in the policy. Andersson did not contest that the provision was valid and enforceable, that his contractual claim was subject to the provision, or that entrenched principles of admiralty law would control the extra-contractual claim if such precedent existed. Instead, Andersson argued that the extra-contractual claim did not “fall within the ambit of the choice-of-law provision.” Thus, Judge Montecalvo addressed whether the bad faith claim under the Massachusetts statute was, in fact, extra-contractual. She noted that the statute applies to failure to adopt and implement reasonable standards for prompt investigation of claims and refusing to pay claims without conducting a reasonable investigation. Consequently, the insurer may be liable under the statute even though it pays the claim and honors the contract, and the allegations are not duplicative of the claim for breach of contract. Having established the nature of the bad faith claim as extra-contractual, Judge Montecalvo compared the claim to the policy provision. She noted that the insuring agreement has separate triggers. For “any dispute arising hereunder,” the dispute is adjudicated under entrenched principles of admiralty law. As there were no such entrenched principles, she turned to the language that, in the absence of entrenched maritime principles, “this insuring agreement is subject to the substantive laws of the State of New York.” Judge Montecalvo considered the language, “this insuring agreement,” to be ambiguous. Any “dispute” could mean contractual and extra-contractual claims, but, as the second clause is limited to “this insuring agreement,” it could be limited to contract-related claims that are subject to New York law and not the extra-contractual claims. As the provision is a “boilerplate” clause, Judge Montecalvo did not believe that extrinsic evidence was relevant and applied the rule that doubts as the intended meaning of the words would have to be resolved against the insurer. Therefore, she reached “the inescapable conclusion that only contract-related claims” were subject to the substantive laws of New York and that the extra-contractual claims were not within the scope of the provision.
The collapse and bankruptcy of bunker supplier O.W. Bunker & Trading continues to occupy the courts. Vessel owners and charterers that had not yet paid for fuel when O.W. Bunker sought bankruptcy protection brought interpleader actions to resolve competing claims for payment for the bunkers. This action involved bunkers supplied to Fujian Ocean Shipping’s vessels M/V ZHENG RUN AND M/V ZHENG RONG. Fujian contracted with O.W. Bunker Far East for the supply of bunkers, and O.W. Bunker contracted with Global Energy to fill the order. Global Energy’s contract with O.W. Bunker contained a retention-of-title clause, which provided that the title to the bunkers would not pass to O.W. Bunker from Global Energy until Global Energy received payment. The clause also stated that, until title passed, O.W. Bunker shall return the bunkers upon request of Global Energy. Global Energy sent a letter to Fujian and O.W. Bunker invoking the retention-of-title clause, claiming that Global Energy retained title to the bunkers, that Fujian was not entitled to use the bunkers, and that any consumption of the bunkers by Fujian would be a conversion. Fujian did not return the bunkers or pay Global Energy or O.W. Bunker. Global Energy and O.W. Bunker brought actions against Fujian, and Fujian brought this interpleader action in federal court in New York. O.W. Bunker’s security agent, ING Bank, asserted a claim for breach of contract against Fujian and an in rem maritime lien claim against the interpleader fund. Global Energy also asserted claims against the interpleader fund for conversion of the bunkers based on Fujian’s consumption of bunkers after Global Energy invoked the retention clause. Judge Caproni granted summary judgment in favor of ING Bank, denied summary judgment on GET’s conversion claim, and entered judgment in favor of ING Bank against Global Energy. She ruled in favor of Fujian on its interpleader claim, with a discharge of its liability and an award of attorney fees and costs from the interpleaded amount. See May 2022 Update.
Global Energy appealed to the Second Circuit, which agreed with Judge Caproni that, assuming that Global Energy could bring a conversion claim against Fujian based on its invocation of the retention clause, the claim was barred by the doctrine of equitable estoppel. Applying Singapore law to the conversion claim, the court noted that Global Energy induced a course of conduct on the part of Fujian by delivering the bunkers to Fujian so that they could be consumed before they were paid for (delivering the bunkers without requiring payment “must plainly have intended . . . for the bunkers to be consumed”). As off-loading the bunkers and replacing the fuel would have caused detriment to Fujian (even if it had been aware of the retention clause), the Second Circuit held that equitable estoppel was a complete defense to Global Energy’s conversion claim. Global Entry also appealed the granting of summary judgment to ING Bank (as assignee of O.W. Bunker) on its claims for breach of contract and for a maritime lien against the interpleaded funds. The Second Circuit, however, disagreed, ruling that O.W. Bunker had performed under its contract with Fujian, and the failure to pay by Fujian was a breach of that contract. Although Global Energy cited the retention clause, the court of appeals answered that the clause was in the contract between Global Energy and O.W. Bunker, which had no effect on the claim asserted by O.W. Bunker (through ING Bank) against Fujian. Finally, the appellate court agreed that the maritime lien claim by ING Bank was proper for the delivery of bunkers to the vessel, even though they were delivered by a subcontractor.
Life Journeys’ Abraham-Hicks Group arranged a cruise around Spain for Tara McCluskey El on the REFLECTION. During the cruise, McCluskey El fell in water near the jacuzzi on the ship. She notified the cruise line that she intended to make a claim, but she brought this action more than a year after the accident. The cruise line moved to dismiss the claim based on the one-year limitation for suit in the ticket. Although McCluskey El argued that she never received the ticket from the cruise line, Magistrate Judge McAliley held that submission of the ticket to the passenger’s travel agent, Life Journeys, was sufficient notice of the terms of the contract to the passenger (although McCluskey El originally referred to Life Journeys as her travel agent, she later started calling Life Journeys her “travel point of contact”). Magistrate Judge McAliley reasoned that McCluskey El had access to the terms of the ticket contract online at any time and that she must have become aware of the jurisdictional requirement for the suit as she, a resident of “California Republic,” brought the suit in Miami where suit was required by the ticket. Additionally, McCluskey El had a year to become meaningfully informed of the time limit. Consequently, Magistrate Judge McAliley concluded that the one-year time limit was enforceable. Finally, McCluskey El argued that the time limit should be equitably tolled as she contracted COVID-19 during the cruise due to the cruise line’s negligence, and she is still experiencing loss of memory and cognition. She also argued that it was difficult hiring an attorney because attorneys wanted to know the extent of her injuries and it was challenging to obtain examinations due to the pandemic. Magistrate Judge McAliley rejected these broad allegations as they were not supported by detailed facts, and they did not prevent McCluskey El from filing her complaint, without an attorney, in the midst of the pandemic in November 2020. See October 2021 Update.
After Judge Williams adopted the report of Magistrate Judge McAliley and denied McCluskey El’s motion for reconsideration, McCluskey El appealed to the Eleventh Circuit. The appellate court affirmed the summary judgment as the action was filed “outside the contractually agreed upon statute of limitations, and McCluskey El had constructive notice of that contract even if she never read it.” The Eleventh Circuit agreed that there is a three-year statute of limitations for maritime tort actions, the court noted that the period could be adjusted by contract as long as the adjustment was reasonably communicated to the passenger. In this case, Life Journeys and not McCluskey El received the packet with the terms for the voyage, but the court noted that she paid Life Journeys to book and pay for her ticket, and she communicated with and issued specific instructions to Life Journeys. As that was the “quintessential principal-agent relationship” between a travel agent and its client,” the notice to the travel agent was sufficient to constitute constructive notice to McCluskey El. And, if that was not sufficient, McCluskey El did not argue that there was anything that prohibited her from accessing the terms of the contract online before, during, or after embarking on the cruise or suffering her injuries. The Eleventh Circuit also found no basis for equitable tolling. The court has previously concluded that this contract limitation is not unconscionable, and McCluskey El identified no precedent in the Eleventh Circuit for an equitable tolling of a statute of limitations based on the COVID pandemic (she did file her complaint during the pandemic despite obstacles she claimed from the pandemic). The appellate court sympathized that it was “unfortunate” that she spoke with an attorney who erroneously told her that she had two years to file her claim, but the court answered that such an error is not a basis for equitable tolling. Likewise, the fact that the cruise line did not inform her about the statute of limitations when “it knew that she intended to file a claim” was not sufficient to toll the running of limitations. Accordingly, the Eleventh Circuit affirmed the grant of summary judgment for the cruise line.
Kholkar Vishveshwar Ganpat, a resident of India, signed a Seafarer’s Mumbai Employment Agreement in India with an Indian subsidiary of Eastern Pacific Singapore that provided for benefits in the event of his disability. Ganpat claimed that he contracted malaria while serving as a crewmember of the M/V STARGATE on a voyage from Gabon to Brazil and brought this suit in federal court in Louisiana against Eastern Pacific under the Jones Act and general maritime law. The thrust of the suit was that the crew failed to stock up on anti-malaria medicine when the vessel stopped at Savannah before heading to Africa. The suit included a claim for benefits under the employment agreement that provided for the application of Liberian law. Ganpat served Captain Owen Bona on the M/V BANDA SEA while the ship lay at anchor in the Mississippi River just below New Orleans, asserting that Captain Bona was a managing agent of Eastern Pacific. Eastern Pacific objected to the service, arguing that Captain Bona was an employee of Ventnor Navigation, not Eastern Pacific. Ganpat responded that Eastern Pacific was the manager of the STARGATE and that Captain Bona was a borrowed servant or managing agent of Eastern Pacific. As there was no evidence that Captain Bona was employed by Eastern Pacific, the question presented was whether he could be considered a managing agent of Eastern Pacific. However, the evidence established that Captain Bona was not involved in any aspect of Eastern Pacific’s business that related to the vessel on which the cause of action arose. Judge Morgan declined to conclude that service could be made on a foreign corporation that was not transacting business in Louisiana through a non-employee captain of a vessel on which the accident did not occur who had no control over any operations of the defendant in the forum state. See February 2020 Update. Judge Morgan gave Ganpat several extensions to serve Eastern Pacific properly. Finally, more than a year later, Ganpat filed a proof of service, an affidavit from a process server in Singapore who stated that he handed the summons and complaint to Eastern Pacific’s receptionist, who signed and affixed the company stamp to the summons. Eastern Pacific challenged the sufficiency of the service, and Judge Morgan held that the service complied with Rule 4(f)(2)(A) in that it was accomplished by a method prescribed by the laws of Singapore for service in that country in its courts of general jurisdiction. See September 2021 Update.
After service was accomplished, Judge Morgan addressed Eastern Pacific’s argument that the case should be dismissed on the basis of forum non conveniens because Ganpat is a resident and citizen of the Republic of India, Eastern Pacific is a Singapore company with its principal place of business in Singapore, Ganpat experienced symptoms of malaria while the vessel was on the high seas sailing from Gabon to Brazil, he was hospitalized and treated for malaria in Brazil, and he was repatriated to India where complications arose. Judge Morgan assumed there was an adequate alternative forum available in India, but she held that Eastern Pacific did not meet its burden of proof with respect to the private interest factors or the public interest factors. Judge Morgan noted, with respect to the private interest factors, that the witnesses were spread across the world. Although many of the crew reside in India, there were others in Romania, Ukraine, Bulgaria, the Philippines, Russia, and Turkey. There were medical witnesses from Brazil and India as well as witnesses with respect to the provisioning of the ship in Savannah before it sailed to Africa. There were also possible witnesses from Liberia, where the owner of the vessel and employer of Ganpat were located. Similarly, with respect to the public interest factors, Judge Morgan found no clear “home” for the dispute involving multiple international contacts. Factoring into the analysis the dilatoriness of Eastern Pacific’s filing of the motion (the longer the case was pending in the United States, the less the defendant could claim inconvenience in the United States), Judge Morgan could not conclude that Eastern Pacific had met the heavy burden of demonstrating that the public and private interest factors weighed in favor of dismissal, and denied the motion to dismiss. The facts were not developed sufficiently for Judge Morgan to decide whether Indian law applied in the context of Eastern Pacific’s motion to dismiss the suit for failure to state a claim under Indian law (there were disputes about which entities owned and employed Ganpat). Accordingly, Judge Morgan held that a determination of the applicable law was premature. See February 2022 Update.
While Ganpat was trying to serve Eastern Pacific, Eastern Pacific and its Indian subsidiary filed suit against Ganpat in South Goa, India (March 2, 2020), seeking an injunction restraining vexatious and oppressive foreign legal proceedings, i.e., the suit in federal court in Louisiana. On March 7, 2020, the court in South Goa, India issued an order temporarily restraining Ganpat from prosecuting the action in the United States, concluding that the parties and the ends of justice would be better served if trial on liability and damages in relation to the Mumbai Employment Agreement were in India. Almost a year and a half after being restrained from pursuing his suit in Louisiana, Ganpat filed a motion in the Louisiana proceeding seeking to enjoin the Indian litigation that had restrained the prosecution of the American litigation. Noting that Eastern Pacific’s counsel had withdrawn its objections to personal jurisdiction in a telephone status conference on April 18, 2019 (although the complaint was not properly served until later), Judge Morgan held that the court in Louisiana had jurisdiction over the defendant and that its suit in India constituted vexatious and oppressive litigation. She also held that the need to prevent the litigation in India and to protect the jurisdiction of the American court outweighed the need to defer to principles of international comity. Consequently, she enjoined Eastern Pacific from litigating the Indian suit, ordered it to dismiss the Indian suit, and extended the injunction to its Indian subsidiary as it was acting in “active concert” with Eastern Pacific. Eastern Pacific filed a notice of appeal the next day. See May 2022 Update.
Judge Morgan then addressed the choice of law applicable to the claims brought by Ganpat based on the eight factors enunciated by the Supreme Court in Lauritzen and Rhoditis. As the illness arose at sea, Judge Morgan concluded that the factor for the place of the wrongful act did not weigh in favor of applying the laws of the United States, India, Singapore, Gabon, or Liberia. Although the factor for the law of the flag (Liberia) is ordinarily “accorded great significance,” Judge Morgan dismissed it as having no specific application as the vessel owner was not a party. Judge Morgan also gave little significance to the factor for the allegiance or domicile of the injured worker (India) because Ganpat’s work took him beyond the territorial boundaries of his domicile. With respect to the allegiance of the shipowner, who was not a party, Judge Morgan took into consideration the defendant’s organization in Singapore. The place where the contract was executed was Mumbai, India, by Ganpat and an Indian company acting on behalf of a Liberian company. The agreement provided that it would be interpreted in accordance with the laws of the state of the flag of the ship on which Ganpat was employed (Liberia). As the employer was not a defendant, Judge Morgan held that the place of the contract was of no particular application, even though Ganpat brought a claim for benefits under the agreement. Judge Morgan previously assumed that India was an accessible forum (for the factor on the inaccessibility of the foreign forum), but she held that this factor was only applicable for the forum non conveniens issue and not with respect to the determination of applicable law. As the suit was brought in the United States, Judge Morgan found that the factor of the law of the forum favored application of American law. Finally, Judge Morgan held that the shipowner’s base of operations was not a factor because the shipowner was not a defendant. In summary, Judge Morgan found three relevant factors, the Indian allegiance of the seaman, the Singapore allegiance of the defendant, and the United States forum for the litigation. Reasoning that the Lauritzen/Rhoditis factors are not exclusive, Judge Morgan considered Ganpat’s allegation that the vessel was not properly provisioned when it left Savannah and that vessels managed by the defendant made hundreds of visits to ports in the United States and held that United States law should apply to the claims brought under the Jones Act and general maritime law. Judge Morgan then addressed the applicable law for the claim for contractual benefits. The Seafarer Employment Agreement incorporated a Collective Bargaining Agreement between Eastern Pacific and the International Transport Workers Federation. Judge Morgan considered the CBA to be a maritime contract and noted that it did not contain a provision for choice of law. Therefore, she held that her previous Lauritzen/Rhoditis analysis applied so that United States law applied to the claim for benefits under the contract that was entered into by the Indian seaman in India. In an amended complaint, Ganpat added a claim for malicious prosecution against Eastern Pacific arising out of the lawsuit it filed against Ganpat in India. As that alleged tort took place in India and not on navigable waters, Judge Morgan held that Indian law applied to this claim. After concluding her decision on the applicable law, Judge Morgan ruled that the decision involved a controlling question of law that would materially affect the outcome of the case. Therefore, she certified her order for interlocutory appeal pursuant to Section 1292(b) and stayed the case pending resolution of the appeal. See December 2022 Update.
Judge Morgan’s order, enjoining Eastern Pacific from litigating the Indian suit, discussed in the May 2022 Update, was upheld by a majority of a panel of the Fifth Circuit, concluding that Judge Morgan was within her discretion in concluding that the vexatiousness of the Indian litigation outweighed concerns for comity. Writing for the majority, Judge Ho found that the time Ganpat spent in jail for violating the Indian injunction (and the possibility of being sent back to jail) and the threat of seizure of his property were sufficient to satisfy the hardship factor considered for an injunction against foreign litigation as vexatious. Judge Ho also found the second factor (the foreign suit’s ability to frustrate and delay the speedy and efficient determination of the cause) was satisfied because the Indian court sought to prevent Ganpat from proceeding with his first-filed suit in the United States. As the Indian litigation imposed “a hardship on Ganpat while frustrating the American litigation,” Judge Ho did not have to consider the third vexatiousness factor (“the extent to which the foreign suit is duplicitous of the litigation in the United States”), but he agreed with Judge Morgan that the suit was duplicative. Judge Ho also agreed with Judge Morgan that comity concerns were minimal, reasoning that no public international issue was implicated in this case and adding that the case had been ensconced in the American judicial system because Eastern Pacific had consented to American jurisdiction and appeared in the case. Finally, Judge Ho disagreed with the dissenting opinion that international anti-suit injunction precedents in the Fifth Circuit require a showing of irreparable injury. Judge Jones dissented, relating the “tortured procedural history” of the litigation, which she described as an attempt by Ganpat “to compel domestic jurisdiction over a suit with highly tenuous domestic connections.” She reviewed the appellate decisions considering anti-suit injunctions and found this case to be similar to those in which the appellate court vacated anti-suit injunctions. As all of the parties are foreign, the only connections to the United States were the location of Ganpat’s attorney and the allegation that the foreign ship manager failed to supply the vessel with enough anti-malaria medication while the vessel was briefly in port in Savannah. Judge Jones also criticized the limited discussion about the dissimilarity of the parties in the Indian and American cases, emphasizing that the duplicative factor related to vexatiousness is about legal, not factual, similarity. And, with respect to comity, Judge Jones found the majority’s emphasis on public international relations to be “well outside the norm,” noting that it was two years after the Indian injunction that Judge Morgan issued the injunction in the American litigation that is the subject of this appeal. She added: “Had Ganpat instead litigated on the merits in the Indian court, this case might have been concluded already.” Judge Jones concluded that there were legal and factual errors underpinning the injunction, that it was an abuse of discretion to bind the Indian company that was not a party to the action in the United States, and that the terms of the injunction were not narrowly tailored and were abusive.
Noble House purchased a hull insurance policy from Certain Underwriters at Lloyd’s London covering its 177-foot motor yacht. Noble House is a Marshall Islands corporation with its principal place of business in Texas. The vessel underwent a substantial refit in Florida before its purchase by Noble House, but after the purchase and during the policy period, the vessel lost its portside rudder in the Bahamas while en route to Fort Lauderdale, Florida. The vessel was towed to Fort Lauderdale, and the Underwriters declined to pay for the repairs or salvage expenses. Noble House brought an action in federal court in Florida, seeking to recover repair and salvage expenses, and the Underwriters moved to dismiss the case for lack of in personam jurisdiction. Noble House asserted that the Underwriters had agents, members, or employees who carried out the Underwriters’ business in Florida by contracting to insure and provide coverage to vessels for damage incurred in Florida. Noble House also tried to use Florida contacts of Argonaut Insurance Co. as it shares the same corporate parent as Syndicate 1200, the lead underwriter for the policy. Judge Singhal was careful to distinguish corporate entities, noting that Argonaut Insurance Co. was not involved in the policy or the case, that the Syndicate is organized under the laws of the United Kingdom and is not licensed to conduct business in Florida, that Noble House and its retail broker are located in Texas, and that the wholesale broker for the policy is a United Kingdom corporation. He also found that the connection to Florida was too tenuous in this case as Florida had no interest in litigating a dispute with such a weak nexus with Florida from the post-damage repairs in Florida. Noble House did submit PACER search results listing 46 actions in the Florida federal court involving Underwriters, including some as plaintiff, but Judge Singhal did not find them relevant to this particular case. Consequently, Judge Singhal held that Noble House had not carried its burden to establish personal jurisdiction against the Underwriters in this case, cautioning that the decision should not be read as establishing that Certain Underwriters at Lloyd’s London may never be subject to general or specific personal jurisdiction in Florida or anywhere else in the United States. See April 2021 Update.
