March 2022 Longshore/Maritime Update

March 1
2022

March 2022 Longshore/Maritime Update (No. 274)

Notes from your Updater:

The Department of Labor published a final rule adjusting penalties after January 15, 2022, pursuant to the Inflation Adjustment Act.  The rule makes the following adjustments to penalties assessed by the Office of Workers’ Compensation Programs (OWCP) under the Longshore and Harbor Workers’ Compensation Act:

Section 14(g) of the LHWCA, 20 C.F.R. § 702.236: Failure to Report Termination of Payments

The penalty amount has increased from $301 to $320.

Section 30(e) of the LHWCA, 20 C.F.R. § 702.204: Penalty for Late Report of Injury or Death

The maximum penalty amount has increased from $24,730 to $26,269.

Section 49 of the LHWCA, 20 C.F.R. § 702.271(a)(2): Discrimination Against Employees Who Bring Proceedings

The penalty amount has increased from a $2,473 minimum and a $12,363 maximum to a $2,627 minimum and $13,132 maximum.

Industry Notice No. 189 is available on the OWCP, Division of Federal Employees’, Longshore and Harbor Workers’ Compensation website at https://www.dol.gov/agencies/owcp/dlhwc/lsindustrynotices/lsindustrynotices.

On February 4, 2022, Judge Gayles in the Southern District of Florida entered an ex parte temporary restraining order under the Perishable Agricultural Commodities Act, ordering a cruise line that bought produce from the plaintiff but did not pay for it not to pay or assign any assets pending further order of the court. See Freedom Fresh, LLC v. Crystal Cruises, LLC, No. 1:22-cv-20327, 2022 U.S. Dist. LEXIS 20820 (S.D. Fla. Feb. 4, 2022).

The Fifth Circuit affirmed the decision of Judge ­­Lake of the Southern District of Texas, applying Texas law, that Hess Corp. failed to prove its claim for revocation of a contract with Schlumberger Technology Corp. to provide surface-controlled subsurface safety valves for deep-sea oil wells in the Gulf of Mexico. See Hess Corp. v. Schlumberger Technology Corp., No. 20-20663, 2022 U.S. App. LEXIS 3340 (5th Cir. Feb. 7, 2022) (Southwick).

In our February 2022 Update we reported that Judge Stark remanded to state court the suit brought by the state of Delaware against a number of energy companies in the fossil fuel industry related to climate change. Judge Stark rejected the Outer Continental Shelf Lands Act as a basis for the removal, holding that the energy companies did not establish the damages would not have occurred “but for” the OCS operations. See Delaware ex rel. Jennings v. BP America Inc., No. 20-1429, 2022 U.S. Dist. LEXIS 2378 (D. Del. Jan. 5, 2022). On February 8, 2022, Judge Stark agreed to stay execution of the remand order until the Third Circuit issues its ruling in the appeal of his order. In a separate proceeding, the Tenth Circuit affirmed the remand of Boulder County Colorado’s climate change suit against energy companies. The case was remanded to the Tenth Circuit after the Supreme Court’s decision in BP v. Mayor and City of Council of Baltimore, which required consideration of all of the grounds for removal and not just the Federal Officer Removal Statute. The Tenth Circuit then held that there was an insufficient nexus between the suit and the operations on the outer Continental Shelf to support jurisdiction under the Outer Continental Shelf Lands Act. Consequently, the Tenth Circuit held that the suit should be remanded to state court. See Board of County Commissioners of Boulder County v. Suncor Energy (U.S.A.) Inc., No. 19-1330, 2022 U.S. App. LEXIS 3458 (10th Cir. Feb. 8, 2022) (McHugh).

The effort of seaman Vinod Kumar Dahiya, an Indian national, to avoid arbitration and bring his claim for an injury in 1999 in Louisiana state court, did not end with the decision of the Fifth Circuit on October 1, 2021 (discussed in our November 2021 Update) in which the Fifth Circuit affirmed the decision of Judge Feldman to confirm an arbitration decision. Dahiya’s effort to avoid arbitration was even discussed in an article written 10 years ago by your Updater and Monica Markovich, Forum Selection and Arbitration Clauses in Seamen’s Injury Claims, 11 Loy. Mar. L.J. 109 (Fall 2012). On February 8, 2022, the Supreme Court docketed the petition for certiorari, No. 21-1097, Dahiya v. Talmidge International, Ltd. The first question presented by Dahiya is: “Can a foreign arbitration award be enforced pursuant to the Convention (9 USC 207) where the arbitration agreement does not meet the Convention’s definitional requisite [Art. II (2)] of bilateral signatures? And, is that defect jurisdictional, or merely fatal to the merits of the enforcement action?”

The Third Circuit affirmed the dismissal as time-barred of FastShip’s suit against Lockheed Martin for breach of contract and misappropriation of trade secrets in connection with the use of FastShip’s hull patents by Lockheed Martin in its proposal to the Navy for the design of a Navy combat ship. See FastShip, LLC v. Lockheed Martin Corp., No. 20-3529, 2022 U.S. App. LEXIS 3533 (3d Cir. Feb. 9, 2022) (Roth).

The Appellate Division of the Supreme Court of New York held that the owner of federally permitted fishing vessels had a sufficient employment relationship with the captain and crew of its vessels that the owner was required to pay state unemployment insurance contributions for these workers. See In re Joseph Fisheries Corp., No. 532585, 2022 N.Y. App. Div. LEXIS 911 (N.Y. Sup. Ct. App. Div. 3d Dept. Feb. 10, 2022) (Aarons).

The Fourth Circuit affirmed the dismissal of the suit by a Navy contractor (that was threatened with having to pay overtime under California law for its employees on Navy ships) against the United States seeking a declaratory judgment of its contract rights and obligations because the contractor had not exhausted its administrative remedies (failure to present a requested sum certain). See Systems Application & Technologies, Inc. v. United States, No. 20-2275, 2022 U.S. Dist. LEXIS 4030 (4th Cir. Feb. 14, 2022) (Wynn).

Judge Mehta of the federal district court for the District of Columbia denied the challenge of American Waterways Operators to the Environmental Protection Agency’s determination (that adequate sewage removal and treatment facilities are reasonably available for Puget Sound), allowing the State of Washington to prohibit commercial and recreational vessels from discharging sewage into Puget Sound. See American Waterways Operators v. Regan. No. 18-cv-2933, 2022 U.S. Dist. LEXIS 26147 (D.D.C. Feb. 14, 2022).

The Ninth Circuit denied two appeals from Chad Barry Barnes in his long-running litigation seeking to recover for the injuries he suffered when the vessel on which he was working exploded. The appellate court dismissed his appeal of three sanctions orders, noting that the appeal was not filed within thirty days of the first two orders and that the third order did not define Barnes’s rights or liabilities or go to the merits of the case, so there was no interlocutory jurisdiction under Section 1292(a)(3). See Barnes v. Henry, No. 21-16120, 2022 U.S. App. LEXIS 4459 (9th Cir. Feb. 18, 2022) (per curiam). With respect to Barnes’s appeal of the dismissal of his claim for an accounting, the Ninth Circuit held that the district court correctly dismissed the claim for lack of any confidential or trust relationship with the defendants and because Barnes has an adequate remedy at law through the normal discovery process. See Barnes v. Henry, No. 20-17141, 2022 U.S. App. LEXIS 4460 (9th Cir. Feb. 18, 2022) (per curiam).

In our May 2020 and October 2020 Updates, we discussed the decision of Judge Bloom to grant leave to Havana Docks to file amended complaints in its suits alleging that cruise lines trafficked in its property (confiscated by the Cuban Government in 1960), in violation of the Libertad Act/Helms-Burton Act. After the filing of the amended complaints, Judge Bloom rejected the motions to dismiss of MSC Cruises and Carnival Corp. in Havana Docks Corp. v. MSC Cruises SA Co., No. 19-cv-23588, 2020 U.S. Dist. LEXIS 163206 (S.D. Fla. Sept. 8, 2020) and Havana Docks Corp. v. Carnival Corp., No. 19-cv-21724, 2020 U.S. Dist. LEXIS 167216 (S.D. Fla. Sept. 14, 2020). On January 11, 2022, Magistrate Judge Louis addressed the motion of the cruise lines to strike Havana Docks’ jury demand and recommended that Havana Docks was entitled to a jury trial under the Seventh Amendment. See Havana Docks Corp. v. Norwegian Cruise Line Holdings, Ltd., No. 1:19-cv-23591, 2022 U.S. Dist. LEXIS 6077 (S.D. Fla. Jan. 11, 2022). Judge Bloom found that Magistrate Judge Louis’ recommendation was well reasoned and correct and concluded that the cruise lines’ motion should be denied. See Havana Docks Corp. v. Norwegian Cruise Line Holdings, Ltd., No. 1:19-cv-23591, 2022 U.S. Dist. LEXIS 30017 (S.D. Fla. Feb. 18, 2022).

On February 22, 2022, Judge Ramos of the Southern District of New York confirmed the third partial arbitration award in favor of the vessel owner against the charterer that chartered a vessel for a shipment of wheat, but the sale of the cargo fell through after the vessel sailed with the wheat. See Kondot S.A. v. Duron LLC, No. 21-cv-3744, 2022 U.S. Dist. LEXIS 30761 (S.D.N.Y. Feb. 22, 2022).

In our June 2021 Update we discussed the denial of the claim for LHWCA benefits under the Defense Base Act of civilian personnel who claimed various illnesses from exposure to plutonium radiation while working on the cleanup of a military aircraft crash near Thule, Greenland in 1968 because the workers failed to establish a causal connection between their illnesses and their alleged plutonium exposure. See Carswell v. E. Pihl & Sons, 999 F.3d 18 (3d Cir. May 27, 2021). The workers and beneficiaries filed a petition for certiorari seeking resolution of the “Unresolved DBA Jurisdictional Conflict” on whether district courts or circuit courts review orders in DBA cases (noting that the conflict has been “Widely Criticized” and citing Monica Markovich’s article, Appeal of Defense Base Act Claims to the Courts: The Disagreement Over Forum Continues, Ben. Rev. Bd. Serv.—Longshore Rep., Pub. 135, Rel. 721, Aug. 2010). On February 22, 2022, the Supreme Court declined to hear the case. See Carswell v. E. Pihl & Son, No. 21-675 (U.S. Feb. 22, 2022).

On February 23, 2022, Judge Oetken of the Southern District of New York, dismissed federal claims (he had previously dismissed state claims) against the Port of New York and New Jersey arising from the clandestine recording of a medical examination of an employee (after the employee reported a workplace injury) in the Port Authority’s Office of Medical Services. See Talarico v. The Port Authority of New York and New Jersey, No. 18-cv-909 (S.D.N.Y. Feb. 23, 2022).

On the LHWCA Front . . .

From the federal district courts:

United States did not breach a duty to an employee of a repair contractor on its vessel to conduct a reasonable inspection of the gangway before it collapsed or to load test the gangway once it was in use; Nelson v. United States, No. 3:19-cv-01761, 2022 U.S. Dist. LEXIS 17230 (D. Ore. Jan. 31, 2022) (Hernandez).

Opinion

Steven M. Nelson, an employee of Peterson Machinery, was injured while disembarking the OSCAR DYSON, a public vessel owned by the National Oceanic and Atmospheric Administration. Peterson Machinery was engaged in the overhaul of two diesel engines while the vessel was docked in Newport, Oregon. The gangway broke because of a defect in a weld, and Nelson brought an action against the United States pursuant to Section 905(b) of the LHWCA. The case was tried in a bench trial to Judge Hernandez with respect to the Scindia active-control duty (duty to exercise reasonable care to LHWCA workers in areas that remain under the active control of the vessel). There was a fact dispute whether the defective weld was detectable by a reasonable inspection, and Judge Hernandez concluded that the inspections by the ship’s personnel were reasonable. Although Safety of Life at Sea Convention guidance suggests that five-year load tests are a best practice for gangways, that practice was not applicable to the domestic waters in this case, and Judge Hernandez found that the United States did comply with its own gangway handling directives. Accordingly, he found for the United States on the Section 905(b) claim.

Jury found shipbuilder 70% at fault and steering-system technician 30% at fault for the technician’s accident during sea trials, but the judge declined to award prejudgment interest on the past damages awarded to the technician; White v. Fincantieri Bay Shipbuilding, No. 19-C-946, 2022 U.S. Dist. LEXIS 17619 (E.D. Wis. Feb. 1, 2022) (Griesbach).

Verdict

Opinion on interest

Rodney White was employed by Engine Motor Inc. as a technician to assist in the installation and testing of the steering system of the M/V MILLVILLE, which was constructed by Fincantieri Bay Shipbuilding. White was injured during a hard-over maneuver for the sea trials of the vessel on Lake Michigan and brought suit against the shipyard (Fincantieri), the company that planned to operate the vessel (Keystone), Keystone’s parent (Chas. Kurz), and the company that contracted for the construction of the vessel (Wawa) Jurisdiction was based on admiralty and diversity. Judge Griesbach found that White was not a seaman and dismissed his seaman’s claims. He also held that White’s claims for Wisconsin common-law negligence were barred by the exclusive remedy provision of the LHWCA. Keystone argued that all of White’s claims against Keystone (except the section 905(b) claim) should be dismissed, and Judge Griesbach agreed, noting that White could pursue claims for both compensatory and punitive damages against Keystone under section 905(b). As Chas. Kurz was not involved in the case other than as owner of Keystone, Judge Griesbach dismissed the remaining claims against that entity. See October 2020 Update. Keystone, Wawa, and Fincantieri then moved for summary judgment on the section 905(b) claims against the defendants. White first argued that the Scindia duties are only applicable when the vessel is turned over to an expert stevedoring company, and there was no stevedore in this case. Citing the rejection of that argument by the Fifth Circuit, Judge Griesbach held that it was appropriate to apply the Scindia duties in this case. Keystone argued that it was not within the class of entities that could be liable under section 905(b). Keystone was not the owner and did not contract for the construction of the vessel. White asserted that Keystone was the operator of the vessel because Wawa reached out to Keystone to provide a crew for the sea trials, and Keystone secured a crew headed by Captain Buddy Davis from Key Marine. Additionally, Keystone previously obtained summary judgment that it could not be liable as operator on the grounds alleged. Finally, White asserted that Keystone and Key Marine are a joint enterprise under Wisconsin law so that Keystone is liable for the negligence of Key Marine, employer of Captain Davis. Judge Griesbach rejected White’s arguments and held that the evidence did not establish a joint enterprise, that Keystone was not estopped to argue that it was not the operator, and that it was not negligent as its only representative on the vessel during the sea trials had nothing to do with the accident. White sought to hold Fincantieri liable under Scindia’s active control duty, claiming that the shipbuilder was responsible for conducting the sea trials and that the trials were conducted at its sole risk and expense. Citing the testimony of White’s expert, Captain Richard DiNapoli, that Fincantieri should have made announcements before each hard-over maneuver (and not just a single announcement before the maneuvers started), Judge Griesbach held there was a fact question whether Fincantieri breached the active control duty. Finally, concluding that Wawa was not the employer of Captain Davis and that Captain Davis was not a borrowed servant of Wawa, Judge Griesbach granted summary judgment to Wawa. See December 2021 Update.

