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September 2019 Longshore/Maritime Update

September 1
2019

September 2019 Longshore/Maritime Update (No. 244)

Notes from your Updater:

On August 29, 2019, the National Office of the OWCP closed approximately 52,000 claims under the longshore program in preparation for the new computer interactive system that is being instituted next year. The cases will remain closed unless a claims examiner receives a call or written request that the matter be reopened or the claims examiner obtains approval from the Director.

The Fifth Circuit affirmed the dismissal of Aaron Wallace’s action against British Petroleum in which he asserted that he provided BP with blueprints for the method that ultimately contained the Deepwater Horizon oil spill and that BP was involved in a conspiracy involving the federal government, BP, Kevin Costner, and the “old partners in crime,” Michelle Obama and George W. Bush. Wallace v. British Petroleum, No. 18-31196 (5th Cir. July 31, 2019).

On July 31, 2019, the district court adopted the recommendations of the magistrate judge in Grupo HGM Technologias Submarina, S.A. v. Energy Subsea, LLC (August 2019 Update) applying maritime law to a contract to provide ROV, support vessel, and associated work using BIMCO Supplytime 2005 forms.

On August 15, 2019, the district court adopted the recommendations of the magistrate judge in Knox v. Hornbeck Offshore Services, LLC (August 2019 Update) applying equitable vacature to a Louisiana seaman’s attachment action against a Louisiana defendant in a suit brought in federal court in Texas.

On August 27, 2019, President Trump officially nominated Eugene Scalia to head the Department of Labor. Scalia faces a confirmation hearing before the Senate Health, Education, Labor and Pensions Committee.

On August 29, 2019, Chief Judge Rosenthal denied Lloyd’s motion to alter or amend the court’s Memorandum and Opinion of July 9, 2019 (August Update) in Lloyd’s Syndicate 457 v. Floatec LLC, in which she dismissed Lloyd’s suit against a marine surveyor who was involved in the building of an offshore drilling platform. Lloyd’s is seeking to recover $500 million that Lloyd’s paid to the owner of the platform, Chevron, when parts of the platform sank to the ocean floor. One of the arguments she rejected was that her decision “ignores the commercial reality of the relationship between [u]nderwriters on an offshore construction project and the [marine warranty surveyors].”

Chad Barnes’ long saga trying to recover maintenance and cure (July Update) resulted in another order on August 29, 2019, in which court issued a sanction of $25,000 against two defendants for wrongfully causing the transfer of a commercial use permit in order to limit Barnes’ potential recovery of his maritime lien for failure to pay maintenance and cure.

On the LHWCA Front . . .

From the federal appellate courts:

ALJ’s decision to regard opinions of doctor treating claimant’s pain as less reliable was reasonable considering the claimant’s lack of credibility. Williams v. Director, OWCP, No. 19-60168 (5th Cir. Aug. 29, 2019) (per curiam).

Opinion

Mandel Williams was injured while working for CB&I Offshore Services as a rigger when he fell from a personnel basket while being transported to a vessel. He landed on his buttocks and hit his head. When he returned to land, Williams was examined by a nurse, reported a headache, and was released to full duty (although CB&I allowed him to return home and rest for the remainder of the day). That evening, Williams went to a hospital complaining of pain in his head, low back, and hand. The tests were normal, but his employer told Williams that it needed to review the discharge paperwork to be sure that he was fit for duty. Williams then retained a lawyer and began seeing Dr. Kimberly Smith for pain. The LHWCA claim was tried over Williams’ complaints of head, neck, and low back pain, and the ALJ concluded that the employer had rebutted the presumption and that Williams had failed to meet his burden of proof. Reviewing the evidence, the Fifth Circuit found substantial evidence to support the ALJ’s decision. The court noted the difference of opinions whether Williams needed further medical care after the initial negative tests, and, considering that there were several instances where Williams’ assertions were either unsupported by the record or were revealed to be false on cross-examination, the Fifth Circuit upheld the ALJ’s decision to regard Dr. Smith’s opinions (based on Williams’ subjective complaints) as less reliable than the other evaluations and objective tests.

Fifth Circuit affirms consultant’s judgment against cargo company for fall through hole. Manson Gulf, L.L.C. v. LaFleur, No. 18-31071 (5th Cir. Aug. 29, 2019) (per curiam).

Opinion

James LaFleur worked as a consultant for Modern American Recycling Service, which dismantled steel structures and sold the metal for scrap and loaded or unloaded cargo from vessels. Manson Gulf shipped a platform to Modern but did not tell Modern that it had cut holes in the platform to aid in its transportation. While inspecting the platform for potentially dangerous fluids and other dangers, LaFleur stepped into an unmarked, uncovered hole, falling 50 feet to his death. LaFleur’s widow brought a section 905(b) action against Manson Gulf, and Judge Barbier awarded her more than $4 million for Manson Gulf’s violation of the turnover duty by failing to warn Modern and LaFleur about the hole (September 2018 Update). The first issue Manson Gulf argued to the Fifth Circuit was that Judge Barbier erred by excluding the testimony of Manson Gulf’s expert, William McCarty. However, the Fifth Circuit noted that the deferential standard for appellate review of decisions on expert testimony is even more deferential when the case is tried without a jury. Consequently, even if the expert’s testimony was admissible, it was not a reversible error to exclude it. The Fifth Circuit also rejected arguments against the findings that Manson Gulf was negligent and that LaFleur was not negligent and against the award of damages. Although Manson Gulf asserted that Judge Barbier did not deduct personal consumption expenses from future earnings, the court of appeals noted that the expert testimony on which he relied had done so. The court of appeals did reverse the award of pre-judgment interest as the award was on all damages, and it was error to award pre-judgment interest on future damages.

Claimant may not recover attorney’s fees without strict compliance with the statute. Kelly v. D.C. Department of Employment Services, No. 18-AA-13, 2019 D.C. App. Lexis 364 (D. C. App. Aug. 29, 2019) (Washington).

Opinion

This cases arises under the District of Columbia workers’ compensation statute, which has provisions on the award of attorney’s fees that are similar to those in Section 928 of the LHWCA. After a dispute arose over the amount of Kelly’s compensation, Kelly’s attorney requested an informal conference and the conference was scheduled. His employer objected to an IFC and requested that the case be referred for a formal hearing. Kelly objected that the employer should not be able to circumvent the IFC mechanism, but the case was referred without an IFC, and Kelly was awarded additional compensation at the formal hearing. As the D.C. statute, like section 928(b), provides that fees can be awarded against the employer when the employer refuses to pay the additional recommended compensation following an IFC, the appellate court held that, without an IFC, fees and costs could not be awarded against the employer.

From the federal district courts:

Longshore worker’s Jones Act claims, but not state-law claims, are dismissed. Mayes v. Selvick Marine Towing Corp., No. 19-C-188, 2019 U.S. Dist. Lexis 126643 (E.D. Wis. July 30, 2019) (Griesbach).

Opinion

Ronald Mayes was employed by McGinnis, a company that repairs barges and towboats. He was injured on Selvick’s vessel after performing repairs on the starboard engine when a pressurized oil pipe burst, resulting in damage to his eye. Mayes brought suit against Selvick in state court asserting claims under the LHWCA, Jones Act and general maritime law as a seaman, and common-law negligence. He alleged that he was a longshoreman under the LHWCA and that he may have been a seaman under the Jones Act. Selvick removed the case to federal court based on admiralty jurisdiction and federal question jurisdiction. As his complaint did not assert any plausible allegations that he was a seaman, Judge Griesbach dismissed the claims based on seaman status. However, as Mayes’ status under the LHWCA was not established from the pleadings, Judge Griesbach did not dismiss the common-law negligence claim in the alternative to the LHWCA claim.

Shipfitter must connect asbestos exposure to a specific defendant’s product for a maritime products liability claim. Yaw v. Air & Liquid Systems Corp., No. C18-5405, 2019 U.S. Dist. Lexis 129716, 140152, 142278 (W.D. Wash. August 2, 19, & 21, 2019) (Settle).

Opinion General Electric

Opinion Warren Pumps

Opinion on Reconsideration

Donald Yaw was exposed to asbestos while working as a shipfitter at the Puget Sound Naval Shipyard. He brought a products liability action against suppliers of products containing asbestos, and in its orders of August 2 and 19, Judge Settle dismissed the claims against General Electric and Warren Pumps on the ground that maritime law was applicable and required that he identify particular products supplied by the defendant that were a substantial contributing factor in causing his disease. In denying rehearing, Judge Settle emphasized that Washington law, which does not require such specificity with respect to the identification of the defendant’s product, was irrelevant as maritime law was applicable.

Claims of asbestos exposure of machinist in naval shipyard are subject to maritime law. Deem v. Air & Liquid Systems Corp., No. C17-5965, 2019 U.S. Dist. Lexis 132573 (W.D. Wash. Aug. 6, 2019) (Settle).

Opinion

Thomas Deem was exposed to asbestos-containing products during his employment as an apprentice and journeyman outside machinist at the Puget Sound Naval Shipyard. After his claims against suppliers FMC and McNally were dismissed under Washington law, Deem filed a motion to apply maritime law. Judge Settle agreed. He concluded that Deem was exposed to dust on ships that were allegedly equipped with products that contained asbestos, satisfying the locality test for admiralty jurisdiction, and Deem’s work in repair and maintenance of naval vessels satisfied the requirement that defective products bear a substantial relationship to traditional maritime activity.