Noble House then filed this suit in federal court in Texas, and the Underwriters moved to dismiss based on forum non conveniens, citing the forum-selection clause in the policy that selected the courts of England and Wales. Noble House’s broker attached a cover note to the policy with a forum-selection clause that selected any court of competent jurisdiction in the United States. Judge Eskridge dismissed the case based on forum non conveniens, and Noble House appealed. Noble House argued that the usual forum non conveniens framework applied, requiring the court to determine whether there was an adequate alternative forum and to balance the private- and public-interest factors. Writing for the Fifth Circuit, Judge Engelhardt rejected that approach in favor of the simplified inquiries applicable when there is a mandatory, enforceable forum-selection clause. The plaintiff’s choice of forum has no weight, and the court only considers arguments about public-interest factors (applying a strong presumption in favor of enforcing the clause). As Noble House did not raise the question of whether the clause in the cover note applied until its reply brief, the Fifth Circuit held that it had waived any argument with respect to application of the clause. Noble House focused on the availability and adequacy of the courts of England and Wales, fearing that the case might be time-barred if litigated there. “Unfortunately for Noble House,” Judge Engelhardt responded that “controlling caselaw affords it no sympathy,” reasoning that the clause is not unreasonable when the plaintiff violates his contractual obligation by filing suit in a forum that is not specified in the contract. Turning to the public-interest factors, Judge Engelhard did not consider Noble House to have carried its heavy burden to establish that the clause should not be enforced. As a final point, Noble House argued that a “return-jurisdiction clause” should have been included in the dismissal in order to prevent Underwriters from failing to participate in the litigation in the designated forum. Judge Engelhardt disagreed, stating: “The existence of a mandatory, enforceable forum-selection clause swallows the purpose of a return-jurisdiction clause whole.” He added that Noble House would have a remedy for breach of contract if the Underwriters attempted to evade jurisdiction of the foreign court. The fact that Underwriters agreed not to count the time during which the suit was pending toward the limitation period exceeded what was expected of the district court to ensure that Underwriters did not “evade” jurisdiction. Accordingly, the Fifth Circuit affirmed the dismissal of the case on the basis of forum non conveniens.
Eduino Costa was injured while serving as a deckhand on the F/V GEORGES BANKS, and the vessel’s owner/operator, G&J Fisheries, filed a limitation action in federal court in Massachusetts. The court ordered that all claims be filed by November 18, 2020, and Costa filed an answer on November 17, 2020 but did not file a claim. More than 7 months later, the owner filed a motion for entry of default as to all persons who failed to file claims, and Costa opposed the motion, arguing that his claim was preserved in the answer. Judge Gorton disagreed, stating that the assertion that Costa’s rights were protected by the answer was impossible to reconcile with the plain language of Rule F and the “clear precedent” that claimants must file claims. Alternatively, Costa sought permission to file a late claim, and Judge Gorton noted that the courts freely grant permission to file late claims upon a sufficient showing of reasons therefor. However, Judge Gorton did not find the assertions of Costa’s counsel, in contravention of Rule F and clear caselaw, to present a convincing excuse, stating that “the failure of his counsel to admit to this oversight in either his initial filing or his sur-reply undermines his good faith.” Consequently, Judge Gorton did not permit the filing of the late claim and entered the default. See December 2021 Update. Costa appealed the entry of default to the First Circuit and argued that the proceedings in the district court should be stayed pending resolution of the appeal. Judge Gorton reasoned that Costa had made no effort to meet the burden for a stay, and he was skeptical that Costa could meet the burden even if he tried. Therefore, he denied the request for a stay. Elizabeth & Niki Fishing Corp. also moved to set aside the entry of default to allow its claim against G&J for indemnity and contribution. Elizabeth & Niki attached a claim but did not ask for leave to submit a late claim. Judge Gorton rejected the claim, noting that Elizabeth & Niki had incorrectly characterized the standard for filing a late claim, which required not just “cause” but “good cause.” Judge Gorton reasoned that the explanation given failed to satisfy the good-cause standard and that Elizabeth & Niki had failed to explain why it had not sought permission earlier. Thus, Judge Gorton entered an order of judgment of exoneration by default. See May 2022 Update.
Costa appealed to the First Circuit, arguing that his answer and other pleadings should have been construed to constitute a claim and that the district court should have given him permission to make a formal filing of that claim after the deadline. The First Circuit disagreed, pointing out that claims and answers serve different purposes (an answer contests the right to exoneration/limitation, but it is not a claim). Writing for the First Circuit, Judge Lynch noted that Costa’s answer raised defenses and referenced the suit he had filed in state court. However, Judge Lynch stated that the claimant cannot merely point to the state court complaint in order to satisfy the requirement in Supplemental Rule F to file a claim. Costa also argued that Judge Gorton applied the wrong legal standard in considering the request to file a late claim (excusable neglect). Judge Lynch answered that, although Rule F does not use the term “excusable neglect,” the standard under the Rule was effectively one of excusable neglect. Judge Lynch agreed with Judge Gorton that Costa had carelessly made no attempt to remedy the failure to file a claim for a year. Although Costa argued that the entry of a default against his claim as a Jones Act seaman was inconsistent with the liberal treatment required for seamen, Judge Lynch answered that the Jones Act “does not exempt Costa or any other seaman from complying with Supplemental Rule F’s requirements for timely filing a claim in a limitation action.” Judge Lynch added that Costa was represented by experienced maritime practitioners who have filed claims in limitation actions, stating that Costa’s approach “clearly harms the efficient administration of admiralty rules by the federal courts,” which have a “strong institutional interest in ensuring that litigants honor court orders.” Consequently, the First Circuit affirmed the exoneration of the vessel owner/operator and the decision to deny the request to file a late claim.
Arena Offshore is an offshore oil and gas developer that contracted with Island Operating to provide crane operators for its platform, based on a Master Service Contract. Arena Offshore contracted with C&G Boats to provide vessels to transport workers to the platform, based on a Master Time Charter Agreement. C&G is a boat broker that brokered the transportation to Rodi Marine based on a Master Time Charter Agreement. This case arises from an injury sustained by Tremayne Jajuan Kelly, an employee of Rodi Marine, who was injured when a crane operator employed by Island Operating was about to begin loading workers from a Rodi Marine boat onto the Arena Offshore platform. Kelly brought this suit in federal court in Louisiana against Rodi Marine, Island Operating, and Arena Offshore, and Island Operating filed a cross-claim against Rodi Marine for indemnity under the Master Time Charter Agreement between Rodi Marine and C&G Boats. Island Operating argued that it was entitled to additional insured status and indemnity from Rodi Marine, and Judge Juneau granted summary judgment to Rodi Marine and dismissed the Island Operating’s cross-claim. Island Operating appealed to the Fifth Circuit, which agreed with Judge Juneau that Rodi Marine owed no duty to indemnify or insure Island Operating. The Fifth Circuit’s analysis required the consideration of two contracts. The agreement between Rodi Marine and C&G Boats provided that the contractors of C&G Boats’ customer (Arena Offshore), which would include Island Operating, were to be named as additional insureds by Rodi Marine, subject to the limitation that the coverage available to the additional insureds would be no greater than the coverage required to be provided by C&G Boats under its contract with the additional insured. Similarly, Rodi Marine agreed to indemnify the Customer Group (including Island Operating) subject to the limitation that the indemnity would be no greater than the indemnity owed by C&G Boats to the member of the Customer Group. Therefore, the court was required to evaluate the obligations of C&G Boats under its contract with Arena Offshore. Concluding that C&G Boats was not obligated to insure or indemnify Island Operating, the Fifth Circuit held that Rodi Marine’s obligation to indemnify and insure C&G Boats did not extend to Island Operating.
Mabisa, a Spanish logistics company, entered into a contract with transformer supplier TSK Electrónica y Electricidad to transport an industrial transformer to La Virgen, Nicaragua. Mabisa subcontracted the entirety of the transportation to Wasa Projects & Logistics and Speedier Shipping (to be performed jointly). The terms of the agreement between Mabisa and Wasa and Speedier were set forth in a BIMCO Liner Booking Note that included a clause calling for London arbitration. The Booking Note was signed by Mabisa as “Merchant” and by Wasa under a signature line that specified that Speedier Shipping was the “Carrier.” Wasa engaged a road hauling company, Constructora Hugo Hutchinson, to perform the overland portion of the transit. The transformer was damaged during the overland portion of the transit from Panama to Nicaragua when a truck carrying the transformer struck a bridge. TSK Electrónica brought suit in Spain against Mabisa to recover under the contract between TSK Electrónica and Mabisa. That claim was settled with a payment from Mabisa’s insurer, Generali España de Seguros y Reaseguros, to TSK Electrónica in the amount of €545,000. Generali España and Mabisa commenced arbitration proceedings against Wasa and Speedier, asserting claims for breach of contract/breach of duty and negligence. Wasa and Speedier argued that they were not liable for transportation beyond the port of discharge in Panama and, alternatively, that the damage was due to an inevitable and unforeseeable circumstance. They also contested the amount of damages. The arbitration tribunal issued two awards (liability and cost allocation) in favor of Mabisa against Wasa and Speedier. The liability award found that Wasa and Speedier were responsible for the entire transportation from Brazil to Nicaragua (including the overland portion), that Wasa and Speedier were jointly liable, and that they owed damages in the amount of €545,000 plus costs. The second award determined that Wasa and Speedier were liable for £83,904.58 in attorney fees and disbursements. Generali España brought this suit in federal court in New York to enforce the two arbitration awards issued against Speedier in London pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Speedier argued that the arbitration clause in the Booking Note was not applicable to Speedier, which was not a party to that transaction, and that Wasa signed the Booking Note on Speedier’s behalf without its consent. Additionally, Speedier argued that it had not participated in the arbitration or agreed to participate in the arbitration. The problem with the first argument was that the arbitrators considered the argument and concluded that Wasa’s signature on the Booking Note under Speedier’s designation as “Carrier” was sufficient to bind both parties. As to its participation in the arbitration, Magistrate Judge Mann found that Speedier was not only aware of the dispute and arbitration but also discussed the matter with Wasa and continued to have an ongoing professional relationship with Wasa. Magistrate Mann concluded that the arbitrators had properly considered and resolved that question and that any objection was waived because Speedier was notified of the arbitration and declined to participate. As Speedier presented no grounds to set aside the awards under the terms of the New York Convention, Magistrate Judge Mann confirmed the awards and entered judgment in favor of Generali España against Speedier. Speedier appealed the judgment to the Second Circuit, which affirmed the confirmation of the award. The appellate court noted that Speedier Shipping had not specified which of the defenses for overturning an award were applicable, adding that the Magistrate Judge had construed the arguments as plausibly implicating two defenses. The Second Circuit concluded that Speedier cited no English authority (applicable to the agreement) for its argument that it was not a party to the agreement and added that English law expressly contemplates the formation of a valid agreement without the parties’ signatures. Moreover, the evidence cited by Speedier did not provide more than a vague denial of Speedier’s involvement in the agreement, which was insufficient to carry its heavy burden to establish a defense. As to the involvement in the arbitration, the Second Circuit agreed that Speedier had not made a timely objection to the submission of the dispute to arbitration (it did not contest that it received notice of the arbitration). Therefore, the appellate court affirmed the judgment in a Summary Order.
Windspeed agreed to buy two vessels (M/V SEMI 1 AND M/V SEMI 2) from Semi Sub Services, and Windspeed provided services, crew, and consumables to the vessels in preparation to take delivery. When the time came to close the sale, Windspeed did not purchase the vessels, and Modern American Recycling bought them. Windspeed then brought this in rem action against the vessels in federal court in Alabama, asserting a maritime lien against the vessels because the items it provided were necessaries. Modern American moved to vacate the arrests, arguing that providing the items was a condition precedent to the agreement to purchase the vessels and that, as such, the items could not be necessaries. Chief Judge Beaverstock agreed, vacated the arrests, and held that the court lacked jurisdiction. Windspeed appealed to the Eleventh Circuit, which noted that, pursuant to the agreement, Windspeed was responsible for the cost of preparing and making the vessels ready for transport to international waters, including fuel, lubricants, stores, consumables, repairs, and other costs. At the time, the vessels were in an inactive or port status, and the goal was to prepare the vessels to be transported to a scrapyard in India. Due to complications from the COVID pandemic, the parties were unable to close on the sale, and the agreement expired. Semi Sub then sold the vessels to Modern American, which towed the vessels to a scrapyard in Mobile, where the vessels were arrested in this action. The Eleventh Circuit first noted that the agreement under which the charges were incurred was a contract for the sale of vessels and was not a maritime contract. Therefore, the agreement did not create a maritime lien or give rise to maritime jurisdiction. Nonetheless, Windspeed argued that the provisions were necessaries separable from the agreement. The Eleventh Circuit cited its pre-Kirby (the Supreme Court’s maritime case about a train wreck) opinion, which stated: “In order for a contract to fall within the federal admiralty jurisdiction, it must be wholly maritime in nature, or its non-maritime elements must be either insignificant or separable without prejudice to either party.” Reasoning that the provisions were not separable, considering the requirement in the agreement that Windspeed bear the burden of getting the vessels ready for sailing, the Eleventh Circuit held that Windspeed did not obtain a maritime lien and that the district court correctly held that it did not have in rem jurisdiction over the vessels. Finally, the court of appeals rejected the argument that the failure to close the contractual sale did not turn the contractual performance into an extra-contractual lien.
From the federal district courts
The death of Raeshon Willis in a jet-ski accident in South Lake Tahoe returns to the Update (June 2019, November 2019, December 2019, August 2020, and January 2022 Updates). Willis, an employee of Zip, Inc. and Berkeley Executives, was on a work trip with fellow employees Thomas Smith and Kai Petrich. As part of a team-building activity, Smith and Willis were riding together in Lake Tahoe on a wave runner that was rented from Williams Sports Rentals. Smith was operating the wave runner when it hit a wave, and Willis was thrown overboard and drowned. Williams Sports Rentals filed a limitation action as the owner of the wave runner, and Willis’ mother sought to lift the limitation stay so she could litigate her claim against Williams Sports Rentals in state court. Judge Mendez declined to lift the federal stay, and the Ninth Circuit ordered Judge Mendez to reconsider his analysis. Instead of lifting the stay, however, Judge Mendez ruled that the owner of the jet ski should be exonerated and dismissed the case. The Ninth Circuit then ordered Judge Mendez to lift the stay in the limitation action, and Judge Mendez considered that order to be “unequivocal.” Although agreeing to lift the stay, Judge Mendez did address whether the trial of the limitation question should proceed in federal court or await the trial of the liability issue in the state court (based on efficient use of judicial resources). As the Sacramento federal courthouse was closed to the public until further notice, Judge Mendez held that the limitation action should be stayed until the completion of the suit in state court.
Willis’ mother had filed a suit in state court in Alameda County against Zip, Inc., Berkeley Executives, Smith, and Petrich. After the limitation stay was dissolved, his mother added Williams Sports Rentals as a defendant. Williams Sports Rentals twice moved to transfer the case from the Alameda County Superior Court to the South Lake Tahoe Branch of the El Dorado Superior Court, and the judge transferred the case, concluding that a trial in El Dorado County would be vastly more convenient than a trial in Alameda County (the principal place of business of Zip and Berkeley and the residence of Smith and Petrich). The Court of Appeal, however, held that the trial court abused its discretion in granting the transfer because Williams Sports Rentals had not carried its burden to show that both the convenience of witnesses and the ends of justice would be promoted by a transfer. The lower court had found that it “cannot determine what delay might result from changing venue,” and that was insufficient to satisfy the requirement that the ends of justice would be promoted by the transfer. Consequently, the appellate court issued a peremptory writ of mandate directing the superior court to vacate its order transferring the case.
The basis for the lifting of the stay of the federal limitation action was that only the Willis estate had filed a claim in the limitation action, and the Willis estate filed the necessary stipulations for a single-claimant exception. The court lifted the federal stay of state-court litigation and substituted a stay of the limitation proceeding pending a resolution of liability in the suit in state court. Several parties in the Willis state-court suit filed cross-claims for indemnity and attorney fees against Williams Sports Rentals. The cross-claimants declined to stipulate to Williams Sports Rentals’ limit of liability. One of the insurers of a cross-claimant also sought to intervene in the limitation action. Williams Sports Rentals then sought to lift the stay of the limitation action as the limitation action no longer presented a single-claimant situation. Chief Judge Mueller agreed that the federal action no longer presented a single-claimant exception, and she lifted the stay of the federal action and enjoined the state-court litigation. See January 2023 Update. On May 9, 2023, Chief Judge Mueller set aside the default judgment entered against Kai Petrich and allowed Petrich and two insurers to intervene in the limitation action.
The Willis estate filed a notice of appeal of the order finding that the case no longer fell within the single claimant exception and lifting the stay of the federal action, and the estate moved the district court to stay proceedings in the limitation action pending resolution of the appeal. The estate argued that it had a substantial case for relief on the merits of its appeal because the cross-claims against Williams Sports Rentals were “manifest shams” that did not threaten the right to limitation in “any real way.” Chief Judge Mueller did not find any explanation for that argument in the briefing and continued to conclude that the single claimant exception no longer applied. The estate also argued that the injunction was overbroad because it enjoined not just the state proceedings that had been filed against Williams Sports Rentals but the continued prosecution of any legal proceedings. As there was no indication of any other proceedings, Chief Judge Mueller did not find any likelihood of success on the part of the estate. Finally, the estate argued that it would suffer irreparable harm during the pendency of the appeal because the breadth of the injunction would cause “disorder” (arguing that the Ninth Circuit would probably not decide the validity of the injunction before the estate lost the June 2023 trial date in state court). However, the deadline to try the state case did not expire until 2026, and a stay of the proceedings in the federal limitation action would not affect the June trial setting because the court had already enjoined the state action. Therefore, there was no showing of irreparable harm in the decision not to stay the proceedings in the limitation action.
Cahuenga Associates operates a marina in San Diego, California. The marina entered into an agreement with Robert Trout, owner of a 39-foot Silverton motor yacht, for wharfage. Trout died and stopped paying for the wharfage. The marina terminated the contract and agreed to defer taking action until Trout’s brother spoke to an attorney. When there was no further contact from Trout’s brother, the marina arrested the vessel in March 2022. No claim of owner was filed, and, after more than seven months, the marina moved for an interlocutory sale (and credit bid). The marina submitted the declaration of a yacht broker that the vessel was subject to deterioration, and it submitted evidence that the value of the vessel was $67,500 and that fees were accruing at no less than $3,710 per month. Finding a likelihood of deterioration, unreasonable delay in securing the release, and disproportionate cost of keeping the vessel in custody, Judge Lorenz ordered the interlocutory sale of the vessel and authorized a credit bid up to the amount of the marina’s lien and custodia legis expenses and costs (no other party had asserted a lien on the vessel). Judge Lorenz also authorized the marina to replace the zincs on the vessel to preserve and protect the vessel.
Captain Charles Moran, a seaman assigned to the tug SIGNET PURITAN, reported for his 28-day hitch on the vessel on September 29, 2021, but was informed that the vessel was not departing due to poor weather. He was given permission to get a haircut and pick up groceries for the crew, but he tripped and fell and broke his ankle in the parking lot of the hair salon and could not perform his duties for his hitch. He was fired on October 13, 2021 after an investigation of an unrelated incident. On December 21, 2021, Moran brought this action in Texas state court against his employer, Signet Maritime, seeking maintenance and cure and punitive damages for willful failure to pay maintenance and cure. Although his employer is a Texas company, it snap-removed the case to federal court based on diversity, arguing that the forum defendant rule did not prevent removal because it had not been served and that the bar to removal of a Jones Act case did not prevent removal of the suit seeking maintenance and cure. Signet Maritime then moved for summary judgment on the claim for punitive damages for willful failure to pay maintenance and cure, arguing that it did not know that Moran was seeking payment for his medical care. Moran responded that he needed medical care for the broken ankle, he told the captain about his injury when it occurred, and that he had not been provided with treatment from Signet Maritime. Finding no support for an inference that Signet Maritime exhibited callousness and indifference to Moran’s injury, Chief Judge Rosenthal held that Moran could not recover punitive damages. On August 29, 2022, Chief Judge Rosenthal denied Moran’s motion for reconsideration, reasoning that Moran gave no indication that he would seek maintenance and cure until after Signet had terminated his employment and just a few days before the filing of this lawsuit and adding that punitive damages were not available for the claim for wrongful discharge. See September 2022 Update.
The parties agreed to bifurcate the trial of Moran’s claims, and liability was tried to a jury, which found that Moran was injured in the service of the vessel (so that Signet was liable for maintenance and cure). The jury did not find that Moran was wrongfully discharged. From the time of the accident until days before trial, the only injury Moran claimed was to his foot and ankle. Subsequently, Moran sought to recover for neck and back injuries that he contends are related to the fall or that were incurred in the service of the vessel. Signet argued that the claim for neck and back injuries was too long after the fall to be the basis for maintenance and cure, but Chief Judge Rosenthal held that the time of the injury, not the timing of the symptoms, determines maintenance and cure benefits. Although Moran argued that injuries occurring during the maintenance and cure period are sustained in the service of the ship, Chief Judge Rosenthal held that consideration of maintenance and cure benefits would be limited to benefits related to conditions arising from or aggravated by the fall. Accordingly, she held that she would allow testimony with respect to Moran’s foot and ankle injuries and other injuries that may have been caused or aggravated by the fall on the ship. See December 2022 Update.
