November 2023 Longshore/Maritime Update (No. 294)
Notes from your Updater:
In our March and April 2023 Updates we discussed the decision of Judge Zilly from the Western District of Washington in Powers v. United States, finding a fact question that was sufficient to allow a suit to proceed against the United States based on a “worsened the situation” theory (that the Coast Guard’s decision that no boat was in distress terminated rescue efforts of other potential rescuers). Accordingly, Judge Zilly declined to dismiss the suit against the United States for the delay in rescuing the operator of a capsized boat. We noted that Judge Williams from the District of New Jersey reached a different result in a case involving the negligence of the Coast Guard with respect to rescue efforts from a capsized vessel in In re Avena, No. 1:21-cv-515 (D.N.J. Nov. 14, 2022). Judge Williams’ dismissal of the United States was appealed to the Third Circuit (No. 22-3132 c/w No. 22-3228, calendared for December 12, 2023). The limitation petitioners requested that the district court stay the discovery and trial during the appeal, and Magistrate Judge Pascal concluded that the limitation petitioners and claimant raised colorable arguments that might succeed in the Third Circuit and agreed to stay proceedings pending the decision of the Third Circuit. In re Avena, No. 1:21-cv-515, 2023 U.S. Dist. LEXIS 166155 (D.N.J. Sept. 19, 2023) (Pascal).
On September 26, 2023, Judge Leon of the United States District Court for the District of Columbia declined to overturn the decision of the Coast Guard to deny Captain Matthew Hight full pilot registration for the United States’ portion of Lake Ontario and the St. Lawrence River. Captain Hight had been serving as a Deputy Pilot and passed the pilotage exam, but the St. Lawrence Seaway Pilots Association declined to endorse him for full pilot registration and terminated his training. See Hight v. United States Department of Homeland Security, No. 21-3277, 2023 U.S. Dist. LEXIS 171978 (D.D.C. Sept. 26, 2023).
The Second Circuit agreed with the remand to state court of the suit brought by the State of Connecticut in Connecticut state court against Exxon Mobil under the Connecticut Unfair Trade Practices Act (alleging that Exxon Mobil engaged in a “decades-long ‘campaign of deception’ to knowingly mislead and deceive Connecticut consumers about the negative climatological effects of the fossil fuels that Exxon Mobil was marketing to those consumers”). Exxon Mobil removed the suit to federal court on numerous grounds, including the jurisdiction of the Outer Continental Shelf Lands Act (for actions arising out of or in connection with OCS operations). Writing for the Second Circuit, Judge Sullivan reasoned that the suit was not related to the extraction of minerals but “talking about what happens to the environment when they are burned.” Connecticut v. Exxon Mobil Corp., No. 21-cv-1446, 2023 U.S. Dist. LEXIS 25513 (2d Cir. Sept. 27, 2023).
On October 3, 2023, the Ninth Circuit resolved a dispute between the Lummi Nation and the Swinomish Indian Tribal Community, the Tulalip Tribes, and the Upper Skagit Indian Tribe with respect to a 1974 decree (arising from the 1855 Treaty of Point Elliott) by declining to read the decree issued by Judge Boldt as granting the Lummi Nation fishing rights east of Whidbey Island, Washington. See Swinomish Indian Tribal Community v. Lummi Nation, Nos. 21-35812, 21-35874, 2023 U.S App. LEXIS 26317 (9th Cir. Oct. 3, 2023) (Collins).
The Update has reported that on April 14, 2023, the Fifth Circuit held that the Sabine River Authority, State of Louisiana, is not an “arm of the state” and was not entitled to sovereign immunity under the Eleventh Amendment (in connection with property damage caused by the release of water from the Toledo Bend spillway gates into the Sabine River). See Bonin v. Sabine River Authority, State of Louisiana, No. 20-40138 c/w No. 22-40433, 2023 U.S. App. LEXIS 9018 (5th Cir. Apr. 14, 2023) (Dennis). On October 10, 2023, the United States Supreme Court declined to grant Sabine River Authority’s petition for a writ of certiorari. See Sabine River Authority, Louisiana v. Bonin, No. 23-149.
In our March 2023 Update, we reported that the Supreme Court declined to grant a writ of certiorari to consider the decision of the Fifth Circuit in Chevron USA, Inc. v. Plaquemines Parish (No. 22-715). That appeal involved cases filed in Louisiana state courts by coastal Parishes against energy companies seeking to recover restoration costs for loss of land along the Louisiana Gulf Coast allegedly resulting from production practices carried out by the energy companies going back to World War II. The Fifth Circuit affirmed the remand of the cases to state court.
After the Supreme Court declined to hear the petition from the energy companies, Judge Zainey of the United States District Court for the Eastern District of Louisiana issued an order remanding to state court the suit brought by Plaquemines Parish and the State of Louisiana against a host of energy companies. The energy companies argued that they had threaded the needle to satisfy the “acting under” requirement for federal officer removal because that case involved a World War II-era refinery contract. Judge Zainey was unpersuaded, answering that the refinery contract satisfied neither the acting-under nor the related-to requirements (the energy company “may have acted under a federal officer when refining oil in Port Arthur, Texas but it did not act under a federal officer when producing that oil in Louisiana”). See Parish of Plaquemines v. Northcoast Oil Co., No. 18-5228, 2023 U.S. Dist. LEXIS 67290 (E.D. La. Apr. 18, 2023). The energy companies have appealed the order of remand to the Fifth Circuit (No. 23-30304), and Judge Zainey stayed the order of remand pending the appeal. Judge Morgan of the United States District Court for the Eastern District of Louisiana reached a similar result in Parish of Plaquemines v. Rozel Operating Co., No. 18-5189, 2023 U.S. Dist. LEXIS 81541 (E.D. La. May 10, 2023). The energy companies have appealed the order of remand (No. 23-30336), and Judge Morgan stayed the order of remand pending the appeal. See June 2023 Update. On June 13, 2023, Judge Summerhays of the United States District Court for the Western District of Louisiana declined to reconsider his decision remanding 42 lawsuits (removed under the Federal Officer Removal Statute) that were brought by several Louisiana parishes against energy companies based on violations of permits under the State and Local Coastal Resources Management Act of 1978 and associated regulations, rules, and ordinances in connection with the defendants’ oil exploration and production activities in coastal parishes. See Parish of Cameron v. Apache Corp. (of Delaware), No. 2:18-cv-688, 2023 U.S. Dist. LEXIS 103010 (W.D. La. June 13, 2023). Judge Summerhays granted a stay of the remand pending appeal, and the energy companies filed a notice of appeal to the Fifth Circuit (No. 23-30422). Judge Fallon also stayed remand orders pending appeal to the Fifth Circuit in Parish of Jefferson v. Destin Operating Co., No. 2:18-cv-5206 (appeal No. 23-30225); Plaquemines Parish v. Exchange Oil & Gas Co., No. 2:18-cv-5215 (appeal No. 23-30291); and Plaquemines Parish v. Great Southern Oil & Gas Co., No. 2:18-cv-5227 (appeal No. 23-30303). See August 2023 Update. On October 11, 2023, the Fifth Circuit granted the motion to lift and vacate the stay pending appeal in Plaquemines Parish v. Chevron USA, Inc., No. 23-30291, 2023 U.S. App. LEXIS 27249 (5th Cir. Oct. 11, 2023) (Higginson) in a published order, concluding that the balance of equities weighed against issuance of a stay. The energy companies have sought a stay in the Supreme Court, No. 23A364, BP America Production Co. v. Parish of Cameron, Louisiana, and Justice Alito ordered a response be filed by November 2, 2023.
On October 12, 2023, the Fifth Circuit reversed the decision of Judge Zainey of the United States District Court for the Eastern District of Louisiana, declining to overturn the permit issued under the Clean Water Act by the Army Corps of Engineers to allow All State Financial to dredge and fill wetlands in St. Tammany Parish, Louisiana to build a multi-use commercial and residential development. The appellate court held that the Environmental Assessment lacked sufficient detail for the court to determine if the project would have a significant effect on the environment. Therefore, the court remanded the case to the Corps of Engineers to prepare a new Environmental Assessment. See O’Reilly v. All State Financial Co., No. 22-30608, 2023 U.S. App. LEXIS 27107 (5th Cir. Oct. 12, 2023) (per curiam).
In our September 2023 Update, we reported that Judge Talwani of the United States District Court for the District of Massachusetts rejected the challenge to the Vineyard Wind Project, a wind energy project off the coast of Martha’s Vineyard and Nantucket, that was brought by Thomas Melone, who owns a house on Nantucket Sound, and Allco Renewable Energy and Allco Finance, the owner/operator/developer of solar electric generating facilities. Melone claimed standing because he derives recreational, conservation, environmental well-being, and aesthetic benefits from the existence of the right whale so that he could challenge the alleged violation of the Marine Mammal Protection Act and the Administrative Procedure Act by the National Marine Fisheries Service. Judge Talwani held that Melone had “sufficiently alleged a small probability that the death of even one whale in connection with the Vineyard Wind Project may impact Melone’s ability to view right whales,” but she held that the NMFS did not act arbitrarily, capriciously, or unlawfully and granted summary judgment to the NMFS. See Melone v. Coit, No. 1:21-cv-1171, 2023 U.S. Dist. LEXIS 135701 (D. Mass. Aug. 4, 2023). On October 12, 2023, Judge Talwani rejected challenges brought by various fishing interests to the Vineyard Wind Project on the outer Continental Shelf off the coast of Martha’s Vineyard and Nantucket, Massachusetts (claiming violations of the Clean Water Act, the Marine Mammal Protection Act, the National Environmental Protection Act, and the Outer Continental Shelf Lands Act). See Seafreeze Shoreside, Inc. v. United States Department of the Interior, Nos. 1:22-cv-11091, 1:22-cv-11172, 2023 U.S. Dist. LEXIS 183483 (D. Mass. Oct. 12, 2023) (Talwani).
The Update has reported the litigation involving the Biden Administration’s executive order pausing new oil and gas leases on public lands and in offshore waters. Louisiana and other states challenged the executive order in the Western District of Louisiana, and Chief Judge Doughty issued a nationwide preliminary injunction that enjoined officials in the Department of Interior from implementing the pause. See Louisiana v. Biden, No. 2:21-cv-778, 2021 U.S. Dist. LEXIS 112316 (W.D. La. June 15, 2021). On August 17, 2022, the Fifth Circuit ruled that Chief Judge Doughty’s order and accompanying memorandum lacked sufficient specificity and remanded the case for further proceedings without reaching the merits of the Government’s challenge to the injunction. Louisiana v. Biden, No. 21-30505, 2022 U.S. App. LEXIS 22872 (5th Cir. Aug. 17, 2022) (Higginbotham). The next day, Chief Judge Doughty granted a permanent injunction enjoining the Government from implementing the pause on public lands and offshore waters as set forth in the executive order with respect to the thirteen states that were plaintiffs in the lawsuit. See Louisiana v. Biden, No. 2:21-cv-778, 2022 U.S. Dist. LEXIS 148570 (W.D. La. Aug. 18, 2022). In separate litigation, the D.C. Circuit held that the Department of Interior adequately considered the option of not leasing in connection with two proposed offshore leases but remanded the suit for consideration of potential deficiencies in the enforcement of safety and environmental regulations. See Gulf Restoration Network v. Haaland, No. 20-5179, 2022 U.S. App. LEXIS 24368 (D.C. Cir. Aug. 30, 2022) (Katsas). In Louisiana v. Haaland, No. 2:23-cv-1157 (W.D. La. Sept. 21, 2023), the State of Louisiana, the American Petroleum Institute, Chevron, and Shell sought to halt the withdrawal of 6 million acres from Lease Sale 261. Judge Cain agreed with the plaintiffs and granted a preliminary injunction, enjoining the United States from implementing the acreage withdrawal. He ordered the United States to proceed with Lease Sale 261 by September 30, 2023. The United States and environmental groups appealed to the Fifth Circuit, and on September 25, 2023, an administrative/motions panel of the Fifth Circuit kept in place the preliminary injunction but amended it to hold that the sale is ordered to take place by November 8, 2023, noting that no extension of that date would be granted. The administrative panel explained: “This is only a ruling that, pending this appeal of the preliminary injunction, a stay of the injunction is DENIED except to change the date by which Lease Sale 261 is to occur” (the panel added that its decision is subject to review by the merits panel once the appeal is submitted). Louisiana v. Haaland, No. 23-30666 (5th Cir. Sept. 25, 2023). On October 26, 2023, the Fifth Circuit ordered that the preliminary injunction that was entered on September 25, 2023, and amended by the motions panel on September 25, 2023, was stayed pending the decision of the merits panel. The case was then set for oral argument before the merits panel on November 13, 2023.
On October 27, 2023, the Federal Energy Regulatory Commission reaffirmed its decision approving the construction and operation of liquefied natural gas export facilities on the Texas Gulf Coast after the United States Court of Appeals for the D.C. Circuit reversed and remanded FERC’s prior approval in Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321 (D.C. Cir. 2021).
On the LHWCA Front . . .