The case was tried to a jury in December 2021, and the jury returned a verdict that Fincantieri was negligent (70%), Captain Davis was not negligent, and White was negligent (30%). The jury awarded damages of $45,000 for past pain and suffering, $125,000 for future pain and suffering, $210,000 for past medical expenses, $20,000 for future medical expenses, $200,000 for lost wages, and $250,000 for loss of earning capacity. White then moved for prejudgment interest on the $318,500 that he was awarded for past pain and suffering, past medical expenses, and past wages (after reduction for his 30% comparative fault). Fincantieri opposed an award of prejudgment interest with several arguments. Fincantieri argued that White had unreasonably delayed prosecution by waiting 18 months to file the suit and that additional delays were the result of COVID-19. Judge Griesbach responded that the filing was well within the statute of limitations and was not an unreasonable delay, and that any delay from COVID was not the fault of either party. However, Judge Griesbach noted that the bulk of the medical expenses did not arise until more than a year after the accident and that a portion of the expenses were paid by his employer or through worker’s compensation, that portions of his lost income did not arise immediately and the amount was not ascertained until trial, Judge Griesbach held that an award of prejudgment interest from the date of the accident would serve as “a windfall to White and punishment to Fincantieri” because it would result in payment of interest on economic and noneconomic losses before they were even realized. As White offered no basis to properly determine an appropriate amount of interest, his motion was denied.

Barge cleaner was not entitled to bifurcation in limitation action by the owner of the vessel on which he was injured absent proper stipulations; In re Ingram Barge Co., No. 3:20-cv-313, 2022 U.S. Dist. LEXIS 26999 (M.D. La. Feb. 14, 2022) (Jackson).

Opinion

Gregory Ratcliff was employed by TT Barge and was assigned to clean the tank on a barge owned by Ingram Barge Co. He slipped and fell on caustic soda that was frozen inside the barge, and Ingram Barge brought this limitation action in federal court in Louisiana. Ratcliff filed a claim against Ingram Barge in the limitation action, and TT Barge, which was subject of a suit brought by Ratcliff in state court, also filed a claim in the limitation action. Ratcliff then moved the court to bifurcate the limitation and non-limitation issues so that he could try apportionment of liability and damages to a jury in his action filed in state court. Judge Jackson denied the motion, reasoning that Ratcliff could only proceed in state court prior to the court’s determination of the vessel owner’s rights to exoneration or limitation when all claimants have entered stipulations protecting the rights of the vessel owner under the Limitation Act. As TT Barge was a claimant and had not agreed to a stipulation, Judge Jackson held that bifurcating the issues of limitation and liability was inappropriate.

Removal of Jones Act claim of welder’s helper (injured in dockside maintenance and repair of a fishing boat) based on diversity jurisdiction was upheld after the judge struck the seaman’s claims as fraudulently pleaded; Montero v. Nguyen, No. 1:21-cv-354, 2022 U.S. Dist. LEXIS 31494 (S.D. Ala. Feb. 23, 2022) (Moorer).

Opinion

Jose I. Tapia Montero was injured while working as a welder’s helper on the fishing boat JENNY JASMINE that was undergoing maintenance and repair at the dock at Graham Shrimp Co. in Bayou La Batre, Alabama. He brought suit in the Circuit Court of Mobile County, Alabama, under the Jones Act and general maritime law, asserting seaman’s claims against the owner of the vessel. Claiming that the seaman allegations were fraudulently pleaded and did not bar removal, the owner removed the case to federal court on the basis of diversity jurisdiction, and Montero moved to remand the case on the ground that he had sufficiently pleaded a non-removable Jones Act claim. Judge Moorer applied the well-developed procedure from the Fifth Circuit for defendants to pierce the pleadings to show that the Jones Act claim has been fraudulently pleaded to prevent removal, and he applied the principles from the decisions of the Supreme Court in Wilander, Chandris, and Papai, along with the decision of the en banc Fifth Circuit in Sanchez. Considering the factors set forth in Sanchez to determine whether a worker satisfies the nature element of the connection test for seaman status, Judge Moorer noted that Montero had worked on the vessel for about two weeks while it was at the dock. He did not perform work on the vessel while it was under weigh or when it was engaged in shrimping activities, and he would not have sailed with the vessel once the repairs were complete. As Montero’s work was land-based and not sea-based and consisted of the performance of specific tasks, after which his connection to the vessel would be concluded, Judge Moorer held that the owner had met his burden to establish that Montero could not establish a connection that was substantial in nature. Accordingly, he denied the motion to remand.

Waiver of federal claims against ship repairer resulted in remand of insulator’s asbestos-exposure suit that was removed based on the Federal Officer Removal Statute; Marcher v. Air & Liquid Systems Corp., No. 2:22-cv-59, 2022 U.S. Dist. LEXIS 33034 (C.D. Cal. Feb. 24, 2022) (Klausner).

Opinion

Nikolaus J. Marcher claimed that he developed mesothelioma while working as an insulator with asbestos-containing products that included repair work at the National Steel and Shipbuilding shipyard in San Diego on the USS DULUTH. He brought this suit in the Los Angeles County Superior Court against National Steel and numerous suppliers of products containing asbestos with which he had worked in his employment. National Steel removed the case based on the Federal Officer Removal Statute (claiming a government contractor defense, Yearsley derivative sovereign immunity, and a combatant activities defense). After removal, Marcher filed a notice of disclaimer that he alleged no cause of action or claim of recovery based on exposure to asbestos from any National Steel product or work performed on premises controlled by the federal government. Marcher and National Steel then moved for remand of the case to the state court, but other defendants objected on the ground that they had similar grounds for removal by their supply of materials for the USS DULUTH as well as the USS CONSTELLATION. Marcher clarified that he waived all government or military-based claims as to all defendants, but the defendants argued that removability must be determined at the time of removal and that post-removal waivers do not affect the jurisdiction that attached at the time of the removal. Judge Klausner held that the waiver did not retroactively make the removal improper. Instead, he exercised his discretion to remand a case that no longer had any colorable federal claim or defense. The defendants also argued that the court should not remand the case because it had admiralty jurisdiction, but Judge Klausner rejected that argument based on his conclusion that the case could not have been originally removed based on admiralty jurisdiction (as opposed to retaining the case based on its admiralty jurisdiction after it was removed based on the

Federal Officer Removal Statute).

From the state courts:

P&I insurer that paid maintenance and cure to an injured shipwright who was later found to be covered under the state workers’ compensation act was entitled to subrogate against the benefits payable under the state act; Arlet v. Workers’ Compensation Appeal Board, No. 12 WAP 2021, 2022 Pa. LEXIS 183 (Pa. Feb. 23, 2022) (Mundy).

Opinion

Robert Arlet was employed by Flagship Niagara League, a non-profit associate organization of the Pennsylvania Historical and Museum Corp. that maintains and operates the US. Brig NIAGARA and its homeport, the Erie Maritime Museum in Erie, Pennsylvania (the NIAGARA was the relief flagship for Oliver Hazard Perry at the time of his victory over the British in the Battle of Lake Erie during the War of 1812). Acadia Insurance, which issued a hull policy to Flagship that also afforded protection and indemnity insurance for crewmembers of the NIAGARA, paid maintenance and cure benefits to and on behalf of Arlet ($4,600 in maintenance and $42,133.36 in cure) until Arlet reached maximum cure. Arlet then filed a claim for Pennsylvania workers’ compensation benefits. Flagship had previously maintained state workers’ compensation insurance from the State Workers’ Insurance Fund, but the coverage had lapsed and Arlet filed an Uninsured Employers Guaranty Fund claim. As the remedies under the state act and maritime law are mutually exclusive, the question was presented in the state proceedings whether Arlet was a seaman. It was ultimately decided that Arlet was not a seaman and was covered under the state act for which he had a net uncompensated wage loss of $5,046.71 that was owed by Flagship. The final question was whether the P&I insurer could subrogate against its insured (Flagship) for the maintenance and cure payments. As Arlet was held to be entitled to state benefits and not maintenance and cure, the question was whether the insurer could subrogate for payments it made on a risk that it did not insure. Recognizing a “no-coverage” exception to the general rule that an insurer cannot subrogate against its own insured, the Pennsylvania Supreme Court held that the P&I insurer was entitled to subrogate for the voluntary payments it made of maintenance and cure that it did not owe because the claimant’s remedy was under the state workers’ compensation act.

And on the maritime front . . .

From the federal appellate courts:

Court that issued an order in a charter party dispute had subject matter and personal jurisdiction over a non-party who violated its order, but sanctions in the trillions of dollars required reconsideration; Absolute Nevada, LLC v. Baer, No. 21-50, 2022 U.S. App. LEXIS 3312 (2d Cir. Feb. 7, 2022) (per curiam).

Opinion

This case arises from a cancelled charter of Absolute Nevada’s vessel M/V AMERICANA. Absolute Nevada brought this suit in federal court in New York against the charterer, Grand Majestic Riverboat Co., and the parties (including the owners and officers of Grand Majestic) agreed to submit all of their disputes related to the charter and the vessel to arbitration and to refrain from placing a lien on the vessel. Despite the agreement, however, Captain Joseph Baer, the president and a stockholder of Grand Majestic, violated the order by asserting a lien on the vessel for unpaid wages. Even though Baer was not a party to the suit, District Judge Castel held Baer in contempt and issued monetary sanctions against him. Baer appealed the order of sanctions and challenged the jurisdiction of the federal court in New York. As the litigation arose out of a charter party dispute, the Second Circuit began by holding that the district court had admiralty jurisdiction over the suit, which was settled by the agreement for arbitration and by the agreement that Grand Majestic and its officers would not place a lien on the vessel. The appellate court rejected Baer’s argument that he was not subject to jurisdiction in New York (claiming that he lacked sufficient contacts with the state) and held that a non-party’s intentional violation of an injunction entered by a district court is an action “designed to have purpose and effect in the forum” so that an exercise of personal jurisdiction comports with due process. The Second Circuit did vacate the portion of the contempt order that imposed the fine. The monetary sanction, which began at $1,000 per day for Baer’s failure to comply with the court’s order, doubled every seven days until he came into compliance. By the time of oral argument, the fine had reached trillions of dollars. The Second Circuit ordered the district judge to reconsider what was a reasonable sanction.

OPA displaced the SAA, leaving the vessel owner without a remedy against the United States for cleanup/removal costs for an oil spill allegedly caused by the negligence of the United States; Savage Services Corp. v. United States, No. 21-10745, 2022 U.S. App. LEXIS ­­­­3536 (11th Cir. Feb. 8, 2022) (Altman).

Opinion

This case presents the legal question of first impression: Does the Oil Pollution Act of 1990 displace the federal government’s waiver of sovereign immunity in the Suits in Admiralty Act when the negligence of the United States is alleged to have caused an oil spill from a vessel? The spill occurred when the M/V SAVAGE VOYAGER, which was pushing two tank barges containing oil on the Tennessee-Tombigbee Waterway in Mississippi, entered the Jamie Whitten Lock, a boat lift operated by the U.S. Army Corps of Engineers. The owner of the tug alleged that the lock master began de-watering the lock chamber without notice before the tug and tow were in correct position, resulting in damage to one of the barges and a release of oil into the water. The owners performed the required cleanup/removal under OPA and brought this suit against the United States under the Suits in Admiralty Act, seeking to recover the cleanup/removal costs plus damage to the barge, loss of use, and lost cargo, based on negligence of the United States under the general maritime law. Although the United States admittedly waived sovereign immunity in the SAA to the extent a private citizen would be liable, the United States argued that the waiver in the SAA was displaced by the comprehensive scheme enacted for cleanup/removal costs in OPA, which does not provide for liability for the United States. District Judge Steele dismissed the claim for reimbursement of cleanup/removal costs (but not the claim for damage to the vessel/loss of use/loss of cargo), and the owner appealed to the Eleventh Circuit. Writing for the appellate court, Judge Altman (district judge from the Southern District of Florida sitting by designation), affirmed the decision of Judge Steele. Judge Altman noted the difference between the provision of the Clean Water Act (which affords a complete defense to the vessel in the event the spill is caused solely by the negligence of the United States), and OPA, which affords a complete defense to the vessel in the event the spill is caused solely by an act or omission of a third party. OPA also creates a contribution action against “any other person who is liable or potentially liable under this Act or another law.” A “person” is defined in OPA as “an individual, corporation, partnership, association, State, municipality, commission, or political subdivision of a State, or any interstate body.” After reviewing OPA in detail, Judge Altman concluded that OPA did not create a cause of action against the United States, noting that the definition of “person” did not include the United States and noting the omission of the fault of the United States in the defenses available to the Responsible Party. Judge Altman then considered the effect of the comprehensive provisions of OPA on the waiver of immunity in the Suits in Admiralty Act and the liability of the United States for negligence under the general maritime law. Finding the language of OPA to be unambiguous that the owner had no right of recovery against the United States, he concluded that OPA displaced the waiver of sovereign immunity and maritime remedy in the SAA. Thus, the owner had no right of recovery for the cleanup/removal costs but could proceed on its claims for damage to the barge and cargo.

