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October 2020 Longshore/Maritime Update

October 1
2020

October 2020 Longshore/Maritime Update (No. 257)

Notes from your Updater:

The Department of Labor has announced the National Average Weekly Wage that will be applicable for the 12-month period beginning October 1, 2020.  The National Average Weekly Wage beginning on October 1, 2020, and extending to September 30, 2021, is $816.35. Consequently, the maximum compensation rate for total disability and death for that period is $1,632.70, and the minimum compensation rate (not always the minimum rate) payable for disability incurred after October 1, 2020, is $408.18 per week. Cost-of-living adjustments effective on October 1, 2019, are 4.65%.

Judge Scola denied the passenger’s motion for new trial from his decision after a non-jury trial (July 2020 Update) concluding that the cruise line was not negligent with respect to the injury suffered by the passenger who fell on the ship’s ice rink in a collision with a passenger who was skating backward. Lucas v. Royal Caribbean Cruises, Ltd., No. 19-20914, 2020 U.S. Dist. Lexis 158248 (S.D. Fla. Sept. 1, 2020).

The “epic saga” over Quantum Sail’s suit against Jannie Reuvers Sails for unlawful sale of sails may have ended when the Sixth Circuit affirmed the judgment in favor of Quantum in the amount of $2,521,754.88. Quantum Sail Design Group, LLC v. Jannie Reuvers Sails, Ltd., No. 18-2348 (6th Cir. Sept. 10, 2020).

In our May 2020 Update, we discussed the decision of Judge Bloom to grant leave to Havana Docks to file amended complaints in its suits alleging that cruise lines trafficked in its property (confiscated by the Cuban Government in 1960), in violation of the Libertad Act. After the filing of the amended complaints, Judge Bloom rejected the motions to dismiss of MSC Cruises and Carnival Corp. in Havana Docks Corp. v. MSC Cruises SA Co., No. 19-cv-23588, 2020 U.S. Dist. LEXIS 163206 (S.D. Fla. Sept. 8, 2020) and Havana Docks Corp. v. Carnival Corp., No. 19-cv-21724, 2020 U.S. Dist. LEXIS 167216 (S.D. Fla. Sept. 14, 2020).

On September 29, 2020, Director Rios sent this update on several issues that had been brought to his attention:

Dear Longshore Stakeholders:

I hope this email finds all of you safe and healthy during these unusual times. I am writing to provide you an explanation of the causes, effects, and the solutions implemented to address the following issues that were brought to my attention recently:

  1. Certain correspondence was delivered to you much later than the date it was authored;
  2. An unexpected influx of pre-penalty letters has been generated due to missing Forms LS-202 (Employer’s First Report of Injury or Occupational Illness); and
  3. Notices of Claim were served on employers without an attached Form LS-203 (Employee’s Claim for Compensation).

We implemented a new process that automates outgoing correspondence and I am happy to report that as of Friday, September 25, there is no backlog of mail.

This year has been a challenging one for most of us, in that normal business operations have changed dramatically due to the pandemic. On March 17, 2020, all Longshore program federal employees were directed to telework 100% of the time. As a result, what was a daily process where Longshore staff would print outgoing correspondence in their local office and place it in that day’s mail has changed. Longshore staff now route all outgoing correspondence to a remote printing location for processing and mailing. With a relatively small contractor operation that was customarily focused solely on creating new cases and processing incoming mail, this process led to a backlog of outgoing mail and a delay in creating new cases. Additional backlogs accumulated when employers re-filed Forms LS-202 multiple times. These issues were unforeseen and their compounded effects led to a delay in the delivery of mail. Sadly, this included informal conference notices. This also led to Notices of Claim letters being sent without Forms LS-203 attached.

Receiving backdated mail is certainly not ideal, and we will accommodate any requests for informal conferences that need to be rescheduled due to insufficient notice. Out of an abundance of caution you may have received multiple copies of the same letter, but that should no longer occur.

I also want to address the large influx of pre-penalty (30(e)) letters that some employers have received. As you know, when our division creates a case following the receipt of Form LS-203, it is our responsibility to inquire if the employer was aware of the injury, particularly when a Form LS-202 has not been filed with the Department of Labor under Section 30 of the Longshore and Harbor Workers’ Compensation Act. Our letters request a statement explaining why the employer did not file Form LS-202 within 10 days of the injury. We have recently seen an increased number of Forms LS-203 filed primarily on Defense Base Act claims, which have generated a large volume of pre-penalty letters. As the issue became more prevalent, to ensure that our statutory duty did not create an onerous and unnecessary work volume for employers, effective July 2, 2020, the missing Form LS-202 pre-penalty letters included the following statement: If Form LS-202 is filed timely, you do not need to provide a statement. To be clear, if Form LS-202 was filed timely according to Section 30(a) of the Act, but a missing Form LS-202 pre-penalty letter was nevertheless sent by DOL, employers do need not to file a statement along with the Form LS-202, nor should they respond to the pre-penalty letter. If the date of knowledge (item 22 on Form LS-202) reflects that you have filed or are filing the Form LS-202 timely, that evidence speaks for itself. A Form LS-202 filed within 10 days of the date of knowledge is considered timely and not subject to a civil penalty.

Finally, on the issue of penalties, most of you are aware that the Department of Labor has not been assessing penalties following its rollout of our new case management system (OWCS). This was a conscious decision intended to provide all employers with the transition period necessary to properly acclimate to our new, automated process of identifying potential penalties. This transition period is dedicated to ensuring that employers who may not have been aware of their untimely filings learn from this period where such letters are received.

I want to thank all of you for your patience as we adjusted our business operations to the pandemic and as we worked through the issues that came with deployment of a new IT system. I also want to thank you for providing us the feedback that was necessary to refine our operations. While the major issues are now resolved, if you experience new or continued issues, I again welcome and strongly encourage you to immediately bring them to our attention by contacting your local District Director. I look forward to seeing you in person once normal operations resume.

Sincerely,

Antonio A. Rios
Director of Federal Employees’, Longshore
and Harbor Workers’ Compensation

On the LHWCA Front . . .

From the federal appellate courts:

Decision that an employee of a shipyard subcontractor was a borrowed servant of the shipyard under the LHWCA was affirmed by the Fifth Circuit even though borrowed servant status was not specifically pled as an affirmative defense and even though the contract between the parties provided that the worker was an independent contractor; Skipper v. A&M Dockside Repair, Inc., No. 20-30278 (5th Cir. Sept. 16, 2020) (per curiam).

Opinion

Walter Skipper was employed by Helix Resources as a painter and blaster. Helix supplied Skipper to A&M Dockside Repair pursuant a contract providing that Helix and its employees were independent contractors of A&M. Skipper was injured when he fell into an open manhole cover on a barge at an A&M shipyard, and he brought suit against A&M for negligence. Judge Vance held that A&M was Skipper’s borrowing employer for purposes of the LHWCA and dismissed the case based on the exclusive remedy provision of the LHWCA (February 2020 Update). In this appeal, Skipper first argued that A&M had waived the borrowed servant defense by not raising it as an affirmative defense in its answer. However, the Fifth Circuit held that an affirmative defense is not waived if the defendant raised it at “a pragmatically sufficient time” so that the plaintiff was not prejudiced in his ability to respond. In this case, the district court and the Fifth Circuit noted that Skipper had reasonable notice of the defense because Helix (brought into the suit by A&M) had asserted that Skipper’s sole remedy was for compensation under the Louisiana Worker’s Compensation Act, or alternatively, the LHWCA. The borrowed servant defense was then explicitly raised in the motion for summary judgment, and Skipper had made thorough and reasoned responses to the defense without asking for additional discovery on the issues. Skipper also argued that several of the Ruiz v. Shell Oil factors presented fact questions so that summary judgment was not proper. Judge Vance and the Fifth Circuit disagreed. The fact that the contract between A&M and Helix provided that Helix and its employees were independent contractors did not present a fact question on the issue of who has control because the facts established that Skipper was following the directions of A&M’s yard superintendent and Helix did not have any supervisors at the job site. The Fifth Circuit disagreed with Skipper’s interpretation of the factor whether Helix terminated its relationship with Skipper. Skipper argued that his employment relationship with Helix had not been terminated when he was working at the A&M shipyard, but the Fifth Circuit held that the inquiry focuses on whether Skipper maintained contact with Helix and not whether his employment relationship was severed. In this case, Skipper was taking direction from A&M, and there were no Helix supervisors at the job site. Skipper argued that the factor that considers whether the employment was over a considerable length of time weighed in his favor because he had only worked for A&M for six days. The Fifth Circuit, however, answered that this is a significant factor only when the work for the borrowing employer is for a considerable length of time and it is neutral when the employee is injured early in the employment. The Fifth Circuit also disagreed with Skipper on the factor considering who has the obligation to pay the worker. Although Skipper was paid by Helix, the funds to pay Helix were received from A&M. Thus, the Fifth Circuit held that this factor favored borrowed servant status. As seven of the nine Ruiz factors favored borrowed servant status, the Fifth Circuit affirmed the summary judgment in favor of A&M.

Second Circuit declined to overturn the BRB’s decision that the employer/carrier failed to carry its burden to show that defendants in a British lawsuit who settled with the claimant were not employers so as to invoke Section 33(g); G4S International Employment Services (Jersey), Ltd. v. Newton-Sealey, No. 19-2471 (2d Cir. Sept. 17, 2020) (per curiam).

