May 2020 Longshore/Maritime Update (No. 252)
Notes from your Updater:
Effective April 6, 2020, the administration of the Longshore Program of the Office of Workers’ Compensation Programs was consolidated into three compensation districts, Eastern, Southern, and Western with sub-offices in Boston, New York, and Norfolk (Eastern District), Jacksonville, New Orleans, and Houston (Southern District), and San Francisco, Seattle, and Long Beach (Western District). The notice is available at: https://www.dol.gov/owcp/dlhwc/lscontac.htm.
Effective May 4, 2020, the OWCP will require the use of new cover sheet forms where a party desires certain interventions or actions from the OWCP. The new LS-4, LS-5, LS-6, LS-7, LS-8 and LS-9 are available on the OWCP’s forms page at https://www.dol.gov/owcp/dlhwc/lsforms.htm. The OWCP expects that the forms will decrease deficiencies in submissions. Failure to use the forms may slow down the processing of the submission.
On April 10, 2020, Chief Administrative Law Judge Henley issued the linked Supplemental Administrative Order and Notice, extending his Order of March 19, 2020 (April Update), which suspended all hearings and procedural deadlines, with certain exceptions, through May 15, 2020. The Supplemental Order provided:
The March 19 Order remains in effect until May 15, 2020, and, effective on May 16, 2020, all in-person hearings are further suspended through at least Friday, July 24, 2020.
The parties may jointly petition the presiding ALJ to conduct a telephonic, video, or other remote hearing or for a decision on the written record without a formal hearing in individual cases prior to Monday, July 27, 2020.
Hearings that were set to be heard between May 15 and July 25, 2020, will be rescheduled.
All time limitations and procedural deadlines in cases currently pending before the OALJ are tolled and suspended until at least June 1, 2020, unless ordered otherwise by the presiding ALJ. The new deadline will be determined by the date on which the period of tolling ends, currently June 1, 2020, or by separate order of the presiding ALJ. Chief Judge Henley gave as an example a deadline of April 17, 2020, which is 25 days after the March 23, 2020, effective date of the prior tolling order, so that the new deadline would be June 26, 2020, which is 25 days after the tolling order is currently scheduled to expire on June 1, 2020.
For cases not yet docketed, the parties who need to file a request for hearing before an ALJ must do so within the limitations period (noting also that the OALJ does not have authority to extend deadlines for filing an appeal with the Benefits Review Board).
The OALJ will not conduct in-person mediation or settlement judge conferences until at least July 24, 2020, but will conduct telephonic mediations and settlement conferences with the consent of all parties and availability of the mediator or settlement judge.
The OALJ will continue to accept filings by email in accordance with the instructions on the OALJ website at https://www.oalj.dol.gov/FILING_BY_EMAIL.HTML or at https://www.oalj.dol.gov/ and clicking on the link found at FILING BY EMAIL.
The hold on issuance of decisions until April 15, 2020, has been modified. The Supplemental Order provided that, beginning on April 16, 2020, the OALJ would begin issuing decisions on a regular basis and serving a copy of the decision on the parties by email, unless the OALJ did not have the email addresses of all parties or the presiding ALJ determined that a party would be substantially prejudiced in the ability to comply with the decision or to exercise appellate rights.
On April 14, 2020, the Fifth Circuit withdrew the opinion issued in Sanchez v. Smart Fabricators of Texas, L.L.C., No. 19-20506 (5th Cir. Mar. 11, 2020), which held that a welder, whose duties were performed on jack up rigs that were jacked up, was not a seaman as a matter of law and his exclusive remedy was pursuant to the LHWCA.
On April 20, 2020, the Supreme Court denied the writ of certiorari sought by Centaur, L.L.C. (No. 19-1146), challenging the decision of the Fifth Circuit (December 2019 Update) in Barrios v. Centaur, L.L.C., that established a test to determine whether non-oilfield contracts are maritime in connection with a contract to build a concrete rail on a dock in the Mississippi River (requiring the use of vessels). The Fifth Circuit held that admiralty law applied to the contract in connection with the injury to a marine construction worker.
On April 20, 2020, the Supreme Court also denied the writ of certiorari sought by fishermen (No. 19-739, Barbour v. Halliburton Co.), challenging the decision of the Fifth Circuit in In re Deepwater Horizon (Lake Eugenie Land & Development, Inc. v. Halliburton Energy Services, Inc.) that affirmed the district court’s decision to dismiss the fishermen’s claims against Transocean and Halliburton for punitive damages arising out of the DEEPWATER HORIZON/Macondo blowout for failing to comply with the district court’s pretrial order (September 2019 Update).
On the LHWCA Front . . .
From the federal appellate courts:
Sixth Circuit awarded attorneys’ fees in Black Lung Benefits Act case; Coleman v. Christen Coleman Trucking, No. 18-3317, 2020 U.S. App. Lexis 11739 (6th Cir. Apr. 13, 2020) (Norris).
After Mac Coleman prevailed on his Black Lung Benefits Act case, his attorney petitioned the Sixth Circuit for an award of $27,485 in fees at a rate of $275 per hour together with $100 per hour for the assistance of a law student. The employer objected to the hourly rate for the attorney, contending that it should be $200 per hour; to any compensation for the student’s time because she was likely an unpaid intern; to the amount of time as excessive; and to clerical tasks such as e-filing documents. The Sixth Circuit, however, rejected all of the employer’s arguments, finding the hourly rates to be appropriate, noting that without the law student’s work the attorney would have had to spend additional hours at his higher rate, rejecting the excessiveness argument for lack of explanation, and denying the argument on clerical tasks as being insignificant.
Ninth Circuit held that unauthorized settlements of third-party suits by the daughters of the deceased ship repairers, which released all heirs, did not bar the widows’ LHWCA death claims pursuant to Section 933(g); Hale v. BAE Systems San Francisco Ship Repair, Inc., No. 18-72869 (9th Cir. Apr. 17, 2020); Verducci v. BAE Systems San Francisco Ship Repair, Inc., No. 18-73063 (9th Cir. Apr. 17, 2020) (per curiam).
These appeals involve deaths of ship repairers from asbestos exposure. Their daughters brought third-party actions and signed settlement agreements that released the claims of all heirs. The widows of the deceased workers brought claims for death benefits under the LHWCA, and Administrative Law Judges Larsen and King denied the claims for failing to obtain the approval of the decedents’ employer, triggering Section 933(g) of the Act. The Benefits Review Board affirmed the denial of the claims, but a majority of the Ninth Circuit panel disagreed, holding that, even if the widows were bound by the settlements signed by the daughters, the widows had not technically entered into the settlement. Judge Gould dissented, citing the definition of “enter” in Black’s Law Dictionary, meaning “to become a party to.” As the widows were bound by the settlements, Judge Gould concluded that they were parties to the settlements and had entered into them in accordance with the meaning of Section 933(g).
Ninth Circuit rejected Florida attorney’s argument for award of fees at $485 per hour and awarded $350 per hour based on the market rate in South Florida for an LHWCA/DBA case heard in San Francisco; Kupke v. Director, OWCP, No. 18-72575 (9th Cir. Apr. 21, 2020) (per curiam).
This appeal arose from a hearing loss case pending before Administrative Law Judge Gee in San Francisco. The case settled, and the Florida attorneys for the claimant submitted petitions totaling $133,925.00 in fees, based on hourly rates up to $485 per hour. In an 87-page opinion, Judge Gee determined that the appropriate market to determine the hourly rate was South Florida, performed her own research to get a sense for that local market, decided that the appropriate hourly rate was $350 per hour for the highest billers in the case, reduced the hours for behavior that was unreasonable and baffling, and ultimately awarded a total of $66,700.50 in fees. The Benefits Review Board affirmed Judge Gee’s decision, and the firm appealed to the Ninth Circuit, arguing that Judge Gee failed to give the firm official notice that she intended to rely on fee awards from the Southern District of Florida. The Ninth Circuit did not have to address that argument as the firm failed to raise the issue before the Benefits Review Board. However, the Ninth Circuit noted that, even if Judge Gee had erred by failing to give the firm notice of her intent to rely on fee awards from the Southern District of Florida, the failure to give notice was not prejudicial to the firm. The firm’s briefs failed to explain why the decisions relied on by Judge Gee were inappropriate indicators of the prevailing rates in South Florida. Additionally, after a request for supplemental briefing, the response from the firm was “bereft of any arguments on this point.” Therefore, the Ninth Circuit affirmed Judge Gee’s award.
