October 2021 Longshore/Maritime Update (No. 269)
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, 2021. The National Average Weekly Wage is $863.49. Consequently, the maximum compensation rate for total disability and death for the period beginning on October 1, 2021, and extending to September 30, 2022, is $1,726.98, and the minimum compensation rate (not always the minimum rate) payable for disability incurred after October 1, 2021, is $431.75 per week. Cost-of-living adjustments effective on October 1, 2021, are 5%, using the statutory cap for the first time since 1984.
On August 28, 2021, a jury in the Superior Court of Rabun County Georgia issued its verdict finding that Malibu Boats West, Inc. and Malibu Boats, LLC negligently failed to warn of a hazard posed by the 2000 Malibu Response LX and that was a proximate cause of the death of Ryan Batchelder. Malibu Boats West, Inc. was assessed 10% of the fault, and Malibu Boats, LLC was assessed 15% of the fault. The jury awarded $80 million in damages. The jury also found that punitive damages should be awarded against Malibu Boats West, Inc. and Malibu Boats, LLC in the amounts of $40 million and $80 million, respectively. Applying the apportioned fault, Judge Claudell entered judgment in the amount of $48 million against Malibu Boats West, Inc. and $92 million against Malibu Boats, LLC. The suit arose from the death of a seven-year old passenger on a vessel when the bow of the vessel became swamped by water while navigating on Lake Burton in North Georgia. Batchelder v. Malibu Boats, LLC, No. 2016-cv-0114-C, Superior Court of Rabun County, Georgia.
In our April 2021 Update we advised that the Supreme Court granted the petition for a writ of certiorari in Servotronics, Inc. v. Rolls-Royce PLC, No. 20-794, on the issue “whether the discretion granted to district courts in 28 U.S.C. § 1782(a) to render assistance in gathering evidence for use in ‘a foreign or international tribunal’ encompasses private commercial arbitral tribunals.” The issue was fully briefed and oral argument was scheduled for October 5, 2021. On September 8, 2021, counsel for Servotronics advised the Court that Servotronics anticipated filing a dismissal motion, and the case was removed from the Court’s argument calendar.
On September 9, 2021, a majority of the en banc Fifth Circuit held that a tool pusher on an offshore rig, who supervised 12 to 13 employees and earned $200,000 a year (twice the salary cap for overtime) while working about half the days of the year was entitled to overtime pursuant to the Fair Labor Standards Act. See Hewitt v. Helix Energy Solutions Group, No. 19-20023, 2021 U.S. App. LEXIS 27215 (5th Cir. Sept. 9, 2021) (en banc) (Ho). Six of the eighteen judges dissented.
On September 20, 2021, the Federal Trade Commission, Grand Bahama Cruise Line, and others submitted a settlement agreement to the Middle District of Florida with respect to telemarketing practices. Federal Trade Commission v. Grand Bahama Cruise Line, LLC, No. 6:20-cv-00052.
For the second time, the federal court in Florida dismissed the False Claims Act qui tam case filed by 84Partners against General Dynamics Electric Boat Corp. and Newport News Shipbuilding, asserting that the defendants provided non-conforming parts and services to the Navy for its nuclear submarines. Concluding that 84Partners failed to plead the existence and submission of a false claim, Judge Corrigan dismissed the suit with prejudice. United States ex rel. 84Partners v. Huntington Ingalls Industries, No. 3:14-cv-1256, 2021 U.S. Dist. LEXIS 180754 (M.D. Fla. Sept. 22, 2021) (Corrigan).
On September 24, 2021, Judge Casper issued her decision from a bench trial on the suit by passengers who purchased European river cruises from Vantage Travel but were not provided portions of the river cruise when the bow thruster on the MS RIVER VOYAGER malfunctioned. Although acknowledging the disappointment of the passengers in not cruising according to the original itinerary, Judge Casper did not find that the passengers suffered a legally cognizable injury under Massachusetts law. Hebert v. Vantage Travel Service, Inc., No. 17-cv-10922, 2021 U.S. Dist. LEXIS 182997 (D. Mass. Sept. 24, 2021).
On the LHWCA Front . . .
From the federal appellate courts:
Surveyor who fell on vessel did not satisfy the Scindia duties for his Section 905(b) claim; Patil v. Amber Lagoon Shipping GmbH & Co., No. 21-30004, 2021 U.S. Dist. LEXIS 26221 (5th Cir. Aug. 31, 2021) (per curiam).
Pradeep Patil was contracted to assess the watertightness of the hatch covers on the M/V AMBER LAGOON. He tested several hatch covers on several holds, but when he came to the Number 4 hold, the port access ladder was blocked by cargo containers. He crossed to the starboard side of the hold, which required Patil to scale a three-foot gap from one ledge to another. His foot slipped during the process and he fell six feet to the deck of the vessel. Patil was paid compensation under the LHWCA by his employer’s insurer and brought this action against the vessel owner under Section 905(b) of the LHWCA. He alleged that a slippery foreign substance on the hold caused his foot to slip. He did not see the slippery spot, but he observed a spot of lubricant on his steel-toed boots in the days following the accident. His inspection companion during the work, Sebastian Kedziora, the vessel’s second officer, likewise did not observe any hazardous foreign substance, even though it was daylight at the time of Patil’s fall. The vessel owner moved for summary judgment, and Judge Feldman addressed each of the Scindia duties. Patil argued that the vessel owner violated the active control duty by obstructing the access to the ladder that Patil would have ideally used to get to the hatch cover. However, Judge Feldman held that making Patil’s job more difficult was not the same as inserting the vessel owner into Patil’s activities. With respect to the duty to intervene, there was no evidence that the vessel owner had actual knowledge that it could not rely on the contractor to protect Patil. Finally, noting that neither Patil nor Kedziora saw any foreign substance, Judge Feldman held that there was no evidence that the owner failed to exercise ordinary care to present a ship on which an experienced worker like Patil could safely perform his tests. Accordingly, Judge Feldman granted the vessel owner’s motion for summary judgment. (See January 2021 Update). Patil appealed to the Fifth Circuit, which affirmed the summary judgment. The court agreed that the vessel was turned over to Patil in a reasonably safe condition based on Kedziora’s testimony that crewmembers examined the area of inspection for grease and cleaned the surfaces before the testing began. Additionally, an experienced surveyor should reasonably have anticipated encountering slip hazards in traversing the gap between the ledges. Finally, there was no “non-speculative” evidence that there was a slip hazard in the area as neither Patil nor Kedziora observed a foreign substance at the site of the accident (“his turnover claim rests on an unsupported assumption”). With respect to the Scindia active-control duty, Patil argued that it was the vessel’s cargo operations that caused the ladder to become obstructed with cargo containers so that he had to attempt the dangerous crossing that resulted in his fall. However, Kedziora attested that all cargo operations, including the loading and placement of containers, were under the control of the stevedoring company and that the vessel crew did not maintain active control over Patil’s work. Kedziora’s involvement was to follow Patil around and mark areas of leakage identified by Patil and not to set up or operate any of the testing equipment. Additionally, even if the vessel crew had been actively involved in the testing work, the active-control claim would still fail as there was no evidence of the existence of a hazard (other than the “unsupported speculation” that there was grease at the site of the accident).
Employer/carrier were not responsible for claimant’s right knee surgery when the referral to the doctor (denied by the carrier) was for treatment to the claimant’s left knee; use of Section 910(a) to calculate the average weekly wage of the claimant who worked more than 260 days was proper; Martin v. Sundial Marine Tug & Barge Works, No. 20-70147, 2021 U.S. App. LEXIS 26499, 26507 (9th Cir. Sept. 2, 2021) (per curiam; Hurwitz).
Rick J. Martin sustained an injury while employed by Sundial Marine as a shipyard worker in Portland, Oregon, and was treated by his first choice of orthopedic surgeon, Dr. Michael Johnson, for bilateral knee pain. Dr. Johnson referred Martin to a microfracture surgery specialist, Dr. Timothy Bollom, for treatment of Martin’s left knee, but the carrier denied the treatment. Dr. Bollom eventually performed surgery on Martin’s right knee, and the carrier declined to pay for the surgery. Administrative Law Judge Berlin denied the medical claim on the ground that Martin had not requested that the employer/carrier provide him with the requested treatment as Dr. Johnson had not referred Martin to Dr. Bollom for treatment of the right knee. Additionally, Judge Berlin ruled that the surgery to Martin’s right knee was not reasonable and necessary. Agreeing with Judge Berlin that no referral was made for the right knee surgery, the Ninth Circuit held that Judge Berlin did not err in denying medical benefits (the Ninth Circuit did not have to address whether the surgery was reasonable and necessary). In a separate opinion, Judge Hurwitz, writing for the Ninth Circuit, held that Judge Berlin did not err in applying Section 10(a) to calculate Martin’s average weekly wage. Martin earned $47,498.41 in the 52 weeks before his injury. He usually worked five days a week, but he worked overtime on weekends when it was available. The work records reflected that Martin worked 264 days, which was five days a week for 52 weeks plus 4 additional days. Although Martin admitted he was a five-day worker, he argued that his average weekly wage should be calculated based on Section 10(c) because of the additional days on which he worked. Judge Hurwitz reasoned that the starting point is the presumptive application of Section 910(a). He then addressed whether it was unreasonable or unfair to apply Section 910(a) when the employee worked more than 260 days. Concluding that the statutory presumption was not rebutted as a matter of law simply because Section 910(a) would slightly underestimate earning capacity (because the claimant worked in excess of 260 days), Judge Hurwitz held that Judge Berlin did not err in using Section 910(a) to calculate Martin’s average weekly wage.
From the federal district courts:
Judge considered briefing to be insufficient to rule whether the LHWCA preempted a longshore worker’s claims under state law against the owner/operator of a vessel on which he asserted that he contracted COVID-19; suit alleging COVID-19 exposure on vessel did not satisfy $75,000 requirement for diversity jurisdiction; Roberts v. Philadelphia Express Trust, No. 4:20-cv-236, 2021 U.S. Dist. LEXIS 166226 (S.D. Ga. Sept. 1, 2021) (Baker); Gilkes v. Philadelphia Express Trust, No. 4:20-cv-235, 2021 U.S. Dist. LEXIS 166209 (S.D. Ga. Sept. 1, 2021) (Baker).
Leonard Roberts is a longshore worker for the Georgia Ports Authority in Savannah. Roberts brought this suit in state court in Chatham County, Georgia, alleging that, while was working on the PHILADELPHIA EXPRESS, a seaman on the vessel was known to have COVID-19 but the vessel did not fly its quarantine flag and the longshore workers were not advised of the situation until after the vessel left port. Roberts claimed that he contracted COVID-19, and it is his belief that he contracted the disease because of his exposure on the vessel. He asserted causes of action against the owner and operator of the vessel for fraud and deceit and sought entitlement to attorney fees and punitive damages under Georgia law. Roberts argued that the defendants knew, but failed to warn him, that there was a risk that he would be exposed to COVID-19 while working on the vessel. The defendants removed the case to federal court and moved to dismiss the complaint on the ground that the claims were preempted by the LHWCA; however, Judge Baker noted that the defendants did not specifically address the issue whether the allegations implicated an “injury” as defined by the LHWCA. Instead, the defendants averred that Roberts could not argue that exposure to an infectious agent on the vessel during longshore operations was outside the core duties governed by Section 905(b), resulting in preemption of his claims. Similarly, the only case cited by the defendants did not offer any guidance on the issue whether Roberts’ allegations implicated an injury covered by the LHWCA. Roberts’ briefing also failed to address whether his alleged injuries fell outside the scope of the LHWCA so as to avoid its preemptive force. Consequently, Judge Baker granted Roberts the opportunity to recast his complaint and the defendants the opportunity to file another motion to dismiss after the filing of the amended complaint or after the time to file the amended complaint expired if no amended complaint is filed. Thanks to Matthew Ammerman of Houston, Texas for bringing this case to our attention.
Lester Gilkes, another longshore worker for the Georgia Ports Authority in Savannah, also brought a suit in state court in Chatham County, against the owner and operator of the PHILADELPHIA EXPRESS. He asserted that he suffered lost wages and was stigmatized in his work as a potential COVID-19 carrier, but he did not allege that he had contracted the virus. The defendants removed the case based on diversity, and Gilkes moved to remand the case on the ground that the amount in controversy was not $75,000 (noting the statement in the complaint that Gilkes sought no more than $74,500). The defendants noted that Gilkes pleaded fraud and deceit under Georgia law, and that Georgia law allowed recovery of punitive damages. However, Judge Baker did not consider punitive damages in his analysis as Gilkes did not plead for punitive damages. Judge Baker did consider Gilkes’ request for attorney fees, but did not consider the evidence to be sufficient to meet the $75,000 requirement for the amount in controversy, particularly in light of Gilkes’ statement that he was not seeking more than $74,500. Consequently, Judge Baker granted the motion to remand.
Removal of suit on behalf of shipyard worker was untimely when earlier discovery answers provided the information to support removal under the Federal Officer Removal Statute; Warren v. 3M Co., No. 2:20-cv-3258, 2021 U.S. Dist. LEXIS 171127 (D.S.C. Sept. 9, 2021) (Hendricks).