From the federal district courts
Paul Hotard was allegedly exposed to asbestos while working at Avondale’s shipyard from 1969 to 1970 as a tack welder. Before he died from mesothelioma, he brought this suit against Avondale and several asbestos suppliers in state court in Orleans Parish, Louisiana. Avondale removed the case to federal court based on diversity, and Hotard’s widow substituted for Hotard after he died. In 2022, Chief Judge Brown granted the motion for summary judgment filed by/joined by Avondale and its insurers, arguing that the state-law claims against Avondale were barred by the post-1972 LHWCA, which provided the exclusive remedy against Avondale (and its insurers). After Chief Judge Brown recused herself and the Fifth Circuit issued its decision in Barrosse (see July 2023 Update), holding that the shipyard workers’ claims under Louisiana state law were not preempted by the LHWCA because his injury occurred prior to Louisiana’s 1975 workers compensation statute, several defendants moved for leave to bring cross claims and third-party claims against Avondale that were denied before Barrosse. Citing the change in law, Judge Fallon granted reconsideration and permitted the filing of the claims.
Romare J. Greene was employed as a longshore worker by Ports America and was injured while descending the gangway on the M/V COSCO CAMELLIA while the ship was docked at the Garden City Terminal near Savannah, Georgia. Greene brought suit in state court in Chatham County, Georgia against the owner of the vessel (Cosco Camellia), the charterer (Cosco Shipping), and the vessel manager (Shanghai Ocean Shipping), under Section 5(b) of the LHWCA. The defendants removed the case to federal court based on diversity and moved for summary judgment, asserting that they had not violated any of the Scindia duties. The facts established that the vessel crew rigged the gangway before cargo operations began and that, shortly after the longshore workers began embarking the vessel, the handrail collapsed when a pin fell out. The handrail was raised, and the pin was re-inserted. The crew left the area, and, when Greene was disembarking, the handrail again collapsed because the pin came out of place. The crew reported that the pin came out because shaking or unintentional bumping of the workers caused the front safety latch to open, resulting in the pin falling out. The vessel argued that the turnover duty was not violated because the alleged negligent installation of the pin occurred after the vessel had been turned over; however, Judge Baker responded that there was also evidence that the problem existed from the commencement of operations. Therefore, there was some evidence that the turnover duty was breached. Greene also argued that the gangway was under the active control of the crew when the injury occurred, and the vessel answered that video evidence established that only longshore workers were using the gangway and were in control of the equipment that caused the handrail to collapse. Judge Baker reasoned that the presence of longshore workers and their exerting control over the gangway did not preclude the crew having concurrent control (active control does not require exclusive control). As the Cosco representative testified that there must be a gangway watchman from the crew to make sure the gangway stays safe, and as the crew was involved in the correction after the first collapse, Judge Baker found sufficient evidence to trigger the active control duty. Even though there were no crew members present at the time, there was evidence that the crew had knowledge of the hazardous condition so as to invoke both the active control duty and the duty to intervene. Thus, Judge Baker denied summary judgment to the vessel owner with respect to each of the three Scindia duties. The result was different, however, for the time charterer and ship manager. Reviewing the provisions of the time charter and the Ship Management Agreement, Judge Baker found no provisions that attributed responsibility to the charterer or ship manager. Therefore, he granted summary judgment to those defendants. Finally, the defendants moved for summary judgment on Greene’s claim for future lost earnings, citing the facts that he had returned to work and was earning more than before the accident and that he had no medical limitations. Greene responded that he would have been able to work at least 15 more hours a week if he had not been injured, but he presented no evidence to corroborate that claim other than his testimony. Concluding that Green’s personal belief did not reach the level of specificity required to support the claim for loss of future earnings, Judge Baker dismissed the claim for future wage loss.
Leonard Roberts was employed as a longshore worker in July 2020 on the PHILADELPHIA EXPRESS at the Garden City Terminal of the Georgia Ports Authority. Roberts alleged that before docking the vessel, the owner (Philadelphia Express Trust) and operator (Hapag-Lloyd) knew that a person on board the vessel had COVID-19; however, the vessel did not fly its quarantine flag before the longshore workers began boarding. Roberts contracted COVID-19 and brought this suit against the owner and operator of the vessel, alleging that he contracted the disease from his exposure on the vessel and bringing claims for negligence under Section 5(b) of the LHWCA and fraudulent concealment under Georgia law. The court dismissed the state claim but allowed Roberts to proceed with his claim under Section 5(b) for violation of the Scindia turnover duty. The vessel defendants then designated an expert (internal medicine and infectious disease doctor), Dr. Mitchell Adam Blass, who opined that Roberts did not contract COVID from his work on the PHILADELPHIA EXPRESS and that Roberts could have contracted COVID from myriad other sources, including contact with the girlfriend with whom he was living who contracted COVID before Roberts. Roberts moved to exclude his opinions, challenging his qualifications, his methodology, and the helpfulness of his opinions, and Magistrate Judge Ray addressed each of them. Magistrate Judge Ray noted that Blass is board certified in infectious diseases, was employed as Hospital Epidemiologist at Saint Joseph Hospital of Emory University, and had seen thousands of patients with COVID. Magistrate Judge Ray concluded that Dr. Blass’s opinions were within the “reasonable confines” of his experience and that any difficulties of contact tracing went to the weight, not admissibility, of his testimony. With respect to methodology, Roberts argued that Dr. Blass did not have detailed knowledge of the ship’s layout, did not review the medical records of the crew member who had COVID or of Roberts’ girlfriend so that he did not know what their symptoms were or when they started exhibiting symptoms, and that he did not know the living arrangements with Roberts’ girlfriend. Magistrate Judge Ray did not believe that the methodology was insufficient with respect to the opinion that Roberts did not contract COVID from his work on the vessel as Dr. Blass relied on deposition testimony on the movements of the crew member and the negative testing of every other member of the crew at the next port (using his extensive experience as an infectious disease expert). Magistrate Judge Ray did not believe that Dr. Blass’ opinion about other sources for the contraction of COVID was sufficient because that opinion did not explain how Blass identified other possible sources of Roberts’ COVID infection and did not explain why his experience was a basis for that conclusion. Finally, Magistrate Judge Ray considered the opinion about the source of the COVID infection to be beyond the understanding of the average lay person and that it would be helpful to the jury.
From the state courts
Henry Pete began his work life as a longshore worker at the Port of New Orleans from 1964 to 1968 (he then became a chiropractor). He was diagnosed with mesothelioma in 2019 and brought this lawsuit in Louisiana state court against several parties, claiming exposure to asbestos during his work at the Port. By the time of trial, there were three defendants left in the suit, Ports America Gulfport, SSA Gulf, and James J. Flanagan Shipping. A jury trial was held in October and November 2020, and a verdict was rendered in Pete’s favor against Ports America. SSA Gulf and Flanagan were found to be free of fault. The jury awarded damages of $10,351,020.70 (that included $9.8 million in general damages: $2 million for past and future physical pain and suffering, $2.3 million for past and future mental pain and suffering, $3 million for past and future physical disability, and $2.5 million for past and future loss of enjoyment of life), and the trial court entered judgment after reducing the award for the fault of Cooper T. Smith Stevedoring and South African Marine, which had settled and were found to bear fault. Pete died shortly after the trial, and his son was substituted as plaintiff. Ports America appealed, and the court of appeal found no abuse of discretion in the jury’s award. The Louisiana Supreme Court agreed to hear the case to address the manner by which appellate courts should review damage awards for excessiveness (noting that the same rules apply in determining whether an award is too low). Writing for the Court, Justice McCallum held that, in reviewing an award, the appellate court should include a consideration of prior awards in similar cases as well as the particular facts and circumstances of the case under review. If there was an abuse of discretion, the court should, considering prior awards, determine the highest (or lowest) point that is reasonably within that discretion. Justice McCallum then reviewed the testimony about the treatment and consequences for Pete and compared that evidence with other decisions, concluding that the highest award reasonably within the jury’s discretion for general damages was $5 million, thereby reducing the award to that amount plus the past medical expenses of $551,020.70. Justice Crichton agreed with the reasoning but would have reduced the award of general damages to $4 million, and Justice Griffin agreed with the decision that prior awards may serve as a factor in the review. However, Justice Griffin believed that the overriding factor must be the individual circumstances of the case and that the jury did not abuse its discretion in awarding $9.8 million in general damages.
And on the maritime front . . .
From the United States Supreme Court
John Newbold and his nephew Jason Rodgers were fishing in Bayou D’Arbonne in Louisiana in a 14-foot flat-bottom aluminum boat owned by Rodgers. Rodgers turned the boat westward into an intersecting waterway, and it struck a “Do Not Anchor or Dredge” pipeline sign, the top of which was located six inches below the water surface. Newbold was thrown from the boat and died from his injuries. The intersecting waterway was two 50-foot pipeline rights-of-way that were owned by Kinder Morgan and SNG Operator. Newbold’s beneficiaries brought this suit in Louisiana state court against Kinder Morgan and SNG Operator, and the defendants removed the suit to the Louisiana federal court based on diversity. The defendants moved for summary judgment, arguing that Louisiana law applied and Louisiana’s recreational use statutes barred any recovery. This argument required a finding that the case did not fall within the admiralty jurisdiction and that admiralty law did not apply. The defendants presented evidence that the pipeline sign was located in an area of wetlands with perennial emergent grassy vegetation that can tolerate semi-permanent, but not permanent flooding. The area is subject to seasonal flooding from the Ouachita River, but the area of the sign was 58 feet from the location where vegetation stopped, and 67% of the time the base of the pipeline sign was on dry land. Reasoning that a waterway is navigable if, in its ordinary condition, trade and travel may be conducted over it in the customary modes of trade and travel on water, Judge Doughty held that the area could not be used for navigation in its ordinary condition because it was dry 67% of the time and was outside of the navigable waters of Bayou D’Arbonne. As Louisiana law applied, Judge Doughty dismissed the claims with prejudice. See July 2022 Update.
Newbold’s beneficiaries appealed to the Fifth Circuit, and Judge Engelhardt began his analysis with the proposition that the Commerce Clause gives the United States a dominant servitude over the navigable waters of the United States. However, that servitude does not burden land that is only submerged when the river floods, and flood waters on land that is unburdened by the navigational servitude are not navigable for purposes of federal law. The beneficiaries argued that the Corps of Engineers had the right to permanently flood lands in the Refuge where the allision occurred that lie below 65 feet above mean sea level. As the allision occurred at 55 feet above mean sea level, the beneficiaries claimed that the allision occurred within the navigational servitude. Judge Engelhardt agreed that the navigational servitude extends laterally to the entire water surface and bed of a navigable waterway that is below the ordinary high-water mark, and the ordinary high-water mark is set at the line of the shore established by the fluctuations of water. Therefore, if the Corps permanently flooded the Refuge, the water would likely be navigable. However, as the Corps did not permanently flood the Refuge, the water was not navigable. The beneficiaries also argued that the allision occurred below the ordinary high-water mark of Bayou D’Arbonne. They advocated a vegetation test (from the Third Circuit) that the ordinary high-water mark should be determined by finding the land upon which the waters have visibly asserted their dominion so that the value for agricultural purposes has been destroyed. Judge Englehardt noted that the location of the allision was on land that was dry 67% of the time and where vegetation was not destroyed, as it required mowing with some regularity. And, more importantly, the Bayou did have an unvegetated channel that was 597 feet wide at the location where the boat split off to fish near the sign, which was located 58 feet away from the unvegetated channel. Judge Engelhardt noted that the Eleventh Circuit had described a definition as ludicrous that would have extended the navigational servitude to areas adjacent to the low water channel that revert to a swampy or even dry condition as the waters recede. Accordingly, he held that the unvegetated channel established the ordinary high-water mark of the Bayou. Finally, the beneficiaries argued that there was a fact question whether the location of the allision was susceptible of being used in its ordinary condition as a highway for commerce so as to be navigable in fact (THE DANIEL BALL). Judge Engelhardt noted that navigability is not destroyed by the waterway being interrupted by occasional natural obstructions or portages, but the essential point was whether the waterway afforded a channel for useful commerce. The only evidence the beneficiaries presented for a commercial purpose for the channel was the sign to warn expected boat traffic, and Judge Engelhardt found that to be insufficient to establish potential commercial value so that the water could be called navigable. Therefore, the appellate court affirmed the determination that there was no admiralty jurisdiction and that the suit was barred under state law. See April 2023 Update.
Newbold filed a petition for writ of certiorari with the United States Supreme Court, presenting the following questions:
This case raises a critical issue concerning the Fifth Circuit limiting the federal navigation servitude to the permanent channel of navigable waters, thereby ceding jurisdiction over the banks to the states. The servitude includes both the permanently flooded channel and its adjacent banks. The ordinary high-water mark defines the banks and establishes the upper limits of the servitude. Howard v. Ingersoll, 54 U.S. 381, 392 (1851). The banks are distinct from the permanently flooded channel, which is the ordinary low-water mark. Howard, 54 U.S. at 392; Handly v. Anthony, 18 U.S. 374, 380-81 (1820). Therefore, any attempts to merge these two lines will create an inconsistency in federal jurisdiction over navigable waters, and must be overruled.
Here, the questions presented are:
- Whether the Fifth Circuit erred in forming new tests that use the permanently flooded channel and the line where all vegetation ceases to exist to define the ordinary high-water mark, thereby merging the ordinary high- and low-water marks and ceding jurisdiction over the banks of navigable waters to the states.
- Whether the correct terrestrial vegetation test to determine the ordinary high-water mark is “the line below which the waters have so visibly asserted their dominion that terrestrial plant life ceases to grow, and therefore, the value for agricultural purposes is destroyed.” Borough of Ford City v. United States, 345 F.2d 645, 648 (3d Cir. 1965).
- Whether the United States Corps of Army Engineers (“CORPS”), by acquiring the right to permanently flood Bayou D’Arbonne up to 65 feet above MSL, established its navigation servitude at that elevation.
