November 2022 Longshore/Maritime Update (No. 282)
Notes from your Updater:
On September 29, 2022, Judge Gallagher in the District of Delaware remanded to Maryland state court a suit brought by the City of Annapolis and other political subdivisions in Maryland against several corporate members of the fossil fuel industry (alleging concealment of climate-related harms caused by fossil fuels), rejecting the grounds asserted by the defendants for removal, including federal question jurisdiction, jurisdiction based on the Outer Continental Shelf Lands Act, jurisdiction under the Federal Officer Removal Statute, and jurisdiction over federal enclaves. See City of Annapolis v. BP P.L.C., No. 21-772, 2022 U.S. Dist. LEXIS 178848 (D. Md. Sept. 29, 2022).
On September 30, 2022, Judge Cooper in the federal court for the District of Columbia, declined to dismiss the antitrust suit filed by American President Lines against Matson Navigation Co. (alleging that Matson was attempting to monopolize the mainland-to-Guam shipping route by bullying would-be American President Lines customers and unfairly leveraging its dominant position in the busier route between the mainland and Hawaii, which cannot be serviced by American President Lines because it is foreign owned). See American President Lines, LLC v. Matson, Inc., No. 21-cv-2040, 2022 U.S. Dist. LEXIS 179822 (D.D.C. Sept. 30, 2022)
On October 3, 2022 (the first Monday in October), the Supreme Court denied a writ of certiorari in Newbauer v. Carnival Corp., No. 22-89, from the decision of the Eleventh Circuit in Newbauer v. Carnival Corp., No. 21-10955, 2022 U.S. App. LEXIS 5363 (11th Cir. Feb. 28, 2022) (Lagoa), affirming Judge Scola’s dismissal of a passenger’s slip-and-fall case for failing to sufficiently plead notice. See April 2022 Update. The question presented in Newbauer’s petition was:
Whether the Eleventh Circuit required an unnecessary and unrealistic level of detail in pleading factual allegations supporting a facially plausible claim of knowledge or notice, contrary to Rule 8(a)(2), Federal Rules of Civil Procedure as interpreted in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009)?
On October 5, 2022, the Eleventh Circuit agreed to grant rehearing en banc from its panel decision in Corporacion AIC, SA v. Hidroectrica Santa Rita S.A., 34 F.4th 1290 (11th Cir. 2022), to decide whether the court had authority to vacate an arbitral award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) on the exceeding powers ground (whether arbitrators exceeding their powers is a ground for vacatur under both the Federal Arbitration Act and the New York Convention).
On October 6, 2022, a panel of the Eleventh Circuit issued its decision (123 pages with the dissent) vacating a preliminary injunction against Florida’s enforcement (against the cruise industry) of its statute prohibiting businesses from requiring patrons to show proof of vaccination against COVID-19 to receive services (the cruise line had required its customers to provide proof of vaccination). Writing for the majority, Chief Judge William Pryor held: “Florida’s statute is a regulation of economic conduct that only incidentally burdens speech, which does not implicate the First Amendment. And its burdens on interstate commerce do not exceed the benefits of furthering Florida’s substantial interests in protecting its residents from discrimination and invasions of privacy.” See Norwegian Cruise Line Holdings Ltd. v. State Surgeon General, No. 21-12729, 2022 U.S. App. LEXIS 27997 (11th Cir. Oct. 6, 2022).
Longsuffering readers of the Update have been following for almost ten years the litigation brought by Chad Barry Barnes against Sea Hawaii Rafting and Kristin Kimo Henry in federal court in Hawaii involving Barnes’ claim for maintenance and cure. In 2018 Barnes filed a second suit in federal court in Hawaii that included allegations that the Bankruptcy Act was unconstitutional. During one of his several appeals to the Ninth Circuit, the appellate court found “unpersuasive” the argument on the constitutionality of the Bankruptcy Act, but Barnes argued to the district court that the Ninth Circuit had not thoroughly analyzed the argument because it was an interlocutory appeal. District Judge Kobayashi did not believe that she could revisit the constitutional challenges and dismissed the 2018 suit. See Barnes v. Sea Hawaii Rafting, LLC, No. 18-389, 2022 U.S. Dist. LEXIS 183893 (D. Hawaii Oct. 7, 2022) (Kobayashi).
Various state and local governmental entities in Louisiana brought suits against energy companies seeking to determine the energy companies’ responsibility for environmental damage to Louisiana’s coastal wetlands. The energy companies removed the cases to federal court, arguing that an expert report produced by the plaintiffs created federal court jurisdiction based upon two potential arguments; (1) federal question jurisdiction and (2) federal officer jurisdiction. After the district court determined that remand was appropriate, the issue was appealed to the Fifth Circuit. The panel of the Fifth Circuit concluded that the expert report filed by the parishes revealed a new theory of liability for the first time and that the removal based upon federal officer jurisdiction was timely. Rather than deciding whether federal officer jurisdiction existed, the court remanded the cases to the federal district courts to address this issue with the benefit of the Fifth Circuit’s en banc decision in Latiolais v. Huntington Ingalls on federal officer removal jurisdiction. On remand from the Fifth Circuit, the district court held that the energy companies had satisfied three of the four required elements of federal officer jurisdiction, but held that the defendants were not “acting under” federal officers during WWII and that federal-officer jurisdiction did not exist. The judge noted that refineries that had contracts with the federal government during the War could likely remove these cases for actions taken under the contracts; however, the producers were subcontractors who were not subjected to the federal government’s guidance or control in that capacity. See February 2022 Update. The energy companies again appealed to the Fifth Circuit, and, reasoning that the energy companies failed to convince the appellate court that they were acting pursuant to a federal officer’s directions in their capacity as subcontractors, the court affirmed the remand of the cases to Louisiana state court. Plaquemines Parish v. Chevron USA, Inc., No. 22-30055, 2022 U.S. App. LEXIS 28733 (5th Cir. Oct. 17, 2022) (per curiam).
In our June 2022 Update, we noted that the courts continue to struggle with the application of the decision of the Supreme Court in Lucia v. SEC on the constitutionality of the appointment of administrative law judges. The United States Supreme Court granted a writ of certiorari to decide the question whether a federal district court has jurisdiction to hear a suit in which the respondent in an ongoing SEC administrative proceeding seeks to enjoin that proceeding, based on an alleged constitutional defect in the statutory provisions that govern the removal of the administrative law judge who will conduct the proceeding. See Securities and Exchange Commission v. Cochran, No. 21-1239. Two days later, the Fifth Circuit handed down its decision in Jarkesy v. Securities and Exchange Commission, No. 20-61007, 2022 U.S. App. LEXIS 13460 (5th Cir. May 18, 2022), holding that the statutory removal restrictions for SEC administrative law judges are unconstitutional because the ALJs are sufficiently insulated from removal that the President cannot take care that the laws are faithfully executed. Accordingly, the Fifth Circuit held that the SEC proceedings were unconstitutional in that case because the respondents in the enforcement action were deprived of their Seventh Amendment right to a civil jury and because Congress unconstitutionally delegated legislative power to the SEC by failing to give the SEC an intelligible principle by which to exercise the delegated power (although the court held that the statutory removal restrictions for SEC ALJs are unconstitutional, the court did not address whether vacating the decision below would be appropriate based on that defect alone). Judge Davis disagreed that the layers of removal protection for SEC ALJs were unconstitutional and with the holding that the removal restrictions interfered with the President’s ability to take care that the laws be faithfully executed. The SEC sought rehearing en banc, and, on October 21, 2022, the full Fifth Circuit declined to grant rehearing en banc by a vote of 10 to 6 (with Judge Haynes writing a dissent from the denial of the petition for rehearing en banc). See Jarkesy v. Securities and Exchange Commission, No. 20-61007, 2022 U.S. App. LEXIS 29433 (5th Cir. Oct. 21, 2022).
On October 24, 2022, Judge Alsup remanded the complaints filed against energy companies by the cities of San Francisco and Oakland in California state court that were removed to federal court (the complaints alleged that the energy companies produced and promoted fossil fuel products as safe for the environment while concealing that their products would accelerate global warming, eventually flooding parts of those cities). Judge Alsup noted the substantial portion of the energy companies’ production that has arisen from the outer Continental Shelf and reasoned that if he “were writing on a clean state, these allegations in the complaint would seem to sustain removal jurisdiction” based on the Outer Continental Shelf Lands Act. However, as the Ninth Circuit rejected federal jurisdiction with the similar allegations in the San Mateo and Honolulu cases, Judge Alsup remanded the cases to the state courts. See City of Oakland v. BP P.L.C., Nos. C 17-06011, C 17-06012, 2022 U.S. Dist. LEXIS 193512 (N.D. Cal. Oct. 24, 2022).
On the LHWCA Front . . .
From the federal district courts:
The Norwegian vessel M/V STAR ISFJORD carried cargo from Germany, but when it arrived in Houston, the U.S. Department of Agriculture noted that wood packaging material contained live insects and ordered that the shipment be put in a sealed hold that could not be opened in U.S. waters/ports. The crew sealed the hold with the contaminated wood packaging, and that including the Chief Mate taping cardboard over the top of the hold. The vessel proceeded to Mexico and then to Mobile, Alabama. Patrick Bass, a longshore worker on the vessel in Mobile, claimed that he stepped on the cardboard where it covered a manhole, causing him to fall 12 to 15 feet (this was a different account from the version he gave in the Prehospital Care Report). After the incident, the crew of the vessel replaced the cardboard covering with plywood and then replaced the plywood with a yellow and black metal cover that warned: “Do Not Step On.” Bass brought this action in Alabama federal court against the vessel and its owner/operator under LHWCA Section 5(b), alleging negligence, gross negligence, and wanton conduct, and seeking compensatory and punitive damages. The defendants moved for summary judgment, and Judge Moorer addressed each of the Scindia duties. Bass argued that the defendants breached the turnover duty by failing to warn Bass or his employer that they had created a false floor by covering the manhole cover with cardboard. The defendants argued that the cardboard covering was open and obvious and an experienced stevedoring company should have anticipated the hazard. Judge Moorer denied the motion with respect to the turnover duty, as there were no visible signs that would call attention to the location in the false floor where the manhole was located, and a fact finder should decide whether an experienced stevedoring company should have anticipated the covered manhole. Similarly, Judge Moorer denied summary judgment on the active control duty, finding that a fact finder could reasonably find that the crew’s placing cardboard over the manhole without any warning was sufficient to establish that the crew members were in charge of the area and that their actions constituted negligence. Judge Moorer did grant summary judgment on the duty to intervene as it was only after Bass fell that the vessel crew was put on notice of the actions of the stevedoring company. The vessel defendants moved for summary judgment on Bass’s claim for punitive damages, arguing that Bass’s allegations did not satisfy the standard from the 11th Circuit’s Amtrak case that punitive damages are only recoverable for intentional wrongdoing. Bass responded that there were questions whether that principle remains good law, and Judge Moorer agreed that the law with respect o punitive damages under the LHWCA “is clearly in a state of flux, or put more bluntly, it’s a mess.” Consequently, he declined to rule on the recoverability of punitive damages at this stage, and he set a conference to discuss logistics for the case, including how to address punitive damages and whether the bench trial should be bifurcated on liability and damages.
The City of Norfolk purchased the vessel MARINE 5 from Safe Boats International to use in maritime security operations and then entered into a contract with Willard Marine to refit the boat to a Full-Cabin patrol boat (including replacing the engines and testing and performing a sea trial). Two employees of Willard Marine, Timothy Pridemore and David Glover were injured when the boat capsized during the sea trial, and their claims have been the subject of state and federal litigation. After litigation on sovereign immunity for the City of Norfolk was addressed by state courts in Virginia (see August and November 2019 Updates). Pridemore and Glover brought suit against the City of Norfolk in federal court, and the City asserted that it was entitled to sovereign immunity. Reasoning that the United States Supreme Court has held that municipalities are not entitled to sovereign immunity for maritime claims, the district court rejected the City’s defense and the Fourth Circuit agreed, declining to limit or overturn the decision of the Supreme Court. The Fourth Circuit also rejected the City’s argument that it was entitled to immunity as an arm of the State, reasoning that the State would not pay a judgment against the City in this case. The Fourth Circuit declined to address the question of whether the workers could proceed on their vicarious liability claims against the City (even though the police officer who was operating the vessel was entitled to qualified immunity) as the order was not a final order. See December 2020 Update. The City filed third-party actions against Willard Marine and Safe Boats, claiming that Willard Marine was required by contract to obtain insurance coverage and to name the City as an additional insured on the policies (Willard Marine’s insurer Travelers declined to afford coverage to the City based on the watercraft exclusion and blanket additional insure endorsement in its policy) and that Safe Boats owed indemnity or contribution to the City. Willard Marine moved to bifurcate the City’s third-party claim from the workers’ tort claims, and Judge Young agreed to the bifurcation, reasoning that the tort claims were based on the conduct of the City and the third-party claim was based on the contract between the City and Willard Marine before the accident. As the claims were separate and independent and involved different evidence and witnesses, Judge Young agreed to try the contract claim after the tort claims. See February 2022 Update.
The suit by Glover and Pridemore against the City of Norfolk and its employee, police officer Hryniewich, asserted negligence claims under LHWCA Section 5(b) and negligence and gross negligence claims under the general maritime law. The City and officer brought contribution and indemnity claims against Safe Boats based on maritime products liability, breach of express warranty, breach of the implied warranty of merchantability, and breach of implied fitness for a particular purpose. Safe Boats filed a motion for summary judgment on the contribution/indemnity claims, arguing Willard Marine was performing ship repair and that LHWCA Section 5(b) does not afford a remedy for the workers arising from ship repair. Safe Boats also argued that Officer Hryniewich was operating the boat as a borrowed servant of Willard Marine, rendering the officer a fellow servant of the plaintiffs and barring the workers’ tort suit under the LHWCA. Thus, Safe Boats argued, there was no tort liability of the City/officer for which indemnity/contribution could be sought against Safe Boats. Additionally, Safe Boats argued that the City could not seek indemnity because the City was an active tortfeasor by its selection of Officer Hryniewich to operate the vessel during the sea trial despite his inexperience. Judge Young was presented with the issue whether the work of replacing the engines constituted “repair,” and the workers argued that there was a fact question whether they were ship repairers, citing the Fifth Circuit’s New v. Associated Painting decision defining repair to mean to restore to a sound or healthy state and not to merely modify or improve. Judge Young noted that other cases have applied a more expansive view, distinguishing between contracts for original construction and contracts for work on vessels that are actively engaged in maritime commerce or navigation. As the MARINE 5 had already been launched and the work was not original construction, Judge Young held that the workers and their employer were engaged in ship repair within the exception to LHWCA Section 5(b). With respect to the argument that Officer Hryniewich was a fellow servant of Glover and Pridemore, there was no allegation that Willard Marine paid any wages or benefits to the officer. Glover and Pridemore did offer instruction to the officer throughout the sea trial, but there was a fact dispute whether the direction they offered was authoritative and whether the contract between the City and Willard Marine conferred authority to Willard Marine to direct the officer (contract requirement that Willard Marine conduct the sea trial “with” a representative of the City indicated participation more than direction). Thus, Judge Young did not grant summary judgment to Safe Boats based on the borrowed servant doctrine. Fact questions also prevented Judge Young from granting summary judgment whether the City was actively negligent in assigning an inexperienced officer to pilot the vessel and on the products liability and warranty claims.
Willard Marine filed a motion for summary judgment on the City’s claim that Willard Marine had failed to provide insurance covering the City for the injuries during the sea trial, and Judge Young began his analysis of the argument with a discussion of what law to apply. As the MARINE 5 was already constructed and had been previously launched into the water, the contract with Willard Marine was not new construction but work on an existing vessel. Thus, Judge Young held that the contract was a maritime contract, and he applied maritime law to the extent that its rules are “on point,” supplementing gaps in maritime law with Virginia law to the extent there is no conflict. The contract required that Willard Marine obtain Commercial General Liability insurance, including Contractual Liability and Products and Completed Operations Coverage and Umbrella/Excess Liability coverage. Willard Marine argued that watercraft exclusions are standard in CGL insurance policies, but the City responded that, in the context of the contractually required sea trial, Willard Marine was obligated to maintain insurance that would not exclude the specific activity that Willard contracted to perform. Concluding that both parties presented reasonable interpretations of the contract and that its requirements were ambiguous, Judge Young found two questions that posed genuine issues of material fact: whether the contract implied that Willard Marine should obtain an endorsement that deleted the watercraft exclusion (in light of the work to be performed under the contract) and whether the requirement that Willard Marine must maintain Contractual Liability and Products and Completed Operations Coverage and Umbrella/Excess Liability insurance mandated that Willard Marine procure a policy that covered any liability incurred via the vessel during the sea trial. Consequently, Judge Young denied Willard Marine’s motion for summary judgment.