Opinion

David Newton-Sealey, a British citizen, was hired by ArmorGroup Services (Jersey), Ltd. (AG Jersey) to provide security in Iraq and was injured when his vehicle was struck by a hostile Iraqi vehicle. AG Jersey provided LHWCA compensation and medical benefits to Newton-Sealey in accordance with the Defense Base Act, and Newton-Sealey filed a suit in the United Kingdom against AG Jersey, ArmorGroup Services Ltd. (AG UK), and ArmorGroup International (AG International). After Newton-Sealey entered into a settlement with the defendants for an amount less than his entitlement under the DBA (without obtaining written permission of the employer and carrier), AG Jersey asserted a defense under Section 33(g) that there had been an unauthorized third-party settlement. Reviewing the evidence and argument from the UK suit, ALJ Rosenow ruled that AG Jersey and AG UK were employers under the DBA, but the employer status of AG International was litigated and decided in the UK (ruling that AG International was not liable in contract to Newton-Sealey and would remain as a tort defendant). It was that tort liability that was the basis of the settlement for which the approval of the carrier was not received. The Benefits Review Board reversed that decision, as the UK opinion on contractual liability did not determine whether AG International might have been a borrowing employer, an issue that was not decided in the UK proceeding as a result of the settlement. The BRB remanded the case to Judge Rosenow to determine whether AG International was a borrowing employer. On remand, Judge Rosenow applied the Ruiz v. Shell Oil factors and determined that AG International was not Newton-Sealey’s borrowing employer. Therefore, the only way that AG International could be anything other than a third party was if the ArmorGroup companies acted as a single entity. As the evidence showed no integration, control, or coordination of the entities, Judge Rosenow concluded that AG International was not a single entity with AG Jersey and AG UK, and its settlement operated as a bar under Section 33(g). On the second appeal, the BRB affirmed the determination that AG International was not a borrowing employer, but the Board noted that there had been a corporate restructuring of the of the ArmorGroup companies after the injury, and the BRB could not ascertain the relationships of the entities as of the date of the settlement in 2009. As Section 33(g) is a defense for which the employer had the burden of proof, the BRB reversed Judge Rosenow’s finding that AG International was a third-party. The BRB then addressed the issues of election of remedies/exclusivity and credit. The employer/carrier argued that the remedy in the DBA is exclusive, and claimant’s pursuit of recovery in the lawsuit precluded his seeking recovery under the DBA. The BRB disagreed, responding that, under UK law, Newton-Sealey had the right to pursue both a local workers’ compensation claim and a tort remedy. Whether the claimant was entitled to recover under both the DBA and UK law had to be raised in the foreign suit. The Board therefore held that the decision of the foreign court could not negate the claimant’s right to compensation under the DBA. Consequently, his settlement did not preclude him from obtaining benefits under the DBA. Finally, the BRB declined to afford the employer/carrier any credit from the payment of the settlement as it did not fit within any of the credit provisions of the LHWCA (advance payments of compensation, payment on a workers’ compensation claim or under the Jones Act, third-party settlement, or prior disability payment for a scheduled injury). As the Board’s decision left no discretion for the ALJ, Judge Rosenow entered an order awarding compensation and medical benefits that was affirmed by the BRB. Agreeing with the BRB, the Second Circuit held that AG Jersey had failed to carry its burden of proof. Although it had produced evidence of the relationship between the companies before the settlement, that evidence predated the restructuring and did not carry the burden to establish that AG International was a third party at the time of the settlement. The failure to establish the status of AG International at the time of the settlement was fatal to the Section 33(g) defense, and the Second Circuit denied the employer/carrier’s petition for review.

From the federal district courts:

Longshore worker was denied a jury trial after the defendant removed the case based on diversity and admiralty and the longshoreman added a non-diverse defendant; Dwyer v. Spliethoff’s Bevrachtingskantoor B.V., No. 1:19-cv-623, 2020 U.S. Dist. LEXIS 164135 (E.D. Tex. Sept. 8, 2020) (Crone).

Opinion

Gerald Dwyer was injured while working as a gang foreman, loading rolls of paper onto the vessel SUOMIGRACHT in the Port of Port Arthur. He brought suit against the vessel interests pursuant to Section 905(b) of the LHWCA, and the defendants removed the case to federal court based on diversity and federal question under general maritime law. Dwyer amended his complaint to add a non-diverse defendant, demanding a jury trial, and then moved to remand the case to state court based on lack of diversity. Judge Crone responded by denying both the remand and the demand for a jury trial. Dwyer waived his right to the choice of forum when he failed to object to the removal based on admiralty jurisdiction within 30 days. When he amended his complaint to eliminate diversity, the court still had admiralty jurisdiction over his Section 905(b) action. Then, as the only basis for jurisdiction was admiralty, Dwyer was no longer entitled to a jury trial, and his request for a jury trial was denied.

Most tort and contract claims related to discharge of worker who brought a DBA claim were dismissed; Sickle v. Torres Advanced Enterprise Solutions, LLC, No. 11-2224, 2020 U.S. Dist. LEXIS 167864 (D.D.C. Sept. 14, 2020) (Jackson).

Opinion

David Sickle and Matthew Elliott worked for defense contractor Torres Advanced Enterprise Solutions. Elliott worked for Torres Advanced as a kennel master in Iraq, training and managing dogs. He claimed an injury to his back for which he was treated by Sickle, a medic at the base in Iraq where Elliott worked. When Scott Torres terminated the employment of both Elliott and Sickle, they brought this suit against both Torres Advanced and Scott Torres, alleging discrimination and retaliatory discharge under the Defense Base Act, breach of contract and the covenant of good faith and fair dealing, common-law retaliatory discharge for filing a workers’ compensation claim, and conspiracy to commit the acts alleged in the complaint. The district court dismissed the claims based on the preemption of the DBA and the failure to exhaust remedies under the DBA. The D.C. Circuit, however, reversed the dismissal of Elliott’s contract claim and Sickle’s tort and contract claims, holding that Sickle’s tort claims were not preempted because they arose independently of any entitlement to benefits under the DBA. On remand, Judge Jackson held that the claims against Scott Torres, a resident of Kansas, had to be dismissed for lack of personal jurisdiction, as his acts were not taken in his personal capacity and the acts taken as a representative of Torres Advanced could not be used to establish personal jurisdiction over him individually. With respect to Sickle’s remaining claims, Judge Jackson held that the tort claims were not viable under applicable Virginia law. Consequently, all of Sickle’s remaining claims except express breach of contract were dismissed.

Suit to enforce in the United States a foreign judgment based on misdelivery of cargo was properly based on federal question jurisdiction as the judgment arose from a maritime setting; Dantzler, Inc. v. Intermarine LLC, No. 20-931, 2020 U.S. Dist. LEXIS 169080 (E.D. La. Sept. 16, 2020) (Ashe).

Opinion

This case arose out of a shipment of lumber from Brazil to Puerto Rico that arrived in Mexico. The cargo plaintiff brought suit against the charterer in Brazil and obtained a judgment that was amended when the charterer merged with another company. That judgment was amended to name a third party after another merger. The cargo plaintiff brought this suit in federal court in Florida to enforce the judgment, and the case was transferred to the Eastern District of Louisiana for personal jurisdiction against the defendant. Before the court could address whether the judgment could be enforced, Judge Ashe addressed the subject matter jurisdiction of the federal court as federal law would apply to cases brought under the federal question jurisdiction, and state law would apply to cases brought under the diversity jurisdiction. Judge Ashe held that the jurisdiction in this case should be considered as a federal question because lawsuits to enforce the judgment of a foreign country retain the jurisdictional status of the underlying judgment. As this case arose in a maritime setting, the court had “federal question (admiralty) jurisdiction” and the federal law of comity applied. Based on the federal comity principles, Judge Ashe held that the plaintiff had sufficiently stated a claim to enforce the foreign judgment.

Claims against future operator of vessel by shipyard subcontractor who was injured during a vessel’s sea trials were dismissed except for compensatory and punitive damages under section 905(b); White v. Fincantieri Bay Shipbuilding, No. 19-C-946, 2020 U.S. Dist. LEXIS 170970 (E.D. Wis. Sept. 18, 2020) (Griesbach).

Opinion

Rodney White was employed by Engine Motor Inc. as a technician to assist in the installation and testing of the steering system of the M/V MILLVILLE, which was constructed by Fincantieri Bay Shipbuilding. White was injured during the sea trials of the vessel on Lake Michigan and brought suit against the shipyard (Fincantieri), the company that planned to operate the vessel (Keystone), Keystone’s parent (Chas. Kurz), and the company that contracted for the construction of the vessel (Wawa). Judge Griesbach found that White was not a seaman and dismissed his seaman’s claims. He also held that his claims for Wisconsin common-law negligence were barred by the exclusive remedy provision of the LHWCA. In connection with this opinion, Keystone argued that all of White’s claims against Keystone (except the section 905(b) claim) should be dismissed, and Judge Griesbach agreed, noting that White could pursue claims for both compensatory and punitive damages against Keystone under section 905(b). As Chas. Kurz had no involvement in the case other than as owner of Keystone, Judge Griesbach dismissed the remaining claims against that entity.

Removal of asbestos case against shipyard was timely after the plaintiff asserted strict liability claims; Becnel v. Lamorak Insurance Co., No. 19-14536, 2020 U.S. Dist. LEXIS 171247 (E.D. La. Sept. 18, 2020) (Lemelle).

Opinion

James Becnel brought this suit against his shipyard employer, Avondale, and others for asbestos-related lung cancer. After his death, his heirs filed an amended complaint that included a strict liability claim. The defendants removed the case at that time pursuant to the Federal Officer Removal Statute, and the heirs moved to remand the case, arguing that the removal was too late and should have been filed when it became evident from Becnel’s deposition that he worked on a Navy vessel. The defendants responded that the original action asserted negligence claims that were not removable until the en banc decision of the Fifth Circuit in the Latiolais case (March 2020 Update). Agreeing that removal would have been unwarranted before the amendment and that the defendants had made a sufficient showing of a defense of federal contractor immunity, Judge Lemelle held that the defendants properly removed the case.

