October 2022 Longshore/Maritime Update (No. 281)
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, 2022. The National Average Weekly Wage is $$916.99. Consequently, the maximum compensation rate for total disability and death for the period beginning on October 1, 2022, and extending to September 30, 2023, is $1,833.98, and the minimum compensation rate (not always the minimum rate and not applicable to employees covered by the Defense Base Act) payable for disability incurred after October 1, 2022, is $458.50 per week. Cost-of-living adjustments effective on October 1, 2022, are 5%, using the statutory cap for the second consecutive year.
On September 9, 2022, the United States District Court for the District of Columbia granted the application of the United States to enforce foreign forfeiture orders (issued by the High Court of Justice of the Autonomous Community of Valencia, Spain) against a yacht and bank accounts in the United States. See In re One Prinz Yacht Named ECLIPSE, No. 12-mc-162, 2022 U.S. Dist. LEXIS 163521 (D.D.C. Sept. 9, 2022) (Lamberth).
On September 14, 2022, the Fifth Circuit upheld the validity of port fees charged by the Sabine-Neches Waterway for improvements to the Waterway. See BG Gulf Coast LNG, L.L.C. v. Sabine-Neches Navigation District of Jefferson County, Texas, No. 22-40158, 2022 U.S. App. LEXIS 25767 (5th Cir. Sept. 14, 2022) (Elrod).
On September 20, 2022, Judge Gutierrez approved an award of attorney fees of $73.6 million (32% of the gross settlement of $230 million) plus more than $6 million in litigation expenses in connection with a class action brought by businesses, property owners and fishing interests related to an oil spill that polluted the shoreline and ocean in Santa Barbara, California in 2015. See Andrews v. Plains All American Pipeline L.P., No. CV 15-4113 (C.D. Cal. Sept. 20, 2022).
On September 23, 2022, the Vermont Supreme Court reversed the dismissal of Huntington Ingalls’ claim against its property insurers for property damage, business interruption, and other losses from COVID-19, including disruption in the orderly construction and repair of vessels, schedule impacts in the construction and repair of vessels, and increased labor and information technology costs. See Huntington Ingalls Industries, Inc. v. ACE American Insurance Co., No. 2021-173, 2022 Vt. 45, 2022 Vt. LEXIS 47 (Sept. 23, 2022) (Eaton).
Applying the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Judge Barbier held that welders and fitters from the Philippines who came to the United States to work on oil rigs were compelled to arbitrate their wage and overtime claims against their employers under the Fair Labor Standards Act but that their claims for violations of the Trafficking Victims Protection Act and the Fair Housing Act did not arise from their employment and were not subject to the arbitration agreement of their employment contracts. See Ortiguerra v. Grand Isle Shipyard, LLC, No. 22-309, 2022 U.S. Dist. LEXIS 173772 (E.D. La. Sept. 23, 2022).
On the LHWCA Front . . .
From the federal appellate courts:
Parent company of the entity that employed civilian workers injured in Iraq and of the entity that contracted with the United States military to provide support services was entitled to the exclusive remedy defense provided in the DBA; Cloyd v. KBR, Inc., No. 21-20676, 2022 U.S. App. LEXIS (5th Cir. Sept. 8, 2022) (per curiam).
The plaintiffs in this case were contractor employees working alongside troops at the Army forward operating base in Al Asad, Iraq. Each of the plaintiffs signed an employment contract with Service Employees International, Inc., a subsidiary of KBR. The plaintiffs were injured in a ballistic missile attack on the base in retaliation for the Army’s killing of a senior Iranian general, and the workers brought suit against KBR in Texas state court. The injured workers claimed that KBR was negligent for failing to evacuate them before the attack, and they sought damages under Texas law. KBR removed the case to federal court in Texas based on the Federal Officer Removal Statute. Citing the provision in the employment agreement that the Defense Base Act provided the exclusive remedy for the workers against Service Employees International and its parent or affiliated companies arising out of the course of employment, KBR moved for summary judgment. In determining whether KBR was an employer and subject to the exclusive remedy provision in the Defense Base Act, Chief Judge Rosenthal cited the relative nature of the work test from the Fifth Circuit and held that the test was satisfied, noting that the employment agreement with SEII provided that the workers were employees of SEII and that their sole recourse for injury against SEII or any parent or affiliate was the DBA, that they received military base access cards from KBR “tied to their employment for KBR,” and that they agreed to the KBR Candidate Expectations of Conduct and signed the KBR Dispute Resolution Agreement and Nondisclosure Agreement with a KBR header. Thus, Chief Judge Rosenthal considered KBR to be responsible for setting the policies and rules that the plaintiffs were required to follow in performing their work, and she rejected the argument that the employment paperwork “has no bearing on reality.” KBR also asserted a Boyle defense-contractor defense based on the combatant activities exception to the Federal Tort Claims Act. The plaintiffs argued that the exception did not apply to government contractors except for the providing of a defective product, but Chief Judge Rosenthal followed the decisions of the Third, Fourth, and D.C. Circuits that have applied the exception outside of equipment procurement. As the military had exclusive control over decisions on security protocols, force protection mechanisms, and evacuations at the base, Chief Judge Rosenthal held that KBR could not be held liable for state-law claims arising out the plaintiffs’ work at the base. See December 2021 Update.
On appeal, the Fifth Circuit first addressed the propriety of the removal, noting that the actions for which the workers sought to hold KBR responsible were taken under the guidance and control of the United States military. The fact that a subsidiary of KBR was the signatory to the contract did not alter the analysis, as the federal jurisdiction encompasses all actions connected with or associated with acts under color of federal office, not merely those causally connected (although the appellate court considered there to be causation in this case). Turning to the exclusive remedy defense, the workers argued that they were employed by SEII and contracted to the subsidiary of KBR that contracted with the United States. Therefore, they argued that KBR, as parent company, could not be the DBA employer. The court of appeals recognized that the DBA is silent as to which entities qualify as an employer, but, in this case, KBR was “so closely intertwined” with its subsidiaries that the court concluded that KBR qualified as employer of the workers under the DBA. Thus, the Fifth Circuit agreed that the workers’ state law claims were barred by the DBA. [Although noting that the political question doctrine has jurisdictional tones, the Fifth Circuit did not address the doctrine and affirmed the judgment of the district court based on the exclusive remedy in the DBA].
Fifth Circuit affirmed decisions of BRB and ALJ on compensability for heart attack and on the decedent’s average weekly wage that included two checks sent after the worker’s death; Island Operating Co. v. Sanchez, No. 22-60153, 2022 U.S. App. LEXIS 25765 (5th Cir. Sept. 14, 2022) (per curiam).
Allen D. Sanchez worked as an A Operator on an offshore platform on the outer Continental Shelf. He was found, sitting upright and leaning against a post, with no pulse, stiff and unresponsive. His death certificate listed myocardial infarction as the immediate cause of death, and coronary atherosclerosis was listed as a contributing cause. Donna Sanchez, the decedent’s widow, brought a claim for LHWCA benefits, and the case was tried to Administrative Law Judge Donaldson. Sanchez presented testimony from Dr. Siddharth K. Bhansali that it is more likely than not that the decedent’s activities at work contributed to or hastened his death. The decedent’s employer presented the testimony of Dr. Kenneth Civello, Jr., who opined that the decedent’s working conditions did not cause or contribute to his cardiac arrest. ALJ Donaldson applied the Section 20(a) presumption, found that it was rebutted, and determined that Sanchez had established, based on the record as a whole, that the decedent’s heart attack arose out and in the course of his employment. She awarded benefits based on her calculation of the decedent’s average weekly wage of $1,489.44. The employer appealed to the Benefits Review Board on compensability and on the calculation of the average weekly wage. The BRB concluded that there was sufficient evidence of the decedent’s work activities, causing the decedent to sweat profusely in extremely hot weather, to invoke the presumption. The Board also concluded that ALJ Donaldson properly weighed the evidence as a whole (with the burden of persuasion on the claimant), giving greater weight to the opinion of Dr. Bhansali that the decedent’s death was hastened due to work activity because his opinion was more well-reasoned and supported by the evidence (she found Dr. Civello’s opinion was, at times, insufficiently explained and internally inconsistent). Therefore, the BRB affirmed the finding of causation based on crediting the opinion of Dr. Bhansali over that of Dr. Civello. The employer objected to ALJ Donaldson’s inclusion of two checks sent by the employer to the claimant after the decedent’s death, claiming that the decedent was paid for the entire work period despite only working five hours of that pay period and that an additional check was sent for the family. ALJ Donaldson found that the evidence did not reflect the purpose of the two checks, and she noted that the entries reflected the decedent’s regular hours and overtime and contained the usual deductions. Accordingly, she held that the payments constituted wages because they were either monetary compensation or a taxable advantage, and the Benefits Review Board affirmed the decision as within the broad discretion of the ALJ in applying Section 10(c). The employer and carrier appealed to the Fifth Circuit, and, in a short per curiam opinion, the appellate court affirmed the BRB under the highly deferential standard for the scope of its review, based on the reasons stated in the BRB’s “thorough, well-reasoned opinion.”
From the federal district courts:
Eleventh Amendment and the statute of limitations barred the civil rights suit by a claimant whose LHWCA benefits were taken by California to reimburse state disability benefits that were paid; Fitzpatrick v. California Employment Development Department/State Disability Insurance Program, No. 3:21-cv-1424, 2022 U.S. Dist. LEXIS 154598 (S.D. Cal. Aug. 26, 2022) (Moskowitz).
John Fitzpatrick suffered an employment injury within the concurrent jurisdiction of the LHWCA and the California Workers’ Compensation Act. After Fitzpatrick received a deposit of funds in the amount of $35,152 for disability under the LHWCA, the California Employment Development Department took the funds to refund benefits paid under the state statute. More than two years later, Fitzpatrick brought this suit in federal court in California against the California Employment Development Department, claiming that it took the benefits in violation of Section 16 of the LHWCA and in violation of his rights under the Fourth, Fifth, and Fourteenth Amendments to the Constitution. The defendant moved to dismiss the complaint on the ground that the state was immune from liability under the Eleventh Amendment and because the suit was time-barred. Judge Moskowitz agreed and dismissed the suit with prejudice, but Fitzpatrick filed a motion to vacate the judgment, asserting fraud as a basis to set aside the dismissal. Judge Moskowitz denied the motion, however, as the fraud claim was addressed to the merits of Fitzpatrick’s claims (the fraud related to how the California EDD allegedly deprived him of his LHWCA compensation) and did not address the bases on which the case was dismissed (immunity and limitations). Although Fitzpatrick argued that he filed the complaint seven months after he discovered the alleged fraud, he did not explain why he was unable to assert his claim before the two-year limitation period expired. Accordingly, Judge Moskowitz denied the motion to vacate the dismissal.
Contract provision did not make offshore worker a borrowed employee under the LHWCA; Earnest v. Palfinger Marine USA Inc., No. 6:20-cv-685, 2022 U.S. Dist. LEXIS 155577 (W.D. La. Aug. 29, 2022) (Summerhays).
Jeremy Earnest, Brandon Dupre, and other workers on Shell Oil’s Auger tension-leg platform located on the outer Continental Shelf in the Gulf of Mexico off the Louisiana coast were injured or killed while Shell was conducting a quarterly test of the lifeboats on the platform. A lifeboat containing the workers was lowered into the ocean, disconnected, and operated in the Gulf. The lifeboat was then reconnected and hoisted back to the platform but fell to the ocean. Suits were brought in Louisiana state court against Palfinger Marine, alleging it was responsible as the owner and manufacturer of the control release cables and release handle to the hooks for the lifeboat. Some of the suits named Shell as a defendant under Section 5(b) of the LHWCA. The defendants removed the suits to federal court in Louisiana, and Shell moved for summary judgment, arguing that the claim under Section 5(b) was only available for a maritime tort and that maritime law did not apply to the incident. Before addressing the issue of admiralty jurisdiction, Judge Summerhays concluded that the incident occurred on an OCSLA situs, that the workers’ employment furthered mineral development on the OCS, and that the accident would not have occurred but for their employment on the platform. Therefore, the OCSLA provided jurisdiction over the accident. Judge Summerhays then addressed whether admiralty law applied and held that, although the accident involved a lifeboat that fell to the ocean, the accident was inextricably linked to the operation of the platform. It was a test of the hook, cable, and davit system on the platform in which the platform equipment failed. Judge Summerhays disagreed with two district court decisions holding that maritime law applied to accidents involving lifeboats, reasoning that the lifeboats were not used in connection with traditional maritime activities. As he held there was no maritime jurisdiction over the claim against Shell, Judge Summerhays dismissed the Section 5(b) claim. See April 2022 Update (Dupre v. Palfinger).
After Judge Summerhays ruled that maritime law did not apply to the accident and that Louisiana law applied as surrogate federal law pursuant to the OCSLA, Palfinger moved to dismiss the claims for punitive damages that were asserted under the general maritime law. Judge Summerhays reiterated that the OCSLA applied as the lifeboat was physically connected to the platform and was being lifted toward its berth on the platform at the time of the accident. As he had held that Louisiana law applied, and as the plaintiffs set forth no provision of Louisiana law that would allow punitive damages, Judge Summerhays dismissed the claims for punitive damages.
Judge Summerhays then addressed the choice of law for the contract between Shell and Palfinger for the maintenance of the lifeboats, as the contract contained a provision for Shell to indemnify Palfinger for death or injury of Shell employees. Palfinger argued that the contract was governed by maritime law under which the indemnity was valid. Shell argued that the contract was governed by Louisiana law under which the indemnity was invalid. Judge Summerhays analyzed two en banc decisions of the Fifth Circuit to reach his decision on the applicable law, Grand Isle Shipyard v. Seacor Marine and In re Larry Doiron, Inc. The court in Grand Isle rejected tort analysis to determine the law applicable to a contract and instead used a focus-of-the-contract test. Thus, a claim would arise on an OCSLA situs if a majority of the performance under the contract was to be performed on an OCSLA situs, such as the tension-leg platform, and it was immaterial that the location of the accident was on navigable waters. As the majority of the work under the Shell-Palfinger maintenance agreement was to occur on the Auger platform, an OCS situs, Judge Summerhays then addressed the question whether maritime law applied to the contract in accordance with the Fifth Circuit’s test to determine the applicable law for OCS situses, applying the test from the Doiron case. As the contract involved services to facilitate the drilling or production of oil and gas on navigable waters, the question became whether the contract provided or the parties expected that a vessel would play a substantial role in the completion of the contract. Reasoning that the work (inspecting components of the lifeboats and the davits and cables) occurred on the platform and did not require a vessel, Judge Summerhays held that maritime law did not apply to the contract. Palfinger finally argued that the contract was inherently and historically maritime as it involved lifeboats. However, even assuming that he could consider an argument that differed from the analysis required by Doiron, Judge Summerhays answered that just because lifeboats were involved did not make the contract maritime as the lifeboats were functioning as safety equipment supporting oil and gas exploration on a platform and not functioning as vessels in maritime commerce. Turning to application of the Louisiana Oilfield Indemnity Act, Judge Summerhays held that the contract pertained to a well as the services were necessary to sustain the manpower for the platform to produce oil and gas from wells. Therefore, the LOIA applied and voided the indemnity. Finally, Palfinger sought to apply Texas law pursuant to the choice-of-law provision in the contract, but Judge Summerhays followed the long-standing rule in the Fifth Circuit that the choice of state law in the OCSLA is mandatory and contractual provisions cannot alter it. Consequently, he dismissed the indemnity claim against Shell (Palfinger’s tort indemnity claim also failed under Louisiana law).