From the federal district courts:

Employee of contractor who worked more than 40% of the time on a drillship on the OCS failed the nature element of the seaman status test, and his suit was removable to federal court; Santee v. Oceaneering International, Inc., No. 4:21-cv-03489 (S.D. Tex. Jan. 27, 2022) (Hittner).

Opinion

Shanon Roy Santee was employed by Oceaneering International as a remote operated vehicle technician. He was injured on the drillship, M/V DEEPWATER CONQUEROR, which was performing drilling operations on the outer Continental Shelf off the Louisiana coast. Santee brought this suit in state court in Houston, Texas against his employer Oceaneering, drilling contractor Transocean, and well operator Chevron, asserting claims under the Jones Act and general maritime law. Chevron removed the case to federal court based on federal question jurisdiction under the Outer Continental Shelf Lands Act (arguing that the Jones Act claim was improperly pleaded and did not prevent removal), and Santee moved to remand the case to state court, presenting Judge Hittner with two questions. The first question was whether Santee sufficiently pleaded a Jones Act claim against Oceaneering so as to invoke the bar to removal of Jones Act/FELA cases in Section 1445(a). Judge Hittner held that that Santee’s work as an ROV technician contributed to the function of the vessel and that the 763 days he spent aboard the DEEPWATER CONQUEROR pursuant to Oceaneering’s contract with Chevron (40% of his time over the last five years) satisfied the duration element of the connection test for seaman status. Judge Hittner then analyzed the factors set forth by the Fifth Circuit in the Sanchez case with respect to the nature element of the connection test, and he held that Santee’s allegiance was to Oceaneering, a shoreside employer, and not to the DEEPWATER CONQUEROR; that Santee was a transitory worker who performed discreet services on the vessel pursuant to a contract and was not permanently assigned to the vessel; but that Santee’s work was sea-based. Reasoning that the sea-based nature of Santee’s work was insufficient by itself to satisfy the nature element of the connection test, Judge Hittner held that Santee was not a seaman and the bar to removal was not applicable. Judge Hittner then considered whether there was jurisdiction under the OCSLA, and, as the drillship was attached to the OCS and was involved in exploration and development of oil and gas resources on the OCS, there was federal question jurisdiction under the OCSLA and the case was removable.

Evidence was sufficient to maintain punitive damage claim against seller of water/fuel separator filter on vessel; Gonzalez v. Sea Fox Boat Co., No. 2:19-cv-130, 2022 U.S. Dist. LEXIS 17622 (W.D. La. Jan. 28, 2022) (Cain).

Opinion

This case arises from injuries suffered during an explosion when the plaintiffs were changing out the batteries on a 2014 Sea Fox Commander fishing boat in Louisiana waters [one of the plaintiffs subsequently died from mixed drug intoxication]. The plaintiffs brought this suit in federal court in Louisiana against Sea Fox, which designed and manufactured the vessel, and Yamaha, which sold the engines and water/fuel separating filters (Yamaha asserted that the filters were designed, manufactured, and tested by Dometic Corp./Sierra International). The complaint sought punitive damages. In our December 2021 Update, we discussed Judge Cain’s decision applying Louisiana law for the remedies for the survival action and Arkansas law to the remedies for the wrongful death action. In a subsequent opinion, Judge Cain addressed Yamaha’s argument that its actions/omissions did not rise to the level of egregious misconduct required to sustain a claim for punitive damages. The plaintiffs argued that the filters were defective because the cannister that contains the filtering device used materials that rust or corrode when submerged in water, that the filters are located in an area that allows them to be submerged in water, and that users are not warned that there is a risk that fuel and fuel vapors can be released in the event the filters rust to the point that their integrity is compromised. The plaintiffs argued that Yamaha knew that if the filters were to rust they would corrode and leak fuel and that Yamaha was reckless because it failed to perform design failure analysis on the filters to prevent the corrosion. Yamaha responded that it had sold 1.8 million filters between 2005 and 2020 and only received 4 claims related to corrosion with no claims for injury or death. Yamaha also argued that it could not be held liable for punitive damages for the design, testing, and manufacture of the filters by Dometic/Sierra. However, the plaintiffs demonstrated that Yamaha had played a significant role in the specification and creation of the filter, including removal of the corrosion testing requirement from the final set of specifications. There were also disputes whether testing for corrosion and/or rust was performed and whether the box in which the filter was contained warned of the danger of rust or corrosion. Accordingly, Judge Cain found sufficient evidence to allow the claim for punitive damages to be determined by the fact finder.

Bunker supplier was allowed to file a counterclaim for conversion against the owners of the vessel whose charterer purchased the bunkers; Prose Shipping Ltd. v. Integr8 Fuels Inc., No. 21-cv-341, 2022 U.S. DIST. LEXIS 17465 (S.D.N.Y. Jan. 31, 2022) (Broderick).

Opinion

Maltese companies, Prose Shipping, former owner of the M/V SEA LAVENDER, and current owner, Poles Shipping, which changed the name of the vessel to the M/V POLES, brought this action against Integr8 Fuels, a Marshall Islands company that sells bunkers. Prose chartered the vessel to a Singaporean company, Harmony Innovation Shipping, for a voyage to carry coal from Indonesia to India. Under the charter party, Harmony was responsible for supplying the vessel with bunkers for the voyage. Harmony contracted with Integr8 to purchase bunkers that were delivered to the vessel. At the end of the voyage, Harmony redelivered the vessel to Prose, and Prose paid Harmony for bunkers that remained on the vessel. Harmony did not pay the invoice to Integr8 in the amount of $229,934.83, and Integr8 arrested the vessel at Abidjan, Ivory Coast, after demanding payment from Poles. Integr8 then demanded arbitration in New York, and Prose and Poles brought this action in federal court in New York seeking an order staying the New York arbitration and a declaratory judgment that they had no agreement to arbitrate with Integr8 as they were not parties to the bunker contract between Harmony and Integr8. Integr8 sought leave to file a counterclaim against Poles and Prose for conversion of the bunkers. Integr8 argued that it held title to the bunkers under its contract as a purchase-money security interest until receipt of the purchase price. Thus, when the vessel was redelivered and the plaintiffs took possession of the bunkers that remained on the vessel, the plaintiffs were in wrongful possession of them as valid title to the bunkers could not be transferred to the plaintiffs. Judge Broderick noted that there are two factually analogous summary judgments from the federal court in New York, rejecting bunker suppliers’ conversion claims, but he also cited the language of a Second Circuit case that did not foreclose the counterclaim as a matter of law, because the Second Circuit stated, “evidence that title of the bunkers did not pass to the vessels until payment” might provide a basis for a conversion argument. As the question was raised in the context of a motion for leave to file a counterclaim, and as the factual record was not developed, Judge Broderick held that the counterclaim contained sufficient allegations to state a claim for conversion and would be allowed.

Louisiana Direct Action Statute did not apply to injury to seaman on the OCS; Clement v. Crosby Tugs LLC, No. 21-1346, 2022 U.S. Dist. LEXIS 16572 (E.D. La. Jan. 31, 2022) (Vance).

Opinion

Randy Clement, Jr., a seaman on Crosby Tugs’ offshore supply vessel, M/V CROSBY CRUSADER, suffered a crushed finger when the crane operator on the derrick barge ARAPAHO (owned by Epic Companies) lifted an anchor buoy from the deck of the supply vessel before Clement moved his hand from the buoy. Clement brought this action against Crosby under the Jones Act and general maritime law, but he did not name Epic in the suit because it had filed for bankruptcy in a Texas federal court. Instead, Clement named Epic’s insurer, Travelers Syndicate Management Ltd. as managing agent of Lloyd’s Syndicate 5000, under the Louisiana Direct Action Statute. Travelers objected that it was not subject to the Direct Action Statute as the accident did not occur within the state of Louisiana as required by the Statute, and Judge Vance agreed. As Clement’s injury occurred on the outer Continental Shelf, it did not occur in Louisiana, and it was not subject to the Direct Action Statute.

After the Eleventh Circuit reversed a summary judgment in favor of the cruise line, a federal jury in Florida found the passenger and cruise line equally at fault for an injury sustained when the passenger tripped over a lounge chair; Carroll v. Carnival Corp., No. 1:16-cv-20829 (S.D. Fla. Jan. 31, 2022) (Martinez).

Verdict

Elaine Carroll tripped and fell while walking to dinner on the CARNIVAL PRIDE. Carroll walked behind her husband in a narrow passageway with the ship’s rail on their left and a row of lounge chairs on their right. She fell when her right foot clipped the leg of one of the lounge chairs that protruded into the walkway. Her suit against Carnival alleged causes of action for maintaining a dangerous condition and negligently failing to warn passengers of the dangerous condition. Carnival moved for summary judgment that the positioning of the chairs did not constitute a dangerous condition and that it had no duty to warn because the condition was open and obvious and because Carnival lacked notice of the hazard. Carroll argued that the dangerous condition was not open and obvious because the layout of the chairs in the narrow path forced her to walk behind her husband, obstructing her view, and that she did not have to prove that Carnival had notice of the hazard because it created the dangerous condition. Judge Martinez granted summary judgment to Carnival on the duty to warn claim based on the open and obvious nature of the condition, and he also granted summary judgment on the claim of maintaining a dangerous condition because it was not necessary to decide whether Carnival had notice of the condition in view of its open and obvious nature. The Eleventh Circuit reversed the summary judgment on both claims. Judge Martinez had concluded that the location of the lounge chair was open and obvious based on Carroll’s testimony that she could have seen the chair leg had she looked down and that she did not have to walk behind her husband because of the narrow passageway, However, her admission was countered with testimony that she did have to walk behind her husband, and that his large profile blocked her view. Thus, there was a fact question whether the condition was open and obvious, leading the appellate court to address whether Carnival had notice of the condition. Although Carroll argued that notice should not be required if the cruise line created the dangerous condition, Judge Jordan noted that this issue had been decided by the Eleventh Circuit in the Everett v. Carnival case and the panel could not overturn that decision. However, Judge Jordan found that Carnival did have notice because there was evidence that Carnival had taken corrective measures to prevent people from tripping over the lounge chairs in the walkway. In order to maintain a sufficient area for walking, Carnival required its employees to set the chairs in an upright position, to push them against the glass wall and out of the walking area, and to regularly patrol the area to correct the position of the chairs. Judge Jordan then turned to the claim that Carnival was liable for maintaining a dangerous condition. The district judge reasoned that it was not necessary to determine whether there was notice of the dangerous condition as its open and obvious nature was dispositive of that claim. Adopting the view of the Third Restatement of Torts, Judge Jordan held that the open and obvious nature of a dangerous condition does not bar a claim against a shipowner for negligent failure to maintain safe premises. As there was evidence that Carnival negligently maintained an unsafe walkway that fell below industry standards, the summary judgment on negligent maintenance of a dangerous condition was reversed. See May 2020 Update.

On remand the case was tried before a jury from January 24, 2022 through January 28, 2022, and the jury returned a verdict of $580,000 in total damages, reduced by the assessment of fault at 50% for Carroll and 50% for the cruise line. The jury awarded $170,000 for past medical expenses and $410,000 for past non-pecuniary damages (pain and suffering, impairment, disfigurement, mental anguish, and loss of capacity for enjoyment of life). The jury awarded nothing for future nonpecuniary damages.

Dispute whether rope that fouled the vessel’s propeller and caused an allision was hanging from a bollard on the wharf precluded summary judgment for the operator and owner of the wharf; In re Plimsoll Marine, No. 19-14757, 2022 U.S. Dist. LEXIS 17634 (E.D. La. Feb. 1, 2022) (Milazzo).

Opinion

While the M/V OKALOOSA was departing the First Street Wharf in New Orleans with two loaded barges, a rope became entangled in the vessel’s propeller, stopping the engine and causing the vessel to allide with other vessels and property. The City of Gretna filed a claim in the limitation action filed by the owner of the OKALOOSA, and the owner of the OKALOOSA filed a third-party complaint in the limitation action against the owner and operator of the First Street Wharf (the Board of Commissioners of the Port of New Orleans and Empire Stevedoring). The owner and operator of the wharf moved for summary judgment that there was no evidence that the rope was not debris in the River as opposed to a rope that was hanging from a bollard on the wharf that was owned and operated by the Board and Empire. The Board and Empire presented Judge Milazzo with photographs showing that the line found tied to the bollard after the incident had eyes at both ends (which, they suggested, demonstrated that the rope had not been broken at all). The owner of the OKALOOSA, however, presented the opinion of its expert, Robert Bartlett, who opined that the section of rope that was removed from the OKALOOSA’s propeller and the segment of rope hanging from the bollard at the wharf were from the same rope (the captain of the OKALOOSA also stated that he believed the vessel had caught a line from the wharf). As there was a dispute whether the rope that entangled the propeller of the OKALOOSA was part of the rope hanging from the wharf or was debris floating in the River, Judge Milazzo denied the motion for summary judgment.

Evidence of a crewmember mopping the area where the passenger fell on a cruise ship was sufficient for the passenger to avoid summary judgment; Atkinson v. Carnival Corp., No. 20-20317, 2022 U.S. Dist. LEXIS 18017 (S.D. Fla. Feb. 1, 2022) (Otazo-Reyes), report and recommendation adopted, 2022 U.S. Dist. LEXIS 24338 (S.D. Fla. Feb. 10, 2022) (Martinez).