Cynthia Warren brought this action in state court in Charleston County, South Carolina, against product manufacturers and suppliers, seeking to recover for the death of her husband, Bobby Warren, from mesothelioma from exposure to asbestos while he worked at the Charleston Naval Shipyard. Westinghouse removed the suit on September 11, 2020, under the Federal Officer Removal Statute, arguing that discovery submitted by the plaintiff on August 12, 2020, provided the first unequivocal notice that Bobby Warren had exposure from Westinghouse turbines that were designed and manufactured by Westinghouse while acting under the Navy’s supervision and control. Judge Hendricks reviewed the plaintiff’s discovery answers from April 8, and noted that the plaintiff asserted that Warren was exposed to asbestos from insulation, gaskets, and packing that included turbines manufactured by Westinghouse. Additionally, the answers contained references to employment records that identified vessels on which Warren worked, which included Navy vessels. Concluding that Westinghouse had unequivocal facts to alert it of a claim of federal officer jurisdiction more than 30 days before its removal, Judge Hendricks held that the removal was untimely and remanded the case to state court.
Disputed evidence that contractor located port-a-potties and hand-washing stand within the fall zone from a vessel that was being repaired at a shipyard was sufficient for the judge to deny summary judgment on the shipyard worker’s negligence claim; Gaxiola v. United States, No. 19-cv-947, 2021 U.S. Dist. LEXIS 174644 (S.D. Cal. Sept. 14, 2021) (Robinson).
Adolfo Gaxiola, a waysman employed by shipyard National Steel & Shipbuilding in San Diego, California, was injured when the crew of the USS BOXER dropped a trashcan dolly on Gaxiola’s head while he was standing on the dock near the vessel using the port-a-potties and hand-washing stand delivered by Diamond Environmental Services. Gaxiola brought this action against the United States, owner of the vessel, and the United States filed a third-party action against Diamond, asserting that Diamond was negligent in its placement of the equipment in the “fall zone” of the vessel. After Gaxiola added Diamond as a defendant, Diamond moved for summary judgment on the claims, asserting that it was not negligent because it delivered the equipment before the vessel had moored. Judge Robinson noted that the testimony was conflicting as to the identity of the party that placed the equipment in the fall zone, so he denied summary judgment to Diamond.
Shipyard worker’s beneficiary failed to overcome the bare-metal defense with respect to exposure to boilers on naval vessel; Phelps v. CBS Corp., No. 17-cv-8361, 2021 U.S. Dist. LEXIS 176524 (S.D.N.Y. Sept. 16, 2021) (Nathan).
John Grimes, now deceased, worked at the Brooklyn Navy Yard as an apprentice coppersmith from 1961 to 1963 in a land-based shop and on warships. Before his death he recalled working on the USS CONSTELLATION. Foster Wheeler manufactured the boilers for the CONSTELLATION, but Grimes did not recall whether the boilers contained asbestos or whether Foster Wheeler required asbestos-containing products for its boilers. Grimes’ domestic partner continued this suit against product suppliers after Grimes died of mesothelioma, and Foster Wheeler moved for summary judgment. Judge Nathan first held that maritime law applied to the suit as the locality test (vessel in drydock on navigable waters) and connection test (worker injured during repair and/or maintenance of a completed vessel) were satisfied. The plaintiff argued that Foster Wheeler was liable for failing to warn about the hazards of third-party asbestos-containing products under the DeVries exception to the bare-metal defense. Judge Nathan found, however, that the boilers on the CONSTELLATION did not require incorporation of asbestos-containing insulation. Consequently, she did not have to address the other prongs of DeVries (although she also concluded that the plaintiff failed to make a sufficient showing of the other prongs). Judge Nathan therefore granted summary judgment to Foster Wheeler.
LHWCA constitutionally barred negligence action against shipyard by beneficiaries of electrician who died from mesothelioma allegedly caused by exposure to asbestos between 1969 and 1977; Barrosse v. Huntington Ingalls Inc., No. 20-2042, 2021 U.S. Dist. LEXIS 182939 (E.D. La. Sept. 24, 2021) (Vitter).
Ronald J. Barrosse claimed that he suffered from mesothelioma from exposure to asbestos while working as an electrician at Avondale’s shipyard on destroyer escorts for the Navy. He brought this action under Louisiana state law in the Civil District Court for the Parish of Orleans, Louisiana, against Avondale and several product suppliers, and the case was removed to federal court by Avondale under the Federal Officer Removal Statute. After Barrosse died, his surviving spouse and children maintained the action. Avondale moved for summary judgment on the basis that the exclusive-remedy provision of the LHWCA preempted the claims under state law. A pivotal issue was whether the pre- or post-1972 LHWCA applied, and Judge Vitter followed the decisions from other judges in the Eastern District of Louisiana, holding that the version in effect at the time of the manifestation, not exposure, governed (post-1972 Amendments). Consequently, Barrosse’s exposure on ships and adjoining areas was covered under the LHWCA, and that coverage extended to exposure in his car and at home to dust on his clothes as it arose out of his employment. Judge Vitter then addressed whether the LHWCA was the exclusive remedy in light of the concurrent jurisdiction that is permitted between the LHWCA and state workers’ compensation statutes by the Supreme Court in the Sun Ship case for the twilight zone where both acts can apply. This case was not brought seeking state workers’ compensation benefits, however, and Judge Vitter held that the exclusive remedy provision in the LHWCA preempted the state negligence claims against Avondale. Finally, Judge Vitter rejected the plaintiffs’ argument that the application of the 1972 Amendments to exposure before 1972 was unconstitutional, holding that Congress’ action was not irrational or arbitrary.
And on the maritime front . . .
From the federal appellate courts:
Watch Your Step warning signs near a step were not evidence that the cruise line had notice of inadequate lighting; Rios v. MSC Cruises S.A., Nos. 20-14811, 21-10198 (11th Cir. Sept. 9, 2021) (per curiam).
Aida Rios tripped and fell on a step up onto an apron stage at the Haven Lounge on the MSC SEASIDE. She brought this action against the cruise line asserting that it was negligent for the poor lighting in the lounge. Rios engaged a lighting expert, engineer Thomas G. Burtness, and MSC moved to strike his opinion on the ground that he had not personally inspected the ship and his testimony was not reliable. As he relied on photographs and videos taken by Rios’ other expert and acknowledged that photos and videos were unreliable indicators of actual lighting, Judge Ungaro struck Burtness’s report and testimony. The cruise line moved for summary judgment on several grounds, including that it did not have actual or constructive notice of the dangerous condition. In opposition, Rios submitted the affidavit of former MSC passenger Joseph DiJoseph, who described a similar incident. She also submitted evidence of “Watch Your Step” warning signs as evidence of MSC’s notice of the dangerous condition. Judge Ungaro rejected Rios’s arguments. First, Judge Ungaro declined to consider the affidavit because it was inadmissible hearsay. The statements made in the affidavit were from passenger Kathleen DiJoseph to passenger Joseph DiJoseph. Even if the affiant had testified in court, his relating of the statements of Kathleen DiJoseph were inadmissible. Moreover, the affidavit only described the condition and did not provide any evidence that the condition was reported to MSC. Thus, it did nothing to indicate that MSC was on notice of the condition. With respect to the warning sign, Judge Ungaro noted that such signs can be evidence of notice of a dangerous condition, but there must be a connection between the warning and the danger. As the complaint was for improper lighting and the sign did not reflect that there was any danger related to lighting, Judge Ungaro held that Rios failed to establish that MSC had notice of a danger from the lighting and granted summary judgment to MSC. (See January 2021 Update). Rios appealed to the Eleventh Circuit which first addressed Rios’ argument that Judge Ungaro erred in failing to allow her to amend her complaint almost six months after the deadline for amended pleadings. In the amendment Rios sought to add to the claim of inadequate lighting a claim that the design of the step itself created a dangerous condition. Rios argued that the justification for the late amendment was that she had not received an expert report on the dangerous condition of the step until after the deadline. However, the Eleventh Circuit rejected that argument, noting that the fact that discovery revealed additional theories to support her negligence claim did not establish good cause for a belated amendment after the established deadline. Turning to the summary judgment, Rios argued that Judge Ungaro misinterpreted her complaint to assert only the inadequate lighting as the basis for the negligence action and that she had given sufficient notice of the defective condition of the step. The Eleventh Circuit disagreed, reasoning that the allegations of design in the step arose for the first time in the late motion to amend the complaint. On the merits, the Eleventh Circuit held that the warning signs were evidence of notice of the condition of the step. However, the condition of the step was not the basis of the negligence allegation, which focused on the lighting. There was no evidence that the warning was intended to alert passengers of a danger of inadequate lighting. Thus, in the absence of notice of the inadequate lighting, the summary judgment was proper. Finally, as the court affirmed the summary judgment on the lack of notice of improper lighting, there was no reversible error in the court’s striking of the opinion of Rios’ expert on lighting.
Sole shareholder in corporation that owned yacht did not have standing to challenge forfeiture of yacht to the United States or to assert an innocent owner defense; claim of judgment creditor of Nigeria to proceeds of yacht sale was barred by sovereign immunity; United States v. M/Y GALACTICA STAR, No. 20-20471 (5th Cir. Sept. 13, 2021) (Davis).
The United States brought this civil forfeiture action against the M/Y GALACTICA STAR, a yacht allegedly purchased with profits from oil and gas contracts in Nigeria that were procured by bribes. The Federal Republic of Nigeria filed a claim in the forfeiture action, and LightRay Capital filed a claim to the assets as the purchaser of all of the stock of the company that owned the yacht. Enron Nigeria also filed a claim against any recovery by the Federal Republic of Nigeria based on an $11 million judgment that Enron Nigeria obtained against the Republic. Judge Ellison rejected the claims of LightRay Capital and Enron Nigeria, and the Fifth Circuit agreed. Judge Davis first held that LightRay’s ownership of stock in the vessel owner did not give it an interest in the seized assets of its subsidiary. Similarly, LightRay could not assert an innocent owner defense because, under basic principles of American corporate law, the corporation and its shareholders are different entities. The Federal Republic of Nigeria opposed the claim of Enron Nigeria on the ground that the Republic was not engaged in commercial activity in the United States that would waive its defense of sovereign immunity. Enron Nigeria argued that the Republic’s encouragement of the United States to sell the GALACTICA STAR was commercial activity in the United States, but Judge Davis held that the United States was the party that used the property in commercial activity, not the Federal Republic of Nigeria. Accordingly, the Fifth Circuit held that Nigeria had not waived its sovereign immunity and there was no jurisdiction to consider Enron Nigeria’s arguments on the merits.
Ninth Circuit affirmed rulings in the long-running Barnes litigation that Henry, owner of the bankrupt company that owned the vessel, was not a defendant in the maintenance and cure trial, that the district court did not err in prohibiting Barnes’ witnesses from testifying as experts because they were not disclosed, that the commercial use permit was not an appurtenance of the vessel, and that the district court did not err in calculating Barnes’ maintenance and cure award; Barnes v. Sea Hawaii Rafting, LLC, Nos. 18-17154, 19-15646, 19-16484, 19-16910, 19-17613, 2021 U.S. App. LEXIS 28713 (9th Cir. Sept. 22, 2021) (per curiam).
The saga of Barnes’ injury claims against Sea Hawaii Rafting, his employer and owner of the TEHANI, and the owner of Sea Hawaii, Kristin Henry, continued with five appeals to the Ninth Circuit after the trial of the maintenance and cure claim. As the litigation continues, there was no appellate jurisdiction over several of the appeals. The Ninth Circuit did have jurisdiction over the decision from the bench trial of the maintenance and cure trial and affirmed Judge Kay’s decision. That included the calculation of the award, the holding that Henry was not a defendant in that trial, and the decision to exclude two of Barnes’ witnesses from testifying as expert witnesses because Barnes did not timely disclose those witnesses. The Ninth Circuit held that it had jurisdiction over the issue whether the commercial use permit for the TEHANI was an appurtenance of the vessel for the in rem liability of the TEHANI for the maintenance and cure claim, and the court affirmed Judge Kay’s holding that the permit was not an appurtenance of the vessel as the permit was issued to the owner and was not transferrable with the vessel. Although there were proceedings in both the district court and the bankruptcy court, the Ninth Circuit held that the district court had exclusive jurisdiction over the TEHANI (in rem) and did not err in its disbursement of funds in that proceeding. Finally, the Ninth Circuit held that the bankruptcy court did not err in discharging Henry, noting that post-petition conduct by Henry was not subject of the discharge.
Supreme Court’s decision in Vaughan v. Atkinson does not require courts to construe disputed medical evidence in the seaman’s favor in maintenance and cure cases; Eleventh Circuit affirmed judge’s finding that the employer established a McCorpen defense to the seaman’s maintenance and cure claim; Witbart v. Mandara Spa (Hawaii), LLC, No. 20-13449 (11th Cir. Sept. 28, 2021) (per curiam).
Sarabeth Witbart, a cosmetologist in the spa on the cruise ship AMERICA’S PRIDE OF AMERICA, brought this suit against the cruise line under the Jones Act and general maritime law (failure to provide maintenance and cure), seeking to recover after she suffered from pain in her neck. Her employer, Mandara Spa, asserted a McCorpen willful concealment defense, and Judge Gayles held an eight-day bench trial, finding that Witbart intentionally misrepresented and concealed her preexisting condition before her employment, that the condition was material to the decision to hire her, and that there was a causal connection between the withheld condition and the condition for which she sought recovery in the suit. On appeal, Witbart argued that Judge Gayles erred in not applying the decision of the Supreme Court in Vaughan v. Atkinson, requiring courts to construe disputed medical evidence in the seaman’s favor in maintenance and cure cases. The Eleventh Circuit rejected the argument as an incorrect reading of Vaughan, stating: “Vaughan did not state that all ambiguities, or even evidentiary ambiguities, were to be resolved in every seaman’s favor. Such a reading would strip district courts of their ability to make credibility determinations when confronted with conflicting evidence during a bench trial. Indeed, this Court ‘must give due regard to the trial court’s opportunity to judge the witnesses’ credibility.’” Concluding that there was no reversible error in Judge Gayles’ findings or rulings, the Eleventh Circuit affirmed the judgment denying Witbart’s maintenance and cure claim.