Callen Cortez claimed that he contracted mesothelioma from exposure to asbestos during his employment as a welder and tacker helper at Avondale’s Westwego Yard as well as from his brother’s employment with Avondale. Callen lived in his family home in Kraemer, Louisiana until he married and moved out in May 1972. His brother, Daniel, went to work for Avondale in August 1967 and lived in the family home with Callen until Daniel married and moved out in July 1968. Daniel testified that he worked with asbestos during this period and that he and his brother beat the asbestos fibers from his clothes after Daniel came home each day, and Avondale’s expert opined that asbestos taken home on Daniel’s clothes significantly contributed to the development of Callen’s mesothelioma. Callen also complained of exposure to asbestos during his employment with Avondale between March 1969 and May 1974. Callen brought this suit in Louisiana state court against Avondale, its executive officers and insurer (Lloyd’s), Halter Marine, and various parties supplying products containing asbestos, including claims for negligence and for an intentional tort. The suit was removed to federal court, and Avondale and its insurer Lloyd’s moved for summary judgment on the ground that Callen’s claims are preempted by the exclusive remedy provision of the LHWCA. Callen and several of the defendants opposed the motion, arguing that the claims fell within the twilight zone of concurrent state and federal jurisdiction over workers’ compensation claims, that the LHWCA does not preempt Callen’s third-party claims arising out of Daniel’s take-home asbestos, and that the LHWCA has an intentional-tort exception. Judge Vance first addressed the version of the LHWCA that is applicable to the suit, as the exposure occurred before the 1972 Amendments that extended the LHWCA shoreside. Following the manifestation rule, so that Callen’s “injury” arose after the 1972 Amendments, Judge Vance held that Callen’s claim satisfied the situs and status of the LHWCA as amended in 1972. Consequently, she held that the state tort claims against Avondale arising from his employment were preempted and should be dismissed. She reiterated rulings from prior decisions that rejected arguments that preemption did not apply because Callen was not seeking benefits under the LHWCA and that dismissal would violate due process by divesting Callen of an accrued right. Without deciding whether the LHWCA recognizes an intentional-tort exception to its preemption, Judge Vance held that Callen had failed to present evidence sufficient to establish that Avondale either consciously desired that Callen contract mesothelioma or knew that the result was substantially certain to follow from Avondale’s conduct. Consequently, Judge Vance granted summary judgment on all of the claims of Avondale in its capacity as Callen’s employer. However, Callen also sued Avondale related to the exposure to asbestos from the clothes of his brother, Daniel, while Daniel was employed by Avondale. Although Callen argued that the LHWCA preempted this claim as well, Judge Vance held that the exclusive remedy language within Section 5(a) of the LHWCA was not so broad as to encompass exposure that did not occur in the course of Callen’s employment with Avondale but, instead, was related to the employment of Daniel. If Callen had been exposed to dust on his brother’s clothes during Callen’s ride to or from employment, the situation would be different. Avondale also cited the non-apportionment rule from the Benefits Review Board that declines to apportion LHWCA benefits across jurisdictions when a claimant’s employment-related injury/disease occurred both within and without the coverage of the LHWCA. She held that the BRB rule has no application to the issue whether non-employment claims are preempted by the LHWCA and only applies to employment exposure falling within different compensation schemes. Finally, Avondale argued that Callen’s mesothelioma is a single disease, and the individual exposures are not indivisible injuries but a single injury/disease that is preempted. Thus, when the employment injury aggravates or combines with a previous condition or disease, the employer is liable for the resulting total disability. Judge Vance rejected that argument, reasoning that the scope of an LHWCA award does not affect the claimant’s ability to sue manufacturers of products, or, in this case, Avondale as employer of Callen’s brother. As the LHWCA is only concerned with Avondale’s capacity as employer, she denied Avondale’s motion for summary judgment for Callen’s exposure in Avondale’s capacity as employer of Daniel. Judge Vance then applied the holding on Avondale’s motion for summary judgment to the motion filed by Avondale’s insurer, Lloyd’s. She only added that Lloyd’s was also not liable in its capacity as insurer for executive officers of Avondale (even though they were not part of the previous order) because the executive officers have the same immunity to suit as the employer. Similarly, Judge Vance denied Lloyd’s motion to the extent of Avondale’s liability in a non-employer capacity with respect to Callen.
Several defendants then moved for summary judgment on the ground that Callen had not produced sufficient evidence of exposure to their products. Defendant Entergy argued that there was no evidence of exposure to asbestos from its facility at Nine Mile Point because Callen supported his claim of exposure with his father’s statements that he worked at the facility. Judge Vance agreed that the testimony was hearsay and dismissed Entergy from the suit. With respect to the other defendants, Judge Vance held that some of the defendants had established that there was no exposure to their products and granted their motions. Callen and some of the defendants sought a clarification or reconsideration of Judge Vance’s decision that the LHWCA does not preempt the plaintiff’s claims against Avondale arising out of his brother’s employment with Avondale; however, Judge Vance did not see any reason for clarifying her holding and reaffirmed that the dismissal was for all of the claims except the take-home exposure claims brought against Avondale in the capacity as employer of Callen’s brother. Albert L. Bossier, Jr. was sued by Callen in his capacity as an officer of Avondale and filed cross claims against multiple co-defendants. The co-defendants moved to dismiss the claims as preempted by the LHWCA, but Bossier died and no substitution was made for him after the suggestion of death was filed for him. Without a substitution, Judge Vance dismissed Bossier’s third-party claims. Callen also alleged that he was exposed to asbestos while employed by Halter Marine, and he named Halter Marine’s insurer, Continental, as a defendant. Continental moved for summary judgment on the ground of preemption under the LHWCA, and Judge Vance reiterated her analysis with respect to the preemptive effect of the LHWCA based on the extension of coverage with the 1972 Amendments. Callen reiterated some arguments and made additional arguments, all of which were rejected by Judge Vance. He argued that Continental’s insurance policy did not provide LHWCA coverage and, consequently, LHWCA immunity was not applicable. Reviewing the policy language digitally, Judge Vance found it legible and clear that there was LHWCA coverage. Callen also argued that even if the LHWCA preempted his claims arising out of injuries incurred while at Halter Marine, it did not preempt his claims arising from exposure from his work clothes while at home. Judge Vance rejected that argument, however, and held that the off-site exposures arose out Callen’s employment and were covered by the LHWCA. Callen also argued that his injuries occurred in the twilight zone of concurrent state/federal jurisdiction where he was allowed to bring a state workers’ compensation claim. Judge Vance noted, however, that Callen was not bringing a state workers’ compensation claim, and she continued to apply her preemption analysis with respect to the state tort action. Judge Vance similarly rejected the argument that the preemption analysis did not apply because Callen was not seeking benefits under the LHWCA, following the previous preemption analysis. Finally, Judge Vance dismissed Callen’s intentional tort claims, holding that the evidence presented fell far short of establishing that Halter Marine intended to harm him or that his mesothelioma was inevitable. See June 2022 Update.
Westinghouse moved for summary judgment, asserting that Callen (now his beneficiaries as Callen recently passed away) failed to produce sufficient evidence that Callen was exposed to asbestos attributable to Westinghouse turbines. Before he died, Callen testified that he was exposed to asbestos gaskets affixed to Westinghouse turbines while he worked as a pipefitter at Avondale from March 1969 to May 1974. He described how he broke the flanges off the turbines and changed the valves. Westinghouse’s representative testified that Westinghouse supplied turbines to Avondale under a contract with Avondale and that the turbines had metallic asbestos gaskets. Reasoning that it is the quality of the exposure, not its length, that satisfies the “substantial factor” test, Judge Vance held that there was sufficient evidence to deny summary judgment as to the use of asbestos gaskets on Westinghouse turbines. However, Judge Vance found that the Cortez claim of exposure to asbestos insulation failed because the plaintiffs failed to submit evidence that Westinghouse manufactured or supplied asbestos-containing insulation. Although there was testimony that the turbines required insulation and that Westinghouse knew that asbestos was a popular insulation and that military specifications called for asbestos insulation, there was no evidence that Westinghouse’s design included an asbestos requirement or recommendation (this finding disposed of both claims for design defect and failure to warn). Consequently, Judge Vance granted in part and denied in part Westinghouse’s motion for summary judgment. See August 2022 Update.
The plaintiffs moved to exclude the testimony of Westinghouse’s expert, Dr. Samuel Forman, with respect to a government contractor defense and as to Avondale’s knowledge of asbestos hazards (relevant to Westinghouse’s sophisticated-purchaser defense). Although Judge Vance had granted summary judgment to Westinghouse with respect to its turbines (and the expert testimony was not longer relevant on that claim), the court denied summary judgment with respect to Callen Cortez’s exposure to asbestos from gaskets used in connection with the turbines. Therefore, Judge Vance denied the motion to the extent Dr. Forman’s testimony addressed naval and related governmental asbestos safety requirements for shipyards, including communications to shipyards about the hazards of asbestos or required protections or procedures for handling asbestos products (what Avondale would have known about the hazards of asbestos from working as a Navy shipbuilding contractor). However, she granted the motion with respect to his opinions regarding the Navy’s requirements for naval shipyards (unless specifically applicable to contractors) and the Navy’s expectations of equipment manufacturers (irrelevant to Avondale’s knowledge).
Certain London Market Insurers (who wrote excess coverage for Avondale from 1973 to 1974) were named as direct-action defendants under Louisiana law. They moved for summary judgment on the ground that the threshold for liability under the excess insurance was $15 million, and it was implausible that the coverage would be triggered for the pro-rata damages allocated to Avondale for any single policy period. Judge Vance rejected that argument as not proper for summary judgment, reasoning that the insurers were simply making a prediction about matters that involved fact issues awaiting trial. Accordingly, she declined to grant summary judgment to the London Market Insurers.
Cindy Hurwitz was hired by her husband, Scott Hurwitz (Logistics Coordinator for Wildfish, LLC). Wildfish is a seller of fresh fish that ships its products interstate and internationally. Cindy was originally hired to work in the shop, but later she began working as a truck driver and unloader (she would drive a truck to the dock and assist in unloading totes of fish from the vessel to the truck to be transported to the next destination). John Good is a commercial fisherman who owned the F/V ALOSA. The vessel was outfitted with a hydraulic take-out boom, operated by Good, that lifts totes of fish off the vessel. While the ALOSA was docked at a public pier in Sandwich, Massachusetts, Cindy attached a boat hook to the handle of one of the totes being lifted so that she could guide the totes to the dock. When the totes are hoisted from the vessel and pulled with the hook, it creates a pendulum effect. The unloader lets go of the hook when it pulls away from the dock, but Cindy failed to let go of the boat hook, and she was pulled from the dock over the boat. She was injured when she fell to the boat. Good filed this action in federal court in Massachusetts seeking limitation of liability. Cindy filed a claim in the limitation action, and Good brought a third-party action seeking contribution or indemnity from Wildfish. Wildfish and Good brought motions for summary judgment, and the decision on Good’s motion resolved the claim for contribution or indemnity from Wildfish. Cindy argued that Good breached the Scindia duty of active control because of the involvement of Good in the lift that injured Cindy. However, Judge Kelley noted that there were no allegations that the boom had any defects or that Good’s operation of the boom was unreasonable. Cindy argued that Good breached a duty to her because he was concerned about her physical stature and body positioning and could see that she was not in the proper position to receive the totes. However, Judge Kelley did not believe that the observations created liability for Good when the failure to let go of the hook happened instantaneously with Cindy’ positioning (particularly after there had been approximately 10 to 20 successful lifts before the one on which she was injured). Cindy also argued that there was a dock crane available and that Scott had told Good that he preferred the dock crane. However, the fact that there was an alternative method available did not suggest that the use of the vessel’s boom presented an unreasonable risk of harm when there was no evidence of any defect in the boom or in its operation. Finally, although Cindy failed to establish that Good breached a duty to her, Judge Kelley also held that Cindy failed to establish that Good’s actions caused her fall as she admitted that had she let go of the boat hook when it pulled away from the dock, the fall would not have happened. Accordingly, Judge Kelley granted summary judgment to Good and declined to rule on Good’s claims against Wildfish, considering them moot.
Benjamin Cormier, a hygrographic surveyor employed by Complete Logistical Services, was injured while transferring from the DIAMOND 85, a lay/bury derrick barge, to the M/V CROSBY QUEST, a tug owned and operated by Crosby Marine. Cormier brought suit in state court in Louisiana against Diamond Services, owner of the DIAMOND 85, and Diamond filed this limitation action in federal court. Cormier filed a claim in the limitation action, and claims were also filed by Crosby Marine, seeking contribution and indemnity, and by Cormier’s employer, Complete Logistical, and its LHWCA insurer, Signal Mutual, seeking amounts paid under the LHWCA or for maintenance and cure. Cormier filed a stipulation seeking to lift the stay in the limitation proceeding, but Judge Summerhays declined to lift the stay, noting that parties seeking contribution, indemnity, costs and/or attorney’s fees were claimants under the limitation act and must file proper stipulations in order for the stay to be lifted. See February 2021 Update.
In March 2021, Cormier’s counsel advised the court that the case had settled, and Judge Summerhays entered a 60-day order dismissing the case. One of the terms of the settlement was a complete release and waiver of lien from Complete Logistical and Signal Mutual. Simultaneously, Cormier had agreed to settle his LHWCA claim against Complete Logistical and Signal Mutual. Two months later, however, Cormier moved to reinstate the case. Diamond Services and Crosby Marine opposed the motion and moved to enforce the parties’ settlement agreement. Cormier learned that he may have a loose cervical anterior plate and possible sequestered cervical interbody spacers with a risk of paralysis. He withdrew from his settlement of his LHWCA compensation claim against Complete Logistical Services and Signal Mutual, and Cormier argued that the failure of that settlement negated the settlement with Diamond Services and Crosby Marine. Cormier argued that he withdrew from the LHWCA settlement before it was approved by the Department of Labor because the worsening of his medical condition would result in additional medical expenses. He then contended that the LHWCA settlement and release by Complete Logistical and Signal was a condition to the tort settlement, so the tort settlement against Diamond Services and Crosby Marine was unenforceable. Reviewing the correspondence and documents exchanged by the parties, Judge Summerhays reasoned that the parties had unambiguously entered into an agreement on all of the essential terms for Cormier’s tort claims, and that the agreement was enforceable without a formal release. As to the release of the LHWCA claims against Complete Logistics and Signal, Judge Summerhays stated that the failure of a condition excuses performance by the party whose performance is dependent on its occurrence, but it does not necessarily prevent a contract from being formed. In this case, the language describing the contingency reflected a condition to performance and not a condition to the formation of the settlement agreement. The language denoted a condition to the payment of settlement funds by Diamond Services and Crosby Marine. It did not condition Cormier’s performance of his obligations under the tort settlement on the approval of the LHWCA settlement. As it was a condition to performance, Diamond Services and Crosby Marine could agree to waive or excuse that condition to performance, which they did, according to Judge Summerhays, by their argument in the motion to enforce the settlement. Judge Summerhays agreed with Cormier, however, that Diamond Services and Crosby Marine could not force a release of his LHWCA benefits by the tort settlement. By waiving or excusing the performance of the condition, Diamond Services and Crosby Marine could not enforce a release that required Cormier to relinquish his rights under the LHWCA. Consequently, Judge Summerhays agreed to enforce the settlement but not to the extent that Diamond Services and Crosby Marine sought to require Cormier to release his LHWCA claims or to obtain a lien release from Signal as a condition to the tort settlement.
