October 2023 Longshore/Maritime Update (No. 293)
Notes from your Updater:
On August 25, 2023, Judge Christensen of the United States District Court for the District of Montana announced his findings of fact and conclusions of law from a bench trial in January 2022 with respect to ownership of the riverbeds underlying the hydroelectric dam facilities on three Montana rivers, basing his decision on the issue whether the rivers were navigable at the time Montana achieved statehood in 1880 (under the Equal Footing Doctrine, states take title to the beds of waters within their boundaries that were navigable at the time of statehood). See Montana v. Talen Montana, LLC, No. 16-35, 2023 U.S. Dist. LEXIS 150453 (D. Mont. Aug. 25, 2023).
On September 1, 2023, the Ninth Circuit held that it did not have jurisdiction to review a letter from the Environmental Protection Agency to Chevron, repealing a prior letter and advising that Chevron may be subject to the Clean Air Act when decommissioning oil and gas platforms on the outer Continental Shelf, reasoning that the letter was not a final agency action and that the letter “merely returned Chevron to a state of regulatory uncertainty.” See Chevron U.S.A., Inc. v. United States, No. 21-71132, 2023 U.S. App. LEXIS 23308 (9th Cir. Sept. 1, 2023) (per curiam).
The Update has reported (see August 2023 Update) on the litigation arising out of the explosion and fire on the MSC FLAMINIA while it was en route from Charleston, South Carolina to Antwerp involving a shipment of divinylbenzene that was loaded in the Port of New Orleans. The incident resulted in the deaths of three members of the crew, damage to cargo on the vessel, and damage to the vessel. The charter party between the owner, Conti, and the charterer, Mediterranean Shipping, contained a London arbitration clause, and the arbitration resulted in an award to Conti of approximately $200 million. Judge Barbier in the United States District Court for the Eastern District of Louisiana affirmed the arbitration award in favor of Conti (MSC has appealed that decision to the Fifth Circuit, and oral argument was presented to the Court on September 5, 2023, No. 22-30808. There was also litigation in New York that included Conti’s limitation action. Ultimately, the Second Circuit affirmed the apportionment of 55% of the fault to Deltech (manufacturer of the DVB) and 45% to Stolt (NVOCC) and the grant of indemnity to MSC and Conti from Deltech and Stolt. Meanwhile, MSC sought to limit its liability in litigation in London, pursuant to the 1976 Convention on Limitation of Liability for Maritime Claims. The admiralty judge, Andrew Baker, held that MSC was not entitled to limit its liability to Conti because Conti’s claims were not within the scope of the Convention. Speaking for the Court of Appeal, Lord Justice Males agreed that MSC was not entitled to limit its liability, and the appeal was dismissed. See MSC Mediterranean Shipping Co. v. Stolt Tank Containers B.V., No. CA-2022-002293,  EWCA Civ 1007 (Sept. 1, 2023).
On September 6, 2023, the Fifth Circuit denied a petition by Healthy Gulf and the Sierra Club, challenging the permit granted by the Army Corps of Engineers for the construction of a terminal on the Calcasieu River in Louisiana for the export of liquefied natural gas (and a pipeline to connect the terminal to existing interstate pipeline systems). Healthy Gulf v. U.S. Army Corps of Engineers, No. 22-60397, 2023 U.S. App. LEXIS 23688 (5th Cir. Sept. 6, 2023) (Smith).
On September 6, 2023, Judge Casper of the United States District Court for the District of Massachusetts dismissed the count for breach of contract based on superior knowledge brought in the suit by Burnham Associates against the United States (seeking to recover for increased costs in its dredging at Harbor of Refuge on Block Island, Massachusetts), because that theory for recovery, which was premised on the same operative facts that were included in the Formal Claim Notice to the Corps of Engineers, was not included in the Formal Claim Notice. As Burnham Associates did not properly exhaust its administrative remedy for that count under the Contract Disputes Act, Judge Casper dismissed the count without prejudice for lack of subject matter jurisdiction. See Burnham Associates, Inc. v. United States, No. 1:22-cv-12007, 2023 U.S. Dist. LEXIS 157210 (D. Mass. Sept. 7, 2023) (Casper).
In our September 2023 Update, we reported that after the State of Texas installed buoys on the Rio Grande River near Eagle Pass, Texas, the United States brought suit in the United States District Court for the Western District of Texas under the Rivers and Harbors Appropriation Act of 1899 against Texas and its Governor, Greg Abbott, seeking the removal of the floating barrier in the Rio Grande River at Eagle Pass. On September 6, 2023, Judge Ezra granted a preliminary injunction, ordering Texas to reposition the buoys and other material composing the floating barrier to the bank of the Rio Grande on the Texas side of the river. See United States v. Abbott, No. 1:23-cv-853 (W.D. Tex. Sept. 6, 2023). Texas filed a notice of appeal to the Fifth Circuit, and on September 7, 2023, a panel of the Fifth Circuit issued a stay of the order. See United States v. Abbott, No. 23-50632 (5th Cir. Sept. 7, 2023) (per curiam).
On September 20, 2023, the California Court of Appeal affirmed the denial of National Steel and Shipbuilding Company’s motion to compel arbitration of a wage and hour complaint under the terms of the arbitration provision in the collective bargaining agreement (failing to pay non-exempt workers for time spent going through workplace security checkpoints, donning and doffing personal protective equipment, having their temperatures checked, and traveling between security checkpoints and workplace sites) that was filed by Archie Shakespeare, reasoning that he had not signed the agreement and that he was not seeking benefits guaranteed by the CBA but was alleging extracontractual violations of state wage and hour laws. See Shakespeare v. National Steel & Shipbuilding Co., No. D081270, 2023 Cal. App. Unpub. LEXIS 5527 (Cal. App. 4th Dist. Sept. 20, 2023) (McConnell).
The Update has reported the litigation involving the Biden Administration’s executive order pausing new oil and gas leases on public lands and in offshore waters. Louisiana and other states challenged the executive order in the Western District of Louisiana, and Judge Doughty issued a nationwide preliminary injunction that enjoined officials in the Department of Interior from implementing the pause. See Louisiana v. Biden, No. 2:21-cv-778, 2021 U.S. Dist. LEXIS 112316 (W.D. La. June 15, 2021). On August 17, 2022, the Fifth Circuit ruled that Judge Doughty’s order and accompanying memorandum lacked sufficient specificity and remanded the case for further proceedings without reaching the merits of the Government’s challenge to the injunction. Louisiana v. Biden, No. 21-30505, 2022 U.S. App. LEXIS 22872 (5th Cir. Aug. 17, 2022) (Higginbotham). The next day, Judge Doughty granted a permanent injunction enjoining the Government from implementing the pause on public lands and offshore waters as set forth in the executive order with respect to the thirteen states that were plaintiffs in the lawsuit. See Louisiana v. Biden, No. 2:21-cv-778, 2022 U.S. Dist. LEXIS 148570 (W.D. La. Aug. 18, 2022). In separate litigation, the D.C. Circuit held that the Department of Interior adequately considered the option of not leasing in connection with two proposed offshore leases but remanded the suit for consideration of potential deficiencies in the enforcement of safety and environmental regulations. See Gulf Restoration Network v. Haaland, No. 20-5179, 2022 U.S. App. LEXIS 24368 (D.C. Cir. Aug. 30, 2022) (Katsas). In Louisiana v. Haaland, No. 2:23-cv-1157 (W.D. La. Sept. 21, 2023), the State of Louisiana, the American Petroleum Institute, Chevron, and Shell sought to halt the withdrawal of 6 million acres from Lease Sale 261. Judge Cain agreed with the plaintiffs and granted a preliminary injunction, enjoining the United States from implementing the acreage withdrawal. He ordered the United States to proceed with Lease Sale 261 by September 30, 2023. The United States and environmental groups appealed to the Fifth Circuit, and on September 25, 2023, an administrative panel of the Fifth Circuit kept in place the preliminary injunction but amended it to hold that the sale is ordered to take place by November 8, 2023, noting that no extension of that date would be granted. The administrative panel explained: “This is only a ruling that, pending this appeal of the preliminary injunction, a stay of the injunction is DENIED except to change the date by which Lease Sale 261 is to occur” (the panel added that its decision is subject to review by the merits panel once the appeal is submitted). Louisiana v. Haaland, No. 23-30666 (5th Cir. Sept. 25, 2023).
If readers of the Update are interested in the litigation involving the JONES ACT ENFORCER, the vessel that was allegedly employed to “gather video and photographic evidence of Jones Act violations” that “w[ould] be submitted to [the] authorities, made public, and shared with the media,” they should refer to the opinion in Triton Diving Services LLC v. Offshore Marine Service Association, Inc., No. 2023 CA 0169, 2023 La. App. LEXIS 1513 (La. App. 1 Cir. Sept. 21, 2023) (Holdridge).
The United States Supreme Court will hear oral argument on October 10, 2023, in Great Lakes Insurance SE v. Raiders Retreat Realty Co., No. 22-500 (see April 2023 Update), on this question: Under federal admiralty law, can a choice of law clause in a maritime contract be rendered unenforceable if enforcement is contrary to the “strong public policy” of the state whose law is displaced?
On the LHWCA Front . . .
From the federal appellate courts
Fifth Circuit agreed that a barge cleaner who was injured while cleaning a tank on a barge in the Mississippi River was not a seaman and that he did not have a negligence claim under Section 5(b) of the LHWCA against the barge owner; In re Ingram Barge Co., No. 22-30577, 2023 U.S. App. LEXIS 24808 (5th Cir. Sept. 19, 2023) (per curiam).
Gregory Ratcliff was employed by T.T. Barge and was assigned to clean the tank on BARGE 976, owned by Ingram Barge Co. The Ingram barge was secured to a floating work barge at T.T.’s facility in the Mississippi River (the facility included two work barges that float in the river—a Cleaning Barge and a Repair Barge). The work barges were decommissioned, but they could still be moved for repairs or to accommodate dredging. Ratcliff alleged that sometimes the barge cleaners and repairmen would ride customer barges about 200 to 360 feet between the work barges. Ratcliff was injured when he slipped and fell on caustic soda that was frozen inside the Ingram barge, and Ingram Barge brought this limitation action in federal court in Louisiana. Ratcliff filed a claim against Ingram Barge in the limitation action, and T.T. Barge, which was subject of a Jones Act suit brought by Ratcliff in state court, also filed a claim in the limitation action for contribution/indemnity. Ratcliff then moved the court to bifurcate the limitation and non-limitation issues so that he could try apportionment of liability and damages to a jury in his action filed in state court. Judge Jackson denied the motion, reasoning that Ratcliff could only proceed in state court prior to the court’s determination of the vessel owner’s rights to exoneration or limitation when all claimants have entered stipulations protecting the rights of the vessel owner under the Limitation Act. As T.T. Barge was a claimant and had not agreed to a stipulation, Judge Jackson held that bifurcating the issues of limitation and liability was inappropriate. See March 2022 Update.
Although Ratcliff did not make a claim against T.T. Barge in the limitation action, T.T. Barge raised the issue of seaman status of Ratcliff in the federal limitation action by arguing that a finding that Ratcliff was not a seaman would mean that Ratcliff’s exclusive remedy against T.T. Barge was the LHWCA and, consequently, T.T. Barge would have no claim for contribution or indemnity to assert in the limitation action. T.T. Barge argued that Ratcliff could not be a seaman because the work barges formed a permanently moored work platform and were not vessels in navigation. Judge Jackson agreed and then addressed Ratcliff’s argument that Ratcliff had a substantial connection to the barges of T.T.’s customer, Ingram Barge, that were brought to the T.T. facility. As Ratcliff worked on barges owned by many different customers and was assigned to work on the customers’ barges at random, Judge Jackson held that Ratcliff owed his allegiance to a shoreside employer and not to any specific vessel (using the Fifth Circuit’s Sanchez analysis). Ratcliff only worked on docked vessels and did not sail with them from port to port. Therefore, Ratcliff could not satisfy the connection test and was not a seaman as a matter of law. See June 2022 Update.
As Ratcliff was not a seaman (and was not entitled to bring an unseaworthiness claim), Ingram Barge moved for summary judgment on Ratcliff’s claim of vessel negligence under Section 5(b) of the LHWCA. Ratcliff argued that Ingram Barge violated the turnover duty from Scindia. Judge Jackson noted that the duty to warn is narrow and does not include dangers that are open and obvious, that a reasonably competent contractor should anticipate encountering, and for harmful conditions that the contractor was hired to correct. It was undisputed that T.T. Barge was hired to clean caustic soda from the barge and that Ratcliff was assigned to clean the caustic soda. Ratcliff only disputed that he did not know the caustic soda was frozen. However, Ratcliff testified that he was informed that his job was to clean “a caustic barge that was frozen, that was iced up.” Concluding that Ratcliff was fully aware of the condition of the barge (Judge Jackson found Ratcliff’s argument to be “nonsensical” in light of his testimony), Judge Jackson held that Ingram Barge had no duty to warn Ratcliff and granted summary judgment to Ingram Barge. See September 2022 Update.
Ratcliff appealed to the Fifth Circuit, asserting that the Cleaning Barge was a vessel, that he was a seaman, and that he presented a sufficient claim against Ingram Barge under Section 5(b) of the LHWCA. T.T. argued that its Cleaning Barge was a work platform that functioned as a dock, citing its extensive mooring connection and rare movement. Ratcliff cited the Lozman test for seaman status and argued that “a reasonable observer would consider T.T.’s work barges to be designed to a practical degree for carrying people or things over water.” Although T.T. and Ingram cited the Fifth Circuit’s pre-Lozman work-platform cases, the Fifth Circuit focused instead on the Supreme Court’s decisions in Lozman and Stewart. The court reasoned that the Cleaning Barge was not regularly used to transport workers or equipment over water, that the process to move it would take more than a week, and that the Cleaning Barge was stationary when the cleaners were working on it. Although Ratcliff argued that the issue of vessel status was a fact question that should be left to the jury and not decided in a summary-judgment proceeding, the Fifth Circuit disagreed and held that the uncontroverted facts and law only supported the conclusion that the Cleaning Barge was not a vessel under the Jones Act. The Fifth Circuit then considered whether Ratcliff’s connection to BARGE 976 was substantial in duration and nature. The court evaluated the factors set forth by the en banc Fifth Circuit in Sanchez for the nature element of the connection test. As to the first factor (whether the worker owes his allegiance to the vessel or a shoreside employer), the court held that Ratcliff owed his allegiance to shoreside employer T.T. and not to any of the multiple customers whose barges he was assigned to clean. For the second factor (whether the work was sea-based or involved seagoing activity), Ratcliff argued that he was exposed to the perils of the sea because the Ingram barges were moored in the Mississippi River and exposed to risks of collision (the Cleaning Barge had previously been struck), because he rode Ingram’s barges about 200 feet, and because he had previously slept at the facility. The Fifth Circuit disagreed, noting that the fact that the Cleaning Barge was struck in the Mississippi River did not make it seagoing, nor did the short rides in the river suggest any seagoing activity and hardly subjected him to the perils of the sea. For the third factor (whether the assignment to a vessel was limited to performing a discrete task after which the connection to the vessel ended or whether the assignment included sailing with the vessel from port to port or location to location), the court cited Ratcliff’s testimony that when he finished cleaning the barges, he was “done with” the vessel (adding that “any 200-foot barge rides cannot constitute sailing from port to port”). As the Sanchez factors weighed against Ratcliff’s satisfying the nature element of the connection test, the Fifth Circuit affirmed the grant of summary judgment that Ratcliff was not a seaman.