From the federal district courts:
This litigation arises from the collision between Marquette’s vessel, the KIEFFER BAILEY, which was proceeding down the Mississippi River near Chalmette, Louisiana, and Navigation Maritime’s vessel, the STRANDJA, which was un-anchoring in the river. The starboard anchor of the STRANDJA was still on the river bottom, causing the vessel to swing in front of the KIEFFER BAILEY. Marquette brought this action against Navigation Maritime in federal court in New Orleans, and Navigation Maritime filed a counterclaim. Marquette answered the counterclaim and filed a third-party action against Crescent Towing, owner of the tug that was assisting the STRANDJA, the M/V PROVIDENCE. Marquette filed a motion for summary judgment that the STRANDJA was not restricted in her ability to maneuver under Inland Rule 18, which requires that power-driven vessels keep out of the way of vessels that are restricted in their ability to maneuver. Rule 3(g) provides that a vessel restricted in its ability to maneuver is “a vessel which, from the nature of her work, is restricted in her ability to maneuver as required by these Rules and is therefore unable to keep out of the way of another vessel.” The STRANDJA was not engaged in any of the enumerated examples of restrictions on maneuverability, such as laying pipeline and dredging, but its owner argued that a vessel with an anchor down is “very restrained” in its maneuverability. Citing an Eleventh Circuit case explaining that “restricted in her ability to maneuver” is a “term of art” based on work activities that restrict a vessel’s ability to maneuver, Chief Judge Brown found that heaving anchors is not “work” as defined by Rule 3(g). Consequently, she granted partial summary judgment that the STRANDJA was not restricted in her ability to maneuver under Rule 18. Crescent Tug also moved for summary judgment as its tug followed all orders of the STRANDJA, and the pilot of the STRANDJA confirmed that the tug did not contribute to the collision. Therefore, Chief Judge Brown granted summary judgment to Crescent Towing.
Judge declined to bifurcate liability and damages in limitation action but lifted the stay once proper stipulations were filed as a single claim; In re N&W Marine Towing, LLC, Nos. 2:20-cv-02390, 2:21-cv-00150, 2021 U.S. Dist. LEXIS 162403 (E.D. La. Aug. 27, 2021) (Guidry).
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 owner of the NICHOLAS filed a limitation action in federal court in New Orleans, and Wooley brought an action in state court in New Orleans that was removed to federal court. Wooley moved for bifurcated trials 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 such that 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 then settled with the only other claimant in the limitation action and took an assignment of that party’s indemnity and contribution claims against the owner of the NICHOLAS. Wooley filed a motion to lift the stay in the limitation action with stipulations as the 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.
Charterer could not arrest vessel as security for arbitration as English law did not provide a lien on the vessel; however, the vessel could be attached as the charterer’s claim was ripe; Integrity Bulk APS v. CS SATIRA M/V, No. 21-01114, 2021 U.S. Dist. LEXIS 162406 (E.D. La. Aug. 27, 2021) (Milazzo).
Satira Shipping time chartered the CS SATIRA M/V to Integrity Bulk, which sub-chartered the vessel to Pacific Basin Handysize. Problems arose during the charter, and Integrity Bulk incurred expenses to correct them. Additionally, Pacific Basin withheld hire owed to Integrity Bulk. The time charter between Satira Shipping and Integrity Bulk contained an English choice-of-law provision and a London arbitration clause. Claiming expenses and overpaid charter hire, Integrity Bulk arrested and attached the SATIRA in federal court in New Orleans to obtain security for the arbitration. As the charter party designated the application of English law, which did not provide for a lien, Judge Milazzo vacated the arrest of the vessel. Satira argued that the attachment should also be vacated because Integrity Bulk’s claims sounded in indemnity and were not ripe pending resolution of its claims with Pacific Basin. Judge Milazzo disagreed, reasoning that Integrity Bulk brought claims to recover from Satira Shipping for damages sustained by Integrity Shipping as a result of alleged breaches by Satira Shipping of the time charter. As the claims were for out-of-pocket losses and not demands for indemnity, they were ripe and the attachment could proceed.
Claimant in limitation action could not merely file a counterclaim without seeking leave to amend; In re Hanson Marine Properties, Inc., No. 2:20-cv-958, 2021 U.S. Dist. LEXIS 163497 (M.D. Fla. Aug. 30, 2021) (Chappell).
Kevin Hyma rented a pontoon boat from Hanson Marine Properties and was operating the boat when Kayley A. Prinzi was thrown overboard from the bow, resulting in her right leg being severed by the propeller. Hanson Marine filed this limitation action, and Prinzi filed an answer, 31 affirmative defenses, and a claim in the limitation action on February 12, 2021. The Case Management and Scheduling Order provided that July 14, 2021 was the deadline to file motions to add or join parties or amend pleadings. Prinzi originally wanted to litigate her damage claim in state court. However, after discussion with counsel she decided to litigate all matters, including liability and damages, in the federal proceeding. Therefore, on July 14, 2021, Prinzi filed an amended answer and a standalone counterclaim against Hanson Marine (without seeking leave of court). When Hanson Marine objected, Prinzi argued that she needed to set forth the extent of her damages as she had not done so in the original claim. As the counterclaim and amended answer were filed without leave of court, and as a counterclaim can only be asserted in an answer, Judge Chappell struck them. In her response, Prinzi urged the court to give her leave to amend her claim, but Judge Chappell declined to construe the response as a motion for leave to amend. Judge Chappell ordered Prinzi to file a motion for leave to amend her answer with a counterclaim, following conferral with counsel.
Allegedly false statements on bill of lading before cargo shipped and after cargo arrived did not satisfy locality test for admiralty tort jurisdiction; court had supplemental jurisdiction over the tort claims based on the anchor admiralty claim for breach of contract; NVOCC stated a claim for fraud but not negligent misrepresentation and was entitled to recover consequential damages on its breach of contract claim; Cargo Logistics International, LLC v. Overseas Moving Specialists, Inc., No. 20-cv-2130, 2021 U.S. Dist. LEXIS 163988 (E.D.N.Y. Aug. 30, 2021) (Brodie).
Overseas Moving, owned and controlled by Boaz Aviani, booked a shipment from New York to Ashdod, Israel with non-vessel-owning common carrier Cargo Logistics. The description of the cargo was “202 pieces of medical and office equipment. ‘Personal Use Only Not for Resale No Commercial Value.’” Cargo Logistics then shipped the cargo on a ship operated by Zim Shipping Line. When the cargo arrived in Ashdod in August 2017, the consignee did not accept the cargo, and Cargo Logistics made multiple attempts to have the cargo either claimed or abandoned and destroyed so that the container could be returned to Zim. Overseas Moving represented to Cargo Logistics that the consignee was gathering documents necessary for customs clearance. The problem with customs clearance was allegedly that the cargo was misleadingly described as for personal use when it was actually business property. As the property was not released, Zim charged Cargo Logistics demurrage and would not do anything with the container and cargo until it received an abandonment letter signed by Overseas Moving. It was not until May 2019 that Overseas Moving agreed to abandonment of the cargo. Cargo Logistics brought this suit, seeking to recover $165,140 in costs and $250,000 in lost profits because Zim would not ship cargo for Cargo Logistics. The suit was based on admiralty jurisdiction for breach of contract, negligent misrepresentation, and fraud. Judge Brodie first addressed the court’s jurisdiction, noting that it had admiralty jurisdiction over the claims arising from the contract of carriage. Judge Brodie held that the tort claims of negligent misrepresentation and fraud failed the locality test for admiralty jurisdiction because the allegedly false statements were made on the bills of lading before the cargo was shipped and in emails to Cargo Logistics after the cargo arrived in Ashdod. However, as the claims for negligent misrepresentation and fraud arose out of the same events as the contractual claim involving the shipment of the cargo, Judge Brodie held that the court had supplemental jurisdiction based on the anchor admiralty contract claim. As Cargo Logistics did not allege a closer degree of trust between the parties than that of parties to a contract, Judge Brodie dismissed the negligent misrepresentation claim for lack of a special relationship. However, Judge Brodie held that the allegations that Overseas Moving made false assurances in specific emails that the cargo would be picked up after it arrived in Ashdod were sufficient to allege a fraud claim that was not duplicative of the contract claim as the fraud claims were made after the formation of the contract. Reasoning that maritime law allows for recovery of consequential damages, including lost profits, if such damages are a foreseeable result of the breach, and supplementing maritime law to the extent New York law was consistent with maritime law, Judge Brodie held that Cargo Logistics could pursue consequential damages, including lost profits from the loss of its business relationship with Zim.
Vessel owner sufficiently alleged admiralty jurisdiction for limitation action for injury to bystander and damage to dock but did not plausibly allege that the value of the claims exceeded the value of the vessel; In re Talbott, No. 3:21-cv-163, 2021 U.S. Dist. LEXIS 165307 (N.D. Ind. Aug. 31. 2021) (Leichty).
Dean Talbott, owner of a 30-foot 2000 Carver 356 motor yacht, filed this action seeking to limit liability in connection with an incident that occurred on Lake Michigan. Talbott alleged that the yacht was docking with the help of a bystander when a gust of wind changed the yachts’ course, causing the bystander to fall into the water from the dock and causing the yacht to strike the dock. The court previously held that the locality prong of the admiralty jurisdiction was satisfied but requested an amendment with respect to the issue whether the incident demonstrated a substantial relationship to maritime activity. After Talbott amended his complaint, Judge Leichty held that it was not difficult to imagine a circumstance in which the damage related to docking could impact maritime commerce and that docking a vessel was a maritime activity. However, Judge Leichty did not believe that Talbott had plausibly alleged that the claims exceeded the value of the vessel, $74,350. Without the allegations of a suit by the bystander or the dock owner to establish the severity of the claims, Judge Leichty did not consider it plausible or reasonable that the damage to the dock, given the slow speed of the vessel during docking, and and injury to the bystander, who only fell in the water and was not struck by the boat, would exceed the value of the vessel.
Judge dismissed federal declaratory judgment action on maintenance and cure after the seaman filed an action in state court asserting claims under the Jones Act and general maritime law; Fellows v. Yates, No. 3:21-cv-126, 2021 U.S. Dist. LEXIS 164487 (D. Alaska Aug. 31, 2021) (Gleason).
Kyleah Lauren Yates was injured on November 14, 2019 while serving as a seaman on the F/V SPARTAN, owned by Erik Fellows. Fellows paid maintenance and cure to Yates and then brought this action in federal court in Alaska on May 21, 2021, seeking a declaratory judgment on Yates’ entitlement to maintenance and cure. Two months later, on July 23, 2021, Yates filed a complaint in Alaska state court seeking to recover under the Jones Act and general maritime law (including maintenance and cure and unseaworthiness). Yates then moved to dismiss Fellows’ federal action. Noting that the federal action would only resolve the issue of maintenance and cure and the state action would still have to proceed on the other issues, Judge Gleason reasoned that allowing the federal action to continue would result in duplicative litigation and could produce potentially conflicting results. She therefore exercised her discretion by dismissing the federal action.
Court remanded ancillary claims after dismissal of the federal officer defendants who removed the case; Gehant v. Air & Liquid Systems Corp., No. 19-732, 2021 U.S. Dist. LEXIS 181705 (M.D. La. Aug. 31, 2021) (Wilder-Doomes), opinion adopted, Sept. 22, 2021 (Dick).
Jerome J. Gehant brought this suit in the Civil District Court for the Parish of East Baton Rouge, Louisiana, seeking to recover for mesothelioma that he claimed resulted from exposure to asbestos when he served in the Navy and then while working on ships and barges for McDermott and others after his service in the Navy. The defendants included shipowners, manufacturers, and direct-action insurers. The claims against the shipowners were brought under the Jones Act and general maritime law. One of the manufacturer defendants, Foster Wheeler, removed the case (joined by five other manufacturer defendants) under the Federal Officer Removal Statute. Gehant then dismissed (without prejudice) his claims against all of the defendants except shipowner McDermott and brought a separate action against the manufacturer defendants in Virginia. Magistrate Judge Wilder-Doomes recognized that Foster Wheeler had sufficient pleaded a basis for removal and that the court had jurisdiction over the Jones Act and general maritime claims against McDermott even after the dismissal, either as ancillary jurisdiction or as maritime claims. The question, however, was whether the case should be remanded after the Federal Officer claims that gave the court removal jurisdiction were eliminated. Magistrate Judge Wilder-Doomes analogized the situation to the exercise of ancillary jurisdiction over state law claims, in which the court can exercise its discretion to decline jurisdiction over the supplemental claims if the federal officer anchor claims are dismissed. Citing concern for federalism, as the claims could not have been removed without the Federal Officer claims and as the maritime claims “are not uniquely federal, nor do they present novel federal issues,” Magistrate Judge Wilder-Doomes recommended that the claims against McDermott be remanded to the Louisiana state court [claims arising under a federal statute in a situation where it is unconstitutional to apply state law are not uniquely federal nor do they present novel federal issues?]. Chief Judge Dick then approved the recommendation on September 22, 2021, and remanded the case.
Crewmember was not a seaman when he was indefinitely assigned to a vessel undergoing a complete refurbishment; Jarvis v. Hines Furlong Line, No. 5:20-cv-00014, 2021 U.S. Dist. LEXIS 166900 (W.D. Kent. Sept. 2, 2021) (Russell).