Suit filed by laborer on vessel after default date in limitation action was untimely; Collins v. Double J. Marine, L.L.C., No. 19-30659 (5th Cir. Apr. 27, 2020) (per curiam).
Roosevelt Collins was injured on February 16, 2016, while working as a laborer on the M/V ATLANTIC GRACE, when the vessel was struck by the M/V MISS SYLVIA. The MISS SYLVIA filed a limitation action, and the court ordered all claims to be filed by September 12, 2016. Four individuals and one insurer filed claims, and, in May 2017, the court defaulted all claims that had not been filed. The owners of the MISS SYLVIA settled with the claimants on September 27, 2018, and the limitation action was closed on November 26, 2018. Three months later, Collins brought this separate suit against the owners of the MISS SYLVIA, and the court dismissed it as untimely. Collins asserted that he did not learn of the limitation action until after it had been closed and that he had not received direct notice of the action as is required for known claimants. He did not dispute that the owner had properly given constructive notice by publication, but he claimed that he was a known claimant because he had filed federal and state workers’ compensation claims and was listed as a witness in the limitation action. However, listing Collins as a witness about the facts of the accident gave no hint that he was a known claimant. Whether he may have been able to file a late claim in the limitation action was not presented as he did not attempt to do so. His separate action was untimely, and the Fifth Circuit affirmed its dismissal.
From the federal district courts:
Contractor could not escape liability by arguing that its employee was a borrowed servant of the company that hired it; Crews v. FAE LLC, No. 6:18-cv-1647, 2020 U.S. Dist. Lexis 61539 (W.D. La., Apr. 7, 2020) (Juneau).
Kinder Morgan hired Allison Offshore to perform construction work on a pipeline along Bayou Boutte near Duck Lake in the Atchafalaya Basin in Louisiana. Allison Offshore then hired Frogco Amphibious Equipment to provide amphibious equipment, including excavators and operators (including Roland Guillory) to work on the project. One of Allison’s employees, James Crews, Jr., was injured when Guillory lost control of a load of sheet pilings that he was moving with a marsh buggy excavator, causing Crews to fall into the bayou with the load of sheet pilings landing on top of him. Crews brought suit against Frogco under maritime law and Louisiana law for the negligence of Guillory, and Frogco moved for summary judgment that it was not vicariously liable for Guillory’s negligence because Guillory was a borrowed servant of Allison Offshore. Crews responded that Guillory could not be the borrowed servant of Allison Offshore as the contract between Frogco and Allison Offshore provided that Frogco was an independent contractor and that its employees were not agents of Allison. Judge Juneau did not have to decide if maritime law or Louisiana law applied, considering the factors to be the same under either to determine the borrowed servant question. Applying the factors from Ruiz v. Shell Oil, Judge Juneau found that there were fact questions regarding the tools necessary for the work and who provided them, who had control over Guidry, and whether the parties impliedly altered the contractual provision with respect to the relationship between the parties. Therefore, Judge Juneau held that resolution of the borrowed servant issue was inappropriate at the summary judgment stage of the litigation.
Some FMLA claims by a shipyard worker against his employer and its LHWCA carrier were dismissed, but a claim for illegal practice of law against the adjuster was allowed to continue; Tate v. Philly Shipyard, Inc., No. 19-5076, 2020 U.S. Dist. Lexis 67187 (E.D. Pa. Apr. 16, 2020) (Bartle).
Robert Tate was injured while working for Philly Shipyard and was placed on modified duty with restrictions. He argued that, despite his request for a modified job, neither his employer nor its LHWCA carrier, Signal Mutual, ever discussed a modified job and that Signal and its adjuster failed to notify the shipyard of the medical necessity of providing a modified-duty job to Tate or of the work restrictions approved for Tate. He asserted that he was forced to take leave under the Family and Medical Leave Act and was eventually forced out of work. Tate also complained that the adjuster counselled him about his obligations under the LHWCA in order to benefit the shipyard, and she never advised him about the necessity for preapproval for medical treatment or suggested that he obtain legal advice. Additionally, Tate argued that the adjuster denied him medical treatment as well as payment of compensation. Tate brought this suit against the shipyard and its employees allegedly involved in these decisions and against Signal and its adjuster on a number of grounds that were addressed in the defendants’ motions to dismiss. Tate brought claims against all of the defendants under the FMLA for interference, retaliation, and discrimination. Although Signal contended that it was not Tate’s employer, Judge Bartle noted that employers are not the only parties who may be held liable under the FMLA. Thus, Signal and its adjuster could be held liable if they were acting in the employer’s interest and violated the statute. Tate argued that the Signal defendants took on the duty to provide the medical treatment for him, should have known of his work limitations, and were responsible in part for his termination. However, Judge Bartle found insufficient pleading to support these contentions and dismissed the FMLA claims against Signal and its adjuster. As Tate alleged that he was placed on FMLA leave because of medical issues caused by his injury, Judge Bartle dismissed the claim against the shipyard that it forced Tate to take FMLA leave. However, Judge Bartle found sufficient temporal proximity between Tate’s termination and his taking FMLA leave to allow the retaliation and discrimination claims under the FMLA to survive the shipyard’s motion to dismiss. Judge Bartle then addressed the claims against Signal and its adjuster for negligence under Pennsylvania law and for illegal practice of law. He dismissed the claim that the Signal defendants were negligent for not notifying the shipyard defendants of his need for workplace accommodations, which resulted in his being forced out of work, as he failed to plead a plausible basis for a duty to report work restrictions to the shipyard. Tate alleged numerous theories against the Signal adjuster for the claim of illegal practice of law, including counseling him on his obligations under the LHWCA for the benefit of Signal and the shipyard, never suggesting that he seek legal advice, not notifying him that pre-approval was necessary for medical treatment, refusing to discuss a change of physician, not advocating for modified work, and denying medical treatment and workers’ compensation payment. Judge Bartle noted that most of these claims had nothing to do with the practice of law. However, Judge Bartle did conclude that the allegation that the adjuster improperly counseled Tate on his duties and obligations under the LHWCA for the benefit of the defendants was sufficient to withstand a motion to dismiss, and the question whether Tate “will be able to prove illegal practice of law must await another day.”
Judge found sufficient evidence of an intentional tort to defeat the shipyard’s motion for summary judgment that the LHWCA and state workers’ compensation act are the exclusive remedy for an employee’s death from lung cancer caused by exposure to asbestos; Dempster v. Lamorak Insurance Co., No. 20-95, 2020 U.S. Dist. Lexis 73163 (E.D. La. Apr. 27, 2020) (Brown).
Callen L. Dempster was employed by Avondale from 1962 to 1994 and was exposed to asbestos and asbestos-containing products that allegedly resulted in his death from lung cancer. He originally brought this suit against Avondale and various product defendants in state court, and his beneficiaries continued the litigation after his death. The case was twice removed to federal court (pursuant to the Federal Officer Removal Statute). In order to avoid the exclusive remedy provisions of the LHWCA and Louisiana workers’ compensation statute, the plaintiffs asserted that Dempster’s employer, Avondale, had committed an intentional tort. Before the second removal, the state court denied Avondale’s motion for summary judgment on the intentional tort claim, and Chief Judge Brown found no substantial reasons for reconsidering that ruling. Nonetheless, she addressed the merits of Avondale’s motion for summary judgment and held that there were genuine issues of material fact in dispute with respect to the knowledge of the hazards of asbestos for Avondale and its executive officers. Consequently, she could not determine as a matter of law whether Avondale had a specific intent to injure Dempster and denied Avondale’s motion for summary judgment.
And on the Maritime Front . . .
From the United States Supreme Court:
Supreme Court narrowed the Ninth Circuit’s broad interpretation of the scope of the Clean Water Act, holding that discharges of pollutants that end up in navigable waters are prohibited without a permit when there is a discharge from a point source directly into navigable waters or when there is the functional equivalent of a direct discharge; County of Maui, Hawaii v. Hawaii Wildlife Fund, No. 18-260 (U.S. Apr. 23, 2020) (Breyer).