Opinion Magistrate Judge

Opinion District Judge

Byron Atkinson, a passenger on the CARNIVAL SUNSHINE, brought this action against the cruise line for the injury he sustained when he fell on the Lido Deck of the ship. He claimed that he lost his footing on a wet and slippery surface on the tile floor that was not objectively perceivable. The cruise line moved for summary judgment, and Magistrate Judge Otazo-Reyes rejected Atkinson’s argument that the open-and-obvious defense for a duty to warn was a fact question for comparative fault and not a bar to liability for negligently maintained premises, noting that the Eleventh Circuit has routinely upheld summary judgments based on this defense despite the role of comparative fault. Accepting the testimony of a witness and Atkinson that the wetness and shininess of the surface were not apparent from the angle that Atkinson approached the location, Magistrate Judge Otazo-Reyes held that the passenger had presented a fact question on the issue of openness and obviousness. With respect to constructive notice, Atkinson argued that a prior incident with a fall on carpet in the restaurant where Atkinson fell provided sufficient notice to the cruise line. Magistrate Judge Otazo-Reyes rejected that argument based on the lack of similarity between the incidents (carpet vs. tile), but there was sufficient notice from testimony that a crewmember was mopping in the same location where Atkinson fell, ten minutes before the incident, but did not put out a wet-floor sign. The cruise line contested Atkinson’s argument that he did not have to prove notice because he based his negligence claim on vicarious liability of the cruise line for the negligence of the crewmember who was mopping ten minutes before the incident and who failed to put out a warning sign. As Atkinson failed to adequately identify which employee was purportedly responsible for creating the allegedly dangerous condition, Magistrate Judge Otazo-Reyes held that Atkinson had not sufficiently pleaded a claim based on vicarious liability. Magistrate Judge Otazo-Reyes also recommended that the claim for negligent design be dismissed because there was no evidence that the cruise line participated in the design process for the floor.

Atkinson objected to the report and recommendation of Magistrate Judge Otazo-Reyes, arguing that she misapplied the vicarious liability principles enunciated by the Eleventh Circuit. Judge Martinez disagreed, holding that cases stemming from negligent maintenance of a ship’s premises or failure to warn are direct liability cases and may not be plead under vicarious liability without an allegation that the defendant was on notice of the allegedly dangerous condition.

Decisions from other circuits “throwing cold water” on application of FELA venue provision in Jones Act cases were insufficient for Illinois judge to reconsider denying the employer’s motion to dismiss a Jones Act suit based on a forum-selection clause; Dailey v. ACBL Transportation Services, LLC, No. 21-cv-366, 2022 U.S. Dist. LEXIS 18271 (S.D. Ill. Feb. 1, 2022) (McGlynn).

Opinion

Donald W. Dailey, Jr.  brought this action in the federal district court for the Southern District of Illinois, seeking to recover for injuries he sustained while employed as a deckhand on the M/V FORT DEFIANCE near Cairo, Illinois. Dailey’s employer moved to dismiss the action for improper venue, based on a forum-selection clause requiring suit in the Southern District of Indiana. Judge McGlynn denied the motion with an order that the clause was unenforceable because the Jones Act expressly incorporates the provisions of the Federal Employers’ Liability Act, which includes the right of the plaintiff to select the forum for the suit. Dailey’s employer moved for reconsideration, arguing that the Seventh Circuit had never applied the FELA decision in Boyd in a Jones Act case and that the Seventh Circuit “was suspicious of Boyd’s old-fashioned view of forum selection clauses.” Although Judge McGlynn recognized that “there is recent jurisprudence in other circuits throwing cold water on FELA venue provision application to Jones Act cases,” he did not consider his previous decision rejecting application of the forum-selection clause as being a manifest error. He therefore declined to reconsider his denial of the defendant’s motion to dismiss.

Suits by and against seaman were dismissed when the motion to substitute the administratrix of his estate after his death was untimely; Hornbeck Offshore Operators, LLC v. Knox, Nos. 10-270, 19-12209 (E.D. La. Feb. 2, 2022) (Guidry).

Opinion

The Jones Act claim of Carlos Knox, a Louisiana resident, returns to the Update, again. Knox was injured while working as a galley hand on Hornbeck Offshore’s HOS BAYOU and brought an action in state court in Houston that Knox later dismissed without prejudice. Hornbeck then brought a declaratory judgment action against Knox in federal court in Louisiana to adjudicate whether it owed maintenance and cure to Knox, and Knox filed an action in federal court in Galveston and sought to attach property of Hornbeck. The attachment was dismissed on the basis of equitable vacatur (Hornbeck was subject to suit in the same district where Knox resides (Eastern District of Louisiana)) (August and September 2019 Updates), but the court did not address whether to award any damages for wrongful attachment. Hornbeck then sought damages for wrongful attachment in the Louisiana federal proceeding, but Judge Guidry denied the request, finding no bad faith, malice, or gross negligence on the part of Knox. See May 2020 Update. The two federal actions were consolidated before Judge Guidry in Louisiana, and the court was notified that Knox had died. As no one filed a motion to substitute for Knox within the 90-day period in Rule 25(a), Hornbeck filed a motion to dismiss Knox’s claims. However, a motion to substitute the administratrix of Knox’s estate was filed after an extension was granted and expired but while a second extension request was pending. Considering the motion to substitute to be untimely, Judge Guidry dismissed the suit filed by Knox, and, as Rule 25 applies to suits by or against the decedent, he also dismissed the action filed against Knox by Hornbeck.

Judge applied Lauritzen factors to determine that New Jersey law applied to a maritime contract for electrical work on a vessel; despite factual disputes as to what was owed contractually, the judge held that the contractor was entitled to a maritime lien on the vessel for the work performed; Atlantic Power & Electric Co. v. The BIG JAKE, No. 20-7585, 2022 U.S. Dist. LEXIS 18738 (D.N.J. Feb. 2, 2022) (Hillman).

Opinion

After purchasing the BIG JAKE, Edward Safer, principal of Safer Tug & Barge, contacted friends, including Douglas Galka, a licensed electrician and president of Atlantic Power, to perform work on the vessel to make it seaworthy. Galka and others performed work on the vessel under disputed terms, and a dispute arose between Galka and Safer, with Safer and another contractor claiming that the work was done in exchange for Safer paying for classes and training, payment of expenses, and the opportunity to become licensed tugboat mariners and employable for good money as union seafarers. Atlantic Power, however, invoiced Safer Tug for the work and, when its invoice was not paid, brought this action in federal court in New Jersey against Safer Tug in personam and against the vessel in rem, seeking to recover for breach of contract, unjust enrichment, quantum meruit, and to enforce a maritime lien under the Commercial Instruments and Maritime Lien Act.

Atlantic Power filed a motion for summary judgment, and Judge Hillman began by considering what jurisdiction’s law to apply to the maritime dispute. As there was no choice-of-law clause, Judge Hillman applied the seven factors from Lauritzen v. Larsen and held that New Jersey law applied as it had the most significant relationship to the case. As the parties disagreed about the terms of the contract, Judge Hillman declined to grant summary judgment on the in personam claim for breach of contract; however, Judge Hillman held that necessaries were provided to the vessel in the amount of the invoiced work and that Atlantic Power consequently had a lien on the vessel for the amount sought.

Judge severed yacht owner’s property damage claims against its insurer from those against the charterer which allegedly caused the damage; West Star Yacht, LLC v. Seattle Lake Cruises, LLC, No. C21-223, 2022 U.S. Dist. LEXIS 21466 (W.D. Wash. Feb. 2, 2022) (Martinez).

Opinion

West Star Yacht’s predecessor in interest chartered the M.V. HARBOR LADY to Seattle Lake Cruises. West Star claimed that, when the vessel was redelivered at the end of the charter, it had sustained damage that was beyond ordinary wear and tear and that was covered by its insurance policy issued by Argonaut Insurance. West Star brought this action against Seattle Lake Cruises and Argonaut in federal court in Washington, and Argonaut moved to sever the claims against it from the claims against Seattle Lake Cruises on the basis that the claims were mis-joined. West Star argued that the claims arose out of the same property damage to the vessel, but Argonaut argued that the claims for property damage occurred first and were separate from the insurance issues that could only arise separately and after the property damage had occurred. Reasoning that the charterer and insurer were not jointly and severally liable and that complete relief could be achieved between West Star and each of the defendants individually without the other defendant, Chief Judge Martinez held that joinder of Argonaut was neither necessary nor permissive. Consequently, Chief Judge Martinez severed West Star’s claims against Argonaut as a new case.

Illegible Red-Letter Clause was insufficient to limit recovery against ship repairer; general maritime law limitation on damages for constructive total loss was not tied to the hull policy’s agreed value; Marlin Oilfield Divers, Inc. v. Allied Shipyard, Inc., Nos. 20-2431, 21-575, 2022 U.S. Dist. LEXIS 19475 (E.D. La. Feb. 3, 2022) (Milazzo).

Opinion

Blue Marlin and Marlin Oilfield Divers are the owner and bareboat charterer of the M/V IRON MAIDEN, which was undergoing repairs by Allied Shipyard. The agreement for repairs was guaranteed by the president of the vessel owner, Logan Moore. The vessel was damaged by a fire while the vessel was at the shipyard, and Marlin declined to pay for repairs performed before the fire. The shipyard sent a demand letter seeking payment for the repairs, and Marlin filed this suit in federal court seeking a declaratory judgment that it was not liable for the repairs. The shipyard then filed suit in Louisiana state court against Logan Moore based on his guarantee of the payment for the repairs and sought the dismissal of the federal suit. Judge Milazzo held that the federal action (seeking a declaration that it did not owe for the repair because the shipyard “may be responsible for the fire”) did present an actual controversy to support the court’s jurisdiction; however, she held that the Trejo factors favored dismissal of the federal action. As the state court would have to consider the same issues to adjudicate liability under the guarantee as are involved in the federal proceeding, the federal action would serve no purpose other than duplication of effort. See April 2021 Update. Judge Milazzo did not dismiss, however, the claims of Marline Oilfield Divers and Blue Marlin for damages. Allied Shipyard then filed a motion seeking to limit its tort damages on two grounds. It asserted that the Red-Letter Clause in the contract limited the plaintiffs’ recovery to $250,000. Alternatively, Allied Shipyard argued that maritime tort law limited the value of the recovery for damage to the vessel, as a constructive total loss, to the market value of the IRON MAIDEN at the time of the fire as established by the agreed value in the vessel’s hull insurance policy ($900,000). Judge Milazzo was unable to give relief on the Red-Letter Clause as the only signed agreement before the court did not contain a legible copy of the clause (rejecting the explanation that the poor copy was the result of printing/scanning equipment). With respect to the argument about the limit for the constructive total loss, Judge Milazzo reasoned that Allied Shipyard confused the concept of constructive total loss under the general maritime law and under insurance coverage. Under maritime law, the vessel is considered a constructive total loss when the damage is repairable but the cost of repair exceeds the fair market value of the vessel before the casualty, but under the policy the vessel is a constructive total loss if the repairs exceed the agreed value of $900,000. As the fair market value of the vessel was contested, there was a dispute over whether the vessel was a constructive total loss. Accordingly, Judge Milazzo could not say that the damages were limited only to those recoverable when the vessel is a constructive total loss.

Beneficiaries of Navy seaman who died from asbestos exposure could bring a maritime negligence action against shipbuilders related to systems and components on the vessels but not for the vessels themselves, which are not “products” under general maritime law; Speck v. 3M Co., No. 20-cv-5845, 2022 U.S. Dist. LEXIS 20016 (N.D. Cal. Feb. 3, 2022) (Donato).

Opinion

This is a Navy seaman’s asbestos suit that includes as defendants the shipbuilders of the vessels on which the seaman claimed exposure to asbestos. The shipbuilders argued that the maritime negligence claims against them was nothing more than a recrafted cause of action for strict product liability, that the ship was not a product in a claim against the shipbuilder, and, consequently, the negligence claims should be dismissed. Judge Donato disagreed, reasoning that maritime product liability claims can be premised on both negligence and strict liability. Judge Donato agreed that the vessel itself cannot be considered the product, but the systems and components within the vessel can be products under maritime law. Consequently, Judge Donato did not dismiss the maritime negligence claims, but he did order the repleading of the claims for fraud and conspiracy to defraud because of the failure to plead with the requisite degree of particularity under Rule 9(b).

Lesson for arresting a vessel: naming the vessel and providing its official number is not a sufficient description of the vessel for a warrant for arrest; Peoples Bank v. NORCOASTER, No. 2:22-CV-127, 2022 U.S. Dist. LEXIS 22700 (W.D. Wash. Feb. 4, 2022) (Jones).

Opinion

People’s Bank brought an in rem action to arrest a vessel based on non-payment of a preferred ship mortgage. The pleadings described the debt and non-payment and attached the loan documents and preferred ship mortgage. However, the Motion for Order Authorizing Clerk to Issue Process Pursuant to Supplemental Rule C only described the vessel as the “vessel, NORCOASTER, Official Number 563617.” Judge Jones declined to issue the warrant, holding that the bank had failed to describe the property with reasonable particularity as required by Supplemental Rule C(2)(b). Noting descriptions that were sufficient (for example, “a 38-foot Bertram motor yacht”), Judge Jones denied the motion without prejudice to refiling with a description of the NORCOASTER.

Holding that the CIMLA prohibits maritime lien actions, whether in rem or in personam, against public vessels, resulted in dismissal of a subcontractor’s suit against the United States; Seaward Services, Inc. v. United States, No. 2:21-cv-131, 2022 U.S. Dist. LEXIS 21983 (E.D. Va. Feb. 7, 2022) (Young).

Opinion

The United States contracted with Great Eastern Group to provide certain services to four training vessels, and Great Eastern subcontracted to Seaward Services a portion of the work. GEG failed to pay Seaward Services, and Seaward Services brought this action against the United States, asserting an in personam claim based on a maritime lien against the vessels—raising the question whether maritime liens can attach to public vessels. The United States argued that the Commercial Instruments and Maritime Liens Act prohibits fixing maritime liens on public vessels, but Seaward Services cited decisions of the Eleventh Circuit that the CIMLA does not prohibit in personam actions against the United States. Judge Young noted that the overwhelming majority of district courts, including district courts in the Fourth Circuit (where this action was pending after being transferred from its original venue in Florida), have held that the CIMLA prohibits any action against a public vessel, whether in rem or in personam. Agreeing with the majority of district courts and not the Eleventh Circuit, Judge Young held that the CIMLA prohibits both in rem and in personam actions based on a maritime lien theory against a public vessel and dismissed the suit with prejudice.