Joseph Jarvis was a deckhand for Hines Furlong on its vessel M/V MAE ETTA HINES when he began suffering from a non-occupational illness. He was permitted to continue his employment on the M/V WARREN HINES, which was undergoing a complete refurbishment lasting 21 months in Paducah, Kentucky. The assignment allowed Jarvis to be closer to home and medical treatment. Jarvis injured his back while working on the repairs on the WARREN HINES and brought this action against Hines Furlong as a seaman under the Jones Act and general maritime law. Hines Furlong moved for summary judgment that Jarvis was not a seaman as a matter of law because he was not assigned to a vessel in navigation. Jarvis responded that the status of the WARREN HINES was a fact question that should be decided by the jury as the vessel was put in the water after each time it was in dry dock and was moved to various locations in the yard by tugs. Judge Russell disagreed, ruling that the length of time the ship was incapable of use for maritime transportation and the fact that it could only be moved by harbor tugs rendered it out of navigation. Jarvis also argued that he had a substantial connection to an identifiable fleet of vessels because his assignment to the WARREN HINES was only temporary. However, Judge Russell noted that Jarvis was released for full duty and remained with the WARREN HINES until he sustained his back injury. Hines recognized that his assignment was to last for an indefinite period until he recovered, and Hines Furlong argued that the assignment was to last for an indefinite period until the refurbishment was complete. In either situation, the assignment was for an indefinite period and was therefore sufficiently permanent. Thus, Judge Russell evaluated the Jones Act status based on the assignment to the WARREN HINES and held that Russell was not a seaman.
Limitation action finally reached the point where the judge could default non-appearing claimants and lift the stay; In re Star & Crescent Boat Co., No. 3:21-cv-00169, 2021 U.S. Dist. LEXIS 168017 (S.D. Cal. Sept. 3, 2021) (Benitez).
The limitation action brought by Star & Crescent after Jade Spurr was injured on August 5, 2018, during a jet boat tour of San Diego Bay on Star & Crescent’s vessel PATRIOT, returns to the Update. Spurr brought suit in San Diego Superior Court against Starr & Crescent, which filed this limitation action. Star & Crescent submitted an Ad Interim Stipulation for Value in the amount of $775,000 together with a letter of undertaking in the amount of $750,000 ($25,000 less than the value of the vessel). Judge Benitez found the security to be inadequate and denied the request to stay proceedings without prejudice to resubmission of the security. After Star & Crescent submitted an amended Ad Interim Stipulation and letter of undertaking, Spurr appeared in the action and filed an opposition to the amended security before filing an answer and claim. The basis of the opposition was that there was no jurisdiction over the limitation action because it had not been filed within six months of written notice of the claim. Star & Crescent argued that Spurr did not have standing to challenge the limitation action, but Judge Benitez disagreed. He reasoned that the court could examine its jurisdiction at any time, even before an answer and claim were filed. Spurr’s counsel sent written notice on October 8, 2018, advising that he would be representing Spurr. Star & Crescent responded by requesting documentation and information to support the claim for damages and liability. Spurr’s counsel sent several responses, including a letter on April 5, 2019, enclosing a report from a neurologist diagnosing Spurr with a diffuse traumatic brain injury. Star & Crescent requested medical bills, and Spurr’s counsel responded that there was insufficient billing information to send at that time. No correspondence from Spurr’s counsel provided information as to the amount of damages that Spurr was seeking. The suit in state court was filed on July 31, 2020, and the limitation action was filed on January 28, 2021, within six months of the state suit, but outside of six months from correspondence with the medical report reflecting the traumatic brain injury. Judge Benitez held that the correspondence was insufficient to trigger the six-month period to file the limitation action. He agreed that the notices did not have to include a monetary amount to trigger the filing requirement; however, it did not follow that Spurr’s suffering from a traumatic brain injury was sufficient notice that the amount of the claim would exceed the value of the vessel ($775,000). Judge Benitez did note that a demand in excess of the value of the vessel or submission of the requested medical bills would likely have resulted in the limitation action being time barred. After Judge Martinez approved the revised security and granted the limitation stay/injunction, he was presented with another procedural issue. The vessel owner/petitioner, Star & Crescent, named the vessel builder/seller as defendants in the limitation action (rather than adding them as third parties). The vessel owner is a California company that contracted for the vessel to be built in New Jersey and delivered in New Jersey by New Jersey companies. The builder/seller knew that the vessel was to be used in California, which is where the accident occurred that resulted in the limitation action in California. However, the negotiations with the California owner for a vessel to be used in California were not sufficient to establish personal jurisdiction over New Jersey companies that built the vessel in New Jersey and delivered it in New Jersey. Consequently, Judge Benitez dismissed the New Jersey defendants, for want of personal jurisdiction, without prejudice. (See March, May, and August 2021 Updates). Once the time passed for the filing of claims with only Spurr filing a claim, Star & Crescent moved for a default of all non-appearing claimants, and Spurr and Star & Crescent filed a joint motion to lift the limitation stay. As Star & Crescent had complied with the requirements for the limitation action, Judge Benitez exonerated Star & Crescent from liability for claims of all non-appearing claimants. He then granted the joint motion to lift the stay, with the federal court retaining exclusive jurisdiction over all issues pertaining to the right to limitation of liability.
Passengers’ negligent infliction of emotional distress claims of fear of contracting COVID-19 were dismissed, but passenger who contracted COVID-19 sufficiently pleaded causation; negligent misrepresentation claims were not sufficiently pleaded; no jury was allowed absent a proper pleading of diversity; Kulich v. Royal Caribbean Group, No. 21-21215, 2021 U.S. Dist. LEXIS 168177 (S.D. Fla. Sept. 3, 2021) (Altonaga).
Kevin Kulich and Lori Lucas, passengers on the INDEPENDENCE OF THE SEAS, brought this suit in federal court in Miami against the cruise line, asserting that Kulich contracted COVID-19 on the vessel and it was unknown if Lucas contracted the virus. The cruise line moved to dismiss the claim of both passengers that sought to recover for negligent infliction of emotional distress, and the passengers contended that they were in the zone of danger of contracting the virus. Noting the dismissal of similar allegations by other judges, Judge Altonaga held that proximity to individuals with the virus and fear of contracting the disease were insufficient to support a claim. She dismissed the claim for negligent infliction of emotional distress by both passengers, but she did note that Kulich, who contracted COVID-19 was entitled to recover emotional distress brought on by the physical injury of contracting COVID-19 as part of his negligence action. The cruise line argued that the passengers’ claim for negligent failure to warn was actually a claim of negligent misrepresentation by making false statements about the health of the passengers. As such, the assertions were subject to the heightened pleading requirement of Rule 9(b). Without particular allegations about the “who, what, when, where, and how,” Judge Altonaga dismissed the claim without prejudice. With respect to Kulich’s claim that the cruise line’s negligence caused him to contract COVID-19 on the vessel, Judge Altonaga held that his allegations that he contracted the virus on the vessel and that it was foreseeable that that the cruise line’s negligence would produce the harm were a sufficient pleading of causation, even though Kulich did not plead when he tested positive or when he began to experience symptoms. Finally, the plaintiffs’ complaint asserted that they are residents of Missouri and that the cruise line’s principal place of business was in Florida. As the pleading did not allege citizenship of the passengers in a specific state, the pleading was insufficient to establish diversity. Therefore, Judge Altonaga dismissed the passenger’s request for a jury trial as the only basis for jurisdiction was admiralty. However, she stated that the plaintiffs could remedy their defective pleading with an amendment that clarified Kulich’s state of citizenship.
Garnishee had standing to raise foreign sovereign immunity for the debtor; debtor waived sovereign immunity by arbitration agreement; debtor’s property was not immune from garnishment; Preble-Rish Haiti, S.A. v. Republic of Haiti, No. 21-cv-4960, 2021 U.S. Dist. LEXIS 167927 (S.D.N.Y. Sept. 3, 2021) (Castel).
Preble-Rish Haiti claimed that it was owed more than $29 million for fuel delivered to the Republic of Haiti by vessel along with consequential damages and commenced an arbitration in New York pursuant to the arbitration clause in the contracts between the parties. Preble-Rish sought security for the arbitration and sought to garnish/attach funds in the possession of BB Energy, located in Houston, that were designated for payment to Haiti (in an action in the Southern District of Texas). BB Energy sought to invoke sovereign immunity on behalf of debtor Haiti, and Judge Ellison held that BB Energy had standing to assert Haiti’s assertion that it was immune from prejudgment attachment/garnishment. The parties argued about whether there was admiralty jurisdiction, but Judge Ellison reasoned that the jurisdiction inquiry began and ended with the Foreign Sovereign Immunities Act because it is the sole basis for jurisdiction over foreign sovereigns, such as Haiti. Turning to the immunity issues, Judge Ellison first held that the arbitration provisions in the contracts between the parties demonstrated the intent to waive foreign sovereign immunity from suit. Judge Ellison then discussed the exception to the general rule in the FSIA that sovereigns are immune from prejudgment attachment and held that the exception was established because the property was used for a commercial activity in the United States, Haiti had agreed to provide security in the contracts, and the purpose of the attachment/garnishment was to secure satisfaction of a judgment and not to obtain jurisdiction. Therefore, Judge Ellison denied the motion to dismiss the attachment, but stayed the proceedings pending developments in the arbitration proceeding (whether the contracts were maritime in nature). (See September 2021 Update). In this action, Preble-Rish filed an attachment action in federal court in New York seeking to attach/garnish funds in a Citibank account in the name of a Haitian governmental agency. After discovering that the name of the account was in the name of the central bank of Haiti, the attachment was supplemented, and the bank sought to intervene and to vacate the attachment. Preble-Rish did not argue that the bank had waived its immunity from attachment and instead argued that the bank did not hold the funds for its own account so that its immunity did not apply. However, Judge Castel held that Preble-Rish did not establish that the bank was acting solely as an intermediary facilitation a payment, noting that accounts that are used for mixed purposes are immune from attachment, even if used for commercial purposes. Consequently, Judge Castel vacated the attachment.
Providing ticket to the passenger’s travel agent gave constructive notice to the passenger of the time limit for filing suit; allegation that passenger contracted COVID-19 on the cruise did not equitably toll the running of limitations; McCluskey El v. Celebrity Cruises, Inc., No. 20-cv-24706, 2021 U.S. Dist. LEXIS 168187 (S.D. Fla. Sept. 3, 2021) (McAliley).
Life Journeys’ Abraham-Hicks Group arranged a cruise for Tara McCluskey El on the REFLECTION. During the cruise, McCluskey El fell in water near the jacuzzi. She notified the cruise line that she intended to make a claim, but she brought this action more than a year after the accident. The cruise line moved to dismiss the claim based on the one-year limitation for suit in the ticket. Although McCluskey El argued that she never received the ticket from the cruise line, Magistrate Judge McAliley held that submission of the ticket to the passenger’s travel agent, Life Journeys, was sufficient notice of the terms of the contract to the passenger (although McCluskey El originally referred to Life Journeys as her travel agent, she later started calling Life Journeys her “travel point of contact”). Magistrate Judge McAliley reasoned that McCluskey El had access to the terms of the ticket contract online at any time and that she must have become aware of the jurisdictional requirement for the suit as she, a resident of “California Republic,” brought the suit in Miami where suit was required by the ticket. Additionally, McCluskey El had a year to become meaningfully informed of the time limit. Consequently, Magistrate Judge McAliley concluded that the one-year time limit was enforceable. Finally, McCluskey El argued that the time limit should be equitably tolled as she contracted COVID-19 during the cruise due to the cruise line’s negligence, and she is still experiencing loss of memory and cognition. She also argued that it was difficult hiring an attorney because attorneys wanted to know the extent of her injuries and it was challenging obtaining examinations due to the pandemic. Magistrate Judge McAliley rejected these broad allegations as they were not supported by detailed facts, and they did not prevent McCluskey El from filing her complaint, without an attorney, in the midst of the pandemic in November 2020.
Judge rejected argument that a high degree of care is applicable for injuries on gangways of cruise ships; warning cones at the top and bottom of the gangway established notice to the cruise line of the wet and slippery condition of the gangway; Bahr v. NCL (Bahamas) Ltd., No. 19-cv-22973, 2021 U.S. Dist. LEXIS 167559 (S.D. Fla. Sept. 3, 2021) (Bloom).
Mai Lis Bahr, a passenger on the Norwegian PEARL, slipped and fell on the gangway while existing the vessel at Skagway, Alaska, allegedly because of the wet and slippery condition of the gangway. She brought this action against the cruise line in federal court in Miami asserting that the cruise line was negligent for failing to maintain slip-resistant materials, failing to provide adequate railings, and failure to warn of inadequate railings and slip resistant materials. The cruise line moved for summary judgment on the basis that it lacked notice of any hazard in the gangway, and Bahr first argued that it is not clear whether a notice requirement applies in a gangway case where there is a heightened standard of care. Judge Bloom noted that the Eleventh Circuit had referred to a high degree of care, but the appellate court had not held that the degree of care was actually different than the degree of reasonable care generally owed in maritime cases. Therefore, she held that notice was a requirement for an injury on a gangway. However, Judge Bloom found sufficient evidence of notice in this case. There were warning cones at the top and bottom of the gangway, but the cruise line argued that the purpose of the cones was to raise situational awareness rather than to warn of a wet floor. As the warning signs in this case stated, “Caution, wet floor,” Judge Bloom was not convinced by the cruise line’s argument and held that it had notice of the potentially hazardous condition of the gangway.