Judge Rosenthal then tried the damages on the maintenance and cure claim. Signet did not pay maintenance and cure benefits for the foot and ankle injury and did not pay unearned wages, disputing whether Moran’s injury was in the service of the ship or while on a personal errand. However, Moran received short- and long-term disability benefits from MetLife based on a policy purchased by Signet that covered both work- and non-work-related injuries. There was no evidence that the MetLife plan provided that the benefits paid would offset any maintenance and cure liability that Signet may have. The long-term benefits amounted to $64,160.33. Accordingly, Judge Rosenthal held that Signet was not entitled to offset its maintenance obligation by the amount of benefits paid under the MetLife plan (Signet did not establish that the primary purpose of the disability plan was to indemnify Signet against liability). Judge Rosenthal found that Moran was entitled to $16,300 in unpaid wages for the 28-day hitch. With respect to maintenance, Moran testified that he spent $150 per week on groceries for himself and his brother, and he presented evidence from the USDA Food Chart that $376.70 per month is reasonable for food expenditures for a man of Moran’s age and circumstances. Judge Rosenthal found that $75 per week was a reasonable amount for Moran’s groceries (not including his brother’s food). Before the boat was repossessed, Moran’s lodging expenses when he lived on the boat were $1,621.06 per month. After a hurricane damaged Moran’s boat, he began to live with his brother part-time. Judge Rosenthal found that this amount was a reasonable lodging expense, and she declined to divide the figure in half to reflect Moran’s residence at his brother’s home for a portion of the maintenance period as Signet did not submit authority suggesting that a move necessitated by a natural disaster should result in diminished maintenance expenses. Moran also purchased a camper trailer after the damage to his boat, but Judge Rosenthal held that the expenses were not part of the maintenance obligation because Moran was already living with his brother and had not sold the boat. She also ruled that Moran’s expenses related to his truck, cell-phone service, and internet service were not part of his maintenance recovery. Although Moran sought cure for his ankle, shoulder, and back, Signet disputed that the shoulder and back complaints were related to the trip and fall, and Judge Rosenthal held that the credible testimony and documentation did not support a finding that those injuries were caused or contributed to by the fall. Turning to the issue of maximum cure, Judge Rosenthal found unpersuasive Moran’s testimony that his ankle had not reached maximum cure on July 15, 2022, when an orthopedic surgeon examined him and opined that his ankle was “healed,” citing Moran’s testimony that he was able to walk extensively during several vacations before that examination, including a trip to New Orleans, a trip to Universal Studios theme park in Florida, and a trip to a strawberry festival. Judge Rosenthal awarded mileage for Moran’s travel to and from his doctors at the IRS mileage rate for medical expenses, not business travel. Judge Rosenthal previously held that Moran was not entitled to punitive damages for failure to pay maintenance and cure, and, after trial, she held that the denial of maintenance and cure was not unreasonable. As this is a maritime claim, Judge Rosenthal awarded prejudgment interest. Citing the Texas Financial Code, she held that the interest accrued from the date the suit was filed (the earlier of the 180th day after the date of written notice of a claim or the date of filing suit).
Miller Boat Line entered into an agreement with Elliott Bay to perform architectural and engineering services in connection with the construction of a 140-foot ferry boat for Miller Boat Line. Miller Boat Line then entered into a construction contract with Fraser Shipyards for the construction of the ferry boat, and Elliott Bay and Fraser Shipyards entered into an agreement for Subcontractor Services so that Elliott Bay could provide engineering, design, and regulatory liaison services to Fraser Shipyards during the construction. Elliott Bay and Fraser Shipyards then entered into an Agreement to Indemnify and Hold Harmless by which Fraser Shipyards agreed to indemnify Elliott Bay and hold it harmless from claims arising out of the use of drawings, sketches, calculations, and data from Elliott Bay. Miller Boat Line brought this suit in federal court in Ohio against Elliott Bay, alleging defects in the architectural, construction, and marine engineering services provided by Elliott Bay, and Elliott Bay filed a third-party complaint against Fraser Shipyards, seeking indemnity under the Agreement to Indemnify and Hold Harmless. Fraser Shipyards moved to dismiss the third-party complaint, asserting it was not valid under state law. As the contract involved the construction of a vessel, Judge Knepp held that state law applied, and he chose Ohio law as there was no choice-of-law clause in the contract. Ohio’s anti-indemnity statute bars certain indemnity provisions in a contract “relative to the design, planning, construction, alteration, repair, or maintenance of a building, structure, highway, road, appurtenance, and appliance,” which raised the question of whether the vessel was a “building, structure, highway, road, appurtenance [or] appliance.” Fraser Shipyards argued that the vessel was a “structure” and that the structure did not have to be attached to real estate. Judge Knepp reviewed the Ohio cases and stated that the courts had interpreted the subject matter of the statute as “confined to naturally and ordinarily stationary objects” and not to moveable property such as planes, vehicles, or boats. Accordingly, he concluded that the Ohio statute was not applicable and did not void the indemnity agreement. Consequently, he denied Fraser Shipyard’s motion to dismiss.
Toby Broussard was employed as an instrument technician by W-Industries LLC and was working on a platform located on the outer Continental Shelf off the Louisiana coast that was owned by Cox Oil. Broussard was injured while attempting a swing-rope transfer from the platform to the DOMINIC S, a utility vessel owned by Gulf Offshore Logistics. Broussard alleged that as he began his maneuver on the rope, the DOMINIC S dropped out from underneath him, causing him to fall to the deck of the boat. Broussard brought this suit in Louisiana state court against Cox Oil, Gulf Offshore, and two Gulf Offshore crew members, alleging that the defendants were negligent for having Broussard perform the shift change at an unsafe time (during a period of high winds and unstable waters), and Cox Oil removed the suit to federal court. The defendants moved for summary judgment, and Judge Fallon agreed that judgment should be entered for the defendants. He first noted that vessels cannot control their vertical movement and that the vertical movement is “ordinary, expected, and not the result of vessel negligence.” Although Broussard argued that this case was different because changes in weather and sea conditions had made it difficult for the captain to position the vessel, Judge Fallon pointed out that Broussard had admitted that he believed that it was safe to conduct the transfer at the time and that the weather was nice and the seas were calm. As Broussard presented no evidence for the cause of his accident other than the vertical movement of the vessel, Judge Fallon dismissed the case.
This case involves a dispute involving the termination of a contract for the transportation of coal from Baltimore, Maryland to a New Jersey power plant located on the Delaware River. Logan Generating owns and operates an electric generation facility in Logan Township, New Jersey that was fueled by coal. Logan entered into a contract with Express Marine in 2008 to transport coal to the facility from Baltimore, Maryland, and Dann Marine assumed Express Marine’s interest in the contract when Dann Marine purchased the barge that Express Marine used to transport the coal. When the 2008 contract expired, Logan and Dann Marine entered into an Amended and Restated Coal Transportation Agreement in 2016 with a term that ended on December 31, 2024. That Agreement contained a provision that Logan could terminate the Agreement immediately (on written notice to Dann Marine) if Logan intended to permanently cease burning coal at the facility for any reason. Dann Marine alleged that Logan inserted that provision because it intended to stop burning coal before the end of 2024, but it did not disclose that intent to Dann Marine. In early 2022, Logan began negotiating with the company to which it supplied electric power to cease burning coal (in exchange for a series of payments), resulting in an agreement that Logan would stop burning coal. On April 13, 2022, Logan sent a formal notice of termination of the transportation agreement to Dann Marine, effective May 15, 2022. Dann Marine objected and demanded more than $4 million in lost revenues related to future coal deliveries and also alleged that there was damage to the barge from the unloading and a claim for demurrage for time lost during repairs. Logan filed this action in federal court in New Jersey, seeking declaratory relief that it had complied with the contract, and Dan Marine filed counterclaims. Logan filed a motion for summary judgment on its request for declaratory relief and a motion to dismiss the counterclaims. Judge Blumb noted that the contract was a maritime contract, and it provided that maritime law would apply, supplemented by New York law. The primary issue between the parties involved the termination clause. Judge Blumb found that Logan’s interpretation of the agreement was straightforward and that it had exercised its right to terminate the Agreement by providing the required written notice. Dann Marine argued that the Agreement was illusory because there was a lack of mutuality—one party was obligated to perform under the contract, but the other was not because it could terminate the contract by its unilateral intent to stop using coal. Judge Blumb disagreed, reasoning that a restricted option (requiring written notice) to terminate does not destroy the mutuality of the obligation. Dann Marine also argued that, even if the Agreement had been terminated in accordance with the termination provision, it was entitled to lost revenue. As there was no provision in the Agreement that supported that relief, Judge Blumb held that the interpretation was not plausible. Dann Marine also sought demurrage under the general maritime law for the period after termination of the Agreement during which the barge awaited repairs. Dann Marine was not entitled to demurrage under the Agreement, but Judge Blumb allowed Dann Marine to replead a claim for implied demurrage in an amended counterclaim. Judge Blumb dismissed Dann Marine’s claim for breach of an implied covenant of good faith and fair dealing because the conduct of which Dann Marine complained did not violate the language of the termination provision of the Agreement. She dismissed the claim for fraudulent inducement because the parties agreed that Logan would have an option to terminate the agreement if Logan decided to stop burning coal. She dismissed the claim for unjust enrichment because the parties had a valid and enforceable written agreement.
Angelique Chappell was a passenger on the cruise ship CARNIVAL HORIZON. She claims that she was injured when she slipped and fell on a wet, foreign, or transitory substance on the metal nosing of a step on a staircase on the vessel. She brought this suit against the cruise line in federal court in Florida, and the cruise line designated a clinical pharmacologist and toxicologist, Dr. Daniel Buffington, as an expert with respect to Chappell’s estimated blood alcohol concentration and the impacts of alcohol on her faculties at the time of her accident. Chappell moved to strike the testimony and opinions of Dr. Buffington as unreliable because they were based on unsupported assumptions and an unreliable methodology. Dr. Buffington relied on Chappell’s deposition testimony, the pleadings, shipboard and hospital medical records, and receipts from Chappell’s drink purchases. He calculated her blood alcohol concentration based on the Widmark Equation (the standard methodology for blood alcohol testing in forensic science) using the percentages of alcohol in a beverage, the individual’s weight, the number of hours since the first drink, and a distribution factor to account for total body water. He opined that her estimated blood alcohol concentration was consistent with signs and symptoms associated with diminished attention, judgment, and self-control; sensory-motor impairment; impaired perceptions; and reduced sensory response (in accordance with the peer-reviewed Dubowski Table that is used to illustrate the progressive stages of alcohol influence on human performance). Although Chappell argued that there were no blood tests to determine the precise blood alcohol concentration, Magistrate Judge Damian held that, in the absence of those tests, the methodologies used by Dr. Buffington were sufficiently reliable. However, Magistrate Judge Damian agreed with Chappell that the opinion that Chappell’s alcohol consumption caused or contributed to her fall was an improper legal conclusion regarding causation that invaded the province of the jury and was not helpful. Therefore, Dr. Buffington was precluded from testifying that the alcohol consumption or its effects caused or contributed to the fall. See May 2023 Update.
The cruise line moved to strike the testimony of Chappell’s engineering expert, Andres Correa, and to strike or limit the testimony of Chappell’s treating physicians, Dr. Catherine Cahill and Dr. Anthony Florschutz. The cruise line argued that Correa was not qualified because his experience is limited to large, land-based, civil engineering projects and that he did not have expertise on maritime issues such as the design and construction of maritime stairs for passengers. Magistrate Judge Damian disagreed, noting that an expert passes the relatively low threshold for qualification even though his experience does not precisely match the matter at hand. As he had experience on similar land structures, Magistrate Judge Damian held that Correa’s qualifications were sufficient. The cruise line objected to Correa’s opinion that the cruise line created an unsafe condition by allowing the existence of a walking surface that did not contain a uniformly slip-resistant surface because Correa did not conduct any objective tests to determine the slip resistance of the nosing on the staircase. However, Magistrate Judge Damian held that it was sufficient that Correa inspected the stairs, observed and compared them with other stairs on the same vessel, documented his observations through photographs and measurements, and reviewed federal and international regulations and codes and standards for criteria to govern construction and maintenance of walking surfaces, and that it was not necessary that he test the stairs for coefficient of friction. She considered the opinion was beyond the understanding and experience of a lay person and would be helpful to the jury. The cruise line objected to the opinions (that the cruise line knew or should have known of the dangerous condition, that the conditions were not readily apparent to users, and that the cruise line was responsible) on the ground that they are legal conclusions. Magistrate Judge Damian agreed that these opinions invaded the province of the jury and were not admissible. The cruise line objected to Correa’s opinions (that the cruise line created an unsafe condition by allowing the existence of excessively large handrails that were not graspable and by allowing the existence of an excessively sloped tread surface) on the ground that Chappell did not plead a claim for negligent design. Chappell responded that the condition of the nosing was a matter of maintenance and that the handrails could have been retrofitted during routine maintenance. Magistrate Judge Damian answered that the probative value of the opinions on the design of the handrails and the slope of the staircase was outweighed by the prejudice to the defendant in light of the absence of a claim of negligent design. Therefore, these opinions were excluded. Finally, the cruise line objected to Correa’s observations that the nosing of the crewmember stairs was similar to the stairs where Chappell fell except that the leading edge of the crew stairs had fine grooves. Magistrate Judge Damian held that the observations were relevant to the process that Correa undertook in formulating his opinions on the stairs where Chappell fell and that Correa would be allowed to present the observations as they were not opinions. Chappell disclosed Drs. Cahill and Florschutz as “hybrid” treating physicians but did not provide expert reports from them. The cruise line argued that the doctors should not be allowed to provide opinions beyond facts observed as part of the doctors’ treatment of Chappell, but Chappell argued that she disclosed the anticipated opinions in her amended disclosures. Magistrate Judge Damian answered that the amended disclosures did not include expert reports and merely listed the topics of opinions that the doctors might render without disclosing the actual opinions. Accordingly, to the extent Chappell intended to offer opinions on causation, prognosis, future treatment, and costs, the testimony would not be permitted.
Opinion Bland, Brumfield, Ellzey, and Norris
Opinion Francisco, Franks, and Hodge
Teresa Ann Dobbs claimed that she was exposed to oil and oil-soaked debris from the Macondo/DEEPWATER HORIZON spill while performing clean-up work near Gulfport, Biloxi, Long Beach, Pass Christian, and Cat Island, Mississippi. David Dumas claimed exposure while performing decontamination work near Lafourche Parish and New Orleans, Louisiana; Tavarish Penn brought a claim for exposure near Mobile, Gulf Shores, Orange Beach, Dauphin Island, and Bayou La Batre, Alabama, and Perdido Key, Florida; Antonio J. Reed alleged exposure at Theodore, Dauphin Island, and West Point, Alabama; Lakesha Butler claimed exposure in and around Cat Island and Ship Island, Mississippi and at the “beaches along I-90.” Eileen Daniel alleged exposure as a cleanup worker around her residence in Pascagoula, Mississippi. Charles Anthony Bowens claimed that he was exposed to oil and harmful chemicals during cleanup work. These plaintiffs presented the expert report of Dr. Cook to support the general causation requirement for their claims. BP moved to exclude Dr. Cook’s opinions, and the plaintiffs asked the court to allow Dr. Cook’s expert testimony as a sanction for BP’s alleged spoliation of evidence of the plaintiffs’ exposure. Judges Vance and Vitter agreed that Dr. Cook’s opinions should be excluded and that the spoliation contention did not change that result. They noted that spoliation is a sanction for the destruction of evidence, but the plaintiffs argued in these cases that BP should have gathered data. Without a duty to collect the data (and as no such evidence existed), there could be no spoliation. Additionally, the admission of a deficient expert report would not be the cure even if there were spoliation. Finally, plaintiffs Penn, Reed, Butler, Daniel, and Bowens noted that some judges had denied summary judgment to BP for symptoms that were transient or temporary. Judges Fallon and Vance responded that the summary judgment motions in those cases were premised on specific causation and that Dr. Cook’s opinions on general causation were not challenged in those cases. In these cases, however, BP argued that Dr. Cook’s opinions were insufficient on general causation and specific causation. As evidence of general causation was required, regardless of whether the condition was transient or temporary, and as there was no expert evidence of general causation, Judges Fallon, Vance, and Vitter granted summary judgment to BP and dismissed all of these suits with prejudice.
John Wunstell worked in the oil spill response as a captain in the Vessels of Opportunity program, assisting in controlled burns of crude oil that was floating on the surface of the Gulf of Mexico (he also claimed that dispersants were sprayed from the air onto his vessel during the cleanup). Wunstell alleged that he had to be airlifted by helicopter from his vessel in the Gulf of Mexico to West Jefferson Hospital. BP moved to exclude Wunstell’s expert, Dr. Judd Shellito, a pulmonologist, and for summary judgment. As with the opinions of Dr. Cook, Judge Milazzo held that Dr. Shellito’s opinions on general causation and specific causation were insufficient and should be excluded. In the absence of expert support on causation, Judge Milazzo granted summary judgment to BP with respect to Wunstell’s physical injuries (also rejecting Wunstell’s argument that he did not need expert testimony to prove his acute, transient medical conditions because they were within the knowledge of lay persons). As Wunstell could not prove his claims for physical injuries, Judge Milazzo also ruled that Wunstell could not succeed on his claim for mental damages (there was no causally related physical injury to support an emotional distress claim). Finally, Judge Milazzo rejected Wunstell’s claim for mental damages based on a zone-of-danger theory. Wunstell argued that he satisfied the test of being within a zone of danger because the vessel was tethered to the burns and he could not leave the dangerous area. Judge Milazzo noted that the Fifth Circuit had rejected more compelling arguments by workers who came upon the immediate aftermath of the explosion of the DEEPWATER HORIZON, were under the threat of subsequent explosions, could feel the extreme heat of the burning rig, and could hear deep rumbling sounds coming from below the surface of the water.
Daray Rashon Bland, Herbert Lee Brumfield, Eric Dewayne Ellzey, Daphne Norris, Mark A. Francisco, Robert Anthony Franks, and Charlie David Hodge moved for reconsideration of the decisions to exclude the expert report of Dr. Cook and to grant summary judgment to BP. They argued that BP’s failure to produce an adequate 30(b)(6) deponent and failure to conduct biomonitoring go to the heart of the general causation issue and that they should be able to respond to the summary judgment motions with additional evidence. However, Judge Vance did not believe that the plaintiffs had discovered any new evidence that would change the inadmissibility of Dr. Cook’s opinions or that would make any difference for the motion for summary judgment. Accordingly, she denied reconsideration in these cases.
This case involves an incident in which the M/Y PEGASUS, owned by CH Barco, lost power and drifted onto the rocks of a jetty in Florida. The vessel was insured under a hull policy issued by Accelerant Specialty, and Accelerant Specialty argued that CH Barco breached the duty of uberrimae fidei and that the policy was void from its inception so that there was no coverage for hull damage or salvage. CH Barco filed suit in Florida state court, and Accelerant Specialty brought this action thereafter in federal court in Florida, seeking a declaratory judgment that the policy was void and did not provide coverage. The insured moved to dismiss the federal declaratory judgment action on the ground that the same case was pending in state court or, alternatively, to stay the federal action pending resolution of the state suit. Accelerant Specialty raised two arguments why the case should not be stayed (as the Eleventh Circuit affirmed in Great Lakes Reinsurance (UK) PLC v. Pomarico). Accelerant Specialty argued that it was going to prevail in the state case, which would be dismissed. Judge Rosenberg was unpersuaded because the argument was based on an uncertain outcome and because a federal stay could be lifted once the state action was dismissed. Accelerant Specialty also argued that cases such as Pomarico were not applicable because Accelerant Specialty was seeking affirmative relief and not merely a declaration. Judge Rosenberg rejected that argument because the federal complaint sought a declaratory judgment and did not contain an independent count for rescission or breach of contract (Accelerant requested that the Court “declare an entitlement to rescission,” but it did not bring “a claim for rescission”). Consequently, Judge Rosenberg declined to dismiss the federal action but stayed it pending the full adjudication of the state suit.