Shell Oil Co. and Shell Offshore moved for summary judgment on Earnest’s claims that they were negligent in maintaining and inspecting the hook and cable system for the lifeboat, and Judge Summerhays agreed that Shell Oil and Shell Offshore had no liability under the general maritime law or the LHWCA as state law applied. However, he found sufficient evidence of a triable issue under state law whether Shell Oil and Shell Offshore were informed of the defective cable, and he denied summary judgment to them. See September 2022 Update.
Shell Offshore filed a supplemental memorandum in support of its motion for summary judgment, arguing that Judge Summerhays had not addressed the immunity afforded Shell Offshore as an LHWCA borrowing employer. Judge Summerhays then addressed the Ruiz factors, beginning with the most critical factor–who had control over the employee and the work that he was performing. The declaration of an employee of Shell Exploration, however, established that Earnest worked for Shell Exploration, the work was controlled and supervised by Shell Exploration and its employees, Shell Exploration had the right to discharge its employees, and it paid them. Shell Offshore, claimed that the Shell Exploration employees were borrowed servants of Shell Offshore by an agency relationship created under a contract between Shell Offshore and Shell Exploration (the contract provided that Shell Exploration was authorized to act on Shell Offshore’s behalf). However, the contract also provided that the Shell Exploration employees remained employees of Shell Exploration, and Shell Offshore did not point to any facts or legal authority that the agency provision in the contract rendered Shell Exploration employees borrowed employees of Shell Offshore. Accordingly, Judge Summerhays declined to reconsider his denial of summary judgment to Shell Offshore as an LHWCA borrowing employer.
Fact question whether diver injured in the Hudson River during repair of bridge fender was covered under the LHWCA or Jones Act caused issue of preemption of state claims by the LHWCA to be premature; Judge held that there were fact questions of liability under state law and for unseaworthiness, but that there was no vessel liability under LHWCA Section 5(b); Friebely v. C.D. Perry & Sons, Inc., No. 1:18-cv-1458, 2022 U.S. Dist. LEXIS 155691 (N.D.N.Y. Aug. 30, 2022) (Suddaby).
The New York Thruway Authority awarded Atlas Painting and Sheeting a contract for rehabilitation of the Castleton Bridge on the Hudson River. The project included replacement of the Bridge’s fender systems, and Atlas subcontracted with C.D. Perry to perform work on the fender system. That work required operations above and below the water. Perry performed work above the water, and Perry subcontracted with Finger Lakes to provide divers and diving equipment to perform the work under the water. Perry provided the barge from which the divers worked. Joshua Friebely and Tony Clayberger were divers, employed by Finger Lakes, who were installing bolts and timbers under the water when the bit of the drill being operated by Clayberger struck Friebely’s hand. Friebely brought this suit in federal court in New York against Perry, Finger Lakes, and Atlas. He asserted claims under the Jones Act and for unseaworthiness against Finger Lakes and Perry as well as a claim for negligence pursuant to Section 5(b) of the LHWCA. He brought claims under New York law against Perry and Atlas. Atlas and Perry moved for summary judgment, and Chief Judge Suddaby agreed that summary judgment was proper for Atlas on Friebely’s claim under New York Labor Law Section 200 (codifying the duty of a landowner to provide workers with a reasonably safe place to work) as the dangerous condition of which Friebely claimed (dive radios that did not permit communication directly between the divers) arose from the tools and methods of the subcontractor and not from Atlas’s premises. However, Chief Judge Suddaby denied summary judgment to Atlas on the claim that Atlas violated New York Labor Law Section 241(6) (requiring owners and contractors to comply with the specific safety rules and regulations promulgated by the Commissioner of the Department of Labor). Noting that the regulation had to be a specific and positive command, Chief Judge Suddaby concluded that the regulation requiring all safety devices, safeguards, and equipment shall be kept sound and operable was potentially violated based on the allegations with respect to the defective radio communication equipment. Atlas also sought summary judgment on its claim for indemnity against Perry based on the contractual provision that Perry would indemnify Atlas to the extent caused by the negligent acts or omissions of Perry or its subcontractors. Chief Judge Suddaby declined to grant summary judgment at this stage of the litigation, however, as the issues of liability and causation had not been determined. Perry also moved for summary judgment on Friebely’s claims and on its indemnity claim against Finger Lakes, and Chief Judge Suddaby dismissed Friebely’s claim under New York Labor Law Section 200 for the same reason as he dismissed the claim against Atlas. However, Perry argued that the claim under Labor Law Section 241(6) was preempted by Section 5(b) of the LHWCA. Friebely responded that the LHWCA did not apply to him as he alleged he was a seaman and that, if he was covered under the LHWCA, Friebely alleged liability against Perry in its capacity as a construction contractor and not as a vessel owner under Section 5(b). As Perry did not address the question whether Friebely was a seaman and intertwined the LHWCA and Jones Act in its arguments, Chief Judge Suddaby held that he did not have the facts necessary to determine whether Friebely was a seaman and held that the preemption argument could not be decided at this time. Therefore, Chief Judge Suddaby considered the similar argument made by Perry that Atlas had presented with respect to the validity of the claim under Labor Law Section 241(6), and he gave the same ruling on the New York claim as he had made with respect to Atlas. Perry also sought summary judgment on the claim that the barge was unseaworthy, claiming that the barge had nothing to do with the accident. Considering there to be questions about the adequacy of the radio communication equipment, considering the equipment provided by Finger Lakes to be an appurtenance of the barge, and reasoning that unseaworthy conditions can cause injuries that are not on the barge, Chief Judge Suddaby denied summary judgment on the unseaworthiness claim. Chief Judge Suddaby then addressed the Scindia duties for Friebely’s Section 5(b) claim and noted that no issue was presented that the barge was turned over in a dangerous condition or that there were any hazards under the active control of the vessel owner. There was no evidence of any actual knowledge of Perry that would give rise to a duty to intervene. Accordingly, Chief Judge Suddaby granted summary judgment to Perry on the Section 5(b) claim. Finally, Perry sought summary judgment from Finger Lakes that Finger Lakes breached its contractual requirement to procure insurance and add Perry as an additional insurance. Perry demanded insurance from Finger Lakes and its insurers and asserted that the demand was “to no avail.” Finger Lakes only responded that it was “not privy to” the response from its insurance provides, and Chief Judge Suddaby held that the response did not raise a genuine fact question. Accordingly, he granted summary judgment to Perry for Finger Lakes’ failure to procure insurance.
Shipyard was denied Boyle and Yearsley defenses in asbestos exposure suit by widow of shipyard worker; suppliers and contractor were denied summary judgment; Adams v. Eagle, Inc., No. 21-694, 2022 U.S. Dist. LEXIS 158790, 159933, 160984, 161852 (E.D. La. Sept. 2, 6, 7, 8, 2022) (Morgan).
Ora Jean Adams was diagnosed with lung cancer and claimed that it resulted from take-home exposure from her husband while he worked as a pipefitter and welder on Destroyer Escorts, Coast Guard Cutters, and LASH vessels at the Avondale shipyard (from fire blankets and pipe insulation). She also claimed that she was exposed to asbestos while working as a laborer and janitor at Charity Hospital. Adams filed suit in Louisiana state court, and Avondale removed the case to federal court pursuant to the Federal Officer Removal Act. Union Carbide, which supplied raw asbestos to a number of companies, was named as a defendant. See September 2022 Update.
Adams filed a motion for summary judgment seeking a ruling that Avondale was not immune (based on the Boyle and Yearsley cases) from her state-law claims for failing to warn its employees of the dangers of asbestos or from taking precautions to prevent the spread of asbestos dust. With respect to the government-contractor defense from Boyle, after confirming with the parties that the government did not instruct Avondale to issue (or not issue) warnings to employees about the dangers of asbestos, Judge Morgan granted summary judgment to Adams that Avondale was unable to establish the defense on the failure to warn claim. Similarly, Judge Morgan held that Avondale failed to establish the defense to Adams’ claim that Avondale failed to prevent the spread of asbestos by not providing adequate ventilation to minimize asbestos exposure and failing to implement a procedure for preventing asbestos from leaving the shipyard. Although Avondale complied with the government’s instruction on use and storage of asbestos, Judge Morgan did not consider the instruction to be a reasonably precise specification (only a minimum safety and health standard). Thus, she granted summary judgment to Adams on this asserted defense. Judge Morgan then addressed the Yearsley derivative sovereign immunity defense. Reasoning that Adams’ claims did not challenge the government’s policy of requiring the use of asbestos in Navy vessels but were based on Avondale’s alleged decision not to warn its employees of the danger of asbestos exposure and the failure to provide adequate ventilation and to prevent asbestos from leaving the shipyard, Judge Morgan granted summary judgment to Adams on the Yearsley defense.
Westinghouse moved for summary judgment, asserting that there was no evidence that Adams was exposed to asbestos attributable to Westinghouse, and Avondale responded that Westinghouse developed and manufactured asbestos-containing Micarta for use on vessels until 1974, that contractor Hopeman Brothers cut and installed wallboards covered with Micarta on Avondale vessels (generating dust with asbestos), and that Adams sustained exposure to asbestos dust as a result of her husband’s work in proximity to Hopeman employees at Avondale. Westinghouse responded that the evidence did not distinguish between asbestos-containing and asbestos-free Micarta, but Judge Morgan held that there was a genuine issue of disputed fact on that issue. As there was expert testimony of causation in the event the wallboards contained asbestos, Judge Morgan denied summary judgment to Westinghouse.
Amchem, which manufactured asbestos products that included adhesives, coatings, sealants, and mastics, moved for summary judgment because neither Adams nor her husband identified any Amchem products to which he was exposed. However, Avondale produced evidence that the decedent was exposed to insulators with asbestos-containing adhesive produced by Amchem that, when dried, crushed, or swept, would release asbestos fibers into the air. Amchem argued that Avondale could not demonstrate that the decedent was exposed to the product because no eyewitnesses placed him near the product and the decedent did not identify the product by name. However, the decedent did testify that he worked around premixed adhesive matching the description of the Amchem product, and other Avondale witnesses testified that the adhesive was used on “just about everything that was built at Avondale.” Based on the testimony as to the amount of the product at Avondale and the testimony that the decedent scraped the adhesive off his shoes, releasing dust, Judge Morgan found sufficient evidence to deny summary judgment to Amchem.
Hopeman was an Avondale subcontractor that performed marine carpentry (“joiner”) work while the decedent worked at Avondale. Hopeman purchased and supplied Micarta laminate manufactured by Westinghouse as well as Marinite board manufactured by Johns-Manville, both of which contained asbestos. Adams contended that, during the installation, Hopeman workers cut the wallboards, generating dust that came home on the decedent’s clothes. Hopeman moved for summary judgment, arguing that it could not be held strictly liable because it was neither a manufacturer of asbestos-containing products nor a professional vendor under Louisiana state law. Judge Morgan noted that in another case pending in the Eastern District of Louisiana, the court had rejected the argument that Hopeman was a manufacturer by incorporating another’s product (wallboard) into the walls that separated living quarters on the vessels. It was Avondale, not its subcontractor, that was responsible for manufacturing the final product (vessels). However, two sections of the Eastern District of Louisiana had held that there were fact questions whether Hopeman was a professional vendor (its invoices and contracts supported an inference that Hopeman held the wallboards out as its own). Accordingly, Hopeman’s motion was granted in part and denied in part.
Longshore worker who struck another longshore worker while driving at the port on his way to pick up game plans for his work on the vessel was not in the course of his employment, and his negligence was not imputed to his employer/stevedoring company; Hicks v. Middleton, No. 4:21-cv-3, 2022 U.S. Dist. LEXIS 173296 (S.D. Ga. Sept. 26, 2022) (Baker).
Richard Hicks was employed as a longshore worker by SSA Atlantic at the Container Berth 8 dock house in the Port of Savannah. Gregory Middleton was hired out of the ILA hall to work for Marine Terminals Corp—East (Ports America) and drove in his personal truck to the Port to pick up the game plan for his assigned work on the HYUNDAI LOYALTY, which was located at container berth 4. Middleton drove past berth 4 to berth 9 and turned around toward berth 8 and struck Hicks. Hicks brought this suit in the state court of Chatham County, Georgia against Middleton and Marine Terminals, and Marine Terminals removed the case to federal court. Marine Terminals moved for summary judgment, contending that Middleton was not acting in the course of his employment at the time of the accident. Noting that Middleton had not obtained his game plans for the vessel, parked or exited his truck, donned his personal protective equipment, or attended the required safety meeting before the commencement of work, Judge Baker held that Middleton was still commuting to work and was not acting in the scope of his employment at the time of the accident. Accordingly, Judge Baker granted summary judgment to Marine Terminals.
From the state appellate courts:
Driver of truck delivering container to the Port of Houston presented a fact question of negligence of the Port’s gantry driver for which the Port waived sovereign immunity; Port of Houston Authority v. Morales, No. 14-21-00052-CV, 2022 Tex. App. LEXIS 6838 (Tex. App.—Houston [14th Dist.] Sept. 8, 2022) (Poissant).
Abran Morales worked for Palletized Trucking as a truck driver. While delivering a container at the Bayport Container Terminal of the Port of Houston, he parked his truck in the bypass lane and waited in a line of trucks to make the delivery. Richard Taylor, an employee of the Port of Houston, was driving a gantry in the runway to the right of the bypass lane of trucks when the gantry struck Morales’s parked truck. Morales brought suit in state district court in Houston against the Port, asserting that the Port’s sovereign immunity had been waived under the Texas Tort Claims Act because of the negligence of Taylor in the operation of a motor vehicle. The Port challenged the district court’s jurisdiction, arguing that it had not waived sovereign immunity because Morales did not state a negligence claim against the Port. In particular, the Port argued that Taylor did not breach his duty as a gantry driver and that Morales did not establish that the gantry accident caused Morales’ injuries. Judge Garrison denied the Port’s motion, and the Port filed an interlocutory appeal. The Port cited its Policy that warns truck drivers that the gantry operator has a limited view of a blind spot because cargo containers block the wharf side leg of the gantry from view. The Port also cited the Policy that states that gantry operators “always have the right of way.” Writing for the Fourteenth Court of Appeals, Justice Poissant stated that the Port’s evidence supported a conclusion that Taylor did not breach a duty, but, viewing the evidence in the light most favorable to Morales, there was sufficient evidence that Taylor breached a duty to Morales. The Port also argued that Morales’s injuries resulted from pre-existing and subsequent vehicular accidents and that his medical evidence on causation was conclusory. However, Justice Poissant reviewed the medical evidence and noticed that the herniations in Morales’ discs had increased after the accident by .8 millimeters, .5 millimeters, and .2 millimeters. She also held that Morales’ doctor had sufficiently provided substantiation for his opinion on causation that it was not conclusory. Accordingly, there was more than a scintilla of evidence for the negligence claim, and the court of appeals affirmed the decision not to dismiss the case for want of jurisdiction based on sovereign immunity.