Court declines to grant TRO/injunction to prevent longshore worker’s counsel from disbursing settlement funds before paying employer and LHWCA carrier’s lien. Hines v. Energy XXI Services, Inc., No. H-17-1505, 2019 U.S. Dist. Lexis 135239 (S.D. Tex. Aug. 12, 2019) (Miller).

Opinion

Hines was injured on an offshore rig while employed by Fab-Con. His employer and its group self-insurer, Signal, paid $225,106.35 in compensation and medical benefits and filed an intervention asserting their LHWCA lien in Hines’ third-party action against several defendants. Two of the defendants were dismissed, and two agreed to settlements with Hines. Claiming that they would suffer irreparable harm if the settlement funds were disbursed to Hines, the intervenors sought a temporary restraining order and injunctive relief that Hines’ counsel not disburse settlement funds to Hines until their lien was satisfied. Judge Miller denied the request, however, as the intervenors did not satisfy their burden of demonstrating that irreparable harm was likely if the court did not grant the requested relief.

Attorney’s work on the LHWCA claim not considered in connection with fees on third-party claim. Simar v. Tetra Technologies Inc., No. 6:15-cv-01950, 2019 U.S. Dist. Lexis 136968 (W.D. La. Aug. 13, 2019) (Whitehurst).

Opinion

Wendell Simar, who was injured on an offshore platform, hired Errol Cormier as his attorney on July 21, 2014 and agreed to a 40% contingent fee if suit were filed. Cormier filed this suit for Simar on June 23, 2015, but Simar terminated his services on February 17, 2017 for failing to bring a resolution to the case. Simar engaged Joseph Gaar, Jr. as his attorney (35% contingency fee), and the suit was settled on May 14, 2019 except for the interest of Cormier. Under Louisiana law, the court allocates one contingent fee between the attorneys, but the allocation depends on whether the first attorney was discharged for cause. In the 2 ½ years in which Cormier represented Simar, progress was made on the LHWCA compensation claim, including approval of surgery; however, very little had been done on the third-party case. Although Cormier cited the work on the LHWCA claim, Magistrate Judge Whitehurst could not consider that work in connection with the third-party claim and ruled that Cormier was terminated for cause. Concluding that Gaar’s 35% fee was the highest ethical contingency percentage to which Simar had contractually agreed, the court divided the fees based on that percentage by allocating 15% of the fee to Cormier, which Judge Whitehurst then reduced by an additional 25% (of the 15%) for cause. Cormier was awarded his costs and expenses (including interest paid to Hancock Whitney Bank).

From the state courts . . .

Railroad employee diagnosed in 2016 with mesothelioma from exposure to asbestos before 1972 is covered under the LHWCA by the 1972 Amendments, and his FELA claim was dismissed. Crowe v. CSX Transportation, Inc., No. 922, 2019 Md. App. Lexis 727 (Md. App. Aug. 28, 2019) (Eyler).

Opinion

Clyde Jackson Crowe was exposed to asbestos during his employment from 1960 to 1969 with CSX’s predecessor, Western Maryland Railway, working as a railway operator and foreman at the Port Covington railyard and port facility in Baltimore. His duties including supervising the loading of cargo (including asbestos bags) from the warehouses onto railcars and trucks. After he was diagnosed in 2016 with mesothelioma, he brought this suit against CSX under the FELA, and CSX moved to dismiss the action on the ground that Crowe’s exclusive remedy was the LHWCA. The first question that Crowe presented to the court was whether the 1972 Amendments could operate retroactively to extinguish Crowe’s rights under the FELA. At the time of the exposure, the FELA provided a negligence remedy to railroad employees such as Crowe, but the LHWCA did not cover his work as it only applied to injuries on navigable waters. Noting that manifestation is the trigger for both the FELA and the LHWCA, the court held that Crowe did not have a claim under either statute until 2016. Prior to that time, Crowe only had an expectation. Therefore, there was no retroactive denial of rights by the application of the LHWCA. As the LHWCA provides the exclusive remedy where it applies, it would bar the FELA claim if applicable (the court also rejected a claim that the FELA should be treated as concurrent for land-based injuries/diseases as is the case with state workers’ compensation claims). The final issue was whether Crowe’s job duties of supervising the loading of stored cargo from the pier warehouse to railcars and trucks for inland shipment was covered under the LHWCA. As this was the final, integral step of the unloading process of moving cargo from the ship to land transportation, the court held that Crowe was covered under the LHWCA and that his status as a supervisor was immaterial. As the LHWCA was his exclusive remedy, the FELA case was dismissed.

From the Administrative Law Judges . . .

Signature of Claimant after he died causes Judge to vacate approval of settlement after more than a year. Winchester v. Huntington Ingalls Inc. (Avondale Operations), 2015-LHC-692 (ALJ Aug. 22, 2019) (Rosenow).

Opinion

Readers of this Update know that your Updaters do not usually review decisions of the Benefits Review Board or Administrative Law Judges. Our thanks to Frank Towers of Blue Williams for submitting this case that merits discussion. Henry Winchester was injured in 2003, and his counsel obtain a compensation order in his favor that was modified once and was subject to a second modification proceeding when the case settled for $112,800 to Winchester and $28,200 to his attorney. The parties agreed to the settlement on May 22, 2015, but Winchester died on May 29, 2015. Winchester’s counsel received the settlement petition from employer’s counsel on June 5, 2015, and the petition was returned with Winchester’s notarized signature on the same day. The settlement was approved, and payments were made. More than three years later, employer filed a motion to vacate the order approving the settlement. As it was more than a year after the order, the motion alleged that the settlement was procured by fraud because Winchester was already dead when the petition was submitted to the claimant for his signature. In other words, the employer asserted that, even though Winchester was dead, counsel procured Winchester’s notarized signature on the petition, returned the completed petition, and accepted attorney’s fees. In defense of the settlement, Winchester’s counsel argued that Winchester was gravely ill, so she drafted a power of attorney authorizing her supervising attorney to sign the settlement on Winchester’s behalf. Thus, although counsel knew that Winchester had died before the petition was signed, her supervising attorney signed for Winchester and admitted that he then signed the name of another lawyer as the notary for Winchester’s signature. Winchester’s counsel asserted that she was under the mistaken belief that the power of attorney remained valid even after Winchester’s death even though the power of attorney specifically stated that it expired on his death. Judge Rosenow concluded that the record clearly established that Winchester was dead and his attorney knew it at the time the settlement petition was submitted. Thus, there was no genuine dispute whether the settlement should be vacated. Winchester’s attorney denied that she had engaged in fraud, contending that her inexperience and inadequate knowledge of basic agency law prevented her from understanding the legal meaning of her actions and the actions of her supervising attorney. Although that assertion was inconsistent with the recitation of her experience in her fee petition, Judge Rosenow concluded that there was a fact issue whether she had engaged in fraud, misrepresentation, or misconduct. However, that was not the case for her supervising attorney who admitted to the attorney whose name was signed as the notary that he had forged her name. Therefore, Judge Rosenow found no disputed facts about whether the supervising attorney had engaged in fraud, misrepresentation, or misconduct to obtain approval of the settlement. Consequently, Judge Rosenow concluded that his prior order (approving the settlement) was approved by fraud and vacated the order, including the parts directing the employer to make the payments to Winchester and his counsel. Judge Rosenow also sent his order vacating the settlement to the Chief Administrative Law Judge for consideration of possible disqualification of counsel. Judge Rosenow noted that the state licensing authority had already been informed, and also noted that employer was free to seek criminal prosecution with the Department of Justice. Employer has notified the U.S. Attorney’s office and the FBI, and has brought a suit against Winchester’s counsel, her firm, and the other participants at the firm, in the United States District Court for the Eastern District of Louisiana, No. 2:19-cv-991, seeking to recover the payments made both to the lawyer and to Winchester.

And on the Maritime Front . . .

From the federal appellate courts:

Multi-purpose arena denied tourism designation for the Deepwater Horizon Economic and Property Damages Settlement. BP Exploration & Production, Inc. v. Claimant ID 100248744, No. 18-30971 (5th Cir. Aug. 9, 2019) (per curiam).

Opinion

A multi-purpose arena in Tampa, Florida that hosts professional sporting events, concerts, and other entertainment submitted an economic loss claim for the Deepwater Horizon Economic and Property Damages Settlement based on a tourism designation that would cause a substantial increase in the multiplier for its damages. The arena was awarded more than $2 million but was denied a significantly higher recovery because it failed to produce sufficient evidence that its customers came from outside their home communities. The Fifth Circuit agreed with the Appeals Panel, drawing a distinction from a sports stadium in the same area that received a tourism designation. The sports stadium was more likely to draw crowds from distant locales and in greater numbers. Although the Fifth Circuit did not grant relief to the arena, it did grant BP’s cross appeal with respect to the improper characterization of the arena’s other production expenses (equipment rentals for events) as a fixed expense because the Administrator deferred to the arena’s description of the expenses and did not exercise its independent judgment in their classification.

A failed business for the Deepwater Horizon Economic and Property Damages Settlement must have ceased operations and have wound down. Claimant ID 100024160 v. BP Exploration & Production, Inc., No. 18-30901 (5th Cir. Aug. 12, 2019) (per curiam).