Lennard H. Stansbury brought this suit in Louisiana state court alleging exposure to asbestos while working at various marine and industrial job sites in the New Orleans area. Two of the sites (and defendants) were Avondale Shipyard and Dixie Machine, Welding & Metal Works (insured by defendant Wausau). Avondale removed the case to the federal court in New Orleans based on the Federal Officer Removal Statute, and Avondale was later dismissed by stipulation. Stansbury moved to remand the case. Wausau argued that the Federal Officer Removal Statute still provided jurisdiction for the claim against Dixie Machine, and it argued that it had established a colorable federal defense from the preemption of the LHWCA’s exclusive remedy. However, Judge Lemelle rejected application of the Federal Officer Removal Statute because Dixie Machine did not work on a United States vessel or pursuant to a government contract. Although Wausau argued that the LHWCA preemption also provided a basis for jurisdiction, Judge Lemelle cited the decisions of the Fifth Circuit holding that the statutory preemption was insufficient to create federal removal jurisdiction. Finally, Wausau argued that the federal court could exercise its discretion to retain jurisdiction after the dismissal of Avondale based on the original jurisdiction under the Federal Officer Removal Act Statute when Avondale was a defendant, but Judge Lemelle declined to do so, noting that the LHWCA defense could be asserted in state court and that state-law claims now predominated in the case.
Ronald John Falgout worked at Avondale’s shipyard in Bridge City, Louisiana, and claimed that he was exposed to asbestos when employees of Hopeman Bros. cut and installed asbestos wall board and when Avondale insulators cut insulation and mixed cement to cover pipe insulation and valves on United States vessels on which he worked. His wife, Ruby Lee Marie Falgout, alleged in this suit that she contracted mesothelioma by laundering Ronald’s work clothes. After she died, Ronald was substituted as the plaintiff. Falgout moved for summary judgment on the Yearsley and Boyle defenses asserted by Avondale, and Judge Barbier began by addressing the Boyle government-contractor defense (for contractors whose products comply with government specifications) for the claim of failure to warn. The first element of the defense requires evidence that the government exercised discretion and approved warnings for the product. Concluding that Avondale failed to carry its burden to establish a government specification requiring it to provide (or not provide) warnings to its employees about asbestos, Judge Barbier held that Avondale failed to establish the defense. Similarly, in the absence of evidence that the government exercised its discretion in approving precise specifications for the use and storage of asbestos, Judge Barbier held that Avondale failed to establish the first element of the Boyle defense for Falgout’s claim that Avondale failed to implement engineering controls and industrial hygiene measures to prevent the uncontrolled spread of asbestos. Judge Barbier then turned to the Yearsley defense (work authorized and directed by the government) and its first element, that the contractors work was authorized and directed by the government. As Falgout claimed that Avondale negligently carried out its government contracts requiring the use of asbestos with warnings, storage, and safety policies separate from those authorized by the government, Judge Barbier held that Yearsley was not applicable and Avondale was not entitled to derivative sovereign immunity.
From the state courts:
Red Hook Container Terminal operates a marine terminal in Brooklyn, New York. Red Hook is not a party to the collective bargaining agreement with the International Longshoremen’s Association and could not hire lashers directly from the Union. Thus, it contracted with American Maritime Services for lashers to attach/detach containers from container ships. Red Hook notified American Maritime how many vessels would be loaded or unloaded daily, and American Maritime provided the lashers and small items for their work, such as hand tools and harnesses. Leonardo Gonzalez was employed by American Maritime and assigned to work for Red Hook. American Maritime paid wages to Gonzalez, withheld taxes, and carried LHWCA insurance. Gonzalez was injured when he slipped on oily stairs on a spreader, and he brought this suit in New York state court against Red Hook, asserting negligence for providing defective equipment and a dangerous workplace. Red Hook filed a motion for summary judgment, arguing that it was the employer of Gonzalez and that the LHWCA provided the exclusive remedy against Red Hook. Although Gonzalez argued that there was a fact dispute whether Gonzalez was supervised by Red Hook, Justice Silber disagreed and held that Gonzalez was a special employee of Red Hook and, accordingly, dismissed the case.
And on the Maritime Front . . .
From the federal appellate courts:
Sithonia Shipholding, owner of the M/V PEBBLE BEACH, entered into a charter party with Greatwin Carrier, and that charter provided that the charterer would not procure necessaries, including bunkers, on the credit of the owners or the vessel. Greatwin contracted with Praxis to provide bunkers for the vessel, and the contract incorporated Praxis’s standard terms that included the charterer’s agreement that the sale created a maritime lien on the vessel. The terms also specified that the agreement would be governed by the maritime law of the United States. Greatwin failed to pay Praxis for the bunkers, and Praxis brought a lawsuit in Brazil against Sithonia, Greatwin, and the manager of the vessel. The vessel was attached in Brazil in a quasi-in-rem proceeding, and the vessel was released when Sithonia provided security. Praxis then arrested the M/V PEBBLE BEACH in this action filed in the federal court in Delaware (an in rem proceeding pursuant to Supplemental Rule C). Sithonia answered and counterclaimed, seeking attorney fees and costs incurred in this action and in the Brazilian action between the parties. The parties filed cross-motions for summary judgment, and Judge Stark held that Praxis did not have a valid maritime lien at the time it initiated the action and awarded Sithonia $170,402.01 in attorney fees based on the terms of the contract (he also ordered countersecurity be posted by Praxis). Judge Stark addressed the hourly rate for the Sithonia’s attorney and accepted his hourly rate of $270 as an experienced lawyer working in the field of maritime law (he graduated in 1984). Judge Stark also rejected the argument that the issues were not complex and straightforward so that the fees and costs were unreasonable, noting that “Praxis’ repeated refrains as to how Defendant ‘should have litigated this matter . . . are unpersuasive, as Praxis was vigorously fighting Defendant at every point . . . .” See September 2021 Update.
Praxis appealed the decisions that it did not have a valid lien when it arrested the vessel in Delaware and that it owed attorney fees, and the Third Circuit affirmed the rulings of Judge Stark. Writing for the Third Circuit, Chief Judge Chagares rejected Praxis’s argument, based on the affidavit of Brazilian counsel, that Praxis did possess a maritime lien against the vessel at the time of its arrest in Delaware (arguing that the proceeding in Brazil was a quasi-in-rem attachment and not an in rem proceeding). Chief Judge Chagares noted that the affidavit was presented in connection with Praxis’s motion for reconsideration and that Judge Stark acted within his discretion in not considering the affidavit. Considering the parties’ presentation of Brazilian law, Chief Judge Chagares held that Judge Stark did not err in determining that Praxis had a valid maritime lien that was tied up in the security held by the Brazilian court. As Praxis’s terms provided for the recovery of attorney fees by the prevailing party, Chief Judge Chagares also affirmed the award of attorney fees to Sithonia.
Ferrominera, a Venezuelan company owned by the Venezuelan government, produces and exports iron ore. Ferrominera chartered the GENERAL PIAR from Commodities & Minerals Enterprise (CME) to shuttle iron ore from Ferrominera’s Venezuelan mines to an offshore transfer station where it would be shipped away by CME. The charter party contained a broad New York arbitration cause, and CME commenced an arbitration proceeding in New York against Ferrominera seeking to recover for unpaid invoices, lost profits, and attorney fees. Ferrominera raised a number of defenses under Venezuela law in the arbitration, but the panel rejected the defenses and ruled in favor of CME based on the choice-of-law provision in the charter selecting United States maritime law. CME then brought this action in federal court in New York to confirm the arbitral award, and Ferrominera responded that it was not properly served with a summons as required by the Foreign Sovereign Immunities Act. It also argued that the panel’s award exceeded the scope of the arbitration agreement and its enforcement would violate United States public policy because the charter was obtained through corruption. Judge Carter held that the court had jurisdiction; he confirmed the award; and he awarded attorney fees to CME. Ferrominera appealed to the Second Circuit. Reading the provisions of the Foreign Sovereign Immunities Act in conjunction with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Federal Arbitration Act, Judge Nardini held that the only document that had to be served was notice of the application to confirm the award, and that it was not necessary to serve a summons (and complaint as no complaint is filed). After upholding the jurisdiction of the district court, Judge Nardini rejected the challenges to the award, noting that the public policy argument attacked the charter party, not the award, and the appellate court would not relitigate the arbitrators’ determination about the enforcement of the charter party. The Second Circuit did, however, disagree about the award of attorney fees (awarded by Judge Carter for failure to present a good faith reason for not complying with the award). Judge Nardini noted that the jurisdictional issue presented a question of first impression and that Ferrominera had twice achieved some success with the argument in other district courts.
The Army Corps of Engineers awarded a contract to T.W. LaQuay Marine for a dredging project on the Texas Gulf Coast. LaQuay obtained a surety bond from Travelers in compliance with the Miller Act. During the project, the dredging vessel, M/V MAGNOLIA STATE, needed repairs, and Diamond Services performed the repairs (completed on March 24, 2020). When LaQuay failed to pay, Diamond submitted a claim to Travelers on the surety bond. Travelers requested that Diamond fill out a form and provide information, and Diamond complied. On March 26, 2021 (two days after the running of the one-year limitation in the Miller Act), Travelers denied the claim, and three days later Diamond filed this action against Travelers in federal court in Texas seeking damages under the bond and the Miller Act. Travelers moved to dismiss the suit for failure to state a claim, and Diamond argued that equitable estoppel prevented Travelers from claiming limitation. Judge Brown rejected the argument, noting that the defendant must do something to actively lead the plaintiff astray, stating: “Maybe Travelers was too cute in waiting until limitations had run before denying Diamond’s claim. But Travelers never made any assurance or even imply that it would pay the claim, or that it would decide the claim within any specified time.” Concluding that Travelers was not equitably estopped from asserting the limitation defense, Judge Brown granted Travelers’ motion to dismiss.
Diamond appealed the dismissal to the Fifth Circuit, and the panel affirmed, reasoning that a party asserting an estoppel defense must show that it was misled to its detriment. As Travelers made no promise of a response or representation that Diamond would be paid, there was no reasonable reliance on anything Travelers said, and “equitable estoppel does not rescue its claim.”
In the October 2022 Update, we reviewed the decision of the Eleventh Circuit in Francis v. MSC Cruises, S.A., affirming the summary judgment granted to the cruise line for lack of notice in connection with the injury suffered by a passenger who slipped and fell on her way to the buffet. Donnie Holland, a passenger on the CARNIVAL HORIZON, slipped on a wet or slippery foreign substance while descending glass stairs from Deck 5 to Deck 4. Holland brought this action against the cruise line in federal court in Florida, alleging causes of action based on vicarious liability for negligent maintenance and negligent failure to warn of the hazard. The cruise line moved to dismiss the complaint for failure to sufficiently allege notice of the hazard, and Judge Scola held that the allegations (that the cruise line must have been aware of the hazard because of prior slip-and-fall accidents and that the staircase was highly trafficked so that the cruise line should have been aware of the condition) did not state a claim that was plausible on its face sufficient to survive a motion to dismiss. Holland appealed to the Eleventh Circuit, and, writing for the court, Judge Lagoa noted that Holland had alleged claims based on vicarious liability. However, there was no allegation seeking to impose liability on an otherwise nonfaulty cruise line for an employee’s negligence—there was no allegation that a specific crewmember caused the injury. Thus, like Judge Scola, Judge Lagoa proceeded to analyze the sufficiency of the complaint based on the duty owed for direct liability of the cruise line, which required pleading of the actual or constructive knowledge of the cruise line of the dangerous condition (noting that, unlike the situation in the Yusko case, Holland had not identified a specific employee whose negligent act caused the fall). Although the staircase was in a highly trafficked area and was potentially visible to many crewmembers and was subject to the regulation of safety agencies, those facts only established that it was possible that the cruise line had constructive notice of the condition so as to invite corrective measures (the complaint also lacked any allegation that the hazard existed for a sufficient length of time). The allegation that there were similar incidents fared no better because Holland only made conclusory allegations and did not allege any facts concerning a substantially similar incident. Consequently, the Eleventh Circuit affirmed the dismissal of the complaint for failure to state a claim.
Nancy Gould, a passenger on the Carnival LIBERTY, was injured while walking up the gangway of the vessel in Nassau, The Bahamas, when a passenger in front of her charged at a woman and took a swing at the woman, causing the woman to fall into Gould, who fell off the gangway. A few minutes earlier, Gould witnessed the man punch the same woman in the head on the pier in Nassau while they were walking back to the ship. Gould brought this suit against the cruise line in federal court in Florida, and her theory of liability against the cruise line was that an employee from a different cruise ship witnessed the earlier assault, scurried down the pier toward the LIBERTY, and made gestures to a crewmember of the LIBERTY to indicate that the man had punched his companion. Gould contended that the crew was negligent in failing to prevent the man from pushing the woman on the gangway. The case was tried in a four-day Zoom bench trial to Magistrate Judge Goodman, and he found that Gould did not establish that an employee of the cruise line had been given notice by the gesture of the earlier physical confrontation or that the cruise line breached any duty to Gould. With respect to notice, Magistrate Judge Goodman noted that Gould testified in her deposition that there were no crewmembers standing between a structure on the pier and the crewmembers on the vessel. That testimony was supported by a passenger who testified that she did not remember a crewmember at the base of the gangway. Finding no crewmember at the base of the gangway, Magistrate Judge Goodman could not find that the gesture happened. And, even if the gesture did occur, Magistrate Judge Goodman did not find that it was sufficient to give notice of the risk-creating condition of the passenger while on the gangway (Gould testified that she felt safe on the ramp and had put the prior incident out of her mind). With respect to duty and breach, Magistrate Judge Goodman concluded that the cruise line did not have a duty to monitor the foreign pier, that if the passenger was a risk, his condition was open and obvious to Gould, and that if the cruise line had notice, it did not have a duty to intervene on the gangway and before the security checkpoint inside the ship. See April 2022 Update.
Gould appealed to the Eleventh Circuit, focusing primarily on the notice issue. However, there were multiple, independent grounds for the judgment, and Gould had the burden to establish that every stated ground for the judgment was incorrect. As Gould did not demonstrate that Magistrate Judge Goodman erred in holding that the cruise line was not required to immediately intervene, that the cruise line lacked reasonable time to intervene and correct the condition once the argument resumed on the gangway, and that an intervention would have prevented the injury, the Eleventh Circuit affirmed the judgment without addressing the notice argument presented by Gould.
Daniel Ramirez, a Louisiana resident, worked for Performance Energy, which contracted with the owners and operators of a platform rig on the outer Continental Shelf, 25 miles off the coast of Louisiana, to perform construction work on the rig. The rig owners also hired Paloma Energy to serve as their representative for the contract with Performance Energy. Paloma Energy hired Madrid Pitre as an inspector and coordinator for the contract. Ramirez and Pitre were roommates on the rig. Ramirez awoke late one night thinking he was having a medical emergency, and he awakened Pitre, who escorted Ramirez to a nearby office. Pitre asked about the symptoms and researched the symptoms. Within 20 minutes after being awakened, Pitre brought the Person-in-Charge to Ramirez, and the Person-in-Charge called a medic on an adjacent platform who recommended that Ramirez go to a hospital. The Person-in-Charge then called a helicopter, which took Ramirez to a hospital where he was treated for a stroke. Ramirez brought suit in state court in Texas against Paloma Energy and others, asserting that the defendants did not provide timely and adequate medical care and failed to timely evacuate him from the platform. The case was removed to federal court, and Paloma moved for summary judgment on the ground that it did not assume a duty to Ramirez or breach any duty to him. Citing Louisiana law, applicable through the Outer Continental Shelf Lands Act, Chief Judge Rosenthal reasoned that a defendant does not generally have a duty to assist a person who is in peril, even if the defendant’s aid could save the plaintiff. However, Ramirez argued that, by voluntarily helping Ramirez, Pitre assumed a duty and had to act in a reasonable and prudent manner. However, Chief Judge Rosenthal pointed out that the duty only arises if the defendant caused the need for medical aid, had a special relationship with the plaintiff, or discouraged others from giving aid. As those facts were not present in this case, Chief Judge Rosenthal held that no duty was owed. And, even if a duty were owed, Chief Judge Rosenthal held that the record did not establish any breach as Pitre brought the Person-in-Charge to Ramirez within 20 minutes, and the Person-in-Charge took over the situation and provided for the evacuation of Ramirez. See September 2021 Update.