And on the maritime front . . .
From the federal appellate courts:
District court should determine whether a choice-of-law clause in an insurance policy violated a strong public policy of the forum state before applying the chosen law to the insurance dispute; Great Lakes Insurance SE v. Raiders Retreat Realty Co., No. 21-1562, 2022 U.S. App. LEXIS 24409 (3d Cir. Aug. 30, 2022) (Ambro).
Raiders Retreat Realty, a Pennsylvania company, insured its yacht RAIDERS with Great Lakes Insurance, headquartered in the United Kingdom, for $550,000. The vessel ran aground and incurred at least $300,000 in damage, but Great Lakes denied the claim on the ground that Raiders misrepresented the vessel’s fire-suppression system’s operating ability and the policy was void from its inception. Great Lakes brought this action in admiralty in federal court in Pennsylvania, seeking a declaration that the policy was void and that it owed no coverage for the grounding, and Raiders responded with a counterclaim that included several extra-contractual liability claims based on Pennsylvania law. Great Lakes moved for judgment on the pleadings that the extra-contractual claims were not valid under New York law, which was applicable to the policy under a choice-of-law provision. Judge Robreno held that New York law applied and dismissed the extra-contractual claims. Raiders filed an interlocutory admiralty appeal under Section 1292(a)(3), and, writing for the Third Circuit, Judge Ambro held that the interlocutory appeal was proper under Section 1292(a)(3) because the dismissal of the extra-contractual claims determined the rights of the parties on those claims. He then addressed the issue whether to enforce the New York choice-of-law clause and the argument that the principles enunciated by the Supreme Court in the Bremen and Shute cases with respect to forum-selection clauses should be used in determining the validity of choice-of-law provisions in maritime contracts such as the insurance policy on the yacht (the Supreme Court held that forum-selection clauses are facially valid and should be honored unless there is a compelling and countervailing reason rendering enforcement unreasonable, such as when the enforcement would contravene a strong public policy of the forum where the suit is brought). Great Lakes argued that the construct used for forum-selection clauses was “utterly irrelevant” in connection with choice-of-law clauses, and the district court agreed, concluding that public policy of a state where the case was filed could not override the presumptive validity under maritime law of choice-of-law clauses where the chosen forum has a substantial relationship to the parties or the transaction. Judge Ambro disagreed, reasoning that the principle of generally enforcing choice-of-law provisions in marine insurance contracts “is not altogether separate” from the regime for forum-selection clauses. Holding that the framework enunciated in Bremen and Shute extended to the choice-of-law provision in the Great Lakes policy, Judge Ambro remanded the case to the district court to consider whether Pennsylvania has a strong public policy that would be thwarted by application of New York law. [Compare Clear Spring Property & Casualty Co. v. Viking Power LLC and Great Lakes Insurance SE v. Andersson, discussed below].
District judge’s rejection of bait-and-switch addition of experts after deadline for experts and dismissal of this BELO suit for lack of expert evidence on causation were affirmed; Saavedra-Vargas v. BP Exploration & Production, Inc., No. 22-30010, 2022 U.S. App. LEXIS 24859 (5th Cir. Sept. 2, 2022) (per curiam).
Antonio Saavedra-Vargas brought this Back-End Litigation Option suit against BP to recover for injuries he claimed resulted from exposure to oil, dispersants, and other harmful chemicals in the clean-up effort from the DEEPWATER HORIZON/Macondo blowout. After the deadline to designate experts had passed, Saavedra-Vargas moved to modify the scheduling order to designate Dr. Natalie Perlin to testify on “breakthrough research.” Judge Fallon granted the motion based on the representations regarding Dr. Perlin’s research and the assurances of Saavedra-Vargas that he would not use the opportunity to replace his current experts or add new ones. Saavedra-Vargas then designed twelve experts, and only two, including Dr. Perlin, had anything to do with the recent research that was cited to amend the scheduling order. Judge Fallon excluded the testimony of the experts on causation based on deficiencies in their testimony or for violating the spirit and purpose of the court’s modification. BP moved for summary judgment that Saavedra-Vargas was unable to establish causation without expert testimony, and Saavedra-Vargas asked for a continuance to allow him to designate experts out of time. The problem with the request for a continuance was that Saavedra-Vargas did not identify any witness that he sought to designate whose testimony had not already been stricken. As the case had been pending for more than three years with multiple continuances, Judge Fallon declined to grant a continuance and granted summary judgment for lack of evidence of causation. See January 2022 Update.
Saavedra-Vargas appealed to the Fifth Circuit, and the Fifth Circuit affirmed the judgment, reasoning that Judge Fallon did not abuse his discretion in rejecting the “transparent bait-and-switch.” As there was no evidence of causation without the experts, the summary judgment was proper.
Fifth Circuit adopted substantial nexus test for OPA causation and held that a business that was suffering net income losses at the time of the DEEPWATER HORIZON/Macondo blowout provided sufficient evidence of a causal link between its demise and the blowout to withstand BP’s motion for summary judgment; In re DEEPWATER HORIZON (Loggerhead Holdings), No. 21-30573, 2022 U.S. App. LEXIS 24863 (5th Cir. Sept. 2, 2022) (Southwick).
Loggerhead Holdings operated a scuba diving business out of Fort Lauderdale and a scuba-diving cruise business in the northern Caribbean and Bahamas using two vessels, the NEKTON PILOT and the NEKTON RORQUAL. Loggerhead operated the business for more than two decades, but it began having financial difficulties in 2007 that continued through the DEEPWATER HORIZON/Macondo blowout on April 20, 2010 (annual operating losses of half a million dollars a year from 2007 to 2009). One of the vessels was drydocked for an extended refit in September 2009, and Loggerhead planned to pay for the refit with income from the other vessel, except that the other vessel encountered mechanical problems, resulting in cancelled cruises. Without any working vessels, Loggerhead posted on its website that it was ceasing operations on May 17, 2010. Loggerhead brought this action against BP under the Oil Pollution Act of 1990 and the general maritime law, arguing that it had sustained damages when one of the vessels sailed through oil and because its customers cancelled trips out of concerns related to the oil spill. There were no records that one of the vessels had sailed through oil (and no invoices for repair due to contact with oil), and it was unlikely that oil came within 100 miles of its position. More importantly, Judge Barbier found no evidence that Loggerhead’s alleged lost profits and impaired earning capacity were due to the oil spill (“Loggerhead’s business was going to fail in the Summer of 2010 regardless of whether the oil spill happened”). Accordingly, he denied Loggerhead recovery under OPA or the general maritime law. See September 2021 Update.
Writing for the Fifth Circuit, Judge Southwick began by noting that Loggerhead did not have to show physical damages in order to recover economic losses under OPA, only that the losses were due to the injury, destruction, or loss of real property, personal property, or natural resources. He then adopted the substantial-nexus causation standard enunciated by the Supreme Court in the Valladolid case for OCS injuries that had been used by Judge Barbier for OPA cases (see the discussion of the Classy Cycles case in the November 2021 Update). Although noting that the evidence presented by Loggerhead was “exceedingly weak,” Judge Southwick reasoned that the company had been able to continue operations for several years “despite its fraught financial condition” and despite reporting net losses for the three years before the blowout. He concluded: “Whether it could have continued to survive, if not thrive, had the [blowout] not occurred presents a fact question.” The appellate court also affirmed the denial of recovery for physical damage to the boat from alleged contact with oil for lack of evidence.
After the yacht PETRUS sank in the Miami River, it was recovered and placed in dry storage. Middle Point Marina agreed with the vessel owner to tow the vessel to its shipyard in Miami, and the owner expected the vessel to be hauled out of the water on its arrival. There was a dispute whether the vessel should be “washed” before haul out or “watched.” Two days later, the vessel sank. The shipyard salvaged the vessel and hauled it out of the water and blocked it on land at the facility. The vessel owner did not pay the fees owed to the shipyard, and the shipyard arrested the vessel. The owner filed a counterclaim for breach of contract/warranty of workmanlike performance and negligence, and the shipyard moved to dismiss the counterclaim. Judge Moore agreed to the dismissal without granting leave to amend, and the owner appealed. The Eleventh Circuit agreed that the counterclaim did not properly plead a case of breach of contract as it asserted a breach of an oral contract for allowing the vessel to sit unattended in the water, but the counterclaim did not allege that the shipyard agreed to watch or attend the vessel. The owner argued in response to the motion to dismiss that the counterclaim was meant to allege that the shipyard agreed to “watch” the vessel, but the counterclaim only alleged that the shipyard would “wash” the vessel and then haul it out. As there was no contract requiring the shipyard to watch or attend the vessel before it sank, the Eleventh Circuit agreed that there could be no claim for breach of an implied warranty. The appellate court rejected the argument that there must have been a breach of warranty to use reasonable care and skill to ensure the safety of the boat because the boat sank. The vessel owner pleaded the negligence claim in the alternative, in the event the court concluded that there was no contract. Although Judge Moore applied the economic loss doctrine to bar the negligence claim on the ground that there was a contract between the parties, the Eleventh Circuit did not have to decide that issue because the court concluded that the counterclaim failed to allege sufficient facts to show that the shipyard had a duty to protect the vessel from the injury caused by the second sinking and that the shipyard failed to do something in breach of such a duty. The allegation that the shipyard should have known that the vessel was liable to sink again, after having been salvaged, put back in the water, and towed to the shipyard was insufficient when the complaint alleged that the vessel was going to remain in the water until it had been washed. The Eleventh Circuit noted that Judge Moore concluded that an amendment would be futile in denying leave to amend, but the appellate court held that Judge Moore had not explained why an amendment would be subject to dismissal. The Eleventh Circuit recognized that Judge Moore may have had good reason to be suspicious of the desire to substitute “watch” for “wash” in describing the oral contract, but the court could not say that the amendment would necessarily fail. Therefore, the case was remanded to Judge Moore to revisit the issue whether leave to amend should be granted.
Eleventh Circuit affirmed summary judgment on lack of notice to the cruise line of the slippery condition that caused the passenger’s fall; Francis v. MSC Cruises, S.A., No. 21-12513, 2022 U.S. App. LEXIS 26749 (11th Cir. Sept. 23, 2022) (per curiam).
Janet Francis, a passenger on MSC’s cruise ship DIVINA, claimed that she slipped on a piece of watermelon in a passageway leading from the buffet. She had noticed that there was a lot of food on the deck of the passageway on her way to the buffet, putting her on heightened awareness. When she exited the buffet, ten to fifteen minutes later, she observed that the deck had been cleaned, but she was still cautious, looking for fruit on the floor. Nonetheless, she slipped on a piece of watermelon. The cruise line moved for summary judgment on the failure-to-warn claim on the ground that it owed no duty to Francis because it had no actual knowledge of the piece of watermelon and it had not experienced substantially similar incidents to put it on notice of the dangerous condition and have a duty to warn its passengers. As the deck had been cleaned within the ten to fifteen minutes that Francis was at the buffet, Magistrate Judge Seltzer held that there was insufficient evidence that the condition had been present long enough to impute constructive notice to the cruise line (see October 2019 Update). Although the cruise line was aware that food could be spilled on its decks and that food on the deck would be a slipping hazard, without a history of accidents of this sort, the cruise line was not on notice that the passageway was hazardous. Additionally, Magistrate Judge Seltzer concluded that the condition of the fruit on the deck was open and obvious so that the cruise line would not have had a duty to warn Francis in any event. Having concluded that the condition was open and obvious, Magistrate Judge Seltzer also dismissed Francis’ claims of negligent design and negligent maintenance, even though the cruise line had not moved for summary judgment on those claims. The Eleventh Circuit agreed with the dismissal of the failure-to-warn claim, as there was only speculation as to how long the watermelon had been on the floor. The appellate court distinguished a decision holding that 30 minutes was sufficient time to invite corrective measures, as that case involved large puddles that were more obvious than a piece of watermelon that was small enough that Francis did not notice it: “Our law does not require crew members to be on notice within 10 to 30 minutes of every small piece of food that falls to the floor, on a ship where hundreds of passengers are walking with food every day.” However, the Eleventh Circuit held that it was error for the magistrate judge to dismiss the negligent design and negligent maintenance claims sua sponte without giving Francis notice that he was going to rule on those claims. The appellate court rejected the argument that Francis had to file a motion for reconsideration to preserve that error, holding that a motion for reconsideration is not necessary to preserve objections to sua sponte grants of summary judgment. See December 2020 Update.
On remand, Francis focused on the floor being wet, submitting expert testimony from Dr. Reza Vaghar that the liquid on the floor reduced the coefficient of friction so that the floor was not sufficiently slip resistant. Francis also provided evidence of the cruise line’s guidelines to use wet-floor signs and the testimony from a representative of the cruise line that wet floors are known causes of slipping hazards. Judge Moreno granted summary judgment to the cruise line on the ground that Francis failed to show that the cruise line knew or should have known that the deck was unreasonably slippery. On appeal, Francis argued that the cruise line had constructive noticed based on the flooring’s failure to meet industry standards for slip resistance and based on the warning to crewmembers that the floor was dangerously slippery when wet. The Eleventh Circuit noted that the appellate court had not held that failure to meet industry standards, by itself, puts the cruise line on notice of a dangerous condition, and that the cases denying summary judgment have relied on other indicators of notice. Although Francis tried to satisfy that burden with the evidence of instruction to crewmembers to put up wet floor warnings, the cases required more specific evidence of corrective measures to establish constructive notice, such as warning signs tailored to the dangerous condition. The instructions and policy in this case operated at the highest level of generality and were insufficient to create a fact issue on notice. Consequently, the appellate court agreed that Francis failed to create a triable issue that the cruise line had notice of the allegedly dangerous condition of the flooring and affirmed Judge Moreno’s dismissal of the suit.
From the federal district courts:
Loss of part of a shackle that broke free and injured a seaman did not result in a spoliation sanction award; Palazzo v. Quality First Construction, LLC, No. 21-778, 2022 U.S. Dist. LEXIS 154740 (E.D. La. Aug. 29, 2022) (Milazzo).
Jason Palazzo was employed by Quality First Construction as a deckhand on the M/V LADY MICHELLE at the time of his accident on September 2, 2020. After Palazzo tied a barge to a piling the barge was pushed away by high winds and Palazzo was struck in the leg by a portion of a metal shackle that broke free of the piling. Quality First was first notified of this litigation on September 28, 2020, when it received a letter of representation from counsel for Palazzo. Palazzo did not request the shackle in his initial discovery requests and did not inquire about it until January 2022. At that point, Quality First conducted a search for the shackle but could not find it, and its corporate representative guessed that it was accidentally thrown away. Palazzo filed a motion seeking sanctions for spoliation of evidence, and Judge Milazzo explained that mere negligence is insufficient and that the moving party must present evidence to support a finding of bad faith. Although Palazzo argued that the explanation given by Quality First was not credible, Judge Milazzo held that Palazzo had not established bad faith or even cast doubt on the explanation (she added that it seemed credible that a piece of what appeared to be scrap metal on a vessel would be discarded or misplaced). Judge Milazzo also held that Palazzo’s ability to present his case was not compromised as Quality First had documented the incident with reports and photographs that were shared with Palazzo, and a piece of the shackle remained affixed to the piling so that Palazzo could analyze the metallurgical properties or its structural integrity. As Palazzo did not establish the elements for a spoliation claim, Judge Milazzo denied the motion.