Raul Calvoz, owner of the 60-foot SUNSEEKER, had a written and/or oral contract with Chamonix to operate, manage, oversee repairs, and control the vessel. Chamonix’s duties included selecting contractors to make repairs and perform maintenance on the vessel and to select captains to operate the vessel. Chamonix selected Ivan Blumenfeld as captain. The vessel was damaged while it was being lifted out of the water in Grove Harbour Marina in Miami, Florida (by a contractor hired by Calvoz’s broker), and Calvoz brought this action against Chamonix and Captain Blumenfeld in federal court in Florida, asserting claims for breach of contract, bailment, and negligence. The defendants moved to dismiss the suit for lack of admiralty jurisdiction, for failure to state claims for relief, and for failure to join indispensable parties. The defendants argued that Calvoz did not show that the incident had a significant relationship to maritime activity to warrant admiralty jurisdiction, and Calvoz responded that the defendants performed negligent acts and breached a contract that damaged the vessel while it was in the water being lifted out of the water by use of a travel lift. Chief Judge Altonaga reasoned that the purported contract in this case fell under admiralty jurisdiction because it involved selecting contractors to make repairs and perform maintenance on a vessel and because it involved selecting captains to operate the vessel, adding that “it is disingenuous and a waste of the parties’ and this Court’s resources to have to consider Defendants’ unsupported position otherwise.” Although the written contract between the parties had expired, Calvoz alleged an oral contract was in effect. Although the defendants asserted that the allegations of the oral contract were too vague to give notice to defend the case, Chief Judge Altonaga noted that the complaint listed several material terms and that the claims for breach of contract and bailment were plausibly based on breach of that agreement. The negligence claims, however, were insufficient. The complaint simply alleged that Captain Blumenfeld owed a duty of reasonable care to Calvoz, and Chief Judge Altonaga stated that this conclusory allegation was insufficient to state a maritime negligence claim. As to Chamonix, Chief Judge Altonaga found insufficient the allegation that Chamonix breached a duty of care by not making sure that the vessel was properly positioned on the travel lift straps before allowing the operator of the travel lift to remove the vessel from the water. She noted that the complaint failed to allege that any employee (or contractor hired by Chamonix) was present during the incident. Additionally, as the negligence claims arose from the same conduct as in the claims for breach of contract and bailment, Chief Judge Altonaga held that the negligence claims should be dismissed based on the independent tort doctrine. Finally, the defendants argued that the case should be dismissed because Calvoz failed to join indispensable parties—the company hired to lift the vessel out of the water and Calvoz’s broker who hired that contractor. Calvoz contended that there are no indispensable parties because admiralty law is governed by the doctrine of joint and several liability. Chief Judge Altonaga agreed that other possible parties that may owe the plaintiff an obligation are not indispensable and denied the motion.
Taylor Ann Moore, a passenger on the MSC MERAVIGLIA, a cruise ship owned/operated by the defendant, claims that she slipped on a foreign transitory liquid substance while stepping down the outdoor stairs between deck 18 and deck 16 of the vessel. She brought this complaint in federal court in Florida against the cruise line and listed nine (or more) potential conditions that may have contributed to her fall. She then claimed that the cruise line was negligent as to each of the conditions for failure to inspect, failure to maintain, failure to remedy, failure to warn, negligent design, and vicarious liability for crew negligence. In what Judge Moore described as a “copy-and-paste complaint,” the passenger stated that the cruise line breached its duty with respect to the conditions without specifying which dangerous condition or subset thereof proximately caused her injury. Judge Moore concluded that the failure to specify which defect related to each count (or which ones actually caused her fall), all the conditions were rendered conclusory and vague. Before dismissing the complaint without prejudice, Judge Moore noted the thirty-year battle in the Eleventh Circuit over shotgun pleadings and put the passenger’s counsel “on notice that repetition of the same pleading failures before this Court may subject counsel to sanctions or other disciplinary action.”
North Star entered into a contract with Eastern Shipping Group to build a fishing boat, the NORTH STAR, at the Eastern shipyard in Panama City, Florida. North Star obtained a builder’s risk policy with Norwegian Hull Club as the lead underwriter. The construction progressed to the stage where the structure was out of the drydock and was afloat at the outfitting pier. However, the structure was awaiting a small amount of work and final sea trials before it was commissioned and delivered. That is when Hurricane Michael made landfall with the eye of the CAT 4/5 hurricane passing over Panama City. The structure broke loose from its mooring and grounded, causing substantial damage. The underwriters paid more than $70 million (agreed value of $77 million minus the deductible), but the parties disputed the amount of the agreed value for the structure, and the underwriters brought this declaratory judgment action in federal court in Florida based on the court’s admiralty jurisdiction. North Star filed a counterclaim (at law) based on diversity jurisdiction and demanded a jury. The underwriters moved to strike the jury, arguing that the complaint was brought in admiralty and that the owner was not entitled to a jury on a counterclaim in a maritime proceeding. Judge Hinkle agreed that no jury was allowed if the complaint sounded in admiralty. He then addressed the distinctions with respect to whether a contract is maritime in which the focus is “on experience—on distinctions entrenched in precedent—more than on logic.” Judge Hinkle found “little logic in the rule that a contract to build a new vessel is nonmaritime, [but] a builder’s risk policy insuring the vessel while under construction is maritime.” Although North Star cited authority applying state law to a dispute over a builder’s risk policy covering a vessel under construction, Judge Hinkle answered that the case established that the policy was maritime as the court in that case applied state law as the maritime rule based on Wilburn Boat. As the builder’s risk policy was a maritime contract, the vessel owner was not entitled to a jury on its counterclaim. Judge Hinkle noted that at a pretrial conference (during which he took under advisement the issue of admiralty jurisdiction), he had said that he would impanel an advisory jury if he concluded that North Star was not entitled to a jury trial. After deciding the issue of admiralty jurisdiction, however, Judge Hinkle reconsidered whether to impanel an advisory jury and held that the “better exercise of discretion” was not to have an advisory jury (citing the complexity of the case, the involvement of multiple experts, and the fact that the judge might have questions for the attorneys or witnesses that he would not be able to ask in the presence of a jury). Accordingly, he held that the case would be tried to the court. See April 2023 Update.
Judge Hinkel held a bench trial and issued his findings of fact and conclusions of law. The cover slip incorporated by reference the American Institute Builder’s Risk Clauses (February 8, 1979), which included an escalation clause to adjust the agreed value for increases or decreases in the cost of labor/materials or for changes in the specifications or design of the vessel, subject to a limit in the increase of a percentage to be designated. Judge Hinkel noted that it was more likely than not that the parties understood that there was an escalation clause in the policy, but there was no mention of escalation or a maximum percentage to be inserted in the policy (this was not surprising as none of the blanks in the form were filled in. Judge Hinkel found that the standard London escalation is capped at 25% unless otherwise indicated and that the industry norm in the United States is 25%. Thus, he concluded that the policy included escalation that was capped at 25%, so the agreed value in the policy of $77 million was increased by 25% to $96.25 million. As the premium was calculated based on $77 million, the underwriters were entitled to an increase in premium that was proportionate to the increase in the agreed value. Therefore, Judge Hinkel awarded judgment based on the increase in the agreed value minus the increase in the premium. He also awarded prejudgment interest (as the claim is maritime), applying the New York rate of 9% based on the application of New York law to the policy in accordance with its choice-of-law provision as contended by the underwriters.
Raymond Hutchins, Jr. was allegedly exposed to asbestos while aboard vessels owned and operated by his employer, Lykes Bros. S.S. Co. Hutchins died from mesothelioma, and his beneficiaries brought suit in Louisiana state court against more than 30 defendants, including Huntington Ingalls, successor to Avondale Shipyard, which removed the case to federal court under the Federal Officer Removal Statute. The plaintiffs filed a second action in state court against Lykes Bros’ insurer, Continental Insurance, which removed the case under the Federal Officer Removal Statute after receiving information that Hutchins worked aboard vessels that were built pursuant to the direction of federal officers (arguing that it was not apparent from the face of the plaintiffs’ petition that the case was removable). The petition in the suit against Continental did not reveal that the ships were built at the direction of federal officers. Continental argued, in response to the plaintiffs’ motion to remand, that the case became removable when its experts provided vessel status cards that reflected that the vessels were built at the direction of federal officers. Judge Barbier noted that although the defendant was aware of the facts that made the case removable, that subjective knowledge did not trigger the time for removal when the petition did not demonstrate that the vessels were built at the direction of federal officers. Instead, the court had to determine when the defendant received an “other paper” from which it could be ascertained that the case was removable. Judge Barbier recognized the Fifth Circuit rule that the voluntary act of the plaintiff may qualify as an “other paper” that triggers the right of removal. However, it was the paper received from the defendant’s own expert that provided the information that identified that the case was removable because the vessels were built pursuant to the direction of federal officers. Giving the Federal Officer Removal Statute a liberal interpretation, Judge Barbier held that a departure from the voluntary-involuntary rule was appropriate in this case, and he ruled that the removal was timely as it was filed within 30 days of the receipt of written notice from the defendant’s expert. Judge Barbier then addressed whether the saving-to-suitors clause prevented removal of the general maritime claim for unseaworthiness and whether the bar to the removal of FELA claims prevented the removal of the Jones Act claim. Noting that general maritime claims can be removed based on a number of statutory bases, such as the Outer Continental Shelf Lands Act and diversity, Judge Barbier “easily dispatched” the argument that the unseaworthiness claim could not be removed. Although the removability of the Jones Act claim was more complicated in view of the bar to removal in Section 1445(a) for FELA cases, Judge Barbier noted that the en banc Fifth Circuit in the Latiolais case (see March 2020 Update) held that “Federal officers may remove cases to federal court that ordinary federal question removal would not reach.” Holding that Section 1445(a) must give way to the policy considerations in favor of the removal of cases under the Federal Officer Removal Statute, Judge Barbier held that the Jones Act claim was removable. See July 2021 Update.
After a number of defendants had reached settlements, Lykes Bros.’ insurer, Continental Insurance, moved for summary judgment, seeking a pro tanto credit (dollar for dollar) for the settlements rather than a reduction in accordance with the proportionate responsibility of the settling tortfeasor based on the Supreme Court’s decision in McDermott v. AmClyde. Continental Insurance cited a line of cases that carved out an exception (for FELA and Jones Act cases) to the proportionate reduction rule and applied a pro tanto credit. Judge Barbier did not find the argument convincing, reasoning that the cases were based on a misunderstanding of AmClyde and the Ayers decision of the Supreme Court in an FELA case. Judge Barbier concluded that the liability of the non-settling defendants should be calculated with reference to a jury’s allocation of proportionate responsibility. See October 2022 Update.
The plaintiffs filed motions for summary judgment that presented the reverse of a typical motion for summary judgment—arguing that there was no evidence that Hutchins was exposed to asbestos that was manufactured, sold, or supplied by a number of the defendants. The motions were opposed by the insurer for Hutchins’ employer, Lykes Bros., and in some cases by Avondale. The opposition asserted that the plaintiffs were trying to preclude the allocation of comparative fault so as to maximize their recovery against Lykes Bros. and Avondale. Although Hutchins died before he was deposed, Judge Barbier found sufficient evidence from the testimony of former co-workers (and others) of Hutchins’ exposure to asbestos-containing materials of most of the defendants who were the subject of the plaintiffs’ motions. Citing Louisiana law, Judge Barbier held that the evidence that exposure was significant and a substantial factor was satisfied, quoting: “Because there is a medically demonstrated causal relationship between asbestos exposure and mesothelioma, every non-trivial exposure to asbestos contributes to and constitutes a cause of mesothelioma.” Consequently, Judge Barbier denied the plaintiffs’ motions with respect to all of the defendants against whom the plaintiffs moved for summary judgment except as to Eagle-Picher and Fibreboard. With respect to Eagle-Picher, neither Continental nor Avondale presented testimony from anyone who worked with Hutchins that Hutchins worked with or around Eagle-Picher cement. As to Fibreboard, the mere fact that its covering was used in the construction of Lykes Bros.’ ships did not show where the product was used, how it was used, or whether Hutchins ever worked with it (or that it was still on Lykes Bros.’ ships when Hutchins was aboard). Accordingly, Judge Barbier granted summary judgment and dismissed the claims against Fibreboard. The plaintiffs, Continental, and Ingalls (except in response to its own motion) worked together in opposing motions filed by Ingalls Shipyard, Redco Corp., Sank, Inc., John Crane Inc., and Bayer CropScience, Inc. With respect to Ingalls, Judge Barbier concluded that the plaintiffs failed to provide evidence of any specific instances of asbestos exposure resulting from Hutchins’ work on vessels constructed by Ingalls. The nonspecific statement from the plaintiffs’ expert about Hutchins’ exposure was insufficient to create a fact question to defeat Ingalls’ motion. With respect to products provided by Redco Corp (formerly Crane Co.), Sank, Inc. (formerly Buck Kreihs Co.), and Bayer CropScience, Inc. (formerly Benjamin Foster Co.), Judge Barbier concluded that the evidence did not establish Hutchins’ exposure, and he granted summary judgment, dismissing the claims. However, Judge Barbier did find sufficient evidence of exposure to exposure for packing and gaskets made by John Crane Inc. that were used in pumps and valves, and he declined to dismiss the claims against John Crane Inc.
Aries Marine owned the liftboat RAM XVIII, which was sent to house workers who were working on a platform in the West Delta region of the outer Continental Shelf off the coast of Louisiana (the workers were employed by Fluid Crane and United Fire). The vessel jacked up, and a construction crew worked until the next day when the vessel began to list and sank. Aries filed a limitation action in federal court in Louisiana, and seven workers on the rig filed claims against Aries under Section 5(b) of the LHWCA. Aries moved for summary judgment that it was entitled to exoneration of liability or, alternatively, limitation of liability. Judge Africk found a fact dispute whether the captain of the liftboat performed a preload before jacking up to ensure that the leg pads for the vessel were on stable ground and would not punch through the seabed. If the preload was not performed, Judge Africk concluded that the failure would constitute negligence under the vessel’s active control, in violation of the duty enunciated by the Supreme Court in the Scindia case. Turning to the limitation issue, Judge Africk noted that with respect to seagoing vessels, the privity or knowledge of the master at or before the beginning of the voyage is imputed to the owner. Aries did not dispute that the liftboat was a seagoing vessel (the accident did occur on the outer Continental Shelf more than 12 nautical miles from the coast). Thus, to the extent there was negligence of the captain before the voyage, it would be imputed to the owner. Judge Africk also cited evidence that the owner allegedly provided an unqualified captain whom it had failed to adequately train, and he declined to grant summary judgment as to limitation of liability. The vessel owner also moved to dismiss the punitive damage claims brought against it under Section 5(b) of the LHWCA on the ground that punitive damages are only recoverable against a third-party tortfeasor by a longshore worker who is injured in state territorial waters (and for lack of evidence of willful and wanton conduct). Judge Africk noted that the Fifth Circuit has not decided the question of whether punitive damages may be recoverable under Section 5(b), and he declined to grant summary judgment on the punitive damage claim. See February 2023 Update.
Fugro USA was hired to assist in positioning the liftboat by providing GPS positioning and performing a sonar scan for debris or obstructions on the sea floor. It provided plats that showed where prior vessels had been placed in the area, but the images Fugro provided only showed the impressions left by vessels that Fugro had helped to position. Therefore, it was possible that there were holes and impressions in the area that were not reflected in the data provided by Fugro to Aries. Fugro moved for summary judgment on the negligence claims asserted against it, noting that the claimants had placed the blame for the listing of the liftboat on Aries’ captain’s failure to conduct a preload (or conducted an improper preload). In response to Fugro’s motion for summary judgment, the claimants argued that Fugro owed them a duty to advise the captain that there could be additional can holes in the area, that there were dark spots on the sonar images that might be additional can holes, and to exercise stop work authority when one leg of the liftboat penetrated deeper than had been expected. Judge Africk assumed for the motion that Fugro had a duty, but he could not find causation for any of the alleged failures because, ultimately, the accident occurred because, as the claimants alleged, the captain failed to properly preload the vessel. The claimants’ expert confirmed that when the failure of the vessel occurs after the preloading, the preload was not adequate. As the preloading was not the responsibility of Fugro, Judge Africk dismissed the claims against Fugro.
Fieldwood, the owner of the platform, chartered the liftboat to provide worker housing in support of work taking place on its platform. Fieldwood moved for summary judgment on the ground that, as the time charterer, it had no control over the vessel and assumed no liability for the negligence of the crew. Judge Africk noted that time charterers owe a “hybrid duty” arising from contract and tort to avoid negligent actions within the sphere of activity over which they exercise at least partial control. He added that a time charterer may be liable for directing the vessel to encounter natural hazards, such as dangerous weather or sea conditions. The claimants argued that Fieldwood was negligent by directing the liftboat to be positioned on the east side of the platform when it knew the conditions were hazardous and by limiting the scope of the marine surveyor (Fugro) to not include geo-technical data. As the claimants’ expert opined that it was likely that either soil samples existed for the location or that penetrations were known by Fieldwood, which, if credited, would permit a finding that Fieldwood had notice of the hazardous conditions and contributed to the failure, Judge Africk denied summary judgment to Fieldwood.
Judge Africk then considered the contracts between the parties for their indemnity obligations. Fieldwood entered into Master Service Contracts with both Fluid Crane and United Fire (employers of the claimants) by which Fluid Crane and United Fire agreed to indemnify Fieldwood for injuries to employees of Fluid Crane and United Fire. The indemnity extended to Fieldwood’s contractors (such as Fugro and Aries) if they entered into contracts with Fieldwood to extend indemnity (for injuries to their employees) to subcontractors of Fieldwood (such as Fluid Crane and United Fire). Fieldwood and Fugro entered into a Master Service Contract by which Fugro agreed to provide similar indemnity to Fieldwood and its contractors. Likewise, Fieldwood and Aries entered into a Master Service Contract by which Aries agreed to provide similar indemnity to Fieldwood and its contractors. Therefore, the contracts between Fieldwood, on the one hand, and Aries, Fugro, Fluid Crane, and United Fire contained provisions by which each party agreed to indemnify the others for injuries to its own employees. Consequently, Fluid Crane and United Fire were obligated to indemnify Fieldwood, Aries, and Fugro for the claims brought by the employees of Fluid Crane and United Fire if the indemnity provisions were valid under applicable law. The validity question required a determination whether Louisiana law or maritime law applied. If maritime law applied, the agreements were valid. If Louisiana law applied, the indemnity was invalidated by the Louisiana Oilfield Indemnity Act. Judge Africk applied the requirement from the Fifth Circuit’s Doiron case (whether the contract provided or the parties expected that a vessel would play a substantial role in the performance of the contract) to determine whether the contracts were maritime or not. The contracts at issue were the contracts between Fieldwood and Fluid Crane and United Fire to perform work on Fieldwood’s platform. Although Aries and Fugro were involved with the role of the liftboat, that expectation was not relevant to the contracts between Fieldwood and Fluid Crane and United Fire. Judge Africk distinguished cases in which the contract documents provided for the use of a vessel. In this case, “Aries and Fugro may have expected the vessel to play a substantial role in the completion of the work, but the same cannot be said of Fluid Crane and United Fire.” Therefore, Judge Africk concluded that Louisiana law applied, and he denied indemnity from Fluid Crane and United Fire to Aries and Fugro. He did not, however, hold that the LOIA invalidated the requirement for payment of defense costs when the indemnitee was found to be free from fault. Thus, if Aries were ultimately found free from fault, it would be entitled to reimbursement of its defense costs. Judge Africk had granted summary judgment on liability in favor of Fugro, so Fugro was entitled to recover its defense costs. Fluid Crane requested that Judge Africk order the defense costs be split evenly between Fluid Crane and United Fire, despite the fact that only one of the seven claimants was an employee of United Fire. Judge Africk agreed that, under Louisiana law, the defense obligation was incapable of division. Therefore, he ordered that the defense obligation be divided in equal portions between Fluid Crane and United Fire. See March 2023 Update).
One of the workers employed by Fluid Crane, Gilberto Gomez Rozas, was an undocumented immigrant who was not authorized to work in the United States. During his deposition and in discovery, Rozas repeatedly invoked the protection against self-incrimination in the Fifth Amendment, refusing to answer questions related to his citizenship and personal history. Aries argued that his claim should be dismissed with prejudice because Rozas had perpetrated a fraud on the court (and to deter future parties from similar conduct). In the alternative, Aries sought a sanction that Rozas be precluded from recovering past and future lost earnings at United States’ wage rates. Judge Africk noted that the party invoking the Fifth Amendment cannot hope to gain an unequal advantage against the party he has chosen to sue and that the defendant should not be required to defend against a party who refuses to reveal the very information which might absolve the defendant of liability. Thus, the Fifth Circuit has enunciated a balancing test that dismissal is appropriate only when less burdensome remedies would be an ineffective means of preventing unfairness to the defendant. In this case, Rozas did not commit perjury or provide false documents, but his invocation of the Fifth Amendment during depositions and discovery impeded Aries’ ability to investigate the claim for damages. Consequently, Judge Africk decided that the lesser sanction of precluding Rozas from seeking future wage loss awards at United States’ rates was the appropriate sanction. With respect to past wage loss, Rozas testified that he had not been working and it had been four years since he prepared tax returns. The parties did not brief the issue of extending the sanction to past wage losses, so Judge Africk did not address the issue of past wage losses at this time. See April 2023 Update.