Passenger who was injured on a shore excursion in St. Lucia did not sufficiently plead notice to the cruise line, could not establish a joint venture with the excursion company, and could not establish personal jurisdiction in Florida for the excursion company as a third-party beneficiary of the Florida forum-selection clause in the contract between the excursion company and the cruise line; Gammons v. Royal Caribbean Cruises Ltd., No. 20-22240, 2021 U.S. Dist. LEXIS 170474 (S.D. Fla. Sept. 7, 2021) (Moreno).
Stephen Gammons, a passenger on the FREEDOM OF THE SEAS, was injured on a zipline excursion in St. Lucia that he booked through the cruise line. He brought suit against the cruise line and excursion company in federal court in Miami, and the cruise line and excursion company moved to dismiss the complaint. Gammons brought claims against the cruise line for negligent failure to warn and as a joint venture with the excursion company. Judge Moreno dismissed the failure to warn claim without prejudice for lack of sufficient allegations of notice of the cruise line of the dangerous condition in the zipline. Unlike other cases where judges denied a motion to dismiss, the complaint did not allege prior accidents and there were no adverse comment cards submitted by passengers who participated in the excursion. This left the general allegations about the cruise line’s initial approval process and yearly inspections, but these general allegations were not accompanied by facts showing how the cruise line knew or should have known of an unsafe condition. Therefore, Judge Moreno dismissed the claim without prejudice to allow Gammons the opportunity to plead the specifics of notice. Gammons sought to establish vicarious liability on the cruise line by alleging that the cruise line and excursion company were engaged in a joint venture. This pleading, however, was contradicted by the specific language of the agreement between the cruise line and excursion company. Gammons argued that the court could not grant a motion to dismiss based on the language of the contract as the terms of the contract were not within the four corners of the complaint. Judge Moreno rejected that argument as the complaint put the agreement at the center of the joint venture claim, even though the document was not incorporated. As the document was undisputed and was at the center of the complaint, Judge Moreno dismissed the joint venture claim that was contradicted by the agreement (he also struck language in the complaint regarding an agency relationship between the defendants as there was no pleading of an agency theory of negligence. The excursion company sought dismissal for lack of jurisdiction as it is a St. Lucia business and the accident occurred in St. Lucia. Gammons tried to establish jurisdiction in Florida by citing the forum-selection agreement in the contract between the cruise line and excursion company in which the excursion company agreed to resolve all disputes in connection with the cruise ticket agreement between passengers and the cruise line to the courts in Miami. Judge Moreno rejected that argument, however, as Gammons was not a party to nor a third-party beneficiary of the contract. Accordingly, he dismissed the excursion company without prejudice for lack of personal jurisdiction.
Seaman did not have the right to have his lawyer present at the medical examination scheduled by the seaman’s employer; In re Callan Marine, Ltd., No. 4:21-cv-1938, 2021 U.S. Dist. LEXIS 169812 (S.D. Tex. Sept. 8, 2021) (Edison).
Cesar Garza and Braulio Lara brought suits against their employer Callan Marine under the Jones Act and general maritime law, seeking to recover for injuries they sustained while working as seaman assigned to Callan’s dredge, GENERAL PATTON, at Ingleside, Texas. Callan then brought this limitation action in federal court in Houston, and Callan scheduled a medical examination for Garza with Callan’s choice of orthopedic surgeon, Dr. David Vanderweide. Garza showed up for the examination with his attorney, but the doctor’s nurse would not let the attorney into the examination room, only allowing an interpreter because Garza does not speak fluent English. Garza left without being examined and filed a motion for a protective order. Magistrate Judge Edison noted that the overwhelming majority of district courts have refused to permit third-party observers, including attorneys, from attending examinations under Rule 35 (because it causes distractions and introduces an adversarial character into the examination process). However, Magistrate Judge Edison noted that an attorney may attend the examination in the rare instance where special circumstances exist. Garza argued that he needed his counsel present to provide moral support and to ensure that the doctor did not engage in improper conduct, but those reasons were insufficient to carry the heavy burden to establish special circumstances. Consequently, Magistrate Judge Edison ordered that Garza be examined without the presence of attorneys.
Causati0n from OCS operations for city’s damages allegedly related to global warming was too attenuated to support jurisdiction under the OCSLA; City of Hoboken v. Exxon Mobil Corp., No. 20-cv-14243, 2021 U.S. Dist. LEXIS 169925 (D.N.J. Sept. 8, 2021) (Vazquez).
The City of Hoboken brought this suit in New Jersey state court seeking compensation from oil and gas companies for costs to protect the city from the effects of global warming allegedly caused by the defendants’ production and sale of fossil fuels. The oil and gas companies removed the case to federal court on several grounds, including the jurisdiction of the Outer Continental Shelf Lands Act, asserting that the city’s claims arose in part from the defendants’ operations on the outer Continental Shelf. Although Judge Vazquez recognized that it is more than plausible that fossil fuels originating from the OCS contributed to the effects of global warming that Hoboken alleged, he did not believe that this was sufficient to establish but-for causation. Citing decisions of other district courts, Judge Vazquez held that even if some of the activities that caused the city’s damages resulted from OCS operations, it was insufficient to show that the city’s cause of action would not have accrued but for the OCS activities. Rejecting all of the grounds for federal jurisdiction, Judge Vazquez remanded the case to state court.
Passenger who was injured on an Alaskan shore excursion could not establish personal jurisdiction in Florida as a third-party beneficiary of the Florida forum-selection clause in the contract between the excursion company and the cruise line; Giuliani v. NCL (Bahamas) Ltd., No. 1:20-cv-22006, 2021 U.S. Dist. LEXIS 169759 (S.D. Fla. Sept. 8, 2021) (Gayles).
Esterina Giuliani, a passenger on the NCL vessel BLISS, was injured when she was thrown from her horse during an Alaskan excursion titled Chilkoot Horseback Adventure that Guiliani booked on the vessel. She brought this suit against the cruise line on multiple grounds, and the cruise line moved to dismiss the counts for misleading advertising, negligent misrepresentation, negligent selection and retention, negligent failure to warn, negligence based on apparent agency or agency by estoppel, and negligence based on joint venture. Judge Gayles held that Guiliani had sufficiently pleaded all of the counts except for negligent selection, as the pleading failed to allege the temporal element of her claim (for example, the cruise line hired the excursion knowing that it was unfit). See July 2021 Update. The Alaskan excursion company then moved to dismiss the amended complaint for lack of personal jurisdiction. Giuliani sought to establish jurisdiction over the Alaskan company as a third-party beneficiary of the contract between the excursion company and the cruise line that designated Florida law as the governing law and that required the excursion company to submit to the jurisdiction of the Florida courts. However, Judge Gayles did not find any intent in the contract that passengers would be third-party beneficiaries of the contract, and the passenger’s claims arose from the excursion in Alaska, not the contractual relationship between the cruise line and excursion company. As Guiliani did not allege any tortious acts occurred in Florida, Judge Gayles held that there was no jurisdiction over the excursion company in the Florida suit.
Fact questions precluded summary judgment for owner of vessel that damaged another vessel while both were stored at a boatyard during a hurricane; Villamil-Sordo v. Varadero @ Palmas, Inc., No. 18-1425, 2021 U.S. Dist. LEXIS 171439 (D.P.R. Sept. 9, 2021) (Carreño-Coll).
Roberto Villamil-Sordo, owner of the EZ TRADE, stored his vessel at Varadero’s boatyard in Humacao, Puerto Rico during the 2017 hurricane season. He noticed that the FRA DOLCINO was placed next to the EZ TRADE before Hurricane Maria struck Puerto Rico, and he requested that the other vessel be relocated. Varadero declined to move the other vessel, and the FRA DOLCINO damaged the EZ TRADE during the storm. Villamil-Sordo brought this action against Varadero and later against the owners of the FRA DOLCINO in the Superior Court of Humacao, Puerto Rico, and the defendants removed the case to the federal court in Puerto Rico based on the court’s original admiralty jurisdiction. Villamil-Sordo settled with Varadero, and the owners of the FRA DOLCINO filed a motion for summary judgment, arguing that Varadero was liable for the plaintiff’s damages and that Hurricane Maria was an Act of God. The defendants argued that under their contract with Varadero, Varadero was responsible for any breach of obligation with respect to securing the vessel. The contract, however, provided that the owners of the FRA DOLCINO would engage one of three listed contractors to provide the securing. Thus, it was not Varadero who was responsible under the contract, and the facts were too disputed to determine whether the owners of the FRA DOLCINO were responsible for the acts of the contractor. Although the owners of the FRA DOLCINO argued that Varadero breached a warranty of workmanlike performance, the contractual provision with respect to the independent contractor hired by Villamil-Sordo negated any implied duty of workmanlike performance (or breach of such a warranty). Judge Carreño-Coll recognized that Hurricane Maria was a storm of “unprecedented strength and destructiveness,” but she did not believe that the owners of the FRA DOLCINO had established for summary judgment that they had taken all reasonable precautions the face of the incoming storm to ensure that their vessel would cause damage to surrounding boats. She held that the reasonableness of the actions of the owners of the FRA DOLCINO should more appropriately be determined by a fact finder at trial.
Raising limitation of liability as a defense did not jump the vessel owner’s defense ahead of the plaintiff’s burden to prove her case; Parnas v. Murray, No. 21-1061, 2021 U.S. Dist. LEXIS 171440 (D.P.R. Sept. 9, 2021) (Gelpi).
Noa Parnas brought this suit in federal court in Puerto Rico seeking to recover from the owner and operator of a small motorboat, the REEF RUNNER 23, for injuries she sustained on the vessel. The owner of the boat answered and asserted a defense that it was entitled to limit his liability to the value of the vessel, $10,000. The owner then filed a motion seeking to limit his liability to $10,000; however, Judge Gelpi cited the local admiralty rule that provided that when limitation of liability is raised as a defense, the plaintiff “shall proceed with its proof first, as is normal at civil trials.” As the plaintiff had not had the opportunity to present her case, Judge Gelpi held that the motion was premature and denied it without prejudice.
Judge found sufficient the pleading of negligence for a passenger’s injury by an elevator door except for the assertion of a malfunctioning door-hold button; Butler v. Carnival Corp., No. 20-24025, 2021 U.S. Dist. LEXIS 171795 (S.D. Fla. Sept. 10, 2021) (Scola).
Lynn Butler was a passenger on the CARNIVAL SUNRISE. He was waiting for an elevator in the lobby of deck nine, and, when the door opened, a Carnival employee directed his attention to the elevator. A video of the incident shows the employee blocking open the elevator door with his right hand while he appears to select a button from the operating panel inside the elevator (out of view of the camera). The employee withdrew his hand from the door as Butler neared the elevator, and, as Butler approached the elevator, the doors began to close, striking Butler’s right arm. The cruise line moved for summary judgment on the counts for general negligence and failure to warn. Butler argued that the door-hold button had malfunctioned as the doors closed while the employee was pressing the button. There was no camera footage or testimony to support the claim that the employee was actually pressing the door-hold button, so Judge Scola held that the negligence claim based on the defective button was “pure conjecture.” However, as Butler was not limited to relying solely on a mechanical deficiency to establish negligence, Judge Scola limited the grant of summary judgment to the claim related to the elevator button. The cruise line also sought summary judgment for lack of evidence of notice of the danger of the elevator door closing on Butler. The cruise line had produced evidence of six instances in the past two years in which passengers on a sister ship complained about elevator doors. The cruise line argued that the situations were not similar and were unverified, but Judge Scola held that the claims did not have to be verified to provide notice and he held that the claims were sufficiently similar (for example, fingers, hands, and arms being caught or stuck) that there was a fact question of notice of the dangerousness of elevator doors.
Judge upheld jurisdiction in the United States on foreign bunker supply contracts based on an alter ego theory; Platina Bulk Carriers Pte Ltd. v. Praxis Energy Agents DMCC, No. 20-cv-4892, 2021 U.S. Dist. LEXIS 172236 (S.D.N.Y. Sept. 10, 2021) (Buchwald).
We previously looked at the supply of bunkers by Praxis Energy Dubai in our May 2021 Update. See Liberty Highrise Pvt. Ltd. v. Praxis Energy Agents DMCC, No. 20-cv-2427, 2021 U.S. Dist. LEXIS 62445 (S.D.N.Y. Mar. 31, 2021) (Abrams). Liberty Highrise, an Indian company and operator of the M.V. MENALON and M.V. GOLD GEMINI, ordered bunkers from Praxis Energy Dubai, a United Arab Emirates company, to be delivered to the vessels in Singapore. Praxis Dubai sent an invoice to Liberty for the bunkers for the MENALON, and Liberty transferred payment to Praxis Dubai’s bank account. With respect to the bunkers for the GOLD GEMINI, Liberty was directed to transfer the funds to the bank account of Praxis Singapore. There was confusion about the payments, and the bunkers were never delivered to the MENALON. Liberty then brought this suit against Praxis Dubai and Praxis Singapore for the retention of the payment/failure to deliver. The suit was brought in New York in accordance with the forum-selection clause in the Praxis General Terms and Conditions for the Sale of Marine Bunker Fuels and Lubricants that was incorporated into the transaction between Praxis Dubai and Liberty. Praxis Singapore sought to dismiss the complaint for lack of personal jurisdiction and forum non conveniens, arguing that Praxis Singapore was not bound by the terms that were agreed between Praxis Dubai and Liberty and that the New York venue was inconvenient because it had nothing to do with the transaction. Judge Abrams denied the motion, however, finding sufficient allegations that Praxis Singapore was an alter ego of Praxis Dubai to avoid the motion to dismiss. He did note that Liberty would have to submit evidence and not just allegations to establish liability on the part of Praxis Singapore. Judge Abrams also denied the defendant’s argument that Liberty had not established any of the requirements of the federal venue statute as this is an admiralty case, and forum-selection clauses are enforced in admiralty unless shown to be unreasonable. Finally, Judge Abrams rejected the defendant’s forum non conveniens argument as the defendant had not provided any reason why the parties choice of forum should not be given deference.