The Fifth Circuit then addressed the issue of whether Judge Jackson properly granted summary judgment to Ingram Barge on Ratcliff’s claim under Section 5(b) of the LHWCA. The appeal focused on the turnover duty to warn the contractor of latent or hidden dangers that are known or should have been known to the vessel owner. However, the Fifth Circuit added that the owner need not warn of dangers that are either open and obvious or that a reasonably competent contractor should anticipate encountering. Ratcliff argued that Ingram Barge warned T.T. about two inches per tank of caustic soda buildup but that the warning did not extend to frozen caustic soda on the ceiling. However, the Fifth Circuit noted that Ratcliff saw caustic soda on the ceiling of the barge and dripping down as he entered the barge. Ratcliff’s foreman warned Ratcliff to stand back as he sprayed the frozen caustic soda to clean it off the ceiling. In fact, Ratcliff had to change his protective clothing because of the caustic soda dripping down on him. Consequently, the pool of caustic soda on the floor was open and obvious, even though Ratcliff was new to and unfamiliar with the cleaning of caustic soda. The openness and obviousness of the caustic soda on the ceiling “negated the duty to warn,” and the Fifth Circuit affirmed that Ingram Barge did not violate the turnover duty. The appellate court also rejected Ratcliff’s arguments that the court should impose a duty on the vessel owner based on a high degree of danger regardless of the openness and obviousness of the danger and that Ingram had a duty to provide a first aid kit because it was industry standard (as there was no evidence of any industry standard relating to first aid kits).
From the federal district courts
Federal court had admiralty jurisdiction over suit by beneficiaries of shipyard worker for causing his death by exposing him to asbestos; it was not necessary that the beneficiaries allege specific acts for each defendant because the defendants were all accused of identical conduct; although recognizing that a Navy ship is not a product for maritime strict liability, the judge found the allegations that the defendants manufactured, fabricated, designed, and developed defective products containing asbestos to be sufficient to state a claim for strict liability; judge dismissed claim for loss of consortium of wife of deceased shipyard worker but declined to dismiss the claim for punitive damages; general allegations of fraud were sufficient to satisfy the Rule 9 pleading standard but still had to be dismissed as no independent cause of action for fraud was alleged; Freeman v. BAE Systems San Diego Ship Repair Inc., No. 22-cv-0934, 2023 U.S. Dist. LEXIS 148748 (S.D. Cal. Aug. 23, 2023) (Lorenz).
Dennis Freeman worked as an insulation contractor at several shipyards in California, Washington, and Hawaii from around 1980 through the mid-1990s. His beneficiaries claim that Freeman died from exposure to products containing asbestos during his work at the shipyards, and they brought this suit against the shipyards based on negligence and strict liability under maritime law and California law. His widow, Linnea Freeman, brought an additional claim for loss of consortium. The defendants moved to dismiss the claims for several reasons, and Judge Lorenz began with the challenge to the court’s admiralty jurisdiction. Judge Lorenz concluded that the decedent’s exposure as an insulation contractor took place, at least in part, on navigable waters, satisfying the locality test. Turning to the nexus test, Judge Lorenz reasoned that deadly exposure to asbestos in shipyards “certainly falls under the wide umbrella of activities that have the potential to disrupt commercial activity.” He then found that the claim that Freeman was injured by unsafe work conditions in shipyards was sufficient to establish a substantial relationship to traditional maritime activity. Therefore, Judge Lorenz held that the court had admiralty subject matter jurisdiction. After upholding personal jurisdiction against the defendants, Judge Lorenz considered the “hotly contested matter of applicable law.” As he had held that the court had admiralty jurisdiction, Judge Lorenz determined that admiralty law afforded a cause of action and that state law did not apply (reasoning that maritime law recognized the tort claim for this situation). Therefore, he dismissed the claims that sought to recover under California law. Although the defendants objected that the beneficiaries made undifferentiated claims against all of the defendants so that it was impossible to discern which defendant was responsible for any particular course of conduct, Judge Lorenz held that it was not necessary for the plaintiffs to allege specific actions for each defendant because the defendants were all accused of identical conduct, committed separately. One of the shipyards objected to the claim for strict liability on the ground that a Navy ship is not a product for strict liability under the general maritime law. Judge Lorenz declined to dismiss the pleading at this stage as the beneficiaries alleged that the defendants manufactured, fabricated, designed, and developed products that created an asbestos hazard and that were defective. One of the shipyards moved to dismiss Linnae Freeman’s claim for loss of consortium, and, unlike the decision in Diaz v. Jungerhans, summarized in our September 2023 Update, Judge Lorenz dismissed the claim, holding that it “would be discordant with the Supreme Court’s holdings and Congress’ intent for this Court to allow recovery for loss of consortium in a case involving the death of a non-seaman that did not occur on the high seas.” However, Judge Lorenz found the law applicable to punitive damages in maritime cases to be less settled, and he declined to dismiss the claim for punitive damages at this stage. Finally, Judge Lorenz concluded that the language required to plead the defendants’ state of mind under Rule 9 was satisfied in the pleading seeking damages for fraud but that seeking damages for fraud without alleging a substantive cause of action for fraud was insufficient.
Fifth Circuit’s Barrosse opinion was applied to permit beneficiaries of a shipyard worker to file state tort claims for asbestos exposure in the zone of concurrent jurisdiction despite the exclusive remedy provision of the LHWCA; Robichaux v. Huntington Ingalls Inc., No. 22-cv-610, 2023 U.S. Dist. LEXIS 159942 (E.D. La. Sept. 8, 2023) (Papillion).
Felton Robichaux worked as a land-based insulator and carpenter at Avondale Shipyard in Louisiana from 1961 to 1979, where he was exposed to asbestos. He was diagnosed with mesothelioma in 2022 and brought this suit in state court in Orleans Parish, Louisiana. Avondale removed the suit to federal court based on the Federal Officer Removal Statute because Robichaux was primarily exposed to asbestos while working on United States Navy ships. Robichaux died after filing the suit, and his beneficiaries substituted for him as plaintiffs. Avondale then moved for partial summary judgment that the LHWCA preempts the beneficiaries’ state-law tort claims against it. Avondale and the beneficiaries disagreed whether the pre-1972 version or the post-1972 version of the LHWCA applied for the preemption analysis, but Judge Papillion noted that the disagreement was no longer relevant after the Barrosse decision of the Fifth Circuit (see July 2023 Update), which held that the LHWCA does not preempt state tort claims against the employer for maritime workers who are injured in the twilight zone in Louisiana who do not seek or obtain LHWCA compensation and whose injuries were not covered by the relevant version of the Louisiana Workers’ Compensation Act. As the beneficiaries satisfied all of the requirements set forth in Barrosse (the version of the state act in effect at the time of the exposure did not allow for recovery for mesothelioma), Judge Papillion denied Avondale’s motion for summary judgment.
Judge held that facts on the borrowed servant issue were not sufficient to overcome, as a matter of law, the provision on control in the contract between the parties, and he denied summary judgment for the platform owner on the arguments that the LHWCA was the exclusive remedy against the platform owner and that the platform owner was not negligent; Thibodeaux v. Equinor United States E&P, Inc., No. 22-cv-15, 2023 U.S. Dist. LEXIS 168128 (M.D. La. Sept. 21, 2023) (deGravelles).
Danos, LLC contracted with Equinor, owner of the Titan platform located at Mississippi Canyon Block 941 on the outer Continental Shelf of the Gulf of Mexico, to provide personnel services for the platform. Danos hired Randall Thibodeaux as an instrumentation and electrical technician for the platform. Equinor also contracted with Premier Offshore Catering to provide meals for contractors on the platform, and Premier ordered groceries from Acadia Wholesale. On July 17, 2021, Equinor assigned Thibodeaux to work as part of a human chain to move grocery boxes to their storage location on the platform, and Thibodeaux was injured while moving a box when the cut-out handle on the box failed, causing him to lose control of the box. Thibodeaux brought this suit against Equinor in federal court in Louisiana, and Equinor filed a motion for summary judgment, arguing that Thibodeaux was a borrowed servant of Equinor and that Equinor’s liability was accordingly barred by the exclusive remedy provision in Section 5(a) of the LHWCA. Equinor also argued that, alternatively, it was entitled to summary judgment on Thibodeaux’s negligence claim. Judge deGravelles discussed each of the nine factors enunciated by the Fifth Circuit in Ruiz to determine whether a worker is a borrowed servant. For the right to control the work Thibodeaux was performing, Equinor argued that there was no Danos supervisor on the platform, that Thibodeaux only contacted his account manager supervisor with Danos a maximum of twice per hitch, and that he worked next to and under the supervision of Equinor employees. However, Judge deGravelles cited Thibodeaux’s argument that although he received his assignments from Equinor, “how he did his jobs was left entirely to him.” Therefore, Judge deGravelles concluded that the evidence was conflicting but leaned strongly in favor of the conclusion that Equinor did not control Thibodeaux’s work. The work performed was Equinor’s work. The contract between Equinor and Danos contained conflicting provisions as it provided that Danos would provide skilled technicians who would perform their duties under the direction and control of the platform leadership, but it also provided that Danos would perform as an independent contractor and have control of its employees. Judge deGravelles believed that this factor was mixed but strongly leaned in favor of the argument that Thibodeaux was not a borrowed servant. Consequently, he held that the Ruiz factors had to clearly point to borrowed servant status in order to overcome the contractual language. On the factor whether the employee acquiesced in the new work situation, Judge deGravelles noted that Thibodeaux worked on the platform without interruption for two years and testified that he did not get his supervision from his contact with Danos and that he did his work without input from Danos (although Thibodeaux contacted his contact at Danos twice a hitch). Therefore, Judge deGravelles believed that this factor (as well as the factor whether the original employer terminated its relationship with the employee and the factor whether the new employment was over a considerable length of time) favored borrowed servant status. As Thibodeaux worked, lived, and ate on the platform and was provided tools by Equinor, the factor inquiring about furnishing tools and the place of performance favored borrowed servant status. Equinor had the right to discharge Thibodeaux from the platform and compensated Danos for the work, so the termination factor and the obligation to pay factor favored borrowed servant status. In conclusion, four factors favored Equinor, three were conflicting but favored Equinor, and two were mixed but leaned in favor of Thibodeaux. However, considering the contractual language that Danos would be considered the employer of its payroll employees working for Equinor, Judge deGravelles held that the factors did not clearly and overwhelmingly point to borrowed servant status, and he denied the motion for summary judgment based on the exclusive remedy provision of Section 5(a) of the LHWCA. Judge deGravelles then considered Equinor’s argument that it was entitled to summary judgment on liability because it did not create the alleged hazard of a defective box handle or an inordinately heavy box, that it had no duty to protect against such a hazard, and it acted with reasonable care in providing safe lifting practices, proper training, and a reasonably safe working environment. Judge deGravelles noted that Thibodeaux was not blaming Equinor for the defective handle but rather for unsafe practices and procedures and that its expert witnesses provided opinions disputing the safety of those practices and procedures. Therefore, the issue involved a mixed question of fact by which the judge would decide the duty and the jury would decide legal cause, so that summary judgment was inappropriate.
From the state courts
Maintenance worker for yacht club who was injured while stepping from a dock to a boat was excluded from coverage under the LHWCA, and his exclusive remedy against the yacht club was under the California workers’ compensation statute and not under the general maritime law; Ranger v. Alamitos Bay Yacht Club, No. B315302, 2023 Cal. App. LEXIS 686 (Cal. App. 2d Dist. Sept. 6, 2023) (Wiley).
Brian Ranger was employed by Alamitos Bay Yacht Club in Long Beach as a maintenance worker. He assisted in the painting, cleaning, maintaining, repairing, unloading, and mooring of vessels at the club. He was injured after loading a club boat into the water when he fell after stepping from the dock to the bow of the boat. He applied for workers’ compensation under the California statute and brought this suit in the Superior Court of Los Angeles County, seeking to recover for negligence and unseaworthiness under the general maritime law. Judge Kim sustained the club’s demurrer, ruling that there was no admiralty jurisdiction and that the state compensation statute provided the exclusive remedy for Ranger. Ranger appealed to the California Court of Appeals, and, writing for the court, Judge Wiley provided an extensive explanation of the 1984 Amendments to the LHWCA, which exclude “individuals employed by a club, camp, recreational operation, restaurant, museum, or retail outlet” if the individuals are subject to coverage under a state workers’ compensation law. As the exclusion ultimately applied to all clubs, whether for profit or nonprofit, Judge Wiley held that Ranger was not covered under the LHWCA, noting that Congress had determined that club employees “are more aptly covered under appropriate state compensation laws” because they lack “a sufficient nexus to maritime navigation and commerce.” Judge Wiley reasoned that employees may not sue their employer in tort under the California statute, and that result made sense in this case because federal and state law were in accord—both the state and federal legislatures have replaced the fault-based tort system with the no-fault alternative of workers’ compensation. Ranger cited the Fifth Circuit’s decision in Green v. Vermillion Corp., permitting a worker at a duck hunting camp, who was excluded from the LHWCA by the 1984 Amendments, to bring maritime claims for negligence and unseaworthiness. However, Judge Wiley “profoundly” disagreed with the Fifth Circuit and joined with the contrary result from the Eleventh Circuit in Brockington v. Certified Electric, reasoning that the uniformity cited by Ranger and the Fifth Circuit as justification for preemption of state law was “a one-way street, not a useful method of analysis: it always insists on national uniformity, regardless of context, and it always disfavors state power, which can be sound and richly diverse.” Judge Wiley preferred the uniformity expressed in modern Supreme Court decisions such as Batterton, where the uniformity sought is with policies enacted by democratically elected representatives. He added that “Green’s and Ranger’s conception of ‘uniformity’ has antique support, but age has rotted some of those old timbers.” Judge Wiley concluded that the California workers’ compensation law was the exclusive remedy, stating: “A core part of the state workers’ compensation bargain is that injured workers get speedy and predictable relief irrespective of fault. In return, workers are barred from suing their employers in tort.”
And on the maritime front . . .
From the federal appellate courts
Fifth Circuit remanded the magistrate judge’s award of $124,531,652 in favor of a terminal lessee against the Port of Lake Charles (for the failure of the Port to secure dredging permits that would allow larger vessels access to the terminal) for the district judge to determine whether the defendant’s consent to the magistrate judge was valid in light of the longstanding friendship between the magistrate judge and the plaintiff’s attorney; IFG Port Holdings, L.L.C. v. Lake Charles Harbor & Terminal District, No. 22-30398, 2023 U.S. App. LEXIS 25062 (5th Cir. Sept. 21, 2023) (Higginson).
IFG Port Holdings entered into a Ground Lease Agreement with the Port of Lake Charles on which IFG was to build a grain export terminal at a cost of more than $50 million. This dispute arose because the Port did not obtain permits to allow dredging that would permit IFG to load larger, deeper draft cargo vessels that were necessary for IFG to seek trade with the most profitable markets. The case was tried to Magistrate Judge Kay, who held that the Port had breached its contract with IFG by failing to secure the appropriate permits that would allow IFG to dredge to the depth designated in the contract. She ruled that IFG was entitled to damages to be determined plus its attorney fees and costs. See September 2020 Update.