Opinion

Grand Panama Resort Management operated a condominium resort in Panama City, Florida that was losing money before the Macondo Blowout and transferred its operations after the Blowout to an entity in which it owned a 50% share. Its claim for economic loss in the BP settlement was denied on the ground that it was a “failed business.” That finding was based on a report prepared by an accounting firm that the business had ceased operations in September 2010 as a result of the Spill, but the finding was insufficient because the Settlement Agreement requires that the business must have ceased operations and wound down. The Appeals Panel did not address whether the claimant had wound down, so the case was remanded for further proceedings.

Offshore rig worker was let go for downturn in the industry and not because of his age. McMichael v. Transocean Offshore Deepwater Drilling, Inc., No. 19-60011 (5th Cir. Aug. 13, 2019) (Stewart).

Opinion

Robert McMichael worked for Transocean as a driller and toolpusher for 15 years before he was fired in 1915 during a large downturn in the oil and gas industry during which Transocean reduced its offshore fleet by 44 rigs between 2014 and 2018 and laid off 48% of its toolpushers. McMichael was 59 years old when he was fired. The rig to which McMichael was assigned was stacked and 80 employees from the rig were fired along with all but one toolpusher. As McMichael could not show any improper pretext for his firing and Transocean fired numerous employees who were younger and more qualified than McMichael, the Fifth Circuit affirmed the dismissal of his suit for age discrimination under the Age Discrimination in Employment Act.

Fishermen’s claims for punitive damages against Transocean and Halliburton were dismissed for failing to comply with the court’s pretrial order. In re Deepwater Horizon, No. 18-30243 (5th Cir. Aug. 13, 2019) (per curiam).

Opinion

Transocean and Halliburton entered into a punitive damages settlement agreement with claimants who asserted that they suffered losses from the Macondo Blowout. The settlement created a punitive damages fund to distribute to fishermen who could establish compensatory damages (as compensatory damages are required under the general maritime law in order to recover punitive damages). This case involves the claims of menhaden fishermen who could only demonstrate compensatory damages by filing a lawsuit. Pursuant to Pretrial Order 60, claimants such as the fishermen were given a deadline to file individual lawsuits separate from the class action that the court dismissed after the settlements by BP, Transocean, and Halliburton. As the fishermen did not file individual lawsuits, their claims were dismissed with prejudice, and the Fifth Circuit affirmed the dismissal.

Fifth Circuit declines to set aside default judgment entered after appearance of counsel. A.P. Moller-Maersk A/S v. Safewater Lines (I) Pvt., Ltd., No. 4:13-cv-1726 (5th Cir. Aug. 19, 2019) (per curiam).

Opinion

Maersk Line carried a container of drums of hydrochloric acid from India to Houston, Texas under a bill of lading in which Safewater was the shipper and Samrat was the consignee. After the containers arrived in Houston, it was discovered that acid was leaking, requiring Maersk Line to incur damages of $243,775.03 for clean-up when Safewater and Samrat abandoned the cargo. Maersk Line brought suit against Safewater and Samrat, and Samrat brought a cross-claim against Safewater. Maersk settled with Safewater and dismissed its claims against Safewater. Samrat then filed a request for entry of default judgment against Safewater, which had not responded to the cross-claim. Safewater’s New Jersey counsel then filed a motion to appear pro hac vice, and two days later the court granted the motion to appear and also entered the default judgment. Safewater then moved to vacate the default judgment on the ground that it believed that Samrat’s settlement with Maersk had resolved the matter. The district court declined to set aside the default judgment, and the Fifth Circuit affirmed. Safewater’s primary argument was that it was not given the seven days’ notice of the application for a default judgment that is required when a party has appeared. However, the Fifth Circuit noted that the rule was not applicable as no service is required on a party that is already in default for failing to appear. The court reminded Safewater that the Federal Rules are clear that unanswered motions for default judgment must be responded to, especially when the defending party has never responded to any pleadings throughout the litigation.

Dismissal of Jones Act/unseaworthiness claims by cameraman against organizer of fishing tournament were dismissed, and the tournament’s workers’ compensation carrier was reimbursed its payments from the cameraman’s recovery against the fisherman who operated the vessel on which the cameraman was injured. Gulley v. Operation Bass, Nos. 18-5053/5055/6274, 2019 U.S. App. Lexis 25067 (6th Cir. August 22, 2019) (Kethledge).

Opinion

Operation Bass organizes professional bass fishing tournaments across the United States. In 2011, it held a tournament on Kentucky Lake, which extends from southern Kentucky into northern Tennessee. One of the professional fishermen was Shinichi Fukae. Operation Bass required that he ride with a cameraman who recorded the event for broadcasting. His cameraman was Robert Gulley. On the way to his final location for the tournament, Fukae removed the pedestal seat on the high-performance fishing boat and set it in the aisle where it began to move around when the boat accelerated. Distracted by the movement, Fukae crashed the boat into a bridge, and Gulley was injured. Gulley filed a workers’ compensation claim with Operation Bass’s insurer, Hartford, and then brought claims against Operation Bass and Fukae under the Jones Act and general maritime law. Fukae admitted fault and the district court awarded Gulley $497,500. The court reimbursed Hartford $189,361.61 and granted summary judgment on liability to Operation Bass. On appeal, Gulley argued that the vessel was unseaworthy because of the loose pedestal seat and because the vessel lacked a foot throttle that would have made the boat safer. The Sixth Circuit agreed with the district court that the vessel was not unseaworthy as there was no evidence that Operation Bass intended that the seat be left in the aisle when the boat was under weigh and the allegation that the boat would have been safer did not mean that it was not reasonably safe—the requirement for unseaworthiness. There was also no presumption of unseaworthiness for a vessel sinking in calm waters because the vessel sank as a result of Fukae failing to look ahead and crashing into the bridge. For the same reason, there was no presumption of negligence from the Oregon Rule when a moving object strikes a stationary object. The Sixth Circuit also rejected Gulley’s negligence claim that Operation Bass should have anticipated that Fukae would set the seat in the aisle because he had asked if he could remove the seat before leaving and was told that the rules prohibited removal. It was not obvious that this decision would lead to Fukae setting the seat in the aisle, become distracted by it, and then crash into a bridge. Finally, the Sixth Circuit held that it did not violate Gulley’s right to receive maintenance and cure that Operation Bass’s workers’ compensation carrier was reimbursed for its payments, including medical expenses, from Gulley’s recovery against Fukae.

Presence of grease in many places on the ship’s deck does not establish grease caused seaman’s slip and fall. Jones v. United States, No. 18-30776, 2019 U.S. App. Lexis 26000 (5th Cir. Aug. 28, 2019) (Willett).

Opinion

Wilfred Jones served as an engineer aboard the CAPE KNOX. He fell when he stepped over the threshold while entering the emergency diesel generator room. It was after dark and Jones had a flashlight, but he did not see what caused him to slip, and he did not see any grease on the deck or on his shoes. On his accident report he stated that he lost his balance and fell. However, in his deposition he testified that he believed that he slipped on grease on the deck. He admitted that it was some time after his fall that he realized that he had slipped on grease. In response to the motion for summary judgment in his suit for Jones Act negligence and unseaworthiness, Jones argued that there was grease in many places on the ship’s deck and that this was the most likely cause of his fall. District Judge Vance granted summary judgment, and, on appeal, Judge Willett noted that in a non-jury case, the district judge has somewhat greater discretion to weigh the evidence in a motion for summary judgment as the judge will be the trier of fact at trial. Judge Willett stated that the judge “has the limited discretion to decide that the same evidence, presented to him or her as a trier of fact in a plenary trial, could not possibly lead to a different result.” Acknowledging the favorable causation standard in Jones Act cases, Judge Willett stated that “it is not no standard at all.” The testimony that there was grease elsewhere on the deck was simply not probative circumstantial evidence that grease caused Jones’ fall. As Jones never saw grease in the spot where he slipped, even when he later investigated the accident, Judge Willett agreed with Judge Vance that there was insufficient evidence to satisfy the Jones Act causation standard. As the standard for unseaworthiness is more demanding, Judge Willett likewise agreed that there was no causation for the unseaworthiness claim. Thanks to John Walker of Schouest, Bamdas, Soshea, & BenMaier for bringing this case to our attention.

Eleventh Circuit dismissed parents’ claim for negligent infliction of emotional distress against cruise line. Azzia v. Royal Caribbean Cruises, Ltd., No. 18-12644 (11th Cir. Aug. 29, 2019) (per curiam).

Opinion

Valentina Azzia, Stefano Agazzi, and their two children took a cruise on Royal Caribbean’s OASIS OF THE SEAS. On the first day of the cruise, the parents lost sight of their four-year old child in the children’s pool area. Another passenger pulled the child’s body from the pool, and the child survived. The parents then brought this suit against Royal Caribbean for negligence on behalf of their child and for negligent infliction of emotional distress on their own behalf. Royal Caribbean’s motion for partial summary judgment on the parents’ claim was granted, and the parents appealed. Addressing the appellate jurisdiction, the Eleventh Circuit noted that the summary judgment did not dispose of all issues and parties, so the issue was whether the court had appellate jurisdiction under section 1292(a)(3)—interlocutory appeals in admiralty cases.  The parents brought the suit based on diversity and admiralty but did not designate the case as an admiralty case. There was no diversity, however, because the parents and Royal Caribbean were both aliens (Royal Caribbean is incorporated in Nigeria and the parents and children are citizens of Italy). Therefore, the district court proceeded with the case in admiralty, and the Eleventh Circuit had appellate jurisdiction over the interlocutory order. The Eleventh Circuit had no trouble affirming the summary judgment on the negligent infliction claim. The parents failed to show that they sustained any physical impact or were placed in immediate risk of physical harm by Royal Caribbean’s conduct.