Platina Bulk Carriers brought this action in federal court in New York against Praxis Dubai, Praxis Singapore, and other Praxis entities in connection with contracts to supply bunker fuel to vessels chartered by Platina. Platina sought to hold Praxis Singapore and Praxis U.S. responsible for Praxis Dubai’s liabilities under a corporate alter ego theory, and Judge Buchwald held that Patina’s alter ego allegations were sufficient to deny the motion of the defendants to dismiss for lack of personal jurisdiction and venue.
Vessel owner was allowed to maintain action against time charterer for damage to vessel’s rudder and for unpaid charter hire when the vessel was not in service based on the charterer pressuring the vessel owner to operate the vessel imprudently, but the owner was not permitted to seek attorney fees; the charter party provision for interest on undisputed amounts did not apply as the invoices were disputed; a dispute over when the owner ceased performing precluded summary judgment on the owner’s claim for unpaid hire; limitation clause in the charter party did not preclude the charterer’s claim for lost profits, and the due diligence provision did not apply to the unseaworthiness claim of the charterer; fact questions prevented summary judgment on the sufficiency of the owner’s compliance with its obligations under the charter party; Chem Carriers, L.L.C. v. L. Energy International, LLC, No. 19-436, 2021 U.S. Dist. LEXIS 172509 (M.D. La. Sept. 10, 2021) (Dick).
- Energy time chartered the M/V MISS DANIELLE and two barges from Chem Carriers at the rate of $7,850 per day plus fuel and lubes to carry L. Energy’s diesel between Corpus Christi and Brownsville/Harlingen, Texas. Disputes arose between the parties after the vessel spent time in dry dock. Chem Carriers then brought this action for breach of charter, seeking to recover for unpaid hire and expenses, lost charter hire caused by early termination of the agreement, interest, and attorney fees. L. Energy counterclaimed for lost profits caused by Chem Carriers’ performance. In the motions for summary judgment filed by the parties, L. Energy argued that Chem Carriers was not entitled to recover attorney fees under state law or the general maritime law. Chief Judge Dick agreed and also addressed Chem Carriers’ argument that fees could be awarded when the defendant deliberately, willfully, and persistently fails to pay what is plainly owed. Concluding that L. Energy had asserted a colorable defense, Chief Judge Dick dismissed the claim for attorney fees. L. Energy challenged Chem Carriers’ claim for damage to the rudder when the Captain of the vessel backed up too far to the side of the channel. Although it was Chem Carriers’ obligation to navigate the vessel, it argued that the damage occurred because L. Energy was rushing it to make a delivery window. Chief Judge Dick agreed that a time charterer who has no control of the vessel assumes no liability for negligence of the crew or unseaworthiness of the vessel; however, she also noted the exception when the charterer actually contributes to the damage. Based on Chem Carriers’ argument that it was pressured into operating the vessel imprudently, Chief Judge Dick declined to dismiss the claim for damage to the rudder. L. Energy sought summary judgment on Chem Carriers claim for charter hire, arguing that there was no “hell or high water” clause in the charter party. Chem Carriers argued that the lack of an “off hire” clause required L. Energy to pay for days that the vessel was dry-docked. Chief Judge Dick held that summary judgment was not appropriate, particularly in the absence of evidence of industry custom and the outstanding issue whether L. Energy negligently necessitated the repairs. L. Energy sought summary judgment on Chem Carriers’ claim for interest on the unpaid invoices for charter hire based on a provision in the charter party that amounts due and not paid by L. Energy after 30 days were subject to a charge of 1.5% per month in interest. As the agreement provide that L. Energy would pay properly prepared and undisputed invoices in 30 days, and as the amounts were disputed, Chief Judge Dick held that interest was not payable under the charter party, even if the disputes were unreasonable [note to those drafting charter parties how to draft the interest requirement]. L. Energy argued that Chem Carriers breached the charter and the breaches excused L. Energy from paying charter hire. As the evidence established that Chem Carriers continued to perform during part of the time in dispute, Chem Carriers was granted partial summary judgment; however, fact questions precluded summary judgment for the remainder of the time. Chem Carriers sought summary judgment on L. Energy’s claim for lost profits based on a limitation of liability in the charter. Chief Judge Dick noted that there were two limitations on liability, and the one that specifically addressed delay did not apply to the situation in this case. Consequently, she held that Chem Carriers’ liability was not limited [note to those drafting charter parties how to draft clauses limiting liability]. As Chief Judge Dick ruled that the charter did not contain a due diligence limitation, she held that there were fact questions whether the M/V MISS DANIELLE was unseaworthy and in breach of the charter. However, with respect to the claim of breach of the warranty of workmanlike performance, Chief Judge Dick held that the warranty would be co-extensive with the duty to make delivery within a reasonable time and redundant. There were fact questions whether Chem Carriers made delivery within a reasonable time that precluded summary judgment.
Claims for negligence and unjust enrichment in complaint for partial sinking of yacht after repair were not independent of the contract claim and were dismissed along with the contract claim that was not sufficiently pleaded; consequential damages for breach of the warranty of workmanlike performance were barred by the contractual limitation; attorney fees under state law were not allowed in this maritime claim; Noble House, LLC v. Derecktor Florida, Inc., No. 0:20-cv-62438, 2021 U.S. Dist. LEXIS 172911 (S.D. Fla. Sept. 13, 2021) (Gayles).
The owner of the yacht NOBLE HOUSE took the vessel to Derecktor’s shipyard in Dania, Florida, for repair and maintenance work, including over 100 hours of work on the vessel’s rudders. After the port rudder fell away from the vessel causing it to partially sink while navigating from The Bahamas to Fort Lauderdale, Florida, the vessel owner brought this action against the shipyard seeking to recover for negligence, breach of contract, unjust enrichment, and breach of the warranty of workmanlike performance. The owner sought damages for salvage, repair, dockage, and lost profits. The shipyard moved to dismiss the counts for negligence, breach of contract, and unjust enrichment and to strike the owner’s prayer for relief. Judge Gayles agreed that the same allegations were asserted for the negligence and contract claims, and he dismissed the negligence claim as it was not independent of the contract claim. As neither party disputed the existence of a contract, Judge Gayles dismissed the claim for unjust enrichment. With respect to the contract work, the allegations of poor workmanship and substandard work did not give the shipyard notice of the exact provisions of the contract that were breached. Therefore, Judge Gayles dismissed the contract claim, advising that the owner could file a motion seeking leave to amend the contract allegations. In defense of the claim for breach of the warranty of workmanlike performance, the shipyard asserted the contractual provision limiting recovery to repair or replacement of the defect and providing that consequential damages were not recoverable. The owner argued that the clause was unenforceable because it did not create a deterrence to negligence, but Judge Gayles held that the shipyard’s repair and replacement obligation was a sufficient deterrent to negligence and he struck the demands for damages that were precluded by the contract. Finally, the owner sought attorney fees under Florida law. Judge Gayles held that maritime law, not state law, was applicable to the vessel repair, and, as the contract only provided for the recovery of attorney fees by the shipyard, no attorney fees could be recovered by the owner.
Dispute whether the service provided to the vessel was towage or salvage did not challenge the existence of a contract, so the court enforced the arbitration provision in the contract; Sánchez-Pont v. E. Towing & Salvage, Inc., No. 20-1554, 2021 U.S. Dist. LEXIS 176247 (D.P.R. Sept. 13, 2021) (Delgado-Colón).
When the YAYI “softly” ran aground between the Island of Icacos and Fajardo, Puerto Rico, the owners contacted Sea Tow (listed in their insurance policy for vessel assistance privileges such as towing and vessel ungrounding). The captain of Sea Tow’s towboat required the owners of the YAYI to sign a blank invoice prior to rendering assistance. That invoice contained an arbitration clause. The owners signed the blank invoice to avoid being marooned, and Sea Tow charged their credit card $16,128 for salvage services. The owners cancelled the credit card transaction, and Sea Tow commenced arbitration proceedings, arguing that the condition of the vessel required salvage. The vessel owners then filed this action seeking a declaration that the contract was invalid, and Sea Tow requested that the court compel arbitration. The owners responded that their consent to the contract was void because it was obtained through duress and because consideration was lacking. Judge Delgado-Colón noted that the arguments raised by the owners identified defects in consent and consideration that might undermine the contract’s enforceability, not its existence. In essence, the owners contested the type of service that was rendered and the price for that service. As that argument did not contest that there was a contract, Judge Delgado-Colón enforced the arbitration clause.
Insured could maintain third-party action against its marine general liability insurer in third-party action against the insured seeking contractual indemnity, even though the insured had indemnity from the injured worker; Williams v. Inflection Energy, LLC, No. 4:15-cv-00675, 2021 U.S. Dist. LEXIS 175099 (M.D. Pa. Sept. 15, 2021) (Brann).
Hyperion Safety Services employed Michael Williams as a safety representative for work on a well site in Lycoming County, Pennsylvania. Williams was injured at the well site and brought an action in federal court in Louisiana against Hyperion under the Jones Act and general maritime law. He filed a separate action in the same court against Inflection Energy and Well Services, which was transferred to the federal court in Pennsylvania. Well Services filed a third-party action in the Pennsylvania suit against Hyperion based on the defense and indemnity provision of the Master Service Agreement between Well Services and Hyperion. Hyperion settled its claims with Williams, and Williams agreed to indemnify Hyperion from contribution and tort indemnity claims by Well Services. Hyperion then demanded that Williams defend and indemnify it against the claims of Well Services, and Williams filed a declaratory judgment action in federal court in Louisiana, and the court in that case ruled that Williams had to defend and indemnify Hyperion from all claims, including the contractual liability claim. The Pennsylvania court than held that Hyperion had a duty to defend and indemnify Well Services, including Well Services’ duty to indemnify Inflection Energy. Hyperion then filed a third-party action against its marine general liability insurer, Navigators, seeking defense and indemnification. Navigators argued that collateral estoppel from the Louisiana litigation prevented Hyperion from relitigating the issue of which party must defend and indemnify Hyperion. Chief Judge Brann did not agree, holding that the issue that was decided in the Louisiana litigation was the duty of Williams to defend and indemnify Hyperion under the settlement agreement. Chief Judge Brann also held that the settlement agreement between Hyperion and Williams did not vitiate Hyperion’s claims under the Navigators’ policy. Finally, Navigators argued that if it had to defend and indemnify Hyperion, then Williams would have to indemnify Navigators. Chief Judge Brann answered that Navigators’ argument did not support dismissing the claim against Navigators and merely provided a basis for Navigators to obtain relief from Williams.
Cruise line did not have notice of danger of a passenger whose assault on the gangway resulted in an injury to a bystander passenger, nor did the cruise line breach any duty to the bystander passenger; Gould v. Carnival Corp., No. 19-cv-20289, 2021 U.S. Dist. LEXIS 175176 (S.D. Fla. Sept. 15, 2021) (Goodman).
Nancy Gould, a passenger on the Carnival LIBERTY, was injured while walking up the gangway of the vessel in Nassau, The Bahamas, when a passenger in front of her charged at a woman and took a swing at the woman, causing the woman to fall into Gould, who fell off the gangway. A few minutes earlier, Gould witnessed the man punch the same woman in the head on the pier in Nassau while they were walking back to the ship. Gould brought this suit against the cruise line. Gould’s theory of liability against the cruise line was that an employee from a different cruise ship witnessed the earlier assault, scurried down the pier toward the LIBERTY, and made gestures to a crewmember of the LIBERTY to indicate that the man had punched his companion. Gould contended that the crew was negligent in failing to prevent the man from pushing the woman on the gangway. The case was tried in a four-day Zoom bench trial to Magistrate Judge Goodman, and he found that Gould did not establish that an employee of the cruise line had been given notice by the gesture of the earlier physical confrontation or that the cruise line breached any duty to Gould. With respect to notice, Magistrate Judge Goodman noted that Gould testified in her deposition that there were no crewmembers standing between a structure on the pier and the crewmembers on the vessel. That testimony was supported by a passenger who testified that she did not remember a crewmember at the base of the gangway. Finding no crewmember at the base of the gangway, Magistrate Judge Goodman could not find that the gesture happened. And, even if the gesture did occur, Magistrate Judge Goodman did not find that it was sufficient to give notice of the risk-creating condition of the passenger while on the gangway (Gould testified that she felt safe on the ramp and had put the prior incident out of her mind). With respect to duty and breach, Magistrate Judge Goodman concluded that the cruise line did not have a duty to monitor the foreign pier, that if the passenger was a risk, his condition was open and obvious to Gould, and that if the cruise line had notice, it did not have a duty to intervene on the gangway and before the security checkpoint inside the ship.
Judge dismissed counterclaim of notify party on bill of lading for attorney fees in the ocean carrier’s suit for demurrage; Ocean Network Express (North America), Inc. v. Pacific Lumber Resources, Inc., No. H-20-1734, 2021 U.S. Dist. LEXIS 175278 (S.D. Tex. Sept. 15, 2021) (Rosenthal).