After a hearing on damages, Magistrate Judge Kay entered a judgment in the amount of $124,531,652 in favor of IFG against the Port that included business losses of $41,696,272 associated with IFG’s inability to market itself as a fully operational terminal and to load deeper draft cargo vessels, treble damages under the Louisiana Unfair Trade Practice Act on the portion of the business losses after notice, outside counsel attorney fees for the work of several firms in the amount of $2,115,509, and general counsel fees of $1,085,000 for the CEO and General Counsel of IFG (estimated 3,500 hours at $310 per hour as he did not keep a contemporaneous record of his time as in-house counsel). See April 2022 Update.
After the entry of the judgment, the defendant learned of the undisclosed longstanding friendship between IFG’s attorney and Magistrate Judge Kay, including that the lawyer was a groomsman in the wedding of the magistrate judge and the magistrate judge officiated the wedding of the lawyer’s daughter three months before the suit was filed. Concluding that the facts asserted (if true) raised serious doubts about the validity of the consent to have the case tried by the magistrate judge, the Fifth Circuit vacated the order of referral to the magistrate judge and remanded the case to the district judge for an evidentiary inquiry as to the validity of the referral.
From the federal district courts
Judges granted summary judgment on BELO and opt-out claims from the DEEPWATER HORIZON/Macondo spill for lack of expert evidence on causation and declined to reconsider decisions rejecting opt-out claims; Walker v. BP Exploration & Production Co., No. 17-4219, 2023 U.S. Dist. LEXIS 145966 (E.D. La. Aug. 21, 2023) (Vance); Brown v. BP Exploration & Production, Inc., No. 17-3519, 2023 U.S. Dist. LEXIS 148870 (E.D. La. Aug. 24, 2023) (Vance); Cintra v. BP Exploration & Production, Inc., Nos. 17-3889, 17-4183, 2023 U.S. Dist. LEXIS 153997 (E.D. La. Aug. 31, 2023) (Milazzo); McDaniel v. BP Exploration & Production, Inc., No. 17-4069, 2023 U.S. Dist. LEXIS 154005 (E.D. La. Aug. 31, 2023) (Milazzo); Walker v. BP Exploration & Production, Inc., Nos. 17-3622, 17-3688, 2023 U.S. Dist. LEXIS 158136 (E.D. La. Sept. 6, 2023) (Milazzo); Johnson v. BP Exploration & Production, Inc., No. 17-4647, 2023 U.S. Dist. LEXIS 162035 (E.D. La. Sept. 13, 2023) (Vance); Turner v. BP Exploration & Production, Inc., No. 17-4616, 2023 U.S. Dist. LEXIS 162036 (E.D. La. Sept. 13, 2023) (Vance); Collier v. BP Exploration & Production, Inc., No. 17-3131, 2023 U.S. Dist. LEXIS 162041 (E.D. La. Sept. 13, 2023) (Vance); Turner v. BP Exploration & Production, Inc., No. 17-4614, 2023 U.S. Dist. LEXIS 162043 (E.D. La. Sept. 13, 2023) (Vance); Gilliam v. BP Exploration & Production, Inc., Nos. 17-3234, 17-4368, 17-4381, 2023 U.S. Dist. LEXIS 163001 (E.D. La. Sept. 14, 2023) (Vance); Odom v. BP Exploration & Production, Inc., No. 17-cv-202, 2023 U.S. Dist. LEXIS 166423 (W.D. Tex. Sept. 18, 2023) (Bemporad); Bonilla v. BP Exploration & Production, Inc., No. 21-2257, 2023 U.S. Dist. LEXIS 167096 (E.D. La. Sept. 19, 2023) (Ashe).
Terry L. Odom brought a Back-End Litigation Option claim against BP, alleging conditions resulting from her working to collect oil from the oil spill after the DEEPWATER HORIZON/Macondo blowout. Odom originally submitted the opinions of Dr. Stephen King on general causation and Dr. Mark D’Andrea on specific causation, but these experts withdrew from the case shortly before oral argument. That left Odom’s third expert, Dr. Terrance Stobbe, an industrial hygiene expert, who opined about Odom’s exposure to chemicals during her work. BP moved for summary judgment, and Magistrate Judge Bemporad noted that Odom had no evidence of general causation. With respect to specific causation, Odom argued that expert evidence was not necessary because her conditions were within a lay person’s common knowledge. Magistrate Judge Bemporad responded that the argument on specific causation was not a substitute for expert evidence on general causation. Without expert evidence on general causation, Magistrate Judge Bemporad recommended that summary judgment be granted to BP. Julio Cesar Bonilla also brought a Back-End Litigation Option claim against BP, disclosing his treating physicians to testify as experts on general causation. BP moved for summary judgment, arguing that the disclosures did not identify an association in the scientific literature between the exposure and disease and did not provide information on Bonilla’s specific exposure response. Concluding that the disclosures were insufficient to establish causation for the BELO claim, Judge Ashe granted summary judgment to BP and dismissed the suit.
Judith Turner, Patrick Collier, Vickey Turner, and Reginald Johnson opted out of the Medical Benefits Class Action Settlement Agreement for the DEEPWATER HORIZON/Macondo spill and brought suits against BP for exposure from their work as onshore cleanup workers. BP moved for summary judgment on these claims because the plaintiffs had not presented any expert evidence on causation. After the deadline for expert disclosure and after the motions for summary judgment, the plaintiffs submitted expert reports, but the opinions were similar to those that have been excluded in other cases. The plaintiffs admitted that the late production of the reports would not change the outcome in the case, and Judge Vance excluded them and granted summary judgment to BP for lack of expert evidence on causation.
Elvis Cintra, Marlon Stallworth, and Ronald McDaniel claimed exposure to crude oil and dispersants from the DEEPWATER HORIZON/Macondo spill. These plaintiffs presented expert reports of Dr. Jerald Cook to support the general causation requirement for their claims. BP moved to exclude Dr. Cook’s opinions, and plaintiffs Cintra and Stallworth asked the court to allow Dr. Cook’s expert testimony because there are no alternative studies on which he could rely to support his opinions. Judge Milazzo agreed that Dr. Cook’s opinions should be excluded, and she added that the additional contention did not change the fact that there was an absence of evidence of general causation. Accordingly, she held that Dr. Cook’s opinions were not admissible and granted BP’s motions for summary judgment.
Rodney Walker, II, Shonte Nicole Brown, Lisa Walker, Danielle Cramer, Earl Gilliam, Aaron Johnson, and Larry Jones sought reconsideration of the decisions of Judge Vance and Judge Milazzo to exclude the opinion of Dr. Cook and requested that they reconsider granting summary judgment to BP on the grounds that it was error to require Dr. Cook to identify a harmful level of exposure to particular chemicals that cause the conditions experienced by these plaintiffs, that BP had a duty to protect the cleanup workers and violated the duty by failing to conduct biomonitoring (based on the affidavit of Dr. Linda Birnbaum and explaining why there is inadequate data on causation), and that the GuLF (Gulf Long-term Follow-up) Study represents the “state of the art” and is a reliable basis for Dr. Cook’s opinions. Judges Vance and Milazzo answered that these arguments (or nearly identical ones) had already been presented in opposition to the motions for summary judgment and were insufficient to support reconsideration. Accordingly, Judges Vance and Milazzo denied the motions for reconsideration.
Judge declined to reconsider decision that a letter requesting information on insurance coverage and preservation of evidence was sufficient notice to trigger the running of the six-month period to file a federal action seeking limitation of liability; In re Intrepid Marine Towing & Salvage, Inc., No. 8:21-cv-420, 2023 U.S. Dist. LEXIS 147522 (M.D. Fla. Aug. 22, 2023) (Honeywell).
On June 14, 2020, Captain Curtis Snyder was operating Intrepid Marine’s vessel when it collided with another vessel occupied by claimants Nicholas Cachussie, Adrienne Cachussie, and Cheryl Watkins. Three days later, on June 17, 2020, claimants’ counsel sent a letter to Intrepid Marine explaining that counsel represented the claimants for losses sustained in the collision with the collision causing significant injuries. The letter requested information on insurance coverage, including the amount of coverage, so that counsel could properly advise his clients of certain legal rights. The letter advised the owner not to discard or alter evidence, requested documents, and advised that the claimants would pursue legal remedies if evidence was spoliated. A second letter was sent to Intrepid’s insurer a few days later advising of the representation. It was more than six months later, however, on February 22, 2021, that Intrepid Marine filed this limitation action in federal court in Florida, and the claimants responded that the action was not filed within six months of written notice of a claim. Magistrate Judge Flynn recommended that summary judgment be granted to the claimants, concluding that the initial letter provided Intrepid Marine with notice of a reasonable possibility of a claim that exceeded the vessel’s value. Magistrate Judge Flynn found notice from seeking information related to a potential claim, placing blame on Intrepid Marine, requesting information about insurance, requesting production of documents, and requesting preservation of evidence “in very serious terms.” Intrepid appealed the recommendation to Judge Honeywell and argued that the letter did not make a claim, noting that there was no demand for any amount and no assertion that the claims could exceed the vessel’s value. However, Judge Honeywell agreed with Magistrate Judge Flynn that seeking information about a potential claim was sufficient, and she entered judgment in favor of the claimants that the limitation action was untimely. [Compare the analysis of the Ninth Circuit in Martz v. Horazdovsky, Nos. 20-35985, 21-15187, 2022 U.S. App. LEXIS 12536 (9th Cir. May 10, 2022) (discussed in our June 2022 Update), in which the appellate court held “the writing must convey to the vessel owner the claimant’s actual intent to initiate a claim”]. See January 2023 Update.
Intrepid Marine moved for reconsideration, but Judge Honeywell held that request did not satisfy the standard for reconsideration as it merely reargued the same legal principles that existed at the time the case was previously presented. As there was no intervening change in law in the Eleventh Circuit and no new evidence, Judge Honeywell repeated that the letter constituted written notice and revealed a reasonable possibility of a claim exceeding the value of the vessel. Intrepid Marine finally asked that Judge Honeywell amend the order and judgment to reflect that the dismissal with prejudice should only apply to the count seeking limitation and should not apply to the count seeking exoneration. Citing the case law that the basis for granting exoneration vanishes when limitation is not possible, Judge Honeywell declined to change the dismissal with prejudice of the count seeking exoneration.
Judge upheld admiralty removal of lawsuits arising from air crash in the Java Sea; In re Air Crash into the Java Sea on January 9, 2021, No. 1:23-md-3072, 2023 U.S. Dist. LEXIS 152851 (E.D. Va. Aug. 25, 2023) (Hilton).
This opinion arises from the crash of Sriwijaya Air flight SJY182 in the Java Sea off the coast of Indonesia. The flight was a commercial intra-Indonesian flight between islands for which there was no land bridge. Sixty-two citizens of Indonesia died in the crash. The beneficiaries of the decedents brought suits against Boeing in the Circuit Court for Cook County, Illinois. Before being served, Boeing removed the cases to the United States District Court for the Northern District of Illinois based on diversity and original admiralty jurisdiction, and the plaintiffs moved to remand the cases. The Judicial Panel on Multidistrict Litigation transferred these cases to the United States District Court for the Eastern District of Virginia, which addressed the plaintiffs’ argument that the cases should be remanded to state court. The plaintiffs argued that Boeing failed to prove that its headquarters and principal place of business were in Virginia, but Judge Hilton held that Boeing had sufficiently alleged the diversity between the plaintiffs and Boeing. The plaintiffs also argued, in a supplemental memorandum, that the forum defendant rule barred removal, but the plaintiffs did not raise that argument within 30 days, the rule does not apply to a defendant that has not been served, and Boeing had moved its headquarters from Chicago, Illinois to Arlington, Virginia before the filing of the suit. Judge Hilton then turned to the independent basis for jurisdiction asserted by Boeing in the removal—the original admiralty jurisdiction of the federal court. He first considered whether there was admiralty jurisdiction over the suits, concluding that the locality test for admiralty jurisdiction was satisfied by the crash into the Java Sea and part of the alleged wrong occurring over navigable waters. Judge Hilton rejected the attempt by the plaintiffs to narrowly frame the wrongful conduct as “stemming from the design, manufacture, and sale of the aircraft’s autothrottle and accompanying manuals on land.” The failure may have first occurred when the aircraft was over land, but it persisted over the water. Judge Hilton found the nexus test was satisfied, reasoning that “a possibility that an incident could injure a crewmember or passenger is a potentially disruptive impact on maritime commerce” and that the flight ferrying passengers over navigable water, which would have been performed by a boat prior to air travel, had a significant relationship to traditional maritime activity. Judge Hilton then concluded that the federal court had admiralty jurisdiction and concluded: “Removal was therefore proper on that basis alone, as the court has original jurisdiction over this action.” Therefore, the removal was proper under 28 U.S.C. Section 1441(a): [A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed.”
Florida court lacked personal jurisdiction over cruise ship passenger’s injury suit against Bahamian excursion operator; passenger sufficiently pleaded claims against cruise line for failure to provide a safe means of boarding, negligent selection and retention, failure to warn, and failure to provide a reasonably safe excursion, but the judge dismissed the claim based on being a third-party beneficiary of the agreement between the cruise line and the excursion operator; Gilles-Jean v. Royal Caribbean Cruises, Ltd., No. 22-22780, 2023 U.S. Dist. LEXIS 152399 (S.D. Fla. Aug. 28, 2023) (Torres).
Marie Rosena Gilles-Jean, a citizen of New York, was a passenger on the cruise ship, FREEDOM OF THE SEAS, and was injured during a shore excursion operated by Dolphin Encounters in The Bahamas. She claims that she was injured while attempting to disembark the Blue Lagoon Ferry, operated by Dolphin Encounters, onto the floating dock that was attached to the FREEDOM OF THE SEAS when there was a sudden drop in elevation of the ferry that caused her left leg to be trapped between the floating dock and the hull of the ferry. Gilles-Jean brought this suit in federal court in Florida against Dolphin Encounters, its owner and managing director, Robert L. Meister, and the cruise line. Dolphin Encounters and Meister moved to dismiss the action against them for lack of personal jurisdiction, arguing that the accident involved a New York plaintiff against foreign defendants for an accident that occurred in foreign waters. Although Gilles-Jean cited a limited set of affiliations that the excursion had with Florida to support general jurisdiction, Magistrate Judge Torres held that the contacts were not “so substantial as to make this one of those exceptional cases in which a foreign corporation is at home in a forum other than its place of incorporation or principal place of business.” Magistrate Judge Torres also rejected Gilles-Jean’s argument that the accident arose out of contacts of the excursion with Florida (she saw advertisements for the excursion in Florida), stating: “Plaintiff has not cited a single act that was at all related to the injury that occurred in the waters off Nassau.” Magistrate Judge Torres also rejected the argument that Gilles-Jean was a third-party beneficiary of the Tour Operator Agreement between the cruise line and excursion, which contained a Florida forum-selection clause as the Agreement contained an express disclaimer of third-party beneficiary status. Finally, the fact that Gilles-Jean served the excursion under the Hague Convention did not confer subject matter jurisdiction. Therefore, Magistrate Judge Torres recommended that the claims against Dolphin Encounters and Meister be dismissed for lack of personal jurisdiction. Magistrate Judge Torres then considered the cruise line’s motion to dismiss for failure to state a claim. He agreed with the cruise line that the claim that the passenger was a third-party beneficiary of the Tour Operator Agreement should be dismissed for the same reason as he stated in considering personal jurisdiction for the tour operator. However, he recommended that the claims for failure to provide a safe means of boarding, negligent selection and retention, failure to warn, and failure to provide a reasonably safe excursion not be dismissed as the pleading alleged sufficient notice to the cruise line for these claims.