From the federal district (and bankruptcy) courts:

Release prevents liability for injury on chartered pleasure boat. In re Carpe Diem 1969 LLC, No. 3:17-cv-56, 2019 U.S. Dist. Lexis 127744 (D.V.I. July 29, 2019) (Miller).

Opinion

Susan and Michael Graham vacationed with friends in the U.S. Virgin Islands. They reserved two boats and a captain for each boat from Carpe Diem. Before boarding the vessels, the captain gave each passenger a half-page release to sign that released Carpe Diem from liability for injury regardless of its negligence. After signing the release, Susan Graham sustained an injury, and Carpe Diem filed a petition for limitation of liability in which Susan (injury) and Michael (loss of consortium) filed claims. Carpe Diem moved to dismiss their negligence claims based on the release that Susan had signed. Magistrate Judge Miller first addressed the effect of Section 30509 of the Limitation Act, which prohibits the owner of a vessel transporting passengers between ports in the United States or between a port in the United States and a foreign port from including a contract provision exonerating the owner from its negligence or that of its employees. Judge Miller noted that the statute has been interpreted to apply to common carriers and does not bar owners of recreational vessels from enforcing such releases. In this case, Carpe Diem supplied a recreational vessel so that the Grahams could go swimming and visit local beaches. The Grahams directed the vessel’s course and activities. Thus, this was not a situation of common carriage and there was no statutory prohibition on the release. Judge Miller then reviewed the terms of the release and determined that it was clear and unambiguous in releasing Carpe Diem for its negligence with respect to the injury to Ms. Graham. The Grahams argued that the release was unenforceable for violating public policy, noting that they had not read the release and did not have a reasonable opportunity to read it. They argued that they were given the release upon boarding the vessel and were told to hurry up because the captain had arrived late to pick them up. Judge Miller noted, however, that whether they read the release was irrelevant because they had an opportunity to do so. And, as they were in control of their own itinerary, they could have taken additional time to read it had they chosen to do so. Finally, Judge Miller rejected the Grahams’ argument that she was in an unequal bargaining position as she could simply have declined to board the vessel if she did not want to sign the release. With respect to the loss-of-consortium claim of Michael Graham, Judge Miller did not have to address whether the spouse of a non-seaman may recover loss of consortium under the general maritime law as his claim was derivative of Susan’s and was likewise barred by the release.

Carnival cannot avoid trial for injury to passenger disembarking in wheelchair. McBride v. Carnival Corp., No. 1:16-cv-24894 (S.D. Fla. July 31, 2019) (King).

Opinion

After addressing expert witnesses in an opinion on July 25, 2019 (August Update), Judge King ruled in this opinion on Carnival’s motion for summary judgment on its liability to a passenger who fell from her wheelchair while disembarking Carnival’s vessel ECSTASY. Carnival asserted that it was not liable for the negligence of the contractor’s employee who was pushing the passenger in her wheelchair on the gangway. However, as a common carrier, Carnival had a non-delegable duty to maintain a reasonable and safe means for passengers to disembark. As such, Carnival could not avoid liability for the contractor’s actions during the disembarkation. Judge King also denied Carnival summary judgment that it did not have actual or constructive notice of a dangerous condition in the gangway for wheelchairs (a steep, short ramp that that creates a challenge for wheelchair pushers), noting that Carnival routinely used two gangways in Miami and there had been prior accidents involving wheelchair users. However, Judge King did grant Carnival summary judgment on the plaintiff’s claim of negligent design of the gangway as Carnival was not involved in the design and placement of the gangway in the Port of Miami.

Declaratory judgment action on maintenance and cure dismissed in favor of seaman’s action in state court. Miss Quynh Anh III LLC v. Tran, No. 18-01202, 2019 U.S. Dist. Lexis 141818 (W.D. La. Aug. 1, 2019), opinion adopted, (Aug. 19, 2019) (Whitehurst).

Opinion

Duc Van Tran allegedly sustained an injury on the fishing vessel MISS QUYNH ANH III. His employer filed this declaratory judgment action for a determination of Tran’s entitlement to maintenance and cure after Tran declined to sign medical authorizations so that his employer could discovery Tran’s medical history. However, the day before the federal lawsuit was filed, Tran filed a Jones Act suit in Louisiana state court. Although Magistrate Judge Whitehurst was sympathetic to the employer’s need for discovery to determine the veracity of Tran’s medical disclosures, he could not grant any relief to the employer until determining whether to dismiss the federal action. Although Judge Whitehurst admonished Tran’s counsel that the employer was entitled to discovery, he dismissed the federal action in favor of the state action.

Vessel owner allowed to bring case against contract adjuster. Halliday v. Great Lakes Insurance SE, No. 3:18-cv-72, 2019 U.S. Dist. Lexis 128364 (D.V.I. Aug. 1, 2019) (Cannon).

Opinion

Bruce Halliday, a resident of the U.S. Virgin Islands, owned the KAYLARA MAI and insured the vessel with Great Lakes. On September 6, 2017, the vessel was damaged by Hurricane Irma while berthed at the Sapphire Beach Resort and Marina. Great Lakes engaged Wager & Associates, a company involved in yacht surveying and insurance claim adjusting, to adjust Halliday’s claim. There was a substantial dispute in the cost to repair between Wager and experts hired by Halliday, and Wager opined that Halliday falsely claimed that the vessel was damaged in the storm when the damage was the result of poor maintenance. Great Lakes then declared the policy void ab initio on the grounds that the vessel was unseaworthy at the time of the storm, that Halliday had misrepresented the vessel’s value, and that the losses were due to lack of maintenance. The questions presented in this opinion involved whether Halliday’s second amended complaint could assert a tort claim against Wager when there was no privity between Wager and Halliday and whether Halliday could assert that he was a third-party beneficiary of the adjusting contract between Great Lakes and Wager. Magistrate Judge Cannon first had to decide what law to apply to Halliday’s claims. Wager argued that the court should apply New York law in accordance with the choice-of-law provision in the policy, but, as the claims arose from the adjusting by Wager and not from the policy, Judge Cannon declined to apply New York law. The adjusting contract was not in evidence, so Judge Cannon applied Virgin Islands law. In the absence of controlling law from the Virgin Islands on the issue whether Halliday could bring an action against the adjuster, Judge Cannon considered the majority rule (no duty of care from adjuster to claimant) and the minority rule (claimants can make negligence claims against adjusters) and decided on a middle ground—Halliday could not bring a negligence claim but would be allowed to bring a claim for gross negligence. Turning to the claim that Halliday was a third-party beneficiary of the adjusting contract, Judge Cannon decided that it was inappropriate at this point (without having the contract in evidence) to decide the issue. Thus, Judge Cannon allowed Halliday to assert a third-party beneficiary claim against Wager.

Court denies bifurcation in limitation action that would allow damages actions to proceed in state court before liability and limitation are tried. In re Marquette Transportation Co. Gulf Inland, LLC, Nos. 6:18-cv-1222, 6:18-cv-1238, 6:18-cv-1250, 2019 U.S. Dist. Lexis 130870 (W.D. La. Aug. 5, 2019) (Hanna).

Opinion

This opinion involves three limitation actions brought in federal court arising out an allision in the Lower Atchafalaya River between a tug and tow and a drydock owned by LAD Services. John Williams, an employee of LAD was injured, and Williams and LAD filed suits in Louisiana state court against the owners/operators of the three vessels involved in the operation in which the allision occurred. Williams and LAD filed claims in the three limitation actions (LAD sought reimbursement of maintenance and cure paid to Williams and damages to its drydock). Two of the vessel owners filed claims against each other for contribution and indemnity. Williams and LAD then filed a motion to bifurcate the liability and limitation issues from damages, allowing them to proceed with their damages claims in state court. The vessel interests urged the court to maintain all claims in the limitation actions and to decide the limitation issues first. They did not agree to participate in any stipulation that would allow the court to lift the stay. Noting that it is the responsibility of the court to ensure that the vessel owners’ rights to limitation are protected and that cannot be done without a stipulation by all of the claimants that they will not seek to enforce a greater award than the limitation fund until the limitation action has been decided, Magistrate Judge Hanna held that bifurcation was premature. He advised that the most economical resolution was to allow the parties to proceed through discovery to determine if the value of the claims was more or less than the limitation fund, after which the court could reconsider whether to bifurcate the case with appropriate stipulations. Judge Hanna was skeptical that the indemnity and contribution claims with respect to Williams were sufficient to defeat a bifurcation stipulation when all parties were present in the litigation, but he could not say the same for LAD’s property damage claim. Additionally, Judge Hanna was not prepared to state whether Williams (Jones Act claim) or LAD (reimbursement of maintenance and cure) qualified for the remedies they sought.

Cruise line not prevented from introducing ticket; not sanctioned for preserving only 91 minutes of video from cruise embroiled in horrific storm. Incardone v. Royal Carribean [sic] Cruises, Ltd., No. 16-20924, 2019 U.S. Dist Lexis 131582, 135333 (S.D. Fla. Aug. 5 & 12, 2019) (Goodman).