Aries moved for reconsideration of the decision on the contractual allocations involving Aries, Fugro Marine, United Fire, and Fluid Crane that was discussed in the March 2023 Update. Aries, Fugro, United Fire, and Fluid Crane were parties to contracts with Fieldwood that contained indemnity provisions that were enforceable under the general maritime law but that were unenforceable under Louisiana law. Applying the Fifth Circuit’s Doiron test, Judge Africk held that the contracts with United Fire and Fluid Crane were not maritime because there was no evidence that United Fire and Fluid Crane expected the vessel RAM XVIII would play a substantial role in the completion of the contract. Aries asked Judge Africk to reconsider that decision, arguing that Judge Africk erred by not considering Fieldwood’s expectations as to the use of the RAM XVIII. Judge Africk agreed that the expectations of Fieldwood were relevant (as it was a party to each of the contracts), but he answered that Aries did not cite any authority that the expectations of one party could establish that the parties expected that a vessel would play a substantial role. Thus, further discussion of Fieldwood’s expectations would not have changed the court’s analysis. Aries also argued that Judge Africk had added a third prong to the Doiron test—”did the vessel in fact play a substantial role in the completion of the contract?” Judge Africk disagreed, stating that the decision was based on the expectations of the parties and not on the use of the vessel (he noted that the actual use was only relevant, according to Doiron, when the parties’ expectations were unclear). Consequently, Judge Africk denied Aries’ motion for reconsideration.
Brandon Earl Truxillo died of cardiac arrest while serving as a captain of Excell Marine’s tug. His widow brought this suit in federal court in Louisiana against various parties, including Excell Marine, alleging negligence and unseaworthiness. After dismissing claims against the other defendants, the plaintiff sought to amend her complaint to add a claim for punitive damages and attorney fees for the employer’s failure to provide cure by failing to have a defibrillator on the vessel. Excell Marine opposed the motion on the basis of futility. Excell Marine conceded that punitive damages are available for failing to provide cure on the vessel, but it argued that the failure was, at best, negligence and not gross negligence. Magistrate Judge Currault began by stating that the plaintiff would have to establish “reckless or callous disregard for the rights of others, or actual malice or criminal indifference” and that “[o]perational recklessness or willful disregard is generally insufficient to visit punitive damages upon the employer.” She added that the conduct would have to emanate from corporate policy or a corporate official with policy-making authority. The plaintiff argued that certain associations and regulations have recommended that defibrillators be located on vessels. Judge Currault found that the failure was, “at most, operations negligence that falls short of what is required to establish the civil equivalent of a crime or conduct that is ‘so egregious as to conduct gross negligence.” Accordingly, Magistrate Judge Currault denied the motion for leave to file an amended complaint.
This litigation arises from a multiple-barge breakaway that originated at Jack’s Run Fleet at approximately Mile 4 on the Ohio River and continued downriver to the Emsworth Lock and Dam. Several barge owners filed lawsuits from the incident, and the defendants included Borghese, which owned the CORI WIELAND and bareboat chartered the JAMES GARRETT (which were on fleet watch at the time of the breakaway). Borghese filed a limitation action in federal court in Pennsylvania. After the parties submitted expert reports, Judge Horan addressed challenges to the expert opinions (and experiments). Borghese tendered the opinion of Richard J. Mancini, a certified consulting meteorologist, to discuss the decisions of the president of Borghese in the lead up to the breakaway and as to the cause of the movement of the subject vessels. The barge owners objected and requested that the court limit Mancini’s testimony to opinions sounding in meteorology, and Judge Horan agreed, striking Mancini’s opinions about the effect of the forecasts on Borghese and the actions taken. One of the claimants engaged Bartley J. Eckhardt, a forensic engineer, to determine whether a broken U-bolt that was found at the fleeting area contributed to the incident. Eckhardt reported the results from an experiment he performed in which he attempted to determine if rings (fabricated by his company’s laboratory) would warp or “potato chip” when placed under tension and appear similar to the condition of the mooring ring at the fleeting area. Borghese objected that the experiment’s comparison to the conditions of the breakaway was crude, informal, and inherently unreliable because it did not sufficiently replicate the conditions involved in the breakaway. Concluding that the experiment “misses the mark of a fair comparison in several regards,” Judge Horan excluded the results of the experiment. Borghese proffered Thomas P. O’Donnell and Joseph M. Turek, who investigated the breakaway, to provide an opinion on the cause of the breakaway. O’Donnell and Turek blamed the failure of the U-bolt on physical and metallurgical conditions that were affected by lack of maintenance. One of the parties objected on the ground that the opinions were unreliable because they failed to analyze alternative causes, particularly whether the breakaway was initiated by the breaking of the U-bolt or by the parting of a wire rope. Judge Horan did not, however, find the criticism to be a basis to decline to admit the testimony. The opinions were grounded in physical evidence. The fact that there were differences in the testimony and opinions went to the credibility of the opinions, not their admissibility. Borghese also proffered David J. Bizzak to opine whether the actions of Borghese in maintaining the fleet were a cause of the breakaway and to reconstruct the manner in which the breakaway occurred. Bizzak stated that shoaling due to sediment deposits prevented Borghese from narrowing the fleet and that the increased load on the fleet from the rising river level and dense ice flow caused the breakaway. He added that the failure of the anchor D-ring occurred because of decreased strength of the material due to cold temperatures and notches in the ring from years of use. The objection to his opinions was that Bizzak was not qualified to render opinions in maritime matters and metallurgy and that he did not provide a reliable method with respect to the force exerted on the fleet. Borghese responded that Bizzak did not need maritime experience to discuss forces that acted on the fleet, but Judge Horan reasoned that, as Bizzak was not an expert in structural engineering, civil engineering, maritime construction, meteorology, metallurgy, or the fleeting of barges, his opinions on ice formation, river conditions, metallurgy, and fleet management would not be admitted. See April 2023 Update.
Borghese objected to the expert opinion of David J. Martyn, who was hired to evaluate the safety of the fleeting area mooring configuration, arguing that Martyn was unqualified to provide expert testimony on fleet management issues and that his opinions were unreliable. As to his qualifications, Borghese argued that Martyn’s experience as a Coast Guard inspector, investigator, and compliance officer did not qualify him to opine about barge fleeting operations and how barges should or should not be moved from a fleet. Judge Horan disagreed, however, concluding that his familiarity with commercial vessels included barges and inland towing vessels, and that was sufficient to allow him to testify about fleet management. Borghese also objected that his report lacked any scientific theories, calculations, or explanation in support of his conclusions. Judge Horan found the argument to be misplaced as his opinions did not require any particular theory or calculation and were based on his practical experience and education. Therefore, she declined to exclude his opinions. Judge Horan next considered the objections to Borghese’s expert, William J. Stewart, who was hired to opine on the actions of Borghese and the crews of the CORI WEILAND and JAMES GARRETT (the failure of the D-ring was the cause of the breakaway; the fleet would have remained secure had it not failed; and Borghese did not cause the breakaway). Although Stewart had 50 years of experience as a towboat captain, the objection was that he was not experienced in barge fleeting management. Judge Horan agreed and held that his training and experience did not provide him with sufficient expertise to offer opinions on fleet management, including determining the size, width, or configuration of fleets in the circumstances of the impending breakaway or regarding the cause or causes for the breakaway. Borghese objected to the opinions of Gregory B. Weeter, a marine surveyor with more than forty years of experience that included marine structures and fleeting areas, to determine the suitability and safety of structures. He opined that the cells used to moor the barges were suitable if proper mooring practices had been undertaken by Borghese and there was no violation of industry standards in not dredging areas at the downriver end of the fleeting area. Judge Horan agreed that Mr. Weeter was qualified to opine on the mooring conditions, noting that he had avoided opinions on engineering and metallurgy and had not opined that the condition of the cells did not result in any failure nor the breakaway. With respect to the industry standards for dredging, Judge Horan noted the absence of a formal industry standard, but the testimony was based on his experience in the industry, and Judge Horan declined to strike the opinion. See May 2023 Update.
Borghese proffered the opinion of Claudio N. Crivici, a marine surveyor and casualty investigator, to rebut the damages claims, and the claimants sought to exclude his opinions because his academic discussion of different valuation methodologies was not relevant. Borghese responded that Crivici only gave general principles because he did not have a sufficient understanding of the pre-loss value of the vessels. Judge Horan reasoned that rebuttal experts may criticize other experts’ theories without offering alternatives and that Borghese was not obliged to offer an alternative calculation or methodology on reasonableness in the calculation. Therefore, Judge Moran did not strike the opinions of Crivici as a rebuttal witness. The contract claim arises from a Harbor Services Agreement entered into in 2015 by McKees Rocks Harbor Services (which operates the McKees Rocks Terminal on the Ohio River) and Industry Terminal and Borghese in connection with the management and operation of the Jack’s Run fleeting/mooring area. Borghese had previously entered into contracts with McKees Rocks to operate its tugs in the performance of management and operation duties at the terminal and fleeting area. The Harbor Services Agreement provided for Borghese and Industry Terminal to market the mooring area. The identity of the party to be responsible for the mooring area and the indemnity and insurance obligations were initially assigned to both Borghese and McKees Rocks, but the final document assigned the management, indemnity, and insurance obligations only to McKees Rocks. The parties signed the agreement and performed under the agreement, but McKees Rocks argued that the agreement should be reformed to reflect that Borghese actually performed the relevant duties and should be the responsible party. Judge Horan agreed that McKees Rocks had retained Borghese to perform the operational activities and paid for those services; however, that action confirmed that it was McKees Rocks which had the responsibility under the Harbor Services Agreement. There was no mutual mistake, as the agreement allocated responsibility to McKees Rocks, which paid Borghese to perform its obligation. As the Agreement provided for Harbor Rocks to defend and indemnify Industry Terminal, Judge Horan upheld Industry Terminal’s contract claim against McKees Rocks. The indemnity included Industry Terminal’s third-party contractual liability to a cargo damage claimant for which Industry Terminal entered into a settlement and received an assignment of rights. Industry Terminal also made a claim under the insurance provisions of the Harbor Services Agreement. McKees Rocks was required to name Industry Terminal as an additional insured on its P&I insurance or on “equivalent insurance.” McKees Rocks argued that the boats covered by P&I insurance were not present at the time of the breakaway, so there was no additional insurance owed. Judge Moran held, however, that McKees Rocks was ignoring the requirement for equivalent insurance. As Industry Terminal identified other policies, Judge Moran ruled that McKees Rocks breached the Agreement by failing to name Industry Terminal on the “equivalent insurance.”
Susan Arnone, a passenger on David Knab’s Powerquest Cruiser, was injured and brought a negligence action against Knab in Erie County Supreme Court. Knab removed the case to federal court in New York based on the court’s admiralty jurisdiction and also filed a complaint seeking limitation of liability. Arnone moved to remand her suit to state court and moved to lift the stay in the limitation action (based on the single-claimant exception) so that she could pursue her suit in state court. Following the majority rule, Magistrate Judge Roemer recommended that the negligence suit be remanded to state court because there was no independent basis for federal jurisdiction (other than admiralty). As Arnone filed the stipulations necessary to protect Knab’s right to have his limitation claim adjudicated exclusively in federal court after the negligence suit was litigated in state court, Magistrate Judge Knab recommended that the stay be lifted and that the limitation action should be stayed while the state litigation proceeded.
These consolidated cases arise from an allision between the crew boat, MR CADE, bareboat chartered by Alliance Offshore, and a fixed platform owned by Southern Oil that was located off the Louisiana coast in the Gulf of Mexico. Jeremy Turner, a passenger on the vessel, was injured. Southern Oil brought suit in federal court in Louisiana against Alliance Offshore for damages to its platform, and Alliance Offshore brought this limitation action in Louisiana federal court. Southern Oil and Jeremy Turner brought claims in the limitation action, and Turner filed a motion to bifurcate so as to preserve his right to proceed in state court before a jury. He asked the limitation court to divide the litigation into three phases: 1) negligence of the vessel; 2) privity or knowledge of the bareboat charterer followed by the apportionment of liability or dismissal of the limitation proceeding and allowing Turner to proceed in the forum of his choice; and 3) stay the federal proceedings to allow Turner to try his damages to a jury. Magistrate Judge Currault noted that bifurcation had been denied in complex cases but that this case was more similar to cases in which judges found bifurcation to be appropriate. Balancing the interest of Turner under the saving-to-suitors clause with judicial economy and expediting the proceedings, Magistrate Judge Currault held that the court would try the issues of liability, limitation, and apportionment in a bench trial, and Turner’s personal injury damages would be tried separately.
Ben Bengelloun is an owner and managing partner of Motor Depot, which sells recreational vessels. After meeting several people who expressed an interest in buying a vessel, Bengelloun took a group of people on a ride on a vessel. With Bengelloun at the helm, the group rode to Beer Can Island and then were on their way to a boat-accessible restaurant near downtown Tampa, Florida. As Bengelloun began to increase the speed of the vessel, the bow starting picking up in the air and bouncing vertically. He allegedly continued to maintain his speed even though the passengers attempted to have him slow down (by hand signals). A third bounce sent everyone and the vessel airborne, resulting in injury to the passengers. Motor Depot filed this action in federal court in Florida seeking exoneration/limitation of liability, and the passengers filed claims in the suit. The claimants then filed a motion for summary judgment, seeking dismissal of the claims for exoneration and limitation, and for relinquishment of jurisdiction to the state court. Judge Jung noted the balance between the vessel owner’s right to have a federal court decide issues related to limitation and the claimants’ rights under the saving-to-suitors clause. He stated that “where no limitation is possible,” the claimants are entitled to have the limitation injunction dissolved so that they may proceed in a common-law forum. In this case, Judge Jung found “no circumstances under which Motor Depot could demonstrate the absence of privity or knowledge concerning whatever negligent acts or unseaworthy conditions (if any) caused or contributed to the June 13, 2020, incident” as Bengelloun, co-owner and functional managing partner of Motor Depot, was the only person who operated the vessel after its departure from Beer Can Island. Thus, he “necessarily had actual or constructive privity or knowledge” of what caused or contributed to the injuries. Judge Jung concluded that it did not matter whether Bengelloun was negligent or the vessel was unseaworthy as favorable findings on these issues would obviate the need for a finding of limitation, and unfavorable findings would not result in limitation. Consequently, Judge Jung held that Motor Depot was not entitled to limitation and that the claimants could litigate their claims in state court.
SV Athena is a Georgia company that owns the sailing vessel ATHENA. B&G Management is a Massachusetts company specializing in yacht management. B&G Global, a British Virgin Islands company, specializes in yacht management, maintenance, and refitting, and it has service centers in Newport, Rhode Island and Lancaster, Virginia. Christopher Patterson is the owner of B&G Management and a minority owner of B&G Global. SV Athena brought this suit in federal court in Massachusetts, alleging that B&G Management, B&G Global, and Patterson provided yacht management services to SV Athena. The defendants delivered the vessel from Southwest Harbor, Maine to B&G Global in the British Virgin Islands, and Patterson and B&G Global agreed to obtain and install an engine on the vessel. There was a dispute about the work, and SV Athena paid B&G Global in order to obtain the release of the vessel. B&G Management (or Patterson) then delivered the vessel from the British Virgin Islands to Southwest Harbor, Maine, and then to Harwich Port, Massachusetts, and finally to Charleston, South Carolina (where SV Athena discovered problems with the engine). SV Athena alleged breach of a maritime contract, breach of the warranty of workmanlike performance, maritime negligence, and conversion against the defendants, and B&G Global and Patterson moved to dismiss the suit for lack of in personam jurisdiction. Patterson argued that there was no general jurisdiction over him in Massachusetts because he was a resident of the British Virgin Islands at the time of the relevant events, and he is now a resident of Virginia. SV Athena established that Patterson had been a resident of Massachusetts, that he had continuous and systematic ties to Massachusetts, and, at the time of the events for this suit, that he held a Merchant Marine Captain’s License listing Massachusetts as his address. However, SV Athena could not show that Patterson was domiciled in Massachusetts during the relevant time period. SV Athena emphasized Patterson’s ties to B&G Management (based in Massachusetts), and Judge Stearns agreed that there was general jurisdiction over B&G Management, but that did not establish general jurisdiction over Patterson as an individual. As to B&G Global, SV Athena alleged that the defendant had purposely availed itself to Massachusetts residents by advertising on its website that it provides service between Rhode Island and Maine and because it was effectively an alter ego of Patterson. The latter argument failed because Judge Stearns held that Patterson was not subject to general jurisdiction in Massachusetts, and the former failed because B&G Global did not provide services online and never mentioned Massachusetts on its website (although Massachusetts is located between Rhode Island and Maine). Turning to specific jurisdiction, Judge Stearns noted that any activity of the defendants was not instrumental in the formation of the contract with SV Athena, which was formed in the British Virgin Islands, and the improper work on the vessel was performed in the British Virgin Islands. As the crux of the allegations involved conduct in the British Virgin Islands, Judge Stearns held there was no specific jurisdiction over Patterson and B&G Global.
Rachel Mallory, a passenger on the CARNIVAL VALOR, claims that she was injured while walking on the upper deck of the vessel when her foot became stuck on an unknown substance on the deck and she fell. She brought this action in federal court in Florida against the cruise line, which moved to dismiss the complaint for failure to state a claim. The cruise line asserted that the passenger failed to plead facts to establish that the cruise line had notice of any potential danger-causing condition. In response, the passenger argued that she was only required by Rule 8 to give notice of the legal theories and circumstances surrounding her claim. She claimed that the complaint was sufficient because she stated: “Carnival owed Plaintiff the duty of reasonable care under the circumstances for her safety and the duty to warn Plaintiff of all dangers it knew or should have known.” Judge Moore answered that the passenger “continuously and incorrectly characterizes the pleading requirements under Rule 8(a)(2)” and that the pleading standards (from Iqbal and Twombly) are “well-established, despite Plaintiff’s attempt to distort the Rule 8(a)(2) requirements.” As the passenger “failed to allege any factual circumstances leading to an inference that it was plausible that Defendant had notice of a dangerous condition,” Judge Moore granted the motion to dismiss the complaint without prejudice.
Chester J. Marine, LLC owns the towing vessel M/V CECILE A. FITCH. Its owner, Larry Fitch, contacted Superior Shipyard in Golden Meadow, Louisiana to perform structural and mechanical repairs on the vessel, and the parties executed a one-page Work Order for “complete repairs as directed” containing a provision that the owner would be responsible for all debts incurred for the work. There was a handshake agreement on the price, believed to be $69,860 by Fitch, but the parties later signed a Bid Letter for the work at a price of $310,503 and an additional Bid Letter for $52,000. Superior Shipyard claimed that at some point after acceptance of the bid letters, Fitch agreed to proceed on a time-and-materials basis. Superior then invoiced Chester Marine $585,432.13 for the work and later sent an invoice in the amount of $36,564 for dry docking and utilities. The shipyard filed this suit against the vessel and owner in federal court in Louisiana, seeking to recover more than $600,000, and then moved for summary judgment to enforce a maritime lien on the vessel or for judgment enforcing the open account under Louisiana law. Chester Marine responded that the signed agreements indicated the cost of repairs was $310,504, that the shipyard did not do the work it charged, that the shipyard unilaterally changed the terms of the agreement, that the shipyard allowed the vessel to be damaged in Hurricane Ida, and that the shipyard essentially abandoned work on the vessel. In analyzing the maritime contract between the parties, Judge Barbier stated that it is a practice and custom in the ship repair industry for the contractor to first do the work and then send a purchase order or invoice with the terms and conditions after the work has been done or completed. In this case, Superior Shipyard asserted that Fitch decided to proceed on a T&M basis and that the shipyard provided him daily reports on the work that, together with the Work Order and Bid Letters, formed the contract under the general maritime law. The evidence presented included emails from the shipyard with the daily reports, most of which stated that the report was presented “due to BID cancellation.” However, Judge Barbier did not believe that this was sufficient to support judgment as a matter of law as Fitch presented an affidavit that there was no oral contract and because the reports were not sent daily (where the owner could object) and, instead, 13 of 14 were sent on a single day. Judge Barbier also noted that there was no evidence of a prior course of dealings that would allow him to infer whether there was a meeting of the minds as to the nature of the contractual arrangement. Accordingly, Judge Barbier held that there were disputes about the terms of the repair contract and the cost of the repair work.
Nicholas Miller, who was domiciled in LaSalle Parish, Louisiana (within the Western District of Louisiana), was injured on a fixed platform located on the outer Continental Shelf off the coast of Louisiana when a storage locker fell on him. He brought this suit against the owner/operator of the platform, Cox Operating, in federal court in the Eastern District of Louisiana (the nearest district to the location of the accident), and he then relocated to Arkansas. His suit was based on the Outer Continental Shelf Lands Act, admiralty and maritime law, and Louisiana law. He amended his complaint to add several defendants and then moved to transfer venue of the suit to the Western District of Louisiana. The new defendants, which reside in the Western District of Louisiana, argued that their residence was not relevant to the transfer issue because the court should only consider the location for Cox Operating, the defendant that was named in the original complaint (located in the Eastern District of Louisiana). As the complaint alleged a claim under the general maritime law, Judge Guidry noted that, in maritime cases, the analysis for venue and personal jurisdiction merges. Therefore, the Western District of Louisiana was an appropriate venue for the defendants that resided in the Western District of Louisiana. Judge Guidry then evaluated the private- and public-interest factors to determine whether the transferee venue was “clearly more convenient” and held that the proximity of the parties and witnesses to the Western District favored transfer.