Wife, who was co-owner of pleasure boat and was not present at the time of the accident, was not liable for deaths of passengers, but there was sufficient evidence to deny summary judgment to the husband/co-owner, who was operating the boat; Gogel v. Maroulis, No. GRL-16-2695, 2023 U.S. Dist. LEXIS 153285 (D. Md. Aug. 29, 2023) (Russell).
John Maroulis and his wife, Paula Maroulis, owned the 26-foot catamaran, NAUTI CAT. They hosted their friends, Konstantinos Balourdos, Fredy F. Castro, William M. Gogel, Jr., and Gogel’s wife (Deborah) and his daughter at their home in Ocean View, Delaware. Maroulis, Balourdos, Castro, and Gogel decided to go deep-sea fishing at Poor Man’s Canyon, approximately 70 miles offshore from Ocean City, Maryland. After the boat was out to sea, it was struck by what Maroulis characterized as a rogue wave. Realizing that the boat was going to capsize, Balourdos dove into the water. A second wave flipped the boat. Maroulis was temporarily trapped under the boat, but he dove down, resurfaced, and climbed onto the upside-down boat. Balourdos found a floating cooler and used it and the boat to stay afloat. They were rescued by a nearby boat about an hour later. Gogel and Castro drowned. The beneficiaries of Gogel and Castro brought suit against John and Paula Maroulis in federal court in Maryland, and John and Paula moved for summary judgment. The beneficiaries engaged Captain Stephen Motyczka as an expert witness, and Captain Motyczka opined that John Maroulis failed to enact proper risk management techniques, given the conditions at sea, and violated navigation rules (he should not have used the auto pilot and his failure to instruct passengers about life vests and his storing of life vests out of reach was a breach of his duty to the passengers). The Maroulises argued that Captain Motyczka was unqualified to provide his opinions and that his opinions impermissibly relied on the Coast Guard Report. Judge Russell rejected the argument on Captain Motyczka’s qualifications based on his experience and education, but Judge Russell was concerned because Captain Motyczka admitted that he obtained the facts of the incident from the Coast Guard Report (as well as a report from WeatherWorks). As the issue of the admissibility of the Coast Guard was not fully briefed, Judge Russell declined to rule on the admissibility of the opinions of Captain Motycza. Judge Russell then considered John Maroulis’ motion for summary judgment and agreed with the beneficiaries that there were fact disputes; however, it was “a close question.” Although there was evidence that the life vests were not readily accessible and that John Maroulis did not provide adequate safety instructions, Maroulis argued that, because the bodies of Gogel and Castro were recovered from the cabin of the NAUTI CAT, the life vests would have made no difference as the decedents were trapped inside and could not have reached the surface even if they wore life vests. Judge Russell was unpersuaded because the evidence about the location of the bodies came from the inadmissible Coast Guard Report. Therefore, he concluded that a reasonable jury could conclude that a life vest would have saved the lives of Gogel and Castro. Judge Russell reached a different result with respect to the liability of Paula Maroulis. The beneficiaries argued that, although she was not present, she could be held vicariously liable for her husband’s negligence because she was co-owner of the vessel (and was present at dinner the night before the incident). However, there was no evidence that she knew of any risk to the passengers or that her presence at the dinner provided her with knowledge of the weather, the water conditions, the presence of life vests, or the instructions provided by her husband. Accordingly, Judge Russell granted summary judgment and dismissed the claims against Paula Maroulis.
Submitting a letter of undertaking corrected the inadequate Ad Interim Stipulation in limitation action; In re Mongelli, No. 8:23-cv-1618, 2023 U.S. Dist. LEXIS 154865 (M.D. Fla. Aug. 29, 2023) (Tuite).
Slade Mongelli is the owner of a 21-foot Polar Boats Runabout that struck a submerged object while being operated in Sarasota Bay, Florida, injuring passenger Cary O’Donnell. Mongelli brought this limitation action in federal court in Florida, seeking to limit liability to the value of the vessel at the end of the voyage ($4,904.45). Mongelli submitted an Ad Interim Stipulation, stating that he would issue a letter of undertaking within 15 days of demand by a claimant or that he would deposit a surety bond into the registry of the court within 15 days after entry of an order confirming the report of a commissioner to be appointed to appraise the value of the vessel, if demanded by a claimant. Noting that the Stipulation was not accompanied by the letter of undertaking or other security, Magistrate Judge Tuite “was not persuaded” that the Stipulation would protect claimants as contemplated by the Limitation Act and Supplemental Rule F. Accordingly, Magistrate Judge Tuite declined to approve the Ad Interim Stipulation or to direct issuance of the Monition and injunction. See September 2023 Update.
Mongelli then filed an Amended Ad Interim Stipulation, including a letter of undertaking from Geico Marine Insurance Co., guaranteeing payment of Mongelli’s obligations in this limitation action up to $4,904.45 plus interest at 6%. Finding the amended submission to be sufficient, Magistrate Judge Tuite approved the Stipulation and entry of the Monition.
Employer established McCorpen willful concealment defense to seaman’s claim for maintenance and cure; Clark v. Offshore Marine Contractors, Inc., No. 22-747, 2023 U.S. Dist. LEXIS 153004 (E.D. La. Aug. 30, 2023) (Barbier).
Jamal C. Clark, Sr., a seaman on the M/V MICHAEL EYMARD, owned by Offshore Marine, was injured when the vessel was riding out Hurricane Ida in Leeville, Louisiana and a window blew out into the pilot house, striking Clark in the head and knocking him to the deck, causing injuries to his head, neck, and back, along with emotional damage. Clark filed this suit against Offshore Marine in federal court in Louisiana, seeking to recover damages and maintenance and cure. During discovery, Offshore Marine obtained evidence that Clark had withheld evidence of pre-existing neck and back problems and workers’ compensation claims when he sought employment. Therefore, Offshore Marine filed a motion for summary judgment asserting a McCorpen willful concealment defense to the claim for maintenance and cure. When Offshore Marine hired Clark, he represented that he had never had a disease or disability arising from his work and that he had never had back trouble or an injury to his back, neck, or head (he also denied any work-related injuries during his deposition). However, Offshore Marine discovered that Clark had an injury to his neck and back for which he received workers’ compensation benefits. Although Clark argued that he had not sustained injuries to all of the areas of his body involved in this case, Offshore Marine only challenged Clark’s right to receive maintenance and cure for his neck and back injuries. As the injury to his low back was well documented, Clark did not disagree that he failed to disclose the injury. However, he contested concealing an injury to his neck. Judge Barbier disagreed, noting that the injury to Clark’s back was more extensive and longer in duration; however, the emergency room notes reflected complaints of neck pain, and the employer reported a neck injury to its workers’ compensation carrier. Consequently, Judge Barbier found that there was concealment for Clark’s neck as well as his back. Judge Barbier then considered the materiality prong of the McCorpen test, and he cited the declaration of the President and CEO of Offshore Marine that it is the company’s policy not to hire individuals with pre-existing neck or back injuries. He added that Offshore Marine would not have approved the hiring if Clark had truthfully disclosed his medical condition. Therefore, Judge Barbier held that the materiality issue was satisfied. Finally, although Clark denied a prior injury to his neck, Judge Barbier held that there was a causal link between the pre-existing injuries and those alleged in the lawsuit (as they were identical in nature). Accordingly, Judge Barbier dismissed the claim for maintenance and cure for the injuries to Clark’s back and neck.
Opinion of expert as to the cause and origin of the fire that consumed two vessels was far from perfect, but it was sufficient to defeat summary judgment; In re Soued, No. 20-6674, 2023 U.S. Dist. LEXIS 154116 (D.N.J. Aug. 31, 2023) (Bumb).
This litigation arises from a fire that consumed two boats that were moored next to each other at the Seaview Harbor Marina in Longport, New Jersey. Dr. George J. Soued owned a 58-foot yacht, WILLIAM G II, and MS Marine/Samson owned a 65-foot yacht, MAJESTIC, which was insured by ACE American Insurance. There were no witnesses who saw where the fire originated. A nearby homeowner saw the fire only after both vessels were ablaze. ACE and the insurer for Soued sent investigators to determine the cause and origin of the fire. ACE’s investigator, Michael E. Schaal, concluded that the fire originated on the WILLIAM G on its starboard side where the power cords were connected with the shore power cord. Dr. Soued hired James Cote as his expert, and he concluded that Schaal’s conclusions were unreliable for several reasons. He classified the origin of the fire as undetermined, but he suggested that the fire started on the MAJESTIC and spread to the WILLIAM G. After the Marina demanded that Dr. Soued pay for damage to the dock, Dr. Soued filed this limitation action in federal court in Maryland, and ACE and the Marina filed claims in the action. Dr. Soued moved to exclude Schaal as an expert, arguing that his opinions were unreliable and that he was entitled to summary judgment in the absence of an expert to establish his liability. Dr. Soued argued that Schaal did not follow the methodology of the National Fire Protection Association 921, A Guide for Fire and Explosion Investigations, which Judge Bumb noted had been called the “gold standard” for fire investigators. Judge Bumb disagreed with Dr. Soued, concluding that Schaal conducted his investigation in the manner contemplated by NFPA 921. The objections went to the application of the NFPA 921 methodology, and Judge Bumb reasoned that those objections went to the weight of the opinions (subject to cross-examination) and not to its admissibility. Judge Bumb also rejected the contention that it was improper for Schaal to rely on deposition testimony and discovery materials such as surveillance footage, answering that the investigator should rely on all available resources to develop origin-and-spread hypotheses and that Schaal only used that information along with the evidence that he obtained firsthand in his investigation. She agreed that Schaal’s investigation was “far from perfect,” but she did not find fatal missteps that caused opinions to be excluded in cases cited by Dr. Soued. Therefore, she declined to exclude Schaal’s opinions and denied Dr. Soued’s motion for summary judgment.
Liability expert was permitted to give opinions on compliance with the Coast Guard certificate and ABS classification, even though the captain testified that the compliance was not relevant to the cause of the injury; employer/vessel owner was not liable to seaman when the cause of the fall was the seaman’s failure to use common sense; services of nurse case manager hired by the seaman did not fall within the cure obligation; Al Qari v. American Steamship Co., No. 21-cv-10650, 2023 U.S. Dist. LEXIS 154447, 164452 (E.D. Mich. Aug. 31, 2023) (Borman).
Hussein Al Qari was employed as a steward’s assistant on American Steamship’s vessel M/V H. LEE WHITE. He claims that he was injured while climbing a flight of stairs while carrying a box containing six jars of coffee grounds. He had one hand on the handrail, but he let go of the handrail when the box began to slip, and he lost his balance and fell. Al Qari brought this suit against American Steamship in federal court in Michigan, seeking to recover for Jones Act negligence, unseaworthiness, and maintenance and cure. He submitted an expert report on liability from Dr. John Morse, Ph.D., P.E., a mechanical engineer whose experience was primarily with OSHA cases. Dr. Morse opined that Al Qari should have been equipped with an alternative means of carrying the coffee cans, and he cited four OSHA regulations to support his opinion. American Steamship moved to exclude Dr. Morse’s opinions, arguing that OSHA regulations do not apply on a Coast Guard-inspected vessel such as the H. LEE WHITE. Al Qari argued, in response, that not all of Dr. Morse’s opinions referenced OSHA regulations and that some courts have allowed non-binding OSHA regulations as evidence of the proper standard of care. Judge Borman rejected both of Al Qari’s arguments. He noted that Dr. Morse did not cite any Coast Guard standards, and the reference to OSHA standards could cause confusion and unfair prejudice. He distinguished cases allowing OSHA regulations as non-binding evidence of the standard of care and held that Dr. Morse’s testimony would be excluded.
American Steamship also moved to exclude or limit the testimony of Al Qari’s liability expert, Captain Daniel Franklin. American Steamship did not object to Captain Franklin’s qualifications. However, it did object that Captain Franklin’s first report was based on the unsworn declaration of Al Qari, and his second report was based on a cherry-picking of facts from Al Qari’s deposition testimony. Judge Borman agreed that the declaration could not be considered as evidence supporting the initial report; however, the complete deposition had been provided and was used to prepare the subsequent report. American Steamship continued to object to the reliability of Captain Franklin’s opinions as he ignored testimony, such as Al Qari’s testimony that his fall was an accident, on the ground that “I don’t think it is relevant to this case.” Judge Borman did not consider the picking and choosing of data on which to base an expert’s opinion to require its exclusion. Instead, he held that it was a subject for cross-examination. American Steamship also objected to the opinion that Al Qari could not safely climb the stairs carrying materials like the coffee cans on the ground that it was within the province of the jury and was not helpful, and Judge Borman agreed that it should be excluded (along with testimony on legal conclusions such as that American Steamship was negligent or that there was an unseaworthy condition). Finally, Al Qari sought to elicit opinions beyond those in the reports during the deposition of Captain Franklin (Captain Franklin asserted that he reserved the right to supplement his opinions based on new information). Judge Borman held that Captain Franklin would not be allowed to express an opinion beyond those contained in his reports or deposition. See September 2023 Update.
Al Qari moved to exclude the opinions of American Steamship’s liability expert, Captain Brian J. Hall, that the vessel was in compliance with its Coast Guard Certificate of Inspection and that it was in compliance with its American Bureau of Shipping Classification. Al Qari argued that the opinions were irrelevant and unfairly prejudicial because they had nothing to do with the facts of the accident or an issue in the suit. Al Qari cited the testimony of the captain of the vessel that the compliance with the inspection and classification requirements had nothing to do with the cause of Al Qari’s fall. However, as Al Qari argued that the vessel was operated in an unsafe, unseaworthy, or negligent manner and that its crew or equipment were not reasonably fit, Judge Borman held that the opinions were relevant and would not be excluded.
Al Qari and American Steamship then filed cross-motions for summary judgment on liability under the Jones Act and for unseaworthiness. American Steamship cited the testimony of Al Qari that there was nothing wrong with the ship or the crew, that the fall was an accident, and that he could not think of anything that American Steamship did wrong that caused or contributed to the accident. However, Judge Borman considered the statements to be evidentiary admissions, not judicial admissions, and they did not preclude introducing contrary evidence. Judge Borman then considered Al Qari’s argument that he did not have sufficient training and equipment with respect to the carrying of the coffee cans up the stairs to the galley. However, he had received training on carrying items up stairs, and he was an experienced seaman who required no training on how to carry specific items up stairs (such as coffee cans). Although Al Qari argued that the box was flimsy, he testified that there was nothing wrong with the box. And, although he was not told that a backpack was available to carry supplies, Judge Borman responded that a safer method did not render the method used unsafe. This was a normal task that was not unsafe and for which the employer had no notice of any hazardous condition. In summary, Al Qari was trained to keep one hand on the rail when carrying something, and he was not excused from the exercise of common sense just because he was acting as a seaman: “The Jones Act does not repeal the laws of common sense, nor does it mean that seamen are to be treated as infants in the work assigned to them.” Therefore, Judge Borman granted summary judgment to American Steamship on the Jones Act negligence claim. Al Qari re-argued some of the same points in support of his unseaworthiness claim that he unsuccessfully raised for the Jones Act claim, the condition of the box and the alternative method of carrying the cans in a backpack. Judge Borman rejected them for the same reasons. In essence, Judge Borman considered the incident to be, at best, a single act of operational negligence, which did not render the vessel unseaworthy. The final issue was whether American Steamship had to reimburse the cost of the nurse case manager hired by Al Qari to coordinate his care. Judge Borman agreed with American Steamship that the services provided do not fall within the obligation to provide cure (“therapeutic, medical, and hospital expenses”) and were not recoverable. Additionally, he noted that American Steamship had appointed a nurse case manager to perform that work at no cost to Al Qari and that Al Qari could not refuse the free services and then seek to hold his employer liable for his handpicked provider. Al Qari filed a notice of appeal to the Sixth Circuit on September 12, 2023.