The complicated and long-standing disputes over the scope of the Clean Water Act continued with the litigation arising from the County of Maui’s wastewater reclamation, treating sewage and pumping the treated water into ground wells from which the effluent travels about half a mile and into the Pacific Ocean. The Clean Water Act prohibits any addition of a pollutant from a point source to navigable waters without a permit from the Environmental Protection Agency. Environmental groups brought this suit, arguing that the County of Maui violated the Clean Water Act by its discharge without a permit. The Ninth Circuit agreed, ruling that a permit is required when a pollutant is “fairly traceable” from the point source to navigable waters. Writing for a majority of six justices, Justice Breyer held that the Ninth Circuit’s construction of the CWA was too broad. He stated that Congress did not require a permit for all discharges that ultimately end up in navigable waters. Instead, he held that a permit is required when there is a discharge from a point source directly into navigable waters or when there is the functional equivalent of a direct discharge. In remanding the case to the Ninth Circuit to apply the new standard, Justice Breyer did give some guidance of what may be relevant in deciding whether a discharge is the functional equivalent of a direct discharge, with time and distance being the most important factors in most cases. He noted that the courts will provide additional guidance in future cases and that the EPA can also provide administrative guidance. Thus, in the absence of a clear line, the Court has ensured that the ongoing dispute over the scope of the CWA will continue to require litigation (and law school exam questions) for years to come.
From the federal appellate courts:
Complaint of passengers for late cancellation of cruise was properly dismissed for failure to specify individual physical and emotional harms and because the economic loss rule barred the passengers’ financial injuries; Heinen v. Royal Caribbean Cruises Ltd., No. 19-13750, 2020 U.S. App. Lexis 9754 (11th Cir. Mar. 30, 2020) (per curiam).
After Royal Caribbean cancelled a cruise from Galveston on the day that Hurricane Harvey struck the Texas coast, passengers who had booked passage on the cruise and who had traveled to Galveston and endured hurricane-force conditions brought this suit alleging negligence and negligent infliction of emotional distress. They sought to recover for their physical and emotional injuries and for their financial losses. The district judge dismissed the complaint, and the Eleventh Circuit affirmed. With respect to the claims of physical and emotional distress, the complaint contained a list of injuries, but the complaint, after amendment, failed to identify which person suffered which injury. This pleading in bulk failed to state a claim. In contrast, the allegations of financial harm (out-of-pocket expenses while the plaintiffs were trapped in Texas during the storm) were specific and factually supported. However, the plaintiffs failed to state a claim for the economic losses because they were barred under the maritime economic loss rule (the losses were not tied to any physical injury to their persons or property or to any emotional harm alleged in the claim of negligent infliction of emotional distress).
Lien of Preferred Ship Mortgagee was not equitably subordinated to lien for necessaries, and the court was not required to marshal assets with a vessel that was not subject to the court’s jurisdiction; TMF Trustee Ltd. v. Monjasa Ltd., No. 19-55532, 2020 U.S. App. Lexis 10572 (9th Cir. Apr. 3, 2020) (per curiam).
TMF Trustee held a preferred ship mortgage on the M/T MEGACORE PHILOMENA and arrested the vessel to enforce its lien. Monjasa, a maritime lienor for necessaries whose line was outranked in priority by the ship mortgage, intervened and sought to equitably subordinate the ship mortgage lien on the ground of inequitable conduct by the mortgagee. Unable to establish that the financial transaction underlying the mortgage was a sham, Monjasa argued that the arrest thwarted a sale of the vessel. However, the court responded that TMF Trustee was justified in concluding that the sale was unlikely because the date of sale had passed a month before the mortgagee arrested the vessel. The court also rejected the argument that the timing was inequitable (on the ground that liens were accumulating) because, even if TMF Trustee knew about the liens, conduct based on negligence or indifference is insufficient to allow equitable subordination. Finally, the court rejected Monjasa’s argument that TMF Trustee should be required to pursue another vessel before receiving assets from the sale of the MEGACORE PHILOMENA under the marshaling of assets doctrine, as the other vessel was not subject to the jurisdiction of the court to give the court the authority to order a marshaling of assets.
Eleventh Circuit affirmed conviction of the unlicensed captain of a commercial charter performance yacht for violation of the Seaman’s Manslaughter Statute based on simple negligence in backing up the vessel without ascertaining that there was no one in the water astern of the vessel; United States v. Alvarez, No. 18-15084, 2020 U.S. App. Lexis 10839 (11th Cir. Apr. 7, 2020) (per curiam).
Mauricio Alvarez, who has never held a Coast Guard license or even taken the captain course, served as captain on the MIAMI VICE, a performance yacht that was offered for commercial charters. After taking several passengers on a birthday celebration that included swimming, Alvarez put the engines of the yacht in reverse without checking to see whether anyone was in the water astern of the yacht, resulting in the death of one of the passengers. Alvarez was charged with causing the death of the passenger through misconduct, negligence, and inattention to his duties in violation of the Seaman’s Manslaughter Statute, was found guilty, and was sentenced to 33 months in prison. Alvarez challenged the mens rea requirement of the statute, arguing that it unconstitutionally criminalized simple negligence. Noting that the statute does not require a heightened standard, such as gross negligence, and that the Supreme Court has not required scienter in every criminal statute, the Eleventh Circuit upheld Alvarez’s conviction based on simple negligence.
Ninth Circuit affirmed nonpecuniary awards for worker who was unhappy and ornery all the time after his accident but reversed the award for future wage loss when the worker continued to work and there was no indication of an imminent risk he would lose his job; Gibbons v. Union Pacific Railroad Co., No. 19-15839 (9th Cir. Apr. 9, 2020) (per curiam).
We review this FELA case for the applicability of FELA cases to the Jones Act. Greg Gibbons was injured in a bridge collapse and brought this action against his railroad employer under the FELA. After the jury awarded Gibbons $500,000 for future medical and hospital expenses, $1,500,000 for future lost wages and benefits, $1,500,000 for mental and emotional damages, and $1,500,000 for physical pain and suffering, the railroad appealed. Citing Gibbons’ testimony that he was unhappy and ornery all the time after the accident, the Ninth Circuit affirmed the nonpecuniary awards. However, the appellate court reversed the award of $1,500,000 for future lost wages and benefits as Gibbons remained employed without restrictions at a salary of $60,000 to $70,000 per year and there was no evidence of imminent risk the he would lose his job or that he would be unable to find alternative employment. The Ninth Circuit gave Gibbons the option of either submitting to a new trial or accepting a reduced amount of damages that the district court considered justified.
Open and obvious nature of dangerous condition on passenger ship negated liability for failure to warn but not for maintaining a dangerous condition; taking corrective action established notice of the dangerous condition; Carroll v. Carnival Corp., No. 17-13602 (11th Cir. Apr. 15, 2020) (Jordan).
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. The district judge granted summary judgment to Carnival on the duty to warn claim based on the open and obvious nature of the condition, and the judge 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. The district judge 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.
Seaman who misrepresented the pre-existing disability to his neck was denied maintenance and cure but was entitled to recover for negligence under the Jones Act and for unseaworthiness; Luwisch v. American Marine Corp., No. 19-30499 (5th Cir. Apr. 15, 2020) (per curiam).
Henry Luwisch was diagnosed with degenerative disc disease and a herniated disc in his neck in 2011, but did not disclose the disability when he obtained employment with American Marine. While working as Chief Engineer of the AMERICAN CHALLENGER on November 2, 2014, Luwisch was performing his job of storing line when he climbed to the upper deck of the vessel to see if there was room to store the line. There was already line lying on the upper deck, and Luwisch fell over it when he attempted to climb back down the ladder. Luwisch was eventually referred for surgery to his neck, but the surgery did not take place because American Marine would not pay for it. Luwisch worked intermittently after the accident, including work as a chief engineer (he denied any previous neck injury or pain in applying for that job). Finally, Luwisch quit his job and moved to Georgia where he sold shrimp and ran an RV park. Luwisch brought this suit seeking maintenance and cure and damages for negligence under the Jones Act and for unseaworthiness under the general maritime law. Judge Morgan of the Eastern District of Louisiana held a nonjury trial and found that Luwisch was not entitled to maintenance and cure for the willful concealment of his preexisting disability. However, she found that the vessel was unseaworthy, that his employer was negligent, that Luwisch was also negligent (apportioning 20% fault to Luwisch and 80% fault to American Marine), and that his total damages were $1,084,186, reduced to $867,348.80. The Fifth Circuit affirmed the finding of unseaworthiness based on the placement of the rope at the top of the ladder and the finding of negligence and comparative fault despite inconsistencies in Luwisch’s testimony. The court also rejected use of the primary-duty rule as a bar to recovery, holding that an injury resulting from the seaman’s failure to perform a duty of his employment only reduces his recovery unless the seaman’s negligence is the sole cause of his injury. Turning to damages, the Fifth Circuit affirmed the award of loss of future earning capacity, despite Luwisch’s employment after the accident, as he worked in pain out of economic necessity and would not be able to do so long-term; he had to misrepresent his condition to obtain employment; and his testimony that he had hoped to retire in five years was not the same as intending to retire if he had not been injured. The Fifth Circuit also affirmed the award of future medical expenses, despite the denial of cure, as the denial had no effect on his right to recover medical expenses under the Jones Act and for breach of the warranty of seaworthiness. The facts that the seaman’s attorney paid his medical expenses and that there was no evidence of any obligation to reimburse the attorney did not prevent the seaman’s recovery of the expenses on the Jones Act and unseaworthiness claims. The collateral source rule, inapplicable in maintenance and cure claims, is applicable to the Jones Act and unseaworthiness claims. The court also rejected application of the rule from the Cenac Towing case that contributory negligence may be found when a seaman has concealed his pre-existing condition (exposing himself to risk of aggravation) and then suffers an aggravation, as Judge Morgan made no findings to support such application. Finally, the Fifth Circuit rejected American Marine’s argument that the award of pain and suffering should be reduced because Luwisch was a “serial liar” and was not credible in his complaints. The Fifth Circuit concluded that he had “told a coherent and facially plausible story” and Judge Morgan was entitled to credit his testimony. Thanks to John Walker with Schouest Bamdas, Soshea & BenMaier in Houston for bringing this case to our attention.