On the first Monday in October 2023 the Supreme Court issued its denial of certiorari.
From the federal appellate courts
Trey Wooley, a deckhand on the M/V ASSAULT, injured his hand while helping to replace severed face wires for the tow of the M/V NICHOLAS in the Mississippi River (the incident occurred during the overtaking of the NICHOLAS by the cruise ship MAJESTY OF THE SEAS. The owner of the NICHOLAS filed a limitation action in federal court in New Orleans, and Wooley, his employer, and the cruise line all filed claims in the limitation action. Wooley also brought an action in state court in New Orleans that was removed to federal court. Wooley moved for bifurcated trials in the limitation action on the issues of liability and damages, with liability to be determined in a bench trial and damages to be decided later by a jury in the separate action (in order to preserve his right to a jury trial under the Saving to Suitors Clause). Citing Judge Barbier’s decision in Bertucci Contracting, Judge Guidry found bifurcation to be unwarranted, as the issues of limitation and damages turned on the same evidence and testimony, and the time and resources of the court and parties would be better served through a single trial on all issues. He therefore denied the motion to bifurcate. (See September 2021 Update). Wooley and the owner of the NICHOLAS settled their claims with the cruise line, and Wooley’s employer assigned its claims to Wooley. Wooley and his employer then filed a motion to lift the stay in the limitation action with stipulations as a single claimant. As the stipulations satisfied the requirements for lifting the stay, Judge Guidry lifted the stay in the limitation action to allow Wooley to pursue a separate action against the owner of the NICHOLAS. See October 2021 Update.
The owner of the NICHOLAS appealed to the Fifth Circuit (jurisdiction over an appeal from an interlocutory order lifting an injunction, under Section 1292(a)(1)), and the Fifth Circuit reviewed the lifting of the stay for an abuse of discretion, although Judge Higginson noted that the adequacy of the stipulations was a question of law that was reviewed de novo. After the settlements and assignment, Wooley was the sole claimant and filed a stipulation that he would not seek to recover in excess of the value of the limitation fund until there was an adjudication of limitation in the exclusive jurisdiction of the limitation action. Judge Higginson agreed that the stipulation recognized the exclusive jurisdiction of the district court and protected the right to limitation of the vessel owner. He then addressed the vessel owner’s argument that the district court abused its discretion in lifting the stay (so that Wooley could proceed in state court) because Wooley’s suit was pending in federal court after a snap removal of the suit that he filed in Louisiana state court. Judge Higginson did not consider that argument to be relevant to the lifting of the stay as the court had previously held that proper stipulations permitted lifting of the stay for state and other forums. Whether the other forum would be state or federal court had not been decided as Judge Guidry had not ruled on Wooley’s motion to remand. The propriety of the removal was not the issue on appeal as Judge Guidry properly lifted the stay based on the single-claim stipulation regardless of whether Wooley pursued his Saving-to-Suitors case in state or federal court. See May 2022 Update.
Back in the district court, Judge Guidry addressed the motion to remand the suit that was filed by Wooley in state court. The suit was removed to federal court based on diversity (and admiralty). The defendants argued that although N&W was a Louisiana company and was nondiverse from Wooley, it was improperly joined in the suit because the limitation stay was in effect at the time the suit was filed. Judge Guidry agreed that N&W was improperly joined, and he dismissed N&W from the case. Consequently, the removal was proper as there was complete diversity between Wooley and the other defendants. As Wooley settled with the other defendants, Judge Guidry dismissed the state suit. The only claim remaining in the limitation action was Wooley’s claim, and Judge Guidry stayed the limitation action to allow Wooley to pursue a claim against N&W in Louisiana state court. Both parties appealed, and, writing for the Fifth Circuit, Judge Wilson agreed that N&W was improperly joined in the suit brought in state court, reasoning that “Wooley could not state a claim in state court against N&W by operation of the Stay Order, leaving the state court no choice but to dismiss Wooley’s claims against N&W.” Consequently, Judge Guidry properly dismissed N&W without prejudice and the case was properly removed based on diversity. Although N&W had been improperly joined, it argued that Judge Guidry erred by dismissing it from the case. N&W argued that Wooley did not “anchor his case in state court by requesting a jury or asserting a Jones Act claim against his employer, Turn Services.” Judge Wilson answered that the failure to assert a Jones Act claim did not change the fact that there had to be an independent basis, other than admiralty, to remove the case to federal court. He added that once N&W was determined to have been improperly joined, it was necessary that N&W be dismissed, regardless of whether there was another basis for jurisdiction. Judge Wilson also stated that, although the Saving-to-Suitors clause does not guarantee a non-federal forum, “a defendant retains a ‘heavy burden’ to show that removal is proper.” From that he concluded that “N&W must still show an independent basis for federal jurisdiction, other than admiralty.” N&W argued that, once the district court determined that removal was proper, his maritime claim against N&W could act as a jurisdictional hook. Judge Wilson rejected that argument, stating: “Essentially, N&W’s contention seems to be that so long as the district court had diversity jurisdiction over some party, then the district court could extend that jurisdiction to any party, even one nondiverse from Wooley. This is wrong.” He also rejected the arguments that the entire case should have remained in federal court because federal courts have exclusive jurisdiction over in rem actions and that the 2011 revisions to the removal statute made a substantive change in removal jurisdiction over maritime cases (noting the dictum in the Fifth Circuit’s Barker decision, which cited dictum in Dutile, which actually stated that “admiralty and general maritime claims fall within the category of ‘any other [civil] action’ governed by the second sentence of § 1441(b). As such, they are ‘removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which the action is brought.’”). Finally, N&W argued that Supplemental Rule F only permitted the district court to stay the action that had been brought in state court and did not allow its dismissal. Judge Wilson rejected that argument as the authority to dismiss the case did not come from Rule F but from the improper joinder doctrine. As the Fifth Circuit determined that N&W was improperly joined and its citizenship did not count for the diversity jurisdiction, the court denied Wooley’s appellate contentions, concluding that N&W was properly dismissed from the case, the motion to remand was correctly denied, and the separate suit was dismissed when the other defendants settled. Thanks to Michael F. Sturley, Fannie Coplin Regents Chair in Law at the University of Texas Law School, for bringing this opinion to our attention.
Kirk Prest operated a fishing and hunting charter business near Venice, Louisiana that was devastated by the spill from the Macondo/DEEPWATER HORIZON blowout. He chartered his boat to BP as part of the Vessels-of-Opportunity Program and helped with the cleanup, including wildlife search and rescue, oil search and reporting, and monitoring bird scare cannons, which exposed him to dispersants and crude oil (including being sprayed with dispersant from an aircraft). Prest brought an opt-out suit in federal court in Louisiana, asserting that he suffered both long-term and temporary health issues as well as emotional distress. BP moved to exclude the opinions of Prest’s experts on causation, Dr. Gerald Cook and Prest’s ophthalmologist, Dr. Robert Ross, and it moved for summary judgment based on the lack of evidence of causation. Judge Ashe excluded the expert opinions and granted summary judgment on the exposure claims based on lack of expert evidence and on the emotional distress claim based on not working within a zone of danger. See December 2022 Update.
Prest appealed to the Fifth Circuit, and the court began by discussing the exclusion of expert testimony on general causation. Prest acknowledged that Dr. Cook and Dr. Roth did not provide scientific evidence of the level of exposure to crude oil or dispersant that would cause his medical condition (in the general population). Instead, he argued that the judge should have applied a different standard based on the “unique circumstances” of this spill. The Fifth Circuit disagreed, stating that the district court would have erred if it had not applied the Fifth Circuit’s standard for evaluating expert evidence on causation. The Fifth Circuit also held that Prest’s argument that his lack of evidence of causation was because of BP’s failure to conduct biomonitoring of the workers and to preserve the data was flawed because it “puts the cart before the horse.” The court reasoned that the failure to conduct biomonitoring and preserve data had nothing to do with general causation “whether, per the scientific literature, exposure to a chemical can cause a specific injury in the general population.” Without that evidence of general causation, Judge Ashe correctly granted summary judgment on the exposure claims. Although Prest argued to the Fifth Circuit that expert testimony was not necessary for the claim for a temporary injury, the court noted that he had cited no authority for that proposition and held that the argument was thereby waived. With respect to the claim of emotional injury, Prest claimed that he had flashbacks and nightmares due to all that he endured related to the oil spill. As the emotional injuries pertained to the oil spill and not to being sprayed with dispersant, the Fifth Circuit affirmed the denial of the claim as Prest was not in the zone of danger (noting that the Fifth Circuit has not adopted that test for claims under the general maritime law). Finally, the appellate court denied Prest’s challenge to the decision not to amend the scheduling order and continue trial based on the fact that his doctor could not determine if his medical issues were the result of his cleanup work until those conditions stabilized. As the potential evidence related to specific causation, it was not relevant to the basis for summary judgment (lack of evidence of general causation), and there was no abuse of discretion in declining to allow the case to proceed.
The Street cases involved the motions to disqualify district Judge Ashe of the United States District Court for the Eastern District of Louisiana. Judge Ashe, who was confirmed in 2018 to a seat on the court, was a partner in a New Orleans law firm that represented defendant Cameron (manufacturer of the blowout preventer that failed) in the Phase One trial on liability in connection with the Macondo/DEEPWATER HORIZON trial (Judge Barbier found no fault on the part of Cameron and dismissed all claims against it). After the trial, the opt-out injury claimants filed complaints (that did not include Cameron), and 85 of the complaints were assigned to Judge Ashe after he was confirmed. This appeal involves 40 plaintiffs (the Street plaintiffs, named for plaintiff Corey Darnell Street). 39 of the 40 Street plaintiffs retained Dr. Jerald Cook as their causation expert, and Judge Ashe began hearing motions from BP to exclude the testimony of Dr. Cook and to grant summary judgment to BP. The Street plaintiffs then moved to disqualify Judge Ashe, and he denied the motions (for lack of jurisdiction in cases he had dismissed and as untimely and meritless in the remaining cases). Ultimately, Judge Ashe dismissed all of the cases, and the 40 plaintiffs appealed to the Fifth Circuit. They did not challenge the decision to exclude the opinions of Dr. Cook. Instead, they argued that Judge Ashe should have disqualified himself or that he should have extended the case-management deadlines (at oral argument counsel for the plaintiffs stated that the sole issue was disqualification). The plaintiffs cited 28 U.S.C. Section 455(b)(2), which provides that a judge shall disqualify himself when, in private practice, he served as a lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter. The plaintiffs argued that Judge Ashe’s position at the firm was an adverse relationship (Cameron was a defendant to the plaintiffs in that case) that required disqualification. Although Judge Ashe denied the motions on the ground that the Phase One liability trial was sufficiently unrelated to the suits in his court so that the matter in controversy requirement in the statute was not satisfied (the liability of Cameron was not in question in these cases), the Fifth Circuit applied the harmless error rule to affirm the decision. Judge Southwick noted that there was no evidence that Judge Ashe worked on the Cameron litigation in the Macondo/DEEPWATER HORIZON litigation, and that the firm’s representation of Cameron was a decade ago. The standard for review of the summary judgments was de novo, the plaintiffs did not even challenge the merits of the decisions, and eight other district judges have reached the same conclusion regarding the admissibility of Dr. Cook’s opinions. As it would not undermine the public’s confidence in the judicial process when Judge Ashe reached the same result as his colleagues when presented with the same issues, the Fifth Circuit affirmed Judge Ashe’s denial of the motions to recuse.
James Michael Jones was employed as a seaman by Select Oilfield Services to work on its lift boat, L/B SELECT 102. Select entered into a time charter with Cox Operating for Cox to use the lift boat in connection with operations on a platform owned by Cox. Jones brought this suit in federal court in Louisiana against Select and Cox. Select’s protection and indemnity insurer, Certain Underwriters at Lloyds, paid maintenance and cure to Jones and intervened in the suit, seeking to recover the payments from Cox based on the negligence of Cox. Cox moved for summary judgment on the claim by Lloyds, arguing that Lloyds had waived subrogation in accordance with the terms of the Master Service Agreement between Select and Cox and the terms of the P&I policy. The insurance exhibit to the MSA required Select to cause its insurers to name Cox as an additional insured and provide a waiver of subrogation in favor of Cox, and the P&I policy gave Select the privilege to name those for whom work was performed as additional insureds and to waive subrogation against them, except that the provisions were not applicable for a vessel that was not actually engaged or involved in the intended operations at the time of loss. Lloyds argued that the exception applied because Jones was injured on the Cox platform, not the lift boat. However, Cox’s head of purchasing and asset procurement described the contracted services as providing the lift boat to assist with Cox’s operations in the Eloi Bay Field, and Lloyds agreed with the description. Thus, Judge Morgan held that the exception did not apply and that Lloyds had no right to recover because it had agreed to waive its rights of subrogation. See July 2022 Update.