Seismic operator who worked on nine jobs for four vessel owners presented a fact question of seaman status; Thomas v. Seabird Exploration Cyprus Ltd., No. 19-11853, 2020 U.S. Dist. LEXIS 174322 (E.D. La. Sept. 23, 2020) (Barbier).

Opinion

Marking Dowling Thomas was injured while working as a seismic navigator on the R/V OSPREY EXPLORER. He brought this action seeking a seaman’s remedies against the owner and operator of the vessel, and the defendants moved for summary judgment that Thomas was not a seaman. During the three years before his injury, Thomas used two employment agencies to find jobs. With one agency he worked seven jobs for two owners on three vessels. He then worked two jobs for the second agency, fifty days on the first job and then 44 or 45 days on the second job, including time before and after his injury. The defendants argued that Thomas’ work on so many vessels owned by different entities demonstrated that he did not have a substantial connection to a single vessel or identifiable fleet. Thomas responded that the court could only consider his employment through the second agency, and he spent more than 30% of his time working on the vessel on which he was injured. Regardless of whether the court considered the agency or the last vessel owner/operator the employer of Thomas, he worked more than 30% of his time on the OSPREY EXPLORER, and Judge Barbier therefore held that he presented a fact question on the duration element of the seaman status test.

And on the Maritime Front . . .

From the federal appellate courts:

Florida real estate broker could not recover from the DEEPWATER HORIZON Economic & Property Damages Settlement Agreement for commissions on real estate deals that were cancelled for lack of funding from the purchaser and not as a result of the oil spill; Claimant ID 100006076 v. BP Exploration & Production, Inc., No. 19-30917 (5th Cir. Sept. 4, 2020) (per curiam).

Opinion

Glen Schooley, a real estate broker in Destin, Florida, made a business economic loss claim based on the Deepwater Horizon Economic & Property Damages Settlement Agreement for commissions on real estate transactions that allegedly failed to conclude as a result of the oil spill. The Fraud, Waste, and Abuse Department of the Claims Administrator determined that the deals were cancelled as a result of lack of funding of the purchaser and not because of the oil spill, and the Administrator denied the claim. The Appeal Panel agreed that the claims were based on fabricated documents and forged signatures, and rejected Schooley’s assertion that the investigators for the Administrator could have intimidated four different witnesses into submitting sworn statements that they did not execute the documents that were attributed to them. Concluding that the Appeal Panel appropriately applied the proper standard of review, the Fifth Circuit affirmed the denial of the claim.

Eleventh Circuit held that there was no appellate jurisdiction over the decision of the district court that arbitration of a seaman’s claim was not available under the New York Convention and that the case should be remanded to state court; Hodgson v. Seven Seas Cruises S. de R.L., LLC, No. 20-11533 (11th Cir. Sept. 9, 2020) (per curiam).

Eleventh Circuit opinion

District court opinion

Nicaraguan citizen Esteban Pedro Sambola Hodgson, a crewmember on the VOYAGER, brought this action in Florida state court against his employer, Seven Seas Cruises, to recover for an injury sustained when he fell down stairs on the vessel. Seven Seas removed the case based on the New York Convention (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards) asserting that the claims were subject to mandatory arbitration provisions. Seven Seas then moved to compel arbitration. Judge Williams ruled that she had jurisdiction to consider the motion to compel arbitration, but she held that there was no written arbitration agreement signed by both parties. She therefore declined to compel arbitration and, as the only basis for federal jurisdiction was the New York Convention, she remanded the case to state court. Seven Seas appealed Judge Williams’ order, asserting that the decision on arbitration was a decision on the substantive law of the case that was separate from the decision on remand, which is ordinarily not appealable. As the substantive issue was intrinsic to the decision to remand, however, the Eleventh Circuit held that the decision on arbitration was essentially jurisdictional–explaining the decision to remand. Therefore, the court of appeals dismissed the appeal for lack of jurisdiction.

Despite no tripping accidents for five years on the four-inch threshold to exit the aerobics room on a cruise ship, the cruise line had notice of the tripping danger due to tripping accidents on thresholds on other decks of other vessels; Bunch v. Carnival Corp., No. 19-12935 (11th Cir. Sept. 10, 2020) (per curiam).

Opinion

Passenger Paulette Howard Bunch stepped over a five-and-a-half-inch threshold to enter the aerobics room on Deck 11 of the GLORY, but she tripped and fell on the four-inch threshold while leaving the room. As no one had tripped on that threshold in the five years before her accident, Chief Judge Moore granted summary judgment to the cruise line on the basis that it lacked notice of a dangerous condition. The Eleventh Circuit disagreed, however, citing evidence that seven passengers had tripped on the eight-and-a-half-inch threshold on Deck 10 of other cruise ships. Even though that threshold was more than double the height of the four-inch threshold in the aerobics room of the GLORY, it was similar because the thresholds in the aerobics room on the Glory and on Deck 10 of the other ships were camouflaged by the reflection of the carpet on the steel baseboards, making it appear as if there was no threshold. The cruise line had responded to those incidents with warning signs and striped tape, indicating that it had notice of the danger. For the same reason, the Eleventh Circuit held that the optical illusion from the steel baseboard reflection of the carpet was sufficient evidence that the condition of the threshold was not open and obvious.

Fifth Circuit rejected the “novel approach” of partially lifting the stay in a limitation action without the stipulation of all claimants; In re Devall Towing & Boat Service, No., 19-30920 (5th Cir. Sept. 11, 2020) (per curiam).

Opinion

Jason Charles Lanclos was injured while working as a deckhand for Devall Towing’s M/V KENNETH J. DEVALL when he was struck by a pipe while assisting the M/V ZELAND M. DELOACH, JR. break its tow. The owners of both vessels filed actions seeking to limit their liability. Lanclos brought suit against both companies in Louisiana state court and filed claims in the limitation actions. Devall Towing also brought claims of contribution, indemnification, and reimbursement in the limitation action brought by the owner of the ZELAND M. DELOACH, JR., Deloach Marine. Lanclos moved to lift the stay and stipulated that he would not seek to enforce any judgment in excess of the limitation fund or assert res judicata from the state proceeding; however, Devall Towing did not agree to any protective stipulations. Judge Juneau decided to adopt a “novel approach” to modify the stay so as to achieve the same effect as if the parties had all entered into stipulations. He retained the stay but allowed the parties to proceed with discovery and trial on the merits in state court, but prohibited the parties from enforcing the judgment in any court and from asserting res judicata or issue preclusion from the judgment. The Fifth Circuit has identified two exceptions in which the district court can lift the stay—(1) when the total amount of the claims does not exceed the limitation fund and (2) when all claimants stipulate to the exclusive jurisdiction of the limitation court over the limitation proceeding and stipulate that the claimants will not seek to enforce a damage award greater than the limitation fund until the right to limitation has been determined by the limitation court. As neither condition was satisfied in this case, there was no exception to the statute’s command that “all claims and proceedings against the owner related to the matter in question shall cease.” Reasoning that the court cannot impose the required stipulations by injunction when the two narrow exceptions have not been met, the Fifth Circuit held that Judge Juneau abused his discretion by allowing the state court to proceed in the absence of a stipulation agreed to by all claimants. Thanks to Matthew Ammerman of Houston, Texas, for bringing this case to our attention.

Fifth Circuit declined to second guess the district court’s findings of fault in a collision case; Deloach Marine Services, L.L.C. v. Marquette Transportation Co., No. 19-30311 (5th Cir. Sept. 11, 2020) (Duncan).

Opinion

This case arose from a collision of two tugs on the Mississippi River. The M/V JUSTIN PAUL ECKSTEIN was facing upriver on the west bank of the river and needed to enter the channel to move downriver. The M/V VANPORT was proceeding downriver and had just made an overtaking agreement with the BEATRICE that the BEATRICE would pass the VANPORT on the port side of the VANPORT, and the VANPORT would stay as close to the west bank of the river as possible. The captains of the VANPORT and JUSTIN then discussed the entry of the JUSTIN into the river whereby the JUSTIN would push its barges into the current, and the current would turn the tug and barges downriver. There was a misunderstanding whether the JUSTIN’s entry would be before or after the passage of the VANPORT, however, and the JUSTIN turned directly into the path of the VANPORT. The case was tried to Judge Vance, who found both vessels at fault and assessed 70% fault to the JUSTIN and 30% fault to the VANPORT, reasoning that the JUSTIN was more at fault because its decision to enter the channel in front of oncoming channel created the unsafe circumstances that led to the collision and its captain did not adequately convey his intent to change the typical right-of-way in this situation. Both parties assailed Judge Vance’s findings, but, giving deference to her findings, Judge Duncan did not find any clear error in her assessments of fault. Judge Duncan did note that Judge Vance’s opinion did not make findings on prejudgment interest, so the case was remanded for the limited purpose of determining whether prejudgment interest should be awarded. Thanks to Professor Michael Sturley of the University of Texas School of Law for bringing this case to our attention.

From the federal district courts:

Court declined to grant expedited trial of seaman’s maintenance and cure claim when it would not preserve the defendant’s right to a jury trial; Morgan v. Ocean Warrior Fisheries, LLC, No. 1:20-cv-69, 2020 U.S. Dist. LEXIS 157165 (D. Me. Aug. 29, 2020) (Rich).