Teresa Christie brought this suit in federal court in Tennessee, asserting that she was subjected to sexual harassment and discrimination while serving as a cook on river vessels operated by Ingram until her employment was terminated. She brought claims of sexual harassment, hostile work environment, sex discrimination, and retaliation under Title VII, and she also asserted claims under the Jones Act and general maritime law (unseaworthiness) based on the same conduct, claiming negligence, intentional infliction of emotional distress, negligent hiring, retention, and supervision, and assault and battery. Ingram moved for dismissal of the claims under the Jones Act, citing the decision of the Sixth Circuit in Griggs v. National Railroad Passenger Corp., that the Jones Act claims are subsumed under Title VII, and that the unseaworthiness claims must be dismissed because damages that are not compensable under the Jones Act are not compensable in an unseaworthiness count. The Sixth Circuit reasoned that the FELA could not provide a remedy for racial and sexual harassment when Congress provided that remedy in Title VII. Judge Trauger, however, cited the decision of the Fifth Circuit in Wilson v. Zapata Offshore Co., which agreed that the Jones Act did not cover conduct that is wrongful only by virtue of Title VII. However, the Fifth Circuit held that conduct that is wrongful under the Jones Act and general maritime law in the absence of Title VII, such as harassment that results in physical and emotional injury (without regard to discrimination), can state a maritime claim. As Christie alleged torts that are actionable at common law, including assault and battery that are independent of the discrimination provisions in Title VII, Judge Trauger declined to dismiss the Jones Act and unseaworthiness claims.
Autumn Hagle was a passenger on Royal Caribbean’s ALLURE OF THE SEAS. At the end of the cruise, the ship called at the cruise ship terminal in Port Everglades, Florida that was leased by the cruise line from the owner of the terminal, Broward County. Broward County contracted with Intercruises Shoreside to provide staff for the embarkation and debarkation of passengers. At the time of the debarkation, there was a power outage so that the elevators and escalators did not work and the passengers had to descend staircases while holding their luggage in the dark. Employees of Intercruises Shoreside lined up along the stairwell and moved the lights from their cell phones up and down to illuminate the stairs. As Hagle was walking down the stairwell carrying her luggage, she fell and was injured. Hagle brought this suit in federal court in Florida against the cruise line, Broward County, and Intercruises Shoreside, and the cruise line and Broward County moved to dismiss the complaint. The parties agreed that maritime law applied to the injury “while descending a stairwell in Port Everglades terminal after disembarkation from the Allure of the Seas” (Broward County’s Motion to Dismiss), and Magistrate Judge Reid agreed that admiralty jurisdiction “extends to cases involving the disembarkation process of passengers from cruise ships,” even though the accident was apparently in the terminal. The cruise line argued that Hagle did not adequately plead notice with respect to the claims of breach of the duty to provide a reasonably safe means to disembark from the ship and failure to warn, but Magistrate Judge Reid disagreed, reasoning that the power outage itself (together with the decision to disembark during the outage) was sufficient to put the cruise line on notice of plausible claims for failure to provide a safe means to disembark and failure to warn. Hagle pleaded claims against the cruise line and Broward County for negligent operation (as premises owner or operator) that resulted in a dangerous or unsafe condition, but Magistrate Judge Reid held that negligent operation claims are not recognized under the general maritime law. Although Hagle argued that the cases rejecting negligent operation do so in connection with falls on foreign transitory substances, Magistrate Judge Reid disagreed and dismissed these claims against the cruise line and Broward County. Besides claiming that the failure to warn claims were insufficiently pleaded with respect to notice, the cruise line and Broward County argued that the danger from the lack of lighting was an open and obvious condition. Magistrate Judge Reid agreed that the lack of lighting was obvious, but the issue was whether the condition alerted the passenger to the extent of the danger. Magistrate Judge Reid stated: “Indeed, walking down a dark stairwell may seem like an obvious dangerous condition. Yet, how clearly dangerous this was in the context of being led down the stairs with lighting provided by the disembarkation personnel from their cellular phones is less clear.” Consequently, she declined to dismiss the claims based on an open and obvious argument. The defendants objected to the commingling of claims of direct and vicarious liability, and Hagle argued that she was entitled to present both theories. Magistrate Judge Reid agreed that Hagle was entitled to present both theories, but she answered that Hagle appeared to conflate direct and vicarious liability by arguing that, as the defendants can only act through their employees, their “direct liability is based on [their] vicarious liability” so that the claims can be brought within one count and not be a shotgun pleading. Magistrate Judge Reid explained that vicarious and direct liability are distinct theories and must be pleaded separately. Finally, Magistrate Judge Reid held that the claims for negligent training, supervision, and retention were pleaded in a conclusory fashion and would have to be repleaded.
This case was brought by and on behalf of a passenger on the HARMONY OF THE SEAS, who sustained a slip-and-fall accident on the vessel and a cerebrovascular incident in Puerto Rico. The suit in federal court in Florida contained allegations related to the medical care and failure to arrange for emergency transportation to the closest medical facility. The cruise line filed a Daubert motion to exclude the expert testimony of Captain Hendrik J. Keijer regarding emergency transportation and the opinions of Dr. David Nidorf and Dr. Camilo Gomez with respect to the medical evacuation and with respect to tissue plasminogen activator. In opposition to Captain Keijer’s opinion that the cruise line deprived Burgess of the opportunity to receive shore-based medical care as soon as possible by use of an ambulance with a slow drive to a shore-based hospital, the cruise line attacked Captain Keijer’s methodology based on use of Google Maps to determine the shortest route so that he could determine the average speed for the transportation time reflected in the ambulance report. Magistrate Judge Otazo-Reyes held that the methodology was sufficiently reliable and declined to strike his opinions. Although the cruise line agreed that Dr. Gomez and Dr. Nidorf had experience facilitating medical transfers, the cruise line objected that they had no experience or personal knowledge with respect to coordinating medical transfers in Puerto Rico. That experience in transferring patients, including those who had suffered strokes, was sufficient that Magistrate Judge Otazo-Reyes declined to exclude their testimony for lack of qualification. She then considered whether the opinions on availability of alternative transfer options were speculative, lacked proper methodology or were unhelpful. Magistrate Judge Otazo-Reyes noted that the evidence that the opinions with respect to obtaining options for the stroke treatment were the same as would be done by emergency doctors and that the opinions about the treatment with tissue plasminogen activator were based on extensive medical sources. Therefore, Magistrate Judge Otazo declined to strike the opinions.
Yolanda Ramirez, a passenger on the CARNIVAL VISTA, claims that her sandal became stuck underneath the raised rubber portion of the nosing (anti-skid strip) on Stairway 60 on the vessel, causing her to fall. She had transited the stairway several times without noticing any defect, and she did not remember which step was the cause of her fall. The cruise line’s security team took photographs of the stairway two and a half hours after the incident, and Ramirez’s husband also took photographs of the stairs. There was no evidence of any work orders or maintenance for the stairway in the three years leading up to the incident. Ramirez did not engage an expert on liability, and the cruise line hired Dr. Tyler Kress, a human factors expert, who reviewed the photographs taken by Mr. Ramirez and located the defect depicted in the photographs in an inspection. He opined that the defect did not depict a condition that had an unreasonable vertical change in height or that would allow the sandal to get underneath it. He also opined that the defect was not near where Ms. Ramirez fell (using CCTV footage) and was not related to her injury. Ms. Ramirez disclosed Dr. Mandeep Chahil, her treating neurologist, as a hybrid medical expert, and Dr. Chahil opined that Ms. Ramirez’s symptoms were, more likely than not, the result of a traumatic brain injury. The cruise line disclosed 12 incidents on the same type of vessel where guests tripped on interior stairways, and two of the incidents involved shoes getting caught on the metal edge of the anti-skid strip. The cruise line moved to exclude the opinions of Dr. Chahil; Ms. Ramirez moved to exclude the opinions of Dr. Kress; and the cruise line moved for summary judgment. Ms. Ramirez objected that Dr. Kress had previously performed tribometric testing on cruise ships but testified in this case from his personal knowledge and experience (after examining the stairway) without performing tribometric testing that the carpet and nosing design on the stairway are known to perform very well from a slip resistance standpoint. Judge Bloom answered that this objection went to the weight, not admissibility, of the testimony and allowed the opinion. Ms. Ramirez objected to Dr. Kress’s assertion that there was no neglect as a result of actual or constructive notice of an unreasonable hazard, arguing that he may not testify as to his opinion on an ultimate legal conclusion. Judge Bloom agreed that Dr. Kress could testify as to his methodology, industry standards, and the facts, but he could not testify as to the legal conclusions of whether there was neglect, actual or constructive notice, or whether the surface was reasonable per se. Ms. Ramirez objected to the methodology for Dr. Kress’s opinions that her sandal did not get caught, that she slipped and did not trip, and that she fell on the sixth step (not the fourth or fifth step), but the cruise line cited the evidence from Ms. Ramirez’s deposition and the CCTV footage of the fall to support the biomechanics of the event, and Judge Bloom held that the methodology was sufficient. Judge Bloom also rejected the objection that the opinions would not aid the jury in its fact finding, as long as the testimony did not verge into legal conclusions or observations that a lay person could make. Turning to the cruise line’s objections to the designation of Dr. Chahil as a hybrid expert to testify as to causation, the necessity of care and treatment of the injury, and the reasonableness, relatedness, and customary nature of the charges, Judge Bloom stated that the treating physician could not offer opinions beyond those arising from treatment without offering the report required by Rule 26(a)(2)(B). Judge Bloom concluded that the disclosure was sufficient regarding past and future symptoms and treatment; however, it was insufficient regarding the reasonable cost of prospective future services. Accordingly, Judge Bloom considered the factors to determine whether the failure to adequately disclose was substantially justified or harmless and held that the deficiencies in disclosure were harmless or could have been timely rectified had the cruise line sought relief sooner. Judge Bloom could not determine whether the opinions were based on observations made in the course of treatment, so she held that she would assess the foundation for the opinions at trial. Judge Bloom then addressed the cruise line’s motion for summary judgment. The cruise line argued that it did not breach any duty because the anti-skid stripping on the stairs was not hazardous. Although Ms. Ramirez did not present expert testimony in response to Dr. Kress, she did present photographs depicting the elevated portion of the rubber strip, and Judge Bloom ruled that Ms. Ramirez presented a fact dispute to be resolved by the jury. The cruise line also argued that the danger was open and obvious because she had transited the area on numerous occasions. However, she did not look at the stairs and argued that an ordinary passenger would have no reason to expect there was a problem. Judge Bloom agreed that summary judgment on the open and obvious claim was not appropriate. Although there were prior incidents involving the stairways, the cruise line argued that they involved the metal portion and not the rubber portion of the nosing and were not substantially similar so as to provide constructive notice to the cruise line. Judge Bloom disagreed, stating that substantial similarity does not require identical circumstances and “allows for some play in the joints.” Consequently, Judge Bloom denied the motion for summary judgment.
Maine Maritime Museum filed a limitation action in federal court in Maine after the knock-down of its SCHOONER MARY E while the vessel was carrying passengers on a Kennebec River cruise that set out from Bath, Maine. Three individuals filed claims in the limitation action, and each settled with Maine Maritime Museum. After the time passed for the filing of additional claims, the Museum filed a motion for default and for a decree of exoneration as to all non-appearing claimants. Judge Torresen held that the complaint did not plead sufficient facts to support a decree of exoneration, even if all of the facts were accepted as true (thin on facts and heavy on legal conclusions). Consequently, she declined to hold that the Museum should be exonerated. For the same reason, she declined to find that the Museum had established that it was without privity or knowledge and entitled to limitation of liability. See August 2022 Update.
A few months later, with the understanding that the Museum had mailed notice to known potential claimants, Judge Torresen granted the Museum’s motion for entry of default judgment and exoneration against claimants who had not timely brought claims. Three months later, James Dotson filed a motion for relief from the judgment of default and exoneration, arguing that he was an employee of a company that was involved in the rescue effort (Bath Iron Works) and that he was injured during the rescue. He claimed that he did not receive any mailed notice and that he did not see the printed notice in the Portland Press Herald as he lives an hour away from Portland in Boothbay, Maine. He alleged that he received notice by reading about settlements on Facebook. The Museum objected that Dotson did not have standing to file the motion because he was not a party to the action, but Judge Torresen disagreed, citing a decision from the Fifth Circuit that persons who “could have been parties to the action” have standing to file a Rule 60 motion. She then addressed the merits of the motion and the Museum’s argument that it was only required by Supplemental Rule F to mail a copy of the notice to every person known to have made a claim against the vessel. However, in this case, Judge Torresen had ordered the Museum to do more than what is required by Rule F. Before she would enter a default and exoneration, she ordered the Museum to mail notice to “all known potential claimants.” As the Museum was aware of Bath Iron Works’ involvement in the rescue, Judge Torresen believed that it was “extremely unlikely” that first responders like Dotson “were not known potential claimants.” In weighing the equities, Judge Torresen noted that the Limitation Act “has been roundly criticized,” and she added: “I am aware of no other area of the law wherein a potential tortfeasor can race into court to force the people it may have injured to file their claims within months of an incident upon pain of losing all right to do so.” Finding it “particularly disturbing” that the Museum would fight to preclude the claim of a rescuer for its vessel, Judge Torresen granted Dotson’s motion for relief from the judgment. See April 2023 Update.
The Museum moved for reconsideration of the order granting relief to Dotson and, alternatively, asked the judge to certify the order for an interlocutory appeal. The Museum obtained medical records reflected that Dotson had obtained counsel earlier than previously disclosed, which went to the question of whether Dotson was diligent in preserving his claims. Judge Torresen answered that it did not matter whether counsel was engaged a few weeks earlier because that fact would not change the conclusion that the Museum had failed to comply with the order to provide mailed notice to all known potential claimants (which would include Dotson). In any event, the few weeks were not so significant as to justify the extraordinary remedy of reconsideration. Turning to the certification issue, Judge Torresen agreed that there were two controlling questions of law, whether Dotson had standing to bring a motion for reconsideration and whether the Museum was required to issue direct notice to Dotson. Additionally, the appeal, if successful, would advance the ultimate termination of the case because the case would be over. Judge Torresen did not believe that there was a substantial ground for difference of opinion on the issue of standing, and she responded that the Museum was missing the point on the requirement that the Museum notify Dotson. She reasoned that the issue was never whether Dotson was entitled to direct notice under Rule F (4). Instead, the issue was whether Dotson was entitled to direct notice pursuant to the order issued by the court. Accordingly, Judge Torresen did not consider this case to present the exceptional case where an immediate appeal was necessary, and she declined to certify the case for an interlocutory appeal.
Antonie Pierre Gray claims that he was on a boat on the James River in the Hampton Roads area of Virginia when he lost $386,423 of jewelry overboard. The jewelry was scheduled on a policy issued by State Farm to Gray. State Farm declined to pay Gray’s claim on the policy, and Gray brought suit against State Farm in the Circuit Court of the City of Richmond, Virginia. State Farm removed the case to federal court and engaged Michael Venturella, a naval architect and marine engineer, to evaluate the claim for loss of the jewelry. Venturella opined that it was improbable that the boat’s motions could have caused the jewelry to be launched overboard, the wave heights were not large enough to crest over the bow of the boat, and it was improbable that the transom door was in an open position when the boat was accelerating forward and pitching aft. Gray moved to exclude the expert testimony on the grounds that the opinions addressed facts that were within the jury’s knowledge and experience, and his opinion that the force created by the waves was not sufficient to propel the jewelry overboard was not reliable because it did not consider the weight of the jewelry. Magistrate Judge Colombell noted that Venturella’s opinions analyzed meteorological data from buoys and explained the forces exerted on the boat and the impact on the boat’s contents. He answered that these technical issues are not within the everyday knowledge and experience of a lay juror. As to the consideration of the weight of the jewelry, Venturella testified that he did consider the weight and dimensions of the jewelry, but these factors had no relevance to his opinion that the boat’s motions did not cause the jewelry to be launched over the side of the boat. He explained that “in the application of uniform acceleration projectile motion equations, the motion of the projectile is independent of the mass, as the projectile is acted only by the downward gravitational acceleration.” As Venturella’s opinions appeared to be based on traditional technical/mechanical expertise, and as the expert provided a reasonable link between the information and procedures he used and the conclusions he reached, Magistrate Judge Colombell declined to exclude the opinions.
Clovis Braxton Collins was employed by Marquette Transportation as a deckhand on the tug M/V PARACLETE. He was injured on a barge maintained by American River Transportation that was being moved by Marquette. Collins brought this suit in federal court in Louisiana against Marquette and American River Transportation, claiming that he slipped on cargo previously transported on the barge, which had not been adequately cleared from the deck of the barge. American River Transportation moved to exclude the opinions of Collins’ liability expert, Robert Borison, arguing that his testimony would not “enlighten” the jury on the key issue as his testimony on failure to clean the deck was common sense. Judge Fallon disagreed because, although “inartfully drafted, Borison’s opinion also addressed the failure to have a non-skid coating and failure to hold a safety meeting. Judge Fallon also rejected the argument that Borison’s testimony was based on unresolved facts, noting that the defendant simply disagreed with the evidence relied upon by Borison. Marquette filed a motion for summary judgment on Collins’ claim for maintenance and cure, alleging a McCorpen defense for willful concealment of pre-existing conditions, and Judge Fallon granted the motion when Collins declined to oppose the motion. Marquette also moved for summary judgment on the claims of negligence and unseaworthiness, arguing that Collins could not bring an unseaworthiness claim against Marquette when he was not injured on the PARQUETTE and that Marquette was not negligent because Collins admitted to noticing the condition of the barge, did not report the condition, and did not show that Marquette should have known of the condition. American River Transportation moved for summary judgment on the unseaworthiness of its barge, arguing that it did not owe a warranty of seaworthiness because Collins was not a crew member of the barge) and on the claim for maritime negligence (arguing that Collins did not establish an unsafe condition of the barge). Collins did not oppose American River Transportation’s motion with respect to unseaworthiness, and Judge Fallon dismissed that unseaworthiness claim. In support of its motion for summary judgment on unseaworthiness, Marquette cited the decision of the Fifth Circuit that a crew member of the tug could not bring an action against his employer for the unseaworthiness of the barge on which he was injured and to which he did not obtain seaman status. Judge Fallon easily distinguished that case, as the unseaworthiness asserted by Collins was for the tug, and there are cases in which the seaman’s employer was liable for unseaworthiness even though the injury did not occur on the unseaworthy vessel. Consequently, Judge Fallon held that the fact that Collins was not injured on the PARACLETE did not preclude him from bringing an unseaworthiness action as long as the injury was caused by the unseaworthiness of the PARACLETE. Marquette also argued that there was no evidence that the PARACLETE was unseaworthy, but Collins argued that the vessel was unseaworthy because it lacked access to Fleetcom, a barge tracking system (which provided information such as whether the barge had gone to the wash dock after being emptied of cargo). Finding evidence that Marquette was aware that when unwashed, the barges often retained remnants of cargo and that Fleetcom may have warned the captain of the condition of the barge, Judge Fallon held there was a genuine issue of unseaworthiness of the tug. Marquette argued that it was not negligent because it provided its crew with slip-and-fall training and Collins was an experienced deckhand who should have recognized the danger of the dirty barge and reported the danger. Collins and another deckhand testified that they were not trained to report dirty or slippery barge conditions, and Judge Fallon reasoned that the fact that neither Collins nor the other deckhand recognized the hazard could be interpreted as an indication that their training was negligently inadequate. Accordingly, he declined to grant summary judgment on the negligence claim (similarly, Judge Fallon held that there was a fact question of whether American River Transportation was negligent for failing to warn of the dirty condition of the barge and the lack of nonskid coating).