State statute involving alcohol impairment conflicted with admiralty comparative fault rule in the case of a passenger injury; judge declined to extend The PENNSYLVANIA Rule to a non-collision/non-allision case; toxicologist/pharmacologist could testify about blood alcohol content and its effects on the passenger’s faculties but not on the causation for the accident; In re Hanson Marine Properties, Inc., No. 2:20-cv-958, 2022 U.S. Dist. LEXIS 155260, 155272 (M.D. Fla. Aug. 29, 2022) (Chappell).
Kaylee A. Prinzi was a passenger on a pontoon boat rented from Hanson Marine and operated by Kevin Hyma. She was thrown overboard, and the propeller severed Prinzi’s right leg. Hanson Marine filed this limitation action in federal court in Florida, and Prinzi and the vessel’s manufacturer filed claims in the limitation action. Hyma was brought into the action, and Prinzi filed a cross-claim against Hyma under the court’s admiralty jurisdiction as both Hyma and Prinzi are Florida citizens. The parties eventually settled all of the claims except for Prinzi’s claim against Hyma, and Prinzi demanded a jury trial on that claim. As there was no diversity or other basis for federal jurisdiction except admiralty, Judge Chappell struck Prinzi’s demand for a jury trial. See June 2022 Update.
Prinzi and Hyma filed cross-motions for summary judgment, which raised issues on the applicable law and standards with respect to the fault of the parties. Judge Chappell recited facts related to the accident, beginning with Prinzi taking antidepressant medication and drinking alcohol on the trip. Prinzi and her friends were on the bow of the vessel while Hyma (a “layperson”) was operating the vessel. Hyma claimed that Prinzi, who was intoxicated, needed to urinate and fell off the bow when she squatted backwards off the front end of the boat as it was moving forward in the water. Prinzi argued that Hyma knew it was dangerous to operate the vessel with passengers on the bow, drove too fast, and accelerated the vessel without warning. Prinzi argued that The PENNSYLVANIA Rule should apply in this case to shift the burden to Hyma to prove that he could not have caused Prinzi’s injuries. In the first place, Judge Chappell noted that the Rule is not a rule of liability and only shifts the burden of proof as to causation. Judge Chappell then reviewed the decisions from the Eleventh Circuit which have only extended the Rule to collisions and allisions. As the Eleventh Circuit has not applied the Rule to situations like Prinzi’s injury, Judge Chappell declined to extend the Rule to Prinzi’s fall from the pontoon boat. Hyma argued for application of the Florida’s statute barring recovery of damages in a civil action when the plaintiff is under the influence of alcohol to the extent normal faculties are impaired or had a blood alcohol content of .08 or higher and was more than 50% at fault. Prinzi contended that the statute conflicted with maritime law’s comparative negligence principles, but Hyma responded that there was no conflict between the statute and maritime law because Florida utilizes comparative fault and still enforces the statute. Judge Chappell disagreed with Hyma, reasoning that the statute is an exception to comparative negligence that prevents a person from recovering when that person would otherwise have been able to recover under comparative negligence principles. Thus, the statute could not be enforced in this maritime case. Finally, Hyma argued that the Rental Agreement signed by Prinzi with Salty Sam’s Boat Rental shielded him from liability. However, Judge Chappell did not agree that a contract between two parties could release a third party who was unnamed and unidentified in the contract.
Prinzi objected to the toxicologist/pharmacologist (Dr. Christopher Borgert) retained by Hyma to testify about Prinzi’s blood alcohol content, the impact on her faculties, and whether her consumption of alcohol caused or contributed to the accident. Judge Chappell began by ruling that Borgert was qualified to testify about Prinzi’s blood alcohol content and its impact on her faculties, and she noted that the testimony on these matters would be helpful in determining the cause(s) of Prinzi’s fall. However, Judge Chappell did not believe that a toxicologist/pharmacologist was qualified to testify whether Prinzi’s consumption of alcohol caused or contributed to her fall (noting that Borgert is not a maritime or boating expert). Judge Chappell also held that Borgert could not testify about which faculties are necessary for boating or about the prevalence of alcohol in boating accidents.
Judges granted summary judgment on opt-out claims from the DEEPWATER HORIZON/Macondo spill for lack of evidence on causation; Miller v. B.P. Exploration & Production, Inc., No. 17-4441, 2022 U.S. Dist. LEXIS 155735 (E.D. La. Aug. 30, 2022) (Vance); Milsap v. B.P. Exploration & Production, Inc., No. 17-4660, 2022 U.S. Dist. LEXIS 158794 (E.D. La. Sept. 2, 2022) (Vance); Norwood v. BP Exploration & Production Inc., No. 17-3203, 2022 U.S. Dist. LEXIS 159932 (E.D. La. Sept. 6, 2022) (Africk); Patton v. BP Exploration & Production, Inc., No. 17-4473, 2022 U.S. Dist. LEXIS 161858 (E.D. La. Sept. 8, 2022) (Vance); Nestle v. BP Exploration & Production, Inc., No. 17-4463, 2022 U.S. Dist. LEXIS 163630 (E.D. La. Sept. 12, 2022) (Vance); McClendon v. BP Exploration & Production, Inc., No. 17-3379, 2022 U.S. Dist. LEXIS 164627 (E.D. La. Sept. 13, 2022) (Milazzo); Graham v. BP Exploration & Production, Inc., No. 19-11673. 2022 U.S. Dist. LEXIS 165997 (E.D. La. Sept. 15, 2022) (Milazzo); Harris v. BP Exploration & Production, Inc., No. 17-3265, 2022 U.S. Dist. LEXIS 166496 (E.D. La. Sept. 15, 2022) (Milazzo); McConaghy v. BP Exploration & Production, Inc., No. 17-3116, 2022 U.S. Dist. LEXIS 166497 (E.D. La. Sept. 15, 2022) (Ashe); Abdelfattah v. BP Exploration & Production, Inc., No. 17-3443, 2022 U.S. Dist. LEXIS 166499 (E.D. La. Sept. 15, 2022) (Milazzo); Colbert v. BP Exploration & Production, Inc., No. 17-3647, 2022 U.S. Dist. LEXIS 166500 (E.D. La. Sept. 15, 2022) (Milazzo); Baggett v. BP Exploration & Production Inc., No. 17-3030, 2022 U.S. Dist. LEXIS 169236 (E.D. La. Sept. 13, 2022) (Guidry); Dawkins v. BP Exploration & Production, Inc., Nos. 17-3533, 17-3596, 17-4158, 17-4334, 17-4342, 2022 U.S. Dist. LEXIS 169328 (E.D. La. Sept. 20, 2022) (Vance); Dean v. BP Exploration & Production, Inc., No. 17-6800, 2022 U.S. Dist. LEXIS 172242 (E.D. La. Sept. 20, 2022) (Milazzo); Norris v. BP Exploration & Production, Inc., No. 17-4565, 2022 U.S. Dist. LEXIS 171280 (E.D. La. Sept. 22, 2022) (Vance); Wade v. BP Exploration & Production, Inc., No. 17-4624, 2022 U.S. Dist. LEXIS 172241 (E.D. La. Sept. 23, 2022) (Vance); Bachi v. BP Exploration & Production, Inc., No. 17-4129, 2022 U.S. Dist. LEXIS 173753 (E.D. La. Sept. 26, 2022) (Vitter).
These cases involve opt-outs from the DEEPWATER HORIZON Medical Benefits Class Action Settlement Agreement. Carolyn Miller claimed exposure to crude oil and dispersants by virtue of her presence in and around Dauphin Island, Mississippi and from consumption of contaminated seafood. Sylvia Milsap claimed that she and her minor children were exposed to toxic chemicals in the environment in Pascagoula, Mississippi. Dorothy McClendon claimed exposure to oil and harmful chemicals during work on the Vessels of Opportunity Program near Pass Christian, Ship Island, and Bay St. Louis, Mississippi. Kent McConaghy brought this action on his behalf and on behalf of Minor McConaghy, Kara McConaghy, and Kohl McConaghy, claiming toxic exposures in Florida related to the spill and cleanup. Michael E. Dean alleged exposure to harmful substances and chemicals around his residence in Destin, Florida. Christian, Sabrina, and Colton Bachi claimed exposure to oil and dispersants at Santa Rosa Beach, Florida. As these plaintiffs failed to support their claims with expert testimony as to causation, Judges Vance, Milazzo, Ashe, and Vitter granted summary judgment for lack of evidence of causation and dismissed the suits.
Austin Norwood was employed in Navarre and Pensacola Beach, Florida to locate and to boom oil dispersants. He claimed that he removed oiled debris and tar from the water by hand and would drag the oil boom behind the boat to skim oil and dispersants from the water. Norwood claimed exposure to oil and dispersants both as a clean-up worker and as a resident of Santa Rose Beach, Florida. Carlos Patton claimed that he was exposed to oil and dispersants while performing clean-up work in and around Gulfport, Biloxi, Pascagoula, and Horn Island, Mississippi. Stephen Nestle alleged exposure to oil and dispersants when he performed clean-up work in and around Pass Christian, Ship Island, and Bay St. Louis, Mississippi. Sarah Graham claimed exposure to oil and dispersants while cleaning beaches at Grand Isle, Louisiana. Charles Harris alleged exposure to oil and dispersants while decontaminating boats and booms near Theodore and Tillman’s Corner, Alabama. Khaled Abdelfattah claimed exposure to oil and dispersants while decontaminating and handling equipment around Plaquemines Parish, Houma, and Venice, Louisiana. Edward Colbert claimed exposure to oil and dispersants while cleaning oily rocks and jetties and picking up tar balls near Gulfport, Long Beach, Biloxi, Cat Island, Ship Island, and Milner Stadium, Mississippi. Vernon Davis Baggett asserted that he was exposed to oil and dispersants while employed to perform the decontamination of vessels involved in the response. Daphne Norris claimed exposure to oil and dispersants while performing cleanup work on the Mississippi shoreline at Gulfport and Biloxi. James R. Wade alleged that he was exposed to environmental and residential exposure to crude oil and dispersants while performing cleanup work, collecting oil and contaminated debris from beaches in Mississippi. These plaintiffs presented the opinions of Dr. Jerald Cook, an occupational and environmental physician to carry their burden on causation, but Judges Vance, Africk, Milazzo, and Guidry held that Dr. Cook’s opinions were insufficient on general causation and were excluded. Consequently, without expert support, these cases were dismissed with prejudice.
Plaintiffs Frederick Lloyd Dawkins, Marcus Jerome Peairs, Steve Coleman, Marcus Grant, and Al’Terryal Harris, whose claims were previously dismissed, moved for reconsideration of the orders excluding the testimony of Dr. Cook and granting the motions for summary judgment. They supported their motions with the contention that they were unable to properly present expert testimony on dosage because of BP’s alleged mismanagement of biological monitoring. However, Judge Vance noted that the plaintiffs did not contend that the discovery, “which involves what BP did not do after the oil spill, would supply the missing dose-response relationship or cure the lack of fit between Dr. Cook’s opinion and the facts of their cases.” Judge Vance pointed out that the plaintiffs had not produced new evidence and that other sections of the court had noted that the point of an expert on general causation is to explain whether the exposure was capable of causing health problems in the general population. “It is not dependent on data from the particular incident at issue.” As the bare assertion that pending discovery implicated questions that went to the heart of the general causation question was insufficient to justify the extraordinary remedy of reconsideration, Judge Vance denied the motions.
Owner and charterer of barge recovered against subcharterer for loss of use of barge that was damaged during the subcharter; Shallow Water Equipment L.L.C. v. Pontchartrain Partners, L.L.C., No. 21-949, 2022 U.S. Dist. LEXIS 155748 (E.D. La. Aug. 30, 2022) (Fallon).
Shallow Water Equipment chartered the spud barge GRANT from TK Boat Rentals and then subchartered the barge to Pontchartrain Partners to work for the Army Corps of Engineers. Shallow Water claimed that the barge sustained damage and that Pontchartrain returned the barge in a damaged condition. TK and Shallow Water brought this suit against Pontchartrain in federal court in Louisiana, with TK seeking to recover for constructive loss of the barge, unpaid charter hire, and consequential damages from the return of the vessel in a damaged condition, and with Shallow Water seeking damages for unpaid charter hire. Pontchartrain moved for summary judgment, which required that Judge Fallon address the contractual relationship among the parties. The arrangement began as a handshake deal for a bareboat charter from TK to Shallow Water to Pontchartrain. After the charter began, there was a written agreement. As the testimony was conflicting about whether the written or oral charter was applicable, Judge Fallon evaluated whether there was a difference as to whether consequential damages could be recovered under either agreement. Assuming the oral charter party governed, Judge Fallon held that the maritime law permits recovery for lost charter hire when the vessel is returned in a damaged condition. As to the written charter party, Pontchartrain cited the provision that all damage must be repaired or a repair charge would be added to the rental invoice and argued that its liability was limited to the repair charges. Judge Fallon disagreed, noting that the language did not address consequential damages or loss of use. Accordingly, he held that Pontchartrain was not immune from the claim for consequential damages regardless of whether the oral or written charter party was applicable. Pontchartrain also argued that TK, as owner, had no claims directly against it, as subcharterer, reasoning that TK was not a party to the subcharter and there was no privity between them. However, Judge Fallon answered that TK asserted a maritime tort claim based on negligence against Pontchartrain. Thus, if TK established the negligence of Pontchartrain, TK would be allowed to recover lost hire resulting from the physical damage to the barge. See September 2022 Update.
Judge Fallon conducted a bench trial. The parties resolved the claim for property damage, and TK Boat was able to charter the barge while awaiting repairs because of the increased demand for barges after Hurricane Ida. Finding that Pontchartrain negligently damaged the barge by using an excavator on the deck of the vessel without adequate mats, Judge Fallon addressed the defense that TK Boat, as owner of a vessel that was chartered, did not have a propriety interest necessary to satisfy Robins Dry Dock and to maintain a maritime tort action against Pontchartrain. Judge Fallon rejected the argument and held that TK Boat was entitled to recover from Pontchartrain the lost charter hire it sustained as a result of Pontchartrain’s negligence, which was $203,850, including the period in which repairs are to be made to the vessel. Judge Fallon also found that Pontchartrain was liable to Shallow Water for the period that it retained possession and control of the barge after the subcharter ended, effectively extending its term. Accordingly, Shallow Water was entitled to damages for loss of use, and Judge Fallon awarded Shallow Water $57,709.41 for lost hire. A portion of the work was performed under the Miller Act and a performance bond that was issued by Continental Insurance, but Shallow Water did not bring its action against Continental within the statutory limitation period of one year. Consequently, Judge Fallon granted judgment to Continental. Finally, Judge Fallon awarded pre-judgment interest. Shallow Water requested that the court award interest at the contractual rate on unpaid amounts of 1.5% per month, but Judge Fallon believed that rate was exorbitant and instead awarded pre-judgment interest at the Louisiana statutory rate of 3.5% per annum, compounded annually.