Talos, the owner of the platform and operator of the lease, then moved for summary judgment on the claim that it was negligent for failing to evacuate Ramirez faster. Ramirez argued that by the time he reached the hospital it was too late to administer a plasminogen activator (tPA) that can dissolve blood clots in patients suffering an ischemic stroke. The parties agreed that tPA should be administered within three hours of the last known well time, but that it can be administered up to four and a half hours after the onset of a stroke. Although the parties disputed the last known well time for Ramirez, Chief Judge Rosenthal calculated the time it took for the Medevac helicopter to get to the platform, transport Ramirez to the hospital, and complete the test to rule out Bell’s Palsy, and she agreed that there was no cause-in-fact for injury from actions of Talos as Ramirez was outside the eligible window to receive tPA regardless of Talos’ conduct. As Talos was not responsible for Ramirez’s inability to receive tPA, Chief Judge Rosenthal granted summary judgment to Talos. See December 2021 Update.
Ramirez appealed to the Fifth Circuit, and, in the absence of evidence of causation from the actions of any defendant, the appellate court held that Ramirez’s claims failed and affirmed Judge Rosenthal’s dismissal of the suit.
Raymond Robinson was injured while working as a deckhand on the M/V TIMOTHY JAMES and made a claim against the vessel and its owner, Stevanna, under the Jones Act and general maritime law. Stevanna reported the accident to insurer, Atlantic Specialty, which issued P&I and marine general liability policies to Stevanna. Atlantic denied coverage because the TIMOTHY JAMES was not included in the schedule of vessels covered under the P&I policy, and Stevanna brought this action against Atlantic seeking coverage under the policies. After the court ruled in favor of Atlantic on the P&I policy, Atlantic file a motion for summary judgment with respect to the MGL policy, arguing that Robinson was an employee and employee claims are excluded from the policy. Chief Magistrate Judge Eddy first addressed Stevanna’s argument that Atlantic had waived the right to assert the exclusion because it had never issued a declination for the policy. However, Chief Magistrate Judge Eddy answered that, under Pennsylvania law, waiver does not bring within coverage risks that are expressly excluded. As the MGL policy excluded liability for an employee, Stevanna argued that the exception to the contractual liability exclusion for liability assumed by the insured in an insured contract applied to the oral contract between Stevanna and its employee Robinson. Chief Magistrate Judge Eddy responded, however, that an insured contract is an agreement under which the insured assumes the tort liability of another party for bodily injury to a third person. The contract with Robinson did not assume the tort liability to a third party and, therefore, provided no basis for avoiding the employee exclusion. See July 2021 Update.
Stevanna then appealed the coverage decisions to the Third Circuit, and Judge Phipps began by considering the P&I coverage. As the TIMOTHY JAMES was not identified in the schedule of vessels, Judge Phipps considered the automatic-acquisition clause that afforded coverage for vessels acquired or chartered by Stevanna. As the P&I policy is subject to the as-owner requirement, Judge Phipps reasoned that the interest in the vessel for the automatic-acquisition clause would have to be a bareboat charter that had the attributes of ownership. Considering the oral charter in this case, Judge Phipps agreed that possession, command, and navigation had not been sufficiently relinquished to Stevanna, and, consequently, he agreed that the P&I policy did not afford coverage [contrary to the Fifth Circuit’s decision in Randall v. Chevr0n, 13 F.3d 388, holding that the liability incurred by Chevron in its capacity as time charterer in that particular case was incurred “as owner” within the meaning of the P&I policy]. With respect to the MGL policy and the exception for liability assumed under an insured contract, Judge Phipps agreed that the agreement to indemnify for Stevanna’s tortious conduct did not evince an agreement to assume the tort liability of others. As it did not make Stevanna liable for injuries caused by another party, it was not an insured contract and the employee exclusion of the MGL policy barred coverage.
From the federal district courts:
Darryl Ashcraft alleged that he was injured when a crane sling snapped under tension and struck his arm while he was employed on a lift boat owned and operated by Alliance Energy while performing a plug-and-abandon job on a platform owned by Cantium. Ashcroft brought this suit in Louisiana state court against Cantium and Alliance Energy, asserting that he was a seaman and alleging claims against both defendants under the Jones Act as well as claims for negligence under the general maritime law. Cantium removed the action based on jurisdiction under the OCSLA and federal question jurisdiction. Cantium argued that the Jones Act claims did not preclude removal and that the Jones Act claim pleaded against Cantium was fraudulently pleaded as Cantium was not Achcraft’s employer. Ashcraft moved to remand the case, arguing that its claims were brought under the general maritime law and were not removable because of the Saving-to-Suitors Clause and because of the non-removability of Jones Act claims. Magistrate Judge Bourgeois first held that Cantium had established that there was jurisdiction under the Outer Continental Shelf Lands Act, and the well-pleaded complaint rule did not apply to bar removal (the operation involved the plugging and abandonment of the oil platform located on the outer Continental Shelf). Magistrate Judge Bourgeois then addressed Ashcraft’s argument that the action was not removable because the claims were governed by general maritime law and the defendants were from the state of suit (forum-defendant rule). Although the Fifth Circuit held that there is federal question jurisdiction over OCSLA cases arising under maritime law in the Barker case so that the forum-defendant rule would not be applicable, Magistrate Judge Bourgeois noted that the Removal Statute has been amended so that the forum-defendant rule only applies to diversity cases. Thus, even if maritime law applied, the forum-defendant rule would not bar removal. As to the Saving-to-Suitors Clause, Magistrate Judge Bourgeois noted that the Fifth Circuit has acknowledged the disagreement among district courts as to the removability of maritime claims brought under the Saving-to-Suitors Clause when there is no basis of jurisdiction independent of original admiralty jurisdiction. However, as there was jurisdiction under the OCSLA, there was no bar to removal from the Saving-to-Suitors Clause. Finally, Magistrate Judge Bourgeois held that there was no genuine dispute that no Jones Act claim was properly pleaded against Cantium, which was not the employer of Ashcraft. Thus, the petition alleged a hybrid case involving OCSLA claims (removable under the federal question jurisdiction) and a Jones Act claim that was not removable. In that situation, the Removal Statute (Section 1441(c)) provided that the case was removable, but the Jones Act claim against Alliance Resources should be severed and remanded to state court (Magistrate Judge Bourgeois noted that Alliance Resources could independently remove the case if it could establish that the Jones Act claim against it was improperly pleaded and that there was an independent basis for subject matter jurisdiction). As no objection was presented to the recommendation, Chief Judge Dick adopted the recommendation.
Jane Villere asserted that she was injured from exposure to oil and dispersants in Pensacola, Florida and Waveland and Gulfport, Mississippi. Cynthia Paige claimed that she was exposed to oil or dispersants based on exposure at Old Highway 61 North in Tunica, Mississippi. Mark Wilson alleged that he was exposed to oil and/or oil-dispersing chemicals/decontaminants by virtue of his environment at New Sarpy, Louisiana. Gwendolyn F. Bennett claimed that she was exposed to harmful substances and chemicals around her residence in Gulfport, Mississippi. As these plaintiffs failed to support their claims with expert testimony as to causation, Judges Vitter and Milazzo granted summary judgment for lack of evidence of causation and dismissed the suits.
Lloyd Stewart, Jr., claimed exposure while working as a beach cleanup worker, cleaning oil and oil-covered debris from the beaches and coastal areas in Gulfport, Biloxi, Point Cadet, Petit Bois, Pascagoula, and Millmer Station, Mississippi, as well as Pensacola, Florida. Sheila Goree Tebbs alleged exposure while working as a recovery technician, cleaning oil and oil-covered debris from the beaches and coastal areas in Gulfport, Biloxi, Pass Christian, and Pascagoula, Mississippi. Holly Moorere claimed exposure while working as a beach cleanup worker, cleaning up oil and oil-covered debris from the beaches and coastal areas in Gulf Shores, Alabama. Andouche Cambre alleged exposure while working as a beach cleanup worker, cleaning oil and oil-covered debris from the beaches and coastal areas in Gulfport and Biloxi, Mississippi. Doug Maurras claimed exposure while working as a boat captain and beach cleanup worker from the beaches and coastal areas in Orange Beach, Alabama and Pensacola, Florida. Joshua Bengson alleged exposure while working as a first mate on the SAIL-MAN, cleaning up oil and oil-covered debris and rescuing oil-covered animals from the waters near Destin, Florida. Courtney Brister claimed exposure as a beach cleanup worker from the beaches and coastal areas in Gulfport, Biloxi, Pass Christian, Long Beach, and Pascagoula, Mississippi. Robyn Hill alleged exposure to oil and dispersants in Gulf Shores, Alabama, the Mississippi Coast, and Raceland, Mississippi. Marqueda Swanier asserted exposure as a beach cleanup worker from the beaches and coastal areas in Gulfport, Biloxi, Long Beach, Pass Christian, Moss Point, Pascagoula, Ship Island, Cat Island, Horn Island, and Petit Bois Island, Mississippi. Robert Fuller claimed exposure as a beach cleanup worker from the beaches and coastal areas in Fourchon Beach, Louisiana. Kathy Lee alleged exposure as a cleanup worker at the beaches and coastal areas throughout Mississippi, Alabama, and Florida. The beneficiaries of Gary Schexnayder claimed that he was exposed to crude oil and dispersants while serving in the Vessels-of-Opportunity Program in Larose, Louisiana. These plaintiffs presented the opinions of Dr. Jerald Cook, an occupational and environmental physician to carry their burden on causation, but Judges Vance and Vitter held that Dr. Cook’s opinions were insufficient on general causation and were excluded. Consequently, without expert support, these cases were dismissed with prejudice.
Orient Express is a non-vessel operating common carrier that arranged for ocean transportation of goods for Bulb Basics. Orient Express issued several bills of lading to Bulb Basics, as shipper/consignor, but Bulb Basics did not pay for a number of the shipments. Orient Express and Bulb Basics then entered into a settlement agreement that released Orient Express’s claims in connection with nine bills of lading, but Orient Express brought this suit in federal court in New York against Bulb Basics with respect to amounts owed under eight of the bills of lading that were included in the settlement agreement. Bulb Basics moved to dismiss the complaint on the grounds of lack of subject matter jurisdiction, lack of personal jurisdiction, and for failure to state a claim based on the settlement agreement. Magistrate Judge Lehrburger first addressed the subject matter jurisdiction of the court. Orient Express argued that the court had admiralty jurisdiction based on amounts due under the bills of lading (maritime contracts). Bulb Basics argued, however, that the court lacked admiralty jurisdiction because the settlement agreement extinguished the bills of lading and the dispute was over the settlement agreement. Magistrate Judge Lehrburger agreed that there would be no maritime jurisdiction if Orient Express had brought suit over enforcement or rescission of the settlement agreement, but its suit was based on the amounts allegedly owed under the bills of lading. Accordingly, he agreed with Orient Express that the court had subject matter jurisdiction based on admiralty. Magistrate Judge Lehrburger also agreed that the court had personal jurisdiction because Bulb Basics consented to jurisdiction in the Southern District of New York in the credit agreement between the parties. Converting the motion to dismiss for failure to state a claim to a motion for summary judgment, Magistrate Judge Lehrburger found no ambiguity on the issue whether the settlement agreement released the claims based on the eight bills of lading involved in the suit (which were enumerated in the settlement agreement). Orient Express argued that the provision in Section 1 of the settlement agreement, reciting that a settlement had been entered into in the amount of $36,496.39, “representing the outstanding balance on the account Bulb Basics has with [Orient Express]” reflected that the remaining amounts due on the bills of lading involved in the suit must not have been released. Magistrate Judge Lehrburger considered that contention to be dubious as the release provisions in Section 2 of the Agreement identified and released all nine bills of lading, including the eight that were involved in the suit. In view of the clarity of the release, Magistrate Judge Lehrburger rejected Orient Express’s arguments of ambiguity and unilateral mistake (based on Kansas law, noting there was no allegation of fraud) and granted summary judgment to Bulb Basics. As the settlement agreement entitled the prevailing party to recover attorney fees, Magistrate Judge Lehrburger recommended that Bulb Basics be awarded attorney fees and costs. See April 2022 Update.
Orient Express objected to the recommendation, and Judge Woods agreed with Judge Lehrburger that the settlement agreement unambiguously released the claims with respect to the bills of lading at issue. However, he held that Orient Express had raised genuine issues of fact on the question whether the agreement should be reformed under Kansas Law (applicable under the choice-of-law clause in the release) for mistake. Based on the negotiation history in the emails between the parties, Judge Woods found that a reasonable fact finder could conclude that Orient Express did not intend to negotiate the amount in the eight bills of lading. Judge Woods rejected the argument that Kansas law required fraud before an agreement could be reformed or rescinded, holding that a contract can be reformed when one party acts inequitably because it knows that another party has made a mistake but fails to inform him of the mistake or conceals the truth. Finding a fact question of inequity from the drafting of the agreement by Bulb Basics that encompassed claims that Orient Express did not believe were within the scope of the discussions, Judge Wood held that Bulb Basic’s motion for summary judgment should be denied (also denying the request for attorney fees as it was now premature).
Zachary Fields brought this action in Washington state court against his employer, Kurt Halvorson, and the fishing vessel on which he was injured, the DOUBLE D, seeking to recover for negligence under the Jones Act and unseaworthiness and maintenance and cure under the general maritime law. Halvorson removed the case to federal court in Washington, and Fields moved to remand the case. Halvorson argued that the federal court had exclusive in rem admiralty jurisdiction because Fields brought claims against the vessel, but Fields agreed to dismiss his in rem action against the vessel, leaving the Jones Act and maritime claims against his employer. Concluding that these claims were not removable absent an independent ground for federal jurisdiction (which did not exist in this case) and that the claims were not removable based on the bar to removal of FELA (Jones Act) claims, Judge Martinez remanded the case to the Washington state court.
BP Exploration engaged Global Fabrications and/or Lawson Environmental to assist in the cleanup of the spill from the Macondo blowout, and Global Fabrications chartered the supply vessel ODYSSEA ATLAS from Odyssea Marine to collect oiled boom and bags from other vessels. Torrey Barlow alleged that he worked aboard the vessel from May to September 2010 and was exposed to oil and chemicals used in the cleanup. He brought this suit in federal court in Louisiana against Odyssea Marine, Lawson, and Global Fabrications under the Jones Act and general maritime law, and the defendants moved for summary judgment on Barlow’s status as a seaman, the seaworthiness of the vessel, causation for his claims, and derivative immunity. Judge Fallon held that Barlow was a seaman as he contributed to the mission of the vessel to collect oiled boom and bags, he spent over four months in service of the vessel (in excess of 30% of his employment), and he satisfied the elements enunciated by the Fifth Circuit in Sanchez for the nature element of the connection test for seaman status. Judge Fallon found that Barlow owed an allegiance to the vessel because he sailed with the vessel, he cleaned the vessel, he ate and slept on the vessel, and his job was essential to the completion of the vessel’s mission. He concluded that his work was entirely sea-based and involved sea-based activity as it occurred in the Gulf of Mexico approximately one to two hours from Venice, Louisiana. He did not perform discrete tasks and sailed with the vessel to different locations. As to the seaworthiness of the vessel, Judge Fallon noted that there was a strong smell from the crude oil and the vessel was covered with dispersant. Barlow complained that he was not provided with protective gear, and Judge Fallon held that the warranty of seaworthiness was a non-delegable duty of the owner, so there was a fact question whether Odyssea Marine was liable for unseaworthiness. As Barlow complained of symptoms and was diagnosed with medical conditions shortly after his exposure on the vessel, Judge Fallon held that there was a fact question whether Barlow suffered injury while serving on the vessel. Finally, the defendants argued that they were entitled to derivative immunity from the Clean Water Act for rendering assistance under the direction and control of the federal government consistent with the National Contingency Plan. However, the defendants did not provide evidence of acts taken under the direction and control of the government, and Judge Fallon declined to hold that the claims were barred by derivative immunity. See September 2022 Update).