Cruise line had sufficient notice of COVID on the vessel; judge deferred ruling on causation for the negligence claims in a non-jury case but dismissed the medical malpractice claims for lack of evidence of proximate cause; Landivar v. Celebrity Cruises Inc., No. 21-20815, 2022 U.S. Dist. LEXIS 22579 (S.D. Fla. Feb. 8, 2022) (Altonaga).

Opinion

Alcides Landivar and his wife, Maria Gutierrez, brought this action against Celebrity Cruises, asserting that Landivar contracted COVID-19 while a passenger on the CELEBRITY ECLIPSE on a cruise from Buenos Aires, Argentina to San Antonio, Chile from which they eventually disembarked in San Diego, California (Landivar tested positive for COVID the day after he disembarked). The plaintiffs are citizens of Bolivia, and, in the absence of diversity, they brought the action pursuant to the court’s admiralty jurisdiction. Nonetheless, the plaintiffs sought an advisory jury trial under the saving-to-suitors clause. Chief Judge Altonaga denied the request for an advisory jury, noting that the plaintiffs gave no reason why the court should spend the time and cost for a jury for claims that fell solely within the admiralty jurisdiction. Chief Judge Altonaga next struck Gutierrez’s claim for loss of consortium, citing the decisions of the Eleventh Circuit that damages for loss of consortium are not recoverable for personal injury claims under the general maritime law (also citing the Parker case from the court in California dismissing the consortium claim for the spouse of a passenger who allegedly contracted COVID-19 on the defendant’s cruise ship). Chief Judge Altonaga also held that the claims of negligent misrepresentation were sufficiently pleaded based on the statement of the ship’s captain that “all guests onboard remain healthy and happy” and statements of the cruise line about the good health of its passengers that were not merely puffery or sales talk in the midst of a global pandemic. See August 2021 Update.

The cruise line moved for summary judgment on the remaining claims (the passengers dropped their claims for negligent provisioning and negligent hiring and retention), so Chief Judge Altonaga addressed the counts for negligent failure to warn, negligent management of the COVID outbreak on the vessel, negligent boarding, general negligence, negligent misrepresentation, and medical malpractice. The cruise line argued that it lacked notice of the risk of COVID transmission on the ECLIPSE, but Chief Judge Altonaga found sufficient notice from several sources. She rejected the cruise line’s arguments that none of the passengers who reported symptoms met the criteria to qualify as Persons Under Investigation under the CDC’s extant guidance because that guidance was issued before the vessel sailed, before the WHO declared COVID a global pandemic, and was subject to change. Additionally, the cruise line had implemented precautionary measures to mitigate the spread of the virus, reflecting notice because of the corrective/precautionary measures it took, and some of the measures were inconsistent with the argument that it should not have been aware of a specific risk that COVID was present on the ECLIPSE. The cruise line also challenged evidence of causation of the negligence counts, including the testimony of Landivar’s expert, Dr. John Bradberry, who was “hard-pressed” to say that the cruise line’s actions were a “direct cause.” Chief Judge Altonaga reiterated that the same rationale for applying Daubert less stringently in a non-jury trial applied with respect to causation. She deferred arguments about the credibility of Dr. Bradberry’s testimony on causation until the non-jury trial. Chief Judge Altonaga ruled differently with respect to causation on the medical malpractice case, which could only be established by expert testimony. Although Dr. Bradberry criticized the ship’s doctors for not recognizing the COVID outbreak earlier and failing to recommend mitigating measures, he had to admit that there was no treatment at the time and that treatment and mitigating measures were not going to help Landivar. Consequently, Chief Judge Altonaga dismissed the medical malpractice case for lack of expert evidence of proximate causation.

Judge did not believe that the vessel owners’ amended complaint (related to land storage of their yacht) alleged admiralty, federal question, or diversity jurisdiction; Watson v. Roff, No. C21-1622, 2022 U.S. Dist. LEXIS 22693 (W.D. Wash. Feb. 8, 2022) (Martinez).

Opinion

Eric and Sarah Watson delivered their rare 1962 Chris Craft Constellation to Latitude Marine for storage in advance of work to repair holes in the vessel’s hull. Disputes arose between the parties, and the Watsons brought this suit, pro se, against several employees of Latitude Marine in connection with their actions related to the vessel during its storage on land. The Watsons moved for an expedited stop to a sale or destruction of the vessel, and Chief Judge Martinez responded by ordering the Watsons to file an amended complaint as the face of the complaint did not establish the subject matter jurisdiction of the court. The Watsons did not allege an adequate basis for federal question jurisdiction, and Chief Judge Martinez found the amount in controversy for diversity to be unclear. Although the Watsons were seeking $1.45 million, Chief Judge Martinez responded that the amount in controversy appeared to be limited to the value of an unseaworthy boat (a further problem with diversity is that both the plaintiffs and defendants appear to be from Washington). The contractual and tortious allegations were based on the storage of the vessel on dry land, outside the scope of navigable waters, and Chief Judge Martinez concluded that the allegations did not invoke the admiralty jurisdiction. See February 2022 Update. The Watsons filed an amended complaint as ordered by Chief Judge Martinez, and Chief Judge Martinez sua sponte considered the subject matter jurisdiction of the court. The owners sought to correct the lack of complete diversity by adding diverse defendants to the nondiverse defendants in the suit. As there were still nondiverse defendants, Chief Judge Martinez held that diversity could not support the amended complaint. For federal question jurisdiction, the Watsons argued that Latitude Marine’s refusal to repair their boat was “about the same treatment” as LGBTQ customers received in the Masterpiece Cakeshop case, but Chief Judge Martinez noted that the Watsons did not allege that they belonged to any constitutionally protected class. Finally, although the Watsons added allegations about damage to their vessel that necessitated taking the boat to Latitude Marine, the additional allegations did not expand on the actions taken by Latitude Marine or its employees, and Chief Judge Martinez dismissed the claims without prejudice.

Cargo’s breach of contract and negligence claims arising from its contract with the NVOCC were sufficient to permit arrest of the vessel; Fluence Energy, LLC v. M/V BBC Finland, Nos. 3:21-cv-01239, 3:21-cv-02014, 2022 U.S. Dist. LEXIS 22816 (S.D. Cal. Feb. 8, 2022) (Benitez).

Opinion

Fluence Energy sought to ship containers of dangerous goods from Vietnam to San Diego, California. BBC Chartering issued a Booking Note to Schenker, a non-vessel operating common carrier for the shipment on the BBC FINLAND. BBC Chartering then issued bills of lading which contained an exclusive forum-selection clause for the federal court for the Southern District of Texas. The bills listed Schenker as the consignee. During the voyage the vessel encountered heavy weather and 87 containers were not delivered. Fluence arrested the BBC FINLAND when it arrived in San Diego, and the vessel was released on a bond of $8.85 million. The day after the in rem action was filed in California, BBC Chartering filed a complaint in federal court in the Southern District of Texas against Fluence Energy, seeking a declaratory judgment eliminating or limiting its liability. Fluence Energy moved to transfer the Texas suit to California based on the suit filed the day before in California (first-to-file rule). BBC Chartering responded that the litigation should remain in Texas based on the mandatory forum-selection clause. Judge Lake in the Southern District of Texas transferred the case, disagreeing that application of the first-to-file rule would re-write the parties’ agreement. Judge Lake explained that the issue whether the forum-selection clause bound the parties did not need to be addressed by the court in the second-filed action. See January 2022 Update. Judge Benitez in the California litigation then addressed the vessel owner’s motion to vacate the arrest and to dismiss the complaint. The vessel owner argued that Fluence Energy’s contract with the NVOCC required the NVOCC to book the cargo and prepare the necessary shipping contracts with the vessel interests. As those contract documents included the bills of lading with the Texas forum-selection clause, Fluence Energy was bound by the clause. Judge Benitez noted, however, that the NVOCC documents involving Fluence Energy did not specifically reference the bills of lading and that Fluence Energy was unaware of the clause. Accordingly, this was a case where enforcement of the forum-selection clause would be unreasonable or unjust. Having survived transfer by deflecting the application of the bills of lading issued by the vessel owner, Fluence Energy then had to thread the needle of establishing potential liability of the vessel, in rem, based on the Sea Waybills issued by the NVOCC to which the vessel owner was not a party. Fluence argued that the vessel was liable in rem to perform its obligations under the Sea Waybills issued by the NVOCC, and the vessel owner argued that it was not bound by the Sea Waybills to which it was not a party and was unaware. Judge Benitez considered this issue to be a factual dispute that was inappropriate for determination on a Rule E motion to vacate an arrest or dismiss the case. Additionally, reasoning that there is a lien for maritime torts and that Fluence Energy had sufficiently alleged a breach of duty by the vessel, Judge Benitez declined to dismiss the negligence claim or vacate the arrest for the negligence claim.

Judge denied spoliation sanctions for failure to preserve Rose Point navigation data for the tug assisting a vessel that was involved in an allision, but deferred ruling on curative measures; In re Marquette Transportation Co. Gulf Island LLC, No. 6:18-cv-1222, 2022 U.S. Dist. LEXIS 23228 (W.D. La. Feb. 8, 2022) (Summerhays).

Opinion

The M/V RANDY ECKSTEIN, a tug owned by Marquette Transportation, was towing six barges in the Lower Atchafalaya River near Morgan City, Louisiana. Due to the conditions of the river, the Coast Guard requested that Marquette engage a tug for assistance, and it was supplied the M/V JOSSETT by C&J Marine Services. Later, the Coast Guard specified that another tug was necessary, and C&J Marine obtained the MISS ELIZABETH from its owner and operator, 40K Marine and Central Boat Rentals. The starboard lead barge of the RANDY ECKSTEIN flotilla allided with a drydock owned by LAD Services, and an employee of LAD, John Williams, was injured in the allision. The owners of the RANDY ECKSTEIN, JOSSET, and MISS ELIZABETH filed limitation actions that were consolidated. Marquette filed a bond for the amount of tug, RANDY ECKSTEIN, $2,684,000. LAD filed a claim for property damage to the drydock and for indemnity for the maintenance and cure payments made to Williams, and Williams filed a claim for his personal injuries. Marquette sought partial summary judgment that the flotilla doctrine did not apply and that the amount of the limitation fund should be limited to the value of the tug and should not include the six barges it was towing. Its argument was based on the fact that there was no contractual relationship between Marquette Transportation and either Williams or LAD. Judge Summerhays noted the “pure tort” exception to the flotilla rule that the owner need not tender all vessels involved in the incident under a single command and owned by the same person when the shipowner owes no duty to the claimant based on consent. “Stated differently, when the alleged damage is inflicted tortiously and there is no contractual or consensual relationship between the offending vessel and the injured party, the pure tort exception applies and the vessel owner need only surrender the value of the actively responsible vessel.” As neither Williams nor LAD alleged any contractual or consensual relationship with Marquette Transportation, Judge Summerhays held that the flotilla doctrine did not apply and that the limitation fund was limited to the fair market value of the RANDY ECKSTEIN plus its pending freight. See July 2021 Update. The owner and operator of the MISS ELIZABETH then moved for summary judgment that there was no evidence that any act or omission of the MISS ELIZABETH contributed to the allision. They argued that the captain of the MISS ELIZABETH was ordered by the captains of the lead tugs to push on the starboard bow of the lead barge of the RANDY ECKSTEIN until the flotilla was caught by the current in the river. Asserting that the MISS ELIZABETH did as it was ordered, its owner and operator argued that it did not contribute to the allision. Williams opposed the motion, citing the testimony of the captain of the MISS ELIZABETH that he backed off when the vessel became endangered by the current. Judge Summerhays reviewed the testimony of the captain and considered it to be inconsistent on the question whether he completed his push as instructed or whether he aborted the operation earlier than planned because the vessel had become caught in the current. The captain’s attempts to clarify that he did not prematurely abort the job did not avoid the fact question that precluded summary judgment. See January 2022 Update. More than 3 years after the allision, and more than a year after Marquette learned that the owner of the JOSSET failed to preserve the Rose Point navigation data of the tug, Marquette filed a motion for spoliation sanctions in which it sought costs and fees in investigating the JOSSET’s pre-allision movements and to prepare the motion together with an adverse inference that the JOSSET’s data would have shown that it prematurely abandoned the RANDY ECKSTEIN and failed to provide the requisite amount of thrust for the rotation of the RANDY ECKSTEIN into position. The tug’s owner, C&J Marine, opposed the motion on the ground that the information was lost in the regular course of business pursuant to its document retention policy. C&J Marine argued that no one asked that the data be retained during the 30-day period before erasure and that no one had suggested during that period that the tug had any liability exposure for the allision. Assuming that a duty to preserve was triggered after the allision, Judge Summerhays noted that there are two provisions in Rule 37 addressing the failure to preserve the data. Subsection (e)(2) addresses acts with the intent to deprive Marquette of the data. Finding no evidence of such intent, Judge Summerhays held that Marquette was not entitled to an adverse inference. Subsection (e)(1), however, allows, upon a finding of prejudice from the loss of information, measures that are no greater than necessary to cure the prejudice. Noting that the argument of prejudice was undercut by the long time Marquette waited to address the alleged spoliation and that C&J Marine argued that other records and data were available to show the positions and speeds of the vessels, Judge Summerhays deferred ruling on the request under Subsection (e)(1) until trial.