Opinion August 5

Opinion August 12

We return to this case (see August Update) involving the claims of a group of autistic children and their families who claimed psychological injuries, asserting that Royal Caribbean’s ANTHEM OF THE SEAS sailed into the path of a storm despite severe weather warnings. In the August 5 opinion, Magistrate Judge Goodman recommended that the plaintiffs’ motion in limine seeking to prevent Royal Caribbean from mentioning the ticket contract (limiting liability) to the jury. Judge Goodman agreed with Royal Caribbean that the ticket terms and conditions were communicated to the plaintiffs, who could not go on the cruise without the ticket, and that the terms had been produced to the plaintiffs as they were attached to an affidavit that was filed more than three years earlier. In the August 12 order, Judge Goodman denied the plaintiffs’ motion for a spoliation sanctions order seeking a mandatory or permissive adverse inference at the jury trial on the ground that only 91 minutes of the 14,400 hours of video from 200 CCTV video cameras on the vessel during the cruise were produced (the remainder were overwritten). Judge Goodman noted that Royal Caribbean was required to take reasonable steps to preserve the evidence, and that the storm buffeted the ship for only a portion of the cruise. While preserving two or three or more hours of representative clips would have been reasonable, Judge Goodman could not say that preserving only 91 minutes was unreasonable, particularly when the video demonstrated that the ship was embroiled in a horrific storm with massive waves and huge winds. Thus, the plaintiffs were not prejudiced enough to warrant sanctions.

Charterer of vessel had sufficient notice of failures of captain to deny its motion for summary judgment on limitation of liability; other insurance clauses in coverage for charter were repugnant, leaving insurers to share pro rata. In re TK Boat Rentals, Inc., Nos. 17-1545, 17-2466, 17-3657, 2019 U.S. Dist. Lexis 132386 (E.D. La. Aug. 7, 2019) (Ashe).

Opinion

Patrick Beck booked a fishing trip out of Venice, Louisiana with Extreme Fishing, owned by Troy Wetzel. Wetzel hired Andre Boudreau to captain Wetzel’s vessel M/V KINGFISH, but the vessel became inoperable, and Boudreau secured the fishing vessel M/V SUPER STRIKE from Chase St. Clair for the trip. Boudreaux ran into trouble with stalling of the port engine during the trip, but he testified that the engine was working at the time the vessel collided with the M/V MISS IDA (owned by TK Boat Rentals) in heavy fog in the Mississippi River. Beck and other inured passengers on the SUPER STRIKE brought an action for damages against Extreme Fishing, TK Boat Rentals, Wetzel, Boudreau, and St. Clair. TK Boat Rentals filed a limitation action for the MISS IDA, and St. Clair and Boudreau filed a limitation action as the owner and operator of the SUPER STRIKE. This opinion involves Extreme Fishing’s motion for summary judgment that it was entitled to limit liability as bareboat charterer of the SUPER STRIKE and insurance coverage issues on policies for Extreme Fishing and Wetzel. Extreme Fishing argued that it had no privity or knowledge of any navigation errors of Boudreau in operating the SUPER STRIKE or in any defects in that vessel. At this stage of the case, there was a fact question whether an engine failure or Boudreau’s failure to sound the vessel’s horn contributed to the collision. As Wetzel hired Boudreau because of Wetzel’s experience with Boudreau, Judge Ashe found it reasonable to infer that Extreme Fishing may have had knowledge of Boudreau’s allegedly negligent practices (failure to inspect the vessel or failure to sound the horn). Therefore, Judge Ashe would not grant Extreme Fishing limitation on a summary judgment basis. Wetzel carried an insurance policy for the KINGFISH with Allianz Global (AGCS) that included coverage for temporary substitute watercraft. Based on that coverage, the court previously determined that AGCS had a duty to defend Boudreau. That policy contained an other insurance clause that stated the policy would be excess over any other insurance that would apply in the absence of the AGCS policy. St. Clair carried an insurance policy with GEICO for the SUPER STRIKE (the substitute vessel) that included coverage for a bareboat charterer, and the court previously ruled that Extreme Fishing was the bareboat charterer of the SUPER STRIKE. The GEICO policy contained an other clause (similar to the AGCS clause) that it would be excess over any other insurance that would apply in absence of the GEICO policy. Although Judge Ashe found sufficient fact disputes that he would not grant summary judgment that Boudreau was covered under the temporary substitute watercraft clause of the AGCS policy, he did address the conflict in the other insurance clauses of the GEICO and AGCS policies. As the provisions were mutually repugnant under Louisiana law (applicable under Wilburn Boat) Judge Ashe treated each insurer as co-primary with the liability of the insurers determined from the remaining provisions of the other insurance clauses. As the GEICO policy’s other insurance clause also provided that when the GEICO policy and another policy covered on the same basis, either primary or excess, the policies would share pro rata based on the total limits of both policies (the same sharing as provided by Louisiana law), Judge Ashe held that the policies would share in proportion to their policy limits, assuming each policy were held to afford coverage.

Installer of asbestos-containing products not entitled to government contractor defense, but entitled to summary judgment on products liability theories. Clayton v. Air & Liquid Systems Corp., No. C18-0748, 2019 U.S. Dist. Lexis 134649 (W.D. Wash. Aug. 8, 2019) (Robart).

Opinion

Will Clayton developed mesothelioma while working with asbestos-containing products in his service in the United States Navy. One of the defendants in his suit was Syd Carpenter Marine Contractor, Inc., a California-based shipyard services contractor that installed products on vessels. That status as an installer, and not a manufacturer, cut both ways for Carpenter. As the military standards and specifications apply to sellers and manufacturers of asbestos products, Carpenter was not entitled to assert a government contractor defense. However, Judge Robart granted Carpenter’s motion for summary judgment that it was not subject to strict liability as a manufacturer or seller.

Presence of owner on vessel insufficient to defeat limitation of liability on a motion to dismiss. In re Schnittger, No. 2:18-cv-04343, 2019 U.S. Dist. Lexis 135482 (E.D.N.Y Aug. 12, 2019) (Spatt).

Opinion

After Fernando Jose Murta was killed in an incident involving the vessel ARRLUK, the vessel’s owner, Steven Schnittger filed a petition for exoneration from/limitation of liability for the value of the vessel, $12,300. The decedent’s administrator filed a motion to dismiss the limitation action, asserting that Schnittger was on the vessel at the time of the incident and therefore could not state a claim that he was without privity or knowledge. Judge Spatt denied the motion for two reasons. First, considering only the limitation complaint for purposes of a motion to dismiss, the complaint did not have any allegations that attributed privity or knowledge to the owner. Second, the question of privity or knowledge would only be relevant once the claimant established the negligence of the owner, and the claimant failed to establish that the owner was negligent. Additionally, the mere presence of the owner on the vessel did not establish that he had privity or knowledge. The issue of privity or knowledge is a fact question that could not be resolved on a motion to dismiss.

Cruise Line may be vicariously liable for negligence of non-medical personnel and for punitive damages for death of passenger from cardiopulmonary arrest after disembarking. Noon v. Carnival Corp., No. 18-23181, 2019 U.S. Dist. Lexis 136528 (S.D. Fla. Aug. 12, 2019) (Torres).

Opinion

After passenger Karen Noon experienced shortness of breath on Carnival’s vessel, the medical staff provided an oxygen tank that she used until it was time to disembark the vessel in Miami. Although her husband alleged that she expressed a desire to keep the tank until she was transported to a hospital, the crewmembers refused to allow her to keep the tank or to arrange for her to be transported to the hospital. After leaving the ship, Ms. Noon went into cardiopulmonary arrest and was pronounced dead after being transported to the hospital by Miami-Dade Fire Rescue. Her husband asserted claims for vicarious liability for breach of a nonmedical crewmember’s duty of care under the circumstances, and Magistrate Judge Torres held that these allegations survived the cruise line’s motion to dismiss. Judge Torres held that the crewmembers had assumed a duty to Ms. Noon when they retrieved her oxygen tank without providing a substitute even though she was in a distressed state. As the cruise line is a common carrier, it had a special relationship with its passenger that gave rise to a duty in this circumstance. Finally, even though the Eleventh Circuit has held that punitive damages are not available under the general maritime law absent “exceptional circumstances” such as intentional conduct, In re Amtrak Sunset Ltd., 121 F.3d 1421 (11th Cir. 1997), Judge Torres declined to dismiss the claim for punitive damages on the ground that the allegations were sufficient to assert an intent to deprive Ms. Noon of life-saving emergency services with knowledge of her condition.

Bunker supplier’s arbitration award against subsidiary of O.W. Bunker confirmed. Bunker supplier who delivered bunkers to vessels allowed recovery as an administrative expense in O.W. Bunker’s bankruptcy. Integr8 Fuels, Inc. v. O.W. Bunker Panama S.A., No. 16-cv-4073 2019 U.S. Dist. Lexis 136662 (S.D.N.Y Aug. 12, 2019) (Freeman); In re O.W. Bunker Holding North America, Inc., No. 14-51720, 2019 Bankr. Lexis 2586, 2587, 2728 (Br. D. Conn. Aug. 19 and 26, 2019) (Manning).

Opinion Integr8

Opinion 2586

Opinion 2587

Opinion 2728

The saga from the bankruptcy of O.W. Bunker continues (see July 2019 Update). Magistrate Judge Freeman confirmed an arbitration award against O.W. Bunker Panama by a panel of three arbitrators appointed by a bunker supplier after O.W. Bunker Panama declined to appoint an arbitrator and the court granted a default against O.W. Bunker Panama. On the bankruptcy front, Chief  Bankruptcy Judge Manning held that where the debtor bought bunker fuel from a claimant and the claimant delivered the bunkers to vessels, the claimant was allowed an administrative expense in the bankruptcy for the value of the bunker fuel. However, the portions of the claims that were not for the bunkers, such as harbor fees, wharfage fees, and barging fees, were relegated to the status of general unsecured claims.