Opinion

This is the first of two decisions in this Update denying a seaman’s request for an expedited trial of his maintenance and cure claim (a third case involves a motion to increase the per diem rate paid for maintenance). Randy Morgan was injured on August 30, 2019, while working on defendants’ fishing boat, OCEAN WARRIOR. Ocean Warrior Fisheries continued to pay Morgan his share of the vessel’s catch after he stopped working, but it did not make the payments as maintenance, and Morgan’s attorney demanded additional payments of $350 per week for maintenance. Morgan’s attorney also argued that Ocean Warrior had not paid all of the medical bills and that cure was owed for $40,000. Morgan then sought an expedited bench trial on his claims for maintenance and cure, wrongful failure to pay maintenance and cure, and for punitive damages, arguing that immediate payment was needed to defray significant financial hardship and to allow him to obtain medical treatment. Ocean Warrior responded that Morgan’s argument that he could not pay for medical treatment was disingenuous as he had already been paid $89,126.71, which was more than he was seeking, and that the bench trial would deny Ocean Warrior its right to a jury trial on the maintenance and cure claims. Morgan had demanded a jury trial on all of its claims, and continued to insist on a jury trial on the remaining claims that were not bifurcated. However, as Ocean Warrior had not forfeited its right to a jury trial on the maintenance and cure claims, Magistrate Judge Rich reasoned that the loss of its right to a jury trial was dispositive in favor of denial of the expedited trial. Moreover, Magistrate Judge Rich added that the duplication of fact and expert testimony in the two trials would be prejudicial to the defendant and would not comport with judicial economy and efficiency.

Beneficiaries of Navy seaman who died from mesothelioma presented fact questions of causation and knowledge of the Navy to avoid summary judgment on their claims against suppliers of products containing asbestos; Hammell v. Air & Liquid Systems Corp., No. 14-13, 2020 U.S. Dist. LEXIS 159083 (D.N.J. Aug. 31, 2020) (Shipp).

Opinion

Arthur Hammell enlisted in the Naval Reserve in 1960 and served on active duty in the Navy from 1962 to 1964, working on the U.S.S. CHARLES H. ROAN when it was modernized in the Brooklyn Navy Yard and while the vessel was at sea. He was exposed to asbestos from forced draft blowers manufactured by Westinghouse that were installed in the forward fireroom and in boilers furnished by Foster Wheeler. The use of asbestos in the blowers was either expressly required by Navy specifications or was considered and approved by the Navy. The Navy supervised and controlled the design, manufacture, testing, and acceptance of the boilers on the vessel. Hammell died from mesothelioma, and his beneficiaries brought this suit against suppliers of asbestos products. Westinghouse and Foster Wheeler moved for summary judgment. Based on the recent decision of the Supreme Court in Air & Liquid Systems Corp. v. DeVries, the defendants asserted that there was no duty to warn because their products did not require incorporation of a part that made the integrated product dangerous. Additionally, Judge Shipp concluded that there were disputed facts whether the products required incorporation of asbestos-containing gaskets or whether the gaskets were merely optimal or preferred by the Navy. The defendants also challenged the sufficiency of the evidence of causation, but Judge Shipp found fact disputes whether the beneficiaries could show a high enough level of exposure to establish that asbestos in the defendants’ products was a substantial factor in causing the decedent’s mesothelioma. Finally Judge Shipp held that there were disputed facts on the element of the government contractor defense that the defendant warned the United States about the dangers of equipment that were known to it but not to the United States, as there was evidence that the Navy believed asbestos-containing gaskets presented no health hazards in shipyard applications.

District court remanded suit that was removed based on the federal court’s admiralty jurisdiction; Southeastern Dock & Platform, LLC v. Atlantic Specialty Insurance Co., No. 9:20-cv-1204, 2020 U.S. Dist. LEXIS 157416 (D.S.C. Aug. 31, 2020) (Gergel).

Opinion

Southeastern Dock brought this action in South Carolina state court against its insurer for failing to procure proper coverage and mishandling its claim for damages under an insurance policy that insured the plaintiff’s barge and excavator that sank in the Coosaw River. The insurer removed the case to federal court based on the court’s admiralty jurisdiction and cited the Seventh Circuit case in Lu Junhong v. Boeing Co. in opposition to the plaintiff’s motion to remand. Rather than addressing the merits of the defendant’s arguments, Judge Gergel simply followed the rule adopted by a majority of district courts and held that the case could not be removed without an independent basis for federal jurisdiction. Therefore, he remanded the case.

Passenger’s testimony about her fall, contrary to accident and medical reports, created a fact question to survive the cruise line’s motion for summary judgment; Stern v. NCL Bahamas Ltd., No. 19-20280, 2020 U.S. Dist. LEXIS 160690 (S.D. Fla. Sept. 1, 2020) (Louis).

Opinion

Cynthia Stern was injured in a fall in the bathroom of her cabin when she first entered the cabin after boarding the cruise ship NORWEGIAN GETAWAY. Citing accident and medical records that Stern had tripped on the threshold at the entry to the bathroom, the cruise line moved for summary judgment. Stern responded with her testimony that she had slipped on a slippery chemical substance on the floor from the cleaning of the bathroom, supported by two medical reports, and that was sufficient for Magistrate Judge Louis to find a fact question of the condition. The cruise line also argued that it did not have sufficient notice of the condition as Stern did not adduce evidence of prior incidents. However, Magistrate Judge Louis cited the evidence that the steward had applied a cleaning chemical to the floor approximately 11 to 26 minutes before the fall. Although the steward testified that the floor was dry, Stern’s testimony that the floor was slippery when she fell was sufficient to establish a fact question whether the substance had been on the floor for a sufficient length of time (15 to 20 minutes is sufficient) to give the cruise line constructive notice of the condition.

Cruise line was held to be aware of the danger of sexual assaults on its passengers from its own reports to the government; Doe v. Royal Caribbean Cruises Ltd., No. 1:20-cv-20443, 2020 U.S. Dist. LEXIS 158726 (S.D. Fla. Sept. 1, 2020) (King).

Opinion

The plaintiff in this case asserted that she was sitting in a hallway aboard the defendant’s cruise ship in a visibly intoxicated state, disoriented and crying, and that a crewmember approached her but failed to offer her any assistance. She was then sexually assaulted by another passenger. The cruise line moved to dismiss the complaint for failure to allege sufficient facts to show that the cruise line knew or should have known that a sexual assault aboard its vessel was foreseeable. Citing the Secretary of Transportation’s compilation of shipboard incidents, Judge King noted that there were 60 sexual assaults reported on the defendant’s vessels in the three years prior to the incident in this case, and 44 of the incidents were against passengers. Reasoning that the cruise line should have known that there was a serious problem of violent crime, including sexual assaults on passengers, on its cruise ships, Judge King denied the motion to dismiss.

Court declined to grant an expedited trial of the seaman’s maintenance and cure claim or to dismiss the seaman’s counterclaim for wrongful refusal to pay maintenance and cure when discovery had just begun, it had been 11 months since the injury, and a jury trial was set on all issues in 6 months; Central Boat Rentals, Inc. v. Brown, No. 20-1277, 2020 U.S. Dist. LEXIS 160074 (E.D. La. Sept. 2, 2020) (Vance).

Opinion

Shawn Brown worked as a pilot on Central Boat Rentals’ M/V CAPTAIN RAPHAEL. He claimed that he injured his neck, back, and arm on the vessel, and the physicians disputed whether he needed a surgery for several discs in his neck. Central Boat Rentals brought this action, seeking a declaratory judgment that it did not owe maintenance and cure, alleging a McCorpen defense of willful concealment of a pre-existing disability. Brown counterclaimed for damages for failure to pay maintenance and cure and for damages under the Jones Act and for unseaworthiness. Brown then filed a motion to sever the maintenance and cure claim and to grant an expedited trial on that claim. Alternatively, he sought to dismiss his counterclaim without prejudice. Before ruling on the motion, Judge Vance entered a scheduling order setting the case for a jury trial on March 8, 2021. As the case was set for a jury trial on all issues in six months, as 11 months had passed since the injury, as the case had only been filed in April and discovery had just begun, and as the same physicians would likely testify with respect to the maintenance and cure claim and the Jones Act and unseaworthiness claims, Judge Vance concluded that Brown’s interest was not well-served by severing the maintenance and cure issue from trial on his remaining claims. Judge Vance also declined to dismiss Brown’s counterclaim as it would be judicially inefficient and would cause prejudice to Central Boat Rentals.

Court denied a partiality challenge to an arbitrator in a dispute over bunkers; Schuyler Line Navigation Co. v. KPI Bridge Oil, Inc., No. 20-cv-2772, 2020 U.S. Dist. LEXIS 159942 (S.D.N.Y. Sept. 2, 2020) (Kaplan).

Opinion

Schuyler Line contracted with Dorick to supply fuel for Dorick’s vessel, and Schuyler Line purchased the fuel from KPI Bridge Oil. When the fuel was off specification, Dorick initiated arbitration against Schuler Line, and Dorick appointed J. Stephen Simms as its designated arbitrator. Schuyler Line then commenced an arbitration against KPI for indemnity for the fuel supplied by KPI. While the arbitrations were still separate and inactive, Simms began representing KPI in an unrelated case. The two arbitrations were consolidated, and shortly after the unrelated KPI litigation was concluded, Simms submitted his disclosure statement, noting his representation of KPI as well as his involvement in the International Bunker Industry Association, of which KPI is a member. Schuyler objected to Simms’s participation in the arbitration panel, but Simms declined to recuse himself. When the arbitrators requested a payment from the parties as security for their fees, Schuyler inquired about a payment that Dorick had made to Simms that had not been disclosed to the other arbitrators. Simms responded that the payment had been applied to his ongoing fees and expenses and would be reconciled in the final opinion. The three-member panel granted KPI’s motion to dismiss Schuyler’s claim, and in the suit over confirmation of the decision, Schuyler argued that the award should be vacated based on Simms’s alleged partiality. Judge Kaplan disagreed and held that Simms’s work for KPI and his involvement in the organization in which KPI was a member did not give rise to a finding of evident partiality. Although Judge Kaplan agreed that it was proper for Schuyler Line to question the payment to Simms, the allegation that it demonstrated evident partiality was based entirely on conjecture and did not satisfy the heavy burden to vacate an arbitration award. Judge Kaplan confirmed the arbitration decision.