Texas law applied to vessel repair contract by choice-of-law clause; International Ship Repair & Marine Services, Inc. v. Great Lakes Dredge & Dock Co., No. 4:19-cv-1049, 2022 U.S. Dist. LEXIS 23555 (S.D. Tex. Feb. 9, 2022) (Bennett), adopting Memorandum and Recommendation, 2022 U.S. Dist. LEXIS 24022 (S.D. Tex. Jan. 13, 2022) (Stacy).

Opinion Magistrate Judge

Opinion District Judge

This case involves a contract to perform repairs on the dredge TEXAS. Disputes arose, and the vessel owner had the dredge towed to another facility where the work was completed by another repairer. The owner brought this suit against the initial repairer for breach of contract; breach of an implied covenant not to hinder, prevent, or interfere with the performance; and quantum meruit. The repairer counterclaimed for breach of contract, negligence/gross negligence, and bailment. Both parties moved for summary judgment, and Magistrate Judge Stacy denied both motions, finding fact questions that prevented summary judgment (applying Texas law). The repairer objected to the recommendations of Magistrate Judge Stacy, arguing that maritime law, not Texas law, applied to its tort claims. Judge Bennett disagreed, reasoning that the damages in the tort claims arose from work within the scope of the contract so that the Texas choice-of-law clause in the contract applied.

Reaching into Massachusetts for crew of their vessels subjected the vessel owners/operators to jurisdiction in Massachusetts for a seaman’s suit under the Jones Act and general maritime law; Ciolino v. Keystone Shipping Co., No. 21-cv-11246, 2022 U.S. Dist. LEXIS 24729 (D. Mass. Feb. 11, 2022) (Casper).

Opinion

Riccardo Ciolino, a resident of Massachusetts, alleged exposure to asbestos while serving as a seaman on four vessels owner or operated by the defendants, the M/V OCEAN CITY, S.S. CHILBAR, S.S. CHELSEA, and the S.S. KEYSTONE TEXAS. The defendants were two Keystone Shipping entities and three entities that chartered vessels to the Keystone Shipping companies. Keystone initially hired Ciolino through a job posting at the National Maritime Union, but thereafter Keystone called Ciolino at his home in Gloucester, Massachusetts and sent him plane tickets to and from the vessel. Ciolino brought this suit against the defendants in Massachusetts, and the defendants moved to dismiss the case for lack of personal jurisdiction, claiming that they did not transact business in Massachusetts (no office, address, bank account, property, or advertising in the state). Judge Casper held, however, that Keystone had “reached into Massachusetts numerous times . . . seeking crew members, including Ciolino” for their vessels, and, but for the contacting of Ciolino in Massachusetts, he would not have been working on the defendants’ vessels. As to the separate entities that owned vessels that were operated by Keystone, there was no evidence with respect to their contacts with Massachusetts, but Judge Casper held that Ciolino could conduct jurisdictional discovery to assess the control that Keystone maintained over those entities.

Passenger on cruise ship who fell on stairs after drinking all day presented fact questions on notice and the open and obvious condition of the stairs, but his claim of negligence in overserving him alcohol was dismissed because the passenger did not believe he was intoxicated; Peare v. Carnival Corp., No. 19-25285, 2022 U.S. Dist. LEXIS 25373 (S.D. Fla. Feb. 11, 2022) (Martinez).

Opinion

Kirk Peare was a passenger on a cruise on the CARNIVAL DREAM for a poker tournament. He began drinking shortly after boarding, and drank continuously through the day. Around 1:00 am, Peare fell down an outdoor staircase and suffered injuries. He brought this suit in federal court in Florida with two counts of negligence–negligent maintenance and failure to warn and negligence of the crew in overserving him alcohol. The cruise line moved for summary judgment on both claims, arguing on the maintenance/warning claim that it was not on notice, that the condition was open and obvious, and that there was no defect in the stairs or handrail. As Magistrate Judge Otazo-Reyes held a hearing and concluded that there were sufficiently similar prior incidents, Judge Martinez held that there was a fact question on the notice issue. With respect to the open and obvious condition of the stairs, Peare testified that he was wet after the incident and did not notice the wet condition of the stairs before his fall. That was sufficient for Judge Martinez to find a fact question on whether the condition was open and obvious. The cruise line argued that it complied with industry standards on friction requirements for the stairs, but Judge Martinez did not consider that to be conclusive whether the stairs were slippery. As to the handrail, there was a dispute between the experts whether the handrail was too low. The cruise line, however, argued that Peale’s testimony that he did not recall if he was holding the handrail when he walked down the stairs was dispositive of any claim based on the handrail. Peale responded that he changed that testimony on the errata sheet because he misunderstood the question, but Judge Martinez had a better answer, concluding that a reasonable juror could find that the reason Peare did not hold onto the handrail was because its height was too low. Judge Martinez did dismiss the claim for negligent overserving of alcohol. Peare testified that he believed he was definitely capable of walking down the stairs and that he did not believe he was overly intoxicated. If Peare did not believe he was intoxicated, how was the cruise line supposed to know that he was intoxicated?

Magistrate Judge schooled the parties on proper affirmative defenses in a passenger injury suit; Gulley v. Royal Caribbean Cruises, Ltd., No. 20-cv-25269, 2022 U.S. Dist. LEXIS 26015 (S.D. Fla. Feb. 11, 2022) (Damian).

Opinion

Arlean Gulley brought this suit in federal court in Florida seeking to recover for injuries she sustained in a fall as a passenger while disembarking the MARINER OF THE SEAS. The cruise line asserted 18 affirmative defenses, and Gulley moved to strike most of them. Disagreeing with the courts that have applied the Iqbal/Twombly pleading standard for affirmative defenses [ruling similarly to Judge Bloom in Birren v. Royal Caribbean Cruises, which is discussed below] and only requiring fair notice, Magistrate Judge Damian declined to strike defenses that the cruise line did not create the dangerous condition, had no constructive notice of it, and that the conditions were not dangerous, as they are not affirmative defenses but merely specific denials. She declined to dismiss open and obvious and comparative fault assertions as they are appropriate affirmative defenses. Defenses asserting negligence of third parties were not dismissed because they sufficiently asserted superseding cause or fault of the passenger, which are valid defenses. Magistrate Judge Damian did dismiss the defense seeking a set-off of the passenger’s recovery by amounts received for her medical care from collateral sources over the objection of the cruise line that it was entitled to challenge the reasonableness and amount of the passenger’s medical expenses, but she did state that the dismissal was without prejudice to the cruise line repleading in accordance with the Eleventh Circuit’s Higgs decision. Magistrate Judge Damian struck the defense invoking the terms and conditions of the ticket contract as the provisions are irrelevant as to the cruise line’s liability and cannot serve as affirmative defenses. Finally, Magistrate Judge Damian declined to dismiss the defenses of failure to mitigate damages and preexisting condition (to which the passenger withdrew her objections without prejudice to reasserting them later in the litigation).

Judge declined to make the dismissal of punitive damage claims without prejudice on claims for Jones Act negligence and unseaworthiness on the chance that a circuit court split might arise some day; Jones v. Morrison Energy Group, LLC, No. 21-1903, 2022 U.S. Dist. LEXIS 25698 (E.D. La. Feb. 14, 2022) (Vitter).

Opinion

Hunter Jones brought this action in federal court in Louisiana against his employer claiming that he was injured while working as a seaman on the DSV JOANNE MORRISON. He sought punitive damages on his negligence and unseaworthiness claims, and his employer filed a motion to dismiss the claims based on the Batterton decision of the Supreme Court and the McBride decision from the en banc Fifth Circuit. In response, Jones argued that the issue may not be completely foreclosed in the future, and there is a possibility that there could be a circuit court split and that the Supreme Court will take up the case. Reasoning that the seaman’s speculation did not assert a valid claim in light of the clarity of the decision in Batterton, Judge Vitter dismissed with prejudice the punitive damage allegations on the Jones Act and unseaworthiness claims.

Judge remanded Jones Act case that was removed based on diversity jurisdiction; Willison v. Noble Drilling Exploration Co., No. 21-1520, 2022 U.S. Dist. LEXIS 25701 (E.D. La. Feb. 14, 2022) (Morgan).

Opinion

Dale Willison was employed as a field engineer for Kongsberg Maritime. Kongsberg had a Master Service Contract (MSC) with Noble Drilling to provide services and products for Noble drilling vessels, and the contract required Kongsberg to indemnity Noble for injuries to Kongsberg employees.  Willison was assigned by Kongsberg to perform repair services for Noble in Guyana, South America. Noble was responsible for transporting Willison from Louisiana to Guyana, which included a driver from Knight Rider Transportation to transport Willison from the airport. Willison was injured when the driver took evasive action to avoid a washing machine in the lane of travel, swerved into the oncoming lane of traffic, and had a collision with a taxi. Willison brought an action against Noble in Louisiana state court under the Jones Act and general maritime law, but Noble had filed for bankruptcy and the case was stayed. Willison added Kongsberg as a defendant in an amended petition, alleging that Kongsberg was liable for Willison’s claims against Noble because of the indemnity provision in the MSC. Willison and Noble reached an agreement in the bankruptcy proceeding by which Willison’s claims against Noble were discharged and the bankruptcy stay was lifted so that Willison could pursue Kongsberg for indemnity. Kongsberg then removed the state case based on diversity, arguing that the Jones Act claim was improperly pleaded and did not prevent removal. Kongsberg first argued that the Jones Act claim had been discharged and could not be a bar to removal; however, Judge Morgan ruled that the discharge did not bar Willison from asserting the same claims through indemnity. Kongsberg next argued that Willison could not maintain a claim under the Jones Act against Noble because he admitted in his petition that he was an employee of Kongsberg. Kongsberg also produced an affidavit that its field engineers were not employees of Kongsberg’s customers. However, Judge Morgan noted that Willison also alleged that he was the Jones Act employee of Noble and that Noble was required to establish that this allegation was undisputedly false. She did not consider the evidence sufficient to establish the falsity undisputedly. Finally, Kongsberg argued that Willison was not a seaman as a matter of law under the summary-judgment-like test used to evaluate claims of improper pleading of Jones Act claims. Willison alleged that he was assigned to work on vessels and was a seaman, but he did not allege facts concerning his connection to a vessel or vessels, but Kongsberg presented evidence that Willison spent less than 1% of his employment on Noble vessels. The conclusory pleading by Willison was insufficient, so Judge Morgan gave Willison the opportunity to submit evidence in support of his argument that he satisfied the seaman status test. See January 2022 Update.

Judge Morgan then addressed Willison’s argument that the case should be remanded because he had asserted a non-removable Jones Act claim. Kongsberg argued that the Jones Act claim was improperly joined, citing the well-established procedure adopted by the Fifth Circuit to address removal of cases with insufficient allegations of Jones Act status. Judge Morgan rejected application of the procedure, stating that the improper joinder exception was not applicable “because the Jones Act claim is not removable even if there is diversity jurisdiction.” [Compare Montero v. Nguyen, discussed above, applying the procedure for consideration of improperly pleaded Jones Act allegations and denying remand of a Jones Act case that was removed based on diversity jurisdiction, and Santee v. Oceaneering International, Inc., discussed above, applying the procedure for consideration of improperly pleaded Jones Act allegations and denying remand of a Jones Act case that was removed based on the jurisdiction of the OCSLA]. Kongsberg did request that, as there was complete diversity, the case be held to be removable and the Jones Act claim be severed and remanded to state court. As that exception is available for removal under the federal question jurisdiction (as in removal based on the Outer Continental Shelf Lands Act) but not for removal based on diversity, Judge Morgan declined the request for removal with a severance and remand of the Jones Act claim.

Expert methodology was sufficiently reliable with respect to elevator maintenance and medical causation for passengers’ injury claims when elevator door closed on them on cruise ship, but with limitations; Birren v. Royal Caribbean Cruises, Ltd., No. 20-cv-22783, 2022 U.S. Dist. LEXIS 26232 (S.D. Fla. Feb. 14, 2022) (Bloom).

Opinion

Kathryn Birren and her daughter Mandy Birren brought this suit against Royal Caribbean for injuries they sustained on the HARMONY OF THE SEAS. They alleged that the elevator doors on deck 6 closed abruptly, striking Kathryn’s arm and forcing her to collide with Mandy. The cruise line responded with twelve affirmative defenses, and the passengers moved to strike seven of the defenses. Before addressing the sufficiency of the pleading, Judge Bloom first had to resolve what standard to apply in assessing the sufficiency. She noted that there are two schools of thought on the sufficiency of pleading defenses and that the Eleventh Circuit has not resolved that split in authority. Comparing the language in Rule 8 (a), (b), and (c), Judge Bloom held that affirmative defenses are not subject to the heightened pleading standard enunciated by the Supreme Court in the Twombly and Iqbal decisions. She then reviewed the defenses asserted and denied the motion to strike as to the allegations of comparative fault, pre-existing conditions, and superseding cause. Judge Bloom also declined to strike the defense that the passengers failed to state a cause of action upon which relief can be granted, treating it as a denial. She did strike the defense that the action was governed by the terms and limitations of the passenger ticket, as limitations on liability are not enforceable against negligence claims. She struck the defense of a set-off for money paid from third parties for medical expenses, reasoning that it was inconsistent with the Higgs case from the Eleventh Circuit; however, she granted the cruise line leave to replead the defense in accordance with the Higgs case. See September 2020 Update.

The cruise line preserved and produced a total of 11 minutes and four seconds of closed-circuit television footage. That included the incident plus 8 minutes and 28 seconds before the incident and 2 minutes and 30 seconds after the incident. The passengers moved for sanctions for spoliation of evidence because the cruise line preserved less than 10 or 15 minutes of footage before the incident and five minutes of footage after the accident. The passengers argued that they were prejudiced by not having footage showing that the doors to the elevator were closing too quickly for at least 15 minutes before the accident—sufficient time to establish notice of the dangerous condition to the cruise line. After reviewing the video, Magistrate Judge Louis noted that the quick closing of the doors did not occur in the first five minutes of the produced footage and only began shortly before the passengers stepped on the elevator and then repeatedly thereafter. Accordingly, Magistrate Judge Louis held that the cruise line had preserved a reasonable amount of footage and no sanctions were appropriate. Judge Bloom concluded that Magistrate Judge Louis’ order was well reasoned and correct in holding that the cruise line had provided sufficient footage, did not act in bad faith, and took reasonable steps to preserve the necessary video footage. See February 2022 Update.