Brent Adkins worked for Marathon Petroleum as a tankerman, deckhand, and mate on the tug M/V ASHLAND from 2008 to 2012, helping in the loading and unloading of oil-based substances that emit hydrogen sulfide fumes. Adkins suffered from childhood asthma, and he was prescribed medication to help with his breathing (claiming that the medication was to treat seasonal allergies and bronchitis). His pre-employment physical reflected mild restrictive pulmonary function, and he reported working in environments that exposed him to dust and cleaning chemicals. Adkins suffers from obesity and had an episode of tachycardia in 2011, after which he was prescribed a beta blocker. Adkins and Marathon agreed that hydrogen sulfide can have harmful effects when inhaled, but they disagreed about the amount or concentration of inhalation that causes harm and whether Adkins’ current problems are attributable to exposure to hydrogen sulfide. Adkins did report that his badge for hydrogen sulfide was alerted on several occasions, and he was taken to the emergency room on one occasion where his complaint was feeling lightheaded. His pulmonary capacity deteriorated, and he was prescribed more intense bronchodilator treatment and eventually supplemental oxygen. His pulmonologist diagnosed him with toxic fume inhalation, and Adkins brought suit in Louisiana state court in 2015, seeking to recover for permanent damage to his respiratory system. The Louisiana court determined that the case would be better prosecuted closer to Adkins’ home in Portsmouth, Ohio, and Adkins filed this suit in federal court in Ohio, asserting claims for Jones Act negligence, unseaworthiness, and maintenance and cure. During the course of the litigation, Adkins hired Dr. Charles Pue to opine on medical causation, and Dr. Pue prepared a report that Adkins suffers from a chronic respiratory condition due to the inhalation of hydrogen sulfide fumes (the report did not address the concentrations required to cause injury, whether the exposure was cumulative, or the physiological mechanism by which Adkins’ asthma was aggravated by the exposure). In a supplemental report after the deadline passed for expert disclosures, Dr. Pue reaffirmed his original medical causation theory, but still provided no discussion of the details and cited no supporting medical studies/articles. Adkins also offered as an expert his treating pulmonologist, Dr. Glenn Gomes, who prepared a letter with his medical causation opinion. That letter did not cite any scientific studies, peer-reviewed articles, or similar sources to support the opinion. Marathon moved for summary judgment in the federal suit, arguing that Adkins did not carry his burden of proving whether long-term, low-level exposure to hydrogen sulfide can cause symptoms like those exhibited by Adkins (general causation) and that the hydrogen sulfide exposure did cause his symptoms (specific causation). Marathon also filed motions to strike or limit the testimony of Adkins’ experts. Judge Cole noted that Adkins had to establish a causal relationship between the exposure and his current conditions in order to succeed on his claims for Jones Act negligence and unseaworthiness. However, Judge Cole stated that causation “is not per se an element” for the maintenance and cure claim. Instead, causation plays a limited role when the injury manifests after the seaman has left the service of the vessel—he must show that the later arising injury arose from his service (the treatment related to an injury that occurred or was aggravated during the service of the vessel). After holding a Daubert hearing, Judge Cole held that Dr. Pue did not provide a reliable basis to opine that the exposure causes pulmonary injury to people with pre-existing asthma (general causation). Dr. Pue declined to cite any literature to support his opinion, testifying that it was “general knowledge” and “goes back to medical school mechanisms of development of asthma.” Additionally, Dr. Pue did not disclose his general causation opinion in accordance with the federal rules. Judge Cole also declined to permit Dr. Pue to testify as to specific causation, as he did not rely on his own differential diagnosis but on the differential diagnosis that was performed by Dr. Gomes. As Dr. Gomes did not perform a reliable differential diagnosis because he did not adequately “rule in” hydrogen sulfide fumes, Dr. Pue’s opinion as to specific causation was not allowed. Collins argued that Dr. Gomes could present opinions as to general and specific causation as a non-retained, treating physician. As a clinical pulmonologist, Dr. Gomes had medical training and experience recognizing and diagnosing respiratory injuries. However, Dr. Gomes was contacted by counsel for Adkins in anticipation of litigation, and he appeared to Judge Cole to have formed his causation opinion based on selective information provided by counsel and not in the course of treatment. Accordingly, Judge Cole concluded that Dr. Gomes was a traditional expert and that his testimony on general and specific causation could not be offered absent a report that complied with Rule 26(a)(2)(B), particularly when there were many potential causes for Adkins’ problems. Judge Howe then found that the failure to comply with the Rule was not substantially justified or harmless and excluded the opinion. In the absence of expert testimony on causation, Judge Cole granted summary judgment to Marathon. Adkins filed a notice of appeal to the Sixth Circuit four days later, on May 8, 2023 (No. 23-3418).
This decision follows the appeal to the Ninth Circuit that considered the timeliness of two limitation actions. Jennifer Horazdovsky was killed on Flat Lake, Alaska, when the raft in which she was riding in tow of a vessel operated by her husband, Andrew, was involved in a collision with a 21-foot recreational vessel being operated by Reagan Martz, son of the boat’s owners, William and Jane Martz. Andrew Horazdovsky’s attorney Timothy Lamb sent a letter to Reagan Martz on June 18, 2018, advising that he was searching for insurance coverage and inquiring about insurance for the accident. Four months later, attorney Carl Cook emailed counsel for the Martzes and requested insurance on the boat and information on the property where Reagan Martz was staying. There was an exchange between counsel about the absence of insurance, property ownership, and whether an insurer was paying for the attorney for the Martzes, including a criminal lawyer for Reagan Martz. On December 4, 2018, a third attorney, Robert Stone, wrote to counsel for the Martzes to seek clarification of the insurance coverage, noting that Reagan was a permissive user of the boat, and advising of the investigation of whether William or Jane Martz would bear any responsibility. He advised that he “would like to avoid unnecessarily naming parties to a lawsuit.” On June 4, 2020, Andrew Horazdovsky brought an action in Alaska state court against Jane and William Martz, and the Martzes filed their limitation action three weeks later on June 25, 2020. Horazdovsky moved for summary judgment on the timeliness of the action, and Judge Gleason considered the letters that were sent by the three lawyers for Horazdovsky. Although the first two letters were “fairly limited in scope,” Judge Gleason found the third letter was far more substantive, “outlining a theory of liability that implicated the Martzes (the notation that Reagan Martz was a permissive user of the boat). The letter mentioned a lawsuit by stating that the lawyer would like to avoid unnecessarily naming parties to the suit, and Judge Gleason used that language to conclude that the representation that the lawyer wanted to avoid unnecessarily naming parties to the suit was notice that the Horazdovsky intended to bring a lawsuit. Although the letter was “undoubtedly tentative,” Judge Gleason held that it was sufficient notice to trigger the running of the period to file the limitation action. See December 2020 Update. The Martzes moved for an injunction pending appeal, arguing that they had complied with the statutory requirements of the Limitation Act and the injunction should remain in place as long as the appeal was pending. Although Judge Gleason assumed that there was sufficient chance of success on the merits of the appeal, she did not find that the Martzes would suffer irreparable harm absent an injunction pending appeal or that the balance of hardships was in their favor. Consequently, she exercised her discretion to deny the request for an injunction pending appeal.
In a separate matter, thirteen-year-old T.T. drowned during the Discover Scuba Diving Experience provided by the owners and owners pro hac vice of the DIVE BARGE, who filed a limitation action. The incident occurred on January 5, 2019, and counsel for the boy’s personal representative wrote a letter to the owners requesting preservation of evidence related to the incident. There were no further communications from the claimant’s counsel prior to the filing of the suit in Hawaii state court more than six months later on September 19, 2019. Within two months of the filing of the suit, but more than six months from the letter requesting preservation of evidence, the owners/owners pro hac vice of the DIVE BARGE filed their limitation action. The personal representative filed a claim in the proceeding and then sought dismissal or summary judgment that the limitation action was untimely. Judge Kobayashi declined to dismiss the action but addressed the timeliness issue on a summary judgment standard. The owners/owners pro hac vice argued that the preservation letter was insufficient to constitute written notice of a claim because it did not assign blame, fault, or liability for the death. However, Judge Kobayahsi considered the tenor of the letter as notice that there was a potential claim. If there were doubt as to whether the letter was giving notice of a claim, Judge Kobayashi stated that the owner/owners pro hac vice could have sought clarification. See December 2020 Update.
The vessel owners in both cases appealed to the Ninth Circuit, which reversed the decisions of the district courts. Writing for the Ninth Circuit, Judge Miller considered two issues of first impression in the Ninth Circuit. The first was whether the six-month limitation in the Limitation Statute is a jurisdictional rule (as the Fifth Circuit recently addressed in the Bonvillian Marine case, see January 2022 Update). Noting the disagreement among the appellate courts, Judge Miller agreed with the Bonvillian line of cases that the six-month rule is an ordinary statute of limitations and is not jurisdictional. Thus, the timeliness of the limitation action is a “merits issue” that is raised by a motion for summary judgment. Judge Miller then turned to the meaning of the requirement of a “written notice.” He began by noting that the factual circumstances of an accident did not constitute written notice and that actual knowledge of damage/injury is not a substitute for written notice. He added that written notice does not require a particular form of words but that the notice must be of a “claim,” and the claim must be one for which the vessel owner could reasonably seek limitation of liability. Judge Miller differed in his analysis from the district courts, reasoning that a “reasonable possibility” of a claim or a “potential claim” is not enough. Instead, “the writing must convey to the vessel owner the claimant’s actual intent to initiate a claim.” The claimants argued that the limitation period should be strictly construed as the Limitation Act is “a relic of an earlier era.” However, Judge Miller was unpersuaded that policy arguments provided any reason to deviate from the statutory language and held that neither claimant provided written notice of a claim before filing suit. Counsel’s letters in the Martz case equivocated on whether a claim would be asserted against William and Jane Martz and did not demand anything from them or assert an entitlement to recovery from them. Similarly, the letter in the Hawaii case did not state any intention to bring a claim against the vessel owners. It did use legal terms, such as evidence, spoliation, and waiver, but “[r]eferences to legal concepts without a definite statement of an intent to file suit—or to assert a legal right in some other way—are insufficient to provide notice of a claim.” Judge Miller also noted that the Hawaii letter was unclear whether it would extend to the liability of the vessel as it did not mention the involvement of any vessel in the death. See June 2022 Update.
On remand from the Ninth Circuit, Horazdovsky moved for judgment on the pleadings based on lack of subject matter jurisdiction and for failure to state a claim. Horazdovsky argued that his claim against the Martzes was for negligent entrustment (of the vessel to their son) and that if the Martzes knew enough to be liable for negligent entrustment, they would have privity or knowledge and would not be able to limit their liability, and if they were not negligent in entrusting the vessel, there would be no need for limitation of liability. Because the district court could not grant relief to the Martzes, Horazdovsky concluded that the court should dismiss the case for want of subject matter jurisdiction. Judge Gleason noted the confusion that had arisen with respect to admiralty jurisdiction and the Limitation of Liability Act, resulting from the decision of the Supreme Court in 1911 in Richardson v. Harmon that the Limitation Act provided an independent basis for federal jurisdiction. That case, involving limitation for a barge that allided with a bridge, was decided before the enactment of the Admiralty Extension Act, which obviated the need for the jurisdictional holding in Richardson. Judge Gleason held that the court’s jurisdiction arose from the grant of admiralty jurisdiction in Section 1333, and the court had jurisdiction because the case involved a boating accident on a navigable waterway. Turning to the issue of whether the Martzes could ever limit liability (failure to state a claim) because of the pleading for negligent entrustment, Judge Gleason noted that Horazdovsky had pleaded other causes of action, such as strict liability under an Alaska statute. Additionally, the key terms for limitation of liability and negligent entrustment were different—“knew or should have known” for negligent entrustment compared to “privity or knowledge” for limitation. Concluding that the Martzes had plausibly stated a claim for limitation, Judge Gleason declined to dismiss the limitation action.
Kiewit Louisiana contracted with DP Concrete to manufacture 1000 pilings and deliver them by barge from DP Concrete’s facility in Vinton, Louisiana to Kiewit’s facility in Cameron, Louisiana. DP Concrete bareboat chartered two deck barges from McDonough Marine to carry the pilings, and DP Concrete chartered the pushboat ZOIE from B&J Inc. to tow the barges. The ZOIE made three trips back and forth between Vinton and Cameron with the barges before the incident. On the final trip, the ZOIE moved the barges to Kiewit’s facility, and its crew secured the barges to the dock. The ZOIE then departed on December 28, 2019, but the barges were not immediately unloaded because the New Year holiday intervened. Between December 28, 2019 and January 2, 2020, the barges slowly took on water, and they capsized on the morning of January 2, causing a loss of their cargo, damage to Kiewit’s crane barge and crane, and damage to the barges. B&J brought this action in federal court in Louisiana seeking exoneration/limitation for the ZOIE, and Kiewit brought a suit against DP Concrete for breach of contract for failure to deliver the pilings and for damage to its barge and crane. The cases were consolidated, and DP Concrete and McDonough Marine also made claims. The suits were tried in a bench trial to Judge Cain, presenting two issues: whether B&J was entitled to exoneration/limitation and whether there was a breach of contract by DP Concrete for failing to deliver the pilings on a seaworthy barge. Judge Cain noted that a suit against the tug sounds in tort and that the tug is not an insurer or bailee for the tow. However, the tug must be adequate and the crew must exercise reasonable skill and diligence. The owner of the tug is liable for the safe navigation, and the owner of the barge and bareboat charterer are responsible for the seaworthiness of the barge. DP Concrete and McDonough Marine relied on the doctrine of res ipsa loquitur for an inference that B&J was negligent, but Judge Cain rejected application of the doctrine and found that there was no negligence by the crew of the ZOIE. He also rejected the argument that the crew of the ZOIE failed to comply with the regulation requiring the recording of forward and aft drafts of the barges as the regulation only applies where the towing vessel’s voyage takes it seaward of the territorial sea baseline and the tug only operated inland. Although there were marks on the rake of one of the barges that DP Concrete and McDonough Marine argued resulted from impact damage during the tow, Judge Cain disagreed and found that the barge was not seaworthy (because of corrosion and holes in the bottom) and that the marks on the rake were cause when the barge capsized, lost its cargo, and violently sprang out of the water and descended on the dock. Accordingly, Judge Cain exonerated B&J. Turning to Kiewit’s claim for breach of contract, Judge Cain noted that the contract provided for sale of the pilings and delivery of the pilings by barge. Applying maritime law under the Barrios (see December 2019 Update) test from the Fifth Circuit, Judge Cain rejected DP Concrete’s argument that, under the Incoterms of the contract, its obligations ended when the barges were delivered to the Kiewit dock, reasoning that DP Concrete failed to make delivery of the goods ready for unloading (a sinking and unseaworthy barge loaded with thousands of tons of concrete piles is not “ready for unloading”). Although DP Concrete argued that Kiewit was liable on a bailment theory, Judge Cain answered that the concrete between DP Concrete and Kiewit contained no terms for a bailment and no terms that Kiewit would store, fleet, or safekeep the barges. And, even if there were a bailment, DP Concrete did not show that the barges were delivered to Kiewit in good condition. As Judge Cain found that one of the barges was unseaworthy, which caused both barges to lose their cargo and the damages sustained by Kiewit, he entered judgment in favor of Kiewit against DP Concrete.
Regions Bank entered into a Credit Agreement with Whitaker Marine for a revolving line of credit that was collateralized with a first preferred fleet mortgage on six vessels. After Whitaker defaulted, Regions Bank arrested the M/V MAXX B, the M/V MISS ALLISON, and the M/V MISS LILLIE on September 28, 2022. Less than a month later, Regions Bank moved for an interlocutory sale, but Judge DuBose denied it for multiple reasons, including the fact that there had not been an unreasonable delay by Whitaker in seeking a release. On January 3, 2023, Regions Bank again sought an interlocutory sale, noting that it had incurred approximately $25,000 in custodia legis expenses and $7,500 in Marshal’s expenses and advising that it was incurring approximately $10,500 per month in custodial expenses. Although less than four months had passed from the date of the arrest to the filing of the second motion, which Judge DuBose did not find to be an unreasonable delay, the judge agreed to the interlocutory sale because Whitaker consented to the sale and the judge concluded that it was in the best interest of Whitaker to sell the vessels to minimize the custodial expenses (as the vessels were afloat, Judge DuBose ordered them shifted to dry docks to allow potential bidders the opportunity to fully inspect the condition of the vessels). See February 2023 Update.
The vessels were sold at a public auction by the Marshal on April 19, 2023, and Regions Bank was the successful bidder for each vessel with a credit bid of $95,000 for each vessel. No interested person filed a written objection to the sale, and Regions Bank moved to confirm the sales. Noting that credit bid rights have been recognized for a century, Judge DuBose held that Regions Bank was entitled to bid without the need to submit cash (or a cashier’s check) for the amount of its bid, and she confirmed the sales, ordering title be transferred to the bank free and clear of all liens, mortgages, or other encumbrances.
Justin Hoye-House claims that he is a professional seaman who was hired as a crew member of the S/Y GODSPEED IN June 2021. The vessel was “on the hard” (hauled out of the water) at that time in Portsmouth, Rhode Island, but Hoye-House alleged that the vessel was supposed to re-enter the water after repair (although he claims that it did not re-enter the water due to omissions by the vessel’s owner). Hoye-House claims that he climbed aboard the vessel on January 5, 2022 and encountered a sticking hatch, which caused him to fall. Hoye-House brought this suit in federal court in Rhode Island against the vessel, its owner, and its beneficial owner, seeking to recover for unseaworthiness, negligence under the Jones Act, and maintenance and cure. The defendants moved to dismiss the suit on the grounds that Hoye-House was not a seaman and because there was no case or controversy between the beneficial owner and Hoye-House. With respect to his status as a seaman, Judge McConnell identified the issue as whether the GODSPEED was removed indefinitely from maritime activities. Judge McConnell recognized that the vessel had sustained serious damage that relegated it to port; however, the complaint was “indeterminate” whether the likelihood of actual use was great enough to engage the underlying purpose of admiralty jurisdiction and the need for a uniform body of national law to allocate the risks of maritime commerce. Judge McConnell reasoned that the facts in the complaint could support the conclusion that the vessel was in such a state of disrepair that it was out of maritime service indefinitely, but the allegations did not mandate that conclusion. Additionally, the complaint did not address the breadth or duration of the work on the vessel, nor did it speak to the intended use of the GODSPEED and whether that use could be conducted. As the complaint alleged sufficient facts to make a finding of status/jurisdiction plausible, Judge McConnell declined to grant the motion to dismiss. Turning to the allegations against the beneficial owner, Hoye-House asserted that the beneficial owner may have compensated Hoye-House for his work and may have retained some level of control over the operation of the vessel as reflected in his holding marine insurance on the GODSPEED. As the facts were insufficient on both issues, Judge McConnell gave the parties 90 days to conduct discovery, directing that, after 90 days, the defendants should either file a new motion to dismiss or answer the complaint.
Coastal Cement hired Colonna’s Shipyard to perform repair work on its barge MBT-35 in Norfolk, Virginia (converting the barge into a “ship unloading barge” and performing American Bureau of Shipping “surveys”). There were disputes about the scope of the work and the amount that Colonna charged that resulted in a payment schedule that was not fulfilled. Coastal transferred the barge to its affiliate, Dragon Products, which used the vessel to carry and unload cement in Boston Harbor. Colonna’s Shipyard filed this complaint in federal court in Virginia against Coastal Cement, and Coastal began negotiation with Colonna’s Shipyard to prevent the arrest of the vessel, offering to file a surety bond in the amount of $3.4 million. After Colonna’s Shipyard declined to accept the bond, Coastal sought a temporary restraining order to prevent Colonna’s Shipyard from arresting the vessel (which would allegedly cause Coastal and its affiliate Dragon to suffer damages that they could not recover). Coastal argued that the district court had the right to place a res as a substitute for a vessel that is not located within the district; however, Chief Judge Davis declined to apply that principle to the situation where an in rem action was not pursued prior to the filing of the motion and where the vessel was located in the territorial bounds of another jurisdiction. Without reaching the merits of the request, Chief Judge Davis denied the request for the TRO, stating that the court in the district where the vessel is located should address the security. See December 2022 Update.
Moving to the merits, Coastal filed a motion to dismiss the second count of the complaint (unjust enrichment) on the ground that unjust enrichment claims are only available in the absence of an enforceable contract, and neither party disputed that there was an enforceable contract between the parties. Colonna’s Shipyard responded that courts applying Virginia law have allowed pleading of alternative grounds for relief, and the unjust enrichment claim should not be dismissed before the court fully interpreted the scope and validity of the contract. Chief Judge Davis agreed that a plaintiff may allege unjust enrichment in the alternative to a claim for breach of contract. However, the alternative pleading is only in the absence of an enforceable contract. In this case, there was no dispute as to the enforceability of the contract, and there were no factual allegations in the complaint plausibly supporting the invalidity of the agreement. Consequently, Chief Judge dismissed the unjust enrichment count in the complaint.
The death of Raeshon Willis in a jet-ski accident in South Lake Tahoe returns to the Update (June 2019, November 2019, December 2019, August 2020, and January 2022 Updates). Willis, an employee of Zip, Inc. and Berkeley Executives, was on a work trip with fellow employees Thomas Smith and Kai Petrich. As part of a team-building activity, Smith and Willis were riding together in Lake Tahoe on a wave runner that was rented from Williams Sports Rentals. Smith was operating the wave runner when it hit a wave, and Willis was thrown overboard and drowned. Williams Sports Rentals filed a limitation action as the owner of the wave runner, and Willis’ mother sought to lift the limitation stay so she could litigate her claim against Williams Sports Rentals in state court. Judge Mendez declined to lift the federal stay, and the Ninth Circuit ordered Judge Mendez to reconsider his analysis. Instead of lifting the stay, however, Judge Mendez ruled that the owner of the jet ski should be exonerated and dismissed the case. The Ninth Circuit then ordered Judge Mendez to lift the stay in the limitation action, and Judge Mendez considered that order to be “unequivocal.” Although agreeing to lift the stay, Judge Mendez did address whether trial of the limitation question should proceed in federal court or await trial of the liability issue in the state court (based on efficient use of judicial resources). As the Sacramento federal courthouse was closed to the public at that time until further notice, Judge Mendez held that the limitation action should be stayed until the completion of the suit in state court.