Judge schooled the yacht purchaser on claims against the seller and manufacturer of a yacht that needed repair; Missing Card 3, LLC v. Horizon Yachts, Inc., No. 19-cv-62630, 2020 U.S. Dist. LEXIS 162602 (S.D. Fla. Sept. 3, 2020) (Ruiz).

Opinion

Missing Card 3 brought this action against Horizon Yachts, Inc., a Florida company, the seller of the motor yacht MISSING CARD III (Horizon USA), and Horizon Yacht Co. a Taiwanese company and manufacturer of the yacht (Horizon Taiwan). The Purchase Agreement with Horizon USA contained a warranty from Horizon Taiwan. The yacht began to suffer from vibration issues, and the purchaser took the vessel to Horizon USA, which made warranty repairs at the direction of Horizon Taiwan. When the repairs did not alleviate the problem, the purchaser incurred expenses of more than $150,000 to correct the problem. The purchaser then brought this suit against the seller and manufacturer in federal court in Florida, and the defendants moved for summary judgment on several grounds alleged by the purchaser. Judge Ruiz dismissed the  express warranty counts against the seller, as the seller issued no warranties in the sales document (the warranty was from the manufacturer). The claim for breach of contract against the manufacturer was dismissed because the manufacturer was not a party to the contract. The seller asserted that the count of breach of an implied warranty of fitness for a particular performance should be dismissed as the purchaser did not allege that the vessel was purchased for a particular purpose. Judge Ruiz agreed, but he gave the purchaser leave to allege the particular purpose along with the purchaser’s reliance. Judge Ruiz recognized that maritime law affords an implied warranty of workmanlike service from contractual relationships (which was negated in the Purchase Agreement), but the purchaser asserted that a warranty arose from the seller’s faulty repair. The problem was that the purchaser did not plead any repair contract outside of the Purchase Agreement. Therefore, Judge Ruiz dismissed this count against the seller with leave to allege a repair contract outside of the Purchase Agreement.

Law firm intervention for fees filed one week after dismissal of the case on account of settlement was timely; Fertilizantes Maya SA v. Thorco Shipping A/S, No. 19-12216, 2020 U.S. Dist. LEXIS 162686 (E.D. La. Sept. 4, 2020) (Roby).

Opinion

This dispute arises from a cargo damage claim brought by attorneys at the Gordon Arata firm in New Orleans in August 2019. In January 2020, the attorneys for the cargo plaintiff resigned from Gordon Arata and started a new firm. The firm asserted that it informed the departing attorneys within months that it was going to intervene in the suit for the fees that had been earned before the departure. On May 29, 2020, the plaintiff filed its settlement agreement with the court, and the court dismissed the case the same day, retaining jurisdiction for sixty days. A week later, on June 5, 2020, the firm filed a motion to intervene for the fees and expenses incurred while the attorneys worked for the firm. Concluding that the intervention was promptly filed and timely, Chief Magistrate Judge Roby granted the firm leave to file the intervention.

Prejudgment interest was not awarded on the passenger’s award of pain and suffering where the award did not specify how much was for past pain and suffering and how much was for future pain and suffering; Lebron v. Royal Caribbean Cruises, Ltd., No. 1:16-cv-24687, 2020 U.S. Dist. LEXIS 162162 (S.D. Fla. Sept. 4, 2020) (Seitz).

Opinion

Edgardo Lebron sought pre-judgment interest on the jury’s damage award to him arising from his injury while a passenger on the defendant’s cruise ship. The jury found the cruise line 65% at fault and assessed $625,000 for past and future pain and suffering. Lebron conceded that he was not entitled to prejudgment interest on his award for future pain and suffering, but he argued that the court had the discretion to award interest on the portion of the award determined by the judge to be for past pain and suffering. Noting that Lebron had not provided any method for the court to make that calculation and that Lebron had not asked for an itemized verdict, Judge Seitz declined to award any prejudgment interest on the lump sum award for pain and suffering.

Court entered final judgment on the mortgagee’s in rem claim but stayed the mortgagee’s in personam claim pending resolution of litigation between the parties in England; TMF Trustee ltd. v. M/T MEGACORE PHILOMENA, No. 17-9010, 2020 U.S. Dist. LEXIS 162578 (C.D. Cal. Sept. 4, 2020) (Rosenberg).

Opinion

TMF brought this litigation on a loan agreement that financed the purchase of two vessels, the MEGACORE PHILOMENA and the MEGACORE HONAMI. The suit in the United States was brought in rem against the MEGACORE PHILOMENA and in personam against Hurricane Navigation. A parallel suit was brought in personam in the Queens Bench Division of the High Court of Justice in England. The American litigation reached the point at which the court ordered an interlocutory sale of the MEGACORE PHILOMENA and summary judgment on TMF’s in rem claim against the vessel. However, TMF asked the court to stay its American in personam claims to permit them to be resolved in the English action. As the trial in the English proceeding was scheduled to begin on November 16, 2020 (and no trial was set on the in personam claims in the American action), and as discovery was about to be completed in the English suit (and expert discovery and pre-trial dates had not been set in the American action), Magistrate Judge Rosenberg stayed the in personam claims in the American action (but entered final judgment distributing the funds from the sale of the MEGACORE PHILOMENA.

Absence of any prior falls in a cruise ship’s shower was insufficient for the cruise line to obtain summary judgment on the basis of lack of notice; Cortes v. Princess Cruise Lines, No. 19-2563, 2020 U.S. Dist. LEXIS 168348 (C.D. Cal. Sept. 8, 2020) (Lew).

Opinion

Carol Cortes, who relies on a scooter or walker because of a motor neuron disease, has been on approximately 30 cruises with Princess Cruise Lines. She was injured on a cruise from Ft. Lauderdale to Europe after the CROWN PRINCESS had arrived in Spain (and she had already taken a dozen showers) when she turned on the water in the shower and then got up from her scooter to grab the handrail in the shower and slipped and fell. Citing its record of no passenger falls in the shower area of Cortes’ cabin or any similarly configured cabin on the ship, the cruise line moved for summary judgment. Cortes responded with the testimony of the cruise line’s manager of access compliance that the cruise line was involved in the design of the ship and was aware of industry guidelines and standards. This awareness was combined with the declaration of Cortes’s expert that the cruise line’s shower was not configured to comply with ADA guidelines that were applicable to land-based buildings and that were not required for cruise ships. Judge Lew held that a reasonable juror could have held that the shower configuration breached the cruise line’s duty of care and that the cruise line was aware of the configuration because of its involvement in the review and design of its ships and knowledge of the layout of the cabins. Judge Lew concluded that the jury could find that, despite the water on the floor, the passenger’s fall was caused by inadequacies in the shower. Judge Lew did, however, reject the passenger’s claim that a higher duty of care was owed to her because of her physical disabilities.

Late notice to insurer of crane barge resulted in denial of insurance coverage under New York law without the insurer having to show prejudice; New York Marine & General Insurance Co. v. Travelers Property Casualty Co. of America, No. 19-cv-1728, 2020 U.S. Dist. LEXIS 164376 (S.D.N.Y. Sept. 9, 2020) (Carter).

Opinion

D’Onofrio General Contractors entered into a contract with the Hudson River Park Trust to assist in the construction of a bulkhead at the Hudson River Park. D’Onofrio, in turn, entered into a subcontract with its wholly owned subsidiary, Diego Construction, to furnish labor, and an employee of Diego, Matthew Lenio, claimed that he was injured on the crane barge MOBRO 94, owned by D’Onofrio. Lenio and his wife brought a lawsuit against D’Onofrio, and D’Onofrio tendered its defense to New York Marine, which eventually agreed to defend D’Onofrio. D’Onofrio did not give notice to Travelers, which issued an Ocean Marine policy to D’Onofrio on which the MOBRO 94 was scheduled. Instead, New York Marine’s managing agent, ProSight Specialty, notified Travelers. Based on information provided by D’Onofrio, Travelers denied coverage on the ground that Lenio did not fall on a barge insured under Travelers’ policy. When New York Marine brought this suit against Travelers, Travelers argued that the failure to give Travelers timely notice of the injury and suit was a defense to coverage. New York Marine cited the provision of New York law requiring that the insurer demonstrate prejudice from the failure to provide timely notice, but that statute does not apply to “ocean going vessels.” Therefore, the court was presented with the question whether the MOBRO 94 was an ocean going vessel. Although the Travelers’ policy contained a Navigation Warranty that the vessel be confined to New York Harbor and the coastal and inland waters of New York, New Jersey, and Connecticut, Judge Carter concluded that the inclusion of both coastal and inland waters implied that the barge was authorized to navigate outside of inland waters and into the Atlantic Ocean. Consequently, no prejudice was required, and the late notice was a defense to coverage under the Travelers’ policy. Finally, Judge Carter declined to rule that Travelers had waived the late-notice defense by its disclaimer on the ground that the injury did not occur on the scheduled barge. Although Travelers knew that the notice was late at the time of its disclaimer, the disclaimer broadly reserved the right to assert new and additional bases, “whether based upon facts presently known or not.”

Forum-selection clause in a contract between the shipper and carrier does not operate as a consent to personal jurisdiction for subcontractors; Zim Integrated Shipping Services Ltd. v. Bellwether Design Technologies LLC, No. 19-cv-3444, 2020 U.S. Dist. LEXIS 166319 (S.D.N.Y. Sept. 10, 2020) (Broderick).