The Birrens and the cruise line then moved to strike each other’s experts, and Judge Bloom gave each side partial relief. Judge Bloom considered the opinions of Tray Edmonds that the elevator was properly maintained and inspected to be sufficiently reliable and helpful to the jury to be permitted; however, she ruled that Edmonds’ opinion that a small girl broke the elevator panel when she pressed the button with her elbow (causing the door close button to be stuck in the pressed position) to be unreliable because it was based on speculation from his viewing of CCTV footage. Kathryn Birren challenged the reliability of the opinion of Dr. Jonathan Gottlieb, an orthopedic spine surgeon, that Birren’s injuries were caused by a motor vehicle accident and not the elevator accident, as Dr. Gottlieb did not review any of the MRIs or images of Birren’s spine and his opinions were based, in part, on CCTV footage. Judge Bloom noted that Dr. Gottlieb had reviewed medical records that included imaging reports, and that was sufficiently reliable methodology. She also allowed his opinion based on the CCTV footage, but he would not be permitted to provide an overview of the footage, which speaks for itself. Similarly, Judge Bloom permitted the testimony of Dr. Richard Rauck, a pain medicine specialist, that Mandy Birren’s alleged Amplified Musculoskeletal Pain Syndrome was not caused by the elevator incident and that her gymnastics and trampoline activities caused greater force on her neck than the elevator incident. The testimony could be based on the CCTV footage, but Dr. Rauck would not be permitted to give an overview of the footage. The cruise line objected to the opinions of Dr. Nicholas Suite as unreliable because he only conducted a telemedicine examination of Kathryn Birren. However, as Dr. Suite did review medical records, CCTV footage, MRI scans, testimony, and other evidence, Judge Bloom considered his methodology to be reliable. Judge Bloom did note that, with respect to future treatment, Dr. Suite only stated that Kathryn Birren was going to need further care and treatment to manage her symptomology. This was insufficient to allow him to testify about future treatment, costs, and medical bills. Finally, the cruise line objected to the testimony of the passengers’ expert, Jeffery Hanson, with respect to the maintenance of the elevator, arguing that he only reviewed materials relating to events that took place after the incident. However, Hanson did conduct a site inspection and reviewed inspection reports from shortly before the incident, industry code, and CCTV footage. Judge Bloom held that this was sufficiently reliable methodology, but that Hanson would not be permitted to give a general overview of the CCTV footage.

Doctor’s knowledge of the risk of re-injury was not the same as the seaman’s knowledge and was not enough to establish comparative negligence of the seaman as a matter of law; maintenance and cure payments that were not owed because of a McCorpen defense could be set off against a Jones Act recovery, and the set off was not limited to duplicative damages; employer was entitled to offset advances on wages only against recovery of lost wages; Merritt v. Marquette Transportation Co. Gulf Island LLC, No. 5:19-cv-00158, 2021 U.S. Dist. LEXIS 26899 (W.D. Kent. Feb. 14, 2022) (Russell).

Opinion

Doniven Merritt injured his right knee while working as a deckhand on Marquette’s FATHER PAT. He brought this action against Marquette under the Jones Act and general maritime law, including a claim for maintenance and cure. Marquette moved for summary judgment on the maintenance and cure claim based on the McCorpen willful concealment defense, as Merritt sustained an injury to his right knee during a high school football practice but did not disclose it to Marquette when he was hired. Although Merritt sought to apply the Second Circuit’s test that requires the seaman know the concealed condition was relevant, Judge Russell noted that the Sixth Circuit, in which the suit was brought, has followed the McCorpen rule from the Fifth Circuit whose first element is simply whether the seaman intentionally misrepresented or concealed medical facts. Although there were disputes about the nature and extent of Merritt’s knee injury, there was no dispute that he did sustain an injury to his knee in 2010 and that he did not disclose it in response to a question whether he had had an injury or pain to his knees. As to the materiality element of the McCorpen defense, Merritt argued that Marquette did not establish that Merritt would have been turned down for the job. However, Judge Thomas found the element was satisfied by the testimony from Marquette’s Medical Director that knowledge of the injury would have prompted further medical investigation. Finally, Merritt argued that his prior injury was not sufficiently serious for there to be a causal link to his injury with Marquette because Merritt had gone for years without symptoms. Although acknowledging the lengthy time gap between the injuries, Judge Russell found that difference to be outweighed by the injury to the exact same location. Consequently, he found all three elements of the McCorpen defense were established and held that Merritt was not entitled to maintenance and cure. See October 2021 Update.

Marquette then moved for summary judgment that Merritt was comparatively negligent on the ground that he should have known that working conditions posed an unreasonable risk of reinjury to his knee. Marquette cited medical testimony that after having one patella dislocation Merritt was many times more likely to suffer another dislocation. Judge Russell noted, however, that the legal standard did not ask what the doctor should have known, and Merritt explained that he believed he had full use of his knee and could engage in physically demanding activity. Accordingly, there was a fact question that prevented summary judgment. Having successfully established its McCorpen defense to the maintenance and cure claim, Marquette argued that it was entitled to a set off of the payments it made for maintenance and cure against any Jones Act damages that Merritt might recovery. Merritt argued that the set off was limited to duplicative damages (equivalent to the maintenance and cure payments), but Judge Russell held that the offset applied to any damages the seaman may recover under the Jones Act. Judge Russell ruled differently, however, in connection with Marquette’s argument for a credit with respect to advance payment of wages. The credit was granted to the extent it was against lost wage payments but not against other Jones Act damages.

Stipulation by all claimants to a pro-rata distribution of the limitation fund was sufficient for the court to lift the limitation stay; In re Whitetail Vessel Co., No. 5:21-cv-129, 2022 U.S. Dist. LEXIS 26902 (W.D. Kent. Feb. 14, 2022) (Russell).

Opinion

This case arises out of the collision in the Tennessee River under the Alabama Highway 117 bridge between a commercial towing vessel, M/V BOBBY THOMPSON, and a recreational vessel with three occupants. One of the occupants was killed, and the other two were injured. The owner of the BOBBY THOMPSON filed this limitation action in federal court in Kentucky, and the three claimants moved to lift the stay so that they could pursue their claims in the forum of their choice. They attached a stipulation in which they agreed to the distribution of the limitation fund pro rata if the limitation court determined that limitation applied. Concluding that the case no longer presented a multiple claims-inadequate fund stipulation and that a concursus was no longer necessary, Judge Russell lifted the stay.

Owner of tour boat on Lake Powell was found liable for violating a state statute on reasonable and prudent speed, causing an excessive wake, violating the maritime duty of ordinary care by navigating down the middle of the channel near a blind turn, and violating Inland Rule 2 for navigating without due regard to the danger posed by its wake; collision of pleasure boat with the tour boat’s wake invoked the Pennsylvania Rule for violations of the Inland Rule and the state statute; husband’s claim for emotional distress arising from being in the zone of danger failed under state law for lack of physical injury; punitive damages were awarded based on the owner’s knowledge of prior wake incidents and conscious indifference; Meador v. Aramark Sports & Entertainment Services LLC, No. 19-08345, 2022 U.S. Dist. LEXIS 28048 (D. Ariz. Feb. 14, 2022) (Tuchi).

Opinion

Larry Meador was operating his 29-foot Hallett 290 powerboat on the navigable waters of Lake Powell with his wife, Annette Meador, and three members of the Lewis family on the boat. Five members of the Lewis family were on jet skis behind the boat. Approaching in the opposite direction was the 76-foot tour boat DESERT SHADOW, owned by defendant Aramark. As the vessels passed, the wake of the DESERT SHADOW impacted the Meadors’ boat, and Annette Meador was injured when the boat rose into the air and crashed back down onto the water. Larry and Annette Meador brought this suit in admiralty in federal court in Arizona against Aramark for negligence and gross negligence, and they sought compensatory and punitive damages. Aramark filed a counterclaim against Larry Meador, seeking equitable indemnity and contribution. The case was tried to the bench in November 2021, and Annette Meador died from cancer on the last day of trial. The Meadors presented several grounds of recovery for negligence under the general maritime law and Arizona law. The Meadors argued that the area of Lake Powell where the accident occurred was a narrow channel under Inland Rule 9 so that the DESERT SHADOW had a duty under Rule 34 to signal with a loud blast as it was entering a sharp bend in the channel where it could not see oncoming vessels. Although considering the applicability of Rule 9 to be a close issue, Judge Tuchi found that the area was not a narrow channel and the duty to signal did not apply. However, Judge Tuchi concluded that Aramark owed a duty of ordinary care under the general maritime law and that Arizona state law and Inland Rules 2, 5, 6, and 7 applied. In determining whether Aramark breached any duty, Judge Tuchi considered conflicting testimony of witnesses and experts as to the speed of the DESERT SHADOW, its location in the channel, and the height of its wake. He concluded that the vessel was proceeding in the middle of the channel, that it was on plane as it approached the turn, slowing to around 15 mph and reaching a speed of around 10 mph, and that it generated a wake of around 3.3 feet or slightly higher, which was the result of the transitional period in speed that generated the largest possible wake at the time it crossed paths with the Meadors’ boat. Judge Tuchi did not believe that the tour boat violated the proper look rule (Rule 5), the safe speed rule (Rule 6), or the requirement of Rule 7 that the tour boat use all available means appropriate to the circumstances to determine if risk of collision exists. He did find a violation of the Arizona statute on reasonable and prudent speed because it specifies that speed must be controlled to avoid swamping other watercraft (concluding that the tour boat should not have made the transition down from plane at a time when it had reduced visibility and could not know if the resulting wake would endanger another watercraft). Judge Tuchi also concluded that the tour boat breached the duty of ordinary care by navigating down the middle of the channel as it approached the blind turn and for slowing its speed and producing the largest wave at the time it passed the pleasure boat. Judge Tuchi also found that the tour boat violated Rule 2 with respect to the ordinary practice of seaman because the captain did not have regard to the danger that the vessel’s wake posed to others. Judge Tuchi applied the Pennsylvania Rule’s presumption of causation to the violations of Arizona’s statute and the Inland Rules, and he then concluded that Larry Meador had an obligation to approach the wake of the vessel at a perpendicular angle but turned away so that the angle of impact was 45 degrees. Judge Tuchi apportioned fault 50% to Larry Meador and Aramark. For damages, Judge Tuchi awarded $70,746.99 for Annette Meador’s medical bills and $160,000 for her pain and suffering before her death from cancer. These amounts were reduced in half for the comparative fault of Larry Meador. Concluding that Aramark was aware, from prior incidents, that its tour boats had the potential to generate dangerous wakes (although Aramark received favorable ratings on its operations from the National Park Service), Judge Tuchi held that Aramark had showed a reckless indifference for the rights of others and awarded punitive damages of $100,000 (mindful of the 1:1 limit in maritime tort cases). Finally, Judge Tuchi addressed Larry Meador’s claim for emotional/consortium damages because he was in the zone of danger at the time of the accident. Citing the Ninth Circuit Chan decision that courts should consult state common law for guidance in determining recovery for maritime claims for emotional distress, Judge Tuchi held that the mental anguish must manifest as a physical injury. Although Larry Meador was impacted severely by the accident, his mental anguish had not manifested as a physical injury, and Judge Tuchi denied recovery.

Marine insurer’s subrogation action against marina for damage to a vessel on the land did not fall within the federal court’s admiralty jurisdiction; Markel American Insurance Co. v. Islands Marine Center, Inc., No. C21-1115, 2022 U.S. Dist. LEXIS 27246 (W.D. Wash. Feb. 15, 2022) (Martinez).

Opinion

Markel American Insurance provided insurance coverage for Mark Lindstrom’s 36-foot Cape George Cutter sailboat. Lindstrom retained Islands Marine Center to haul the vessel out of the water and store it at Island Marine’s facility at Lopez Island, Washington. Islands Marine hauled the vessel out of the water, but, while the vessel was stored on land, it toppled over and fell from its supports. Markel American Insurance made payments to Lindstrom and brought this subrogation action in federal court in Washington against Islands Marine for breach of a maritime contract to haul out, block, and store the vessel (breach of the warranty of workmanlike performance), breach of bailment for the vessel, negligence, and violation of the Washington Consumer Protection Act (seeking treble damages). Markel American Insurance based the jurisdiction of the court on admiralty (for the contract and negligence actions) and supplemental jurisdiction over the Washington Consumer Protection Act claim. Damages were believed to be limited to a repair estimate of $46,355.99, which Chief Judge Benitez noted, sua sponte, is less than the threshold for diversity jurisdiction. Noting that the damage occurred on land so as to lack locality for the tort claim and that the contract was primarily related to storage of the vessel on land and not to commerce or transportation on the water, Chief Judge Benitez stated that he believed that the court lacked admiralty jurisdiction. Accordingly, he ordered the parties to explain why the court had subject matter jurisdiction. See February 2022 Update. After receiving the explanations, Chief Judge Martinez ruled that the court lacked maritime tort jurisdiction as the tort claim failed the locality test (the damage occurred on land a year after the boat had been removed from the water). With respect to maritime contract jurisdiction, Chief Judge Martinez concluded that the subject matter of the contract was primarily related to the storage of the boat on the land and not to its use as a vessel. Chief Judge Martinez distinguished cases involving storage of a vessel for the winter as winter storage aided in maintaining the seaworthiness of the vessel, noting that the portion of the contract at issue related to storage on dry land. Declining to exercise supplemental jurisdiction over the state claims, Chief Judge Martinez dismissed the case for lack of subject matter jurisdiction.