Odyssea Marine moved for reconsideration, arguing that Barlow had not filed a motion for summary judgment and that the court should have simply denied the defendant’s motion rather than sua sponte holding that Barlow was a seaman. Judge Fallon disagreed, noting that the issue of seaman status was fully briefed and both parties had the opportunity to present their arguments on Barlow’s status. As the court was required to determine whether Barlow was a seaman in order to decide the defendant’s motion, Judge Fallon held that it was proper to rule in favor of Barlow, and he denied the request for reconsideration. Odyssea Marine also moved for reconsideration of the decision on unseaworthiness, but, as it did not present any newly discovered or previously unavailable evidence or new arguments, Judge Fallon declined to reconsider his ruling that there was a fact question of the seaworthiness of the vessel.
Nahim Jorge Bonilla and Simon Librati each owned 50% of the stock of Sea-Era Charters, which purchased the M/Y SEA ERA from Miami Beach Yacht Sales for a purchase price of $2.75 million. Bonilla funded the down payment, and Sea-Era Charters gave Miami Beach Yacht Sales a first preferred ship mortgage for $2,050,000. While Sea-Era Charters was defaulting on the payments for the first mortgage, Librati recorded a second preferred ship mortgage in the amount of $837,000 and, through his beneficially owned company Yacht 87, purchased an assignment of all of Miami Beach Yacht Sales’ interest in the SEA ERA, including its rights under the first mortgage. Bonilla brought this suit in federal court in Florida based on admiralty jurisdiction, seeking to void the second mortgage as fraudulent and adding several claims under state law. After hundreds of filings, the case was no longer this “quaint dispute.” The vessel was sold and the proceeds of the sale ($1 million) were deposited into the registry of the court as a substitute res. Moreover, the second ship mortgage in the amount of $837,000 was satisfied and extinguished. The question was then presented whether the court still had subject matter jurisdiction after the count that gave rise to the court’s admiralty jurisdiction (the argument over the second mortgage) was now moot. Although Bonilla argued that he was actually requesting relief under both the second mortgage and the first preferred ship mortgage, Judge Moore rejected that argument as unsupported by the pleadings. Bonilla also argued that there was a continuing dispute over the $1 million res in the court’s registry, but there was no lien to the res within the pleadings. As the admiralty claim was moot, as there was no diversity between the parties, and as Judge Moore declined to exercise supplemental jurisdiction, the case was dismissed for lack of subject matter jurisdiction. As to the $1 million res for the vessel, Judge Moore ordered the parties to determine how the parties should dispose of it or to provide their positions on its disposition if they could not agree.
Arlene Figueroa Lopez, a passenger on the CARNIVAL MIRACLE, was injured when her foot became caught on a loose or defective metal plate while descending a staircase between Deck 3 and Deck 2 on the vessel. She brought this suit in federal court in Florida alleging negligent failure to warn and negligent failure to maintain, and the cruise line moved to dismiss the complaint for failure to state a claim based on insufficient pleading of notice. Lopez alleged that the cruise line had actual notice of the dangerous condition because the area where she fell had been closed for repairs or maintenance earlier in the day of her fall. The cruise line argued that the passenger should have to allege the type of maintenance being performed and the temporal relationship between the maintenance and the incident, but Judge Bloom held that the allegations were sufficient for actual notice and that requiring more would effectively impose a heightened pleading standard that was not required. Lopez also argued that her allegations of numerous prior incidents of passenger injuries involving the metal nosing on stairs on the cruise line’s ships was sufficient to establish constructive notice, and the cruise line objected that the allegations were not sufficiently similar because they involved other classes of ships with different designs and layouts. Judge Bloom disagreed with the cruise line, reasoning that the similarity was a fact issue that need not be decided on a motion to dismiss and that the allegations were not too conclusory or generalized. Accordingly, Judge Bloom denied the motion to dismiss.
This opinion arises from the movement on the Mississippi River of the TIDEMAR, a work barge owned by Rigid Constructors, by the tug M/V RIVER DIAMOND, owned by Diamond B. Rigid Guidry, a deckhand on the TIDEMAR, claimed that he was injured by a spud that cracked during the operation. Guidry filed suit against Rigid Constructors and Diamond B. in Louisiana state court, and both Rigid Constructors and Diamond B. filed limitation actions in Louisiana federal court. Guidry, the sole injury claimant, did not file stipulations and did not seek to lift the stay in the limitation actions. Instead, he moved to bifurcate the liability and damage issues, so that liability would be tried in the federal proceedings, and, if limitation were denied, he could proceed with a trial on damages in state court. The vessel owners objected that Guidry’s seaman status had not been determined, but they were unable to cite any authority that his status had to be determined before bifurcation was considered. The vessel owners also objected that Guidry had not presented the stipulations required by the Fifth Circuit to lift the limitation stay, but Judge Vance answered that Guidry was not seeking to proceed in state court during the pendency of the limitation actions. Consequently, Judge Vance ordered that the court would try liability, limitation, and apportionment of fault in one bench trial with trial on damages being held separately.
William Herrin was employed as a technician by Tri-State Environmental to provide cleaning services to oil and gas industry clients. He initially worked for Tri-State in Texas and was promoted to a supervisor position, working in Mississippi. Herrin claimed that the promotion was from the land division to the offshore division in which he would work on vessels. After his promotion, he frequently worked on Diamond Offshore drill ships, including the WEST VELA on the outer Continental Shelf, on which he was injured. Herrin brought this suit in Louisiana state court against Tri-State (under the Jones Act), Seadrill (as the owner/operator of the drill ship), and BP (as the oil company that contracted for the services of the drill ship). BP removed the case to federal court based on the jurisdiction of the Outer Continental Shelf Lands Act, diversity, and admiralty. Tri-State moved for summary judgment on the Jones Act claim, asserting it was improperly pleaded, and Herrin filed a motion to remand the case based on the non-removable nature of Jones Act claims. Herrin voluntarily dismissed his claims against BP and Seadrill, leaving only his claim against Tri-State under the Jones Act. Tri-State argued that there are no divisions within the company, and that employees are not permanently assigned to work on land or at sea. Instead, it averred that technicians are assigned to work on a job-to-job basis depending on client requests, which had been primarily offshore. Noting that between 2016 and the injury in 2021, Herrin had only worked a single day on a land rig, Judge Guidry held that a reasonable juror could conclude that Herrin qualified as a seaman based on the substantial shift in time spent onshore after 2016. Accordingly, Judge Guidry held that Tri-State had not carried the heavy burden to prove that the Jones Act claim was improperly pleaded, and he remanded the case to state court.
Bogdan Andrei Bindea sought to insure the offshore supply vessel, M/V BOB ROUSE with a seven-person crew to perform humanitarian work in Haiti. The application submitted to Atlantic Specialty by Bidea’s agent requested coverage for the vessel and a three-person crew to deliver construction supplies in and around Fort Lauderdale, Florida. The policy was issued with a navigational area within the east coast of Florida and with a crew coverage not to exceed three crew members at one time. While transporting cement from Port-au-Prince Haiti to Mole Saint-Nicholas, Haiti, in the Caribbean Sea, the vessel hit rough water and capsized, resulting in the death of five of the crew and the other two being missing and presumed dead. Atlantic Specialty brought this declaratory judgment action in federal court in Virginia, seeking a declaration that the policy was void or, alternatively, that there was no coverage under the policy. Under Wilburn Boat, Magistrate Judge Hoppe held that Virginia law governed the policy’s validity and scope (as it was issued in Virginia, which was Bindea’s domicile). On the merits, Atlantic Specialty argued that there was no insurance contract as there was no meeting of the minds as to the essential terms of the agreement. Bindea’s response did not address this point, and Magistrate Judge Hoppe considered that Bindea had conceded the argument. Under Virginia law, the policy provides the terms for the contract between the parties, and Magistrate Judge Hoppe concluded that the policy clearly excluded coverage for the incident (“area around Florida” and “within the east coast of Florida” were not ambiguous). As there were no material disputed facts and as the policy did not afford coverage for the loss, Judge Hoppe granted judgment on the pleadings to Atlantic Specialty that it was not obligated to cover the loss.
Ridgebury Kilo time chartered the vessel RIDGEBURY PROGRESS to Seawolf Tankers, and Seawolf voyage chartered the vessel to Laurel Shipping for the carriage of fuel oil from the Caribbean to Singapore. Laurel Shipping is the trading arm of the Freepoint family of companies whose cargo of fuel oil was the subject of the voyage charter. Bills of lading were issued to Freepoint Commodities as the shipper of the cargo, with Freepoint Singapore listed as the consignee. The vessel loaded the cargo, but Freepoint alleged that there were problems with breakdowns, malfunctions, stoppages, and an incessant need for repairs during the voyage. Freepoint asserted that, as a result of the delay, it was unable to market the cargo and suffered a loss in excess of $29 million. Seawolf filed a suit against Laurel seeking payment for freight and port costs under the voyage charter, and the Freepoint entities brought this action against vessel owner Ridgebury Kilo, seeking a maritime attachment. Freepoint added Seawolf in an amended complaint, asserting causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, conversion, tortious interference, and misrepresentation. Seawolf moved to dismiss the claims for breach of contract, breach of implied covenant of good faith, and conversion. It argued that the Freepoint entities were not third-party beneficiaries of the voyage charter, but Judge Abrams disagreed. He noted that several clauses in the voyage charter necessarily benefited the Freepoint entities by providing for the cargo’s secure and efficient delivery and that the charter clearly evinced an intent to permit enforcement of the charter by the Freepoint entities. As the language of the charter strongly suggested that the parties intended to give the Freepoint entities the right to enforce the guaranties of seaworthiness and speedy delivery of the cargo, Judge Abrams concluded that the Freepoint entities plausibly alleged that they were intended beneficiaries of the charter so that they could maintain a claim for breach of contract. Seawolf argued that the claim for breach of an implied covenant of good faith could not be maintained where the complaint also alleged a claim for breach of contract. However, Judge Abrams found a difference between the claims, reasoning that the claim for breach of contract depended on whether Seawolf breached the guarantees in the voyage charter, but the claim for breach of the implied covenant of good faith flowed from whether Seawolf failed to inform the Freepoint entities about the condition of the vessel. The conversion claim was premised on the assertion that Seawolf wrongfully exercised dominion and control over the cargo by manipulating communications to the Freepoint entities and Laurel with respect to the breakdowns and delays, depriving Freepoint of the information that would have enabled it to make a reasonable decision with to continuation of the voyage. However, Seawolf never appropriated the cargo for its own use and did deliver the cargo to Freepoint. Accordingly, Judge Abrams dismissed the conversion claim.
Liberty Highrise, an Indian company and operator of the M.V. MENALON and M.V. GOLD GEMINI, ordered bunkers from Praxis Energy Dubai, a United Arab Emirates company, to be delivered to the vessels in Singapore. Praxis Dubai sent an invoice to Liberty for the bunkers for the MENALON, and Liberty transferred payment to Praxis Dubai’s bank account. With respect to the bunkers for the GOLD GEMINI, Liberty was directed to transfer the funds to the bank account of Praxis Singapore. There was confusion about the payments, and the bunkers were never delivered to the MENALON. Liberty then brought this suit against Praxis Dubai and Praxis Singapore for the retention of the payment/failure to deliver. The suit was brought in New York in accordance with the forum-selection clause in the Praxis General terms and Conditions for the Sale of Marine Bunker Fuels and Lubricants that was incorporated into the transaction between Praxis Dubai and Liberty. Praxis Singapore sought to dismiss the complaint for lack of personal jurisdiction and forum non conveniens, arguing that Praxis Singapore was not bound by the terms that were agreed between Praxis Dubai and Liberty and that the New York venue was inconvenient because it had nothing to do with the transaction. Judge Abrams denied the motion, however, finding sufficient allegations that Praxis Singapore was an alter ego of Praxis Dubai to avoid the motion to dismiss. He did note that Liberty would have to submit evidence and not just allegations to establish liability on the part of Praxis Singapore. Judge Abrams also denied the defendant’s argument that Liberty had not established any of the requirements of the federal venue statute as this is an admiralty case, and forum-selection clauses are enforced in admiralty unless shown to be unreasonable. Finally, Judge Abrams rejected the defendant’s forum non conveniens argument as the defendant had not provided any reason why the parties’ choice of forum should not be given deference. See May 2021 Update.
Liberty Highrise added Praxis USA and Theodosios Kyriazis as defendants in an amended complaint, asserting that they were alter egos of Praxis Dubai and Praxis Singapore (Kyriazis was manager of Praxis Dubai and director and sole shareholder of Praxis Singapore). Praxis USA and Kyriazis moved to dismiss the amended complaint for lack of personal jurisdiction, improper venue, and forum non conveniens, and for the same reasons given in the court’s prior order, Judge Abrams held that the assertion of personal jurisdiction over Praxis USA based on Praxis USA being an alter ego of Praxis Dubai was sufficient to deny the motion to dismiss. However, Judge Abrams held that the allegation that Kyriazis dominates and controls the Praxis Defendants and disregards their corporate form to the extent that each is actually carrying on business as one joint entity was insufficient to allege that Kyriazis was an alter ego of the Praxis entities, and he granted the motion to dismiss Kyriazis without prejudice (allowing Liberty Highrise leave to amend its allegations). As with the previous decision, Judge Abrams cited the forum-selection clause in response to the defendants’ argument on improper venue and forum non conveniens and held that there was no showing of unreasonableness in the action proceeding in New York.
Thomas Jackson Bowling died from asbestos-related cancer, and this suit in federal court in Ohio asserted that his death was related to asbestos exposure during the 65 days he worked for Cleveland Cliffs during 1973 to 1974. Bowling’s parents pre-deceased him. He never married and had no children. His sister, Alice Starr, brought this suit as his personal representative and asserted that she was dependent on her brother so as to fall within the category of beneficiaries under the FELA/Jones Act, “next of kin dependent upon such employee.” Alice proposed a test for dependency with seven categories of contributions (based on her relationship to her brother). Although Alice and her husband had a combined income of approximately $150,000 per year and Thomas earned approximately $13,000 per year, Alice claimed dependency because Thomas provided emotional support, non-monetary support, and helped pay for utility and food when he moved in with his sister after his trailer flooded. Judge Polster answered that the money Thomas paid was compensation for his usage, and, even though Thomas and Alice shared a bank account, there was no evidence that she ever withdrew money from the account. Alice also testified that Thomas repaired household appliances and fixed her computer, but these were infrequent occurrences that were insufficient to be considered necessary to maintain his sister’s standard of living. Finally, although Thomas had been there to help Alice’s children when they were younger (which made Alice’s life easier), that was years before his death. Her reliance on her brother was different than financial dependency, and Judge Polster dismissed Alice’s Jones Act claim.
Georgia Power Co. owns and operates Oliver Dam, a commercial hydroelectric generating facility on the Chattahoochee River on the Georgia/Alabama border in Columbus, Georgia. Alex Reed Paxton, a commercial diver, descended into the water, was trapped by a pipe within the infrastructure of the dam, and drowned. His beneficiaries brought this suit in Georgia state court under a state negligence theory, and Georgia Power Co. removed the suit to federal court in Georgia, basing jurisdiction on federal question, federal officer removal, admiralty, and diversity. The plaintiffs argued that Georgia Power could not remove the case based on diversity because of the forum-defendant rule, and Georgia Power clarified that it would not rely on diversity. Judge Self did not have to reach the issue whether there was removal jurisdiction based on federal question or admiralty as he concluded that the court had jurisdiction under the Federal Officer Removal Statute. He reasoned that the Congressional “subjugations” imposed on Georgia Power by its license issued by the Federal Energy Regulatory Commission reflected governmental control, not governmental guidance–establishing that Georgia Power was acting under a federal officer and that Georgia Power had raised a colorable federal defense of federal preemption of the state-law action alleged by the plaintiffs.