Toolpusher who was paid biweekly based on a daily rate for days worked was not compensated on a salary basis and was entitled to overtime; Hewitt v. Helix Energy Solutions Group, Inc., No. 19-20023 (5th Cir. Apr. 20, 2020) (Ho).
Michael Hewitt worked for Helix as a toolpusher. He worked more than 40 hours a week in hitches that lasted about a month. He was paid biweekly based on a daily rate for the number of days he worked in each two-week period. Helix argued that it did not owe Hewitt overtime for the hours worked in excess of 40 each week as Hewitt was an exempt or highly compensated employee (his daily rate was greater than the weekly salary requirement from Department of Labor regulations). However, as his compensation varied by the number of days he worked, Judge Ho held that he could not be considered to be a salaried employee (calculated as a fraction of annual compensation and not based on the number of days worked). Therefore, he was entitled to be paid overtime.
From the federal district courts:
Board members of sailing club were considered to be owners and entitled to bring a limitation action for the club’s sailboat; evidence of their negligence was sufficient to avoid summary judgment in favor of the board members; waiver of liability could not be enforced in the limitation action because of the waiver’s forum selection clause; In re Felgate, No. 3:18-cv-910, 2020 U.S. Dist. Lexis 55320 (D. Conn. Mar. 30, 2020) (Bryant).
Clinton Sailing Club is a nonprofit organization that provides sailing lessons to children in the Clinton, Connecticut community regardless of their ability to pay. Julia Farnoli was a student at the club who had completed a five-day class at which she learned how to sail the sailboats. During her second camp, she took the sailboat out with another student, Theresa Tine. Farnoli acted as skipper and handed the mainsheet to Tine so that Farnoli could determine the direction of the wind. The vessel’s boom struck Farnoli in the face, breaking and deforming her nose. The club filed a limitation action, and it was joined by two of the club’s board members, Alan Felgate and John Walker, after Farnoli brought suit against them. The first issue addressed by Judge Bryant was whether there was admiralty jurisdiction to support the limitation action. As the accident occurred on the navigable waters of Clinton Harbor and involved injuries to a student on a vessel that could potentially disrupt maritime commerce, Judge Bryant held that the court had admiralty jurisdiction. Farnoli had not filed any stipulations seeking to lift the limitation stay, so Judge Bryant proceeded to address the question whether Felgate and Walker could seek limitation. Although the sailboat was owned by the club, Judge Bryant noted that non-title owners who are jointly responsible for the operation, maintenance, and caretaking of the vessel may be considered to be operators who can limit liability. She also noted the cases that hold that stockholders of a corporation that owns a vessel are owners for purposes of the Limitation Act. In this case, the non-profit corporation could only act through its board members. Therefore, Judge Bryant held that treating the board members of the club as owners furthered the purposes of the Limitation Act. Judge Bryant then addressed the board members’ motion for summary judgment that there was no evidence of their negligence. However, Judge Bryant found enough evidence to defeat their motion for failing to teach the students how to handle the mainsheet and for failing to warn Farnoli of impending foul weather. Finally, Judge Bryant addressed the waiver that Farnoli and her father signed before the second camp. The waiver contained a forum-selection clause providing that all disputes arising from the waiver shall be heard in the courts of Middlesex County, Connecticut. As there are no federal courts in Middlesex County, Judge Bryant held that she could not adjudicate any issues concerning the waiver and that they would have to be adjudicated in the courts of Middlesex County.
Doing the splits may not have injured the seaman’s back, but it was sufficient to allow his punitive damage claim to proceed for failing to pay maintenance and cure with respect to his disputed hernia and leg conditions; Williams v. Maersk Line, Ltd. No. 16-6679, 2020 U.S. Dist. Lexis 56542 (E.D.N.Y. Mar. 31, 2020) (Matsumoto).
On June 3, 2015, Donald Williams reported that he had slipped outside the freezer box on the MAERSK DETROIT four days earlier, on May 31, 2015, forcing him into a lunge, described as doing the splits. He was examined that day, diagnosed with a thigh strain, and found fit for duty. He returned to work and signed off the vessel on June 8, 2015. After he returned home, Williams’ diagnoses progressively deteriorated, including left femoral cutaneous neuropathy, groin sprain, inguinal hernia, lumbar sprain, myofascial pain syndrome, abductor tendonitis, spinal stenosis, and lumbosacral spondylosis. The recommendations and suggestions for treatment included hernia surgery and a lumbar fusion. The medical opinions were not clear about what conditions and treatments were caused by Williams’ injury on the MAERSK DETROIT, and the causation analysis was complicated when Maersk discovered that Williams had misrepresented in his employment application that he had not undergone any medical treatment in the five years prior to his employment (omitting an MRI of his lumbar spine following an automobile accident in which he suffered pain that radiated into his legs). Maersk acknowledged that there was a factual dispute as to whether maintenance and cure was owed, but Maersk sought summary judgment that it was not liable for punitive damage for willful failure to pay maintenance and cure. Judge Matsumoto rejected the argument that the conflicting medical evidence precluded a finding of bad faith. Judge Matsumoto reasoned that the reliance on some opinions (and the advice of in-house counsel) over those of others may not be arbitrary and capricious, but it was sufficient to have a jury resolve the issue. As to Williams’ concealment of his back condition, if that was the cause of all of his disabling conditions, then he might be barred from recovering maintenance and cure. However, that would have to be resolved by the jury.
Passenger’s allegations against cruise line with respect to injuries sustained in accident during shore excursion were sufficient to survive the cruise line’s motion to dismiss; Adams v. Carnival Corp., No. 19-24578, 2020 U.S. Dist. Lexis 57258 (S.D. Fla. Mar. 31, 2020) (Torres).
Laurence Adams was injured while zip-lining in St. Maarten during a shore excursion sold by Carnival to its passengers when the brakes for the zip-line failed, causing him to hit the zip-lining equipment. Adams asserted that the staff of the excursion company, RF Adventure, failed to provide him with a helmet and adequate safety directions, and that the zip-line had malfunctioning brakes and was not properly maintained or inspected. Adams alleged multiple causes of action against Carnival and RF Adventure, and both moved to dismiss the allegations. The first two counts were misleading advertising and negligent misrepresentation, based on Carnival’s statements about the ownership and operation of the excursion, its safety, and the insurance and jurisdiction of the excursion operator. Magistrate Judge Torres found sufficient evidence from Carnival’s advertising to support these allegations and concluded that the statement in the website that the shore excursions are owned and operated by independent contractors over whom Carnival exercises no control was not enough to dismiss the claims as a matter of law. However, as RF Adventure did not make these statements, the advertising/misrepresentation counts were dismissed against RF Adventure. Magistrate Judge Torres also declined to dismiss the allegations against Carnival for negligent selection/retention, negligent failure to warn, and negligence, finding that Carnival was sufficiently on notice of the dangers, even though there had not been any prior incidents, because it should have known of the dangers through its program of initial and annual inspections of the excursion. Magistrate Torres found sufficient evidence of apparent agency on the part of Carnival through its marketing of “our” excursion, its discouraging of excursions not sold through Carnival, and its financing of RF Adventure and attendance at the ribbon cutting ceremony. However, there was no evidence of how Carnival could be an apparent agent of RF Adventure, so the apparent agency allegations against RF Adventure were dismissed. Magistrate Judge Torres also declined to dismiss the joint venture allegations because of the allegations that Carnival exercised day-to-day control of the operation, sold the excursion directly to the passengers, collected a portion of the fee, and shared in the losses when it had to provide refunds; however, the claim that Adams was a third-party beneficiary of the contract between Carnival and RF Adventure failed because that contract contained an express provision disclaiming any intent for the contract to benefit the passengers.