State innocent seller law was not applicable in product liability case arising from boating accident on navigable lake; Marandola v. Pueblo Suzuki, Inc., No. 1:20-cv-02113, 2022 U.S. Dist. LEXIS 157476 (D. Colo. Aug. 31, 2022) (Sweeney).
This is a product liability case arising from a boating accident on Lake Powell in which a carabiner connecting the anchor line (that was used to tow a disabled boat) failed and struck Kristine Marandola in the head. Marandola brought this suit in federal court in Colorado against the sellers of the line and carabiner, basing jurisdiction on diversity and admiralty. Marandola moved to clarify the choice of law in the case to establish that maritime law applied, and the defendants objected and asserted that the Colorado innocent seller statute applied. Magistrate Judge Mix concluded that admiralty law applied and that the Colorado statute conflicted with applicable maritime law and did not apply. Judge Sweeney agreed that admiralty law and its strict liability rules under Restatement Second of Torts Section 402A were applicable to the product liability claims. She then considered whether state law could be used to supplement the maritime law. Judge Sweeney considered Section 402A to be entrenched federal precedent and then considered whether the Colorado statute (providing that plaintiffs may only sue a seller if they attempt and fail to obtain jurisdiction over the manufacturer) conflicted with entrenched maritime law. As the maritime law allows plaintiffs to hold both manufacturers and sellers liable, Judge Sweeney agreed with Marandola that the Colorado statute was materially different from and conflicted with the maritime law. Finally, Judge Sweeney considered whether to carve out an exception to the general maritime law, noting situations in which state law has been used to supplement maritime law. However, Judge Sweeney reasoned that the exceptions involve filling gaps in admiralty law. In this case, the maritime law did not contain a gap that needed to be filled on the issue whether a seller can be sued on a product liability theory. Accordingly, Judge Sweeney granted Marandola’s motion with respect to application of maritime law.
Estate of Navy boiler tender presented sufficient evidence to preclude summary judgment of boiler supplier in asbestos exposure suit, but the supplier was allowed to assert a superseding/intervening cause defense and introduce evidence of the knowledge of the Navy of the hazards of asbestos; Hipwell v. Air & Liquid Systems Corp., No. 1:20-cv-63, 2022 U.S. Dist. LEXIS 158607, 158608 (D. Utah Aug. 31, 2022) (Parrish).
Keith W. Hipwell served as a boiler tender on the U.S.S. FOSS from 1951 to 1953. After he died from mesothelioma, his estate brought this suit against suppliers of products allegedly containing asbestos, including Foster Wheeler, which supplied boilers containing approximately 250 pounds of asbestos. Foster Wheeler moved for summary judgment, arguing that Hipwell’s exposure to asbestos associated with Foster Wheeler’s boilers was not a substantial factor in Hipwell’s development of mesothelioma and asserting a DeVries defense and a Boyle government-contractor defense. There was conflicting testimony as to Hipwell’s exposure, including that from a co-worker who testified to their having to enter the boilers that were surrounded by asbestos and as to replacing a mixture of clay and asbestos. Although Judge Parrish characterized the evidence as “weak,” she held that it was sufficient to hold Foster Wheeler liable. With respect to the DeVries defense, Judge Parrish found sufficient evidence that Foster Wheeler directed that asbestos be incorporated into its boilers. Although there was evidence that the Navy regarded the gaskets and packing as negligible sources of asbestos exposure, there was a fact question whether there was a danger posed to the boiler tenders and whether the boiler tenders would realize the dangers of using the boilers. Consequently, Judge Parrish denied the DeVries defense. Finally, Judge Parrish addressed the government contractor defense from Boyle. Although Foster Wheeler argued that the Navy exercised its discretion by developing detailed specifications regarding warnings, Judge Parrish concluded that a reasonable inference from the evidence was that the Navy paid little attention to warnings during the relevant time for this case and simply rubber-stamped contractors’ decisions to include or omit warnings. Whether the Navy exercised sufficient discretion for Foster Wheeler to assert the defense presented a fact dispute to be resolved at trial.
The estate moved to preclude Foster Wheeler from presenting evidence of the Navy’s intervening or superseding negligence, asserting that the Navy’s alleged failure to warn Hipwell of the dangers of asbestos was a foreseeable consequence of Foster Wheeler’s failure to warn. Judge Parrish rejected the argument, reasoning that the alleged negligence of the Navy was relevant to whether Foster Wheeler’s alleged negligence was a proximate cause of the death and that there was evidence that the Navy was aware of the hazards of asbestos, had written guidelines dealing with protection of personnel, and that Foster Wheeler knew about the safety procedures promulgated by the Navy so that it may not have been foreseeable that the Navy would fail to warn Hipwell. Consequently, Judge Parrish also held that evidence of the Navy’s knowledge about the dangers of asbestos was relevant and admissible.
Non-settling defendants in a seaman’s asbestos-exposure case will receive a reduction for settlements of other defendants based on proportionate responsibility and will not receive a pro tanto credit; Hutchins v, Anco Insulations, Inc., Nos. 19-11326, 21-369, 2022 U.S. Dist. LEXIS 158002 (E.D. La. Sept. 1, 2022) (Barbier).
Raymond Hutchins, Jr. was allegedly exposed to asbestos while aboard vessels owned and operated by his employer, Lykes Bros. S.S. Co. His beneficiaries brought suit against more than 30 defendants, including Huntington Ingalls, successor to Avondale Shipyard, which removed the case to federal court under the Federal Officer Removal Statute. The plaintiffs filed a second action in state court against Lykes Bros’ insurer, Continental Insurance, which removed the case under the Federal Officer Removal Statute after receiving information that Hutchins worked aboard vessels that were built pursuant to the direction of federal officers (arguing that it was not apparent from the face of the plaintiffs’ petition that the case was removable). The petition in the suit against Continental did not reveal that the ships were built at the direction of federal officers. Continental argued, in response to the plaintiffs’ motion to remand, that the case became removable when its experts provided vessel status cards that reflected that the vessels were built at the direction of federal officers. Judge Barbier began by noting that although the defendant was aware of the facts that made the case removable, that subjective knowledge did not trigger the time for removal when the petition did not demonstrate that the vessels were built at the direction of federal officers. Instead, the court had to determine when the defendant received an “other paper” from which it could be ascertained that the case was removable. Judge Barbier recognized the Fifth Circuit rule that the voluntary act of the plaintiff may qualify as an “other paper” that triggers the right of removal. However, it was the paper received from the defendant’s own expert that provided the information that identified that the case was removable because the vessels were built pursuant to the direction of federal officers. Giving the Federal Officer Removal Statute a liberal interpretation, Judge Barbier held that a departure from the voluntary-involuntary rule was appropriate in this case, and he ruled that the removal was timely as it was filed within 30 days of the receipt of written notice from the defendant’s expert. Judge Barbier then addressed whether the saving-to-suitors clause prevented removal of the general maritime claim for unseaworthiness and whether the bar to removal of FELA claims prevented removal of the Jones Act claim. Noting that general maritime claims can be removed based on a number of statutory bases, such as the Outer Continental Shelf Lands Act and diversity, Judge Barbier “easily dispatched” the argument that the unseaworthiness claim could not be removed. Although the removability of the Jones Act claim was more complicated in view of the bar to removal in Section 1445(a) for FELA cases, Judge Barbier noted that the en banc Fifth Circuit in the Latiolais case (see March 2020 Update) held that “Federal officers may remove cases to federal court that ordinary federal question removal would not reach.” Holding that Section 1445(a) must give way to the policy considerations in favor of removal of cases under the Federal Officer Removal Statute, Judge Barbier held that the Jones Act claim was removable. See July 2021 Update.
After a number of defendants had reached settlements, Lykes Bros.’ insurer, Continental Insurance moved for summary judgment, seeking a pro tanto credit (dollar for dollar) for the settlements rather than a reduction in accordance with the proportionate responsibility of the settling tortfeasor based on the Supreme Court’s decision in McDermott v. AmClyde. Continental Insurance cited a line of cases that carved out an exception (for FELA and Jones Act cases) to the proportionate reduction rule and applied a pro tanto credit. Judge Barbier did not find the argument convincing, reasoning that the cases were based on a misunderstanding of AmClyde and the Ayers decision of the Supreme Court in an FELA case. Judge Barbier concluded that the liability of the non-settling defendants should be calculated with reference to a jury’s allocation of proportionate responsibility.
Judge applied Restatement Second of Torts (not the Restatement Third) in denying summary judgment on product liability claim; Gonzalez v. Sea Fox Boat Co., No. 2:19-cv-130, 131, 132, 2022 U.S. Dist. LEXIS 158562 (W.D. La. Sept. 1, 2022) (Cain).
This case arises from injuries suffered during an explosion when the plaintiffs were changing out the batteries on a 2014 Sea Fox Commander fishing boat in Louisiana waters [one of the plaintiffs subsequently died from mixed drug intoxication]. The plaintiffs brought this suit in federal court in Louisiana against Sea Fox, which designed and manufactured the vessel, and Yamaha, which sold the engines and water/fuel separating filters (Yamaha asserted that the filters were designed, manufactured, and tested by Dometic Corp./Sierra International). The complaint sought punitive damages. In our December 2021 Update, we discussed Judge Cain’s decision applying Louisiana law for the remedies for the survival action and Arkansas law to the remedies for the wrongful death action. In a subsequent opinion, Judge Cain addressed Yamaha’s argument that its actions/omissions did not rise to the level of egregious misconduct required to sustain a claim for punitive damages. The plaintiffs argued that the filters were defective because the cannister that contains the filtering device used materials that rust or corrode when submerged in water, that the filters were located in an area that allowed them to be submerged in water, and that users were not warned that there is a risk that fuel and fuel vapors can be released in the event the filters rust to the point that their integrity is compromised. The plaintiffs argued that Yamaha knew that if the filters were to rust they would corrode and leak fuel and that Yamaha was reckless because it failed to perform design failure analysis on the filters to prevent the corrosion. Yamaha responded that it had sold 1.8 million filters between 2005 and 2020 and only received 4 claims related to corrosion with no claims for injury or death. Yamaha also argued that it could not be held liable for punitive damages for the design, testing, and manufacture of the filters by Dometic/Sierra. However, the plaintiffs presented evidence that Yamaha had played a significant role in the specification and creation of the filters, including removal of the corrosion testing requirement from the final set of specifications. There were also disputes whether testing for corrosion and/or rust was performed and whether the box in which the filters were contained warned of the danger of rust or corrosion. Accordingly, Judge Cain found sufficient evidence to allow the claim for punitive damages to be determined by the fact finder. See March 2022 Update.
Sea Fox also moved for summary judgment on the punitive damage claim, and it fared no better than Yamaha. Sea Fox argued that it complied with all standards and regulations and that its conduct fell short of conduct that constituted gross negligence or callous/reckless disregard for the rights of others. The plaintiffs cited several actions or inactions in manufacturing the vessel that they argued could constitute a pattern of negligence that, taken together, established a reckless or callous disregard for the rights of others (failure to have a build-plan for the boat, failure to have drawings which purportedly matched the manufacture of the boat and placement of the filters, failure to install the filters in the location shown on an inspection report of a similar vessel, installing the filters in a highly corrosive environment, and failure to have warnings of fire and explosion due to fuel leakage). Judge Cain considered the cumulative effect of these negligent acts sufficient to collectively constitute gross negligence. See May 2022 Update.
The parties then moved to strike expert opinions, but Judge Cain declined the motions. The plaintiffs challenged metallurgical engineer failure analysist Gary Fowler with respect to the results of Fourier Transform Infrared Spectroscopy testing and sea spray testing on the grounds that the tests were unreliable and the opinions flowing from them would not assist the jury. The plaintiffs argued that Fowler had not personally conducted the Fourier test; however, their own metallurgical expert relied on a chemist to conduct similar testing for the plaintiffs. The plaintiffs made the same objection to the sea spray testing, but their expert did not criticize the testing when given the opportunity to do so. Judge Cain found that the test was highly relevant and helpful to the fact finder for its demonstration that the Yamaha filter experienced only superficial deterioration (that was unlikely to impact the structure of the canister), and held that questions on the supervision of the experiment were “fodder for cross-examination.” The defendants moved to strike the opinions of forensic economist Randy Rice on the loss of earnings resulting from the death of Jeremy Eades because the opinions did not account for Eades’ personal consumption, the historical support his mother and children received from him, the ages of the children to majority, and the life expectancy of his mother. However, Rice was only offered to testify as to the total lost earnings of Eades, so his failure to account for the objections of the defendants did not affect the admissibility of his testimony and could be addressed by the defendants’ economist. Yamaha and Sea Fox moved to strike the testimony of Dr. William Vigilante, an expert on ergonomics/human factors, on the adequacy of warnings, but Judge Cain held that his reports and methods were sufficiently reliable to allow him to testify about the adequacy of the warnings and the foreseeability of misuse. The defendants objected to the characterization of Dr. Darrell Henderson, a plastic surgeon who treated the burn wounds of Gonzalez, Outlaw-Knight, and Eades, as a treating physician because he was hired after the accident, but Judge Cain denied the motion, and he also allowed Dr. Henderson to testify about the plaintiffs’ need for psychological treatment, the need for pulmonary consults, counseling needs, and complications of wounds and obstacles to return to the plaintiffs’ occupations, such as heat exposure and physical strain. Judge Cain rejected the argument that the life-care plan of Ruth Rimmer or the opinions of vocational rehabilitation expert Joyce Beckwith and economist John Theriot were insufficiently based on supporting medical evidence. As the defendants’ motion to exclude evidence of domestic violence or disciplinary actions related to Dennis Kleinpeter was unopposed by the plaintiffs, Judge Cain precluded mention at trial of claims of domestic violence or disciplinary actions relating to Kleinpeter, although Judge Cain declined to grant the defendants’ motion to exclude internet reviews of Dr. Richard R. Roniger as being too premature for the court to determine if the objection was warranted. Finally, as it was unopposed, Judge Cain ruled that the defendants could not argue that Gonzalez was at fault for dumping out gasoline from the water/fuel separator, but he declined to rule in a motion in limine that the defendants’ experts could not testify that Gonzalez was at fault for continuing to work on the boat after he smelled gasoline and that the defendants could not argue to the jury on the application of joint and several liability. See June 2022 Update.
Yamaha moved for summary judgment on the claims for strict liability, negligence, and failure to warn, arguing that the product warnings instructed that the user should check for leaks in the filters after every installation and engine start-up, but no such check was made. Judge Cain declined to grant summary judgment on this defense, however, concluding that the warnings failed to convey the risk of explosion should the instructions not be followed. Similarly, Judge Cain did not consider the danger to be open and obvious, and he declined to grant summary judgment on the failure to warn claim. Finally, Judge Cain declined to conclude as a matter of law that the plaintiffs were negligent or that there was no causation with respect to the product liability claims. See September 2022 Update.