Paul Anthony Billiot was employed by Maintenance Dredging and complained of an injury on January 18, 2022 to his neck and low back while working on Maintenance Dredging’s vessel near Chalmette, Louisiana. He received conservative treatment but, two months later, he again complained of neck and low back pain. MRIs revealed bulging discs, and the physician recommended epidural steroid injections and discussed the possibility of a future procedure. Maintenance Dredging requested authorization to review Billiot’s medical history as Billiot had denied any injuries during his employment. Billiot refused, and Maintenance Dredging conducted an independent investigation that discovered records of previous neck and low back injuries. Maintenance Dredging brought this suit in federal court in Louisiana on May 26, 2022, seeking a declaratory judgment that it did not owe maintenance and cure until it had been allowed to properly investigate Billiot’s claim and that, after discovery, it be granted judgment that it was not liable for maintenance and cure because of Billiot’s willful concealment of his pre-existing conditions (McCorpen defense). Billiot then filed suit in Louisiana state court on June 22, 2022, alleging claims for Jones Act negligence, unseaworthiness, and maintenance and cure and moved the same day to dismiss the federal declaratory judgment action. Judge Lemelle weighed the factors to determine whether he should exercise his discretion to dismiss the federal action and did not find sufficient reason to dismiss the action, noting that when courts have found a viable McCorpen defense, the courts have permitted declaratory relief. Turning to the elements of the McCorpen willful concealment defense, Judge Lemelle found that Maintenance Dredging had presented more than sufficient evidence to allow the declaratory judgment action to proceed with focused discovery on the relevant medical history and the objective facts on the McCorpen elements. Therefore, he denied the motion to dismiss the federal action. Thanks to Michael W. McMahon with Daigle Fisse in Covington, Louisiana for bringing this case to our attention.
EnVen Energy contracted with ARO Solutions to perform plug and abandonment work for the decommissioning of EnVen’s fixed platform in the Gulf of Mexico on the outer Continental Shelf off the Louisiana coast. EnVen Energy also contracted with Diverse Safety and Scaffolding (DSS) to assist in the work, and DSS scaffold foreman Daniel Guevara was injured during the work. Guevara brought suit against EvNven Energy and ARO in the federal court for the Western District of Louisiana, and ARO filed a third-party claim against DSS, seeking pass-through defense and indemnity pursuant to the Master Service Agreement between EnVen and DSS. Judge Hanna transferred the third-party action to the federal court for the Eastern District of Louisiana based on a forum-selection clause in the Master Service Agreement, and DSS and ARO Solutions filed cross motions for summary judgment with respect to the claim for defense and indemnity. The parties agreed that the decision on the merits would be determined by the applicable law for the Agreement (the defense and indemnity obligation was valid under maritime law and invalid under Louisiana law). The Agreement provided: “This Agreement and the legal relations between the parties hereto shall be governed by and construed under the general maritime law of the United States; provided, however, that if the general maritime law is not applicable, this Agreement shall be construed under the internal laws for the state in which the work is performed. If the work is performed in federal offshore waters, then this agreement shall be construed under the internal laws of the state offshore of which the work is perform [sic].” ARO Solutions argued that the first sentence required that the court perform an analysis of the applicable law, maritime or state, and that maritime law applied under the Fifth Circuit’s Doiron decision. DSS argued, however, that the second and third sentences stood on their own and that the third sentence mandated application of state law (Louisiana in this case). ARO Solutions responded that third sentence was merely a continuation of the contingent language from the second sentence in the event maritime law was held not to apply. Judge Milazzo agreed with DSS and held that the third sentence of the Agreement provided for the application of Louisiana law and that it was not necessary to determine if maritime law applied based on the first sentence (as maritime law would enforce the choice of Louisiana law if it were applicable). Consequently, applying Louisiana law, she dismissed ARO Solutions’ third-party claim against DSS.
Hapag-Lloyd contracted with Orly Industry to carry a cargo of used tires to a port in India. Orly contended that while the cargo was in transit, Orly instructed Hapag-Lloyd to change the final destination to Karachi, Pakistan; however, the goods were delivered to India. Hapag-Lloyd brought this suit against Orly in federal court in New Jersey seeking to recover for amounts due for the carriage, and Orly brought a counterclaim for damages resulting from the alleged mis-delivery. Hapag-Lloyd moved to dismiss the counterclaim on the ground that it did not state a viable claim under the Carriage of Goods by Sea Act because it did not identify the bills of lading for the goods. Orly responded that the bills of lading were identified in Hapag-Lloyd’s complaint, but Magistrate Judge Clark disagreed with Orly. Magistrate Judge Clark first held that COGSA was applicable to the mis-delivery claim and then ruled that evidence of the bills of lading was essential to a COGSA claim. As the counterclaim did not identify the bills of lading, the counterclaim was defective. Orly requested leave to amend the counterclaim, and Hapag-Lloyd opposed the request on the ground that amendment would be futile, arguing that the counterclaim was filed more than one year after the delivery of the cargo in India. Orly responded that COGSA’s limitation did not apply because the goods were never delivered to their port of final destination. However, Magistrate Judge Clark answered that non-delivery does not foreclose the running of the limitation period. Instead, the limitation begins to run on the date the goods should have been delivered to Pakistan or on the date the consignee had notice that the goods were discharged and stored in India. Orly also argued that COGSA’s limitation period applies only when the goods are lost or damaged and the cargo was not lost or damaged. However, Magistrate Judge Clark held that mis-delivery is a breach of the contract of carriage under COGSA, triggering the one-year limitation, and that dis-delivery does not deprive the carrier of the benefits of the limitation period. Magistrate Clark then addressed whether Hapag-Lloyd had established that the goods were or should have been delivered more than a year from the filing of the counterclaim. As Hapag-Lloyd failed to document the dates of delivery, Judge Clark could not determine whether the counterclaim was timely. Therefore, he held that the counterclaim failed to state a claim under COGSA, but that Orly would be allowed to amend the counterclaim to include the relevant bills of lading.
Lauren Barham and Matthew Urey were honeymooners on a cruise in New Zealand. They signed up for the shore excursion to White Island, an active volcano, but the volcano erupted when they were on the island, causing the passengers to suffer serious injuries. The passengers sued the excursion operators and cruise line in federal court in Miami, and the excursion operators moved to dismiss the action for lack of personal jurisdiction. Although the excursion operators were New Zealand entities, the passengers argued that the entities were subject to jurisdiction in Florida based on the contract between the excursion operators and the cruise line that contained a choice-of-law provision designating Florida law and selecting Florida as the place of exclusive jurisdiction. Agreeing with the other judges in the Southern District of Florida, Judge Moreno held that the passengers could not use the excursion operators’ consent-to-jurisdiction clause to support jurisdiction in personal injury cases arising during the foreign excursion. Turning to the claims asserted against the cruise line, Judge Moreno noted that the negligent misrepresentation claim was different than the standard case involving a general promise of safety followed by unlucky harm. In this case it was “empirically demonstrable that a volcanic eruption was more likely than usual, and some of the alleged misrepresentations were more specific than promises of safety. Consequently, Judge Moreno declined to dismiss that count. Judge Moreno dismissed the counts based on joint venture, third-party beneficiary, and breach of a non-delegable duty of safe passage, but he held that the allegations of negligent selection/retention, negligent failure to warn, and general negligence were sufficiently pleaded. See September 2021 Update. Barham and Urey appealed the dismissal of the excursion operators for lack of jurisdiction, and the Eleventh Circuit noted that it did not have appellate jurisdiction under Section 1291 as the dismissal order was not a final judgment for all claims. As Judge Moreno did not certify the order for immediate review under Rule 54(b), the only other basis for appeal was as an interlocutory admiralty action. The appellate court held that the dismissal for lack of personal jurisdiction did not fall within the limited class of interlocutory appeals authorized by Section 1292(a)(3) for the rights and liabilities of the parties in admiralty. Consequently, the court dismissed the appeal for lack of jurisdiction. See December 2021 Update.
The cruise line then moved for summary judgment (see the September 2022 Update for a discussion of the sufficiency of pleading against the cruise line in another case arising from this tragic incident, Reed v. Royal Caribbean Cruises Ltd., No. 20-cv-24979, 2022 U.S. Dist. LEXIS 136835 (S.D. Fla. Aug. 1, 2022) (Ruiz)). Magistrate Judge Goodman summarized the legal issue: “Plaintiffs point to evidence which they say establishes myriad examples of negligence by [the cruise line}. But their passenger and shore excursion tickets bar all claims resulting from incidents occurring off the vessel, as well as those arising from the negligence of independent contractors, like the one who operated the volcano excursion to White Island.” The passenger tickets and shore excursion tickets contained language in which the passengers agreed that the carrier would not be liable for any injuries taking place off the vessel or as part of any shore excursion and that the carrier would not be liable for any acts, omissions, or negligence of any independent contractors. The question was whether the waivers were valid under 46 U.S.C. Section 30509, which addresses liability for a vessel transporting passengers between ports in the United States or between ports in the United States and a port in a foreign country. Magistrate Judge Goodman agreed that the waivers were valid for the cruise that commenced in Australia and ended in Australia and that involved no United States port. Magistrate Judge Goodman also agreed that the waivers did not violate public policy, noting that they were not an attempt by the cruise line to “abandon altogether its obligations to the public,” focusing on limited scenarios. Accordingly, Magistrate Judge Goodman recommended that all claims be dismissed with prejudice. Shortly after Magistrate Judge Goodman’s recommendation, the parties settled and the case was dismissed.
Brian J. Billiot brought this action in federal court in Louisiana to recover for an injury he allegedly sustained when he slipped on an unsecured board on the HAYDEN II. Within two weeks of the commencement of the period for discovery, Billiot moved for summary judgment that his employer be required to pay maintenance and cure. His employer responded that there were fact questions whether an accident occurred, asserting that Billiot had stormed off the vessel after financial disputes between the parties, threatening that his lawyer would be calling (after which Billiot claimed to have been injured on the vessel). As neither party had, because of “the hastiness of this motion,” been able to provide the court with much evidence to prove or disprove the alleged injury, what kind of injuries he sustained, and even if Billiot was employed by the defendant at the time of the injury, and as the date of injury in his original complaint was later determined be inaccurate, Judge Zainey declined to grant the motion.
Travis Perry is a lobster fisherman who works from his own fishing vessels and from his father’s wharf in Harrington, Maine. He commissioned construction of the ISLA & GRAYSON in 2017 (named for his children), using a business loan of $500,000 and $475,000 of his own funds. He had continuing mechanical problems with the vessel, calling the vessel “junk” and sending a text that he would “burn Her in the morning.” He ordered a cheaper replacement vessel and tried to sell the ISLA AND GRAYSON, but it did not sell even when he dropped the price to $700,000. After Perry performed some “uninspired” repair work, the vessel was consumed by fire, and Perry presented a claim to the vessel’s hull insurer, Hanover. Hanover’s investigator noted the poor handiwork (considering it to evince an intent to burn the boat as it was out of keeping with Perry’s general fastidiousness. He found cloth rags, a solidified mass of resin containing red dye in the hue used to dye marine diesel fuel, and traces of petroleum products in the debris and noted that the mass of resin did not appear in photographs of the location taken the day before the fire. Hanover theorized that the resin and fuel were poured into the hull in an effort to catalyze the fire, and it denied the claim. Perry brought this suit against Hanover in federal court in Maine in admiralty, and the case was tried to Judge Walker. Judge Walker found Perry to be credible and, although he was eager to replace the vessel, he did not intentionally set the fire or request his crew member to do so. Judge Walker found that the diesel contamination and its red colorant could have come from a leak from the nearby fuel line during the fire. Although he ruled in favor of Perry on the contract claim, Judge Walker also found in favor of Hanover on Perry’s claim for bad faith, concluding that Hanover did not appear to have engaged in motivated reasoning in its investigation or to have breached professional norms of fire investigation (finding that it conducted a good faith investigation and treated Perry fairly). See September 2022 Update.
Judge Walker then addressed Perry’s request for pre-judgment interest and attorney fees. Although Perry requested interest at the rate Perry was charged on funds borrowed in response to the fire, Judge Walker reasoned that, as the insurer had not been found to have acted in bad faith, there were no reasons for deviating from the local forum’s (Maine) rate of interest. Therefore, he awarded pre-judgment interest at the rate of the one-year United States Treasury bill rate plus 3%. However, Judge Clark declined to apply the accrual period in the Maine statute (notice of claim or filing of the complaint) and held that prejudgment interest would accrue from the date of the loss. Under Maine law, in the absence of bad faith, attorney fees were available if the contract provided, if there was statutory authorization, or under the court’s inherent authority to sanction egregious conduct. As neither the policy nor a Maine statute provided for recovery of attorney fees, and as there was no sanctionable conduct, Judge Walker declined to award attorney fees to Perry.
Goodloe Marine engaged the services of Caillou Island Towing Co. to tow its dredge PERSEVERANCE and Idler Barge from Texas to Florida, but the dredge sank while in tow of the defendant’s tug, CHARLES J CENAC. Goodloe Marine then brought a six-count complaint against Caillou Island Towing (and others related to the tug), and the defendants moved to dismiss or to strike irrelevant allegations (Caillou Island Towing also filed a limitation action). The defendants objected to the phrase, maritime transportation services, in the negligence counts, arguing that transportation or affreightment is distinguishable from towing. While agreeing with that distinction, Judge Barber declined to dismiss or strike the portions of the negligence counts using the term, maritime transportation services, which was used in the parties’ contract, as it was clear that Goodloe Marine was suing for negligence in towing as opposed to transportation or affreightment. Although the complaint did not set forth the specific facts that constituted gross negligence, Judge Barber considered the allegation that the defendants were “so reckless or wanting in care as to constitute a conscious disregard or indifference to life, safety, or rights of persons and property exposed to such conduct” as sufficient to put the defendants on notice of the claim against them. Noting that the cause of action for damage to a tug is ex delicto and not ex contractu, the defendants objected to the count alleging breach of contract. Judge Barber noted that Goodloe had alleged negligence counts (ex delicto), but this count alleged damages not for damage to the tug but for the tow not being delivered to the contracted destination. Therefore, he considered the breach of contract count to be sufficient. Finally, the defendants objected to the count asserting a breach of the warranty of workmanlike service. Citing the divergent lines of cases whether the tower owes a warranty of workmanlike service or only a negligence duty, Judge Barber declined to dismiss the count and advised that the parties may revisit the issue through summary judgment after developing facts to determine whether the warranty may apply to the defendants’ conduct. See July 2020 Update.
Caillou Island Towing then brought a third-party complaint against RJA, Ltd, which was hired by Goodloe to survey the tow and certify its fitness, seeking indemnity and contribution. RJA moved to dismiss Caillou Island Towing’s indemnity claims, and Judge Badalamenti began by agreeing that maritime service contractors, such as the surveyor, must perform their services in compliance with a warranty of workmanlike performance and that failure to do so is a breach of contract (citing Ryan Stevedoring). Judge Badalamenti added that privity of contract is not required for the warranty claim and that Caillou Island Towing, the entity that towed the dredge, was a foreseeable third party of RJA’s warranty. However, the mere existence of the warranty did not make RJA liable for indemnity. Caillou Island Towing also had to show that RJA had a duty to indemnify for liability arising out of the breach. Judge Badalamenti stated that the clear trend in maritime cases has been to reject all-or-nothing indemnity in favor of allocation based on comparative fault, and he found that indemnity was inappropriate in this case for two reasons. First, he held that, based on the “unique services” performed by surveyors and classification societies, courts have regularly held that these entities do not have a duty to indemnify owners and third parties for damages. In this case, RJA was hired to conduct a trip and tow survey and did not create any hazards or defects for which indemnity would be appropriate. Second, citing authority that the WWLP has been “virtually abandoned” for property damage cases, Judge Badalamenti declined to find indemnity was available and dismissed the indemnity claim. It was therefore unnecessary to determine whether the contract between RJA and Goodloe excluded indemnity. Finally, Judge Badalamenti held that Caillou Towing’s third-party complaint against RJA sought judgment against RJA and also in favor of Goodloe based on Rule 14(c). As such, he ordered RJA to answer the claims of Goodloe as well as the claims of Caillou Towing. See December 2021 Update.
Nearly two years after the initiation of litigation, Caillou Towing moved to dismiss the suit brought by Goodloe Marine and the claim brought by Goodloe Marine in Caillou Towing’s limitation proceeding on the basis that Goodloe Marine’s insurer, RKH Specialty, had paid Goodloe Marine $1.9 million for the total loss of the dredge. Although Judge Badalamenti was concerned about the timing and sequence of events, he held that standing is a jurisdictional issue and that the court could consider whether Goodloe Marine was the real party in interest. Goodloe Marine argued that it had not been fully compensated for the contents of the dredge and barge, for damages flowing from Caillou Towing’s breach, and for punitive damages. Reasoning that Goodloe Marine was seeking to recover for both insured and uninsured losses, Judge Badalamenti held that Goodloe Marine was an appropriate party and declined to dismiss the suit and claim.