Guarantor of vessel’s pollution liability (WQIS) that sought recovery from the vessel’s P&I Club was subject to the London arbitration clause applicable in the P&I Club Rules, and the third-party action by the guarantor against the Club and the action by the United States against the guarantor were stayed pending resolution of the London arbitration; United States v. Water Quality Insurance Syndicate, No. 8:22-cv-2158, 2023 U.S. Dist. LEXIS 154655 (M.D. Fla. Aug. 31, 2023) (Barber).
This case arises from a pollution incident that occurred or threatened to occur in East Bay, Tampa, Florida involving Barge 285, owned by Bouchard Transportation Co. After Bouchard failed to abate or mitigate the threat to the satisfaction of the Coast Guard, the Coast Guard assumed responsibility for the removal of 147,960 gallons of petroleum products from the barge at a cost of $6,202,516.27. Bouchard filed for bankruptcy, and its assets were liquidated under Chapter 7. The United States then brought this suit in federal court in Florida under the Oil Pollution Act of 1990 against Water Quality Insurance Syndicate, which provided the financial security for the barge and Bouchard under OPA. At the time of this incident, the United Kingdom Mutual Steam Ship Assurance Association provided protection and indemnity coverage for the barge that included coverage for pollution liability. Consequently, when WQIS answered the suit brought by the United States, it brought a third-party complaint against the UK Club, seeking a declaratory judgment for indemnity for any amounts that WQIS might owe the United States as well as a claim for unjust enrichment. The indemnity claim tendered the claims of the United States to the UK Club under Rule 14(c). The UK Club responded that the third-party action was subject to the arbitration clause in the Club’s rules as WQIS brought its claim standing in the shoes of Bouchard. The dispute presented two questions for resolution by Judge Barber: whether there was a valid arbitration agreement that bound the litigating parties and whether the agreement applied to the claims asserted by WQIS. As the court was sitting in admiralty, Judge Barber held that the law of the forum (federal admiralty law) applied to procedural questions, such as whether there was a valid arbitration agreement, and whether the chosen law in the contract applied to substantive questions. Under federal admiralty law, Judge Barber reasoned that a non-signatory may be bound to an arbitration agreement under a theory of direct benefits estoppel when the “nonsignatory knowingly exploits the agreement containing the arbitration clause.” As WQIS sought to exploit the terms of the insurance provided by the UK Club to Bouchard, Judge Barber held that WQIS embraced that contract and was bound by the arbitration clause under direct benefits estoppel. Judge Barber then applied English law under the choice-of-law provision in the Club’s Rules and held that the claims asserted were within the arbitration agreement. Therefore, he held that WQIS must arbitrate its claims against the UK Club and that a stay of the claims was mandatory. The UK Club also argued that the Rule 14(c) claim should be dismissed because the United States admitted at oral argument that it did not have a claim against the UK Club. Judge Barber rejected that argument as, despite the indifference of the United States, WQIS did make a proper claim against the UK Club on behalf of the United States under Rule 14(c). Therefore, he added the claims of the United States to the stay and held that all proceedings on the complaint and third-party complaint would be stayed pending the arbitration in London.
Sade P. Benson was positioned in her 2011 Infiniti QX56 in the front line on the port side of the ferry PLAQUEMINES PRIDE, owned and operated by Plaquemines Parish, during the ferry’s transit of the Mississippi River at Belle Chasse, Louisiana. After the ferry docked, Benson began to move her vehicle forward to disembark; however, deckhand Alton Johnson directed Benson to stop her vehicle so that Walter Williams, another employee of the Parish, could back a Parish-owed Ford F-150 pickup truck out of its spot and disembark first. As instructed by Johnson, Williams backed up the truck and directly into Benson’s car, causing damage to the vehicle and injuries to Benson. Benson brought this suit in federal court in Louisiana against the Parish and Williams, based on admiralty jurisdiction. After a bench trial, Judge Zainey found that Williams was acting in the course of his employment for the Parish while operating the truck, that Johnson was 99% at fault for telling Benson to stop her vehicle in place while ordering Williams instructions to back up his vehicle (resulting in the collision), that Williams was 1% at fault for failing to look behind him when backing up, and that Benson was not at fault for the location of her vehicle. Judge Zainey noted that if Benson’s vehicle was stopped in a position that made her subject to being struck by another vehicle, that situation was created by Johnson. Benson underwent four facet joint injections in her low back before she switched to 68 sessions of therapy (she deemed the injections too risky for the potential reward). Judge Zainey awarded Benson $18,776 for past medical expenses, and in response to her request for $300,000 in general damages, he awarded $125,000, noting that she had not seen a doctor in more than two years and that she often could not find time in her hectic schedule for her therapy sessions.
Magistrate Judge recommended that the federal court had admiralty jurisdiction over a passenger’s tort claim that arose from the cruise line’s breach of the ticket contract (cancellation of cruise because of an impending storm) even if the locality test for admiralty tort jurisdiction was not satisfied; he also recommended that the locality test was satisfied because the plaintiffs qualified as passengers when they came to the port to rendezvous with the ship, even though the cruise was canceled and they never boarded the vessel; McIntosh v. Royal Caribbean Cruises Ltd., No. 17-23575, 2023 U.S. Dist. LEXIS 155293 (S.D. Fla. Aug. 31, 2023) (Torres).
Nikki McIntosh filed a class action suit for passengers who were scheduled for a cruise on the LIBERTY OF THE SEAS from Galveston on August 27, 2017 (she later dropped the class action allegations and brought the suit in the name of 130 individuals). McIntosh complained that the cruise line did not cancel the cruise on account of Hurricane Harvey, which made landfall in Texas and Louisiana, until the day the vessel was scheduled to depart, forcing the passengers to travel to Galveston and surrounding areas as the storm approached, causing them physical and emotional injuries when they were forced to endure hurricane-force conditions at the Port. Judge King held that the cases could not proceed as a class action in light of the class-action waiver in the tickets, and he then held that the individual plaintiffs had not individually satisfied the requirement of $75,000 in controversy for diversity jurisdiction and that the claims did not fall within the admiralty jurisdiction. Therefore, he dismissed the case with prejudice for lack of subject matter jurisdiction. The Eleventh Circuit was not convinced that all of the plaintiffs failed to plead damages in excess of $75,000, noting that many passengers were trapped by a devastating storm, without power and with limited water and food, sustaining injuries to their bodies, impairment, and physical and mental pain and suffering. However, that alone was not enough to establish diversity. Alienage diversity must be complete so that there is no alien on both sides of the dispute. Thus, there would be no diversity between a corporation incorporated in a foreign state and another alien, regardless of the corporation’s principal place of business. It appeared that the cruise line is a citizen of Liberia (where it is incorporated), and some of the passengers were residents of Canada, Mexico, and the Philippines. Writing for the Eleventh Circuit, Judge Jordan remanded the case to reconsider whether the requirements for diversity jurisdiction were satisfied, noting that a dismissal for lack of jurisdiction should be without prejudice. Regardless of whether there was diversity, Judge Jordan instructed Judge King to consider on remand whether the claims satisfied the locality/connection test for admiralty jurisdiction as the outcome of that decision would determine whether state law or maritime law applied. Judge Jordan noted that the Eleventh Circuit had recognized a claim for negligent infliction of emotional distress under the maritime law (under different circumstances), but the plaintiffs never embarked on a cruise in this case, and the district court would have to determine whether to apply that maritime cause of action in this situation. See August 2021 Update.
In the district court, Judge Gayles referred the case to Magistrate Judge Torres to determine whether the court had subject matter jurisdiction, and Magistrate Judge Torres held an evidentiary hearing. He found that the cruise line employs a hurricane management team to make recommendations about the operation of vessels when there is a hurricane event. The team received input from the captain of the LIBERTY OF THE SEAS, but the members of the team were on land when they made decisions about whether to cancel this cruise. Beginning with the issue of whether there was admiralty jurisdiction, the cruise line argued that the connection/nexus test was satisfied for admiralty tort jurisdiction but that the locality test was not satisfied because the cancellation was made from the cruise line’s headquarters in Miami. Magistrate Judge Torres, however, analyzed the case based on the test for jurisdiction for admiralty contracts, as the tort theories stemmed from the negligent performance of the cruise line’s obligations under the ticket contracts, which are admiralty contracts. He noted that although the Supreme Court treated the Kirby case (“a maritime case about a train wreck”) as a contract case, the case involved both tort and contract claims because the court was asked to assess whether the rail carrier’s “tortious conduct led to the derailment of the train.” Although the “tort claims may arguably not directly satisfy a location test,” Magistrate Judge Torres believed that “they do satisfy the alternative conclusion that the tort claims are directly and proximately related to the Defendant’s performance of a maritime contract.” Therefore, he concluded that there was admiralty jurisdiction even though the locality test did not “squarely resolve the dispute.” Even if there was no admiralty jurisdiction based on the nature of the tort arising from the terms of the maritime contract, Magistrate Judge Torres believed that there was an independent basis for admiralty jurisdiction under the locality test because “the shore does not define the spatial limits of the location test.” He reasoned: “Just as a cruise line’s communications about a port-of-call can open the door to admiralty jurisdiction, so too can the cruise line’s communications about a departure port because embarkation is a unique and essential function of the cruise experience.” As the cruise line pressured the passengers to travel to the departure port because their failure to timely board the vessel would result in forfeiture of their ticket payments, the tortious conduct of the cruise line “effectively began on the cruise ship because purchasing a ticket to sail on a specific voyage of the Liberty of the Seas was a necessary precursor for the alleged tortious conduct.” Magistrate Judge Torres believed that the plaintiffs qualified as passengers from the moment they agreed to rendezvous with the ship at the port, even though the cruise was canceled and they did not board the vessel. Consequently, Judge Torres recommended that the court had admiralty jurisdiction and that the plaintiffs be allowed to replead to specify the citizenship of each of the plaintiffs so that it could be determined whether there was diversity jurisdiction.
Judge used replacement cost (less depreciation and non-compensable improvements) as the measure for recovery for damage to two 40-year-old pilings; Entergy New Orleans, LLC v. Magnolia Fleet, LLC, No. 22-5285, 2023 U.S. Dist. LEXIS 155057 (E.D. La. Sept. 1, 2023) (Vance).
This case arises from the allision in the Inner Harbor Navigation Canal (of the Intracoastal Waterway in New Orleans) between the tug M/V LUCILLE BROOKS (owned by Magnolia Midstream and operated by Magnolia Fleet) and two concrete steel pilings (owned by Entergy New Orleans). Entergy brought this suit against Magnolia in federal court in Louisiana, and Magnolia moved for summary judgment on damages and to exclude the opinions of Entergy’s expert surveyor, Randy Bullard. Magnolia argued that damages should be based on the market value of the two pilings at the time of the destruction less the salvage value. Entergy argued that the proper measure of damages was the repair or replacement cost less depreciation. Judge Vance began by stating in “new for old” cases, the injured party is entitled to recover the amount necessary to restore the damaged property to the same condition as existed immediately prior to the incident. For repair or replacement, the judge must determine whether the repair or replacement added new value or extended the useful life of the property and make an appropriate reduction from the full repair or replacement costs. Judge Vance explained that the purpose of this rule is to “avoid giving the injured person a windfall by furnishing something entirely new ‘for that which was old and depreciated and would in the normal course of things have to be replaced in any event.’” Judge Vance then addressed whether the fair market value of the damaged pilings prior to the loss could be discerned. If it cannot be ascertained, the replacement cost is the more suitable basis. In this case, the pilings were installed between 39 and 42 years before the allision, and there was no resale or general trading market for used pilings. Therefore, Judge Vance agreed that damages would be the replacement cost less depreciation and non-compensable improvements, denying summary judgment to Magnolia. Magnolia also moved to exclude the opinions of Entergy’s expert surveyor, Randy Bullard, who opined that the remaining usable life of the pilings was 60 to 70 years at the time of the allision and that the replacement cost was $151,083.64. Judge Vance did agree that to the extent Bullard relied on documents/studies whose circumstances were not sufficiently akin to those of the Entergy pilings, the opinions as to the usable life of the pilings were unreliable. However, she rejected objections based on Bullard’s reliance on Google Earth imagery, his survey of the pilings, or observations of others in rendering his opinions.
Presentment of damage claim from oil spill to the party designated in the public notice was sufficient presentment for each responsible party under OPA; presentment that included both OPA and non-OPA damages was sufficient to satisfy the “sum certain” requirement for an OPA presentment, and the presentment was sufficient for claims that were fairly implicit in it; OPA displaced federal maritime remedies against both responsible and non-responsible parties, but it did not preempt claims under state law; Glynn County, Georgia v. GL NV24 Shipping Inc., No. 2:22-cv-28, 2023 U.S. Dist. LEXIS 155518 (S.D. Ga. Sept. 1, 2023) (Wood); Cheek v. GL NV24 Shipping, Inc., No. 2:22-cv-86, 2023 U.S. Dist. LEXIS 162569 (S.D. Ga. Sept. 13, 2023) (Wood); Crum v. GL NV24 Shipping, Inc., No. 2:22-cv-85, 2023 U.S. Dist. LEXIS 162572 (S.D. Ga. Sept. 13, 2023) (Wood).