Passenger’s suit for injuries sustained when she tripped on an unmarked pipe extending into a walkway were dismissed for failure to plead notice to the defendant of the danger of the condition, but the court declined to dismiss the passenger’s request for damages under Florida law; Ramirez v. NCL (Bahamas) Ltd., No. 19-23140, 2020 U.S. Dist. Lexis 58200 (S.D. Fla. Apr. 1, 2020) (Moreno).
Leslie Ramirez was walking on a crowded narrow passageway on NCL’s vessel, when she tripped over an unmarked protruding metal pipe. Although her allegations that the pipe was unmarked and concealed were sufficient to state that the condition was not open and obvious, they were not sufficient to establish the requisite notice to NCL of the danger of the condition. Judge Moreno reasoned that Ramirez conflated the creation of the condition with notice that it was dangerous. Thus, even though the condition may have been created by NCL, the owner still had to be put on notice of its danger, such as through prior injuries, in order to have a duty to warn or correct (compare to the Eleventh Circuit’s decision above in Carroll v. Carnival Corp.). Accordingly, Judge Moreno dismissed the complaint and granted Ramirez leave to amend it to plead notice. Ramirez did not plead any causes of action under Florida law, but she did seek to recover damages under Florida law. Judge Moreno stated that the legal issue whether Ramirez was entitled to supplement damages available under maritime law with damages available under Florida law required a careful balancing act so as not to trample on the general maritime law. As he did not believe that the court should perform the balancing act at the stage of a motion to dismiss, Judge Moreno declined to dismiss the request for damages under Florida law.
Opinion of safety expert was not excluded on the ground that his testimony had been excluded in other cases; opinion of mechanical engineer was not excluded on the ground that he did not test the hardhat the seaman was wearing or use the object that fell on the seaman; Compton v. Moncla Cos., No. 17-2258, 2020 U.S. Dist. Lexis 59041 (E.D. La. Apr. 2, 2020) (Ashe).
James Compton brought this action to recover under the Jones Act for the injury he sustained when he was hit in the head by a falling object. His employer sought to exclude the opinions of Compton’s marine safety expert, Gregg S. Perkin, and his expert on mechanical engineering, David Paulus. Moncla objected to the opinion of Perkin on the ground that his experience in marine safety (48 years) was insufficient to support his opinions that had not been tested or subject to peer review, noting that his testimony had been excluded by other courts. Judge Ashe denied the motion, subject to trial cross-examination, noting that Moncla’s own expert used similar methodology and stating that the exclusion of Perkin’s testimony in other cases had no bearing on his opinion in this case. Moncla objected to the opinion of Paulus with respect to the force of the weight that struck Compton on the grounds that Paulus did not test the hard hat that Compton was wearing and did not know what hit Compton or its weight. In denying the objection, Judge Ashe noted that Paulus tested a hat of the same make and model, so as to preserve Compton’s hard hat for the jury to observe, and that he could not use the actual object that hit Compton because Moncla’s employees failed to preserve the evidence after the accident.
Coverage litigation over yacht policy will proceed in federal court; Fish v. Cincinnati Insurance Co., No. RDB-20-18, 2020 U.S. Dist. Lexis 58183 (D. Md. Apr. 2, 2020); Cincinnati Insurance Co. v. Fish, No. RDB-19-3355, 2020 U.S. Dist. Lexis 59208 (D. Md. Apr. 3, 2020) (Bennett).
Cincinnati Insurance issued a watercraft insurance policy for Joseph Fish’s yacht. Nine days later, Fish’s broker reported that a storm caused damage to the hull and water damage to the interior. Cincinnati Insurance requested that Fish take the vessel for an inspection and estimate, but Fish continued to use the vessel and did not forward an estimate to the insurer for 15 months. At that time the estimate exceeded the policy limit of $215,000. Cincinnati Insurance had the vessel inspected, and the surveyor determined that the damage from the storm was $18,625, and the remainder of the damage was caused by wear and tear. After Fish’s complaint with the Maryland Insurance Administration was resolved in favor of Cincinnati Insurance, the insurer filed a maritime declaratory judgment action in federal court, and four days later Fish brought suit in Baltimore City Circuit Court, naming both Cincinnati Insurance and Fish’s non-diverse broker. Cincinnati Insurance removed the state case based on diversity jurisdiction, asserting that the broker was fraudulently joined. Judge Bennett agreed that the broker was fraudulently joined as there was no dispute about the application of the policy or about defenses such as uberrimae fidei that could result in a cause of action against the broker. Consequently, as there was diversity between Cincinnati Insurance and Fish, the case was properly removed to federal court. The removal to federal court of the state action essentially resolved the jurisdictional issues with respect to the suit brought in federal court by Cincinnati Insurance. Fish first objected to that suit, which was brought under the admiralty jurisdiction, as a violation of the saving-to-suitors clause. Of course, the saving-to-suitors clause does not prohibit an admiralty suit being brought in federal court, so the federal court had jurisdiction over the suit by Cincinnati Insurance. That left the argument that the federal court should defer to the action brought in state court; however, that action was now pending in federal court. Consequently, Judge Bennett exercised his discretion to decline to dismiss the federal declaratory judgment action.
Judge held that Florida’s Deceptive and Unfair Trade Practices Act was not preempted in a maritime lien act case and that expert testimony on damages should not be stricken for lack of scientific reliability; Jones Superyacht Miami, Inc. v. M/Y Waku, No. 19-20735, 2020 U.S. Dist. Lexis 58985 (S.D. Fla. Apr. 3, 2020) (Moreno).
Jones Superyacht, a boatyard, brought this action to enforce a maritime lien on the M/Y WAKU for necessaries, including dockage, electricity, monitoring, maintenance, and inspection of the yacht. The owner of the WAKU argued that one of the charges, for environmental impact fees, was deceptive and in violation of the Florida Deceptive and Unfair Trade Practices Act. Jones Superyacht argued that maritime law preempted application of the Florida statute based on the authority of the Supreme Court in Southern Pacific Co. v. Jensen–that application of the Florida law would interfere with the uniformity of the maritime law. Judge Moreno disagreed, reasoning that the core aim of maritime law is the protection of maritime commerce through uniform rules of decision. In this case, as the same conduct that constitutes a violation of the Florida statute is also a violation of the federal statute, Judge Moreno considered application of the Florida statute to advance uniformity in the maritime law. Thus, although the Supreme Court in Washington v. W.C. Dawson & Co. declared that application of state workers’ compensation statutes to maritime workers violated the uniformity of the admiralty law because “there was no attempt to prescribe general rules” and allowing application of state workers’ compensation would “introduce conflicting requirements,” it did not violate the uniformity principle to apply the deceptive trade practices acts of the states to maritime transactions. The vessel owner also objected to the report of Jones Superyacht’s expert, a marine surveyor, that the charges were reasonable, arguing that the report was not based on scientific methods. Judge Moreno rejected that argument on the ground that standards of scientific reliability were not in play with respect to damages, and the expert was entitled to rely on his years of personal experience.
When a maritime judgment was reversed on appeal and a new judgment (awarding the same amount) was rendered on remand, the court awarded prejudgment interest until the date of the judgment on remand; Dakota, Minnesota & Eastern Railroad Corp. v. Ingram Barge Co., No. C15-1038, 2020 U.S. Dist. Lexis 59232 (N.D. Iowa Apr. 3, 2020) (Strand).
This case arises from an allision in which Ingram’s barge struck Dakota’s bridge near Sabula, Iowa. The case was tried to Chief Judge Strand, who awarded Dakota $276,860.85 in damages. The Eighth Circuit reversed the award, and Chief Judge Strand issued an award in the same amount on remand. Dakota sought an award of prejudgment interest until the date of the judgment on remand (an additional $14,888.60), and Chief Judge Strand agreed and awarded the additional prejudgment interest. He reasoned that if the plaintiff had originally lost and was successful on appeal, the prejudgment interest would be awarded until the judgment on remand. He found no reason why “a plaintiff who receives the same favorable judgment originally and on remand should be denied the accrual of interest simply because there was a successful appeal by the defendant in the interim.