The collision between the destroyer U.S.S. JOHN S. MCCAIN and the Liberian merchant vessel M/V ALNIC MC, resulting in the deaths of ten sailors and injuries to more than 40 others, returns to the Update (see January, February, April, and November 2020 Updates). Both ships were bound for destinations in Singapore, and they collided approximately 24 nautical miles from the Singapore mainland. The claimants sought to apply the test set forth by the Supreme Court in Jones Act cases in Lauritzen v. Larsen, 345 U.S. 1 (1953) (as expanded by the Court in Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970)). However, Judge Crotty held that the Lauritzen/Rhoditis test was unsuited to deciding a choice-of-law question involving a collision halfway around the globe involving a U.S. Navy warship based in Japan and a Liberian-flagged vessel. Although there was a dispute between Malaysia and Singapore over sovereignty of the area in question, Judge Crotty applied Singapore law to the collision based on the fact that the vessels were both headed to Singapore and were in the Singapore Traffic Separation Scheme.
Judge Crotty split the trial of the case into two phases and tried the liability issues in five days in November 2021. In a 70-page opinion, Judge Crotty apportioned 80% of the fault to the JOHN S. MCCAIN and 20% of the fault to the ALNIC. He then addressed whether the owner of the ALNIC was entitled to limit its liability to $16,768,480. As the owner engaged Stealth Maritime to manage the vessel, Judge Crotty looked to its privity or knowledge “as a proxy” for the owner. In this case, Stealth Maritime was aware of deficient staffing practices and other “risky behavior” and “allowed ALNIC—one of the worst vessels the Stealth Marine Superintendent had ever audited—to again travel through one of the busiest shipping lanes in the world.” This was sufficient to establish privity or knowledge. However, Judge Crotty noted that the Limitation Act, as amended, broadens the privity or knowledge for seagoing vessels to the master at or at the beginning of the voyage. Finding that the captain planned, before the voyage, to understaff the bridge, Judge Crotty ruled that there was additional support for denying limitation to the owner of the ALNIC. Applying Singapore law, Judge Crotty held that the United States should recover 20% of its damages and the owner of the ALNIC should recover 80% of its damages, with those damages offset. He awarded prejudgment interest in accordance with Singapore law. Going forward, Judge Crotty held that the wrongful death and injury claims for the sailor-claimants would proceed with a Phase II trial, and he reserved the questions whether the sailor-claimants would be entitled to a jury and whether the owner of the ALNIC would be entitled to contribution from the United States. See July 2022 Update. Both the United States and Energetic Tank filed interlocutory appeals.
After issuing a correcting order, nunc pro tunc, with respect to damages and certifying the decision for appeal pursuant to Rule 54(b), Judge Crotty addressed the contribution claim brought by the owner of the ALNIC against the United States in connection with the claims of the sailors on the JOHN S. MCCAIN. Judge Crotty set forth the issue: The sailor-claimants brought suit against the owner of the ALNIC but not against the United States. Under admiralty law, a tortfeasor, such as the owner of the ALNIC, which pays more than its apportioned share of an injured party’s damages, may generally seek contribution from the other tortfeasors. However, the United States, which was found to be 80% at fault, is a sovereign with sovereign immunity. Although Judge Crotty previously held that Singapore law applied to the substantive issues of liability and damages, the question was presented whether Singapore law would incorporate American sovereign immunity law to bar the contribution claim. Judge Crotty noted that federal sovereign immunity is a jurisdictional matter, and he could apply American sovereign immunity principles even though foreign law provided the applicable substantive law for the case. One jurisdictional bar is the Feres–Stencel doctrine, which provides sovereign immunity against certain claims by military service members (and claims for contribution/indemnity with respect to those claims). The owner of the ALNIC argued that the United States waived its claim to sovereign immunity through the Public Vessels Act and the Suits in Admiralty Act. However, Judge Crotty held that both statutes incorporate an exception to their waiver of immunity: the Feres–Stencel doctrine. Reasoning that Feres and Stencel are directly on point, and declining to overrule the cases as wrongly decided, Judge Crotty dismissed the contribution claim for lack of jurisdiction.
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 claim 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. See March 2022 Update.
The cruise line then moved to dismiss all of the claims. The cruise line argued that it did not have a duty to warn of the dangerous condition of the elevator doors because the Birrens were aware that the doors were closing unusually fast. The passengers argued that the question whether the condition of the doors was open and obvious presented a fact question that was not appropriate for summary judgment. Judge Bloom agreed that the extent of the dangerous condition was not open and obvious because the dangerous condition was not just the fast closing of the doors but that the sensors did not operate properly to re-open the doors. The decision not to exclude the passenger’s expert, Jeffery Hanson, allowed the claim for negligent design/installation to survive as Hanson testified that the design included the mobile application of the manufacturer/installer that provided maintenance notifications about the elevator. Hanson’s opinion along with the testimony of the cruise line’s Chief Electrical Officer and corporate representative supported the passenger’s claim of negligent hiring, retention, and supervision with respect to the proper testing of the sensor. Judge Bloom did dismiss the claims of negligence of the ship’s medical staff for lack of evidence. See April 2022 Update.
On the eve of trial, Mandy Birren filed a motion for voluntary dismissal, requesting that her claims be dismissed with prejudice. The cruise line responded and requested that the dismissal be conditioned on an award of fees and costs. Judge Bloom agreed to the dismissal with prejudice and reserved ruling on whether fees and costs should be awarded to the cruise line. Kathryn Birren’s case proceeded to a jury trial in April before Judge Bloom, and the jury returned a verdict that the cruise line was negligent, apportioning fault 10% to the cruise line and 90% to Kathryn Birren. The jury awarded a total of $6,000 in damages for Kathryn’s past medical expenses and awarded nothing for disability, disfigurement, pain and suffering, and loss of enjoyment of life. Judge Bloom entered a judgment in the amount of $600 (10%), and Birren moved for an award of costs. Magistrate Judge Louis recommended an award of $10,751.87, consisting of the filing fee of $400, $65 for service of a subpoena, $9,247.55 in court reporter and transcription fees, and $1,039.32 for costs to obtain medical records, and Judge Bloom adopted the recommendation. See October 2022 Update.
Magistrate Judge Louis then addressed the issue whether the cruise line was entitled to recover fees and costs under Rule 41 as a result of the voluntary dismissal. Magistrate Judge Louis agreed that an award of fees and costs “will ordinarily accompany an order voluntarily dismissing an action without prejudice, but noted that awards of fees have almost never been awarded with a dismissal with prejudice. Finding no basis for an award of fees and costs under Rule 41, Magistrate Judge Louis recommended that fees not be awarded. However, Magistrate Judge Louis agreed that the disposition of Mandy Birren’s claims rendered the cruise line the prevailing party under 28 U.S.C. Section 1920 and recommended that the cruise line renew the request in a properly filed motion to tax costs (limited to recoverable costs under Section 1920).
Jackie Wyne, tripped and fell over a stanchion while boarding the cruise ship CARNIVAL BREEZE and brought this suit in federal court in Florida against the cruise line, seeking to recover for her injury. After an initial skirmish over the cruise line’s motion to dismiss, the cruise line filed 11 affirmative defenses in response to Wyne’s amended complaint. Before addressing the specific defenses, Judge Scola stated that affirmative defenses are not held to the same pleading standard as claims for relief and that the Iqbal/Twombly jurisprudence does not govern them. Wynn challenged the affirmative defenses that the action was governed by the terms of the ticket and that the incident and injuries were the result of intervening and unforeseeable causes, but Judge Scola responded that these defenses functioned as a specific denial of duties and claims and should not be stricken. As to the defenses that Wynne failed to mitigate damages, that her injuries were the result of a pre-existing injury, and that the injury was the result of third parties over whom the cruise line had no control, Judge Scola held that the pleading sufficiently placed Wyne on notice of the arguments that the cruise line intended to present at trial. Judge Scola did strike the defense that Wyne’s medical expense damages are limited to those that are reasonable and necessary, including reduction for amounts that were written off or that Wyne was not required to pay, as that defense is inconsistent with the Higgs decision of the Eleventh Circuit (allowing evidence of reductions but not allowing a reduction in damages).
Charles McCoy alleged that he suffered two injuries during his service as a second cook for the E. STROUD. He claimed that he injured his back while moving boxes of food on December 28, 2018 (when a crew member threw a heavy box to him), and that he injured his leg, back, and foot when he stepped through a rusty grating on Alabama Shipyard’s dock in Mobile, Alabama, on January 10, 2019. McCoy brought suit in the district court of Calcasieu Parish, Louisiana, and his employer, the owner of the E. STROUD, filed this limitation action in federal court in the Western District of Louisiana. Citing McCoy’s failure to disclose a significant history of cervical spine issues on his employment application in 2016, Hooks filed a motion for summary judgment in the limitation action that McCoy was not entitled to recover maintenance and cure for his December 2018 accident based on the McCorpen willful concealment defense. Judge Cain concluded that Hooks had established that McCoy intentionally concealed or misrepresented his prior condition but his employer had not established the causal connection between the concealment and McCoy’s complaints from the December accident. Hooks relied on McCoy’s testimony that the December accident resulted in injuries to his neck and back, but there were no medical records establishing the specific region of the spine that was involved in the December accident. As the injury might have occurred in a separate region of the spine, Judge Cain found the evidence to be insufficient. Magistrate Judge Kay then addressed McCoy’s motion to bifurcate the limitation action, severing the issues of exoneration and limitation and allowing all non-limitation actions to be resolved in the state action. Magistrate Judge Kay noted that the court had “considerable discretion” on how to try the limitation and non-limitation issues. However, the primary reason for bifurcation was to minimize prejudice to McCoy’s rights to pursue his common-law remedies. In this case, McCoy had not offered any stipulations to lift the limitation stay, and claimant Alabama Shipyard indicated that it might not enter into a stipulation. Although Magistrate Judge Kay declared that she had discretion to bifurcate the case even in the absence of stipulations, she did not consider bifurcation was appropriate or necessary, finding no certainty that Hooks’ limitation rights would be protected if the matter were bifurcated. See September 2021 Update.
Hooks filed a second motion for partial summary judgment in the federal limitation action, arguing that it now met its burden on the remaining elements of the McCorpen willful concealment defense and that it was entitled to a judgment that it did not owe maintenance and cure to McCoy. As Judge Cain had previously held that the concealment element had been satisfied, he addressed the other two elements of the test. With respect to the materiality element of the test, McCoy cited evidence that he had passed his physical and the testimony from Hooks’ corporate representative that the company left decisions on medical fitness to its doctor and that disclosure of a history of neck or back pain would not necessarily have made McCoy ineligible for the job. However, the job duties included lifting heavy objects (including unloading groceries) and Judge Cain found the previous neck and back ailments were rationally related to these functions. The fact that McCoy would not necessarily have been ineligible for employment did not defeat materiality as the full disclosure would have prompted his employer to conduct further medical evaluation. The failure to disclose thus satisfied the materiality element. The third element required that Hooks show a causal connection between the previous injury/condition and the present injury. Hooks showed a well-documented record of injuries to the same regions of McCoy’s neck and back, and McCoy had no answer for this element except to request that Judge Cain defer the issue to the underlying state court litigation. As the McCorpen defense had twice been brought to the federal court and was fully briefed, Judge Cain proceeded to grant summary judgment that Hooks had no obligation to pay maintenance and cure, reasoning that deferring resolution to the state court would allow McCoy to continue to receive maintenance and cure after Hooks had proven that he was not entitled to it. See August 2022 Update.
Hooks then filed a motion for summary judgment on the Jones Act negligence and general maritime unseaworthiness claims. Hooks cited the Report of Injury signed by McCoy and the ship’s captain that McCoy lost his grip while carrying a box of chicken weighing about 50 pounds and pulled something in his back when he tried to regain control and catch the box. McCoy later disavowed that version of events and said that he did not know how the report came to be signed by him. Instead, he asserted that a crew member named Tim was unhappy about being called away from the engine room to help in the galley and started throwing boxes to McCoy. After the safety man James told the workers to stop playing around, Tim became upset and threw a box of chicken at McCoy, knocking him down. Judge Cain noted that even if McCoy could show grounds to discredit his own signed version of the incident, Hooks produced evidence disproving that version of events. Although there was an engineer named Timothy Bright, he was not working on the vessel on the date of the accident. Additionally, McCoy’s testimony that Tim’s actions so angered another crew member, Rochelle Malvo, that she got into an altercation with Tim, was contradicted by the fact that the only person with a similar name, Chief Cook Irene Malveaux, was not on the vessel on the date of the incident. As McCoy had been trained in lifting of heavy loads, had stop-work authority, and failed to establish any insufficiency of the crew or other basis for negligence or unseaworthiness that might have contributed to the injury based on the facts of the initial report, Judge Cain granted summary judgment on the Jones Act and unseaworthiness claims.
This case arises from a convoluted series of transactions between Nimbus Boat Rental Corp., Christian Valdes, and Elaine Leyva (the plaintiffs in this case) and Angel Garcia and his company Jet Skis in Miami, Corp. (defendants in this case). Garcel proposed that Valdes and Leyva purchase the F/V NIRVANA and that Garcel and Jet Skis would charter the vessel. There were disagreements throughout the purchase and operation of the vessel, but the vessel was initially titled with Jet Skis with the alleged agreement that Garcel would pay half of the price for purchasing and restoring the vessel. At some point there was a transfer of title to Nimbus Boat Rental followed by Garcel obtaining a duplicate title, an arrest of Valdes but no prosecution, and then the arrest of the vessel in this suit in federal court in Florida. Magistrate Judge Louis held a post-arrest hearing and initially addressed which Supplemental Admiralty Rule was involved in the case. The complaint alleged an in rem claim for arrest of the vessel (requesting that Nimbus be decreed the rightful titled owner of the vessel), and in personam claims for conversion, imposition of a constructive trust, unjust enrichment, and accounting, malicious prosecution, intentional infliction of emotional distress, and abuse of process. Although the plaintiffs argued that they had a maritime lien or enforceable ship mortgage, Magistrate Judge Louis cited the language in the complaint that the in rem claim requested that the vessel be decreed to be rightfully titled to Nimbus. As the plaintiffs could not explain how they held a valid maritime lien, Magistrate Judge Louis recommended that the arrest under Rule C be vacated (Magistrate Judge Louis also found a lack of exigent circumstances for the arrest without judicial review). Assuming that the arrest was functionally brought under Supplemental Rule D (as it appeared to be a possessory/petitory action), Magistrate Judge Louis reviewed the evidence and testimony and held that the plaintiff must have a claim of legal title and not equitable title (such as paying the full purchase price for the vessel). For the legal title, the parties confirmed that the current legal title to the vessel was held by Jet Skis, and, based on the evidence she found credible, Magistrate Judge Louis held that the plaintiffs failed to make out a prima facie case that they were wrongfully deprived of title to the vessel. Therefore, she recommended that the arrest of the vessel be vacated. Additionally, she recommended that the defendants be awarded fees and costs in accordance with the local rules of the Southern District of Florida that provide for such an award when the court orders the arrest to be vacated or when exigent circumstances did not exist for an arrest.