Punitive damages not allowed in passenger’s action against cruise line. Simmons v. Royal Caribbean Cruises, Ltd., No. 1:19-cv-22863, 2019 U.S. Dist. Lexis 137425 (S.D. Fla. Aug. 13, 2019) (Ungaro).

Opinion

This case reaches the opposite conclusion on punitive damages from the decision of Magistrate Judge Torres in Noon v. Carnival Corp. (in this Update). Shaheena Ahmad Simmons was injured while descending the rock-climbing wall on Royal Caribbean’s cruise ship GRANDEUR OF THE SEAS. Royal Caribbean moved to dismiss Simmons’ prayer for punitive damages based on In re Amtrak Sunset Ltd., 121 F.3d 1421 (11th Cir. 1997), in which the Eleventh Circuit ruled that punitive damages are not available under general maritime law absent “exceptional circumstances” such as intentional wrongdoing. Judge Ungaro agreed that Simmons’ allegations did not rise to the level of intentional misconduct necessary for the court to find an exceptional circumstance in which punitive damages would be warranted. Therefore, she dismissed the punitive damage claim.

Claimants must file a motion with proper stipulations to lift the stay in a limitation action. In re Moog, No. 3:19-cv-00030, 2019 U.S. Dist. Lexis 139224 (D. Idaho Aug. 14, 2019) (Nye).

Opinion

After a collision between a vessel owned by Therese and Mark Moog and a vessel owned by Christopher Ball on the Snake River near Lewiston, Idaho, the Moogs filed a petition for limitation of liability. Bryan and Stacy Wilkinson were passengers on the Ball vessel and filed a claim in the limitation action. Their second cause of action was for a change of venue, seeking a transfer of the action to Idaho state court. Chief Judge Nye noted that the second cause of action was procedurally improper. First, a request for remand would have to be brought by a motion, not by a complaint. Second, the Wilkinsons’ claim in the limitation action had never been pending in Idaho state court so the court could not simply transfer the action. Chief Judge Nye then instructed the passengers that the proper procedure would be to file a motion asking the court either to dismiss the action or to dissolve the limitation injunction so they could file suit in the desired court. He then reviewed the legal principles with respect to limitation of liability and the saving-to-suitors clause and advised the Wilkinsons with respect to the proper method to stipulate to dissolve the concursus of claims from the limitation action.

Claim for contribution/indemnity sinks claimant’s effort to lift limitation stay. In re Cibco Barge Line, LLC, No. 19-9512, 2019 U.S. Dist. Lexis 137836 (E.D. La. Aug. 15, 2019) (Lemmon).

Opinion

Cibco Barge Line, owner of the towing vessel MISTER C, filed a limitation action after an injury was suffered by Cody Jackson, who was employed by the operator of the vessel, Creole Chief, pursuant to a crewing agreement with Cibco Barge Line. Jackson sought to lift the stay, but Creole Chief filed a contribution/indemnity claim in the limitation action seeking to recover the maintenance and cure it had paid. When Creole Chief declined to sign the stipulations required to lift the stay, Judge Lemmon denied the motion to lift the stay as all of the claimants have to sign the stipulations.

Undocumented alien killed by Coast Guard vessel while swimming across Brownsville Ship Channel denied recovery from Coast Guard or vessel/engine manufacturers. Garcia v. United States, No. 1:17-cv-00028, 2019 U.S. Dist. Lexis 138376 (S.D. Tex. Aug. 15, 2019) (Olvera).

Opinion

Patricia Guadalupe Garcia Cervantes, an undocumented alien, and her smuggler, Galindo Ruiz-Hernandez, were swimming across the Brownsville Ship Channel at night to enter the United States from Mexico. She was trying to cross undetected, so she had no illuminating or noise-making equipment to alert authorities (or vessels) of her presence. She was killed when a Coast Guard vessel struck her while navigating in the ship channel. Her spouse brought suit against the United States and the manufacturers of the vessel and engines. Judge Olvera dismissed all of the claims. First, he held that the United States did not owe any duty to Cervantes unless the Coast Guard had actual knowledge about the probability of hitting Cervantes as she swam across the Channel. Second, Judge Olvera dismissed the claims against the manufacturers. As Cervantes was essentially a bystander, she lacked standing to bring a maritime product liability claim, and if there were a duty to warn of a danger in the product, it would be the United States, and not the plaintiff, who would have a claim. Ruiz-Hernandez was convicted of conspiracy to transport an alien resulting in death and transporting an alien for private financial gain and resulting in death and was sentenced to 80 months in prison. Cervantes’ spouse has filed a notice of appeal of the dismissal of the civil case.

Court finds fire to engines on yacht not caused by defect in impeller pump. National Union Fire Insurance Co. of Pittsburgh v. SPX Flow US, LLC, No. 18-cv-80332, 2019 U.S. Dist. Lexis 137791 (S.D. Fla. Aug. 15, 2019) (Bloom).

Opinion

This case is a subrogation claim brought by the insurer of the yacht BELISSIMO, which was damaged from an engine fire. The insurer brought the action against the distributor of the starboard impeller pump that allegedly failed because it was defective and unsafe for its intended use. The distributor alleged that the pump failed when it ran dry, running without sufficient water to prevent friction and heat from building up in the pump because the seawater flow sensor was not connected and operational, so no alarm would sound in the event the seawater flow sensor detected a seawater flow shortage. After a lengthy bench trial, Judge Bloom concluded that the plaintiff had not established that the pump was defective, and that even if it were defective, the failure was not the cause of the damage to the vessel.

Designating treating physicians is not subject to the expert deadline. Parker v. John W. Stone Oil Distributors, L.L.C., No. 18-3666, 2019 U.S. Dist. Lexis 139820 (E.D. La. Aug. 19, 2019) (Fallon).

Opinion

In this Jones Act case the defendants moved to strike the testimony of two treating physicians who were not designated as experts before the deadline to designate expert witnesses. Judge Fallon denied the motion on the ground that treating physicians are not subject to the expert deadline. Instead, they are subject to the deadline for providing a list of all witnesses who may or will be called to testify at trial. Additionally, Judge Fallon rejected the argument that the testimony of the doctors was cumulative of the seaman’s designated expert clinical neuropsychologist as the doctors were treating physicians who would testify about treatment while the neuropsychologist was designated as an expert witness to discuss the diagnosis and causal relationship.

Widow of passenger who died of heart attack on vessel failed to allege claim for negligent hiring of medical personnel and cannot recover punitive damages under DOHSA. Murphy v. Carnival Corp., No. 19-21450, 2019 U.S. Dist. Lexis 140475 (S.D. Fla. Aug. 20, 2019) (Scola).

Opinion

Passenger Daniel Murphy was taken to the medical center on Carnival’s vessel complaining of chest pain, discomfort, profuse sweating, chills, stomach ache, diarrhea, lethargy, and weakness. After examination and testing, he was sent back to his stateroom where he suffered a fatal heart attack. In response to Carnival’s motion to dismiss, Judge Scola dismissed count 1 of the complaint brought by Murphy’s widow for negligent hiring and retention of medical personnel on the ground that the plaintiff did not assert any facts to support the allegations. The court also ruled that the Death on the High Seas Act and American maritime law were applicable, not Panamanian law, and therefore the plaintiff could not recover punitive damages because of DOHSA’s pecuniary loss limitation.

Later filed federal action for damages for breach of charter party not dismissed under the Colorado River abstention doctrine. Blank River Services, Inc. v. TowLine River Service, Inc., 2:19-cv-418, 2019 U.S. Dist. Lexis 141753 (W.D. Pa. Aug. 21, 2019) (Hornak).

Opinion

This case involves a charter of the towboat M/V FRANCIS J. BLANK from Blank River to TowLine. Blank River asserted that the vessel was returned after the lengthy charter in an appalling condition. Beating the owner to the courthouse, TowLine filed a declaratory judgment action in Pennsylvania state court. One week later, Blank River filed this federal action seeking damages for breach of the charter party and for tortious damage and conversion, unjust enrichment, and negligent bailment. TowLine argued that the federal court should abstain from hearing the case under the Colorado River abstention doctrine. The first issue to be addressed was whether the actions were parallel. Although Chief Judge Hornak was unaware of any precedential authority that a declaratory judgment action was not parallel to an action for damages, he did not have to decide that issue as he held that there were no extraordinary circumstances justifying abstention (the state action was in its earliest stages without significant discovery or court intervention). Chief Judge Hornak was presented with the interesting (but legally unsound) argument that the Saving-to-Suitors Clause presented a separate abstention doctrine in favor of TowLine’s choice of a state forum. Judge Hornak responded that the single claimant exception in limitation of liability cases resulting from the Saving-to-Suitors Clause, as exemplified in Langnes v. Green on which TowLine relied, presented the opposite scenario from this case. The single claimant situation involves a shipowner who invokes federal jurisdiction with a declaratory claim that it is not liable or has limited liability, with the claimants seeking to proceed with their damages action in state court. That is the opposite of the present case where the defendant filed a declaratory action in state court and the claimant brought a damage action in federal court. Chief Judge Hornak declined to read the Saving-to-Suitors Clause as evincing Congressional intent that every suitor in an admiralty case have its first choice of a forum with the suitor that files first having its preference honored. Therefore, he declined to abstain from hearing the federal action. Chief Judge Hornak also denied TowLine’s argument that the Pennsylvania gist-of-the-action doctrine barred all of Blank River’s claims except for the breach-of-contract claim. Without having to decide how Pennsylvania law would apply to a maritime charter party, Chief Judge Hornak held that the doctrine would not apply to bar the tort claims as the mere existence of a contractual relationship between the parties does not automatically prevent one party from asserting tort claims for conduct during the performance of the contract. Finally, even though a party to a contract cannot recover under an unjust enrichment theory when there is a governing contract, Chief Judge Hornak declined to dismiss the unjust enrichment claim at this time as TowLine was disputing the validity and effect of the charter party.