Bumbershoot insurer’s suit against the underlying primary carriers with respect to an excess judgment for injuries on a cruise ship was held to fall within the federal court’s admiralty jurisdiction, but the judge held that the suit could not be removed from state court without an independent basis for federal jurisdiction; New York Marine & General Insurance Co. v. AGCS Marine Insurance Co., No. 2:19-cv-104, 2020 U.S. Dist. Lexis 61134 (S.D. Ga. Apr. 7, 2020) (Wood).
After a verdict was rendered in excess of the primary limits in litigation involving an injury on a cruise ship, the bumbershoot insurer brought this action in Georgia state court against the primary carriers for negligently representing the insured, resulting in the excess judgment. The claims included equitable subrogation, negligent failure to settle, and bad faith failure to settle. The primary carriers removed the action to federal court based on the court’s original admiralty jurisdiction. The first question presented by the removal was whether the suit fell within the admiralty jurisdiction, and Judge Wood held that it did. Although the bumbershoot insurer argued that the tort (adjusting the claim) occurred on land and failed the navigable waters test, Judge Wood noted that the bumbershoot insurer had pled a claim for equitable subrogation and such an action was like an indemnity action, whose jurisdiction is determined from the underlying maritime tort. However, Judge Wood then followed the line of cases preventing removal of maritime cases based on the original jurisdiction of the federal courts, absent an independent jurisdictional basis such as diversity, which was not present in this case, and ordered the case remanded to state court. Judge Wood did hold that the primary carriers were not unreasonable in their removal arguments, citing the “complex history of the savings clause,” and denied the umbrella carrier’s request for attorney’s fees.
Oral contract for the repair, design, replacement, and installation work on the hydraulic systems of a vessel is a maritime contract, and claims for breach of contract and breach of the warranty of workmanlike service fall within the federal court’s admiralty jurisdiction; Cascade Maritime Resources LLC v. Industrial Power Supply Inc., No. 2:20-59, 2020 U.S. Dist. Lexis 61209 (W.D. Wash. Apr. 7, 2020 (Tsuchida).
Cascade Maritime purchased the passenger vessel CASCADIA and began refurbishment and refit work on the vessel, including entering into an oral contract with Skagit Hydraulics for the repair, design, replacement, and installation work on the hydraulic systems of the vessel in Washington. Contending that Skagit Hydraulics failed to perform the work as agreed, Cascade Maritime brought this action in federal court pursuant to its admiralty jurisdiction. As contracts to repair a vessel are maritime, Skagit Hydraulics likened the installation of the “novel” hydraulics to a contract related to the construction of a vessel. However, as the work was performed on a completed vessel, Judge Tsuchida easily rejected the argument and held that the claim for breach of contract fell within the admiralty jurisdiction. As the maritime law recognizes oral contracts, and as the warranty of workmanlike service is implied in maritime service contracts, Judge Tsuchida also held that the claim that Skagit Hydraulics breached the duty to act in a workmanlike manner fell within the admiralty jurisdiction. Finally, Judge Tsuchida rejected Skagit Hydraulics argument that the oral agreement was unenforceable under the Uniform Commercial Code and Washington law, as federal maritime law governed the oral contract.
Judge Barbier denied claims of fishermen for negligent infliction of emotional distress suffered during their rescue efforts after the DEEPWATER HORIZON/Macondo blowout; In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010 (Shivers v. BP P.L.C.) No. 2:10-cv-03261, 2020 U.S. Dist. Lexis 61569 (E.D. La. Apr. 8, 2020) (Barbier).
The emotional injury claims of fishermen after the DEEPWATER HORIZON/Macondo blowout (March 2020 Update) were again addressed by Judge Barbier after giving them leave to amend to present a facially plausible case for negligent infliction of emotional distress. The Shivers plaintiffs were miles away from the DEEPWATER HORIZON when it exploded in flames, fishing from a 31-foot boat. They saw a distant light and realized that a rig was on fire when they looked through binoculars. They sped to the location and spent hours searching for missing persons while hearing rumbling sounds from below the water’s surface that they believed were caused by other explosions. They asserted claims for negligent infliction of emotional distress for being frightened while searching in the zone of danger and in connection with the physical injuries they suffered during their efforts. Judge Barbier rejected their claims and dismissed their amended complaint with prejudice. Although they believed that they were under threat of another massive explosion that would send debris near their vessel, Judge Barbier did not believe that they objectively faced an immediate risk of physical harm as no debris was ever thrown anywhere near their vessel. With respect to the physical injuries they suffered, such as bruises and scratches from leaning over rails and passing gear to other vessels, and one worker smashing his hand while holding onto a lifeboat, Judge Barbier noted that the claims of emotional harm did not relate to those injuries but from the fear of an explosion. Finally, even though some of the fishermen had singed hair and burns on their faces, the closest they came to the rig was between 100 and 200 feet, not enough to be licked by the flames and to fear that they would be consumed by the fire.
Delegation of inspection and certification authority to American Bureau of Shipping was held insufficient to permit removal of suit pursuant to the Federal Officer Removal Statute; Jackson v. American Bureau of Shipping, No. H-20-109, 2020 U.S. Dist. Lexis 61621 (S.D. Tex. Apr. 8, 2020) (Miller).
The beneficiaries of a deceased seaman brought this suit in state court against American Bureau of Shipping in connection with an explosion and fire on a barge off the coast of Corpus Christi, Texas. ABS, which had performed many inspections on the barge, removed the case to federal court based on the Federal Officer Removal Statute, asserting that the inspections and classification work it had performed on the barge were done under the direction of a federal officer because the work was performed under a memorandum of understanding and statutory and regulatory authority that controlled the means and manner of ABS’ work. However, concluding that the work was not performed at the direction of the Coast Guard, and concluding that ABS was not entitled to remove the case based on original maritime jurisdiction, Judge Miller remanded the case to state court.
Judge reconsidered her previous dismissal and held that maritime attachment and garnishment were available despite the parties’ agreement to arbitrate; Asia Maritime Pacific Chartering Ltd. v. A. Cayume Hakh & Sons, No. 19-cv-24919, 2020 U.S. Dist. Lexis 64683 (S.D. Fla. Apr. 12, 2020) (Bloom).
This case involves a maritime suit for attachment and garnishment arising from alleged breach of maritime contracts related to chartered bulk cargo shipments of rice and failure to pay demurrage. Judge Bloom originally dismissed the suit based on the London arbitration clause in the charter party (April 2020 Update), but in this opinion she reconsidered the dismissal. She noted that traditional admiralty practice allows parties to an arbitration clause to obtain security through maritime procedures in support of arbitration. Therefore, she reinstated the suit and stayed it pending arbitration.
Judge ordered bifurcation in limitation proceedings with liability, apportionment of fault, and limitation tried to the bench and then damages tried separately; Archer Daniels Midland Co. v. M/T AMERICAN LIBERTY, Nos. 19-10525, 19-10925, 19-11813, 19-12748, 2020 U.S. Dist. Lexis 66839 (E.D. La. Apr. 16, 2020) (Vance).
These cases arise from a casualty on the Mississippi River in which the tanker AMERICAN LIBERTY lost power, allided with the cargo ship AFRICAN GRIFFON and two barges (injuring workers on one of the barges). The barges then broke loose and ultimately allided with Archer Daniels Midland’s elevator grain facility and vessels that were located at and near the ADM facility. Owners of three of the vessels filed limitation actions, and injury and property damage claims were filed in the limitation actions. Three personal injury claimants sought to have liability and limitation issues tried first in a bifurcated proceeding with damages and allocation of fault tried separately. Judge Vance did agree to the bifurcation, but she ruled that it would be inefficient to try the allocation of fault in the second trial. Instead, she ruled that the most efficient resolution was to try liability, apportionment of fault, and limitation first. As the limitation action would be determined while the state court actions were stayed, the claimants would not be able to enforce a damage award in excess of the limitation fund before the limitation rights were adjudicated. The court could, therefore, protect the owners’ limitation rights, freeing the claimants to seek damages in state court only if limitation were denied.
Injury to passenger walking to vessel that occurred on a platform leading to the dock was not the result of ownership or operation of the vessel and was not covered under the owner’s fleet policy; Great Lakes Insurance SE v. Boat Rentals of Miami, Inc., No. 19-20623, 2020 U.S. Dist. Lexis 68008 (S.D. Fla. Apr. 16, 2020) (Altonaga).