Lloyds appealed to the Fifth Circuit, arguing that the P&I policy did not cover the maintenance and cure payments, asserting that the policy only covered liability “as owners” and that, based on the well-known Lanasse decision, the owner of the vessel, Select, was not liable as owner of the vessel for the injury on the platform that did not occur on the vessel (citing the Fifth Circuit’s decision in Naquin that applied Lanasse to an injury to a seaman on the land). The Fifth Circuit disagreed, reasoning that Select’s duty to provide maintenance and cure existed because Jones was in the service of the ship at the time of the accident. Thus, “Select became liable to pay Jones maintenance and cure precisely as the ‘owner’ of the M/V SELECT 102.” Accordingly, the Fifth Circuit agreed that the benefits were covered by the P&I policy. The appellate court then addressed the issue whether Lloyds had the right to bring the subrogation action in view of the provision in the P&I policy (Blanket Additional Assureds and Waivers of Subrogation) that allowed Select to name those for whom Select was performing work as additional assureds on the policy and required Lloyds to waive subrogation rights against them. That provision contained a limitation that the name/waive provision did not apply for a vessel which was not actually engaged or involved in the intended operations at the time of the loss. Judge Morgan found that the SELECT 102 was engaged or involved in the intended operations at the time of Jones’ injury as the vessel was servicing the oil and gas production facility on which Jones was injured. The Fifth Circuit held that the vessel was involved in the operations intended by Select and Cox even if the vessel was not directly involved in the incident. Agreeing that the waiver of subrogation was applicable, the Fifth Circuit held that Judge Morgan properly dismissed Lloyds’ intervention (the Fifth Circuit also held that Lloyds’ claim was barred by the anti-subrogation rule because Cox was an additional insured on the P&I policy).
This litigation arises from the contract to convert the vessel M/V IRON DON from an offshore supply vessel to a salmon fishing vessel. The vessel owner, Kenai Ironclad alleged that it secured a charter for the vessel to fish in Alaska, and that the shipyard knew that the owner needed the work to be completed by June 20, 2019. Disputes arose between the parties, and the vessel owner asserted that the timely performance of the contract was jeopardized. When the owner came to pick up the vessel, the defendants blocked the owner from retrieving its vessel. The owner brought this action in federal court in Louisiana against the shipyard defendants for breach of contract and wrongful detention. Chief Judge Brown conducted a bench trial and held that there was no breach of contract but that, when the defendants detained the vessel, the work was complete and all sums that were owed had been paid. Thus, the defendants had no valid lien, and Chief Judge Brown found that the defendants had acted with bad faith and callous disregard for the safety of persons on the vessels (detention was accomplished by ramming, blocking, and converting the vessel for five days). For punitive damages, Chief Judge Brown awarded the net day rate for the salmon fishing charter ($3,516.10) for the five days the vessel was detained, plus attorney fees, expert fees, expenses, court costs, and prejudgment interest at the Louisiana rate from the date the vessel was detained. See June 2022 Update.
The shipyard defendants appealed to the Fifth Circuit, challenging the finding that they had wrongfully seized/converted the vessel and the awards of punitive damages and prejudgment interest. Writing for the Fifth Circuit, Judge DeGravelles of the United States District Court for the Middle District of Louisiana, sitting by designation, first discussed the finding that the defendants had wrongfully converted the vessel. Although the defendants argued that they seized the vessel because Kenai’s check had not cleared, Judge deGravelles found ample evidence to support Chief Judge Brown’s conclusion that the bill had been paid in full and that there was no longer a lien. The defendants also argued that the evidence did not support Chief Judge Brown’s findings that the vessel hired by Kenai to remove the IRON DON was rammed, endangering lives, with the defendants claiming that the bumping was controlled, safe, and appropriate.” Judge deGravelles disagreed and found sufficient evidence of bad faith from the wanton disregard of the legal rights of Kenai. Concluding that the evidence was sufficient to support an award of punitive damages, Judge deGravelles then addressed the amount of the award for punitive damages. In considering whether the 1:1 ratio between compensatory and punitive damages articulated by the Supreme Court in the EXXON VALDEZ case was a hard rule applicable to all cases or whether it was a limit in cases, like the EXXON VALDEZ, where the conduct was reckless, profitless to the tortfeasor, and less than malicious, he reasoned that “where the conduct is intentional and malicious, and the compensatory damages are small, imposing the 1:1 ratio would do little to serve the twin purposes of punitive damages: to punish the wrongdoer and deter his and others’ similar future conduct.” Judge deGravelles then addressed the issue whether punitive damages require compensatory damages. However, it was unclear from the decision in the district court whether the award was intended to be compensatory (at least in part). Therefore, Judge deGravelles remanded the case to the district court to clarify that issue. Kenai argued that the attorney fees awarded by the district court were awarded as costs and would serve to satisfy any requirement that punitive damages are necessary for there to be an award of punitive damages. Kenai argued that, by analogy, the tort for malicious prosecution includes attorney fees in the award of compensatory damages. Judge deGravelles answered that the attorney fees in this case were not in a collateral proceeding and were incurred in this suit. Accordingly, he held that the award of fees could not be considered as compensatory damages. Finally, the shipyard defendants argued that the award of prejudgment interest was inappropriate for the award of punitive damages and that the entire award was intended to be for punitive damages because Chief Judge Brown found that Kenai suffered no damage from the five-day delay. However, in her award of punitive damages, Chief Judge Brown awarded Kenai the value of its missed contract days for the time the vessel was wrongfully detained. As it was unclear whether the award was compensatory in part and the case was being remanded on that basis, Judge deGravelles deferred the decision on prejudgment interest until the decision of Chief Judge Brown on the nature of the damages she awarded. Thanks to Matthew Ammerman of Houston, Texas for bringing this matter (and others in this Update) to our attention.
Intercontinental Terminals operates a chemical-storage facility on the Houston Ship Channel in Deer Park, Texas. A fire broke out at the facility in 2019, and various tank products along with water and foam used to extinguish the fire accumulated in a containment area. That wall eventually collapsed, and between 470,000 and 523,000 barrels of the material were released, ending up into the navigable Ship Channel. The chemicals in the release included benzene, ethylbenzene, naphtha, xylene, toluene, pyrolysis gas, and refined oils. 17 of the chemicals were “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), and 5 were oils under the Oil Pollution Act of 1990 (OPA). As the spill was determined by the Environmental Protection Agency and the Coast Guard as oil mixed with hazardous substances, the United States determined that the spill was a CERCLA incident and was not covered under OPA. Several parties who claimed damages from the spill brought suit against Intercontinental Terminals under OPA in federal court in Houston, seeking to recover economic losses due to interruption of their business activities resulting from the closure of the Ship Channel. The claimants argued that both CERCLA and OPA could apply to a mixed spill of oil and CERCLA-regulated hazardous substances. The district court granted summary judgment to Intercontinental Terminals, and the claimants appealed to the Fifth Circuit. Writing for the Fifth Circuit, Judge Jolly noted that CERCLA’s coverage for hazardous substances excludes “petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance.” At the time OPA was enacted in 1990, the language of CERCLA was recognized as reflecting “a recognition that when oil contains a hazardous substance that is not indigenous to the refining process, the commingled mixture is itself a hazardous substance covered by CERCLA.” Congress then enacted OPA to cover “oil of any kind or in any form, including petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil,” but it excluded any substance that is designated as a hazardous substance under CERCLA. The legislative history reflected that the definition ensured “that there would be no overlap in the liability provisions of CERCLA and the Oil Pollution Act.” Accordingly, Judge Jolly held that the claimants could not bring economic loss claims under OPA because the mixed spill was covered under CERCLA and not under OPA where such claims were compensable. Judge Jolly did caution, however, that this ruling did not “close the door for liability under state or other federal laws, including common law (those claims are not compensable under the general maritime law as the Fifth Circuit held in the TESTBANK case in 1985).
From the federal district courts
Charlie Meeks boarded the MV ROBIN LANETTE on September 14, 2021 in Channelview, Texas to begin a two-week shift as a seaman. He learned that day that one of the seamen whose shift was ending showed signs of COVID-19 and that six seamen had been exposed to him. Although Meeks expressed concerns to his supervisor, Jacob Clay, about working with seamen who had been exposed to the sick co-worker, Clay dismissed his concerns and assured Meeks that the worker did not have COVID. Two days later, however, the worker tested positive. Meeks refused to attend a meeting with an inspector and other personnel at the dock, expressing his concern over exposure to COVID. He reported the hazardous condition to Clay by text message and refused to perform his duties because of a reasonable apprehension of injury. Clay responded that he would take the issue to the captain, and Meeks declined to perform his duties. Meeks was fired on the final day of his shift, September 28, 2021, and Meeks brought this suit in federal court in Texas against his employer, Hard’s Marine, alleging retaliation and wrongful termination under the Seaman’s Protection Act. Hard’s Marine filed a motion to dismiss, arguing that Meeks did not state a claim under any sections of the statute. Magistrate Judge Sheldon began with the claim that Meeks was discharged for refusing to perform duties ordered by his employer because he had a reasonable apprehension that performing the duties would result in serious injury to himself, other seamen, or the public. However, to qualify for protection, the seaman must have sought from the employer, and been unable to obtain, correction of the unsafe condition. Meeks claimed that he refused to perform duties ordered by his employer because he feared contracting COVID and that he sought correction of the issue by asking to remain on the vessel, the crew to be quarantined, and the vessel to be taken out of service. Although Hard’s Marine did not quarantine the crew or take the ship out of service, it was unclear that Meeks asked anyone with authority to take those steps or that anyone actually refused to take those actions. In contrast, Hard’s Marine did rectify Meeks’ fear of third-hand exposure by not forcing him dockside, avoiding injury to others by allowing him to remain on the vessel. Meeks also argued that he was discharged because he testified in a proceeding brought to enforce a safety law or regulation. He did not allege that there was a proceeding convened to enforce a safety law or regulation, but he claimed that his internal complaint should be construed as testifying at a proceeding. Although internal complaints are considered protected activity, Magistrate Judge Sheldon did not consider the text message discussion to rise to the level of a formal complaint that is entitled to the protection of the statute. Finally, Meeks argued that he was discharged because he had notified or attempted to notify the vessel owner or Secretary of a work-related injury or illness of a seaman. Hard’s Marine pointed out that the vessel was owned by Mamaru Towing, and Magistrate Judge Sheldon reasoned that the report to Meeks’ supervisor, Clay, was not notice to the owner or Secretary. Concluding that Meeks did not state a claim under the statute, Magistrate Judge Sheldon dismissed the complaint. Meeks filed a motion to alter the judgment, and Magistrate Judge Sheldon rejected his arguments that an additional text message was sufficient notification or that he had erred in applying too narrow a definition for the vessel owner. Therefore, Magistrate Judge Sheldon denied the request for reconsideration, and Meeks immediately filed an appeal to the Fifth Circuit (No. 23-20453).
Jamie and Kimberly McAtee, who are residents of Kansas, sought to purchase a yacht to use in Cabo San Lucas, Mexico. They were referred to Off the Hook Yacht Sales and started working with its boat broker Al DiFlumeri. The McAtees purchased the yacht (moored in Texas) through their company, Arch Nemesis, intending to move the yacht to Cabo San Lucas for commercial and personal purposes. Arch Nemesis worked with an insurance broker, West Coast Real Estate and Insurance, to place insurance on the yacht, and West Coast worked with Concept Special Risks, an independent underwriter acting for insurer Clear Spring Property and Casualty. Clear Spring issued the policy to Arch Nemesis on February 14, 2022, and Arch Nemesis paid premiums to its broker, West Coast. The yacht was sailed to Mexico with no issues. On May 28, 2022, the designated captain took the yacht out without permission, and it ran aground on rocks, causing the yacht to sink. Arch Nemesis submitted an insurance claim, and Concept conducted an investigation and issued a reservation letter stating that the policy was void from its inception and that the claim was excluded. Arch Nemesis responded to the reservation letter, and Clear Spring followed with a denial of the claim and this declaratory judgment action in federal court in Kansas based on the court’s admiralty jurisdiction. Arch Nemesis counterclaimed against Clear Spring (both contractual and extracontractual claims) and filed third-party claims against Concept (fraud and negligent misrepresentation), Off the Hook Yacht Sales (negligence and negligent misrepresentation), and West Coast (constructive fraud, negligent misrepresentation, negligence, and breach of contract). Arch Nemesis based its claims on the court’s diversity jurisdiction and demanded a jury. Off the Hook and Concept moved to dismiss the complaint against them for lack of personal jurisdiction. The Off the Hook defendants are North Carolina and Maryland limited liability companies that did not solicit business from Arch Nemesis. No representatives of the entities had ever visited Kansas, and the yacht never entered Kansas. However, the broker for Off the Hook, DiFlumeri, communicated with McAtee in Kansas, and Judge Crabtree believed that the communications with a Kansas resident to purchase a boat established minimum contacts with Kansas to justify specific jurisdiction over the Off the Hook defendants. Concept is incorporated and operates under the laws of the United Kingdom, but Judge Crabtree was persuaded that there were minimum contacts with Kansas because Concept’s engagement with Arch Nemesis, a Kansas LLC, spanned the application process and the claim handling. Concept argued that, as a foreign company, it was not properly served with process because it was not served under the Hague Convention. Arch Nemesis responded that it could serve Concept under the insurance policy provision for suit on Mendes & Mount in New York. Concept responded that it was neither a signatory nor a party to the insurance contract, leaving Judge Crabtree to determine Concept’s status under the policy and whether it fell within the term “Underwriters” in the clause addressing service. Judge Crabtree complained that the parties had “left the court rudderless in a sea of potentially applicable law,” so he reasoned that the court was sitting in diversity and that the court would apply the law of the forum (Kansas) under the well-known rule from Klaxon v. Stentor, in the absence of a showing that a different law should apply. Judge Crabtree noted that the parties argued “ardently” about whether the contractual choice-of-law provision could bind Concept as a non-signatory, but in order “to resolve this non-signatory question by applying the choice of law specified in the contract seems circular.” In the absence of a binding contractual choice of law, Judge Crabtree applied the law of the forum, Kansas. As the insurance contract did not define the term “Underwriters,” and as Judge Crabtree declined to find that the contract bound Concept as a non-signatory under the other theories proposed by Arch Nemesis, Judge Crabtree concluded that Concept had not been properly served. Judge Crabtree gave Arch Nemesis the opportunity to serve Concept properly within 90 days.