Opinion

Zim issued a bill of lading listing Bellwether Design as the consignee for carriage of a container of laminated glass from Barcelona, Spain, to Norfolk, Virginia. The bill of lading selected the United States District Court for the Southern District of New York as the forum for disputes arising under the bill of lading. Bellwether engaged PEI, a Georgia corporation, to provide transport and logistical services for the movement of the container from Norfolk to Bellwether’s customer’s job site in Washington, D.C. PEI arranged for an authorized motor carrier to deliver the cargo to A&A, a Virginia corporation, to remove the cargo from the container; however, the container was lost while in custody of A&A. Zim brought this action in the New York federal court against Bellwether, which brought in PEI, which brought in A&A. A&A moved to dismiss the case for lack of personal jurisdiction, and Judge Broderick recognized that the court could exercise jurisdiction against A&A if it consented to jurisdiction in New York. Although that consent of a non-party to the contract containing a forum-selection clause can be established when the contract is closely aligned with the party, Judge Broderick held that a forum-selection clause in the bill of lading issued by the carrier is insufficient to establish consent to personal jurisdiction for subcontractors. As A&A lacked minimum contacts for New York, and it did not consent to the forum-selection clause in the bill 0f lading, Judge Broderick granted A&A’s motion to dismiss.

Court rejected claims of vessel captain under the ADA, ADEA, and state law when he was restricted to non-maritime duty due to his high blood pressure, abnormal EKG, and irregular heart rhythm; Sutherland v. Edison Chouest Offshore, Inc., No. 19-414, 2020 U.S. Dist. LEXIS 165158 (E.D. La. Sept. 10, 2020) (Vance).

Opinion

Roger Sutherland began working for Edison Chouest and Galliano Marine in 1998 as a deckhand. By 2012 he had been promoted to a master captain. After Sutherland reached the age of 69, Dr. Darren Duet restricted him to non-maritime duty as a result of Sutherland’s high blood pressure, abnormal EKG, and irregular heart rhythm. He was assigned light-duty work until worsening economic conditions made it impractical to continue paying him the same as workers in maritime service, and he was offered positions at reduced pay that Sutherland would not accept. Sutherland brought this action for disability discrimination under the Americans with Disabilities Act, for age discrimination under the Age Discrimination in Employment Act, and for disability and age discrimination under the Louisiana Employment Discrimination Law. Concluding that there was ample evidence to support the non-discriminatory decisions of Sutherland’s employers, Judge Vance granted summary judgment to his employers on all of the claims.

Court ordered counter-security under Supplemental Rule E (7) for an in personam counterclaim in the same amount as the security given by the vessel owner on the in rem claim; R.P.M. Diesel Engine Co. v. M/V “3K,” No. 20-21981, 2020 U.S. Dist. LEXIS 166672 (S.D. Fla. Sept. 10, 2020) (Torres).

Opinion

This case involves a dispute over repairs on the vessel 3K made by R.P.M. Diesel Engine Co. When the owner of the vessel declined to pay for the repairs in the amount of $39,853.96, R.P.M. arrested the vessel and the owner posted security in the amount of $65,000. The owner then brought an in personam counterclaim against the repairer for damage to the vessel in the amount of $85,509.91 and sought counter-security pursuant to Supplemental Rule E (7). The repairer objected that it would be unjust to require that it post security when it was saddled with the costs for the parts and labor for the repair on the vessel, but Magistrate Judge Torres responded that the argument overlooked the fact that the vessel owner was asserting that it lost more than the repairer had. The repairer also argued that counter-security was not appropriate because the counterclaim was not brought in rem. Magistrate Judge Torres answered that the courts allow counter-security for in personam claims, but the amount is usually limited to the amount of security posted on the original claim. Consequently, Magistrate Judge Torres recommended that the vessel owner be ordered to post security in the same amount as the repairer posted, $65,000.

Passenger who tripped on an ashtray at the end of an aisle in a casino on a cruise ship “squeaked by” the cruise line’s motion for summary judgment; Morrison v. Royal Caribbean Cruises, Ltd., No. 19-21220, 2020 U.S. Dist. LEXIS 165633 (S.D. Fla. Sept. 10, 2020) (Goodman).

Opinion

Patricia Morrison was injured when she tripped over an ashtray at the end of an aisle in a casino on the ENCHANTMENT OF THE SEAS. She testified that she was distracted by a wheelchair that caused her to not notice the ashtray. Although the cruise line argued that a standing ashtray, approximately two feet tall, located in the open at the end of a walkway was open and obvious as a matter of law, Magistrate Judge Goodman held that the condition presented a fact issue that could not be resolved by a motion for summary judgment. With respect to the notice of a dangerous condition, Magistrate Judge Goodman reviewed the evidence of prior incidents and found that none were sufficiently similar to provide notice to the cruise line. However, there was just enough evidence of corrective action  (“albeit barely”) to give notice based on the testimony of the corporate representative that employees would move an ashtray if it was spotted in a walkway or aisle. Consequently, Magistrate Judge Goodman held that Morrison had “squeaked by” the cruise line’s motion for summary judgment.

Allegations against the cruise line with respect to an injury to a passenger during an excursion survived the cruise line’s motion to dismiss in one case and had to be repleaded in another; Storm v. Carnival Corp., No. 20-22227, 2020 U.S. Dist. LEXIS  166676 (S.D. Fla. Sept. 10, 2020) (Torres); Thompson v. Carnival Corp., No. 20-22217, 2020 U.S. Dist. LEXIS 167765 (S.D. Fla. Sept. 11, 2020) (Torres).

Storm opinion

Thompson opinion

James Storm was injured while returning on an excursion boat when he slipped on stairs and a portion of his middle finger was severed. He brought suit against the cruise line and excursion company, and the cruise line moved to dismiss the allegations against the cruise line. Storm agreed that his third-party beneficiary claim should be dismissed, and Magistrate Judge Torres agreed with Storm that the allegations were sufficient to support the remaining allegations against the cruise line. With respect to the heightened pleading standard for negligent misrepresentation about the excursions, Magistrate Judge Torres rejected the cruise line’s argument that its website and ticket contract identified the excursion operators as independent contractors. He concluded that Storm had alleged specifics for the time and place of each statement asserted to be misleading and rejected the argument that Storm had to allege how many times he viewed the cruise line’s website on a specific date. The cruise line’s arguments were more appropriate for a motion for summary judgment. Magistrate Judge Torres also held that Storm had sufficiently asserted a claim of negligent selection and retention of the excursion operator, as Storm’s pleading asserted that the cruise line knew or should have known of the operator’s unfitness based on prior injuries involving substantially similar excursions. Storm’s allegations of notice of the risk-creating condition for the count of failure to warn were also held to be sufficient because Storm gave six ways that the cruise line had notice of the wet stairs. Following the decisions of other courts, Magistrate Judge Torres held that the allegations in support of apparent agency or agency by estoppel sufficiently asserted that the cruise line had allowed its name to be used for the advertising and marketing of the excursion entity, arranging the excursion, selling it from a desk on the ship, and recommending that passengers not engage in tours sold through companies other than the cruise line. Likewise, Magistrate Judge Torres held that the allegations of joint control of the excursion, sharing in profits and losses, and an ownership in the tour operation were sufficient to survive the motion to dismiss with respect to the count of a joint venture even though the contract between cruise line and excursion company provided that the relationship between the parties was not a joint venture. Finally, Magistrate Judge Torres declined to dismiss the count asserting that the cruise line was negligent in failing to adequately treat Storm after his injury, declining to follow the decision in Barbetta v. S/S BERMUDA STAR, in which the Fifth Circuit held that the general maritime law does not impose liability on the cruise line based on respondeat superior for the negligence of a ship’s doctor. In the second case, Claudia Thompson was injured during a shore excursion in Mexico during a cruise on the CARNIVAL BREEZE when her ATV abruptly stopped after striking a mud hole and she was thrown through the air and into a nearby tree. Magistrate Judge Torres dismissed the counts of negligent failure to warn, negligent misrepresentation, apparent agency and agency by estoppel, and third-party beneficiary (but not the joint venture count) and gave Thompson leave to file an amended complaint.

Court applied state law to allow an oral modification of a written maritime contract and awarded attorney’s fees under state law for breach of the maritime contract; Couvillion Group, LLC v. Quality First Construction, LLC, No. 19-676, 2020 U.S. Dist. LEXIS 166261 (E.D. La. Sept. 11, 2020) (Vitter).

Opinion

Quality First contracted with the United States Army Corps of Engineers to relocate a hydraulic steel flood control gate along the Mississippi River in St. Bernard Parish, Louisiana. Quality First accepted the proposal of Couvillion Group to provide equipment and personnel for the project (including a crane barge), and the parties entered into a written subcontract. Quality First and Couvillion also entered into an agreement for the use of a houseboat to support the personnel working on the project. During the project, Quality First requested that Couvillion perform additional work, outside the scope of work in the subcontract, and when Quality First declined to pay for the additional work, Couvillion brought this suit for breach of contract. Judge Vitter first held that the subcontract was a maritime contract as the crane barge played a substantial role in the performance of the work. She also held that, when interpreting a maritime contract, federal admiralty law, rather than state law, applies. However, Judge Vitter qualified that principle by noting that state law may be applicable when it is not inconsistent with admiralty principles. Citing Louisiana law, Judge Vitter held that the written contract could be orally modified and that the evidence established an oral modification in this case. Thus, she awarded damages to Couvillion for the additional work that was performed. Judge Vitter also awarded pre-judgment interest as this is an admiralty case. Returning to Louisiana law, Judge Vitter ruled that Couvillion could recover attorney’s fees based on Louisiana’s open account statute. [Note that the Fifth Circuit, in which this case is pending, has denied recovery of attorney’s fees under state statutes in a maritime contract dispute. See, e.g., Texas A&M Research Foundation v. Magna Transportation, Inc., 338 F.3d 394, 405-06 (5th Cir. 2003)].