These opinions arise from the capsizing of the M/V GOLDEN RAY, a car and truck carrier, in the St. Simons Sound located in Glynn County, Georgia. The vessel was carrying 4,161 vehicles, 240,000 gallons of diesel fuel, and more than 86,000 gallons of heavy bunker fuel. It was “the largest shipwreck in the coastal United States since the Exxon Valdez in 1989,” and thousands of gallons of fuel and oil spread to nearby shorelines, rivers, and marshes and to the beaches and waters of Jekyll Island. The vessel was owned by GL NV24, and it was chartered and managed by Hyundai Glovis, which was responsible for getting the vessel in and out of port. Hyundai Glovis hired G-Marine to operate the vessel, and it hired Norton Lilly to be the vessel’s agent in the Port of Brunswick. Norton Lilly developed the load plan (where vehicles would be placed on the vessel), and the plan was reviewed by Hyundai Glovis. G-Marine calculated stability prior to the vessel’s departure. The Coast Guard and National Transportation Safety Board determined that the vessel had too much cargo at a high center of gravity, making it top-heavy. In accordance with the Oil Pollution Act of 1990, the National Pollution Funds Center (controlled by the Coast Guard) issued a public notice naming GL NV24 as the source of the discharge and directing the presentment of claims to the owner’s agent at an address in Texas. After presentment of claims to the owner’s agent, suits were filed against GL NV24, Hyundai Glovis, G-Marine (the vessel defendants), Norton Lilly, and the wreck removal company (T&T Salvage) by Glynn County, Timothy Cheek and sixteen other plaintiffs who are involved in the local tourism industry, and Tommy Crum and forty other plaintiffs who are involved in the shrimping or crabbing industries. The vessel defendants and Norton Lilly moved to dismiss the suits, and Judge Wood addressed a number of issues related to the relationship between OPA and the federal and state remedies asserted by the plaintiffs in their lawsuits. The vessel defendants argued that the presentment was insufficient for several reasons. They first argued that the suits must be dismissed because OPA requires that “all claims for removal costs or damages shall be presented first to the responsible party” and that the plaintiffs failed to comply with that requirement because they did not present the claims to G-Marine and Hyundai, which are also responsible parties under OPA. Reading all of the presentment provisions of OPA, Judge Wood held that by following the procedure set forth in the public notice, the plaintiffs satisfied the requirement in OPA to present the claims to each responsible party. The vessel defendants also objected that the claims in the presentment did not comply with the statutory rule that the claim must be for a “sum certain,” because the presentment included claims for OPA damages as well as damages under state and federal law. However, Judge Wood disagreed. The demands did include a definite number as well as a statement of facts. The sum was not broken down between OPA and other claims, but there was enough detail to allow the vessel defendants to conduct an investigation and evaluate the claims. The vessel defendants next argued that the presentments did not include all of the types of claims that were pleaded under OPA in the law suits. Judge Wood noted that the claims only had to be “fairly implicit” in the presentment, and she held that most of the claims were fairly implicit. However, she did dismiss the claims for subsistence use and some of the claims for property damage. Judge Wood then addressed the argument that the remedies provided in OPA displace the remedies provided by the general maritime law, and she concluded that OPA does displace the general maritime remedies against responsible parties. She extended that ruling to non-responsible parties as well, reasoning that Congress chose not to afford claimants a cause of action against non-responsible parties and instead compensated claimants with a strict liability remedy against responsible parties who may then seek recovery from non-responsible parties. As to the preemption of state claims, Judge Wood held that the claims satisfied the test for admiralty jurisdiction and then noted that the issue of preemption of state law by the maritime law and OPA was subject to conflicting precedents, stating that “one might tack a sailboat into a fog bank with more confidence.” In the end, Judge Wood concluded that the provision in OPA that preserves state-law claims prevented preemption of the state claims. That did not mean that the state claims may not be preempted by another statute, such as the Clean Water Act, but that issue was not addressed by the parties. Finally, Judge Wood held that the claims under state law for negligence, negligence per se, public nuisance, and trespass were sufficiently pleaded.
Insured’s breach of the Captain Warranty in its yacht policy increased the risk to the vessel for damage from Hurricane Dorian, voiding coverage under the policy; Serendipity at Sea, LLC v. Underwriters at Lloyd’s of London Subscribing to Policy No. 187581, No. 20-cv-60520, 2023 U.S. Dist. LEXIS 155538 (S.D. Fla. Sept. 1, 2023) (Ruiz).
Serendipity at Sea owns the yacht M/Y SERENDIPITY that was damaged by Hurricane Dorian while docked in The Bahamas. The beneficial owner and manager, Sean Oakley, obtained insurance for the vessel under a SeaWave Yacht Insurance Policy that contained a Captain Warranty by which the owner “[w]arranted a full time licensed captain is employed for the maintenance and care of the vessel and is aboard while underway.” After Oakley brought the vessel to Treasure Cay in The Bahamas, he docked the yacht behind a residence known as the “Pink Paradise” and departed The Bahamas. He planned to leave the yacht in that location with no captain for a year; however, the hurricane resulted in the constructive total loss of the yacht.
The vessel’s insurer denied the claim based on a breach of the Captain Warranty in the policy, and Serendipity brought this suit against the insurer in state court in Broward County, Florida. The insurer removed the action to federal court, and the parties filed cross-motions for summary judgment. Magistrate Judge Strauss first addressed the choice of law. As the policy contained a Florida choice-of-law clause that was enforceable in admiralty, Magistrate Judge Strauss held that Florida law was applicable. Magistrate Judge Strauss concluded that Serendipity breached the Captain Warranty in the policy because it did not employ a full-time licensed captain. Although an earlier policy provided that Oakley could operate the vessel without the captain aboard, that provision was not in the policy that was effective at the time of the loss, and even if it were, it would not have created any ambiguity as it only applied while the vessel was under weigh with someone other than Oakley operating the vessel. However, Florida law only allows denial of the claim if the breach of warranty “increased the hazard by any means within the control of the insured.” As the insurer’s motion failed to establish that the risk was increased by the failure to employ a full-time captain for the vessel, Magistrate Judge Strauss recommended that the increased-hazard issue be addressed at trial. See March 2021 Update.
Lloyd’s engaged Thomas E. Danti as an expert for his experience as a seaman, officer in the merchant marine, commander in the Navy Reserve, yacht captain, professor of marine science, and instructor/dean at the Chapman School of Seamanship. He opined that the failure to employ a full-time licensed captain contributed to the loss of the vessel, that there were favorable hurricane protection features in the agreed mooring location for the vessel in Port Canaveral, Florida, that Automatic Identification System tracking showed numerous vessels departing The Bahamas before the Hurricane, that the SERENDIPITY was not prepared for hurricane season, and that lack of preparation contributed to the loss. The owner moved to exclude Danti’s opinions for lack of qualification, reliability, and helpfulness. With respect to Danti’s qualifications, the owner argued that Danti is not an insurance expert; however, Magistrate Judge Strauss responded that Danti’s testimony is with respect to seamanship, for which he is qualified. As to reliability, Magistrate Judge Strauss cited Danti’s extensive experience and knowledge on the subject matter that made his opinions reliable together with the significant information and explanation that supported his opinions with respect to the business of being a vessel captain and preparing vessels for hurricanes. Finally, the matters on which he gave his opinions were beyond the purview of an average lay person and were, therefore, helpful. Consequently, Magistrate Judge Strauss denied the motion to strike. See April 2021 Update.
The court ordered further briefing on the issue of whether breach of the Captain Warranty increased the hazard within the control of the insured, and Serendipity responded to the testimony of Captain Danti’s opinion about the increased hazard by rehashing issues that had already been decided, asserting that the warranty was ambiguous and had not been breached. Reasoning that the hazard issue was not disputed, Judge Ruiz granted summary judgment in favor of the insurer. Serendipity appealed to the Eleventh Circuit, and neither the defendants, Underwriters at Lloyd’s of London and USI Insurance Services, LLC, nor the insured, Serendipity, objected to appellate jurisdiction (appeal from the judgment entered in a diversity case). The Eleventh Circuit noted that, with respect to syndicates of Lloyd’s underwriters, the plaintiff must plead the citizenship of each member. The pleading against Lloyd’s was sufficient in this case as it described each of the subscribers as a citizen of the United Kingdom. However, Serendipity and USI are limited liability companies, and the pleadings did not allege the citizenship of the members of both limited liability companies (laws under which they were created and their principal place of business). Accordingly, the Eleventh Circuit remanded the case to the district court to determine the citizenship of Serendipity and USI. See February 2022 Update.
On remand, Judge Ruiz found that there was complete diversity, and the Eleventh Circuit then addressed the merits of the appeal of the summary judgment in favor of Lloyd’s on Serendipity’s claim for breach of contract based on the owner not employing a full-time licensed captain in violation of the policy’s Captain Warranty and the breach increasing the hazard posed to the vessel as set forth in the opinion of Captain Danti. The owner continued to argue on appeal that the Captain Warranty was ambiguous and vague, and, applying Florida law, Judge Marcus examined the language that warranted “a full time licensed captain is employed for the maintenance and care of the vessel and is aboard while underway.” Judge Marcus was persuaded that the warranty was ambiguous because there was more than one reasonable way to interpret the language of the warranty that “a full time licensed captain is employed.” One interpretation was that the owner must hire a person to work on the vessel exclusively as a full-time captain. Alternatively, however, Judge Marcus stated that a reasonable interpretation was that the owner was required to hire a person whose full-time profession was that of a captain but who only worked for the owner part-time. Nonetheless, the ambiguity did not save the owner because, under either interpretation, the owner violated the warranty as it did not hire a licensed captain either full-time or whose full-time job was as a licensed captain. Consequently, Judge Marcus held that there was a breach of the Captain Warranty. Judge Marcus then addressed the issue of whether the breach increased the hazard and the insurers’ argument on appeal that the owner forfeited the argument by not properly raising it in the district court. Judge Marcus noted that the owner disputed the opinion in Captain Danti’s report because he relied on a meteorological fact of which he did not possess any particular expertise. Although the owner raised the argument in connection with the claim that it did not breach the warranty, Judge Marcos held that the argument (although placed in the wrong section) was adequately raised and did not require the district judge to “scour the record” to find the owner’s argument on whether the breach increased the hazard. Turning to the merits, Judge Marcus concluded that Captain Danti’s testimony contradicted weather reports that existed at the time and that Judge Ruiz could not conclude that the owner did not produce evidence to rebut Captain Danti’s testimony. Accordingly, the appellate court held that there was a fact issue to be determined on the issue of whether breach of the warranty increased the hazard to the vessel posed by Hurricane Dorian and reversed the summary judgment to the insurers. See February 2023 Update.
Judge Ruiz held a bench trial, and he found that Oakley did not create a hurricane evacuation plan for the SERENDIPITY and did not reserve a haul-out spot for the yacht. Instead, he engaged Captain Trevor Lightbourne to occasionally check on the vessel. As the storm approached in the category as a tropical storm, Oakley and Captain Lightbourne believed that it was best to leave the boat in its relatively safe location. However, when the storm approached as a major hurricane, the lack of a hurricane evacuation plan and a captain at the location who could take the vessel away from the storm became critical. There were only two people who could have navigated the vessel from danger, Oakley and Captain Scott Connelly, who did not even know where to take the vessel in view of the absence of a hurricane evacuation plan. As neither was located in Treasure Cay, and either would have to fly in at a time when the storm was strengthening to at least Category 3 and later to Category 5, Oakely decided to leave the SERENDIPITY tied up to the dock. Based on these findings, it became clear to Judge Ruiz that the failure to hire a full-time licensed captain increased the hazard that the yacht would be destroyed by Hurricane Dorian. That captain would have created a detailed hurricane evacuation plan and would have evacuated the area in advance of the storm making landfall. Judge Ruiz agreed that the progression of the storm was, to an extent, unpredictable. However, a “full-time captain would have prepared for and worked around the unpredictability of a hurricane rather than simply failing to act.” Having determined that the insured’s breach of the Captain Warranty increased the hazard in this case, Judge Ruiz entered a final judgment in favor of the insurer.
Judge held that maritime law applied to claims in connection with death of Navy sailor from mesothelioma in suit against product suppliers and that claims for loss of consortium, punitive damages, and survival damages were available; Cook v. Foster Wheeler Energy Corp., No. 1:21-cv-11362, 2023 U.S. Dist. LEXIS 155618 (D. Mass. Sept. 1, 2023) (Burroughs).
Roland Cook served as a fireman and boiler tender on the USS Mullinnix and died from mesothelioma in 2022. His widow, Linda Cook, brought this suit in federal court in Massachusetts (individually and on behalf of his estate) against suppliers of asbestos-containing products that they claimed were the cause of his death. Foster-Wheeler filed a motion to clarify the law applicable in the case, seeking to apply maritime law (along with its defenses and limitations on damages). Judge Burroughs agreed that the claims satisfied the locality test because the exposure occurred while Cook served on the vessel either at sea or in drydock and satisfied the nexus test because they involved injury to a Navy worker during repair/maintenance of a completed vessel. Judge Burroughs also agreed that the bare-metal and government-contractor defenses were available. She disagreed with Foster-Wheeler, however, with respect to damages and held that Linda Cook could seek loss of consortium, punitive damages, and survival damages, citing the recent decision of the magistrate judge from the United States District Court for the District of Massachusetts in Pritt v. John Crane (see August 2023 Update) [contrary to Scarborough v. Clemco Indus., 391 F.3d 660 (5th Cir. 2004)].
Just because the plaintiff does not allege fault against a party does not mean that the defendants cannot assert contribution and tort indemnity claims against that party; In re Jack’d Up Charters LLC, No. 22-4535 c/w No. 23-1073, No. 23-1074, 2023 U.S. Dist. LEXIS 156144 (E.D. La. Sept. 5, 2023) (Brown).
Jeff Harrington was riding on a fishing vessel owned by Jack’d Up Charters when it struck a Weeks Marine dredge pipe being towed down Tiger Pass in Venice, Louisiana by Madere & Sons’ tug, KENNETH M, and Weeks Marine’s tug, MASTER MYLES. Harrington brought a suit in Louisiana state court, and Jack’d Up Charters and Madere filed limitation actions in federal courts in Louisiana. Madere, Weeks, and Harrington filed claims in the Jack’d Up limitation action, and Jack’d Up, Weeks, and Harrington filed claims in the Madere limitation action. Weeks filed a third limitation action, and the three limitation suits were consolidated (and a non-jury trial was scheduled). Harrington then moved to bifurcate the issues of liability, limitation, and apportionment of fault, proposing that the issue of damages could be tried separately in state court if he was successful in defeating limitation of liability in the first phase. The petitioners argued that the bifurcation of damages was improper because the limitation stay cannot be lifted unless the parties stipulate that the value of the limitation funds exceeds the value of the claims asserted. Chief Judge Brown disagreed, reasoning that the petitioners’ argument applies when the claimants seek to proceed in state court simultaneously with the limitation proceeding (and to strip the federal court of jurisdiction to decide the limitation claims). The proposed bifurcation did not present a risk that Harrington could seek a damage award exceeding the limitation fund because Harrington could only proceed in state court in the event of denial of limitation. Chief Judge Brown also concluded that separating the damage trial would expedite and economize the limitation proceeding as the parties and court would only need to expend resources on liability and privity, and the damage phase might be unnecessary. Finally, Chief Judge Brown noted the balance that the district judges in the Fifth Circuit have reached between the protection of the owner’s right to limitation and the claimant’s right to a jury trial under the Saving-to-Suitors Clause, which favors the right to a jury trial over judicial economy as long as the federal court maintains the right to decide the limitation issues. Accordingly, she agreed to the bifurcation. See August 2023 Update.
Jack’d Up Charters then moved for summary judgment, and Weeks and Madere opposed the motion. Jack’d Up Charters argued that Harrington had foreclosed claims against it because Harrington did not name Jack’d Up Charters as a defendant in his suit in state court, that Harrington had not alleged fault against Jack’d Up Charters in the limitation action, that Harrington was precluded from alleging fault against Jack’d Up Charters because he pleaded that the dredge pipe was not visible and that Jack’d Up Charters was not aware of its presence and testified that the captain of the fishing boat did nothing that he believed was unsafe, and that Weeks and Madere had no contractual indemnity or tort indemnity claims and no contribution claim because they did not share a common legal liability with Jack’d Up Charters in the absence of any claim by Harrington that Jack’d Up Charters was liable to Harrington. Weeks and Madere responded with testimony that they claimed was sufficient to demonstrate that Jack’d Up Charters was negligent and violated the Rules of the Road, invoking THE PENNSYLVANIA Rule and supporting the conclusion that Jack’d Up Charters was a tortfeasor that owed either tort indemnity or contribution. Chief Judge Brown noted that the law in the Fifth Circuit on tort indemnity in maritime cases is mixed, but recent cases have clarified that full indemnity is only available “when there is a significant difference in the indemnitor and indemnitee’s degree of conduct” or “where proportionate degrees of fault cannot be determined on a rational basis or where the party claiming indemnity is one on which the law imposes responsibility even though [it] committed no negligent acts.” Although Harrington did not assert fault against Jack’d Up Charters, Chief Judge Brown found ample support for fault from the evidence presented by Weeks and Madere to allow Weeks and Madere to seek full or partial indemnity from Jack’d Up Charters. Turning to the contribution claim, Chief Judge Brown stated that the general maritime law recognizes a claim for contribution between joint tortfeasors when a tortfeasor pays more than its proportionate share of a judgment unless there is a statutory bar to liability against the tortfeasor from whom contribution is being sought (for example, if one of the tortfeasors is an LHWCA employer against whom the plaintiff has no tort remedy). In this case, Chief Judge Brown held that Jack’d Up Charters, Weeks, and Madere all shared a common legal liability if the tortfeasors were found at fault for the collision, and there was no statute barring Jack’d Up Charters from bearing liability to Harrington. As she found sufficient facts to support the liability of Jack’d Up Charters, Chief Judge Brown declined to dismiss the contribution claims.