The insurance issues arising from the injury of Claudia Baerlin-Gallegos return to the Update (February 2020 Update). She and a group of friends rented two boats from businesses owned by Edgardo Velez in Miami. To reach the boats, the passengers had to walk down a set of steps ending on a wooden platform leading to a floating dock. Velez owned the steps and dock. Baerlin-Gallegos was injured when she tripped and fell at the base of the wooden platform leading to the floating dock. She brought suit against the company that owned and rented the vessel she was going to board, and the vessel owning entity sought coverage from Great Lakes Insurance based on a fleet policy that covered claims that resulted from the ownership or operation of the vessel. Great Lakes then brought this action against the owner and Baerlin-Gallegos seeking a declaration that its fleet policy did not afford coverage. Baerlin-Gallegos argued that she would not have been injured if it were not for the operation of the boat because she was walking to the boat when she was injured. She also argued that her injury may have been aggravated on the boat because she was not afforded medical care on the boat. Judge Altonaga rejected these arguments as they did not involve the operation of the boat and because the mere situs of an injury on a vessel is not enough to trigger coverage.
Company named as consignor on bills of lading was bound by the forum-selection clause incorporated into the bills of lading, even though the company did not contract directly with the carrier, but the company was not bound by the forum selection clause when it was only named as the notify party; Ingram Barge Co. v. Bunge North America, Inc., No. 3:19-cv-1030, 2020 U.S. Dist. Lexis 67865 (M.D. Tenn. Apr. 17, 2020) (Trauger).
Bunge is a New York corporation with its headquarters in Missouri. It ships agricultural commodities, routinely contracting with SCF Marine to arrange transportation of Bunge’s products on barges. SCF arranged for 21 shipments of Bunge grain to Louisiana on Ingram barges. Ingram also carried five shipments of grain that Bunge purchased on a CIF basis, for which the seller provided cost, insurance and freight, including arranging for the Ingram barges. Bunge was listed as the consignor on Ingram’s bills of lading for the SCF shipments, but Bunge was listed only as the notify party (informed when the grain arrived) on the CIF bills of lading. All of the Ingram bills of lading contained a forum-selection clause for the United States District Court for the Middle District of Tennessee. A dispute over costs of shifting, fleeting, and wharfage services arose during the shipments, and Ingram brought this suit in the designated federal court in Tennessee. Bunge asserted that it was not subject to personal jurisdiction in that court, and Judge Trauger held that Bunge was subject to jurisdiction for some claims but not others. Judge Trauger held that the forum-selection clauses that were incorporated from Ingram’s Grain Transportation Terms into the bills of lading in which Bunge was named as the consignor (the SCF-arranged shipments) were enforceable, and personal jurisdiction was proper against Bunge. Although it was SCF that arranged with Ingram for the transportation on Ingram barges, Bunge took possession of the bills of lading and was aware that it was named as the consignor. It was therefore bound by the terms of those bills of lading. Although Bunge may not have been on notice of the forum-selection clause with respect to the first shipment, Judge Trauger held that the court had pendent personal jurisdiction over that claim. The CIF shipments presented a different situation. Admiralty judges have distinguished between shipments in which a party is named as a consignor (party to the bill) compared to a notify party (not party to the bill). Considering that Bunge was not party to the CIF bills of lading, Judge Trauger held that the forum-selection clause in the CIF bills did not bind Bunge so as to afford personal jurisdiction. As the CIF bills were contractually distinct from the SCF-arranged shipments, Judge Trauger held that the court did not have pendent personal jurisdiction over the claims arising from the CIF shipments. She therefore dismissed those claims for lack of personal jurisdiction. Finally, Judge Trauger declined to transfer the SCF claims to a more convenient forum, as there were no exceptional circumstances sufficient to overcome the forum selection clause.
Owner of waterfront property in Havana, Cuba, was allowed to amend its complaint to assert sufficient interest in the property to bring a claim against cruise lines for trafficking in property confiscated by the Cuban government in violation of the Libertad Act; Havana Docks Corp. v. Carnival Corp., No. 19-cv-21724 (S.D. Fla. Apr. 20, 2020) (Bloom).
Havana Docks Corp. asserted that it was the rightful owner of the Havana Cruise Port Terminal in the Port of Havana, that its property was confiscated by the Cuban Government in 1960, and that several cruise lines trafficked in that property in violation of the Cuban Liberty and Democratic Solidarity Act (the Libertad Act). The complaints against the cruise lines were originally dismissed on the basis that Havana Docks did not have a sufficient property interest to assert a claim because it had a leasehold interest that expired in 2004. However, Judge Bloom granted leave to Havana Docks to file an amended complaint to assert a property interest based on a statutorily created property interest and to assert that the plaintiff’s concession did not expire in 2004. The cruise lines have asked Judge Bloom to certify her decision for an interlocutory appeal.
Redelivery of vessel in California was held to be insufficient to establish in personam jurisdiction over foreign entities that were claimed to have wrongfully exercised custody and control of the vessel; Mayhem Crude, Inc. v. Borrelli Walsh Pte. Ltd., No. 19-cv-4622, 2020 U.S. Dist. Lexis 69132 (N.D. Cal. Apr. 20, 2020) (Gilliam).
Mayhem Crude, a corporation organized under the laws of the Republic of the Marshall Islands, is the owner of the crude oil tanker V8 STEALTH, registered in the Marshall Islands. Mayhem Crude bareboat chartered the vessel to JB Ugland Shipping Singapore, and the charterer was later amended to Siva Group Shipping. Standard Chartered Bank, an English bank, provided a loan to Siva Group, and when Siva Group defaulted on the loan, the bank and other defendants at the bank’s behest allegedly began to exploit the vessel for their own use in carrying cargoes of crude oil worldwide. After the vessel was redelivered in California with serious damage, Mayhem Crude brought this suit in California against the bank and the defendants who had been operating the vessel for wrongfully exercising custody and control of the vessel for their own gain. As none of the parties were residents of California, and as there was no evidence that the conversion claim arose out of any contacts the defendants had with California, Judge Gilliam dismissed the claims for lack of in personam jurisdiction. Additionally, Judge Gilliam noted that Singapore was an adequate forum with an actionable tort of conversion, and he held that the case should alternatively be dismissed on the basis of forum non conveniens.
Seaman was not assessed damages for vacated attachment; Hornbeck Offshore Operators, LLC v. Knox, No. 10-270, 2020 U.S. Dist. Lexis 69578 (E.D. La. Apr. 21, 2020) (Guidry).
The Jones Act claim of Carlos Knox, a Louisiana resident, returns to the Update. 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 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.
Failure to relinquish complete control of a vessel to the insured defeated the claim that the vessel was covered under the insured’s P&I policy through the Automatic Acquisition Clause; Stevanna Towing, Inc. v. Atlantic Specialty Insurance Co., No. 2:15-cv-1419, 2020 U.S. Dist. Lexis 73447 (W.D. Pa. Apr. 24, 2020) (Eddy).
Raymond Robinson, an employee of Stevanna Towing, was injured while working as a deckhand aboard the M/V TIMOTHY JAMES. He brought suit against Stevanna under the Jones Act, and Stevanna sought coverage on its P&I policy issued by Atlantic Specialty Insurance Co. Although the TIMOTHY JAMES was not listed as a vessel on the policy, Stevanna argued that the vessel was covered by the Automatic Acquisition Clause, which afforded coverage to vessels that were acquired, purchased, or chartered by the insured. As a P&I policy for vessels, the policy was only required to cover Stevanna to the extent that it was acting as owner of the vessel at the time of the accident. Thus, Chief Magistrate Judge Eddy addressed whether the evidence was sufficient to establish that Stevanna had control over the vessel equivalent to a bareboat charter. Concluding that the evidence was insufficient to establish that Stevanna had complete control over the crew and operations of the TIMOTHY JAMES, Chief Magistrate Judge Eddy recommended that Atlantic Specialty be granted summary judgment that the vessel was not covered under the P&I policy.
Transcripts of interviews taken by the Bahamian Maritime Authority during its investigation (in conjunction with the United States Coast Guard and the National Transportation Safety Board) of a marine casualty were held to be statutorily inadmissible in a civil suit arising from the casualty; Incardone v. Royal Caribbean Cruises, Ltd., No. 16-20924, 2020 U.S. Dist. Lexis 73285 (S.D. Fla. Apr. 27, 2020) (O’Sullivan).