Cruise line was not on notice that a passenger would punch another passenger after being called out for cutting in line during a delay in disembarking the cruise ship; Fuentes v. Classica Cruise Operator Ltd., No. 19-cv-60883, 2020 U.S. Dist. LEXIS 167525 (S.D. Fla. Sept. 11, 2020) (Valle).

Opinion

When the GRAND CLASSICA cruise ship returned to West Palm Beach after a short cruise to the Bahamas, Reinier Fuentes was waiting in line to disembark, but the area was crowded because Customs and Border Patrol had stopped the disembarkation process and was not allowing passengers to leave. Fuentes noticed Clynt Hadley and three other passengers cutting in line next to Fuentes, and he told them to go to the back of the line. A security guard observed the verbal altercation and attempted to separate Fuentes and Hadley; however, Hadley punched Fuentes in the face while another member of Hadley’s group joined the fight. Fuentes brought this action against the cruise line to recover for injuries he sustained in the fight. As there had never been a physical altercation before this during the disembarkation process, Magistrate Judge Valle recommended that the cruise line’s motion for summary judgment be granted. She did not believe that having security guards on the scene established notice of a danger of physical altercation, and the crowding of the lobby because of the delay in disembarkation was not inherently dangerous.

Re-removal of seaman’s suit 18 years later based on the New York Convention was proper; Dahiya v. Talmidge International Ltd, No. 20-1527, 2020 U.S. Dist. LEXIS 169393 (E.D. La. Sept. 16, 2020) (Feldman).

Opinion

Vinod Kumar Dahiya, an Indian national who was serving as an engine cadet on the M/T EAGLE AUSTIN, was injured in international waters in 1999. He brought suit against the vessel interests in Louisiana state court in 2002, and the defendants removed the case to federal court pursuant the Convention on the Recognition and Enforcement of Foreign Arbitral Awards based on arbitration clause in his contract that called for arbitration in India or Singapore. Judge Feldman remanded the case, and the Fifth Circuit held that the remand order was unreviewable. Dahiya then obtained a judgment of $579,988 in state court, but the state appellate court reversed the award and ordered Dahiya to arbitrate his claims in India. The Indian arbitration resulted in a judgment of approximately $130,000 on January 25, 2020, and Dahiya thereafter moved the state court to reinstate the original judgment or to grant him a new trial. The vessel interests then removed the case a second time and also filed a suit in federal court to confirm the award. Holding that the second removal was timely and that the case was not removed on the same ground as the first removal, Judge Feldman held that the removal was permissible, and he denied the seaman’s motion to remand.

Motion to increase the per diem for maintenance was not the proper procedural device to request an increase in the maintenance rate paid to a seaman; In re LeBeouf Bros. Towing, LLC, No. 20-1314, 2020 U.S. Dist. LEXIS 170114 (E.D. La. Sept. 17, 2020) (Morgan).

Opinion

Daniel Goss claimed an injury from exposure to fumes while serving on the GONSOULIN 523. He brought suit against LeBeouf Towing in Louisiana state court, and LeBeouf filed this limitation of liability action. Goss filed a seaman’s claim in the limitation action that included Jones Act negligence, unseaworthiness, and maintenance and cure. He then filed a Motion to Increase Per Day Maintenance Payments, seeking $88.24 per day as opposed to the $40 per day that was being paid by LeBeouf. LeBeouf opposed the motion on the ground that there were fact questions whether maintenance was paid, whether Goss had reached maximum cure, and as to the daily amount. In denying the motion, Judge Morgan reasoned that there were two ways to address the maintenance rate before trial of the case. One is a motion for summary judgment. The other is a severance of the maintenance claim and an expedited trial by the court. Goss did not request a severance. Therefore, Judge Morgan suggested that Goss file a motion for summary judgment and comply with Fed. R. Civ. P. 56 and Local Rule 56.1.

Application of hull policy’s 1-year time limitation for suit barred most of the boat owner’s claims on his hull policy; GEICO Marine Insurance Co. v. Mandel, No. 19-3107, 2020 U.S. Dist. LEXIS 174000 (E.D.N.Y. Sept. 18, 2020) (Tomlinson).

Opinion

Lee Mandel insured his 52-foot SeaRay bridge boat with GEICO. Mandel first reported a problem with the starboard engine on the vessel in December 2015, and GEICO paid more than $92,000 for repairs to the engine. In 2016, Mandel reported additional damage to the starboard engine along with damage to the port engine. Before the end of the year, Mandel replaced both engines. GEICO made a final of payment of $17,391.51 on February 16, 2017, for damage to the starboard engine, and a payment of $23,238.11 on February 26, 2018, for the port engine. GEICO provided Mandel with a report of its findings and conclusions from its investigation on February 8, 2018, and that report advised that additional liability was declined. GEICO brought this declaratory judgment action against Mandel on May 24, 2019, and Mandel filed a counterclaim on July 1, 2019, asserting breach of contract and bad faith. Citing the one-year time limit for suit in its policies, GEICO moved for summary judgment on the counterclaim. Applying New York law to this marine insurance policy under Wilburn Boat, Magistrate Judge Tomlinson noted that New York courts enforce one-year limitations in policies provided they are reasonable and in writing. GEICO contended that the one-year period began to accrue at the time of the damage to the engines in 2015 and 2016, and the counterclaim was therefore untimely. Magistrate Judge Tomlinson disagreed with respect to the timing for the accrual, holding that the contract claim accrued at the time of the denial. Therefore, the contract claim for failure to pay for the cost of replacing the engines accrued in February 2018, but the contract claim was still time barred at the time the counterclaim was filed in July 2019. Similarly, the claim for negligent or inadequate investigation accrued by November 2017 and was time barred. However, Mandel’s claim that GEICO filed the suit in bad faith as opposed to invoking the appraisal and dispute process in the policies did not accrue until the suit was filed. Consequently, it was not time-barred.

Removal based on original admiralty jurisdiction was upheld when there was a forum-selection clause for federal courts; survival action asserted by the spouse of a passenger who died from COVID-19 was preempted by DOHSA; Maa v. Carnival Corp., No. 20-6341, 2020 U.S. Dist. LEXIS 172621 (C.D. Cal. Sept. 21, 2020) (Fischer).

Opinion

Toyling and Wilson Maa were passengers on the CORAL PRINCESS on a cruise from San Antonio, Chile. Both developed symptoms of COVID-19 during the cruise, and Wilson Maa died two hours after being taken ashore in Miami. Wilson Maa’s estate and Toyling Maa brought suit in California state court, and the cruise line removed the suit to federal court based on the original admiralty jurisdiction of the court, citing the forum-selection clause in their ticket requiring them to bring their lawsuit in federal court and waiving any right to seek a remand. The plaintiffs argued that removal was not the proper way to enforce a forum-selection clause, but Judge Fischer disagreed. He held that the federal court had original admiralty jurisdiction, and the protections asserted by the plaintiffs from the saving-to-suitors clause were procedural protections that could be waived. Concluding that the forum-selection clause was valid and that it effectively waived the plaintiffs’ procedural objection to removal, Judge Fischer denied the plaintiffs’ motion to remand. Judge Fischer then addressed the cruise line’s motion to dismiss the survival claim for the estate of Wilson Maa and held that, as Wilson Maa contracted COVID-19 while he was on the high seas, DOHSA preempted the survival claim under the general maritime law.

Differing versions from the vessel owner and ship repairer precluded summary judgments in dispute over work performed on vessel; NextWave Marine Systems, Inc. v. M/V NELIDA, No. 3:19-cv-1354, 2020 U.S. Dist. LEXIS 172477 (D. Ore. Sept. 21, 2020) (Immergut).

Opinion

Gerard Stascausky, owner of the M/V NELIDA, and his father entered into a contract with NextWave Marine Systems to replace the vessel’s hydrostatic transmission. The owner made the payments due under the contract, but, during a water test, the parties identified operational issues with the vessel that needed to be addressed. NextWave submitted an invoice for additional work, but the owner declined to pay it, and NextWave would not allow the owner to retrieve the vessel until its invoice had been paid. The Stascauskys then boarded the vessel and sailed it away without paying NextWave. They discovered some tools on the vessel and mailed them back to NextWave. NextWave then brought this action for breach of contract, quantum meruit, and conversion of its tools, and the owner counterclaimed for failing to complete the contracted work. Both parties filed motions for summary judgment, presenting their respective sides of the negotiations between the parties. As there were fact disputes whether the written contract integrated the entire agreement, whether there were subsequent contract modifications, and whether extra work outside of the contract would support a quantum meruit claim, Judge Immergut denied the motions for summary judgment. However, as the owner contended that he returned all the tools, and as NextWave was not able to reliably identify any specific tools that were still missing, Judge Immergut dismissed the conversion claim.

False answers about seaman’s medical history resulted in sanction of dismissal; Domingue v. Jantran, Inc., No. 4:18-cv-199, 2020 U.S. Dist. L          EXIS 172303 (N.D. Miss. Sept. 21, 2020) (Brown).