Robert M. Champagne III and Elizabeth G. Champagne, owners of waterfront property in Houma, Louisiana, brought this suit seeking to recover for damage from an allision with their concrete bank cover by the M/V UNCLE JOHN, owned by Alexis Marine and operated by A&T Maritime. The action was brought in personam against the owner and operator of the vessel and in rem against the UNCLE JOHN. After the Marshal arrested the vessel, the Champagnes moved to appoint their contractor, Sea Sales, as substitute custodian, and the court granted the motion and permitted the movement of the vessel within the district. Sea Sales engaged a towing contractor, and the vessel was damaged during the tow. Sea Sales paid for repair to the vessel, but the vessel owner brought a counterclaim against the Champagnes in the event there is additional damage or if the repairs were done improperly. The Champagnes moved to dismiss the counterclaim, and Judge Zainey agreed, noting that there were no allegations that the Champagnes acted negligently in hiring Sea Sales and that there was no authority in the maritime law that would make a seizing creditor liable for the acts of the substitute custodian simply by hiring it. Judge Zainey also found meritless the argument that the hold harmless agreement, signed by the Champagnes in favor of the United States and the Marshal, inured to the benefit of the owner of the arrested vessel. The owner of the vessel did not have insurance for the vessel and did not post security for the vessel in the five months after it was arrested. That resulted in a flurry of motions: the charterer seeking payment of defense costs from its P&I carrier, the owner seeking a release of the vessel without posting security, and motions to set the amount of security and for interlocutory sale. The charterer’s P&I insurer argued that there was no coverage under the policy because the policy named the UNCLE BLUE, not the UNCLE JOHN. The charterer argued that the owner substituted the UNCLE JOHN after the UNCLE BLUE became inoperable and the Automatic Attachment Clause in the policy continued coverage for the UNCLE JOHN. However, the insurer did not learn of the substitution or the allision until almost a year after the casualty, despite the reporting requirement in the policy. Citing the eight-corners rule for interpreting the duty to defend, the charterer argued that the insurer should reimburse the charterer’s defense costs with respect to the suit. The carrier responded that the P&I policy did not contain a duty to defend and that a decision on whether it had a duty to reimburse defense costs was not subject to the eight-corners rule and necessitated a decision on coverage and the defenses that were asserted. Judge Zainey agreed that the eight-corners rule was inapplicable and that the obligation to cover the claim was not separate from the duty to reimburse the insured for defense costs. Therefore, the coverage issues would have to be fully presented to the court. Judge Zainey then considered the motion to release the vessel and for its interlocutory sale. Judge Zainey reasoned that the owner was laboring under a “fundamental misunderstanding of the nature of in rem proceedings against the vessel’s owner.” The charterer may have been operating the vessel at the time of the allision, but the plaintiffs arrested the vessel to assert a maritime lien against the vessel as a tortfeasor. The in rem claim is separate from the in personam claims against the owner and charterer. The plaintiffs were not “persecuting” the owner for its lack of financial ability to post security. They were enforcing their maritime lien for payment of damages caused by the vessel. The arrest and sale of the vessel might cause a financial hardship on the owner, but “the sole party responsible for that unfortunate circumstance” was the owner who did not properly insure the vessel. Therefore, Judge Zainey would not release the vessel without security. Judge Zainey declined to hold a hearing to determine the value of the vessel as it would appear to be an “exercise in futility” with the owner giving no indication that it was willing or able to post security regardless of the value that the judge might assign to the vessel. Judge Zainey gave the owner 30 days to either post security or reach agreement with the plaintiffs, after which he agreed that the plaintiffs could move to have the vessel sold at an interlocutory sale. See September 2021 Update.
Settlement was reached with the Champagnes, and the UNCLE JOHN was released to Alexis Marine. The focus of the litigation then turned to the claims of Alexis Marine and A&T Maritime against RLI Insurance Co. pursuant to a marine insurance (hull and P&I) policy. A&T Maritime purchased the policy, which covered vessels listed on a schedule. When the policy was purchased, A&T chartered the UNCLE BLUE, and that vessel was named on the schedule. Later, the UNCLE JOHN was substituted so that the UNCLE BLUE could obtain repairs, but the UNCLE JOHN was not listed on the schedule. Thus, when the allision occurred, the UNCLE JOHN was named on the schedule, and Judge Zainey held that the UNCLE JOHN was not covered unless it was through the Automatic Attachment Clause (extending coverage to additional vessels acquired by the assured by purchase or bareboat charter). RLI argued that the clause only applied to additional vessels and that the UNCLE JOHN was a substituted vessel, not an additional vessel. Judge Zainey disagreed and held that the UNCLE JOHN was automatically covered by the clause. RLI also argued that the clause required the assured to report the additional vessel as soon as practicable and that RLI did not learn about the UNCLE JOHN until the lawsuit was filed, which was long after the policy had been cancelled. At that point, RLI argued, it was too late to add a vessel because the policy was no longer in existence. Judge Zainey disagreed, reasoning that the coverage attached automatically, not when notice was provided. He then turned to the argument that several policy warranties on notice were violated (requiring notice to RLI as soon as practicable after a loss). Judge Zainey agreed that the notice provisions were breached and that RLI had established actual prejudice by the increase in the amount for which the case settled. The final issue was the remedy for the assured’s breach of the policy warranties. Judge Zainey did not believe that voiding of all coverage was appropriate in the absence of language to that effect in the policy. Therefore, he granted partial summary judgment to RLI but held that the parties could file a narrower motion for summary judgment as to the appropriate remedy for the breach of warranties and the prejudice sustained by RLI as a result.
Arthur A. DeGeorge and a group of friends went to the Belmar Manutti Marina in Belmar, New Jersey to board DeGeorge’s vessel MISS ZENA for a fishing trip. DeGeorge noticed fishing line tied around the docks (to deter birds from landing on boats or the docks), but his guest, John Marincola did not notice the lines and tripped and fell into the boat while trying to board it. Marincola did not remember his feet catching on anything when he fell, and he proceeded with the fishing trip. It was when the parties returned that Marincola pieced together what happened—that the fishing line must have caused his fall. Marincola brought suit in New Jersey state court against Belmar and DeGeorge, and DeGeorge brought this limitation action in New Jersey federal court. DeGeorge also removed the action brought in state court based on pendent or ancillary jurisdiction to the limitation action. Belmar and DeGeorge each filed a motion for summary judgment. Judge Shipp granted Belmar’s motion on Marincola’s claims (alleging a dangerous condition and negligent hiring and training) as Marincola did not know (other than assumption) was caused his fall. As to DeGeorge, Marincola asserted that DeGeorge was negligent for failing to inspect the dock, failing to warn of the fishing line, and failing to assist in boarding the boat. Applying New Jersey law, Judge Shipp reasoned that the precise duty owed to Marincola depended on what type of visitor Marincola was. Considering Marincola to be a licensee (a social guest and not a visitor for business purposes), Judge Shipp held that DeGeorge did not owe a duty because the condition was not on DeGeorge’s property. Judge Shipp stated: DeGeorge may wish his social guests fair winds as they venture out to sea, but he has no legal duty to ensure they safely make it to his vessel.” Judge Shipp similarly dismissed the unseaworthiness claim as there was no dangerous condition on the vessel. He therefore granted exoneration to DeGeorge.
After Bobbijo Wolf Ramsden was injured while disemabarking from Gerald Wilson’s pontoon boat at the Otisco Lake Marina in Marietta, New York, Wilson brought this limitation action in federal court in New York. When no claims were filed, Wilson filed a motion for a default judgment, but Judge Kahn raised the issue of subject matter jurisdiction and found no indication that Otisco Lake could be considered a navigable waterway under The Daniel Ball so as to provide the court with admiralty jurisdiction. Consequently, Judge Kahn denied the motion for default judgment and ordered Wilson to file supplemental briefing to provide evidence that Otisco Lake is a navigable waterway.
This opinion and its predecessor in this litigation deal with the adequacy of the allegations in federal complaints brought by passengers. Marilyn Patton tripped on a metal threshold that was not flush with the floor on Deck 9 of the cruise ship M/S VICTORY. She brought suit against the cruise line in federal court in Florida, and the cruise line moved to dismiss the complaint for failure to plead sufficiently that the cruise line had actual or constructive notice of any danger from the threshold. Patton presented a photograph of the threshold and argued that it was apparent that the gap did not develop overnight. The problem was that the photograph was undated and did not establish the condition of the threshold at the time of the accident or how long the depicted condition had existed. Patton’s argument that common sense dictated that employees of the cruise line would have seen the hazard as they routinely clean the floors fared no better as she did not allege how or why the staff that cleaned the area would recognize the potential danger of the threshold. Finally, Patton cited two safety reports/minutes (from an unidentified ship and from a different vessel) that gave a general warning about thresholds and a specific warning about a particular threshold that lacked carpet and visible signage. Judge Scola rejected the argument that the different incident or general references to dangers of thresholds in safety minutes were sufficient to provide notice with respect to the condition of the threshold on the VICTORY. Consequently, he dismissed the case without prejudice. See September 2022 Update.
Patton amended her complaint to add three “new” factual allegations, but Judge Scola held that the new allegations were insufficient to state a claim and dismissed the amended complaint. The first addition was that a new, undated, photograph that Patton alleged was taken at or shortly after the time of the fall established that the gap had developed over time so that the crew would have had notice of the gap. Judge Scola answered that Patton did not even attempt to argue that the photograph represented the state of the threshold before the time of the accident, let alone its condition for a sufficient time to give notice to the crew. Second, Patton argued that the crew members routinely clean the floors in the area, so a reasonable inference from common sense dictates that the crew would have seen the tripping hazard. As Judge Scola had previously rejected this argument, he simply noted that Patton had not added anything to buttress the argument. Third, Patton attached the same safety minutes to the amended complaint as she had previously submitted. As Judge Scola had previously held that these documents were too generalized to establish notice for the specific hazard in this case, he held they were insufficient and dismissed Patton’s amended complaint.
Thomas Gorton developed mesothelioma that he attributed to products containing asbestos to which he was exposed while serving in the Navy as an electrician mate on the USS BLUE. Gorton and his wife, Rhonda J. Gorton (Thomas eventually died from the mesothelioma), brought this action against at least 65 defendants in Pennsylvania state court, and the case was removed to federal court based on the Federal Officer Removal Statute. Defendant Eaton Corp., successor to Cutler-Hammer, which supplied motor controllers containing asbestos, filed a motion for summary judgment, arguing that, under admiralty law, Ms. Gorton had not produced sufficient evidence of exposure to its products containing asbestos. In order to resolve the motion for summary judgment, Judge Conti began by determining whether admiralty law or Pennsylvania law applied to the claims against Eaton. As Ms. Gorton did not invoke the admiralty jurisdiction of the court, and the case was removed based on the Federal Officer Removal Statute, Judge Conti held: “Eaton’s argument that admiralty law applies to this case is misplaced because Mrs. Gorton did not invoke this court’s admiralty jurisdiction. The court, therefore, will apply Pennsylvania law to resolve Eaton’s motion for summary judgment.” Applying the “frequency, regularity, proximity standard” from Pennsylvania law, Judge Conti found sufficient evidence to deny the motion.
Marine Towing received a distress call from the captain of the WHIRLAWAY, reporting that the vessel’s anchor had failed. Marine Towing sent a vessel that removed the WHIRLAWAY from a sandbar, and the captain signed a contract for the serviced provided to rescue the vessel. Marine Towing did not receive payment and brought this suit in federal court in Florida against the vessel, the captain, and the vessel owner, invoking the court’s admiralty jurisdiction and seeking relief under Rule 9(h). The complaint included a jury demand. The defendants moved to strike the jury demand, and Magistrate Judge Dudek noted that Marine Towing had invoked the admiralty jurisdiction and asserted no other basis for jurisdiction. Accordingly, Magistrate Judge Dudek struck the jury demand from the complaint.
Victor J. Marolda, III, was injured while serving as a seaman on the tug SIRIUS, owned and operated by Tisbury Towing, when a barge in tow of the tug capsized during a voyage from New Bedford to Martha’s Vineyard. Marolda brought this suit in federal court in Massachusetts against Tisbury under the Jones Act and general maritime law and moved to add four additional defendants involved with the loading and with the manufacture/sale of the scale system used by the loading system to weigh the sand and gravel aggregate carried by the barges. Marolda argued that the court had supplemental jurisdiction over the proposed claims; however, Judge Hillman denied the amendment under the supplemental jurisdiction because the court had admiralty jurisdiction over the claims. Tisbury Towing eventually impleaded the other parties, seeking contribution and indemnity, and Marolda filed a third-party complaint against them, alleging common-law negligence and product-liability claims. The third-party defendants moved to dismiss Marolda’s third-party complaint for lack of subject matter jurisdiction, arguing that the prior decision was law of the case on the supplemental jurisdiction issue. Marolda responded that having admiralty jurisdiction was not dispositive on the issue whether the court had supplemental jurisdiction and cited case law in this response from the First Circuit and Eleventh Circuit that the district court could exercise either admiralty jurisdiction or supplemental jurisdiction. Judge Hillman noted that the exercise of supplemental jurisdiction is discretionary, but as all of the claims arose out of the same case and controversy, Judge Hillman agreed to exercise supplemental jurisdiction and denied the motion to dismiss. See June 2022 Update.
Marolda then moved to amend his complaint to include punitive damages against third-party defendant Cape Cod Aggregates, claiming that the defendant was aware that the scale was defective and that it consistently under-weighed the aggregate. Additionally, Marolda argued that employees and contractors for Cape Cod Aggregates had suggested alternatives that were rejected. Although Cape Code Aggregates argued that Massachusetts law controlled the issue and that punitive damages were not available under Massachusetts law, Judge Hillman held that maritime law was applicable and that Massachusetts law could not supplement maritime law because it was incompatible with maritime law. Citing the Supreme Court decision in Exxon v. Baker, and reasoning that Marolda had plausibly alleged willful, wanton, and reckless conduct, Judge Hillman permitted Marolda to amend his complaint to seek punitive damages [compare the decision of the Fifth Circuit in Scarborough v. Clemco, 391 F.3d 660, holding that seamen may not recover non-pecuniary damages from third parties].
From the state appellate courts . . .
Peter Phan did not have a slip to store his 57-foot catamaran, so he kept it in the waters of Lake Washington with an anchor that could not keep the vessel in place. The catamaran grounded several times in Juanita Bay, and the King County Sheriff’s office received numerous reports of the groundings. After a grounding on October 2, 2017, Phan contacted BoatUS, a boaters’ group that provides vessel towing assistance to its members (which the court described as providing services similar to the American Automobile Association), and BoatUS dispatched Pullen Tows to assist with towing the grounded vessel. The catamaran was dislodged from the shallow water and Pullen Tows began towing it to deeper water, but Phan discovered that there was a water leak and the vessel was sinking. As it was not safe to tow the vessel in that condition, Pullen Tows decided to re-ground the vessel not far from where it had been. Pullen Tows did not attempt to salvage or dewater the boat because that was not covered under the plan Phan purchased with BoatUS. The Sheriff’s office was concerned the vessel would capsize, and deputies assisted in dewatering the vessel. Phan eventually hired a commercial service to plug the leak and dewater the vessel so it could float, but wind and waves pushed the vessel into a pier where it sank and was a total loss. The City of Kirkland impounded the vessel under the state Derelict Vessels Act, and Phan brought this suit in Washington state court against BoatUS and Pullen Tows, claiming negligence, breach of contract, negligent infliction of emotional distress, and outrage. Judge Richardson granted summary judgment to the defendants on all of the claims, and Phan appealed the dismissal of all the claims (except the tort of outrage). Applying maritime law, Judge Coburn, writing for the Washington Court of Appeals, reasoned that towed vessels impliedly warrant that they are seaworthy and that, if unseaworthiness of the towed vessel is discovered, the tug operator must take reasonable steps to save the towed vessel. In this case, the parties discovered that the vessel was taking on water when it was dislodged from the grounding, and the towing company then re-grounded the vessel. The towing company offered to assist with salvage and dewatering, but Phan did not sign up for that service. Thus, Judge Coburn agreed that there was no violation of duty. Similarly, Phan was unable to identify any express or implied contractual duty that the towing company violated. With respect to the claim for negligent infliction of emotional distress, Phan argued that he was in the zone of danger based on the damage to the vessel, but Phan failed to present evidence of negligence of the defendants, and, additionally, nothing established that Phan was in immediate risk of physical harm as the vessel was in shallow water during the operation. Thus, Judge Richardson did not err in granting summary judgment to the defendants.
Kenneth G. Engerrand
President, Brown Sims, P.C.
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Quote:
A Perfect Storm
The skies unrest when the government tests performance-based solicitations,
A wary dredger would fare far better if it worked with fewer hesitations,
Fighting the elements, with debris and sediments, onward the task did drag,
Before they knew it, the fish window, they blew it, so up they raised the white flag,
Motions were filed, allegations compiled, but material facts are disputed,
To trial we go so the parties may show if this perfect storm has concluded.
Judge Ryan T. Holte, Marine Industrial Construction, LLC v. United States, 158 Fed. Cl. 158, (Ct. Fed. Cl. 2022) (as a tribute to Judge Loren A. Smith and his maritime poem published in Neal & Co. v. United States).
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© Kenneth G. Engerrand, July 29, 2022; redistribution permitted with proper attribution.