Sea Fox then moved for summary judgment, arguing that the Third Restatement of Torts should provide the applicable principles for maritime product liability claims, but the plaintiffs responded that the Fifth Circuit applied the Second Restatement. Applying the Second Restatement, Judge Cain held that there was sufficient expert evidence to support a manufacturing defect, a design defect (placement of the filters), and on how corrosion occurred and led to the fuel leak which caused the explosion. Judge Cain also found sufficient evidence to deny summary judgment to Sea Fox on to the adequacy of warnings and on the issue whether the cause of the fire was misuse by the plaintiffs.
Parent company was not liable under the Jones Act or for maintenance and cure or unseaworthiness for injury of seaman employed by its subsidiary; Simon v. Bertucci Contracting Co., No. 20-3320, 2022 U.S. Dist. LEXIS 159931 (E.D. La. Sept. 6, 2022) (Barbier).
Orlando Simon, an employee of Bertucci Contracting, was injured on a spud barge owned by Bertucci Contracting and brought this suit against Bertucci under the Jones Act and under the general maritime law for maintenance and cure and unseaworthiness. He also claimed that Crosby Tugs was liable for all of the allegations brought against Bertucci because Bertucci had been purchased by Crosby Tugs prior to his accident. Crosby Tugs filed a motion for summary judgment, and Judge Barbier agreed that Crosby Tugs could not be liable under the Jones Act or for maintenance and cure as no facts were presented that it employed Simon. Similarly, Judge Barbier held that Crosby Tugs did not own the spud barge and could not be liable for its alleged unseaworthiness. Judge Barbier then addressed the argument that Crosby Tugs should be held responsible for Bertucci’s liability, noting that the companies have the same address and registered agent and because the companies have effectively blended their business together (noting that an employee of Crosby Dredging was working on a vessel being towed by Crosby Tugs). Judge Barbier held, however, that the arguments were insufficient to establish that the companies were alter egos of each other, and he granted summary judgment dismissing the Jones Act, maintenance and cure, and unseaworthiness claims against Crosby Tugs.
Evidence that the defendant was negligent does not establish that it was solely negligent; Savage Services Corp. v. United States, No. 20-137, 2022 U.S. Dist. LEXIS 160030 (S.D. Ala. Sept. 6, 2022) (Steele).
This case initially presented the legal question of first impression: Does the Oil Pollution Act of 1990 displace the federal government’s waiver of sovereign immunity in the Suits in Admiralty Act when the negligence of the United States is alleged to have caused an oil spill from a vessel? The spill occurred when the M/V SAVAGE VOYAGER, which was pushing two tank barges containing oil on the Tennessee-Tombigbee Waterway in Mississippi, entered the Jamie Whitten Lock, a boat lift operated by the U.S. Army Corps of Engineers. The owner of the tug alleged that the lock master began de-watering the lock chamber without notice before the tug and tow were in correct position, resulting in damage to one of the barges and a release of oil into the water. The owners performed the required cleanup/removal under OPA and brought this suit against the United States under the Suits in Admiralty Act, seeking to recover the cleanup/removal costs plus damage to the barge, loss of use, and lost cargo, based on negligence of the United States under the general maritime law. Although the United States admittedly waived sovereign immunity in the SAA to the extent a private citizen would be liable, the United States argued that the waiver in the SAA was displaced by the comprehensive scheme enacted for cleanup/removal costs in OPA, which does not provide for liability for the United States. District Judge Steele dismissed the claim for reimbursement of cleanup/removal costs (but not the claim for damage to the vessel/loss of use/loss of cargo), and the owner appealed to the Eleventh Circuit. Writing for the appellate court, Judge Altman (district judge from the Southern District of Florida sitting by designation), affirmed the decision of Judge Steele. Judge Altman noted the difference between the provision of the Clean Water Act (which affords a complete defense to the vessel in the event the spill is caused solely by the negligence of the United States), and OPA, which affords a complete defense to the vessel in the event the spill is caused solely by an act or omission of a third party. OPA also creates a contribution action against “any other person who is liable or potentially liable under this Act or another law.” A “person” is defined in OPA as “an individual, corporation, partnership, association, State, municipality, commission, or political subdivision of a State, or any interstate body.” After reviewing OPA in detail, Judge Altman concluded that OPA did not create a cause of action against the United States, noting that the definition of “person” did not include the United States and noting the omission of the fault of the United States in the defenses available to the Responsible Party. Judge Altman then considered the effect of the comprehensive provisions of OPA on the waiver of immunity in the Suits in Admiralty Act and the liability of the United States for negligence under the general maritime law. Finding the language of OPA to be unambiguous that the owner had no right of recovery against the United States, he concluded that OPA displaced the waiver of sovereign immunity and maritime remedy in the SAA. Thus, the owner had no right of recovery for the cleanup/removal costs but could proceed on its claims for damage to the barge and cargo. See March 2022 Update.
Back in the district court, the owner moved for summary judgment on its property damage claim, seeking a ruling that the negligence of the United States was the sole cause of the accident. The owner submitted the testimony of the lock operator and argued that his commencement of the de-watering while the tug and tow were not in correct position was the sole cause of the accident. Judge Steele assumed, without deciding, that this failure was negligent. However, the motion sought to establish that it was the sole negligence. Reasoning that the “universe of ways in which a party may be negligent is vast,” and that the owner had failed to “identify all the myriad ways in which they might have performed negligently,” Judge Steele declined the owner’s motion. After noting that it seemed reasonable that the owner had a duty of reasonable care to properly position the tow to avoid its becoming caught on the miter in the event of a normal 1 to 2 foot surge and noting the experience of the tug’s pilot who had transited the lock at least 250 times, Judge Steele concluded that there was a fact question whether the vessel owner was negligent.
Injured passenger has to replead vicarious liability and direct liability claims against cruise ship; Segarra v. Carnival Corp., No. 21-23661, 2022 U.S. Dist. LEXIS 160724 (S.D. Fla. Sept. 6, 2022) (Martinez).
Carlos Segarra, a passenger on the SUNRISE, was injured on the Lido Deck when he bent over to tie his shoelace and was struck from behind by a trolley cart pushed by a crewmember. Segarra alleged that the view of the crewmember was obscured because the trolley cart was taller than the crewmember. Segarra brought this suit in federal court in Florida, alleging claims of both vicarious liability and direct liability of the cruise line. The cruise line moved to dismiss the vicarious liability claims on the ground that Segarra had disguised his claims as counts of vicarious liability to bypass the notice requirement for direct liability claims, but Judge Martinez disagreed as the complaint asserted that the employee directly created the risk through his own conduct. It was not necessary for a vicarious liability claim that Segarra provide the identity of the crewmember, only that the act was of a crewmember employed by the cruise line and acting on its behalf. Judge Martinez did note that Segarra did not allege that the crewmember owed a duty of care to Segarra. Accordingly, the vicarious liability claims were dismissed to be repleaded. With respect to the direct liability claim, Segarra vaguely alleged prior similar incidents to satisfy the notice requirement. As the complaint did not allege how the prior incidents related to Segarra’s accident, Judge Martinez dismissed the direct liability claim to be repleaded.
Prior limitation action filed by the vessel owners in federal court did not provide federal question jurisdiction for removal of a “saving for suitors” suit brought by claimants in state court; Lalonde v. Progressive Security Insurance Co., No. 2:21-cv-2365, 2022 U.S. Dist. LEXIS 172896 (W.D. La. Sept. 6, 2022) (Kay), opinion adopted without objection, (E.D. La. Sept. 21, 2022) (Cain).
This suit arose from a collision between two pleasure boats on the Calcasieu River in Louisiana. One boat was operated by Thomas Lundy. The other vessel was operated by Austin Lalonde with passenger Elizabeth Blanchard aboard. Mark and Lillian Lundy, owners of the Lundy boat, filed a limitation action in the federal court for the Western District of Louisiana, and Judge Cain ordered a stay on April 28, 2021 of any action against the owners or their insurers. Just over a month later, on June 2, 2021, Lalonde and Blanchard filed this action in Louisiana state court against Thomas Lundy and Progressive Security Insurance Co. That action, which did not name the vessel owners, alleged that it was a “saving for suitors” admiralty claim. Judge Cain in the limitation action stayed the state action, and the defendants in the state action removed the case to the federal court for the Western District of Louisiana, arguing that the court had federal question jurisdiction because of the relationship between the state suit and the federal limitation action. Magistrate Judge Kay reasoned, however, that to the extent there was a federal question, it concerned application of the Limitation Act. That Act was not raised in the suit filed in state court and was therefore a defense that did not satisfy the well-pleaded complaint rule. Accordingly, Magistrate Judge Kay recommended that the suit be remanded to state court. Magistrate Judge Kay also noted that, to the extent there may have been a federal question, the removal appeared to be untimely (more than 30 days after service of the suit on the defendants). The defendants did not object to the recommendation, and, on September 21, Judge Cain adopted the recommendation and ordered the case remanded to Louisiana state court.
Louisiana federal court had jurisdiction over suit to confirm London arbitration award based on connection of the damage to Louisiana and the terms of the letter of undertaking provided by the charterer; Conti 11 Container Schiffarts GmbH & Co. v. MSC Mediterranean Shipping Co., No. 22-1114, 2022 U.S. Dist. LEXIS 160988 (E.D. La. Sept. 7, 2022) (Barbier).
Conti, owner of the M/V MSC FLAMINIA, chartered the vessel to Mediterranean Shipping Co. in 200, and the vessel carried cargoes for MSC for 12 years, calling at ports around the world, including the Port of New Orleans. In 2012, the vessel called in New Orleans to load three tanks of 80% divinylbenzene. The tanks of cargo exploded thirteen days later while the vessel was transiting the Atlantic Ocean, resulting the deaths of three members of the crew, damage to cargo on the vessel, and damage to the vessel. The charter party contained a London arbitration clause, and Conti pursued its claims against MSC in a London arbitration that resulted in an award of approximately $200 million. There was also litigation in New York, including Conti’s limitation of liability action. Conti filed this action in federal court in New Orleans to confirm the arbitration award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and MSC moved to dismiss the action for lack of personal jurisdiction. MSC argued that the underlying litigation was no longer relevant to the question whether the award was enforceable, but Conti argued that the issue was whether it was the beneficiary of an award resulting from the defendant’s forum activities in connection with the claim. After a thorough analysis of the language of the statute implementing the Convention, Judge Barbier concluded that in actions to compel arbitration or confirm arbitration, the court may “look through” the application to the underlying substantive controversy between the parties to determine whether it has personal jurisdiction. As the cargo that exploded was loaded and shipped in New Orleans, Judge Barbier held that Conti’s cause of action related to MSC’s contacts in Louisiana, and that there was personal jurisdiction over MSC to confirm the award. MSC also issued a letter of undertaking in which its insurer agreed to pay Conti any judgment up to $220 million issued by the Eastern District of Louisiana in exchange for Conti’s agreement not to arrest or attach MSC’s vessels or bring any proceeding for the enforcement of the arbitration award in any jurisdiction outside of the English jurisdiction other than the Eastern District of Louisiana. Concluding that the letter of undertaking demonstrated that MSC had consented to the jurisdiction of the Eastern District of Louisiana, Judge Barbier held that MSC had waived any personal jurisdictional defense it may have had to the federal court in Louisiana.
Lawsuit over data from the treasure salvage of the S/S ISLANDER was not covered under a marine general liability policy; Great American Insurance Co. v. May, No. C21-1002, 2022 U.S. Dist. LEXIS 161430 (W.D. Wash. Sept. 7, 2022) (Coughenour).
The luxury steamer SS ISLANDER (carrying passengers and a cargo of gold bullion valued at more than $6 million at the time) sank in 1901 on a voyage that began in Skagway, Alaska and was headed for Victoria, British Columbia. Tyche High Seas Capital, which owns the contract salvage rights to the gold, chartered the OCEAN TITAN from Pacific Survey Group to survey and explore the area where the ISLANDER is believed to be located and to retrieve property from the vessel if possible. There is litigation pending in federal court in Washington between Pacific and Tyche in which Pacific is seeking payment due under the charter party and a maritime lien on the data collected during the charter party (arguing that the charter party granted Pacific a lien on property recovered from the ISLANDER to the extent of amounts owed under the charter party). In 1996, an in rem action against the cargo of the ISLANDER was initiated in federal court in Alaska, and Tyche was ultimately awarded salvage rights in the proceeding. After Tyche moved to file its report with its survey, salvage, and recovery plan under seal so that it was unavailable for the public or other parties to view until completion of Tyche’s salvage operations, Pacific moved to intervene in the Alaska suit so that it could seek to modify the protective order granted by the court (it wants access to the reports filed by Tyche so that it can use them in the Washington litigation). Judge Holland granted leave for Pacific to intervene and also held that Pacific would be granted access to Tyche’s sealed status report after an appropriate non-disclosure agreement was reached. See August 2022 Update.
Meanwhile, litigation ensued between other potential salvors of the ISLANDER when their efforts did not result in salvaging the gold. The suit sought a declaratory judgment, injunction, and damages over the failure to convey intangible property, including computer data, photographs, videos, imaging, readings, logs, and journals. Great American Insurance Co., which issued a marine general liability policy, declined to defend the suit and brought a declaratory judgment action to establish that there was no coverage under the MGL policy. Judge Coughenour agreed that the policy, which covered physical injury to tangible property, did not cover the injuries from the loss of access to data describing the location of the ISLANDER and its contents, and that the failure to provide the intangible property was not a qualifying occurrence. Accordingly, Judge Coughenour granted summary judgment to Great American that it did not have a duty to defend/indemnify under the policy.
Owner who was operating the vessel could proceed with his limitation action, and the action was not dismissed because of an error in identifying the vessel in the complaint; In re Denver, No. 21-cv-11841, 2022 U.S. Dist. LEXIS 161930 (D. Mass. Sept. 8, 2022) (Burroughs).
Ryan Denver, owner of the M/V MAKE IT GO AWAY, was operating the vessel when it struck a fixed navigational aid near Castle Island in Boston Harbor, resulting in the death of a passenger and injuries to others. The navigational aid serves to warn deep-draft vessels of shallow water with a green light that flashes every 2 ½ seconds affixed to the top of pilings driven into the sea floor. The light was approximately 40 feet above the water, and the pilings were not illuminated or affixed with reflective material to make them visible at night. The accident happened on a dark night, and Denver did not see the navigational aid because the light was absorbed by the lights of a dredging project located behind the navigational aid. Denver brought this limitation action in federal court in Massachusetts, and claimants in the action moved to dismiss the complaint for two reasons. First, the claimants contended that Denver could not plausibly assert that he lacked privity or knowledge because he was navigating the vessel at the time of the allision and only Denver could be liable for it. Judge Burroughs noted the conflicting precedents on this issue and held that the owner’s operation of the vessel at the time of the accident does not categorically defeat a limitation action. Instead, she considered whether it would be possible for the owner to demonstrate lack of privity or knowledge. She found “just enough” allegations that Denver acted reasonably based on the claim with respect to the illumination of the pilings, the lights from the dredging, and the claim that the drowning resulted from another vessel leaving the scene of the accident without rendering aid. Although the claimants invoked The OREGON and PENNSYLVANIA Rules, Judge Burroughs did not believe that the Rules altered the analysis. The OREGON Rule did not change the fact that Denver plausibly alleged that he was free of fault, and the claimants did not identify any specific navigational rule violated by Denver for application of the causation rule for The PENNSYVANIA. The claimants also argued that the limitation complaint failed to state a claim because Denver misidentified the vessel with an incorrect official number. As the misidentification was only a scrivener’s error and there was no question about the vessel that was involved in the allision, Judge Burroughs declined to dismiss the complaint on this ground.