Although the Limitation Act did not provide original jurisdiction over the explosion of a vessel on land in a shipyard, the judge held that there was admiralty jurisdiction because the unseaworthiness arose from failure to maintain the vessel on navigable waters; In re Silver, No. 1:22-cv-11833, 2023 U.S. Dist. LEXIS 156216 (D. Mass. Sept. 5, 2023) (Talwani).
After James Silver had trouble starting his boat, M/V SEA-RENITY NOW, he had the boat towed to the Mattapoisett Boatyard in Massachusetts to have the fuel tank replaced. The vessel exploded when an employee of the boatyard used a power tool to remove the fuel tank, destroying the vessel and much of the boatyard. Silver filed this limitation action in federal court in Massachusetts, and twenty parties, including the boatyard, filed claims in the limitation action. Several claimants moved to dismiss the limitation action for lack of jurisdiction, arguing that the boat was 80 feet from the water when it exploded. Silver cited the Supreme Court’s decision in Richardson v. Harmon for the proposition that the Limitation Act provides an independent basis for jurisdiction, but Judge Talwani answered that Silver’s reading of that case was overbroad because the Court held that the Limitation Act applied to damage caused on land by a vessel on navigable water and the SEA-RENITY NOW was located on land. Judge Talwani noted that all of the circuit courts after Richardson have held that the Limitation Act does not independently provide jurisdiction over vessel-related torts when admiralty jurisdiction is lacking. However, the claims against the vessel were based on unseaworthiness of the vessel from failure to maintain the vessel on navigable waters. Judge Talwani considered that contention to be sufficient at the pleading stage to satisfy the locality test for admiralty jurisdiction. Judge Talwani also considered the use and repair of a vessel to have a substantial relationship with traditional maritime activity. Therefore, she declined to dismiss the limitation action for lack of jurisdiction.
Judge held that there was admiralty jurisdiction over a vessel collision on the Colorado River at Lake Havasu, that the Inland Rules and Arizona law applied, that there were fact questions of whether the owner seeking limitation was at fault, but she declined to address whether there was privity or knowledge because the issue of fault was not determined; In re DeMore’s Montana LLC, No. 21-cv-730, 2023 U.S. Dist. LEXIS 157848 (D. Ariz. Sept. 6, 2023) (Humetewa).
This case involves the collision between the MTI and the ELIMINATOR on the Colorado River at Lake Havasu. DeMore’s Montana LLC (owned by Michael DeMore) owns the MTI, which was being operated by Brandon Bond at the time of the accident. DeMore was sleeping below deck. Jim Dolson was operating the ELIMINATOR. As the MTI attempted to pass the ELIMINATOR, the ELIMINATOR made an abrupt left turn toward the MTI and struck the starboard side of the MTI. The collision resulted in the deaths of Jim Dolson, Sean Crow, and Shawn Fasulkey. DeMore’s filed this limitation action in federal court in Arizona, and the beneficiaries of Dolson, Crow, and Fasulkey filed claims in the limitation action. DeMore’s filed a motion for summary judgment for exoneration (that Dolson’s impaired operation of the ELIMINATOR was the sole cause of the accident) and, alternatively, a motion for partial summary judgment that DeMore’s should be granted limitation of liability for lack of privity or knowledge. Judge Humetewa first addressed whether the court had admiralty jurisdiction and noted that the Ninth Circuit had established that Lake Havasu is a navigable waterway. She then held that the collision of two boats had the potential to disrupt maritime commerce and that the navigation of the boats in navigable waters had a significant relationship to traditional maritime activity. Therefore, the court had admiralty jurisdiction. Judge Humetewa then determined the applicable law. DeMore’s argued that Arizona law applied and that the federal Inland Navigation Rules were inapplicable. The beneficiaries argued that the Inland Rules applied and that, if the Inland Rules did not preempt state law, it was California law that applied because the collision occurred on the California side of the Colorado River and the beneficiaries are California residents. Judge Humetewa found persuasive the reasoning of the court in Meador v. Aramark Sports (discussed in the March 2022 Update), in which Judge Tuchi of the United States District Court for the District of Arizona held that Arizona law that was not in conflict with the Inland Rules would apply to an accident in navigable waters in Arizona. Judge Humetewa accordingly held that Arizona law may supplement, but does not replace, the Inland Rules. Applying the Inland Rules, Judge Humetewa found fact questions whether Bond (operating the MTI) violated Rule 5 (look out) when he lost sight of the ELIMINATOR for half a second while overtaking it, violated Rule 6 (safe speed) by failing to reduce his speed while overtaking the ELIMINATOR, violated Rule 7 (risk of collision) by overtaking the ELIMINATOR at close range, violated Rule 8 (action to avoid collision) by failing to turn in time to avoid the collision, violated Rule 9 (narrow channel failure to signal) by providing no warning signal while attempting to overtake the ELIMINATOR, violated Rule 13 (overtaking) by failing to consider unexpected maneuvers of the ELIMINATOR during the overtaking, violated Rule 16 (action by give-way vessel) by failing to stay clear of the ELIMINATOR, and violated Rule 34 (maneuvering warning signal) by failing to blow a horn or whistle while attempting the overtaking. DeMore’s argued that Dolson violated Arizona statutes on the operation of the ELIMINATOR in a passing situation and for operating the vessel under the influence of alcohol. DeMore’s contended that these violations invoked the presumption that Dolson caused the accident under THE PENNSYLVANIA Rule. As there were fact questions about the negligence and violations by both parties, the presumption “would apply in both directions . . . canceling out any impact.” Therefore, Judge Humetewa declined to grant summary judgment to DeMore’s. With respect to the motion for partial summary judgment, DeMore’s argued that there was no privity or knowledge on behalf of DeMore, who was asleep below deck and had no knowledge of the operational errors alleged against Bond. Judge Humetewa reasoned, however, that the shipowner must establish lack of privity or knowledge “[o]nly if liability is established.” As there were fact questions with respect to Bond’s negligence in operating the vessel, liability could not be established, and she held that she need not reach the issue of privity or knowledge at this time.
Employer established McCorpen willful concealment defense for neck, back, and left shoulder injuries but not for the seaman’s claim of PTSD for which he had not previously sought treatment; Flowers v. Magnolia Marine Transport Co., No. 22-1209, 2023 U.S. Dist. LEXIS 159035 (E.D. La. Sept. 8, 2023) (Barbier).
Jamal D. Flowers was hired as a green deckhand by Magnolia Marine in 2011 and worked his way up to being a mate while employed on and off by Magnolia Marine, resuming work for Magnolia Marine in May 2021 as a mate/tankerman on the M/V KELLY LEE, owned by Magnolia Marine. On October 27, 2021, Flowers was working with a green deckhand to tie up barges for the tow of the KELLY LEE when the deckhand fell into the water and Flowers hurt his back, neck, and left shoulder trying to assist the deckhand out of the water. Flowers brought this suit in federal court in Louisiana, seeking to recover under the Jones Act and general maritime law (unseaworthiness, maintenance and cure, and punitive damages). Magnolia Marine filed a motion for summary judgment on the claims for punitive damages (Judge Barbier dismissed the claims for punitive damages for gross negligence and unseaworthiness) and maintenance and cure (asserting a McCorpen, defense that Flowers intentionally concealed pre-employment injuries to his left shoulder, back, and neck). Magnolia Marine cited evidence that Flowers was injured in a vehicular accident in 2017 in which the airbags deployed and he was treated for neck, back, and left shoulder injuries and a vehicular accident in 2020 where the airbags deployed and he was treated for pain in his left shoulder and neck. He was also injured in a forklift accident in 2020, causing a ligament sprain in his neck and a girdle sprain in his left shoulder. Flowers denied these injuries when he completed the medical questionnaire in 2021, but he claimed that the thought the questionnaire was asking about current problems he was having and that he was not having problems at the time he was hired in 2021. He also argued that the materiality requirement of the McCorpen test was not satisfied because Magnolia Marine performed an MRI on his low back that showed no problems. Finally, Flowers argued that the defense should not apply to his claim for post-traumatic stress disorder for which he has been undergoing medical treatment. Magnolia Marine countered with Flowers testimony that he withheld medical facts because “he wanted to go back to work on the river,” with the clear label on the questionnaire (“Medical History”), and with the testimony of Magnolia Marine’s Director of Personnel that Magnolia Marine would not have hired Flowers if he had disclosed the prior conditions. Magnolia Marine answered the claim for PTSD with the testimony of Flowers that the source of his depression was not working, rather than the accident itself. Judge Barbier reviewed the questionnaire and answers and held that Flowers’ “misunderstanding” about the medical history was not supported by the evidence and that he had concealed the injuries to his neck, back, and left shoulder; however, Judge Barbier did not find that Flowers concealed the psychological injury as he had not previously experienced that problem. Judge Barbier also held that Flowers argument that the MRI did not show a problem with his low back did not overcome the evidence from Magnolia Marine that it would not have hired him if he had not concealed the conditions. Consequently, Judge Barbier held that Magnolia Marine established a McCorpen defense to the maintenance and cure claims with respect to Flowers’ back, neck, and left shoulder. As to the psychological claim, Magnolia Marine did not have any evidence of prior treatment, and Judge Barbier did not believe that the testimony that the source of his depression was his inability to return to work was sufficient to establish as a matter of law that his PTSD was causally related to any withheld information about injuries. Therefore, he declined to dismiss the claim for maintenance and cure for Flowers’ psychological injury.
Judge allowed late third-party claim against barge owner in cargo damage suit in order to allow complete resolution of the claims in one proceeding; KG Dongbu United States, Inc. v. Panobulk Logistics, Inc., No. 23-cv-27, 2023 U.S. Dist. LEXIS 160976 (E.D. La. Sept. 11, 2023) (Fallon).
KG Dongbu contracted with Panobulk to transport steel coils from Korea to New Orleans and then to Illinois and Ohio. Panobulk hired Cooper Consolidated to transport the coils by barge from New Orleans, and the coils were loaded onto barge LTD-237 (contracted by Cooper from its owner, Marquette Transportation). KG Dongbu hired Coastal Cargo to load the coils onto the barge, and Coastal allegedly damaged the barge, causing water to enter the hold and damage the coils. KG Dongbu brought this suit in federal court in Louisiana against Panobulk, Cooper Consolidated, and Coastal, and the defendants filed cross-claims against each other. A month after the deadline in the scheduling order for filing third-party claims, Coastal sought leave to file a third-party complaint against Marquette Transportation, asserting that the LTD-237 was unseaworthy. Cooper opposed the motion, arguing that, in addition to being late, the motion added nothing to the claims because Cooper had assumed the responsibility of providing a proper barge, and the other parties had no contractual relationship with Marquette. Judge Fallon did not believe the delay of a month was prejudicial, particularly because the parties were aware that Coastal intended to file the third-party action. On the merits, Judge Fallon reasoned that adding the owner of the barge would promote judicial efficiency as it would allow for complete resolution of the dispute in a single proceeding rather than in multiple proceedings. Accordingly, he granted leave to bring the barge owner into the litigation.
Judge refused to overturn decision of arbitrator appointed by the court or to disqualify counsel, rejecting arguments of a “corrupt” agreement between the arbitrator and counsel; Spliethoff Transport B.V. v. Phyto-Charter Inc., No. 20-cv-3283, 2023 U.S. Dist. LEXIS 164881 (S.D.N.Y. Sept. 18, 2023) (Oetken).
Spliethoff Transport chartered the M/V DELTAGRACHT to Phyto-Charter Inc. and then brought this suit in federal court in New York seeking to compel arbitration based on a New York arbitration clause in the charter party when Phyto-Charter allegedly breached the charter party. Phyto-Charter opposed arbitration, and Judge Oetken ordered arbitration and appointed Charles B. Anderson as the arbitrator. Anderson issued an award in favor of Spliethoff for $633,558.68 (including an award of attorney fees), and Phyto-Charter moved to vacate the award, arguing that Anderson acted with “evident partiality” based on pre-award communications with counsel for Spliethoff. Phyto-Charter also moved to disqualify counsel for Spliethoff, claiming that the attorney “entered into a corrupt agreement with Anderson to exchange payment for a favorable arbitration agreement.” Spliethoff moved to confirm the award. Phyto-Charter argued that Anderson manifestly disregarded the law in awarding attorney fees, but Judge Oetken held that Anderson provided a well-reasoned justification for his award based on Phyto-Charter’s refusal to accept Judge Oetken’s ruling upholding the validity of the arbitration clause, causing [Spliethoff] to incur substantial and unnecessary legal costs addressing the issue in these proceedings.” As to claim that there was a corrupt deal/partiality, Anderson directed each of the parties to deposit half of his fee of $15,000 into its respective escrow account, but Phyto-Charter declined to do so. Anderson then advised the parties that payment of the fee was the joint-and-several obligation of the parties and that Spliethoff may advance Phyto-Charter’s share, subject to its right to recover any portion of the arbitrator’s fee that may be assessed against Phyto-Charter. Anderson advised the parties that he was prepared to issue his award on August 22, 2022, and on September 1, 2022, he asked Spliethoff’s attorney if Spliethoff would pay Phyto-Charter’s portion of the fees. Spliethoff agreed to pay half—thus, the corrupt bargain. Of course, Judge Oetken pointed out that there was no possible showing of partiality because the payment was made after the arbitrator had announced that he was prepared to issue the award, and there was no evidence that the award changed after the payment was made. Similarly, the motion to disqualify counsel failed because Judge Oetken held that Phyto-Charter had not made a colorable claim of any improper conduct. Finally, Spliethoff requested that the court order Phyto-Charter to pay Spliethoff’s attorney fees to resist Phyto-Charter’s arguments for vacatur on the ground that the arguments were frivolous and groundless. Judge Oetken gave Spliethoff leave to submit a formal declaration in support of its application for an award of attorney fees.
Judge declined to wade into the merits of a charter party dispute in addressing a request to reduce the amount of countersecurity when the decision on the merits would be made in a London arbitration; Bertling Bulk Services PTE, Ltd. v. Cofco International Freight S.A., No. 22-cv-6350, 2023 U.S. Dist. LEXIS 165108 (S.D.N.Y. Sept. 18, 2023) (Oetken).
Bertling Bulk agreed to charter a vessel to Cofco International to carry bagged coffee from Vietnam to Belgium. The charter party contained a London arbitration clause and an English choice-of-law provision. Bertling Bulk alleged a short loading of cargo, and Cofco responded that it was Bertling Bulk’s failure to properly outfit the vessel for the cargo that caused the dispute. The claims of the parties were submitted to arbitration in London, and Bertling Bulk filed this action in federal court in New York under Supplemental Rule
B to attach $790,500 in property belonging to Cofco. Cofco then sought countersecurity against Bertling Bulk under Supplemental Rule E(7) in the amount of $473,163, but Bertling Bulk argued that the security should be reduced by $103,788.61 because that amount was frivolous. Judge Oetken noted that the New York courts have “recognized that this situation calls for judicial restraint in wading into the merits” and that “deference” to the parties’ valuations is particularly important when the ultimate merits will be decided by an arbitration panel in another country. Adding that “a rational valuation of the parties’ relative claims would require familiarity with how English courts apply English procedural laws governing pleading and answering complaints,” Judge Oetken ordered countersecurity in the amount of $473,163 without reduction.