Willis’ mother had filed a suit in state court in Alameda County against Zip, Inc., Berkeley Executives, Smith, and Petrich. After the limitation stay was dissolved, his mother added Williams Sports Rentals as a defendant. Williams Sports Rentals twice moved to transfer the case from the Alameda County Superior Court to the South Lake Tahoe Branch of the El Dorado Superior Court, and the judge transferred the case, concluding that trial in El Dorado County would be vastly more convenient than trial in Alameda County (the principal place of business of Zip and Berkeley and the residence of Smith and Petrich). The Court of Appeal, however, held that the trial court abused its discretion in granting the transfer because Williams Sports Rentals had not carried its burden to show that both the convenience of witnesses and the ends of justice would be promoted by a transfer. The lower court had found that it “cannot determine what delay might result from changing venue,” and that was insufficient to satisfy the requirement that the ends of justice would be promoted by the transfer. Consequently, the appellate court issued a peremptory writ of mandate directing the superior court to vacate its order transferring the case.
The basis for the lifting of the stay of the federal limitation action was that only the Willis estate had filed a claim in the limitation action and the Willis estate filed the necessary stipulations for a single-claimant exception. The court lifted the federal stay of state-court litigation and substituted a stay of the limitation proceeding pending a resolution of liability in the suit in state court. Several parties in the Willis state-court suit filed cross-claims for indemnity and attorney fees against Williams Sports Rentals. The cross-claimants declined to stipulate to Williams Sports Rentals’ limit of liability. One of the insurers of a cross-claimant also sought to intervene in the limitation action. Williams Sports Rentals then sought to lift the stay of the limitation action as the limitation action no longer presented a single-claimant situation. Chief Judge Mueller agreed that the federal action no longer presented a single-claimant exception, and she lifted the stay of the federal action and enjoined the state-court litigation. On December 12, 2022, the Willis estate filed a notice of appeal (No. 22-16928), which is currently pending in the Ninth Circuit. See January 2023 Update.
The limitation action was filed in 2017, and in that year, a default was entered against all those who did not file a claim in the limitation proceeding. A party who was named as a third-party defendant, Kai Petrich, moved to set aside the entry of default, but the court declined to set aside the default for failure to show good cause under Rule 55(c). Petrich filed another motion to set aside the default, asserting that he had moved out of the United States and was living in Canada when the limitation action was commenced and that he was unaware of the action because he did not read the newspapers in which notice was published. He became aware of the state and federal actions when he was served with the state complaint while he was in Canada. He did not believe that he was affected by the federal action until he was served as a third party in the limitation proceeding. Chief Judge Mueller considered the explanation to be, at most, neglectful and not to exhibit bad faith, and she considered his argument that he was not a passenger on nor driving the jet ski to be a sufficiently meritorious defense. As to prejudice (the limitation action was filed in 2017), Chief Judge Mueller noted that the court recently lifted the stay and that the case had not significantly progressed. Therefore, she did not find prejudice to Willis and set aside the default. Chief Judge Mueller also considered the motion to intervene of Twin City Fire Insurance and Sentinel Insurance, which were liability insurers for Zip, Inc. As Zip’s corporate status had been suspended by the California Secretary of State, the insurers sought to intervene to protect their interests as insurers for Zip and to seek (like Petrich) to set aside the default that included Zip. Willis complained of prejudice due to the delay in this “long-running case,” but Chief Judge Mueller noted that the length of delay was due in part to the “complicated proceedings.” Concluding that the insurers had a right to protect their interests, Chief Judge Mueller granted their motion to intervene.
This action arises from a boating accident involving a vessel named LA AQUAVIDA in The Playpen area of Lake Michigan. The owners of LA AQUAVIDA, Theresa Tran and Chicago AquaLeisure, LLC, filed this action in federal court in Illinois, and claims were filed in the limitation action by Marija Velkova, Lana Batochir, and Jacob Houle. The court entered an order of default against non-appearing claimants, and the appearing claimants moved to lift the limitation stay so that they could pursue their claims in state court. The claimants proposed to make seven concessions (as the Seventh Circuit does not require binding stipulations, see discussion of Roen Salvage in the December 2021 Update). The concessions included that the claimants would only seek their respective pro-rata share of the limitation fund and would not seek any amount beyond the limitation fund if limitation was upheld by the federal court. The vessel owners objected to the seventh concession that the claimants did not concede that limitation of liability was appropriate and did not concede any of the limitation issues raised by the owners in their complaint. Judge Gottschall considered that concession as merely confirming settled law that the claimants retained the right to contest limitation in the federal action. The vessel owners argued that they were exposed to a potential contribution claim by the captain of the vessel, who was hired by the claimants when they chartered the vessel from the owners. The captain was named as a defendant in suits brought in state court by two of the claimants, and he did not join in the concessions. Thus, Judge Gottschall noted that the proposed concessions would not protect the vessel owners if the captain were to assert a contribution claim against the vessel owners in state court, obtain a judgment, and then plead it as res judicata in the limitation action. The claimants argued that the captain had not filed a claim in the limitation action and was defaulted from bringing a contribution claim against the limitation fund. However, Judge Gottschall was not persuaded that the “non-final” default sufficiently protected the vessel owners. Thus, Judge Gottschall decided to stay entry of judgment and enforcement of any recovery obtained in state court pending the outcome of the federal limitation proceeding, which would prevent entry of a judgment in state court in excess of the limitation fund (he added that the court would be obligated to stay any claims by the captain if he did not agree to concessions that protected the vessel owners’ limitation rights). As no judgment could be entered in state court, there would be no judgment that the captain could use to plead res judicata in the limitation action. Consequently, Judge Gottschall lifted the limitation stay, but he stayed entry of judgment and enforcement of any recovery obtained in state court pending the outcome of the limitation proceeding.
Jamal Vaughn, a deckhand employed by American Commercial Barge Line on its vessel M/V EXPLORER, was injured when the EXPLORER struck a moored vessel while traveling from Baton Rouge to Harahan, Louisiana for repairs. Vaughn brought this suit against ACBL in federal court in Louisiana, asserting claims for Jones Act negligence, unseaworthiness, and maintenance and cure and seeking to recover damages that included pain and suffering on the Jones Act and unseaworthiness claims and punitive damages and attorney fees for willful failure to pay maintenance and cure. ACBL moved for partial summary judgment that Vaughn had reached maximum cure and was not entitled to maintenance and cure, citing the opinion of the orthopedic surgeon who performed two arthroscopic surgeries on Vaughn’s right shoulder who signed off on Vaughn being at maximum cure with respect to his right shoulder. Shortly before that finding from Vaughn’s orthopedic surgeon, Vaughn began treating with a different orthopedic surgeon, Dr. Andrew G. Todd, with respect to his neck and back. Dr. Todd performed disc replacement surgery and epidural steroid injections and opined that Vaughn had reached nonsurgical maximum improvement but would continue to require intermittent epidural steroid injections that were “meant to address ongoing complaints of pain.” ACBL argued that any future treatment was palliative, and that the opinion that Vaughn had reached nonsurgical maximum improvement indicated he was at maximum cure because Vaughn had elected not to have further surgery at this time. Judge Barbier disagreed, holding that Dr. Todd’s communications reflected an issue of fact remained as to whether Vaughn had reached maximum cure and whether further treatment was curative. Therefore, he held that ACBL had not carried its burden to provide unequivocal evidence that Vaughn had reached maximum cure. For the same reason, Judge Barbier declined to dismiss Vaughn’s claims for punitive damages and attorney fees for willful failure to pay maintenance and cure, reasoning that, absent an unequivocal justification to terminate maintenance and cure, the employer may subject itself to liability for punitive damages and attorney fees for terminating benefits. Finally, ACBL sought summary judgment on Vaughn’s claims for non-pecuniary damages for mental anguish, emotional distress, loss of enjoyment of life, and pain and suffering. Judge Barbier agreed that nonpecuniary damages such as loss of society are not recoverable by a seaman in his claims for Jones Act negligence and unseaworthiness; however, Judge Barbier found no controlling case precluding a Jones Act seaman from recovery for pain and suffering, and he noted that the Fifth Circuit had permitted awards of pain and suffering by seamen. Categorizing pain and suffering as pecuniary damages, Judge Barbier declined to dismiss Vaughn’s claim for pain and suffering.
Doe and her cabinmate, who were passengers on the Carnival MIRACLE, were returning to their cabin after having a drink in the cabin of other passengers, James and John. James attempted to walk them back to their cabin, but Doe kept hiding from them. At some point, Doe slipped and hit her head, and James gave up on escorting her back to her cabin. Doe ended up in a storage closet where she asserts she was sexually assaulted by a crew member. Doe does not recall going in or out of the closet, but she believed that the crewmember kept the door to the closet locked and would not let her leave. The cruise line asserted that Doe consented to the interaction and was free to leave the closet based on a report prepared by the FBI. Doe brought this suit against the cruise line, asserting a number of causes of action. The cruise line moved for summary judgment on the claim of false imprisonment, citing the FBI’s conclusion that Doe was free to leave the closet at any time (based on statements of the crewmember during the FBI investigation). Magistrate Judge Torres ruled that the statements of the crewmember were hearsay. As the crewmember was not available to corroborate his statements, there was no evidence to counter Doe’s allegation that she was locked in the closet, and Magistrate Judge Torres consequently granted summary judgment in favor of Doe on the false imprisonment claim. The cruise line moved for summary judgment on Doe’s claim for negligent infliction of emotional distress, and Magistrate Judge Torres agreed that the cause of action applies to mental or emotional harm that is not directly brought about by a physical injury but that manifests itself in physical symptoms. As Doe claimed emotional distress from a physical injury, Magistrate Judge Torres recommended that her claim for negligent infliction of emotional distress be dismissed. See July 2021 Update.
The case was tried to a jury before Judge Williams, and, on July 19, 2022, the jury returned a verdict that the passenger was falsely imprisoned by the cruise line’s crew member and that the crew member sexually assaulted the passenger. The jury declined to find that the crew member intentionally inflicted emotional distress on the passenger or that the cruise line was negligent. The jury awarded damages of $3,000 for medical and psychological treatment in the past, $240,000 for future medical and psychological expenses, $6,000,000 for pain, suffering, and anguish in the past, and $4,000,000 for future pain, suffering, and anguish (a total of $10,243,000). See August 2022 Update.
The cruise line filed a motion for new trial and a motion for remittitur, and Judge Williams denied the motions on May 11, 2023.
Our longsuffering readers know that the Update does not generally summarize discovery issues, but this opinion involves a request for sanctions that is related to a discovery issue. Brenden Yarborough, a crew member of the M/V GERRY BORDELON, claims that he was compelled to stay on the vessel, docked at Port Houma, Louisiana when Hurricane Ida struck Louisiana. During the peak of the storm, he was instructed by the captain to retrieve oil drums that had broken loose, and he was struck by one of the drums and pinned to the cargo on the vessel. Yarborough also claims that he sustained additional injuries when vessels came unmoored during the storm and struck the GERRY BORDELON. After he advised the captain of his injuries, Yarborough alleges that he was instructed to tape employees’ car windows in the parking lot of his employer in Houma. After he started, Yarborough returned to the vessel to tell the captain the work in the parking lot was unsafe because there were wasps, snakes, and “potentially alligators” in the parking lot. The captain instructed Yarborough to return to the parking lot, but he was attacked by wasps, causing him to fall off a truck. Yarborough brought this suit against his employer under the Jones Act, general maritime law, Louisiana state law, and Section 5(b) of the LHWCA. After his deposition, Yarborough filed a motion for sanctions, asserting that, during the deposition, his employer’ counsel showed him multiple still images from a video of Yarborough on the vessel (during the events that are the basis for the suit) that contradict Yarborough’s account of the events. Yarborough based his claim for sanctions on his discovery requests for all photographs of the area of the occurrence and the facts of the incident. His employer did not produce the video, and Yarborough argued that the court should preclude the use of his testimony from his deposition as a sanction for his employer’s failure to produce the video. His employer argued that the video was impeachment evidence that did not have to be disclosed prior to the deposition, and Yarborough countered that the video was substantive evidence that had to be disclosed. Following the Fifth Circuit’s Chaisson decision, Judge Fallon found the video to be both impeachment evidence (discrediting Yarborough’s testimony) and substantive evidence (what occurred on the vessel at the time of the accident). Thus, the defendant would have to produce the evidence before trial, or it would not be allowed to use it at trial. In a subsequent decision, the Fifth Circuit clarified that it was not error to produce a surveillance tape after the discovery cutoff but nine or ten months before trial. It is left to the discretion of the judge to decide at what point in the discovery process before trial the evidence must be produced. In this case, the video was produced prior to the cutoff for discovery and five months prior to the scheduled trial. Accordingly, Judge Fallon held that it was within his discretion to hold that the disclosure was adequate, and he found no basis to impose sanctions on the employer.
This litigation arises from the crash of the Boeing 737 MAX (Lion Air Flight JT 610) in the Java Sea after taking off from Jakarta, Indonesia, resulting in the deaths of everyone on board. Numerous actions were filed against Boeing, and Boeing settled with the families of all but two of the decedents, Liu Chandra, an Indonesian businessman, and Andrea Manfredi, an Italian professional cyclist and entrepreneur. The Chandra plaintiffs filed suit in Illinois state court, alleging wrongful death under the Death on the High Seas Act and the Illinois Wrongful Death Act, and they included survival claims. Boeing removed the case to federal court based on the Multiparty, Multiforum, Trial Jurisdiction Act and based on the federal court’s admiralty jurisdiction. In an amended complaint after removal, the Chandra plaintiffs demanded a jury and based jurisdiction on diversity, DOHSA, and the MMTJA. The Manfredi plaintiffs filed suit in federal court in Illinois invoking diversity asserting claims for wrongful death, survival, and based on the Illinois Consumer Fraud and Deceptive Practices Act and the federal Computer Fraud and Abuse Act. They demanded a jury trial and sought punitive damages. Boeing filed motions in both cases seeking a determination that DOHSA applies, that it preempts the non-DOHSA claims, and that it requires a non-jury trial. Recognizing the cases holding that DOHSA applies to deaths on or over the high seas, the Manfredi plaintiffs argued that over half of the flight occurred over land. They contended that the court should consider the location where the negligence was consummated into a “first” injury, and that Manfredi was first injured during the period where the flight was over land (suffering, at a minimum, emotional distress). However, the Manfredi plaintiffs lacked authority for the theory, and Judge Durkin cited the Fifth Circuit’s Motts case that held that the proper test looked to the location of the accident for the application of DOHSA. As the situs of pre-death (but non-fatal) injury did not matter for DOHSA, and as there were no factual disputes in this case about whether the death occurred over the land or water (as the complaint alleged that Manfredi’s death occurred when the plane crashed into the ocean), Judge Durkin held that DOHSA applied. Judge Durkin then addressed whether DOHSA’s application preempted other remedies that were sought and whether the plaintiffs were entitled to a jury trial. Based on the decisions of the Supreme Court in Tallentire and Dooley, Judge Durkin began with the principle that, where DOHSA applies, it is generally the exclusive source of applicable law and preempts state wrongful death claims as well as survival claims. Although the plaintiffs argued that some of the injuries occurred while the plane was over land, citing cases involving asbestos exposure that occurred in employment on land and over the water, Judge Durkin distinguished those cases as indivisible injury cases where the fatal injury occurred over many years and partially over land. Judge Durkin also held that DOHSA preempted claims for property damage and claims under the state and federal statutes (the federal statute would be displaced rather than preempted). The final question was whether the saving-to-suitors clause and diversity preserved a right to a jury trial for the DOHSA claims. Although the plaintiffs could bring maritime claims in diversity and obtain a jury trial, Judge Durkin noted that DOHSA is limited to “a civil action in admiralty,” and that does not carry the right to a jury trial. The Supreme Court explained in Tallentire that DOHSA’s saving clause allows state courts to hear suits under DOHSA, but it does not allow state causes of action to be brought in DOHSA cases or allow the plaintiffs to invoke common-law jurisdiction. The Chandra case was brought in state court where the plaintiffs would have a jury trial, but when it was removed, federal procedural law controlled the right to a jury trial, and Judge Durkin held that there was no right to a jury trial in federal court in an admiralty claim. Diversity provided an additional basis for federal jurisdiction, but it did not enlarge the substantive remedy on which the claim was based—DOHSA. See February 2023 Update.
On May 25, 2023, Judge Durkin issued an amended opinion and order in which he reiterated the holdings, dismissing the claims for pre-death pain and suffering, emotional distress, property damage, and state and federal fraud claims. He held that both cases would be tried exclusively under DOHSA, which mandated that the cases be tried to the court’s admiralty jurisdiction in a bench trial. He did, however, certify for an interlocutory appeal the single issue of the plaintiffs’ entitlement to a jury trial.
From the state appellate courts
Richard E. Wright was a seaman on Farrell Lines’ vessels and was allegedly exposed to asbestos and asbestos-containing products that contributed to the lung cancer that caused his death. Willard E. Bartel and David C. Peebles were appointed as co-ancillary administrators for the Estate of Richard E. Wright by the Probate Court in Cuyahoga County, Ohio based on Wright’s Ohio property (listed as an “undetermined wrongful death action”), and Bartel and Peebles then brought this suit against Farrell Lines (Farrell-Isbrandtsen and Keystone Shipping) in New York state court, seeking recovery under the Jones Act and general maritime law. Almost two years later, Wright’s widow, Brenda Wright, was appointed as the administrator for the Estate of Richard E. Wright by the Campbell County Circuit Court for the Commonwealth of Virginia. Bartel and Peebles then moved to substitute Brenda as the plaintiff in the New York suit (after the running of the statute of limitations), and Farrell Lines moved to dismiss the suit as time-barred. A similar situation was presented in connection with the death of Douglas R. Otto, who was a seaman on Maersk Lines’ and American Export Line’s vessels. Bartel and Peebles were appointed as co-ancillary administrators for his estate by the Probate Court in Cuyahoga County, Ohio, and brought this suit in New York state court against the vessel owners under the Jones Act and general maritime law. After Otto’s widow, Ellenor M. Otto, was appointed as the Executor of Douglas’s estate by the General Court of Justice, Superior Court Division for Brunswick County, North Carolina, Bartel and Peebles moved to substitute Ellenor in the New York litigation, and the defendants moved to dismiss the suit as time barred. The defendants argued that the Ohio probate court lacked jurisdiction to appoint Bartel and Peebles as co-ancillary administrators because the decedents were not residents of Ohio, did not die in Ohio, owned no property in Ohio, never sailed on a vessel in Ohio waters, and were not injured in Ohio (so that the cause of action alleged could not constitute Ohio property). Alternatively, they argued that Bartel and Peebles lacked standing to bring the lawsuits in New York. The appellate court disagreed, reasoning that when the record shows nothing to the contrary, it is conclusively presumed that the probate court had subject matter jurisdiction. The appellate court also disagreed with the argument, based on state authority, that Bartel and Peebles lacked standing to bring the actions in New York, answering that the authority of the personal representative under the Jones Act derives from a federal statutory right and that jurisdiction is not limited to the confines of the state where the representative was appointed. Similarly, the court cited federal law (from FELA cases), not state law, that even if Bartel and Peebles commenced the action without capacity, the substitution of the proper administrator after the running of the statute of limitations was timely.
Angie Moriana worked for Viking River Cruises in California as a sales representative. She brought an action in California state court against Viking, alleging violations of the California Labor Code pursuant to the California Private Attorneys General Act. Viking moved to compel arbitration of the claims based on the arbitration clause in her employment agreement, but the California courts held that the agreement violated public policy and that federal law did not preempt application of state public policy. The United States Supreme Court reversed that ruling in Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (June 15, 2022) (Alito), and, on remand from the Supreme Court, the California Court of Appeals remanded the case with instructions that Moriana’s individual PAGA claims should be arbitrated (the appellate court remanded Moriana’s non-individual claims so that the Superior Court could consider how to dispose of them.
Kenneth G. Engerrand
President, Brown Sims, P.C.
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Quote:
For all these reasons, I find that Winchester’s Motion to Reduce Security should be GRANTED. In granting Winchester’s motion, I want to be clear that I have not overlooked Winchester’s “actions that led to the extensive detention of the vessel and delay in PMI being able to deliver its cargo.” I am well aware of the “very serious MARPOL investigation undertaken by the USCG and DOJ,” and the fact that “Winchester is an SVP (single vessel purpose company) meaning that the company has no assets other than the vessel,” which it has since sold. But Winchester’s actions and the risk that Maersk will be left holding the bag for some nebulous sum do not, on their own, transform whatever quantum of security PMI demands into a reasonable damages claim. I made it very clear at the hearing that PMI still has an obligation to show that its claims are not frivolous. I gave PMI an opportunity to provide some kind of substantiation, but PMI did not do so. Including its initial motion for attachment, PMI has had five bites at this apple, and I still have nothing more to work with than numbers with labels. For this reason, I grant Winchester’s motion.
Maersk Tankers MR K/S v. M/T SWIFT WINCHESTER, No. 3:22-cv-390, 2023 U.S. Dist. LEXIS 51260 at *20–*21 (S.D. Tex. Mar. 27, 2023) (Edison).
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© Kenneth G. Engerrand, May 31, 2023; redistribution permitted with proper attribution.