Breach of warranty voided insurance coverage for vessel fire loss even though the breach was not related to the loss; Clear Spring Property & Casualty Co. v. Viking Power LLC, No. 21-62306, 2022 U.S. Dist. LEXIS 162223 (S.D. Fla. Sept. 8, 2022) (Altonaga).
The M/Y MISS DUNIA was destroyed by a fire in August 2021 during coverage under a policy issued by Clear Spring Property and Casualty Co. and Certain Underwriters at Lloyd’s of London that insured the hull for up to $1,925,000. The policy provided that a breach of any of the policy’s warranties would void the policy from inception. It also contained a warranty that fire-extinguishing equipment would be properly installed and maintained in good working order, including weighing the tanks once a year and certification/tagging and recharging as necessary. The vessel had handheld fire extinguishers and two fixed fire extinguishers, but the last time they were professionally inspected, weighed, and certified was December 2018 (although they were checked but not weighed). After the fire, the insurers denied the claim, supported by the opinion of their fire expert, Adam Goodman, that the maintenance of the fire extinguishers fell short of the manufacturer’s requirements and industry standards. The vessel owner responded that the fire-suppression system functioned correctly on the day of the fire and any breach of the warranty was unrelated to the damage. The insurers brought this action in federal court in Florida seeking a declaratory judgment that the policy was void ab initio and that there was no coverage for the loss. Both parties filed motions for summary judgment, and Chief Judge Altonaga began by considering the applicable law. The policy contained a provision for the application of principles of entrenched maritime law and, in its absence, New York law. As the Eleventh Circuit had recently applied New York law based on a similar clause, Chief Judge Altonaga applied New York law to the warranty provision. As New York law permits marine insurers to deny coverage for breaches of promissory warranties regardless of whether the breach is causally connected to a later loss, Chief Judge Altonaga held that the policy was void and that summary judgment should be granted to the insurers.
Cargo insurer’s suit against NVOCC for loss/damage to cargo was transferred to New York pursuant to the forum-selection clause in the bill of lading; Travelers Property Casualty Co. of America v. Expeditors International of Washington, Inc., No. 2:21-cv-1184, 2022 U.S. Dist. LEXIS 162235 (W.D. Wash. Sept. 8, 2022) (Chun).
Signal Products contracted with Expeditors to carry Signal’s cargo from Phnom Penh, Cambodia, to Long Beach, California. Expeditors, a non-vessel operating common carrier, contracted with Ocean Network Express to transport the cargo on the ONE AQUILA. The vessel encountered heavy weather in the north Pacific, and some of the containers carrying the cargo were lost overboard, and others arrived in a damaged condition. Cargo insurer Travelers paid Signal $153,362.64 for the loss/damage and brought this subrogation action in federal court in Washington against Expeditors. Expeditors filed a separate suit in federal court in New York against Ocean Network Express, seeking indemnity for any liability that Expeditors may have to Travelers. Expeditors then moved to transfer the Washington subrogation case to the federal court in New York based on the forum-selection clause in its Terms and Conditions, incorporated into the Sea Waybill for the cargo. The clause provided for non-exclusive jurisdiction in federal or state court in Washington, but it added that the shipper irrevocably consented to the transfer of venue to any court in which the carrier is a party to a legal action brought by itself or a third party that arises from the shipment or damage/loss of the cargo. Signal Products opposed the motion, arguing that Expeditors waived the right to move to transfer because it waited almost a year after the filing of this suit in Washington and ten months after Expeditors filed its related action in New York. Reasoning that Expeditors had brought the issue to the court’s attention in its Joint Status Report and Proposed Discovery Plan and had not substantially invoked the judicial process to the detriment of Signal Products, Judge Chun held that Expeditors had not waived the right to seek enforcement of the forum-selection clause. Although Signal Products argued that the clause was ambiguous and part of a contract of adhesion that should be strictly construed against Expeditors, Judge Chun held that the clause unambiguously provided for transfer in this situation and that its enforcement would not be unreasonable or unjust, would not deprive Signal Products of its day in court, and would not contravene Washington public policy. Finally, evaluating the factors for a transfer under Section 1404(a) and the principle that the court should transfer the case in accordance with the forum-selection clause absent extraordinary circumstances unrelated to the convenience of the parties, Judge Chun granted the motion to transfer the case to the federal court in New York.
Claims for civil theft and conversion under state law for mis-delivery of truck after ocean carriage were pre-empted by COGSA; Kelts v. King Ocean Services, Ltd., No. 22-22299, 2022 U.S. Dist. LEXIS 162359 (S.D. Fla. Sept. 8, 2022) (Scola).
Cameron Kelts and Jeffery Sullivan contracted with King Ocean to ship a truck from Florida to Costa Rica. The truck was discharged from the ship in Costa Rica, but the shippers claimed it was wrongfully released to Oscar Calderon without the shippers’ approval. Kelts and Sullivan brought suit in Florida state court against King Ocean and Calderon, asserting claims for civil theft and conversion under Florida statutes and common law. An additional count was brought against Calderon for fraudulent transfer. King Ocean removed the case to federal court in Florida based on the jurisdiction of the court over a case involving a statute regulating commerce (the Carriage of Goods by Sea Act) and federal question. King Ocean then moved to dismiss the allegations for civil theft and conversion for failure to state a claim, arguing that the claims were pre-empted by COGSA. As the bill of lading for the shipment contained a Clause Paramount providing for the application of COGSA during the time the goods were in the custody of the carrier, as the plaintiffs incorporated the bill of lading in their complaint, and as the claims were based on circumstances that occurred while the truck was in King Ocean’s custody, Judge Scola held that COGSA was the exclusive remedy against King Ocean and the claims for civil theft and conversion were pre-empted by COGSA. He therefore dismissed the counts against King Ocean without prejudice.
Expert testimony presented fact question of vessel negligence for claims of damage to oyster lease; In re Hot Energy Services, Inc., Nos. 20-3242, 21-45, 2022 U.S. Dist. LEXIS 162540 (E.D. La. Sept. 8, 2022) (Ashe).
Bonvillian Marine, owner of the M/V LADY CRYSTAL, and Hot Energy Services, owner of the M/V MISS LUCY and M/V MISS LAUREN, brought limitation actions in connection with alleged damage caused to the oyster lease of Cecile and Gleason Alexis in connection with work performed by the vessels for Hilcorp Energy. Cecile and Gleason Alexis filed a negligence claim in the limitation actions, and Bonvillian Marine moved for summary judgment based on the report of its navigation expert, Steve J. Cunningham, who determined from the LADY CRYSTAL’s automatic identification system data that the vessel always remained more than 500 feet from the oyster lease during the work. The claimants responded with the opinion of their oyster biology expert, Gabriel Johnson, that the vessel’s propwash caused significant damage. Although the parties appeared to adopt as the applicable standard a care a rule that vessels must remain 500 feet from an oyster lease, they did not identify any statute, rule, regulation, or maritime custom establishing that rule, and Judge Ashe was reluctant to make that rule the basis for summary judgment without a firmer foundation. Nonetheless, as the expert report established a disputed fact question whether the vessel’s propwash damaged the oyster lease, Judge Ashe declined to grant summary judgment at this stage of the litigation.
Judge ordered small reduction in security in Rule B attachment (as security for London arbitration of charter party dispute) based on updated estimate from the plaintiff, but declined to reduce the security based on the economic loss rule from American law; Thorco Projects A/S v. Nutrion Feeds North America, No. 2:22-cv-1331, 2022 U.S. Dist. LEXIS 162989 (E.D. Cal. Sept. 9, 2022) (Nunley).
Thorco Projects chartered the M/V ANSHUN to Nutrion Feeds to carry calcium salt and palmitic acid, and Thorco Projects alleged that when the vessel arrived at the discharge port of Stockton, California, Nutrion Feeds’ cargo had deteriorated and created a hazardous condition on the vessel. Thorco Projects filed this suit in federal court in California pursuant to Rule B, seeking to secure jurisdiction and security over Nutrion Feeds while the claims were arbitrated in London pursuant to the arbitration clause in the charter party. Judge Nunley set the security at $5,100,000 based on Thorco Projects’ estimate of damage, and Nutrion Feeds moved to reduce the amount of the security. Nutrion first argued that the claim for hire was barred by the economic loss rule from Robins Dry Dock, claiming that Thorco Projects was a charterer of the vessel and did not have a sufficient proprietary interest in the vessel to recover its economic losses. Thorco Projects responded that English law applied to the charter party and that there was no authority applying the economic loss rule to a claim being arbitrated in a foreign country. As it was not for the American court to determine what rule would apply to the arbitration, Judge Nunley declined to reduce the amount of security based on this argument. Nutrion Feeds also challenged Thorco Projects’ contention that it was compelled to hire the vessel for longer than anticipated, which resulted in damages at $45,000 a day for an estimated 71 days ($3,195,000). Nutrion Feeds argued that the judge should reduce the amount to the demurrage rate of $29,000 per day ($2,059,000). Noting that the court had authority to set security at up to double that amount ($4,118,000), Judge Nunley declined to reduce the security for $3,195,000 for this element of the claim. As Thorco Projects provided evidence that it was entitled to its CVE and MGO claims and port PDA and discharge costs under English law, Judge Nunley declined to reduce the security for these claims based on Thorco Projects’ updated estimates. Finally, although Thorco Projects did not submit a declaration from an English solicitor to support its recovery of interest, arbitration costs, and legal fees, the declaration it submitted was sufficient to support its estimates for these items. Accordingly, based on the revision in Thorco Projects estimates, Judge Nunley reduced the security from $5,100,000 to $5,000,000.
Judge awarded attorney fees and costs after upholding repair lien on vessel that had been out of service and on land for a year; American Marine Tech, Inc. v. M/Y ALCHEMIST, No. 19-CV-60636, 2022 U.S. Dist. LEXIS 163986 (S.D. Fla. Sept. 9, 2022) (Valle), recommendation adopted, Sept. 19, 2022 (Singhal).
World Group Yachting entered into a written contract for American Marine Tech to perform engine work on the M/Y ALCHEMIST, a recreational yacht owned by World Group Yachting. The yacht was inoperable and had sat on land with a nonoperational engine for about a year, but the owner sought to sell the yacht once its engine had been repaired. A dispute arose over the amount that was owed as AMT performed additional work beyond what was in the written contract. AMT then brought this action against WGY, in personam, and the yacht, in rem. After a bench trial, Judge Singhal addressed whether there was admiralty jurisdiction to support the claims and held that AMT had established a maritime lien on the vessel for the costs incurred for the repairs under the written and oral contracts. The Eleventh Circuit agreed that the yacht did not cease to be a vessel “simply because she sat on land for some time” and that there was admiralty jurisdiction and a lien for necessaries. The appellate court also affirmed the findings of the amount of the lien, reasoning “that although WGY signed only the engine-replacement cost estimate, AMT’s other work was part of the parties’ agreement because it was necessary to reach the parties’ express goal: a total repower of the ALCHEMIST.” Finding that WGY requested additional work separate from that described in the cost estimate, the court affirmed the judgment awarding more than the cost estimate. See November 2021 Update.
American Marine Tech moved for attorney fees and costs, and Magistrate Judge Valle noted that the Eleventh Circuit had described the action as a breach of contract case. As the contract provided that the vessel owner would be responsible for attorney fees, Magistrate Valle awarded attorney fees to American Marine Tech of $130,243 based on hourly rates between $275 an hour to $350 an hour for attorneys at two firms. Fees for defense of the appeal to the Eleventh Circuit in the amount of $51,860 were awarded to the firms at the same rates. Costs were taxed in the amount of $11,396.41 for filing fees, service of summons/subpoenas (at the current statutory rate for the U.S. Marshal), transcripts, printing and photocopying, and for the arrest by the Marshal. Finally, Magistrate Judge Valle awarded prejudgment interest, and Judge Singhal adopted Magistrate Judge Valle’s decision.
Contribution and indemnity claims of dredge owner against swimming pool installation/maintenance company that was operating the dredge in Long Island Sound when it capsized and whose employees were killed and injured were dismissed based on the exclusive-remedy provision of the Connecticut Workers’ Compensation Act; In re Liquid Waste Technology, LLC, No. 3:18-cv-1306, 2022 U.S. Dist. LEXIS 163673 (D. Conn. Sept. 12, 2022) (Meyer).
Guilford Yacht Club operates a yacht club in Guilford, Connecticut. As it is necessary to regularly dredge the water around its marina for the safety of boats accessing the marina, Guilford leased a Mud Cat MFD dredge from Liquid Waste Technology d/b/a Elliott Dredge, and then sought to hire a dredge operator. None of the professional dredging companies agreed to perform the dredging, so Guilford hired Poolscape, the swimming pool installation/maintenance company that maintained Guilford’s pool, to operate the dredge. Guilford signed a contract for the lease of the dredge that included insurance and indemnity provisions in favor of Elliott Dredge, and Elliott Dredge agreed to provide training supervision to set up the dredge and to orient Poolscape’s employees on the operation of the dredge. Elliott Dredge’s employee, Robert Carufel, set up the dredge in the basin of the marina but he did not deploy the dredge’s sponsons or spuds because of the location where the dredge was moored and because the spuds did not reach the bottom of the marina. When one of the Poolscape employees caused the boom arm to swing to the left, the dredge capsized, killing Poolscape employee James Willard and injuring Poolscape employee Richard Dziubinski. Elliott Dredge brought this limitation action in federal court in Connecticut and filed a claim for contribution/indemnity against Poolscape and its owner, Michael Martocci, in the limitation action. Citing the exclusive-remedy provision of the Connecticut Workers’ Compensation Act, Poolscape and Martocci moved for summary judgment on the contribution/indemnity action. Concluding that the claims were barred by Connecticut law, Judge Meyer granted summary judgment to Poolscape and Martocci.
Complaint sufficiently alleged notice of metal latch protruding from upper berth in cruise ship cabin and that the hazard from the latch was not open and obvious; Canyes v. Carnival Corp., No. 22-cv-20858, 2022 U.S. Dist. LEXIS 166427 (S.D. Fla. Sept. 15, 2022) (Bloom).
Charlene Canyes was a passenger on the CARNIVAL HORIZON with her husband and daughter. Two twin beds were pushed together in their cabin to form a king-sized bed, and there were upper berths. The cabin steward routinely made up the beds during the cruise and lowered one of the upper berths for Charlene’s daughter to sleep. Charlene bent down to pick up a bottle of water that had fallen out of a small refrigerator, and, when she stood up, she struck her head on a sharp metal latch that was protruding from the upper berth (used to secure the upper berth to the ceiling when the berth was not in use as a bed). Charlene brought this suit in federal court in Florida against the cruise line, asserting claims of negligent maintenance, negligent design and construction, and negligent failure to warn, claiming that her injury was caused by the placement of the refrigerator in the cabin, the configuration of the lower beds into a king-sized bed, and the fact that the upper berth was left down with the protruding latch. The cruise line moved to dismiss the claims, and Judge Bloom held that the allegations of notice were sufficient because the steward configured the twin beds; the steward would have seen the latch in the open/down position; and the steward should have known that the refrigerator was placed adjacent to a wall where the use of it placed the passenger in danger of striking her head on the latch. Judge Bloom also held that the allegation that the cruise line participated in the design and construction of the cabin, including the placement of the refrigerator, was a sufficient pleading with respect to the claim of negligent design and construction in order to survive a motion to dismiss. Finally, Judge Bloom held that the allegations were sufficient with respect to whether the danger was open and obvious as the color of the latch and the configuration of the beds made the latch less observable, and the placement of the refrigerator required an awkward maneuver with the upper bed lowered.