Judge declined to grant summary judgment exonerating fleeting company in breakaway of vessels during Hurricane Ida or to grant summary judgment on claims of the captain of a tug against his employer or the fleeting company; In re Magnolia Fleet, LLC, No. 2:22-cv-504, 2023 U.S. Dist. LEXIS 166960, 166962 (E.D. La. Sept. 18, 2023) (Fallon).
Magnolia Fleet and River Tug are the owners of a fleeting facility located at mile marker 122 on the Lower Mississippi River, and they own and operate the M/V LOUISIANA (their fleet boat). Magnolia Fleet and River Tug brought this limitation action in federal court in Louisiana after vessels broke free from the fleet during Hurricane Ida in August 2021, causing property damage and one injury. There are numerous claims for property damage in the limitation action along with cross-claims, counterclaims, and third-party claims. The only injury claim was filed by Rocky Hickman, Captain of the M/V NANCY SONIER, a tug that broke away along with a tier of barges. Hickman allegedly attempted to guide the tier of barges away from other vessels, but the crew eventually evacuated, and he jumped into the Mississippi River and sought shelter within a barge. He presented a claim for PTSD, depression, and anxiety in the limitation action as well as a third-party claim under the Jones Act and general maritime law against his employer, LeBeouf Brothers Towing. LeBeouf and Magnolia/River Tug filed claims against each other, and LeBeouf tendered Hickman to Magnolia/River Tug, alleging that if LeBeouf had any liability to Magnolia/River Tug, then Hickman was liable for tort indemnity or contribution. LeBeouf filed motions for partial summary judgment on Hickman’s Jones Act and unseaworthiness claims, arguing that the mental harms he alleged were not foreseeable and that LeBeouf did not cause or contribute to the breakaway. Magnolia/River Tug also filed a motion for summary judgment, claiming that Hickman was not entitled to recover for emotional injuries and that Magnolia/River Tug owed him no duty. In a case of this complexity that was “fraught with factual questions,” Judge Fallon was not prepared to grant the motions, noting that the fact finder would need to determine what was known to LeBeouf (and when), how the parties understood the storm and fleet conditions, and the reasonableness of everyone’s actions, including Hickman. Magnolia and River Tug also moved for summary judgment that they were entitled to exoneration from liability because they undertook reasonable precautions in advance of Hurricane Ida, that they took reasonable precautions, and that they had passed all Coast Guard inspections. After discussing bailment law applicable to a fleeting company, the act of God defense, the presumptions from THE OREGON Rule, THE LOUISIANA Rule, and THE PENNSYLVANIA Rule, Judge Fallon found “numerous questions of fact” that precluded summary judgment, including compliance with permits and statutory frameworks, issues about who knew which conditions and when, adequacy of protocols undertaken, and the reasonableness of the actions taken. Therefore, he declined to grant summary judgment to Magnolia Fleet/River Tug. [Judge Fallon also denied summary judgment sought by American River Transportation Co. (operator of two fleets near the Magnolia/River Tug fleet that also suffered breakaways), but he granted summary judgment dismissing claims brought by Vopak, whose facility was located too far upriver to have been affected by this incident].
Judge applied maritime law to P&I and bumbershoot policies for scrapping of vessel and found fact questions to deny the insurer’s motion for summary judgment on uberrimae fidei, breach of the warranty of seaworthiness, and fortuity, and she held it was for the jury to decide whether the pollution exclusion applied to bar wreck removal coverage for the removal that was ordered to prevent pollution; Party Book Hill Park, LLC v. Travelers Property Casualty Co. of America, No. 18-cv-1179, 2023 U.S. Dist. LEXIS 168222 (D.P.R. Sept. 19, 2023) (Méndez-Miró).
Marine Environmental Remediation (MER) purchased the vessel LONE STAR for scrapping and recycling at a former Navy base, Roosevelt Roads, in Ceiba, Puerto Rico. MER insured the vessel with a P&I policy and a bumbershoot policy with Travelers. During the work, the LONE STAR sank and discharged approximately 1,800 gallons of oil into the water (MER’s surveyor determined that open valves on the vessel caused the sinking, and MER denied that its agents had opened the valves). The Coast Guard, the Puerto Rico Department of Natural and Environmental Resources, and the Puerto Rico Local Redevelopment Agency issued orders for the removal of the LONE STAR due to its threat of pollution, and MER submitted the wreck removal claim to Travelers. Travelers denied wreck removal coverage, contending that the wreck did not threaten navigation, the orders to remove the wreck were “pollution-centric” and excluded by the pollution exclusions in the policies, and the wreck was a pollution event that was not covered. MER filed this suit in federal court in Puerto Rico against Travelers, and after MER went bankrupt, Party Book Hill Park purchased MER’s claims and became the plaintiff in the case. Travelers answered the complaint and filed a counterclaim that the P&I and bumbershoot policies were null and void because MER violated its duty of uberrimae fidei, violated the policies’ warranties of seaworthiness, the sinking was not a fortuitous event, the policies do not cover the recovery of the vessel, and the wreck removal coverage was limited. Travelers and Party Book moved for summary judgment, and Magistrate Judge Soler recommended that both motions be denied. The parties appealed to Judge Méndez-Miró. Party Book first argued that Travelers’ counterclaims rested on the applicability of admiralty law doctrines of uberrimae fidei, the warranty of seaworthiness, and fortuity and that admiralty law did not apply because the LONE STAR was a dead ship that had been permanently removed from navigation prior to the inception of the policies. Judge Méndez-Miró disagreed, noting that MER sought the policies to cover maritime risks, and it characterized the LONE STAR as a vessel and the insurance it sought as “marine.” Judge Méndez-Miró also noted that the policies contained “innately maritime risks,” including a warranty of seaworthiness, a clause on vessel alterations or repairs, and terms on collision and wreck removal. Turning to uberrimae fidei, Travelers alleged that MER made material misrepresentations regarding the stage of the vessel’s demolition, but Judge Méndez-Miró rejected that argument, concluding that Travelers was aware that demolition had already begun at the time the policies were bound. As to the other alleged misrepresentations about the methods for removal of the vessel from the water, maintaining its integrity during the demolition process, and the cause of the flooding and sinking, Judge Méndez-Miró found fact questions that precluded summary judgment. Judge Méndez-Miró then addressed the warranty of seaworthiness in the policies. The parties did not dispute that the LONE STAR had been permanently removed from navigation. But that did not establish for Judge Méndez-Miró that the structure was no longer a vessel, noting that Lozman required an objective analysis of the physical attributes and behavior of the structure. Consequently, Judge Méndez-Miró could not decide on summary judgment whether the LONE STAR was still a vessel, and there were factual disputes over whether the cause of the sinking was unseaworthiness (whether the sinking was caused by sabotage or acts of agents of MER). With respect to the maritime fortuity doctrine, Judge Méndez-Miró pointed out that the surveyor made inconsistent conclusions about the cause of the loss—sabotage or criminal mischief and failure to maintain the LONE STAR in a seaworthy condition. That alone was sufficient for Judge Méndez-Miró to find a fact dispute to deny summary judgment. And, even though MER fired almost all of its employees and stopped paying for security shortly before the loss, that was insufficient to establish that MER engaged in willful misconduct. Judge Méndez-Miró then considered the argument that the pollution exclusion applied so that Travelers had no coverage under the wreck removal coverage. She could not determine from the summary judgment evidence, however, whether damages that are “dual in nature” can be severed into pollution damages and wreck removal damages. Assuming that the damages are severable, Judge Méndez-Miró believed that a jury was better suited “to determine the scope and effect of the pollution exclusion clause in the context of a dual pollution and wreck event.” Finally, Judge Méndez-Miró declined to grant summary judgment to Party Book on its bad faith claim under Puerto Rico law.
Jones Act claim was improperly pleaded and did not prevent removal, but the judge remanded the suit because the worker sufficiently pleaded a case against forum defendants; Cannon v. Shelf Drilling Holdings Ltd., No. 4:22-cv-3748, 2023 U.S. Dist. LEXIS 169037 (S.D. Tex. Sept. 22, 2023) (Ellison).
Billy Wayne Cannon was a consultant who was working for Shelf Drilling Offshore Holdings on jack-up drilling rig ADRIATIC 1 in the coastal waters of Nigeria. He died after falling from the rig, and his wife and children brought this suit against Shelf Drilling Distribution, Shelf Drilling Holdings, and Daniel Munoz in Texas state court. The plaintiffs alleged that Cannon was working as a Jones Act borrowed employee of “Shelf Drilling” and that Munoz was the manager of the vessel. Shelf Drilling Distribution and Munoz removed the case to federal court, arguing that the Jones Act claim was improperly pleaded so that the Jones Act claim did not prevent removal and that there was complete diversity because the only forum defendant was Munoz, and the plaintiffs did not have a cause of action against him. The plaintiffs moved to remand the case, and Magistrate Judge Palermo recommended that the case be remanded, finding that the plaintiffs had a possibility of success on their Jones Act claim against Shelf Drilling Holdings (but not Shelf Drilling Distribution). Judge Ellison disagreed, reasoning that the decision was based on a conflation of corporate entities. He held that the plaintiffs had no possibility of recovery under the Jones Act against either Shelf entity named as a defendant, so the Jones Act claims did not bar removal. However, Judge Ellison found that the plaintiffs’ allegations against Munoz were sufficient to provide the plaintiffs with some possibility of recovery from Munoz (even if the allegations were based on misstatement of facts). As Munoz was a citizen of the forum state, Judge Ellison remanded the case (this avoided having to decide if the improper joinder doctrine applies to avoid the forum defendant bar to diversity removal).
Judge exonerated tug owner in alleged collision with skiff piloted by and carrying intoxicated seamen returning to a different vessel; In re Yazoo River Towing, Inc., No. 20-214 c/w No. 20-252, 2023 U.S. Dist. LEXIS 173899 (M.D. La. Sept. 28, 2023) (deGravelles).
This litigation arises from the drowning deaths of two crew members of the M/V MELVIN L. KING. The M/V MELVIN KING, a push boat owned by Yazoo River Towing, was waiting its turn to pass through the Bayou Sorrel locks of Little Tensas Bayou in Louisiana when four crew members (including Lloyd Standridge and Norsalus Jackson) boarded the vessel’s skiff and traveled to Jack Miller’s Landing/J’s Lounge where they consumed alcohol until the bartender felt they had enough to drink and kicked them out. On the return to the MELVIN KING, the skiff either struck an object in the water and swamped or collided with the tow of the M/V CECILE A. FITCH (owned and operated by Chester J. Marine). Mate Jamie Lee May was operating the skiff. Standridge and Jackson drowned, and the owners of the MELVIN KING and CECILE A. FITCH filed limitation actions in federal court in Louisiana that were consolidated. Claims were filed in the limitation actions by the the families of the deceased seamen and the vessel owners. The Standridge beneficiaries moved to bifurcate the limitation actions so that only the exoneration-limitation actions were decided in federal court, and they could then try their damage claims and actions against third parties in state court. Evaluating the rights of the parties under the Limitation Act and the Saving-to-Suitors Clause in the context of judicial efficiency, Judge deGravelles held that the court would bifurcate proceedings and try exoneration, limitation, and apportionment of fault in one proceeding. That trial would include the fault of all of the parties from whom Standridge sought to recover in order to avoid separate, duplicative, and expensive liability trials. If the first trial were to result in the denial of limitation and Standridge were entitled to recovery, the limitation stay would be dissolved so that Standridge could proceed with trial of damages in state court. See August 2021 Update.
Yazoo River Towing then filed a motion for summary judgment, arguing that it was not liable because the employees involved in the incident were not acting within the course and scope of their employment and because their actions in operating the skiff after drinking were a superseding cause that would break any chain of causation as to Yazoo River Towing. Yazoo River Towing argued that the crew members left the vessel in the skiff without authority or permission and that their actions were directly contrary to their employer’s policies (prohibiting the crew from using the skiff for personal reasons). The claimants provided evidence, however, that the skiff had been used to get groceries and cigarettes and, on at least two other occasions, to buy liquor. Moreover, there was evidence that the captain of the MELVIN KING called the crew while they were ashore and asked them to bring back some crawfish. Thus, there was some evidence that the crew was returning to the vessel with food on the order of the captain. Additionally, Judge deGravelles cited case law that a seaman’s intoxication on authorized shore leave will not take him outside the course of employment unless the intoxication was a cause of the accident, which could not be determined on summary judgment. Judge deGravelles noted Yazoo River Towing’s policy prohibiting employees from drinking alcohol while on/in a vessel/vehicle and being paid by Yazoo River Towing, but there was evidence that the policy was not enforced and that alcohol was consumed in the wheelhouse of the vessel while it was under weigh. Consequently, there were multiple issues to be resolved with respect to the course of employment. As to superseding cause, which is ordinarily a fact question, Judge deGravelles reiterated the same questions of authorization and enforcement (for the alcohol policy) with respect to the policy on the use of the skiff. Therefore, he held that summary judgment was not appropriate on the defense of superseding cause. See December 2022 Update.
All of the claims settled except those of the Standridge beneficiaries against Chester J. Marine, owner and operator of the CECILE A. FITCH, and Judge deGravelles held a bench trial on the issue of the liability of Chester J. Marine and whether it was entitled to limit liability. Judge deGravelles first addressed whether the CECILE’s tow collided with the skiff, and he was persuaded that the tow struck the skiff by evidence that two life jackets that were being worn by the skiff’s crew were found stuck between the barges in the CECILE’s tow. However, Judge deGravelles concluded that Chester J. Marine was not negligent in causing the collision, finding that Larry Fitch, owner of Chester J. Marine (and shoreside manager), who was acting as captain, wheelman, and sole lookout, was not overworked and fatigued, was not negligent for failing to post an additional lookout, and was not at fault for only having one radar. Instead, Judge deGravelles found that the accident was caused by the combined fault of Standridge, May, and Yazoo River Towing (a breathalyzer indicated that May had a blood alcohol concentration of .138% five hours after the incident; a blood test seven hours after the incident indicated that he had a blood alcohol concentration of .128%; and there was testimony that Standridge was drunk and needed assistance walking out of the bar). Judge deGravelles concluded that Standridge and those on the skiff were in the course and scope of their employment during their return to the MELVIN KING (along with the vessel’s captain, who was also found at fault) and that May was grossly negligent in operating the skiff while intoxicated, for his failures in navigation, and with respect to the lighting on the skiff. As Judge deGravelles exonerated Chester J. Marine, he did not have to reach the issue of privity or knowledge on the limitation issue. Thanks to Georges M. Legrand of Mouledoux, Bland, Legrand, Brackett in New Orleans for bringing this decision to our attention.
Kenneth G. Engerrand
President, Brown Sims, P.C.
1177 West Loop South
Houston, TX 77027
365 Canal Street
New Orleans, LA 70130
1110 Cowan Road
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Gulfport, MS 39507
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Judges are not like pigs, hunting for truffles buried in briefs.
United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991) (per curiam).
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© Kenneth G. Engerrand, September 29, 2023; redistribution permitted with proper attribution.