As Clear Spring based its declaratory judgment complaint on the court’s admiralty jurisdiction, Clear Spring moved to strike the jury demand of Arch Nemesis on its counterclaim against Clear Spring. Magistrate Judge James noted that the courts are split on the issue that she described as “whether Plaintiff’s election to proceed under admiralty without a jury should take priority over Defendant’s Seventh Amendment right to a jury under the saving to suitors clause merely because Plaintiff filed its declaratory judgment claims first.” Agreeing with Arch Nemesis, Magistrate Judge James reasoned that neither the Seventh Amendment nor any statute or rule forbids jury trials in maritime cases, and that the result sought by Clear Spring would “incentivize a race to the courthouse in cases such as this.” That left the issue whether the insurer’s claims should also be tried to the jury even though they were brought pursuant to Rule 9(h). Magistrate Judge James stated, “Trying first either Plaintiff’s declaratory judgment claims to the court or Defendant’s counterclaims to the jury would necessarily prejudice the other by determining the entirety of the issue before the other has its opportunity to litigate in its chosen mode of trial.” As “the mere fact that Plaintiff won the race to the courthouse and filed its declaratory judgment action first should not deprive Defendant of its constitutional right to a jury trial,” Magistrate Judge James ordered that the entire case would be tried to a jury.
Wesley Murphy was operating the BETTER TIMES II, owned by Jason Palermo, on Lake Michigan near Chicago, Illinois and Hammond, Indiana, when a guest, Lane G. Schaedel disappeared from the boat (either fell off or jumped) and drowned. Schaedel’s brother (administrator of his estate) filed suit against Palermo and Muphy in Illinois state court, and Palermo brought this limitation action in Illinois federal court. The administrator filed a motion to dismiss the federal suit for lack of subject matter jurisdiction, arguing that limitation was not available. He reasoned that the allegations in his state complaint (permitting the boat to operate in dangerous conditions, failure to provide sufficient safety devices to the passengers, and failure to provide reasonable rescue care) could not have occurred without the privity or knowledge of Palermo. Judge Kness agreed that, considering the claims being asserted, “the Limitation Act cannot apply in this case.” He then considered whether the failure to sufficiently allege a lack of privity or knowledge was jurisdictional and reasoned that when the owner fails to establish lack of privity or knowledge, “the federal court lacks the power under the Limitation Act to limit his liability, and the federal court must relinquish exclusive jurisdiction and allow the [claimant] to proceed in state court.” As he could “do nothing more than dismiss the case if the pleadings make clear that the Limitation Act cannot apply,” Judge Kness granted the motion to dismiss.
Terry Stamper was employed by Wood Group and assigned to work on platform Mari-B in the Mediterranean Sea off the coast of Israel and within sight of the Gaza Strip. In May 2021, militants in Gaza began launching rockets, drones, and autonomous submarines at Israeli targets, including the Mari-B platform, which was the closest platform to the conflict. The platform was owned and operated by Chevron entities, and Stamper alleged that Chevron did not timely evacuate the platform and, when it finally decided to evacuate it, it decided to use a vessel because helicopters were more vulnerable to rocket fire. There was no functioning boat dock, so the workers were evacuated by crane, and Stamper was the only certified crane operator. Therefore, Stamper claims that he was left on the platform for ten days along with a skeleton security team (made up of retired members of Israeli Special Forces). Stamper, a citizen of Louisiana, brought this suit in federal court in Louisiana against a number of Chevron entities and Wood Group (alleging intentional abandonment so as to avoid the exclusive-remedy provision of the Louisiana workers’ compensation law). He claimed that he suffered severe post-traumatic stress disorder from being left on the platform for ten days during attacks by the militants. One of the defendants, Chevron Mediterranean, moved to dismiss the action for lack of personal jurisdiction, noting its principal place of business in Israel and that it was not licensed to do business anywhere in the United States. Concluding that it was fundamentally unfair for Chevron Mediterranean to litigate a suit in Texas where there was no connection with Louisiana, Judge Fallon dismissed Chevron Mediterranean for lack of personal jurisdiction.
Our longsuffering readers know that the Update does not ordinarily discuss discovery disputes. Two recent opinions address issues that may be of interest to our readers. Kevin Hobbs brought suit in federal court in Indiana asserting seamen’s claims against his employer for a injury he claims to have suffered while carrying a heavy wire spool across barges in navigable waters in St. Louis, Missouri. Citing hospital records reflecting a payment from a funding company, Hobbs’ employer requested production of information on the agreements between Hobbs and the medical financing companies. Magistrate Judge Barr noted that the discoverability of agreements with respect to healthcare financing or litigation funding “is an unsettled area of law (see Collateral Source Issues in Maintenance and Cure Claims, 42 Tulane Mar. L. J. 1 (2017) for a discussion of medical financing for cure); however, she reasoned that decisions generally support “the principle that healthcare financing agreements may be relevant to the question of damages or the value of medical services provided and, thus, should be discoverable.” In this case, Hobbs waived any objections based on the collateral source rule, attorney-client privilege, work product, or undue burden. This left the issue of whether the information sought was relevant, and Magistrate Judge Barr agreed that it was. Therefore, she compelled production of the agreements but cautioned that the ruling should not be read to support a blanket conclusion that discovery related to medical financing or litigation funding will always be relevant or discoverable.
The litigation over the breakaway of vessels from the Magnolia Fleet/River Tug fleeting facility during Hurricane Ida, which was discussed in the October 2023 Update, was the subject of a dispute over photographs taken by a drone over the fleeting facility by Rocky Hickman (Captain of a tug that broke away), who is a claimant in the limitation action filed by Magnolia Fleet/River Tug. Magnolia Fleet/River Tug argued that their facility is governed by the Maritime Security Directive, which requires certain security protocols, that the footage was taken without its consent, and that Hickman acted recklessly by flying the drone over a secure facility that contains loaded tank barges. Hickman argued that the footage was relevant because it showed that Magnolia Fleet/River Tug continued to use tiering and mooring protocols that did not comply with federal regulations. Judge Fallon sided with Hickman that the footage was relevant and was not prejudicial because the same information was available on Google Earth. As to the lack of consent, Judge Fallon reasoned that surveillance footage is not inadmissible and that if Magnolia Fleet/ River Tug believed there was a trespass, they could bring that claim in a separate action.
This litigation involves claims brought by owners of lots in the River Point subdivision on the banks of the Black Warrior River in Tuscaloosa County, Alabama, asserting damage from erosion and failure of the slope between their residences and the riverbank. They brought suit against a number of defendants, including the United States, alleging that the damage was caused by dredging operations in and on the Black Warrior River. The property owners recognized that the Federal Tort Claims Act did not apply and focused on admiralty jurisdiction and the Admiralty Extension Act as the jurisdictional basis for their claims against the United States. Judge Coogler found that there was admiralty jurisdiction over the claims because the properties were allegedly damaged by dredging from vessels on navigable waters, and dredging satisfies the connection test. However, as the locality test was satisfied by the Admiralty Extension Act, the property owners were required to comply with the requirement in the Admiralty Extension Act that a claim may not be brought until the expiration of six months after the claim has been presented in writing to the agency owning/operating the vessel that caused the damage. As the property owners failed to comply with that requirement, Judge Coogler dismissed the claims against the United States for lack of subject matter jurisdiction.
The October 2023 Update reported the decision of Judge Barber of the United States District Court for the Middle District of Florida in United States v. Water Quality Insurance Syndicate, No. 8:22-cv-2158, 2023 U.S. Dist. LEXIS 154655 (M.D. Fla. Aug. 31, 2023), holding that the guarantor of a vessel’s pollution liability (WQIS) that sought recovery from the vessel’s P&I Club was subject to the London arbitration clause in the P&I Club Rules. This case involves the grounding of the tanker T/V MARGARA three miles off the coast of Tallaboa, Puerto Rico. The response to free the vessel and guide it safely to port resulted in the destruction or destabilization of nearly 7,000 square meters of coral reef. The United States brought this suit in federal court in Puerto Rico against the operator of the vessel, Ernst Jacob, and the guarantor of its liability under the Oil Pollution Act of 1990, Shipowners Insurance & Guaranty Co. (SIGCo), seeking to recover under OPA for the natural resource damages resulting from the substantial threat of discharge of oil from the grounding. The vessel was entered for P&I coverage with Steamship Mutual Underwriting Association, and SIGCo filed a third-party complaint against Steamship Mutual, seeking to recover any sums that it was required to pay to the United States. Steamship Mutual responded by filing a motion to compel arbitration in accordance with the London arbitration clause in its Club Rules, citing the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Judge Méndez-Miró first addressed whether the P&I Rules and arbitration clause were subject to the New York Convention, and she held that the Convention did apply and superseded the Puerto Rican Insurance Code, including the direct-action provision of the Code. She then addressed SIGCo’s argument that it could not be bound by the arbitration clause in the Club Rules because it was not a signatory to the Club Entry that incorporated the Rules. Judge Méndez-Miró disagreed, reasoning that “when non-signatories’ causes of action are borne of a contract containing an arbitration term, courts have concluded that those parties which have actively exploited the contract, are thus also bound by all its terms.” Applying the “direct benefits theory of equitable estoppel,” Judge Méndez-Miró held that the Club had met the burden of establishing that “SIGCo exploited the P&I Contract in a manner that merits recharacterizing it as a party that can be bound to the arbitration term of the Policy.” Finally, Judge Méndez-Miró found that the plain language of the arbitration provision covering any dispute affecting the member “and concerning the insurance afforded by the Club” was broad enough to cover the claim presented by SIGCo. Therefore, she granted the Club’s motion to compel arbitration.
Gary Beaumont entered into an agreement with Vanguard Logistics to ship a crate containing his personal property (a hand-built Italian motorcycle, a bicycle, and other goods) from Sydney, Australia to New York. Vanguard issued a bill of lading for the shipment through its non-vessel operating common carrier in Hong King, and the reverse side of the bill of lading contained a LIMITATION OF LIABILITY that the value of the cargo would be deemed to be $500 per package unless otherwise provided. The back also mentioned the Carriage of Goods by Sea Act. The shipment arrived in New Jersey where the cargo was damaged when a much larger item was dropped on top of the crate. Beaumont brought suit in state court in New Jersey against Vanguard, and Vanguard removed the case to federal court in New Jersey based on diversity and admiralty. Vanguard moved to transfer the case to New York pursuant to a forum-selection clause on the back of the bill of lading. Beaumont opposed the motion on the grounds that there was no admiralty jurisdiction for the shoreside damage, that COGSA did not apply for the same reason, and that the clause was an unenforceable contract of adhesion (and that a reasonably prudent person would not have been aware of it from its location in “very tiny” print on the back of the bill of lading. The New Jersey court held there was admiralty jurisdiction (contract for ocean carriage) and that COGSA was applicable to the damage based on the language of the bill of lading. The judge transferred the case to New York, and Beaumont filed an amended complaint that included claims under COGSA and the New Jersey Consumer Fraud Act. Vanguard moved for summary judgment after the case was transferred, arguing that its liability was limited to $500 under the COGSA package limitation, which preempted Beaumont’s other claims. In response, Beamont argued that he placed the shipping order via email and that only the top half of the bill of lading was sent to his shipping agent. Although Vanguard contended that this argument was rejected by the court in New Jersey, Judge Vyskocil answered that the arguments presented in New Jersey did not address the issue whether Beaumont had received sufficient notice so as to have a fair opportunity to declare a higher value for his cargo, so she considered the fair opportunity issue. Vanguard argued that the front of the bill of lading gave notice of the opportunity to declare a higher value, stating: “FOR EXCESS AD VALOREM VALUE SEE CLAUSE 19 ON REVERSE SIDE.” However, the front of the bill of lading also stated: “Page 1 of 1” (indicating that there was no second page). Concluding that there was a fact question whether the front of the bill of lading provided Beaumont with a fair opportunity to declare a higher value to avoid the package limitation, Judge Vyskocil declined to grant summary judgment to Vanguard.
This case arises from an injury allegedly suffered by Layton K. Price while serving as a seaman on the M/V LANEY CHOUEST in Port Fourchon, Louisiana. Price asserts that his hand was pulled into a capstan while he was handling a mooring line. He brought suit in federal court in Louisiana against his employer and the owner of the vessel, and after the parties designated their experts, the defendants moved to exclude the opinions of Price’s vocational expert, Joyce C. Beckwith, and his economist, John Theriot. Price moved to exclude or limit the testimony of the defendants’ marine liability expert, Christopher Karentz, their life care planning expert, Nancy Favaloro, and their economist, Kenneth Boudreaux. The defendants argued that Beckwith’s opinion on Price’s future earning capacity was speculative and unfounded because Price did not intend to work in the industry for a meaningful period of time, did not take any concrete steps to become a chief engineer, and had a work history and health issues that undermined his credentials. Accordingly, the defendants asserted that the opinions of Beckwith (and economist Theriot based on the vocational opinions of Beckwith) that Price was on track for promotion to chief engineer within four years were unsubstantiated. Price argued that the opinions of Karentz were unreliable because he had not conducted an inspection of the vessel and his opinions ignored the defendants’ post-accident investigation reports that found the cause of the accident to be that the captain had failed to conduct a compulsory pre-job risk assessment. Price also objected that Karentz’s opinions intruded into the jury’s functions. Price objected to the opinions of Favaloro (and the opinions of Boudreaux based on Favaloro’s opinions) because she is not a medical doctor and because she failed to consider future psychiatric and medical care and expenses that the treating physicians and defense medical expert deemed necessary. The defendants answered that Favaloro based her opinions on the future medical expenses on information provided in the medical reports and from conferences with the physicians. Judge Fallon rejected all of the objections, concluding that all of the experts were sufficiently qualified and that their opinions were formed using reliable methods. He added that the fact that the opposing party disagreed with the facts relied upon by the experts or the interpretation of those facts did not render their opinions unreliable. The objections were best addressed by cross-examination.