Motion to dismiss cargo claims was not the proper means to assert defenses from the bill of lading that were not apparent from the face of the complaint; Inter Metals Group v. Centrans Marine Shipping, No. 20-7424, 2022 U.S. Dist. LEXIS 28747 (D.N.J. Feb. 17, 2022) (Vazquez).

Opinion

A container of copper wire arrived in Newark, New Jersey with a cargo weight of 20,010 kilograms. By the time it reached Inter Metals’ facility in Pennsylvania, the cargo weight was zero. Inter Metals brought this action in federal court in New Jersey against the parties in the chain of custody or control from the waterfront, and the defendants filed motions to dismiss the complaint. Judge Vazquez held, at the motion to dismiss stage, that Inter Metals had sufficiently alleged claims against the defendants under the Carmack Amendment and that the Carmack Amendment preempted the state claims that were asserted. The defendants then sought to invoke the Himalaya Clause (extending the protections of the Carriage of Goods by Sea Act and defenses in the ocean bill of lading to the carrier’s agents and subcontractors). Judge Vazquez declined to consider the defenses (the 9-month notice and exoneration provisions in the bill of lading and the one-year statute of limitations in COGSA), however, as the Himalaya Clause was not contained in the complaint or documents attached to it, the defenses were not apparent of the face of the complaint, and there were fact questions from the complaint whether the defendants fell within the protection of the Himalaya Clause.

Charterer’s attachment of vessels was vacated because the owner had an agent in an adjacent district and agreed to arbitration there; judge approved interlocutory private sale of arrested vessels but the sale was not free of liens; Glander International Bunkering Inc. v. M/V TERESA, No. 1:21-cv-06830, 2022 U.S. Dist. LEXIS 28930 (E.D.N.Y. Feb. 17, 2022) (Kuntz).

Opinion

Glander International arrested the M/V TERESA and barge ACADIA in the Eastern District of New York based on a lien for nonpayment of bunkers that were provided on order of the vessels’ owner, Unico Marine. JMB Shipping, which chartered the RUBIA, BELLA, and MORENA to Unico Marine, then intervened in Glander’s suit against the TERESA and ACADIA to attach the TERESA and ACADIA as security for arbitration proceedings between Unico Marine and JMB Shipping in New York. Unico Marine moved to vacate the attachment on the grounds that it was present within the Eastern District of New York because it appointed an agent for service of process after the attachment. Additionally, Unico Marine argued that it could be “found” within the adjacent Southern District of New York because it had previously appointed an agent in that district and because its agreement to arbitrate in New York constituted an agreement to personal jurisdiction. Citing the Aqua Stoli decision from the Second Circuit, Unico Marine argued that the relevant district for Rule B extends beyond the district in which the court sits and includes “a convenient adjacent jurisdiction,” and the situation where the attachment proceeding is “across the river” from the district where the defendant is located “is a paradigmatic example of a case where an attachment should be vacated.” Judge Kuntz agreed and vacated the attachment. Unico Marine moved for an interlocutory private sale of the vessels for the sum of $3,350,000, to which other parties did not object. However, JMB Shipping argued that a private sale of the vessels would not result in a sale that is free and clear of liens, and Judge Kuntz agreed that the vessels would be sold but that the sale would not be free of liens absent a showing that it was necessary to preserve the value of the property.

Merely claiming that the arbitrator misapplied the law is not a basis to deny confirmation of an arbitration award; Mirkovich v. Carnival Corp., No. 21-23813, 2022 U.S. Dist. LEXIS 30016 (S.D. Fla. Feb. 18, 2022) (Scola).

Opinion

Stanko Mirkovich sustained an injury while working as a seaman on the CARNIVAL HORIZON and obtained an award from an arbitrator in Nice, France, in the amount of $315,660.71. Mirkovich brought this action in federal court in Florida to confirm the award when the cruise line argued that a portion of the award was not owed because the arbitrator had misapplied the law. The cruise line alerted the tribunal of the dispute but did not file a timely brief with the tribunal. Mirkovich moved to confirm the arbitration award, and the cruise line objected on the ground that the arbitrator had misapplied the law. However, the cruise line did not explain the nature of the misapplication, and did not begin to surpass the “high hurdle” to overturn the award (it is not enough to show that the arbitrator committed an error or even a serious error, and it is only when the arbitrator effectively dispenses his own brand of industrial justice that his decision may be unenforceable). Judge Scola therefore granted Mirkovich’s petition to confirm the arbitration award.

Lack of expert support for COVID-19 claims after the late designation of experts was disallowed resulted in summary judgment on passenger claims against cruise line; Dhillon v. Princess Cruise Lines, Ltd., No. 2:20-cv-11661, 2022 U.S. Dist. LEXIS 30156 (C.D. Cal. Feb. 18, 2022) (Pregerson).

Opinion

Passengers who began to exhibit symptoms of COVID-19 during a cruise from San Francisco to Puerto Vallarta on the GRAND PRINCESS brought this action against the cruise line for negligence and gross negligence. The cruise line moved for summary judgment on the issue of causation, and the passengers presented their own declarations for response together with the opinion of Dr. Barry Fox. However, the plaintiffs failed to timely designate their expert witnesses, and Judge Pregerson held that the violation was neither substantially justified nor harmless. He precluded the passengers from using the opinions of Dr. Fox, and, in the absence of expert evidence of causation, granted summary judgment to the cruise line.

Judge vacated default in limitation action for failure to comply with the Rule F notice requirement; In re Schauber, No. 19-641, 2022 U.S. Dist. LEXIS 30683 (D. Md. Feb. 22, 2022) (Russell).

Opinion

Francis and Evelyn Schauber, owners of the S/V MYSTERY, brought this limitation action in federal court in Maryland after an unexpected gust of wind caused the MYSTERY to capsize, resulting in several persons entering the water. Stephanie L. Meredith died following the accident. A default was entered when no claimants filed a claim in the limitation action. Beneficiaries of Ms. Meredith then filed suit against the Schaubers in federal court in Maryland and moved to vacate the default judgment when they became aware of the limitation action. The beneficiaries argued that they had not been mailed a notice of the limitation action as required by Supplemental Rule F, which provides that the vessel owner must mail a copy of the notice of the limitation action to all persons known to have made a claim and in cases involving a death, the notice must be mailed to the decedent at the decedent’s last known address and to any person who has made a claim on account of the death. The Schaubers argued that they were not required to mail notice to the decedent, but Judge Russell held that their argument was not supported by the language of the Rule. Judge Russell also held that the failure to send the notice to the decedent’s address was sufficient to vacate both the decedent’s survival action and the wrongful death action of the beneficiaries.

Removing toe boards on scaffolding (that were required by OSHA) was not causally related to pipe falling on a worker on an offshore platform; Warner v. Talos ERT LLC, No. 2:18-cv-1435, 2022 U.S. Dist. LEXIS 31317 (W.D. La. Feb. 22, 2022) (Cain).

Opinion

Walter Jackson was employed as a rigger by DLS on an oil and gas production platform owned and operated by Talos on the outer Continental Shelf of the Gulf of Mexico off the Louisiana coast. Jackson and other DLS workers were attempting to lower sections of pipe when one of the sections came loose and struck Jackson, resulting in his death. Jackson’s wife brought suits against Talos and Diverse Safety and Scaffolding, which provided the scaffolding from which the pipe was being lowered, and the suits were consolidated. Diverse Safety and Scaffolding moved for summary judgment that its scaffolding had no causal connection to the accident, despite not having toe boards in violation of OSHA regulations. Jackson’s beneficiaries argued that the toe board is designed to prevent something from falling or rolling off the scaffold, but Diverse Safety and Scaffolding responded that the toe boards were purposefully left off the scaffolding so that the pipe could be more easily lowered to the deck of the platform (the sections of pipe were pushed over the side of the scaffold deck). It was after the pipe was pushed over the side of the scaffold deck (where the toe board would have been) that the pipe disconnected from its rope. That disconnection was unrelated to the condition of the scaffolding, and the duty of Diverse Safety and Scaffolding did not extend to the risk of the pipe disconnecting from its rope while being lowered. Accordingly, Judge Cain dismissed the suit against Diverse Safety and Scaffolding with prejudice.

From the state appellate courts:

Parent company’s procurement of insurance policies covering its shipyard subsidiary did not subject the shipyard subsidiary to jurisdiction in the insurer’s declaratory judgment action in the state of the parent’s domicile where the policies were issued; Huntington Ingalls Inc. v. Certain Underwriters at Lloyd’s London, No. 01-21-262-CV, 2022 Tex. App. LEXIS 739 (Tex. App.—Houston [1st Dist.] Feb. 1, 2022) (Countiss).

Opinion

The London Insurance Market placed excess liability policies from 1968 to 1986 for Tenneco, headquartered in Houston, Texas, that included coverage for Tenneco’s subsidiary, Newport News Shipbuilding. Newport News Shipbuilding was the corporate predecessor of Huntington Ingalls, which was subjected to numerous personal injury claims for asbestos exposure. The London Insurance Market underwriters brought this declaratory judgment action in state court in Houston against Huntington Ingalls, seeking declarations whether the claims were covered under the policies. Huntington Ingalls filed a special appearance to challenge the jurisdiction of the Houston state court, and the district judge denied Huntington Ingalls’ special appearance. Huntington Ingalls appealed, arguing that the coverage issue arose from injury claims involving exposure to asbestos during construction, overhaul, or repair of vessels at a shipyard in Newport News, Virginia, and that work and exposure was entirely outside of Texas. The underwriters responded that the policies were purchased by a company headquartered in Houston through its Houston insurance department with premiums paid from Houston and policies delivered to Tenneco in Texas. Writing for the Texas Court of Appeals, Justice Countiss noted that the contacts cited by the underwriters were conduct by Tenneco in Texas and did not provide any evidentiary basis for imputing that conduct to Huntington Ingalls’s predecessor, Newport News Shipbuilding. As a parent company’s interactions with its subsidiary are insufficient to subject the subsidiary to jurisdiction in the state where the parent company conducts business, and as the insurers did not establish that Newport News Shipbuilding was involved in the negotiation or administration of the insurance, the appellate court reversed the denial of Huntington Ingalls’ special appearance and rendered judgment dismissing the insurer’s suit.

Suit against dock owner by seaman who was injured on the vessel during loading of a lifeboat onto the vessel was time barred under state law; Dinh v. Gulf South Inc., No. 21-542, 2022 La. App. LEXIS 181 (La. App. 3d Cir. Feb. 9, 2022) (Cooks).

Opinion

Paul Dinh claimed that he was injured while working as a deckhand on the F/V PRINCESS MARY during the loading of a lifeboat onto the vessel when he was pinned between an I-beam and the lifeboat. Dinh settled with his employer and brought this action in Louisiana state court against Gulf South, which owned the dock from which the lifeboat was being loaded and the forklift being used in the process. He claimed that Gulf South negligently entrusted the loading equipment to the captain of the vessel. Gulf South argued that Louisiana law applied because the action complained of against Gulf South was the negligent entrustment of the forklift on the land and that the case was not timely filed under Louisiana’s one-year prescriptive period. The district judge dismissed the case, and the Louisiana Court of Appeal affirmed the dismissal. Writing for the court, Chief Judge Cooks rejected the argument that maritime law applied because the injury involved appurtenances of the vessel—the lifeboat and captain who was operating the forklift, noting that the Admiralty Extension Act could not be invoked because Gulf South did not own the lifeboat or employ the captain.

Kenneth G. Engerrand
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Quote:

In our February 2022 Update, we discussed the decision in Vizinat v. Dupre Marine Transportation, LLC, No. 20-1857, 2021 U.S. Dist. LEXIS 247903 (E.D. La. Dec. 30, 2021), in which Judge Ashe declined to apply the rule of forfeiture in response to the employer’s motion for partial summary judgment. The seaman’s employer argued that it was no longer obligated to pay maintenance and cure for the failure of the seaman to follow the orders of his doctors for two years to reduce his A1C level below 7.5. Judge Ashe concluded that the issue should be submitted to a fact finder.

The decision in Vizinat does cause us to recall the colloquy between Judge Gewin and Judge Gee in Coulter v. Ingram Pipeline, Inc., 511 F.2d 735 (5th Cir. 1975). In reversing the decision of the district judge to apply the rule of forfeiture to the maintenance and cure claim of a seaman (weighing 350 to 375 pounds) who did not achieve maximum cure when he failed to follow his prescribed diet and exercise and weighed more than ever, Judge Gewin commented: “Common sense and personal experience tell us how emotionally and physically difficult it would be for a person of this size to maintain an exercise program and a daily diet of 1500 calories without supervision and medical advice.” Id. at 738.

Judge Gee dissented and took the majority to task:

The foundations of the law maritime will not likely be shaken by the amiable result which the majority reaches. Under it the district court is to reconsider whether a fat seaman, unwilling to stay on his diet but able to con the treating physician provided by the shipowner into releasing him from supervision, should or should not be rewarded for his eloquence, and if so, by how much. No one seriously disputes that had Coulter kept on his diet he would have attained maximum recovery. No one argues that he did not abandon it about the time maintenance was stopped, like one who drops a glass bottle of nasty but curative medicine. Yet somehow it has been determined that his abandonment of it may not have been an unreasonable refusal of treatment. This conclusion seems to rest on the shipowner’s failure to pursue Coulter with sufficient ardor, nagging and beseeching him (presumably, since it could not force him) to stick to tea and celery and leave the beer and beans alone.

***

Further, as noted above, however benevolent to Coulter the majority’s result may be, casting the shipowner for failing to make a seaman do a thing it had no power to require seems to me unjust — let alone rewarding the seaman for his own delinquence. Even afloat, responsibility for a result should not be pressed much beyond power to effect it. Charitably doing so here, we inch toward new heights of anachronism the image of that noble but feckless Ward of the Admiralty, the sea-chest-bearing sailor with heart of oak, good company on a voyage to Treasure Island but scarce among the ranks of today’s seagoing technicians.

Id. at 739-40.

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© Kenneth G. Engerrand, February 28, 2022; redistribution permitted with proper attribution.

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