Costs were awarded after jury verdict of $600 in favor of passenger who was injured by elevator doors on cruise ship; Birren v. Royal Caribbean Cruises, Ltd., No. 20-cv-22783, 2022 U.S. Dist. LEXIS 167712 (S.D. Fla. Sept. 15, 2022) (Louis).
Kathryn Birren and her daughter Mandy Birren brought this suit against Royal Caribbean for injuries they sustained on the HARMONY OF THE SEAS. They alleged that the elevator doors on deck 6 closed abruptly, striking Kathryn’s arm and forcing her to collide with Mandy. The cruise line responded with twelve affirmative defenses, and the passengers moved to strike seven of the defenses. Before addressing the sufficiency of the pleading, Judge Bloom first had to resolve what standard to apply in assessing the sufficiency. She noted that there are two schools of thought on the sufficiency of pleading defenses and that the Eleventh Circuit has not resolved that split in authority. Comparing the language in Rule 8 (a), (b), and (c), Judge Bloom held that affirmative defenses are not subject to the heightened pleading standard enunciated by the Supreme Court in the Twombly and Iqbal decisions. She then reviewed the defenses asserted and denied the motion to strike as to the allegations of comparative fault, pre-existing conditions, and superseding cause. Judge Bloom also declined to strike the defense that the passengers failed to state a claim upon which relief can be granted, treating it as a denial. She did strike the defense that the action was governed by the terms and limitations of the passenger ticket, as limitations on liability are not enforceable against negligence claims. She struck the defense of a set-off for money paid from third parties for medical expenses, reasoning that it was inconsistent with the Higgs case from the Eleventh Circuit; however, she granted the cruise line leave to replead the defense in accordance with the Higgs case. See September 2020 Update.
The cruise line preserved and produced a total of 11 minutes and four seconds of closed-circuit television footage. That included the incident plus 8 minutes and 28 seconds before the incident and 2 minutes and 30 seconds after the incident. The passengers moved for sanctions for spoliation of evidence because the cruise line preserved less than 10 or 15 minutes of footage before the incident and five minutes of footage after the accident. The passengers argued that they were prejudiced by not having footage showing that the doors to the elevator were closing too quickly for at least 15 minutes before the accident—sufficient time to establish notice of the dangerous condition to the cruise line. After reviewing the video, Magistrate Judge Louis noted that the quick closing of the doors did not occur in the first five minutes of the produced footage and only began shortly before the passengers stepped on the elevator and then repeatedly thereafter. Accordingly, Magistrate Judge Louis held that the cruise line had preserved a reasonable amount of footage and no sanctions were appropriate. Judge Bloom concluded that Magistrate Judge Louis’ order was well reasoned and correct in holding that the cruise line had provided sufficient footage, did not act in bad faith, and took reasonable steps to preserve the necessary video footage. See February 2022 Update.
The Birrens and the cruise line then moved to strike each other’s experts, and Judge Bloom gave each side partial relief. Judge Bloom considered the opinions of Tray Edmonds that the elevator was properly maintained and inspected to be sufficiently reliable and helpful to the jury to be permitted; however, she ruled that Edmonds’ opinion that a small girl broke the elevator panel when she pressed the button with her elbow (causing the door close button to be stuck in the pressed position) to be unreliable because it was based on speculation from his viewing of CCTV footage. Kathryn Birren challenged the reliability of the opinion of Dr. Jonathan Gottlieb, an orthopedic spine surgeon, that Birren’s injuries were caused by a motor vehicle accident and not the elevator accident, as Dr. Gottlieb did not review any of the MRIs or images of Birren’s spine and his opinions were based, in part, on CCTV footage. Judge Bloom noted that Dr. Gottlieb had reviewed medical records that included imaging reports, and that was sufficiently reliable methodology. She also allowed his opinion based on the CCTV footage, but he would not be permitted to provide an overview of the footage, which speaks for itself. Similarly, Judge Bloom permitted the testimony of Dr. Richard Rauck, a pain medicine specialist, that Mandy Birren’s alleged Amplified Musculoskeletal Pain Syndrome was not caused by the elevator incident and that her gymnastics and trampoline activities caused greater force on her neck than the elevator incident. The testimony could be based on the CCTV footage, but Dr. Rauck would not be permitted to give an overview of the footage. The cruise line objected to the opinions of Dr. Nicholas Suite as unreliable because he only conducted a telemedicine examination of Kathryn Birren. However, as Dr. Suite did review medical records, CCTV footage, MRI scans, testimony, and other evidence, Judge Bloom considered his methodology to be reliable. Judge Bloom did note that, with respect to future treatment, Dr. Suite only stated that Kathryn Birren was going to need further care and treatment to manage her symptomology. This was insufficient to allow him to testify about future treatment, costs, and medical bills. Finally, the cruise line objected to the testimony of the passengers’ expert, Jeffery Hanson, with respect to the maintenance of the elevator, arguing that he only reviewed materials relating to events that took place after the incident. However, Hanson did conduct a site inspection and reviewed inspection reports from shortly before the incident, industry code, and CCTV footage. Judge Bloom held that this was sufficiently reliable methodology, but that Hanson would not be permitted to give a general overview of the CCTV footage. See March 2022 Update.
The cruise line then moved to dismiss all of the claims. The cruise line argued that it did not have a duty to warn of the dangerous condition of the elevator doors because the Birrens were aware that the doors were closing unusually fast. The passengers argued that the question whether the condition of the doors was open and obvious presented a fact question that was not appropriate for summary judgment. Judge Bloom agreed that the extent of the dangerous condition was not open and obvious because the dangerous condition was not just the fast closing of the doors but that the sensors did not operate properly to re-open the doors. The decision not to exclude the passenger’s expert, Jeffery Hanson, allowed the claim for negligent design/installation to survive as Hanson testified that the design included the mobile application of the manufacturer/installer that provided maintenance notifications about the elevator. Hanson’s opinion along with the testimony of the cruise line’s Chief Electrical Officer and corporate representative supported the passenger’s claim of negligent hiring, retention, and supervision with respect to the proper testing of the sensor. Judge Bloom did dismiss the claims of negligence of the ship’s medical staff for lack of evidence. See April 2022 Update.
The case proceeded to a jury trial in April before judge Bloom, and the jury returned a verdict that the cruise line was negligent, apportioning fault 10% to the cruise line and 90% to Kathryn Birren. The jury awarded a total of $6,000 in damages for Kathryn’s past medical expenses and no award for disability, disfigurement, pain and suffering, and loss of enjoyment of life. Judge Bloom entered a judgment in the amount of $600 (10%), and Birren moved for an award of costs. Magistrate Judge Louis recommended an award of $10,751.87, consisting of the filing fee of $400, $65 for service of a subpoena, $9,247.55 in court reporter and transcription fees, and $1,039.32 for costs to obtain medical records.
Insurer could not file a second declaratory judgment action after its late motion for leave to amend its complaint to add another ground for denial of coverage was denied in its first declaratory judgment action; Great Lakes Insurance SE v. Andersson, No. 21-40087, 2022 U.S. Dist. LEXIS 168404 (D. Mass. Sept. 19, 2022) (Hillman).
Martin Andersson, who lived in Massachusetts, purchased a marine insurance policy from Great Lakes for his catamaran, MELODY. The vessel sustained catastrophic damage when it struck a breakwater near the Port of Boca Chica in the Dominican Republic, and Great Lakes declined to pay for the cost of salvage or repair because Andersson had failed to keep the vessel in seaworthy condition and had sailed outside the bounds of the policy’s navigational limits. Great Lakes brought its first action in federal court in Massachusetts seeking a declaratory judgment that it owed no coverage under the policy, and Andersson counterclaimed for breach of contract and for bad faith under Massachusetts law. Great Lakes moved to dismiss the bad faith count of the counterclaim, arguing that New York law, which does not afford a bad faith action, was applicable by a choice-of-law clause in the policy. The clause provided that “any dispute arising hereunder” would be adjudicated under entrenched principles of federal admiralty law, “but where no such well established, entrenched precedent exists, this insuring agreement is subject to the substantive laws of the State of New York.” Andersson argued that New York law applied to the contract claim, but Massachusetts law applied to extra-contractual claims (the bad faith claim). Judge Hillman rejected that argument, however, citing the cases holding that New York law applies to all claims arising from the performance under the contract and subsequent coverage disputes, which includes bad faith claims. He then addressed Andersson’s argument that Massachusetts public policy rendered the choice-of-law clause unenforceable and held that application of New York law, rather than Massachusetts law, would not conflict with any entrenched principle of maritime law and that New York did not lack a substantial relationship to the parties or transaction. Consequently, he applied New York law and dismissed the bad faith count of the counterclaim. See July 2021 Update.
After discovery was closed and the deadline to amend pleadings had passed, Great Lakes sought leave to amend its complaint to add a claim that Andersson violated the policy’s Named Operator Warranty. Judge Hillman denied the motion as untimely and unfairly prejudicial to Andersson, and Great Lakes filed an interlocutory appeal that the First Circuit dismissed for lack of jurisdiction. After the denial of its motion to amend, Great Lakes brought this second action against Andersson, presenting the claim it sought to add by the late motion for leave to amend in the first suit. Andersson moved to dismiss the second suit based on res judicata, and Great Lakes responded that res judicata was not applicable because the denial of the motion to amend was not a final judgment on the merits of the claim sought to be presented in the amendment. Judge Hillman disagreed with Great Lakes, citing case law that denial of leave to amend constitutes res judicata on the merits of claims that were the subject of the proposed amended pleading. Reasoning that allowing the second suit would result in the same prejudice and inefficiency that were cited by the court in denying the amendment in the first suit, Judge Hillman dismissed the second suit (adding that the remedy for Great Lakes was an appeal of the denial of leave to amend in the first suit at the conclusion of that suit). Andersson also sought sanctions for filing the late motion to amend and the second suit, but Judge Hillman denied the motion without substantive discussion.
Navigating outside the insurance policy’s navigational limits resulted in denial of claim for fire loss of vessel; Axis Insurance Co. v. Olivia Yacht Ltd., No. 21-cv-23251, 2022 U.S. Dist. LEXIS 171643 (S.D. Fla. Sept. 22, 2022) (Bloom).
Olivia Yacht Ltd. sought to insure its 50’ Schaefer Yacht Phantom 500 with Axis. Axis provided a quote for an agreed value of $250,000 for a premium of $4,429 and navigational limits of the inland and coastwise waters of the United States and Canada, including the territorial waters of the Bahamas for a maximum of 30 consecutive days. The policy was issued, but the broker for Axis advised that the policy would have port risk coverage (no navigation) until a letter of compliance was submitted with receipts for recommended repairs on the yacht. The owner informed the broker that it had completed the repairs, and Axis’ broker responded that the letter of compliance was needed. No letter was ever submitted, so the policy contained a navigational warranty that required the vessel to be within the confines of Coco Plum Marina in Coral Gables, Florida. However, the policy also contained the Bahamas Coverage Endorsement, amending the navigational limits to the territorial waters of the Bahamas for a period not to exceed 30 consecutive days. The yacht caught fire and sank near Elliott Key, Florida. Olivia Yacht made a claim on the policy, and Axis denied the claim and brought this declaratory judgment action in federal court in Florida. Axis moved for summary judgment, arguing that the loss did not occur within the confines of Coco Plum Marina or the Bahamas so that there was no coverage under the policy. The owner responded that Axis waived the navigational limits by issuing the Bahamas Coverage Endorsement and that the provisions conflicted so that the navigational limits were ambiguous. Judge Bloom accepted that the Eleventh Circuit requires strict construction of express navigational limit warranties, but a strict construction required that the vessel either be within the confines of Coco Plum Marina or in the territorial waters of the Bahamas, and those limits did not include a trip to and from the Bahamas. As the vessel was being navigated outside of the navigational limits, Judge Bloom held that Axis was entitled to summary judgment.
P&I club sufficiently alleged that the charterer’s entry of two vessels (chartered from a cruise line) in the charterer’s P&I Club and the naming of the owner as a co-assured on the Certificates of Entry subjected the cruise line to liability for calls, including on vessels not owned by the cruise line; American Steamship Owners Mutual Protection & Indemnity Association v. Carnival PLC, No. 21-cv-10641, 2022 U.S. Dist. LEXIS 173581 (S.D.N.Y. Sept. 26, 2022) (Crotty).
Carnival chartered two of its cruise-line vessels to subsidiaries of Global Maritime, and, as part of the charter party, Carnival required the subsidiaries to obtain insurance. Global Maritime entered the two vessels (as part of an entry of six vessels) with the American Club. The American Club produced Certificates of Entry listing Carnival as a Co-assured. Carnival received a copy of the Certificates of Entry, and the Certificates stated that Co-assureds would be liable for any owed premium in accordance with the Club Bylaws and Rules (providing that members are liable for insurance premiums). When the balance of the calls on Global Maritime’s account exceeded $1.9 million, the American Club demanded payment from Carnival and brought this collection suit against Carnival in federal court in New York. Carnival moved to dismiss the complaint, claiming that the complaint did not allege mutual assent. However, as Carnival had received a copy of the Certificates of Entry with the language about payment of premiums, Judge Crotty considered that Carnival was on inquiry notice of the terms of the contract, and he also held that the Bylaws sufficiently provided for liability of Co-assureds for premiums. Carnival also argued that it was not a Co-Assured under the Bylaws, but Judge Crotty cited the provision that a member may apply its policy to any other Co-assured and held that the Club had sufficiently pleaded that Carnival was a Co-Assured. Carnival then argued that it was not liable for the calls for the vessels it did not own, but the Club sufficiently pleaded that the Bylaws provided for joint and several liability for all Co-assureds. Finally, Carnival argued that it did not have an insurable interest in the four vessels it did not own, but Judge Crotty responded that only an insurer may raise lack of an insurable interest as a defense to liability. Accordingly, he denied the motion to dismiss the complaint.
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
A Perfect Storm
The skies unrest when the government tests performance-based solicitations,
A wary dredger would fare far better if it worked with fewer hesitations,
Fighting the elements, with debris and sediments, onward the task did drag,
Before they knew it, the fish window, they blew it, so up they raised the white flag,
Motions were filed, allegations compiled, but material facts are disputed,
To trial we go so the parties may show if this perfect storm has concluded.
Judge Ryan T. Holte, Marine Industrial Construction, LLC v. United States, 158 Fed. Cl. 158, (Ct. Fed. Cl. 2022) (as a tribute to Judge Loren A. Smith and his maritime poem published in Neal & Co. v. United States).
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