After Marquette’s tug M/V BRUCE L. HAHN allided with a small recreational boat near Redwing, Minnesota, Marquette filed this limitation action in federal court in Kentucky. Rachel Koenig, mother of her minor child, filed a claim in the limitation action on behalf of her son, who was injured in the allision, and she moved to lift the stay as a single-claimant situation. Marquette objected because Koenig filed suit in federal court in Minnesota on behalf of her son and included in that suit her own claim for loss of consortium. Marquette had also received an email placing it on notice for damage to the barge in tow of Marquette’s tug that struck the pleasure boat. Although Koenig argued that there was only a single claim filed in the limitation action, Judge Beaton pointed out that she had not abandoned the pending claim for loss of consortium filed in Minnesota, and he declined to lift the stay. He noted that the effect of the Minnesota claim on the limitation action was unclear and that Koenig had not addressed the claim in her stipulations. Therefore, he declined to lift the stay.
Polar Vortex, LLC is the owner of the catamaran sailing vessel POLAR VORTEX, which was docked at its berth at Compass Point Marina, St. Thomas, U.S. Virgin Islands, when Hurricane Irma struck on September 5, 2017. The vessel broke loose from its moorings, was impaled by a piling, and was submerged. The vessel was insured under a Marine Yacht Insurance Policy issued by Certain Underwriters at Lloyd’s with an agreed value of $1 million. The vessel was raised, patched, and moved to Fort Lauderdale, Florida where repairs were made from 2017 to May 2019. Eventually, Polar Vortex submitted a Notice of Tender of Abandonment and Sworn Proof of Loss on June 17, 2019, which Lloyd’s rejected. Polar Vortex renewed its Notice of Tender of Abandonment in August 2020, and Lloyd’s rejected that Tender in September 2020. Polar Vortex filed its original complaint in the Southern District of Florida on September 29, 2020, and Lloyd’s filed a motion to dismiss, arguing that the policy provided a one-year limitation period and that the suit, filed more than three years after the date of loss, was time barred. Polar Vortex argued that the limitation period was tolled by the continuing violations doctrine as the suit was brought within a year of the most recent denial of the insured’s tender in 2020. The court denied the motion to dismiss and denied a motion for summary judgment, identifying fact questions—whether the insured elected to repair the vessel and whether the insurer continued to adjust the claim after the initial tender in 2019 (thereby extending the limitation period). The case proceeded to a six-day bench trial that resulted in Judge Ruiz concluding that the policy imposes a one-year limitation period (from the date of the occurrence out of which the claim arose) and that the evidence did not support the argument that the continuing violations doctrine tolled the limitation period. Applying New York law in accordance with the choice-of-law provision in the policy (that claims would be governed by New York law in the absence of well-established principles of admiralty law), Judge Ruiz found the limitation period to be reasonable and that the period was triggered in July 2019 when the insurer last adjusted any claims and rejected the tender. Judge Ruiz then addressed whether Polar Vortex had established that the continuing violations doctrine (where a contract requires continuing performance, each successive breach may begin the running of the limitation period) would serve to toll the limitation period in this case (applying New York law as there is no entrenched maritime rule regarding continuing violations). Judge Ruiz found no continuing obligation and that the continuing damage suffered by the insured stemmed from the initial rejection of the tender by the insurer. Consequently, Judge Ruiz concluded that the insured’s claims were time-barred.
Sonder Distribution, which manufactures and sells home furnishings, engaged Laufer Group (a non-vessel operating common carrier) to transport goods from Asia to the United States in 2021. All of the goods were delivered except for two containers, which Laufer did not release because Sonder did not pay outstanding invoices. Laufer then brought this suit in federal court in New York against Sonder along with its CEO Managing Member, Remo Polselli, its President, Marc Abrams, and its Chief Financial Officer, Michael Klein. Sonder counterclaimed, alleging that Laufer agreed to release one of the containers in exchange for payment of $40,000. The parties filed motions for summary judgment with Laufer arguing that all of the defendants were jointly and severally liable because the Terms and Conditions and Rules Tariff provided for liability of any person having an interest in the goods or any person acting on their behalf. As Polselli signed the Credit and Security Agreement on behalf of Sonder and received invoices, both of which referred to the Terms and Conditions, Judge Rochon held that Sonder and Polselli were both liable for the charges. However, Judge Rochon found the evidence was insufficient to establish that Abrams and Klein were acting as principals of Sonder Distribution, citing a decision from the court in which the judge declined to “conclude that, simply because a defendant participated in a fraudulent scheme [or transaction] relating to a cargo shipment governed by a bill of lading, he is automatically bound by and in violation of its terms.” Finally, Judge Rochon granted summary judgment to Laufer on Sonder’s counterclaim, finding no evidence to support a
vague agreement” to release the shipment prior to payment in full.
Hercules OEM purchased a cargo of water-meter machine parts from a supplier in China and arranged with Orient Star Transport, a non-vessel operating common carrier, to ship the goods from Shanghai to Savannah, Georgia. The goods were packaged into 1,336 cartons that were grouped into 22 shrink-wrapped pallets and loaded into a single container. Orient Star contracted shipping company Zim Integrated to carry the goods, and the cargo was carried to Savannah on the ZIM ANTWERP and trucked to Hercules’ warehouse in Alabama. When Hercules broke the seal on the container, it noted water damage to the cargo (a surveyor examined the cargo and concluded that it was wet from freshwater). Hercules and its subrogated cargo insurers brought this action in federal court in New York against Zim Integrated and Orient Star, and Hercules filed a motion for summary judgment, arguing that it had established a prima facie case to recover under COGSA, that the relevant packages under Zim’s bill of lading for the COGSA package limitation were the 1,336 cartons, and that the limitation of liability in the Orient Star bill of lading was invalid under COGSA. Hercules argued that it established a prima facie case because “the only reasonable conclusion” was that the cargo must have been damaged while in the constructive care, custody, and control of the defendants. Judge Rochon disagreed. She noted that Hercules did not have direct evidence to argue that the cargo was delivered to Zim in good condition in Shanghai. Zim provided an empty container to Hercules that was returned six days later with the cargo sealed inside. As that did not establish the condition of the cargo at the time of delivery to Zim, Judge Rochon could not find that the cargo was in good condition at that time. Hercules argued that it had established the cargo was wet at the time of outturn from the ship because the container was not removed from the chassis after discharge until it was delivered to Hercules and the trucking company advised that the container was never exposed to any flooding. However, Judge Rochon noted that the container was not transported directly to Hercules’ warehouse and was stored at a depot for at least two days. She also cited the evidence that the damage was caused from freshwater and held that there was also a fact question about delivery from the vessel in good condition. Judge Rochon then considered the limitations on liability in the bills of lading issued by Zim Integrated and Orient Star. The front of the Zim bill of lading had no heading for the number of packages, referring only to the attached list that referred to 1,336 cartons. However, the reverse side of the Zim bill stated that the meaning of the word package “shall be any palletized and/or unitized assemblage of cartons which has been palletized and/or unitized for the convenience of the Merchant, regardless of whether said pallet or unit is disclosed on the front hereof.” Although Hercules argued that the language was insufficient and vague, Judge Rochon held that the definition on the back was sufficient to define the pallets as the packages for the COGSA package limitation. As separate bills of lading were issued by Zim Integrated and Orient Star, Judge Rochon considered the bills separately to determine the package limitation for the vessel owner and NVOCC. The Orient Star bill of lading did not have the package definition on the back, and the description of goods was 1,336 cartons. However, the number of containers or packages listed the one container in which the cargo was shipped. Under the Second Circuit decisions, Judge Rochon held that, because the number of cartons was listed, the cartons were the COGSA packages. Judge Rochon also rejected arguments from Orient Star that the court should consider the freight rate charged and that the court should apply the same rule as applied to the Zim Integrated bill of lading. Finally, she considered the clause in the Orient Star bill of lading that provided a limitation of liability based on Special Drawing Rights. However, as the amount under that limitation would be less than the amount owed based on the package limitation for 1,336 cartons, Judge Rochon declined to enforce it as it would violate COGSA.
Serifos Maritime, owner of the M/T SERIFOS, contracted through a bunker broker for the delivery of bunkers to the vessel in Singapore by Glencore with the broker accepting Glencore’s General Terms and Conditions. After the goods were delivered and the vessel was on a voyage from Singapore to Gabon, the vessel encountered engine issues because of “elevated levels of chloro-contaminates,” and the vessel had to make multiple diversions before returning to Singapore, where Glencore removed and replaced the remaining bunkers. Serifos brought this suit in federal court in New York against Glencore, alleging breach of contract, negligence and strict liability, intentional misrepresentation, and gross negligence. Glencore moved to dismiss the complaint, and Judge Schofield held that the claim for breach of contract was subject to three limitations in the Terms and Conditions. The Terms provided that Glencore was not liable for consequential or indirect damages and that its liability for off-specification fuel was limited to removing and replacing the fuel with a damage cap of $300,000. Finding that the limitations were not unconscionable, Judge Schofield held that the only recoverable damages for breach of contract were for removal and replacement of the bunkers, subject to the damage cap. As to the claim that Serifos could recover mitigation expenses to prevent catastrophic harm to the vessel based on claims of negligence and strict liability, Judge Schofield held that the economic loss rule barred recovery, noting that the complaint alleged that the fuel could damage the engine, not that the vessel suffered actual damage. Finally, Judge Schofield dismissed the claims for intentional misrepresentation and gross negligence, as they were duplicative of the claim for breach of contract.
This litigation arises from the detachment of the derrick barge EPIC HEDRON, which was moored at the Triton Fourchon Marine Base in Port Fourchon, Louisiana, when Hurricane Ida struck. Several claims for property damage and injury resulted in lawsuits in Texas and Louisiana, and Hedron Holdings and Triton Diving Services, owner and owner pro hac vice of the derrick barge, brought this limitation action in federal court in Louisiana. The claimants in the limitation action filed a motion to bifurcate the issues of exoneration and limitation of liability for a separate trial from the assessment of damages. Judge Guidry agreed that bifurcation was appropriate because the issues with respect to liability overlapped, but the issue of damages for the injury and property claimants would involve separate questions and distinct evidence from each claimant. Accordingly, Judge Guidry agreed to try the issues of liability, limitation, and apportionment of fault in a bench trial with the issue of damages bifurcated to be addressed thereafter.
The tanker AFRAMAX received a cargo of crude oil at the Houston Fuel Oil tank facility on the north side of the Houston Ship Channel and engaged two harbor tugs, the GASPARILLA and JESS NEWTON, to assist in the departure. During the departure, the AFRAMAX suffered a malfunctioning runaway engine that was stuck in the astern direction and the vessel struck mooring dolphins at the terminal on the opposite side of the Channel. Moments before the allision, the JESS NEWTON quit pulling on the AFRAMAX because a piling was “right between the ship and me.” The terminal operator brought suit against the interests of the AFRAMAX in federal court in Houston, and the AFRAMAX interests brought third-party claims against the operators of the harbor tugs. Judge Hanks held a bench trial in February 2023 and held the AFRAMAX to be 100% responsible for the allision and that the tugs were not responsible.
This is the first of two opinions dealing with transfer of cases brought in federal court in Massachusetts involving incidents that occurred outside of Massachusetts. This suit was brought by beneficiaries of passengers who were killed in the crash of TWA Flight 800 in the Atlantic Ocean off the coast of Long Island in 1996 on a flight from New York to Paris. Twenty-five years after the crash, the beneficiaries met with a physicist, Dr. Thomas Stalcup, who claims to have uncovered new evidence from the United States that the plane was brought down by an errant United States missile. The beneficiaries then brought suit in federal court in Massachusetts against the United States and contractors Raytheon and Lockheed Martin (alleging product liability and failure to warn theories). The United States moved to dismiss the complaint for improper venue, and Judge Kelley reasoned that venue was proper in New York because the “gravamen” of the allegations is that the United States engaged in reckless missile testing off the shore of New York and New Jersey that resulted in the errant missile strike on the flight off the coast of New York. Although Judge Kelley reasoned that the Eastern District of New York appeared to be an appropriate venue for all of the defendants, she gave the plaintiffs an opportunity to state their preferred venue before transferring the case.