Fact questions on whether ocean carrier is liable for spoiled cheese. Atalanta Corp. v. Mediterranean Shipping Co., No. 17-cv-5333, 2019 U.S. Dist. Lexis 141914 (S.D.N.Y. Aug. 21, 2019) (Torres).

Opinion

This case involved damage to a cargo of cheese that was shipped in a refrigerated container from Spain to Long Beach, California. The plaintiff argued that the cheese was damaged from exposure to high temperatures before it was loaded onto the vessel in Spain for transport to the United States. Citing the port-to-port Sea Waybill, the ocean carrier argued that it was only liable for damage occurring after loading. However, the Waybill also contained a clause incorporating COGSA for the periods before loading and after discharge as long as the cargo remained in the custody of the carrier or its subcontractors. Therefore, the issue was presented whether the company that trucked the cargo from the warehouse to the port was a subcontractor of the ocean carrier. As that issue was disputed between the parties, Judge Torres did not grant summary judgment to the ocean carrier. Similarly, Judge Torres declined to apply other provisions in the Waybill that could have exonerated the carrier on the grounds that there were fact questions or that the provisions did not apply when interpreted in favor of the plaintiff (because the Waybill was drafted by the carrier).

Shower on pushboat was not unseaworthy. Douglas v. Chem Carriers Towing, LLC, No. 18-5529, 2019 U.S. Dist. Lexis 143639 (E.D. La. Aug. 23, 2019) (Vance).

Opinion

Anthony Douglas slipped and fell while exiting the shower on the inland pushboat of which he was the captain and pilot, when his foot caught on the shower’s threshold. He claimed the vessel was unseaworthy and his employer was negligent because the threshold was 9.5 inches high, the shower had no grab bars, and the tile floor was not covered by a mat. Judge Vance rejected all of his claims and granted summary judgment to his employer. Although Douglas’ expert contended that the shower violated regulations established by the ADA and OSHA, Judge Vance concluded that the ADA did not apply to the design of the shower and that the OSHA regulations did not apply to this vessel or to the shower features that the plaintiff alleged were unsafe. Judge Vance added that this type of shower is used in hundreds of similar vessels and that the Fifth Circuit had addressed a similar situation in overturning a district court’s findings of negligence and unseaworthiness in Jackson v. OMI Corp., 245 F.3d 525 (5th Cir. 2001).

Worker not entitled to summary judgment on seaman status when employer testified that he guessed that the worker spent 30% of his time on vessels. Abadie v. Madere & Sons Marine Services, LLC, No. 17-6705, 2019 U.S. Dist. Lexis 143392 (E.D. La. Aug. 23, 2019) (Lemmon).

Opinion

Joseph Abadie was employed by the defendants and was assigned to work as the captain of a crew boat that was sent to an offshore platform to take on a tote tank containing liquid oilfield waste. He was injured when the tank struck him and pinned him against a bulkhead on the vessel. Abadie’s employment with the defendants was divided between vessels, platforms, and land. The testimony from Chad Madere, an owner of the defendant companies, was that, if he had to guess, Abadie worked on a vessel maybe 30% of the time. Although Abadie testified that he worked on vessels over 30% of the time, he only submitted two months of logs of his hours worked. Judge Lemmon noted that the worker must have spent at least 30% of his entire employment with the defendants in the service of a vessel or identifiable fleet in order to be a seaman. However, the records that he submitted were only for two months and his testimony was inconsistent with his logs. Based on the conflicting evidence, Judge Lemmon declined to hold that Abadie was a seaman as a matter of law.

Seaman’s lien for wages extinguished. Abella v. O’Kelly, No. 18-00217, 2019 U.S. Dist. Lexis 143451 (D. Hawaii Aug. 23, 2019) (Kay).

Opinion

Abella purchased the vessel S/V TALISKER in Australia, and engaged Roger O’Kelly to serve as a crewmember on the vessel to assist in sailing it to Hawaii. After the vessel arrived in Hawaii, O’Kelly filed a notice of claim of lien for labor against the vessel with the Coast Guard in the amount of $50,000. The Coast Guard terminated the notice of lien a year later, but O’Kelly indicated that he might refile the lien with an attorney. Facing a possible lien on the vessel, Abella filed this suit to declare that O’Kelly did not have a valid maritime lien on the vessel. Abella filed a declaration that O’Kelly agreed to serve as a crewmember in exchange for all meals during the voyage, sailing experience, and training. In response to Abella’s motion for summary judgment, O’Kelly did not dispute Abella’s declaration. Therefore, Judge Kay granted Abella’s motion and held that O’Kelly did not have a valid maritime lien on the S/V TALISKER.

Platform worker held to have presented fact question of seaman status to defeat summary judgment. In re Prosper Operators, Inc., No. 2:16-cv-01363, 2019 U.S. Dist. Lexis 144064 (W.D. La. Aug. 23, 2019) (Cain).

Opinion

Mitchell Navarre was employed by Prosper to work as an operator in the Sweet Lake oil production field in Cameron Parish, Louisiana. He was responsible for traveling to the well-control units throughout Sweet Lake to read gauges and monitor them for leaks. He used Prosper’s motor vessel AMBER or two other vessels to reach the units that were only accessible by water. He claimed that was injured on the AMBER and brought suit (and a claim in Prosper’s limitation action) as a seaman under the Jones Act. Although all of his work as an operator was performed on platforms, Navarre asserted that he operated the AMBER or two other vessels to get to the platforms and performed maintenance and minor repairs on the vessels. Citing Mungia v. Chevron Co., U.S.A., 675 F.2d 630, 633 (5th Cir. 1982), for the proposition that summary judgment has been denied for oilfield workers on transportation vessels when their work becomes the piloting, navigation, loading, and unloading of these vessels, Judge Cain found a sufficient fact question whether Navarre sufficiently contributed to the transportation mission of the vessels or whether the vessels were aquatic taxis—an adjunct to a land-based drilling operation to which Navarre was assigned. Judge Cain did not cite the later decision of the Fifth Circuit in Munguia v. Chevron Co., U.S.A., 768 F.2d 649 (5th Cir. 1985), in which the Fifth Circuit affirmed the trial court’s granting judgment N.O.V. after a jury verdict in favor of Munguia. The Fifth Circuit held that Munguia (whose situation was like Navarre) was not a seaman as a matter of law, holding that he was not assigned to the vessels and that the vessels were instead assigned to him as a means of performing his work of servicing platforms.

Breach of captain and crew warranties in hull policy voids coverage for hurricane damage to yacht. Travelers Property Casualty Co. of America v. Ocean Reef Charters, LLC, No. 18-civ-81270, 2019 U.S. Dist. Lexis 146648 (S.D. Fla. Aug. 26, 2019) (Ruiz).

Opinion

Ocean Reef Charters insured its yacht M/Y MY LADY with Travelers for an agreed value of $2 million. After the yacht sank during Hurricane Irma, Travelers brought this action seeking a declaratory judgment that Travelers was not liable for the loss because of the insured’s breach of warranties in the policy that a professional captain would be employed full time and approved by Travelers and that the insured would employ one full time or part time professional crew for the yacht. Although the insured did hire a captain for the vessel, he was not in Florida when the hurricane struck and damaged the vessel. The first question presented was what law to apply to determine the effect of the insured’s alleged breach of warranty. Although Wilburn Boat applies state law to marine insurance policies when there is no judicially established federal admiralty rule on the issue, Judge Ruiz noted that the Eleventh Circuit has held that breach of an express warranty in a marine insurance contract releases the insurer from liability even if compliance with the warranty would not have avoided the loss. As this rule is an entrenched rule of admiralty law, Judge Ruiz held that the insured’s breach of the captain and crew warranties released Travelers from liability under its policy.

Vessel owner has to warn guest who swam to the boat that the water is too shallow to dive off the boat. In re Garibotto, No. 17-12129, 2019 U.S. Dist. Lexis 144317 (D. Mass. Aug. 26, 2019) (Sorokin).

Opinion

John Garibotto anchored his boat about 100 yards from Whitehorse Beach in Plymouth, Massachusetts. Two hours later, Derick Fleming walked, waded, and swam to the boat from the beach. An hour after boarding the boat, Fleming dived off the bow of the boat, hit his head on the ocean floor, and broke his neck. Garibotto filed a limitation action and a motion for summary judgment for Fleming’s claim in the limitation action, arguing that the duty of reasonable care to invitees does not include a duty to warn of risks that are open and obvious. However, Judge Sorokin denied the motion because several guests had successfully performed head-first dives before Garibotto. Thus, even though Fleming had reached the boat by walking, wading, and swimming, the risk of diving into the shallow water was not sufficiently open and obvious to grant summary judgment.