Opinion

Marilyn Domingue brought this suit against her employer, Jantran, Inc., for injuries she claimed to have sustained on February 28, 2017, in an accident while serving as a seaman on a vessel on the Mississippi River. In her answers to discovery requests and deposition, Domingue denied similar injuries and only provided the names of one doctor and a nurse together with an unnamed doctor who removed a cyst on her back. However, between 2013 and 2016, Domingue was treated by at least five doctors for neuropathy, back pain, hip pain, ataxia and gait disturbance, and radiating pain in her arms and hands. An MRI of her cervical spine in 2014 reflected multilevel degenerative disc disease and spondylosis. When Jantran discovered that the testimony and discovery responses were false, it moved for sanctions. Although recognizing that false answers are always improper, Judge Brown cautioned that they are only sanctionable under the court’s inherent authority when they are contumacious (knowingly false). Domingue did not dispute that her answers were false, but she argued that her conduct was not contumacious because she suffers from cognitive dysfunction and anterograde amnesia. However, Judge Brown answered that anterograde amnesia only impacts the ability to create new memories and should not have impacted Domingue’s ability to recall her medical treatment before the accident that caused the condition. Considering her memory loss to be “particularly convenient,” Judge Brown found that Domingue’s conduct satisfied the contumaciousness requirement. Finally, Judge Brown found that lesser sanctions than a dismissal would not adequately protect future proceedings as the conduct demonstrated that Domingue had no regard for the court’s authority or the integrity of the judicial process. Therefore, Judge Brown dismissed the suit with prejudice.

Discretionary function exception insulated the Coast Guard from liability for allegations of negligence in the rescue mission that was conducted on a vessel before it capsized; In re Moore, No. 1:17-cv-1310, 2020 U.S. Dist. LEXIS  172458 (D. Md. Sept. 21, 2020) (Grimm).

Opinion

This action against the United States was brought on behalf of the beneficiaries of Roger Grissom, Sr., who died when the vessel REEL INTIMIDATOR capsized in the Potomac River during a storm. The plaintiffs alleged that the Coast Guard acted negligently in its rescue operation and created a reliance interest for those onboard the vessel. They brought the suit under the Suits in Admiralty Act, and the United States argued that the case should be dismissed based on the discretionary function exception. In upholding the exception and dismissing the case, Judge Grimm explained that there are inherent stresses, difficulties, and other factors, such as limited resources and competing demands for those resources that must be considered in mounting a rescue. He would not second-guess decisions made in rapidly unfolding dangerous situations such as were presented in this case.

Federal court lacked subject matter jurisdiction over a dispute involving DEEPWATER HORIZON settlement funds and a lease and sublease for oyster bedding grounds in Louisiana; Robin v. Creighton-Smith, No. 20-1987, 2020 U.S. Dist. LEXIS 174315 (E.D. La. Sept. 22, 2020) (Fallon).

Opinion

Courtney Creighton-Smith leased oyster bedding grounds in Christmas Camp Lake, St. Bernard, Louisiana, from the state of Louisiana and subleased the grounds to her husband Van Robin. They had three children before they were divorced. After the lease was damaged by the Macondo/DEEPWATER HORIZON blowout, Creighton-Smith collected settlements of more than $1.4 million, and Robin brought this action in state court seeking to recover the settlement money on the ground that Creighton-Smith had promised to transfer the lease to their three children and had not sustained any damages because Robin maintained the lease and harvested the oysters. Creighton-Smith removed the case on the ground that there was jurisdiction as a federal question, under the Oil Pollution Act and the Outer Continental Shelf Lands Act, and under the original admiralty jurisdiction. Judge Fallon rejected each basis and remanded the case to state court. The dispute over the lease and settlement proceeds did not require the court to interpret the BP settlement agreement or federal law, and the connection to OPA or the OCSLA was too attenuated. Finally, neither the lease nor the sublease was a maritime contract even if oyster harvesting were considered a traditional maritime activity for maritime tort jurisdiction.

Judge declined to stay his decision to lift the stay in a limitation of liability action; In re Freedom Unlimited, No. 19-61655, 2020 U.S. Dist. LEXIS 175465 (S.D. Fla. Sept. 24, 2020) (Altman).

Opinion

Joshua Bonn, a deckhand who was injured on the M/Y FREEDOM, brought suit against the owner of the vessel and the owner of the boatyard where the vessel was undergoing repair. The vessel owner filed this limitation action, and the deckhand and boatyard brought claims in the limitation action.  The boatyard’s claims were for contribution and contractual indemnity. Judge Altman lifted the stay when Bonn filed stipulations as a single claimant, and the owner filed a motion to stay the lifting of the stay pending an appeal to the Eleventh Circuit. Noting that Bonn had filed appropriate stipulations to protect the owner against the contribution claim, and that the contractual indemnity claim was not subject to limitation under the personal contract doctrine and need not be addressed in the stipulation, Judge Altman declined to stay his lifting of the stay.

Federal court declined to overturn decisions of the National Pollution Funds Center that denied reimbursement of payments made on behalf of the responsible party after an oil spill; American Steamship Owners Mutual Protection and Indemnity Association, Inc. v. United States, No. 18-cv-2652, 2020 U.S. Dist. LEXIS 175796 (E.D.N.Y. Sept. 24, 2020) (Matsumoto).

Opinion

Boston Maritime Transport’s barge leaked oil into the water at the New York Terminal in Elizabeth, New Jersey, and Boston Maritime was designated the responsible party under the Oil Pollution Act. Boston Maritime and its insurers engaged in clean-up activities and engaged vendors to resolve third-party damage claims. After the expenses exceeded Boston Maritime’s limit of liability under OPA, Boston Maritime’s excess insurer sought reimbursement from the Oil Spill Liability Trust Fund, but the National Pollution Funds Center denied claims for Global Risk Solutions, which provided personnel, equipment, and materials to administer third-party claims, and for the claim paid for a shipyard’s losses caused in the disruption and interruption of its shipbuilding and repair. Concluding that the denials were not arbitrary and capricious, Judge Matsumoto held that the court would not set aside the decisions of the National Pollution Funds Center.

Federal court had subject matter jurisdiction over an untimely suit against the United States for deaths and injuries of boaters at the W.D. Mayo Lock and Dam #14 in the McClellan-Kerr Arkansas River Navigational System, but the case was dismissed for failure to state a claim; Farhat v. United States, No. 19-401, 2020 U.S. Dist. LEXIS 176687 (E.D. Okla. Sept. 25, 2020) (Shreder).

Opinion

William, Kristy, Physher, and Weston Farhat were boating in the McClellan-Kerr Arkansas River Navigational System approximately half a mile west of the W.D. Mayo Lock and Dam No. 14 when their boat’s motor failed and they were pulled under the gates, resulting in the deaths of William, Kristy, and Physher Farhat and injuries to Weston Farhat. Administrative claims were filed against the United States Army Corps of Engineers, but the Corps had not made a final determination on the claims before the plaintiffs filed this action under the Federal Tort Claims Act more than two years after the accident. The United States moved to dismiss the case for lack of jurisdiction, asserting that the case fell within the Suits in Admiralty Act, which has a two-year statute of limitations, arguing that the untimely filing was a jurisdictional defect. Alternatively, the United States moved to dismiss the case for failure to state a claim (based on the statute of limitations). Magistrate Judge Shreder agreed that the Suits in Admiralty Act was applicable with its two-year limitations period, but he did not agree that the failure to file within that time deprived the court of jurisdiction. Therefore, he addressed the plaintiffs’ argument that the United States was equitably estopped from asserting the statute of limitations on the ground that the Corps had induced the plaintiffs to believe that the statute of limitations was tolled until the Corps took action on their administrative claim. Noting that the defense was raised as a motion to dismiss, Magistrate Judge Shreder declined to consider the evidence in support of equitable tolling as it was not contained in the complaint. Therefore, he ordered that the case should be dismissed but that the plaintiffs should be given leave to file an amended complaint to assert the basis for equitable tolling.

From the state courts:

Third appeal of approval of worker’s settlement of his state and federal claims was barred by res judicata; Rosales v. Icicle Seafoods, Inc., No. S-17578, 2020 Alas. LEXIS  108 (Alaska Sept. 2, 2020) (per curiam).

Opinion

Hugo Rosales was injured on a fish-processing vessel in Alaska while working for Icicle Seafoods. Rosales filed a state workers’ compensation claim and hired an attorney who filed a maritime lawsuit against Icicle in Washington state court. Rosales and Icicle reached a global settlement of both matters in which Icicle paid Rosales $200,000, and Rosales waived future medical and re-employment benefits. The settlement was approved by the Alaska Workers’ Compensation Board after a hearing in which Rosales testified that he approved the settlement and understood that he would not receive any more workers’ compensation benefits. When Rosales later sought additional benefits, he asked the Board to modify or set aside the settlement, but the Board denied his request, and the Appeals Commission and Alaska Supreme Court affirmed the denial. Rosales then made another attempt to set aside the settlement, which was denied based on res judicata and affirmed on appeal. In his third attempt to set aside the settlement, Rosales argued that the Board did not have jurisdiction to approve the workers’ compensation settlement because it was based on money paid in the settlement for his Jones Act claim. He contended that the only set off of future benefits could result from the payment of maintenance and cure (about $14,600), and the remainder of the settlement was for damages that were available under the Jones Act and not under the workers’ compensation law, such as pain and suffering. Therefore, the compensation given in exchange for his future compensation claim was inadequate. The Alaska Supreme Court rejected Rosales’ argument, however, as he could either have made the argument or did make the argument in the prior efforts to overturn the settlement. Consequently, the prior decisions that upheld the settlement operated as res judicata to bar the third action to set aside the settlement.

Thanks to Monica Markovich for her help in preparing this Update.

Kenneth G. Engerrand
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Quote:

As is sometimes the case, the issue turns on the want of a comma and the omission of a simple word—“or,” or “and.” This case, and its sister case, remind us that the smallest of word and punctuation choices may matter the most.

Navigators Insurance Co. v. Rio Marine, Inc., No. H-19-461 (S.D. Tex. July 2, 2020) (Rosenthal).

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