HC&D, a Hawaiian company, purchased a freight barge from Cashman Equipment to use in transporting concrete in Hawaii. The Purchase and Sale Agreement contained a Boston, Massachusetts forum-selection clause. Prior to executing the Agreement, Precision NDT & Consulting (a Louisiana company with its office in Patterson, Louisiana) inspected the barge in Louisiana and prepared a Hull Diminution Survey for the barge, demonstrating its seaworthiness. HC&D allegedly relied on the report for its purchase. After the sale, the barge was towed from Amelia, Louisiana to California, where a visual inspection revealed the barge to be flooded and holed out. HC&D, which spent almost $4 million to repair the barge, brought this suit in federal court in Massachusetts against Cashman Equipment and Precision NDT, and Precision NDT asserted that the complaint should be dismissed for lack of personal jurisdiction. HC&D then moved to transfer the case to Louisiana in its entirety. Judge Woodlock found that Massachusetts had personal jurisdiction over Cashman Equipment, but that there was no personal jurisdiction over Precision NDT in Massachusetts. Instead, he found that there was personal jurisdiction over Precision NDT in the Western District of Louisiana, and that there was also personal jurisdiction over Cashman Equipment, which conducts a meaningful amount of business in Louisiana and has a business address there. Accordingly, the Western District of Louisiana could be an appropriate venue for both defendants. That conclusion presented the issue whether to transfer all or a portion of the case. Giving effect to the forum-selection clause, Judge Woodlock agreed to sever HC&D’s claims against Precision NDT so that the claims against Cashman Equipment would remain in federal court in Massachusetts and the claims against Precision NDT were transferred to the Western District of Louisiana.
Carmine Johnson and Bobby McDonald claimed exposure to crude oil and dispersants from the DEEPWATER HORIZON/Macondo spill. Johnson claimed exposure while scooping up oil on the beaches of Pensacola, Ocean Springs, Horn Island, and Sand Island, and McDonald asserted exposure while picking up tar balls and oil-soaked debris from beaches in Mississippi. Cedric Beachem and Jason Landers claimed that they were exposed to oil and dispersants from their work as onshore cleanup workers and as residents of Florida. Shaunise Anderson asserted exposure as an onshore cleanup worker and as a resident of Louisiana. Charles Carter claimed exposure as an onshore cleanup worker. These plaintiffs presented expert reports of Dr. Jerald Cook to support the general causation requirement for their claims. BP moved to exclude Dr. Cook’s opinions, and the plaintiffs argued that the court should not require Dr. Cook to identify a harmful level of exposure to particular chemicals that cause the conditions experienced by these plaintiffs, that BP had a duty to protect the cleanup workers and violated the duty (spoliation) by failing to conduct biomonitoring (based on the affidavit of Dr. Linda Birnbaum and explaining why there is inadequate data on causation). Judges Vance and Africk rejected the arguments and granted summary judgment to BP after excluding the opinions on causation of Dr. Cook. Plaintiffs Beachem, Anderson, Carter, and Landers also argued that some judges had denied summary judgment to BP for symptoms that were transient or temporary. Judge Vance responded that the summary judgment motions in those cases were premised on specific causation and that Dr. Cook’s opinions on general causation were not challenged in those cases. In these cases, however, BP argued that Dr. Cook’s opinions were insufficient on general causation and specific causation. As evidence of general causation was required, regardless of whether the conditions were transient or temporary, and as there was no expert evidence of general causation after the striking of the opinions of Dr. Cook, Judge Vance dismissed these suits with prejudice.
Seacoast National Bank arrested the vessel M/Y VIAGGIO in federal court in Florida to foreclose a ship mortgage. The court ultimately granted a final default judgment, and the bank’s attorneys requested fees of $47,760 based on hourly rates of $600 and $500 for their work. Noting that in recent cases involving default judgments in the Southern District of Florida, the judges rejected hourly rates of $500 and $400 for attorneys of comparable or greater experience, Magistrate Judge Strauss recommended hourly rates of $450 and $375, and Judge Ruiz adopted the recommendation on October 19, 2023, when there was no objection.
Randi Waldstein, a passenger on the SCARLETT LADY, was injured when she slipped and fell on the deck of the vessel. She brought this suit in federal court in Florida against the cruise line, and the complaint included one count of negligence in which Waldstein alleged twelve ways by which the cruise line breached four duties to Waldstein. Many of the alleged breaches raised distinct theories of liability, but some did not appear to be based on duties that were alleged or cognizable. Judge Scola conducted an independent review of the record and struck the complaint as a shotgun pleading; however, he instructed that each distinct theory is a separate cause of action that must be pleaded independently with corresponding factual allegations to support that theory. Judge Scola permitted Waldstein to file an amended complaint, but he admonished her not to include redundant claims or counts and forewarned her “that failure to comply with this order may result in dismissal of this case with prejudice or other appropriate sanctions.”
Blake Anthony was employed by Parker Drilling as a roustabout on Chevron’s Genesis spar platform in the Gulf of Mexico. Baker Hughes and Dril-Quip had equipment on deck when Chevron ordered the Parker employees to perform a hazard hunt in the dark. Anthony tripped over rigging attached to Dril-Quip’s box of equipment and injured his back and neck. Anthony brought suit in state court in Tangipahoa Parish, Louisiana against Chevron, Parker Drilling, Baker Hughes, Dril-Quip, and Sparrows Offshore (employer of the crane operators on the platform). He alleged that Sparrows’ crane operators did not take reasonable caution to keep the platform uncluttered or to warn Anthony of the dangerous work environment. Chevron removed the case to federal court, and Sparrows moved to dismiss the claims against Sparrows for failure to state a claim. Applying the law of the adjacent state (Louisiana) under the Outer Continental Shelf Lands Act, Judge Barbier reasoned that Sparrows, an independent contractor, generally owed no duty to protect the employees of another independent contractor beyond the exercise of ordinary care that is owed to the public, which included the duty to refrain from creating an unreasonable risk of harm or hazardous condition. Sparrows argued that Anthony’s claim against Sparrows was that it had a duty to protect Anthony from hazards created by other defendants because he tripped on clutter left out by Baker Hughes and Dril-Quip. As Sparrows did not operate the platform or employ or supervise Anthony, Judge Barbier reasoned that Sparrows owed no duty to Anthony, and the pleading that Sparrows owed Anthony a duty to maintain a safe working environment was a legal conclusion that was not supported by Louisiana law. Concluding that an amendment would be futile, Judge Barbier dismissed the claims against Sparrows with prejudice.
The M/V DAGGA BOY, a 53-foot Hatteras recreational vessel, was damaged by fire while moored for repairs at a dock located in New Orleans, Louisiana. The vessel was insured by Accelerant Specialty with a Private and Pleasure Yacht Insuring Agreement that contained a forum-selection clause for the federal district court where the insured or its insurance agent resides. After Accelerant denied the claim, the vessel owner filed suit against Accelerant in state court in Orleans Parish, demanding a jury. Accelerant responded by filing a declaratory judgment action in federal court under the court’s admiralty jurisdiction and by removing the suit brought in state court, citing original admiralty jurisdiction and diversity as the jurisdiction for the removal. Once both cases were in federal court, Accelerant moved to dismiss the case that was originally brought in state court, asserting that the suit violated the forum-selection clause in the insurance agreement, and the cases were consolidated. The parties disputed the reason that Accelerant was seeking to dismiss the state action. The vessel owner argued that Accelerant was seeking to avoid the Louisiana bad-faith allegations in the state suit and to deny the owner its right to a jury trial (arguing that the only basis for removal was diversity for which the owner would be entitled to a jury trial). Accelerant responded that choice-of-law was not an issue as the insurance agreement also contained a choice-of-law provision for entrenched admiralty law/New York law, and Judge Zainey agreed that choice-of-law was not at issue for the motion to dismiss. However, Judge Zainey did not believe that dismissal was necessary as he held that the court had subject matter jurisdiction over both cases. Recognizing that the issue whether the cases would be heard before a jury was still at issue, Judge Zainey advised that Accelerant must move to strike the jury demand within 30 days of the entry of the scheduling order.
Steven Campbell, a resident of Georgia, was vacationing at the Coco View Resort in Honduras when he was struck by the propeller of a boat owned and operated by the resort (allegedly run by a West Virginia company). Campbell brought this suit in federal court in West Virginia against the resort, alleging federal jurisdiction based on admiralty (but mentioning diversity), and the resort argued that the court did not have admiralty jurisdiction over the case because the accident occurred in the territorial waters of Honduras (citing a case from a district judge in Virginia that cited the decision of the Supreme Court in Victory Carriers that maritime jurisdiction applies to navigable waters of the United States and the high seas). As there was a dispute about whether the accident occurred in Honduras waters, and as Judge Chambers believed “the location of the accident will determine if jurisdiction exists under 28 U.S.C. § 1333,” the judge allowed a brief period of discovery to determine the location of the accident. See May 2023 Update.
After the discovery period, Campbell conceded that the court lacked admiralty jurisdiction over the accident in territorial waters in Honduras and filed an amended complaint that alleged that the amount in controversy exceeded $75,000. The resort cited the single medical bill produced by Campbell in the amount of $1,533 and argued that Campbell’s damages would fall well short of the jurisdictional threshold in light of the de minimis amount expended on medical care. In his response, Campbell disclosed, for the first time, that he had undergone five endovenous chemical ablations at a cost of $16,848.53 per ablation. The resort argued that the treatments were for venous reflux and varicose veins and were unrelated to the accident. Although Judge Chambers found the resort’s argument “compelling, he could not declare on a motion to dismiss that the ablations had nothing to do with the accident and he declined to dismiss the case for lack of subject matter jurisdiction. Judge Chambers then addressed the motion of the corporate defendant identified by Campbell as doing business as the resort and dismissed it for lack of connection to the resort.
Acciaierie D’Italia (ADI), which operates a steel-manufacturing business in Taranto, Italy, entered into contracts with Xcoal Energy under which ADI purchased coal from Xcoal that required delivery of the coal to ADI’s plant in Taranto. Xcoal claimed that ADI breached the contracts, and Xcoal initiated arbitration against ADI, seeking $3,437,552. Before it finished filing claims in the arbitration, Xcoal brought this attachment action in federal court in Alabama, seeking damages of $38 million and attaching coal allegedly belonging to ADI on the MV BULK DESTINY. Claiming that the coal on the vessel was actually owned by Javelin Global Commodities, seller under a contract with ADI, and that the contracts between ADI and Xcoal were not maritime contracts, ADI and Javelin moved to vacate the attachment. Although ADI had paid 25% of the purchase price for the coal to Javelin as a prepayment, the contract with Javelin provided that title would pass once both the prepayment and provisional payment were made. As the provisional payment had not been made, the title to the coal was still in the name of Javelin, and the coal did not belong to ADI. Therefore, Magistrate Judge Cassady held that ADI had no property right that would allow Xcoal to maintain the attachment. Magistrate Judge Cassady also held that the attachment had to be vacated because the contracts between Xcoal and ADI were not maritime contracts. Citing Kirby (contract involving transportation by ship and rail), Xcoal argued that the contracts were maritime because they required that the coal would be shipped across the sea to Italy. Magistrate Judge Cassady disagreed, reasoning that the “primary objective” of the contracts was not transportation of goods (even though the damages would include demurrage), and the purchase/sale elements were the primary objective and were not “merely incidental.” As the court could not exercise maritime jurisdiction over the dispute, Magistrate Judge Cassady recommended that the attachment be vacated.
Arnold L. Pritt and his wife, Ruth A. Pritt, brought this suit in Massachusetts state court, asserting that Arnold was exposed to the defendants’ asbestos products while he worked in shipyards and on ships at sea and in port during his employment by the Navy. The case was removed to federal court, and Ruth continued to prosecute the claim after Arnold died. Ruth sought to amend her complaint, and John Crane objected to her survival claim for pain and suffering and medical bills, her claim for loss of consortium and society in the wrongful death claim, and her claim for punitive damages for the wrongful death claim, claiming that they were not permitted by the Jones Act or the Death on the High Seas Act. Ruth argued that the Jones Act was not applicable because John Crane was not the employer of her husband and that DOHSA did not apply because Arnold’s injuries were indivisible between the high seas and territorial waters. Magistrate Judge Bowler agreed with Ruth on both points, stating that the Jones Act did not apply because the complaint was against a product manufacturer and not Arnold’s employer [contrary to Scarborough v. Clemco Indus., 391 F.3d 660 (5th Cir. 2004)], and that DOHSA did not limit the recoverable damages when the exposure to asbestos occurred on the high seas and in territorial waters. Finding no overlap between statutory and decisional law, Magistrate Judge Bowler held that punitive damages and damages for loss of consortium could be recovered by Ruth under the general maritime law and that there were “no established and inflexible rules that would convince [her] to withhold the remedies sought by plaintiff under the Massachusetts wrongful death statute.” Finally, reasoning that “it makes little sense to recognize plaintiff’s right to wrongful death damages but strip her of the rights that were afforded to her husband prior to his death,” Magistrate Judge Bowler held that a survival remedy was available in this case. See August 2023 Update.
John Crane objected to the recommendation, and Judge Gorton began by addressing whether there was a survival remedy. Citing Batterton, John Crane argued that recognition of the remedy should be left to Congress, but Judge Gorton disagreed, noting that the Jones Act (allowing) and Death on the High Seas Act (not allowing) were not in conformity. Therefore, there was no controlling precedent after Batterton, and Magistrate Judge Bowler’s recommendation was not clearly erroneous or contrary to law. John Crane objected to the recovery for loss of consortium and punitive damages, and Judge Gorton reasoned that Magistrate Judge Bowler’s logic in distinguishing Miles “flouts Batterton’s holding, which directs courts to ‘look primarily to . . . legislative enactments for policy guidance.’” He set aside the ruling on loss of consortium, stating that “permitting plaintiff to seek damages for loss of consortium would undermine uniformity between maritime statutory law and maritime common law and would ignore the Supreme Court’s ruling in Miles.” He set aside the ruling on punitive damages “because Miles forecloses the award of punitive damages in wrongful death claims brought pursuant to general maritime law.”