The claims of the special-needs children and their families arising from the winter storm that struck Royal Caribbean’s ANTHEM OF THE SEAS return to the Update (August and September 2019 Updates). The court earlier granted the plaintiffs’ motion and held that the investigative report of the Bahamian Maritime Authority was inadmissible, but the plaintiffs later sought to admit interview statements of crewmembers taken during the investigation as a carve-out from the previous order. The cruise line cited 46 U.S.C. § 6308(a), which states that “no part of a report of a marine casualty investigation conducted under section 6301 shall be admissible or subject to discovery. Although the parties disputed whether the investigation was jointly conducted with the National Transportation Safety Board and United States Coast Guard, the plaintiffs previously acknowledged that the investigation was in fact conducted by all three entities. The report referenced materials provided by the USCG and NTSB, and the interviews included questions from the investigators of the USCG and NTSB. Although the Bahamian Maritime Authority took the lead in the investigation, Chief Magistrate Judge O’Sullivan considered that the participants in the investigation, the USCG and NTSB, would be deprived of the statute’s protection if the report fell outside the purview of the statute. Thus, Chief Magistrate Judge O’Sullivan distinguished a case from Texas in which the investigation was conducted by the Brazilian Maritime Authority alone. Finally, considering the language, “no part of a report” to be clear, Chief Magistrate Judge O’Sullivan held that the transcripts of the interviews should be excluded.
Total Loss Rule did not limit recovery for breach of contract claim for repairs performed by boatyard; tort claims for fraudulent and negligent misrepresentation, including punitive damages, were allowed to proceed; Rocque v. Zetty, LLC, No. 2:18-cv-256, 2020 U.S., Dist. Lexis 73535 (D. Me. Apr. 27, 2020) (Levy).
Edgecomb Boat Works performed substantial restorations on Arthur and Carol Rocque’s wooden vessel, built in 1970, and provided annual maintenance on the vessel for eight or nine seasons. After the vessel had been winterized and stored, Arthur Rocque orally agreed with the chief mechanic for Edgecomb that the shaft logs needed replacement. The chief mechanic could not find replacement shaft logs for the wooden vessel, and he had not installed fiberglass shaft logs on a wooden vessel. Rocque authorized Edgecomb to repair the shaft logs on the condition that the former owner of the boatyard would be consulted and kept abreast of the repairs. The chief mechanic then fabricated two shaft logs out of fiberglass and installed them. Within a week after the repairs were completed, the vessel sank, and the Rocques brought this action alleging that failure to properly repair the shaft logs caused flooding, which resulted in the sinking and total loss of the vessel. Edgecomb moved for summary judgment on several claims brought by the Rocques. First, Edgecomb asserted that the Total Loss Rule limited the damages that the Rocques could recover to the vessel’s value before the casualty minus salvage proceeds so that the plaintiffs could not recover for lost profits or loss of use of the vessel. Chief Judge Levy agreed that the rule applies in tort cases, where the parties are usually unknown to each other, but held that the rule was not applicable in contract cases. As the Rocques alleged a breach of an oral maritime contract for repairs, Chief Judge Levy held that the Total Loss Rule did not limit the damages available to the Rocques for breach of that contract. Edgecomb also sought summary judgment on the Rocques’ claim of breach of the implied duty of good faith and fair dealing. Edgecomb argued that maritime law is silent whether the Rocques’ can allege a separate action for breach of the duty of good faith and fair dealing, and, in the absence of governing maritime law, Maine law does not recognize an independent action. Recognizing that the duty of good faith and fair dealing is part of all maritime contracts, Chief Judge Levy held that the alleged breach of the duty would inform the Rocques’ claim of breach of contract, but it would not stand as an independent cause of action. Although there is a split of authority on whether maritime or state law applied to the Rocques’ claims of negligent and fraudulent misrepresentation, Chief Judge Levy held that the Restatement (Second) of Torts governed negligent and fraudulent misrepresentation claims under both Maine and maritime law. He then held that the assurances of expertise of the chief mechanic and of the agreement that the former owner of Edgecomb would be consulted were sufficient to state claims for negligent and fraudulent misrepresentation. Finally, Chief Judge Levy held that the Rocques’ claim for punitive damages was not an independent claim, but that the Rocques could seek punitive damages for the claims of fraudulent misrepresentation (but not for breach of contract).
Claims of Navy seaman against supplier of products containing asbestos for exposure in the harbor were held to fall within the admiralty jurisdiction; Mullinex v. John Crane, Inc., No. 4:18-cv-33, 2020 U.S. Dist. Lexis 74006 (E.D. Va. Apr. 27, 2020) (Jackson).
Herbert H. Mullinex was a Machinist Mate in the United States Navy who claimed that he was exposed to asbestos while assisting in shipbuilding and repair on vessels docked on navigable waters at the shipyard. He brought this suit in state court in the Circuit Court of Newport News against John Crane, Inc. for failing to warn that products it supplied contained asbestos. The suit was removed to federal court (based on the Federal Officer Removal Statute), and the amended complaint asserted claims under both Virginia law and within the admiralty jurisdiction. John Crane moved to dismiss the admiralty claims, and Judge Jackson denied the motion. Judge Jackson first concluded that the locality test was satisfied because Mullinex alleged exposure on ships on navigable waters, and it did not matter whether the exposure was on ships that were docked or at sea. Judge Jackson also concluded that both prongs of the connection test were satisfied. He found that there was a disruptive effect on maritime commerce because injuries to workers on Navy ships from defective products, and labor shortages resulting therefrom, could create unsafe working conditions that could disrupt the Navy’s ability to protect commercial ships. Finally, Judge Jackson concluded that there was a substantial relationship to traditional maritime activity as the replacement of asbestos-containing gaskets was essential for the proper functioning of the ships.
Passenger failed to plead sufficient facts to support that she was threatened with imminent physical harm or sustained a physical impact in order to recover for the panic attack she suffered in the face of an approaching storm; In re Boatrides International, Inc., No. 20-cv-20166, 2020 U.S. Dist. Lexis 74631 (S.D. Fla. Apr. 27, 2020) (Ungaro).
Zorah Shareh embarked on what was scheduled to be a 90-minute sightseeing tour as a passenger on the M/V BAYSIDE BLASTER. About 30 minutes into the tour, dark clouds began to form with thunder and frequent lightning strikes, and the tour guide announced that the tour would end early and the boat would return to the dock. Shareh suffered a panic attack, fearing that the boat would sink, developing severe whole-body tremulousness, and being unable to stand or catch her breath. She was ultimately diagnosed with conversion disorder, functional neurological disorder, and post-traumatic stress disorder. She experienced uncontrollable shaking, headaches, weight gain, and occasional paralysis. Shareh brought this action on a negligence theory, but she did not allege any physical injury as a direct result of the defendant’s negligence. Therefore, Judge Ungaro analyzed the case as a claim for negligent infliction of emotional distress, and held that, under the general maritime law, Shareh had to satisfy the zone of danger test (either sustaining a physical impact or being placed in an immediate risk of physical harm). Although Shareh contended that she suffered a physical impact from her body tremors, shaking, and inability to stand, Judge Ungaro held that her argument conflated physical impact with the physical manifestation of an emotional injury. Her bodily reaction was not the result of a physical impact but the physical manifestation of a panic attack. Judge Ungaro likewise held that Shareh’s allegations that she witnessed severe weather conditions was insufficient to support the requirement that she was threatened with imminent physical harm. Consequently, Judge Ungaro dismissed Shareh’s complaint but gave her one opportunity to amend to allege either a physical impact or that she was placed in an immediate risk of physical harm.
Kenneth G. Engerrand
Brown Sims, P.C.
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Poems and books get written, songs sung, and movies made about sinking ships. But there’s nothing stirring or awe-inspiring about a yacht that partially sinks in calm waters while docked. That, sadly, is the event at the center of this case.
Chartis Property Casualty Co. v. Inganamort, No. 19-1903 (3d Cir. Mar. 24, 2020) (Jordan) (citing Henry Wadsworth Longfellow, The Wreck of the Hesperus, Gordon Lightfoot, The Wreck of the Edmund Fitzgerald, Sebastian Junger, The Perfect Storm).
Please note that these opinions and statements are my own analysis of the cases that are discussed. They do not represent the position of Brown Sims, P.C. or any organization to which I belong or that I represent. Under no circumstances should these opinions and statements be considered legal advice. If you want legal advice, please consult an attorney.
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