Ocean Network carried a cargo of plywood from Brazil to Texas under two bills of lading. The cargo arrived in November 2018 but was not picked up for two months (allegedly due to a commercial dispute between the purchaser and seller of the cargo), and the Port of Houston charged Ocean Network with demurrage/storage charges. Ocean Network paid the Port and brought this suit against the consignee (Pacific Lumber) and notify party (Greatway Logistics). Greatway Logistics brought a counterclaim for attorney fees, and Chief Judge Rosenthal dismissed that claim as barred by the one-year limitation in the Carriage of Goods by Sea Act. Greatway moved for reconsideration, asserting that its demand was not based on COGSA but on the Shipping Act and Texas Deceptive Trade Practices-Consumer Protection Act. Chief Judge Rosenthal pointed out, however, that Greatway had not asserted claims under those statutes and could not prevail on claims it had not raised. Concluding that an amendment would be futile, Chief Judge Rosenthal dismissed the attorney fee claim with prejudice. She also declined to stay her decision pending a decision of the Federal Maritime Commission on the merits of Greatway’s claim against Ocean Network as Greatway did not raise a claim under the Shipping Act in its counterclaim.
Vessel owner was permitted to maintain third-party claim against pilot of vessel for willful misconduct in connection with surge damage to marina; Port of Kalama v. M/V SM MUMBAI, No. 3:20-cv-00621, 2021 U.S. Dist. LEXIS 175494 (D. Ore. Sept. 15, 2021) (Immergut).
Christopher Boyce was the lead pilot (accompanied by two trainee pilots) on the M/V SM MUMBAI, an ocean-going vessel that was navigating up the Columbia River. Boyce directed the vessel to increase its speed from half ahead to full ahead (approximately 15 to 16 knots) before it passed the Kalama Export grain terminal. A few minutes later, it passed the Port of Kalama’s marina at the same speed, creating a three- to four-foot wake that caused damage to the boats moored at the marina and the marina’s docks. Boyce reported to the Oregon Board of Maritime Pilots that is his standard practice is to reduce the vessel’s speed to 10 knots when passing the marina. The Port of Kalama brought this suit against the owner of the SM MUMBAI, which brought a third-party action against Boyce. As Oregon law limits the liability of pilots unless they are guilty of willful misconduct or gross negligence, the vessel owner alleged that Boyce was liable on those grounds. Boyce moved to dismiss the complaint, but Judge Immergut denied the motion, holding that the complaint asserted a facially plausible claim of the pilot’s conscious indifference or reckless disregard to the rights of the vessels/docks by disregarding his standard practice and maintaining a speed of 15 to 16 knots when passing the marina. (See January 2021 Update). Boyce later moved for summary judgment on the ground that there was no evidence that he committed willful misconduct. He argued that the provision in Oregon’s statutes that the pilot could not be liable except for gross negligence or willful misconduct was further limited by a provision that limited liability of the pilot to a security deposit of $250 except for willful misconduct. The vessel owner argued that willful misconduct and gross negligence are synonymous [like one of the arguments made to Judge Barbier before the trial in the DEEPWATER HORIZON/Macondo case], but Judge Immergut did not have to decide the issue as he concluded that there was a genuine issue of material fact whether Boyce had engaged in willful misconduct—intentionally increasing the speed of the vessel to full speed.
Court lacked admiralty jurisdiction over suit to quiet title to vessel, to determine possession, and for forfeiture; Hueter v. Pederson, No. 21-0900, 2021 U.S. Dist. LEXIS 176719 (W.D. Wash. Sept. 16, 2021) (Martinez).
Steven Pincus Hueter brought this action against Ingrid Ann Pederson and Gerald Young, asserting that they illegally took possession of the Trimaran Sloop S/V FALCON from a storage facility in Bellingham, Washington, and sailed it to American Samoa where the defendants live on the vessel. Hueter brought this action against Pederson and Young, in personam, and against the FALCON, in rem, seeking a declaration of his rights to possession and ownership of the vessel, an order that the defendants transfer the vessel to the Western District of Washington, and damages for the unjust appropriation of the vessel. Hueter brought the claim under the court’s admiralty jurisdiction, and the defendants moved to dismiss the complaint for lack of admiralty jurisdiction. The dispute arose from a contested sale of the vessel, which Hueter asserted was fraudulent, and Judge Martinez reasoned that a suit arising out of the sale of a vessel does not give rise to admiralty jurisdiction. Additionally, there could be no in rem jurisdiction over the vessel as the vessel was in American Samoa. Consequently, Judge Martinez dismissed the suit for lack of subject matter jurisdiction. In a separate suit, Hueter v. Haaland, No. 21-1271 (W.D. Wash.), Hueter sued the Secretary of the Interior, Deb Haaland, for allegedly failing to appoint justices to the High Court of American Samoa who would protect Hueter’s constitutional rights and impartially adjudicate his claims regarding the FALCON. Judge Coughenour denied Hueter’s request to issue a summons and dismissed the suit with prejudice on September 24, 2021.
Court dismissed suit arising from charter party dispute for lack of sufficient allegations, but granted leave to amend; Laurel Shipping LLC v. Ridgebury Kilo LLC, No. 20-cv-7246, 2021 U.S. Dist. LEXIS 177569 (S.D.N.Y. Sept. 17, 2021) (Abrams).
Ridgebury Kilo owned the RIDGEBURY PROGRESS, which was time chartered to Seawolf Tankers. Seawolf subchartered the vessel to Laurel Shipping for the shipment of a cargo of fuel oil from the Caribbean to Southeast Asia. Freepoint Singapore, which was not a party to the charter or any other agreement with Seawolf, was the consignee on the bills of lading. Laurel and Freepoint claimed that the ship was delayed by approximately 57 days because of multiple mechanical failures, and Seawolf brought suit against Laurel seeking more than $12 million in freight and port costs. Laurel answered and filed a counterclaim against Seawolf for breach of the charter party’s warranty of seaworthiness, and then Laurel and Freepoint filed this action against Ridgebury and Seawolf for breach of contract and maritime tort. As Laurel’s claims in this action were the same as in its counterclaim, Judge Abrams dismissed Laurel’s claims as duplicative. He then held that Freepoint had not sufficiently alleged how it was entitled to bring a contract claim against Seawolf, and Judge Abrams dismissed that claim with leave to amend to demonstrate status as a beneficiary of the charter party. Seawolf moved to dismiss Freepoint’s tort claims based on the economic loss rule from Robins Dry Dock. As the tort allegations lacked sufficient factual content to state a plausible claim for relief under tort theories that might establish a viable claim for the economic losses, Judge Abrams dismissed the tort claims with leave to replead.
Language in confidentiality footer on emails was insufficient to incorporate standard terms and conditions into the contract between the parties in connection with the construction of an offshore wind farm; judge declined to transfer case from the plaintiff’s home forum; US Wind Inc. v. InterMoor, Inc., No. 19-02984, 2021 U.S. Dist. LEXIS 178667 (D. Md. Sept. 20, 2021) (Gallagher).
- Wind needed to install a Met Mast Tower in a wind farm that it was building off the coast of Ocean City, Maryland. US Wind ordered the Met Mast from a Louisiana company, and its prime contractor, InterMoor, hired a Louisiana company, All Coast, to carry and install the alignment frame that was necessary for the installation of the Met Mast, using its vessel the GREAT WHITE. US Wind’s insurer required that US Wind retain a marine warranty surveyor to assess the feasibility of plans for various stages of the wind farm project, including the suitability of vessels being used. American Global Marine’s bid was accepted, and American Global issued a Certificate of Approval for the sailaway of the GREAT WHITE. The vessel arrived late, however, because of adverse weather, and US Wind incurred significant losses as a result. US Wind brought this suit in federal court in Maryland against InterMoor in 2019 and added American Global as a defendant in 2021 on the basis that its approval should have considered the suitability of the vessel in anticipated weather conditions. American Global moved to transfer the case to Texas because InterMoor and American Global are both Texas entities and a majority of their witnesses are from Texas. Citing US Wind’s choice of its home forum, the fact that the target destination was off the coast of Maryland, and the familiarity of the court with the facts and issues after presiding over the case for two years, Judge Gallagher declined to transfer the case. American Global then moved for judgment on the pleadings on the grounds that timely notice had not been given and its liability was limited to $50,000 based on the provisions of its standard Terms and Conditions, which it alleged were incorporated into its contract with US Wind. There was no reference to those Terms and Conditions in the Proposal that American Global sent to US Wind for execution; however, American Global argued that the Terms and Conditions were incorporated through the confidentiality footer on emails and in the Certificates of Approval and invoices. Judge Gallagher declined to rule based on the Certificates and invoices for lack of sufficient facts. The language in the email footers under the title “CONFIDENTIALITY NOTICE” contained several sentences about the confidentiality of the communication and agreeing to delete the email if received in error. At the end it contained an incomplete sentence: “All work undertaken subject to our standard terms and conditions of business (a copy of which is available on request).” Noting that the unclear language, buried in an incomplete sentence of an otherwise relative standard confidentiality notice at the footer of corporate emails was sufficiently unclear to incorporate the Terms and Conditions, Judge Gallagher denied the motion for judgment on the pleadings.
Judge set aside default judgment against garnishee because the record did not establish proper service at the time the default was entered; Dan-Bunkering (America), Inc. v. Ichor Oil, LLC, No. 3:20-cv-03341, 2021 U.S. Dist. LEXIS 181163 (N.D. Tex. Sept. 21, 2021) (Scholer).
Dan-Bunkering brought this action against Ichor Oil in federal court in Texas in connection with the sale of fuel. Dan-Bunkering sought to attach/garnish assets owned by Ichor Oil that were held by B&G Futures, attempting to serve the writ on B&G’s registered agent. When the process server was unable to locate the registered agent at the address on file with the Texas Secretary of State, Dan-Bunkering served the writ on the Secretary of State. B&G did not answer, and the court entered a default judgment. Dan Bunkering then obtained post-judgment writs for B&G accounts, and B&G moved to vacate the default judgment for lack of proper service. Judge Scholer noted that Texas law requires the record to affirmatively show that the plaintiff used reasonable diligence to serve the registered agent before undertaking substitute service on the Secretary of State. However, Dan-Bunkering did not file proof of its diligence until responding to the motion to vacate the default. As the record did not affirmatively demonstrate proper service at the time the default was entered, Judge Scholer held that the court lacked jurisdiction and set aside the default.
Judge resolved dispute over competing forum-selection clauses in the cruise line’s documents in favor of the passenger’s selection of Florida rather than the cruise line’s selection of Australia; Reed v. Royal Caribbean Cruises Ltd., No. 20-cv-24979, 2021 U.S. Dist. LEXIS 180657 (S.D. Fla. Sept. 22, 2021) (Ruiz).
Paul and Ivy Reed were passengers on the OVATION OF THE SEAS on a round-trip cruise between Sydney, Australia and New Zealand. They were injured when a volcano erupted during a shore excursion to White Island off the coast of New Zealand. The Reeds purchased their passage for the cruise through an Australian travel agent, which obtained the tickets from an Australian wholesaler. The Reeds brought this suit against the cruise line in federal court in Florida in accordance with the forum-selection clause in the Ticket Contract that is referenced on the cruise line’s web site. The cruise line moved to dismiss the suit based on the forum-selection clause for New South Wales, Australia, which is located in a Brochure referenced in the Guest Ticket Booklet. The Reeds received the Booklet, but claimed that they did not receive the Brochure. The cruise line submitted a screen shot of the terms of the Booklet from March 2019, but Judge Ruiz did not find the screen shot from March 2019 indicated what the terms were at the time of the booking in October 2019. As the cruise line did not adequately show that the Brochure with the Australian forum-selection clause was available at the time of the booking, Judge Ruiz enforced the Florida forum-selection clause that was available on the cruise line’s website at the pertinent time. Therefore, he denied the motion to dismiss the Florida suit.
Domestic seaman’s Jones Act suit was dismissed so that the arbitrator could determine whether his claims under the Jones Act and general maritime law were arbitrable under state law; Trejo v. Sea Harvest, Inc., No. 21-cv-10978, 2021 U.S. Dist. LEXIS 180748 (D. Mass. Sept. 22, 2021) (Burroughs).
Aaron Trejo was injured while serving as a crewmember on Sea Harvest’s vessel ATLANTIC BOUNTY. Trejo signed an employment contract with Sea Harvest that contained an arbitration clause for any claim arising out of his work as a crewmember. The arbitration was to be administered by JAMS, and New York law was applicable if the agreement was exempt from enforcement under the Federal Arbitration Act. All disputes related to the agreement, including the scope or applicability of the arbitration clause, were to be determined by an arbitrator in Philadelphia. Trejo brought suit under the Jones Act and general maritime law in the federal court in Massachusetts, and Sea Harvest moved to compel arbitration. The parties agreed that the contract was exempt from enforcement under the FAA, but Judge Burroughs held that the exemption from the FAA did not mean that the agreement could not be enforced under state law. Applying New York law, Judge Burroughs held that when the agreement clearly delegates the question of arbitrability to an arbitrator, the court must respect that decision. As Trejo attacked the arbitration agreement as a whole, and not the delegation provision, the arbitrability of the dispute had to be determined by the arbitrator. Consequently, Judge Burroughs dismissed the case without prejudice so that Trejo could submit his claims to JAMS for a determination as to arbitrability.
Good faith obligation of marine contract to unload ships plausibly included cost of tariff on port users; Murphy Marine Services, Inc. v. Dole Fresh Fruit Co., No. 1:20-cv-25, 2021 U.S. Dist. LEXIS 180780 (D. Del. Sept. 22, 2021) (Bibas).