Marine Diesel Repairs performed an inspection and repairs on the 105-foot Leopard motor yacht DREAM ONE, and submitted invoices for $219,235.29 to its owner, Allure II. The owner paid $152,235.29 and disputed the reasonableness of the balance. Marine Diesel then brought this action in federal court in Florida against the vessel to foreclose on its lien for necessaries and also for breach of contract and unjust enrichment. Allure filed counterclaims for fraud in the inducement, deceptive practices, breach of contract, and breach of warranty. Allure moved for summary judgment that the charges were not reasonable, and Marine Diesel responded by producing invoices and estimates from several of its competitors for similar types of boat repairs, arguing that the rates charged were either the same or less than that charged by its competitors for similar work. Judge Cannon held that the competitor invoices presented a fact question whether Marine Diesel’s rates were reasonable and in accord with the prevailing charges for labor and materials and denied Allure’s motion for summary judgment. See May 2022 Update.
Judge Cannon held a four-day bench trial on the claims and counterclaims and issued findings of fact and conclusions of law that denied all of the claims. The shipyard satisfied the first three elements of its claim for a lien (providing of services, to the vessel, on the order of the owner), but Judge Cannon held that it failed to establish that the balance it claimed was reasonable (citing haphazard bookkeeping, practices that called into question the reasonableness of the charges, and disorganization in billing practices). She found that neither party committed a material breach of contract (or breach of warranty), and that the unjust enrichment claim failed due to the existence of a contract between the parties. Finally, although the evidence left “some doubts about [the shipyard’s] practices as a whole,” Judge Cannon held that the vessel owner did not establish with the requisite level of proof that the shipyard engaged in deceptive practices or that it knowingly made false statements for the fraudulent inducement claim. She concluded that neither the shipyard nor the vessel owner could be declared a prevailing party.
This litigation arises from a collision near Estero Bay in the Gulf of Mexico between the M/V MISS MADISON, owned by Sweetwater Lifestyle and captained by Arron Golly, and a pleasure boat owned and operated by Harold Fredericks. Fredericks brought suit in state court in Lee County, Florida against Captain Golly, and Sweetwater filed this limitation action in federal court in Florida. Fredericks then filed a motion to lift the stay in the limitation action so he could add Sweetwater to the suit he filed in state court, and Sweetwater opposed the motion, arguing that Fredericks “sought to circumvent the limitation stay or proceedings by suing only the master.” He asked the court to deny the motion because the law “does not contemplate such evasive tactics.” Sweetwater did not cite any supportive case law for the argument, and Judge Badalamenti was “not convinced that Mr. Fredericks’s intentions (when he filed his initial state court action) are germane to this issue. Judge Badalamenti did agree with Sweetwater that Fredericks would have to prepare appropriate stipulations, and that the stipulations would have to “include language indicating that if this Court grants exoneration, there will be no recovery for Mr. Fredericks.”
Lisa Jones, a passenger on the CARNIVAL SUNRISE, was injured while returning to the vessel from an excursion at Grand Cayman when she slipped on the gangway to the cruise ship from the tender in windy and stormy weather. She brought suit against the cruise line in federal court in Florida, alleging direct liability counts against the vessel (I, II, and III) for general negligence, negligent maintenance, and negligent failure to warn, and a vicarious liability count (IV). The cruise line moved to dismiss the vicarious liability count as a shotgun pleading and as duplicative of the allegations in the counts asserting direct liability. Although the vicarious liability count contained an allegation of notice of the dangerous condition, which was not necessary to sustain the claim of vicarious liability, that language did not convert the count into one of direct liability where notice is required. Thus, Judge Bloom declined to dismiss the count as a shotgun pleading. The issue was whether the factual allegations in the complaint could give rise to both direct and vicarious liability claims because the same negligent acts were pleaded for the direct and vicarious liability counts. Judge Bloom explained that the passenger “appears to conflate Defendant’s crewmembers’ negligent acts with their breach of a duty owed to Plaintiff by those acts, but the principle of vicarious liability allows an otherwise non-faulty employer to be held liable for the former, not the latter.” Judge Bloom noted that the allegations of the breach of duty by the crew members were premised on the same acts that were pleaded to give rise to the direct liability of the cruise line. Reasoning that the passenger provided “no basis in law allowing her to plead that both Defendant and its employees are responsible for the same risk-creating conditions,” Judge Bloom dismissed Count IV with prejudice.
Ironshore Indemnity issued a marine general liability insurance policy to Villa Marina in Puerto Rico. During the policy period, a client of the marina notified the marina that his yacht was improperly stored and had become infested with termites. When the marina notified Ironshore of the claim, the insurer denied coverage based on late notice and brought this suit in federal court in Puerto Rico in admiralty seeking a declaratory judgment that the claim was time barred. The marina moved to dismiss the claim for lack of admiralty jurisdiction and based on abstention related to a parallel proceeding pending before the Office of the Commissioner of Insurance of Puerto Rico. Judge Besosa examined the policy to ensure that it was a maritime contract and noted that the policy extended to moorage, fueling, storage (ashore and afloat) and to marine perils in the operation of a marina. Therefore, he believed the controversy was “squarely within the Court’s admiralty jurisdiction.” Judge Besosa then considered the Brillhart abstention exception to the court’s duty to adjudicate a controversy within its jurisdiction. The marina argued that “there is already a proceeding on this very matter before the Office of the Commissioner of Insurance” that “is broader in scope than this case and can provide Ironshore virtually the same remedies it seeks here.” The court did not, however, have access to the parallel proceeding and the assertions presented by the parties contradicted each other. Accordingly, as Ironshore properly invoked the jurisdiction of the federal court, Judge Besosa declined to abstain at this time.
This litigation arises from a collision in the navigable waters of Miami-Dade County, Florida, between a vessel owned by Windward Boating and another vessel whose passengers were ejected, resulting in two deaths. Windward Boating filed this limitation action in federal court in Florida, and a claim was filed in the limitation action by Taymi Estevez as personal representative of the Estate of Pablo Castro Diaz. Estevez moved to dismiss the limitation action or that it should be stayed based on the single-claimant exception. Windward Boating objected that the single claimant exception was not ripe because others might file claims, but Judge Moore answered that the time to file claims had passed with only the single claim. Windward Boating also argued that the stipulations were insufficient, but the claimant agreed to “proceed only to judgment of issues exclusive of exoneration or limitation of liability.” As the stipulation complied with the Beiswenger decision from the Eleventh Circuit, Judge Moore agreed to lift the stay in the limitation action but to retain jurisdiction.
Fitflop USA imported a cargo of 2,292 cartons of ladies’ shoes with a shipment from Vietnam to Columbus, Ohio. Expeditors International issued a sea waybill for the carriage of the cargo in containers. When the cargo was delivered at the warehouse in Columbus, the cargo was found to wet and damaged. Cargo insurer CNA brought this subrogation action against Expeditors and the inland trucking company in federal court in Washington, and Expeditors moved for summary judgment that CNA was unable to establish a prima facie case of liability under the Carriage of Goods by Sea Act. CNA submitted photographs of the condition of the cargo at the time it was loaded in the containers, but Expeditors argued that the photos were not admissible because they were not authenticated. CNA responded that the metadata of the photographs, showing the date and time the photographs were taken, established their authenticity, and Judge Martinez held that he would deem the photos authentic, but that Expeditors would be able to present evidence at trial to dispute the authenticity. CNA tried to bolster its evidence of the condition of the shoes by the testimony of FitFlop’s director of operations about the procedures followed and documents prepared for the shoes, but he was not present at the time of loading and had no personal knowledge of the loading. Judge Martinez held that he would be allowed to testify and denied the motion for summary judgment as there was a factual dispute about when and in whose custody the water damage occurred.
This opinion arises from a limitation action filed in federal court in California in connection with a boating accident in which a crew member, Robert Swift, broke his leg on the LEGACY, owned and managed by Oceansound Investments and Robert Nagata. The petitioners filed an ad interim stipulation and sought an order enjoining prosecution of claims. Judge Robinson was inclined to grant the requested relief, but noted deficiencies in the ad interim stipulation and ordered the petitioners to correct them before he would issue the order. First, the ad interim stipulation did not include the $500 security for costs that is required under Rule F and the court’s local rules. Second, Judge Robinson held that the stipulation did not provide adequate security for the petitioners’ $350,000 interest in the vessel because it failed to identify the petitioners as insureds on the insurance policy whose insurer signed the stipulation. Additionally, Judge Robinson held that the language of the stipulation appeared to permit the petitioners to take actions that would void the stipulation. He ordered the petitioners to supplement the stipulation with a letter of undertaking from the insurer.
Saydatou Tatieta, who owns a company that buys and exports vehicles, contracted with Auto Export Shipping, a freight forwarder, to arrange insured transportation of a vehicle from Jacksonville, Florida to Benin. There was a fire on the vessel on June 4, 2020, and the vehicle was a total loss. On July 2, 2021, Tatieta brought suit in the judicial circuit court of Duval County, Florida against Auto Export, alleging claims under state law for breach of contract and negligence. The state court dismissed the complaint with prejudice on the ground that the claims were governed by the Carriage of Goods by Sea Act, which preempted the state law claims, and the claims were barred by the one-year limitation period in COGSA. Tatieta then brought this suit against Auto Export (and others) in federal court in Florida on September 26, 2023, asserting claims against Auto Export for breach of contract, fraud, intentional “confliction” of economic damages, intentional infliction of emotional distress, loss of client and/or prospective clients, and embezzlement. Auto Export moved to dismiss all of the claims based on res judicata. Judge Corrigan noted that Tatieta and Auto Export were the same parties in both proceedings and that a dismissal based on the running of the statute of limitations is an adjudication on the merits. Although the claims in the two suits were not identical, Judge Robinson held that res judicata bars re-litigation of claims that were brought or that could have been brought in the first suit. As all the claims in the federal action against Auto Export could have been brought in the state suit, Judge Robinson dismissed the claims against Auto Export with prejudice.
Nadya Sandoval was injured on Freedom Marine Sales’ pontoon boat in the navigable waters near Sanibel, Florda, and Freedom Marine Sales brought this limitation action in federal court in Florida. Freedom Marine Sales asked the court to issue its monition and injunction, but Magistrate Judge Dudek declined to do so, noting that the ad interim stipulation was deficient because Freedom Marine Sales promised to issue a letter of undertaking or deposit a surety bond following a demand by the claimant. Magistrate Judge Dudek noted that the same language found to be insufficient by Judge Tuite in the Mongelli case (discussed in the September and October 2023 Updates), and denied the request, stating that Freedom Marine could refile the ad interim stipulation after correcting the deficiency, as Mongelli did.
Leah Rager, a passenger on the MSC SEASHORE, was injured when she tripped and fell on an “unreasonably uneven, unexpected, hazardous, and/or dangerous flooring surface” that had “a metal rise that was raised almost two inches.” Rager brought this suit against the cruise line in federal court in Florida, asserting three negligence claims. However, her statements about the notice to the defendant, whether the condition was open and obvious, and how the cruise line was negligent were just conclusory allegations that did not even describe the circumstances of her fall, where it happened, or how the cruise line should have known about the condition. Reasoning that Rager had failed to properly plead a negligence claim under the plausibility standards of Iqbal and Twombly, Judge Singhal dismissed the complaint without prejudice.
From the state courts
Dilshad Makbul Sheikh, a resident of India and widow of seaman Makbul Abdul Rajjak Sheikh, brought suit in state court in Brazoria County, Texas against Bugle Shipping Co. and Niki Shipping Co., seeking to recover for the fatal accident that occurred to her husband while he was working as the bosun on the MSC IMMACOLATA, which was docked at the Port of Freeport, Texas. Bugle, the owner of the vessel is an Isle of Man entity, and Niki, which provides corporate management services to Bugle, is a Swiss entity. Bugle and Niki objected to personal jurisdiction, and the district judge denied their special appearances. The defendants filed an interlocutory appeal to the court of appeals, and Bugle argued that it had bareboat chartered the vessel to MSC Mediterranean Shipping and had not purposefully directed its ship to Texas and did not control the ship’s activities in Texas. Bugle did not attach the bareboat charter to its special appearance and, instead, offered the affidavit of its director who stated that the ship was bareboat chartered to MSC, the ship was under the direction and control of MSC, that Bugle had not purposely directed the ship to Texas, and that the ship called in Texas at the direct and control of the bareboat charterer. Sheikh responded that the statements were conclusory with no factual support, and Chief Judge Christopher, writing for the court of appeals, agreed. She explained that “without a copy of the alleged bareboat charter, Bugle’s naked assertion that it relinquished control of the ship under the charter is conclusory.” Therefore, she agreed that the district court correctly denied Bugle’s special appearance. Unlike the case with Bugle, Niki’s special appearance did not depend on the existence of a bareboat charter. Niki did not have any ownership interest in the vessel and was not the ship manager—it provided corporate management services to the owner. Chief Judge Christopher did not believe that Niki’s affidavit testimony was conclusory (it was not dependent on the bareboat charter that was not introduced). As Sheikh did not produce controverting evidence to the statements, the court of appeals reversed the denial of the special appearance and dismissed the suit against Niki for want of personal jurisdiction.
Kenneth G. Engerrand
President, Brown Sims, P.C.
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Quote:
We likewise reject appellants’ argument that the statement “I am my brother or sister’s keeper” in the safety statement gives rise to a higher duty than required under FELA.
Espinoza v. Kansas City Southern Railway Co., No. 04-22-00732-CV, 2023 Tex. App. LEXIS 6445 (Tex. App.—San Antonio Aug. 23, 2023) (Valenzuela).
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