Claims against cruise line arising from injury during excursion in Mexico survived motion to dismiss. Doria v. Royal Caribbean Cruises, Ltd., No. 1:19-cv-20179, 2019 U.S. Dist. Lexis 147711 (S.D. Fla. Aug. 27, 2019) (Williams).

Opinion

Enid Doria, a passenger on Royal Caribbean’s HARMONY OF THE SEAS, sustained an injury during an ATV excursion in Cozumel, Mexico, operated by Renta Safari. He brought suit against Royal Caribbean based on multiple theories, and Royal Caribbean moved to dismiss his action for failure to state a claim. The causes of action against Royal Caribbean included misleading advertising in violation of Florida law, negligent misrepresentation, negligent selection and/or retention, negligent failure to warn, and apparent agency or agency by estoppel. Judge Williams denied the motion, holding that Doria’s pleading was sufficient to defeat a motion to dismiss. In doing so, however, Judge Williams reached the opposite conclusion from Judge Ungaro in Serra-Cruz v. Carnival Corp., No. 1:18-cv-23033 (S.D. Fla. Feb. 12, 2019), in which she held in similar circumstances that the heightened pleading standard of Rule 9(b) for claims of fraud/negligent misrepresentation was not satisfied with respect to the claim of negligent misrepresentation under Florida law.

Seaman’s failure to provide evidence of expenses for maintenance sinks claim for summary disposition of arbitrary and capricious claim. Norberg v. Cenac Marine Services, LLC, No. 17-4587, 2019 U.S. Dist. Lexis 146352 (E.D. La. Aug. 28, 2019) (Ashe).

Opinion

Derrick Norberg was injured while serving on Cenac’s vessel M/V WEEZIE 4 on August 22, 2015. Cenac continued his salary for more than a year while Norberg underwent two surgeries on his low back, finally ending his salary after one of Norberg’s surgeons declared that he had reached maximum cure in September 2016 (paying more than $200,000 in cure). Norberg then demanded that Cenac pay maintenance, arguing that he had not reached maximum cure as he still had to undergo hardware removal. Although Cenac contended that it did not owe maintenance after the maximum cure finding, it did request that Norberg present evidence of his expenses to determine the amount of maintenance. Although Norberg’s attorney responded with legal authority that Norberg should receive $40 per day in maintenance, he did not respond with Norberg’s expenses until he filed a motion in November 2018 seeking attorneys’ fees and punitive damages for arbitrary and capricious failure to pay maintenance. Cenac then agreed to pay maintenance under protest, without any offset for paying Norberg’s full salary for a year, continuing to assert that Norberg was not entitled to any maintenance as he reached maximum cure in 2016. In denying Norberg’s motion, Judge Ashe noted that Norberg’s burden to prove expenses is feather light, but he had not provided any proof of expenses until filing his motion seeking punitive damages and attorneys’ fees. In fact, he never responded to the requests for production of such evidence, only producing it in support of his motion. Thus, Judge Ashe stated that Cenac’s failure to pay could “hardly be said to be indisputably willful and callous.”

Cruise line not liable for injury on excursion. Albanese v. NCL (Bahamas) Ltd., No. 1:18-cv-20770, 2019 U.S. Dist. Lexis 146044 (S.D. Fla. Aug. 28, 2019) (King).

Opinion

Roseann Albanese, a passenger on the defendant’s vessel NORWEGIAN GEM VOYAGE, was injured on a day excursion to Great Stirrup Cay. She brought suit against the cruise line, which filed a motion for summary judgment arguing that it was not vicariously liable for the excursion operators and that it was not directly liable for the injury when it was not on notice of any condition on the excursion that created a risk to passengers. Judge King agreed, noting that the excursion ticket stated that the cruise line had no ownership or control of the services furnished in connection with the excursion. That ticket also incorporated the terms of the cruise line’s Guest Ticket Contract that provided that the tour operators were independent contractors and were not agents of the cruise line.

Passenger must allege facts to survive motion to dismiss. Rygula v. NCL Bahamas Ltd., No. 18-24535, 2019 U.S. Dist. Lexis 147586 (S.D. Fla. Aug. 28, 2019) (Scola).

Opinion

Leroy Rygula brought this action against NCL to recover for injuries he suffered on its vessel PEARL when he jumped into a pool that was mostly drained of water. He alleged claims of negligence and medical malpractice, but his amend complaint failed to allege the facts showing that the cruise line had either constructive or actual notice of the dangerous condition or that the medical staff provided inadequate medical attention or was not competent or qualified. Judge Scola also rejected Rygula’s argument that he was not required to show notice of a dangerous condition when the defendant created the condition, as the Eleventh Circuit continues to require proof of notice, regardless of whether the defendant created the condition (citing Pizzino v. NCL (Bahamas) Ltd., 709 Fed. App’x 563, 567 (11th Cir. 2017)).

From the state courts:

Release held unenforceable for injury on cruise excursion. Leach v. Cruise Ship Excursions, Inc., 2019 VI Super 110U, 2019 VI Lexis 86 (V.I. Super. Aug. 12, 2019) (Mackay).

Opinion

This case involves a suit by Katherine Leach who was injured on an excursion in the U.S. Virgin Islands during a Royal Caribbean cruise. After boarding Cruise Ship Excursions’ catamaran CHAMPAGNE CAT, Leach was handed a clipboard containing a release. One side of the clipboard contained the terms of a “Release of Liability, Assumption of Risk, Waiver of Claims & Indemnification Agreement” that expressly released Cruise Ship Excursions from liability, including negligence but not gross negligence. The other side of the clipboard (that was facing up when handed to Leach) contained signature lines and contained a statement at the top of the page in all capitals that the signatories understood that they “MAY BE WAIVING CERTAIN LEGAL RIGHTS, INCLUDING THE RIGHT TO SUE.” Leach signed the release without reading it. On the return trip from snorkeling, the catamaran hit an unusually large wave and Leach was injured. When the excursion asserted the release in defense of her suit alleging negligence of the excursion, Leach argued that the release could not be enforced against her. Judge Mackay began by determining what law to apply to the release and correctly determined that admiralty law applied to Leach’s claim. However, Judge Mackay’s analysis went downhill thereafter. First, she reviewed the maritime cases addressing the enforceability of exculpatory clauses and noted that the courts have disagreed on their enforceability. Then, rather than determining what rule should be applied as the maritime rule, she chose to apply the law of the Virgin Islands on the ground that there was no uniform admiralty rule. That was only her first mistake. Judge Mackay then held that the release was unenforceable because it was not conspicuous, sufficiently clear, and unambiguous. Even though Leach’s signature was under the warning in all capitals that she understood that she may be waiving all legal rights, including the right to sue, Judge Mackay held that the release was not conspicuous because it was possible that a person signing the release may not have been alerted to the fact that the release appeared on the other side of the document she signed. Leach might have thought that a document warning in capital letters about her waiver of legal rights and the right to sue was merely a sign-in sheet. Additionally, even though the reverse side expressly stated that she was releasing her right to sue for negligence, Judge Mackay stated that the release language was not unequivocal because the language above her signature did not state unequivocally that she was waiving her right to sue. Judge Mackay then agreed with the excursion that Leach had not pleaded a gross negligence claim. The effect of this case is that Judge Mackay has added to the lack of uniformity in the interpretation of maritime contracts. If you are in federal court in the U.S. Virgin Islands, the excursion release is enforceable as written (see the Carpe Diem case in this Update). If you are in the Superior Court in the U.S. Virgin Islands, unequivocal provisions of a release may not be enforceable.

NY state court enforces forum selection clause in passenger ticket. Liang v. NCL (Bahamas) Ltd., No. 71559/18, 2019 N.Y Misc. Lexis 4545 (N.Y. Sup. Ct. August 20, 2019) (Caloras).

Opinion

Jieming Liang brought this suit in state court in Queens County, New York against Norwegian Cruise Line as the owner of the NORWEGIAN BREAKAWAY on which she fell and injured herself in her stateroom. NCL moved to dismiss the action based on a forum selection clause in her ticket, and the court dismissed the action. Judge Caloras rejected the passenger’s argument that the forum selection clause was unenforceable because the ticket was not printed until two days after the trip had been booked and paid for.

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

Kenneth G. Engerrand
President
Brown Sims, P.C.

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Quote:

The life of the law has not been logic: it has been experience. The felt necessities of the time, the prevalent moral and political theories, intuitions of public policy, avowed or unconscious, even the prejudices which judges share with their fellow-men, have had a good deal more to do than the syllogism in determining the rules by which men should be governed. The law embodies the story of a nation’s development through many centuries, and it cannot be dealt with as if it contained only the axioms and corollaries of a book of mathematics. In order to know what it is, we must know what it has been, and what it tends to become. We must alternately consult history and existing theories of legislation. But the most difficult labor will be to understand the combination of the two into new products at every stage. The substance of the law at any given time pretty nearly corresponds, so far as it goes, with what is then understood to be convenient; but its form and machinery, and the degree to which it is able to work out desired results, depend very much upon its past.

Oliver Wendell Holmes, Jr., The Common Law, 3-4 (John Harvard Library ed., Belknap Press of Harvard Univ. Press 2009) (1881), quoted in Delaware River & Bay Authority v. Kopacz 584 F.3d 622, 636 (3d Cir. 2009) (Alarcon, J., dissenting).

Please note that these opinions and statements are my own analysis of the cases that are discussed. They do not represent the position of Brown Sims, P.C. or any organization to which I belong or that I represent. Under no circumstances should these opinions and statements be considered legal advice. If you want legal advice, please consult an attorney.

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