Murphy Marine contracted with Dole Fresh Fruit to unload Dole’s vessels at the Port of Wilmington for the cost of its labor plus a markup for overseeing the work. After Delaware privatized the Port, however, the company licensed to run the port levied tariffs on all Port users, including Murphy. The result of the tariff was that Murphy spent more than it earned, so Murphy claims it obtained the assurance of Dole executives that Dole would not leave Murphy hanging for the tariff. Murphy continued to work (paying the tariff), but Dole never reimbursed Murphy for the tariff expense. Murphy brought this suit against Dole and the executives under a long list of contractual, quasi-contractual, and tort theories, and Dole and the executives moved to dismiss most of the claims. Judge Bibas of the Third Circuit, sitting by designation, held that most of Murphy’s claims failed, but he did hold that under governing admiralty law every maritime contract includes an implied term of good faith and fair dealing. By plausibly claiming that the refusal to pay denied Murphy the benefit of the agreement (based on the expectation to be able to pass on certain costs to Dole), Murphy sufficiently stated a claim for breach of the implied good-faith term. Judge Bibas rejected Murphy’s claim of an oral contract. Assuming that the law allowed an oral modification despite the clause that the contract could only be amended by a subsequent written agreement, Judge Bibas held that the complaint was not specific enough to establish the modification. Judge Bibas rejected Murphy’s quasi-contractual theories of promissory estoppel, unjust enrichment, and quantum meruit, citing Delaware law in the absence of maritime law on quasi-contractual claims. He denied the unjust enrichment claim because Dole was not unjustly enriched when all it got was the benefit of the original contractual bargain. He denied the quantum meruit claim because that claim cannot be used to bypass the terms of a contract. Judge Bibas denied the promissory estoppel claim because Murphy did not sustain damages by the breach. Murphy could either continue to unload the ships and pay the $1.5 million tariff, or it could breach the contract and pay Dole the cost of another contractor to unload the ships, with that contractor including the same tariff in its charges (Judge Bibas did give Murphy leave to amend to allege that it suffered damages by losing the opportunity to secure more lucrative work as a result of its continuing to work for Dole). Similarly, the fraud claims failed for lack of evidence of damages, subject to the same opportunity to replead to allege a loss of the opportunity to secure more lucrative work.
Crawfisherman in dispute with property owner did not sufficiently allege admiralty jurisdiction and was required to replead; Thibodeaux v. Bernhard, No. 6:21-0061, 2021 U.S. Dist. LEXIS 181577 (W.D. La. Sept. 22, 2021) (Whitehurst).
This dispute arose in Lost Lake, across the Atchafalaya River from Butte Larose in St. Marin Parish, Louisiana. Devin Thibodeaux, a commercial crawfisherman, was harvesting his crawfish traps in water over property owned by Kenneth Bernhard, whose son Adam Bernhard manages the property, when Bernhard intercepted and collided with the skiff occupied by Thibodeaux. Bernard declared that Thibodeaux was trespassing, and ordered him to retrieve his traps, exit the property, and never return. Bernard then summoned a sheriff’s deputy who issued a citation to Thibodeaux for criminal trespass. Thibodeaux brought this action in federal court under the admiralty jurisdiction, asserting a conversion claim under Louisiana state law. Bernhard moved to dismiss the case for lack of admiralty jurisdiction, claiming that Thibodeaux did not sufficiently allege the location of the incident for the locality portion of the test for admiralty jurisdiction, nor did he allege how the actions of the defendant had a connection to traditional maritime activity. Magistrate Judge Whitehurst agreed that the allegations were insufficient, but she gave Thibodeaux an opportunity to amend the complaint to provide more specific allegations on the elements of the test for admiralty jurisdiction.
Passenger presented fact question of constructive notice of puddle on the deck because the crew and passengers walked over the spot for at least 7o minutes; Reynes v. Paradise Cruise Line Operator, Ltd., No. 20-61474, 2021 U.S. Dist. LEXIS 182486 (S.D. Fla. Sept. 23, 2021) (Cannon).
Norma Reynes slipped and fell on Deck 9 of the GRAND CELEBRATION. She claimed that she stepped onto an oval-shaped patch of marble flooring and slipped on a wet surface. She did not see a puddle before her fall, but after the fall she saw a clear circular puddle and there was liquid on the back of her shirt. The Safety Officer for the cruise line investigated the accident and did not find any dangerous condition, and there were no reports of any similar accidents in the past five years. The video footage for 70 minutes before the fall did not show any spills and showed numerous crew and passengers walking across the floor in the proximity to where Reynes fell. The cruise line moved for summary judgment on the basis of lack of actual or constructive notice of a dangerous condition. Judge Cannon agreed that there was no evidence that the cruise line knew of the existence of the puddle, but she found sufficient evidence of constructive notice from the fact that the video did not show any spill in the 70 minutes before the accident (giving rise to an inference that the puddle may have been on the deck for 70 minutes) and the fact that at least 20 crewmembers walked through the area in that 70-minute period. As the cruise line did not participate in the design of the floor, Judge Cannon granted summary judgment on Reynes’ claim of negligent design/creation.
Inactive state of yacht because of an action by the Office of Foreign Assets Control for suspected illegal activity did not change the status of the yacht as a vessel, and the court enforced liens on the yacht; Jones Superyacht Miami, Inc. v. M/Y WAKU, No. 19-20735, 2021 U.S. Dist. LEXIS 182918 (S.D. Fla. Sept. 24, 2021) (Moreno).
The claim of Jones Superyacht, a boatyard, to enforce a maritime lien on the M/Y WAKU TRINITY for necessaries, including dockage, electricity, monitoring, maintenance, and inspection of the yacht, returns to the Update (see May 2020 Update). The yacht was subjected to an action by the Office of Foreign Assets Control due to suspected illegal activity by the original owner of the yacht and was eventually sold at a U.S. Marshal’s sale. FRS Affair Limited became the owner and filed a claim to the vessel when Jones Superyacht Miami arrested the vessel and asserted a maritime lien for dockage and maintenance. FRS Affair presented the “creative” argument that the Foreign Assets Control action prevented the use of the yacht in marine navigation, so the yacht lost its status as a vessel and no maritime lien could attach to the vessel. That argument raised this jurisdiction issue: if the yacht was a vessel used as a means of marine transportation of people or things, the court would have subject matter jurisdiction, but if it was not, the court would have no power to order the new owner of the yacht to pay for the dockage or other services. Although the order of the Office of Foreign Assets Control blocked the vessel from navigation, the test from Lozman was whether a reasonable observer, looking to the craft’s physical characteristics and activities, would not consider the craft to be designed to any practical degree for carrying people or things on water. Judge Moreno held that the yacht was a vessel under the Lozman test and then addressed whether it was a “dead ship.” Following the analysis of the Eleventh Circuit that a ship that is “rendered permanently incapable of maritime transportation” is a dead ship that is ineligible for maritime liens, Judge Moreno held that the yacht was not a dead ship as it was not permanently incapable of marine transportation. Having subject matter jurisdiction over the “living” vessel, Judge Moreno held that Jones Superyacht established a lien for dockage, shore power and shore power connection, monitoring services, maintenance, delivery of the vessel to Jones Superyacht’s location, and hurricane preparation. Judge Moreno declined to award an administrative fee. Therefore, he entered judgment against FRS Affair in the amount of $429,300.
Employer established McCorpen willful concealment defense based on the seaman’s prior knee injury while playing high school football; Merritt v. Marquette Transportation Co. Gulf Island LLC, No. 5:19-cv-00158, 2021 U.S. Dist. LEXIS 183191 (W.D. Kent. Sept. 24, 2021) (Russell).
Doniven Merritt injured his right knee while working as a deckhand on Marquette’s FATHER PAT. He brought this action against Marquette under the Jones Act and general maritime law, including a claim for maintenance and cure. Marquette moved for summary judgment on the maintenance and cure claim based on the McCorpen willful concealment defense, as Merritt sustained an injury to his right knee during a high school football practice but did not disclose it to Marquette when he was hired. Although Merritt sought to apply the Second Circuit’s test that requires the concealed condition to be relevant, Judge Russell noted that the Sixth Circuit, in which the suit was brought, has followed the McCorpen rule from the Fifth Circuit whose first element is simply whether the seaman intentionally misrepresented or concealed medical facts. Although there were disputes about the nature and extent of Merritt’s knee injury, there was no dispute that he did sustain an injury to his knee in 2010 and that he did not disclose it in response to a question whether he had had an injury or pain to his knees. As to the materiality element of the McCorpen defense, Merritt argued that Marquette did not establish that Merritt would have been turned down for the job. However, Judge Thomas found the element was satisfied by the testimony from Marquette’s Medical Director that knowledge of the injury would have prompted further medical investigation. Finally, Merritt argued that his prior injury was not sufficiently serious for there to be a causal link to his injury with Marquette because Merritt had gone for years without symptoms. Although acknowledging the lengthy time gap between the injuries, Judge Thomas found that difference to be outweighed by the injury to the exact same location. Consequently, he found all three elements of the McCorpen defense were established and held that Merritt was not entitled to maintenance and cure.
From the state courts:
Attorney immunity and judicial proceeding privilege precluded the claimant’s attorney from suing his client and its malpractice attorney for defamation and tortious interference in connection with the claimant’s attorney’s handling of the client’s claims against BP in the DEEPWATER HORIZON/Macondo litigation; In re Canfora, No. 01-21-00128-CV (Tex.-App.—Houston [1st Dist.] Sept. 9, 2021) (original proceeding) (per curiam).
Mark Canfora and Mark Canfora Investments hired a law firm to represent them against BP in connection with the DEEPWATER HORIZON/Macondo blowout, and that firm engaged Brent Coon & Associates to prosecute the claim. The litigation against BP ended with the dismissal of Canfora’s claims for failure to comply with a court order, and Canfora entered into a settlement agreement with Brent Coon under which the firm waived $105,000 in attorney fees in exchange for Canfora’s release of Brent Coon. Canfora hired Lance and David Kassab to represent Canfora in a legal malpractice action against Coon, and that suit, filed in state court in Houston, Texas, contained allegations that Coon had collected a full filing fee from Canfora even though he included Canfora’s claims in a suit with other parties, pocketing fees that were not incurred. Coon counterclaimed against the Kassabs for defamation and tortious interference with contract and against Canfora for defamation and breach of the settlement agreement. The Kassabs and Canfora asserted defenses of attorney immunity and the judicial proceedings privilege, but district judge Lauren Reeder declined to dismiss the counterclaim. The Kassabs and Canfora then brought this mandamus action in the Texas Court of Appeals, which held that the allegedly defamatory statements about the payment of filing fees had a sufficient relationship to the Canfora’s underlying claim of breach of fiduciary duties that they were protected by attorney immunity. As the conduct of the Kassabs was part of the discharge of their duties in representing their client, the tortious interference claim was also barred by attorney immunity. The defamation claim against Canfora fell within the judicial proceedings privilege and was barred. Consequently, the appellate court conditionally granted the mandamus petition.
Maryland state court lacked jurisdiction under the OCSLA to enforce lien on meteorological tower on the OCS offshore Maryland; InterMoor, Inc. v. U.S. Wind Inc., No. 0867, 2021 Md. App. LEXIS (Md. Ct. Spec. App. Sept. 10, 2021) (Gould).
InterMoor contracted with U.S. Wind to transport and install a meteorological tower to the outer Continental Shelf offshore Maryland to collect wind data for an offshore wind farm. After U.S. Wind terminated the agreement, InterMoor sent U.S. Wind a notice of intent to claim a lien in the amount of $4.8 million and brought a complaint for a mechanic’s lien in the Circuit Court for Worcester County, Maryland. The circuit court ordered InterMoor to supplement its complaint with respect to the court’s jurisdiction, and InterMoor responded by arguing that there was jurisdiction pursuant to the Outer Continental Shelf Lands Act. InterMoor argued that the OCSLA permits lienholders to invoke Maryland lien laws and cited decisions from other jurisdictions in which courts applied state lien law to structures on the OCS. The circuit court held that there was no jurisdiction in the state court over property located beyond the border of the county in which the court sits, and the appellate court agreed. Judge Gould explained that InterMoor confused choice of law with subject matter jurisdiction. State law might be applicable under the OCSLA; however, the power of the circuit court to provide the relief that InterMoor sought is a matter of state law. As the circuit court lacked power under Maryland law, the appellate court affirmed the dismissal of the case for lack of jurisdiction.
Kenneth G. Engerrand
President, Brown Sims, P.C.
1177 West Loop South
Houston, TX 77027
1100 Poydras Street
New Orleans, LA 70163
2304 19th Street
Gulfport, MS 39501
4000 Ponce De Leon Blvd
Coral Gables, FL 33146
The testimony of Andrew Furuseth, President of the International Seamen’s Union of America, was important when Congress was considering whether to subject seamen to the LHWCA. Furuseth argued that seamen should not be subject to the LHWCA because seamen preferred their maintenance and cure remedy. Congress agreed and exempted crew members from the LHWCA when it was enacted in 1927. Furuseth testified:
One of the best arguments in favor of compensation on shore is, that the help comes practically at once, while liability is at best slow. On shore and in harbor, as applied to harbor workers, that is true. The worker is at home or with friends and the commission is near and accessible: but the seaman is away from country, home, and friends. The vessel is away from the commission. She may be in Asia, South Sea Islands, Australia, or Africa, away even from consuls or commercial agents, and if the care and cure is abolished, the men are likely to be thrown on shore to be eaten by strange dogs.
Testimony of Andrew Furuseth, President, International Seamen’s Union of America, Hearing on H.R. 9498 before the House Committee on the Judiciary to Provide Compensation for Employees Injured and Dependents Killed in Certain Maritime Employments, 69th Cong., 1st Sess., 112 (1926).
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© Kenneth G. Engerrand, September 29, 2021; redistribution permitted with proper attribution.