September 2020 Longshore/Maritime Update (No. 256)
Notes from your Updater:
After Judge Ozerden entered judgment in the long-running dispute between Ingalls Shipbuilding and the Venezuelan Ministry of Defense over the $200 million contract for repair of two military frigates (discussed in the June and July 2020 Updates), awarding Northrop Grumman (f/k/a Ingalls Shipbuilding) more than $137 million in accordance with an arbitration award in its favor, Northrop Grumman sought an award of $187,460.20 in attorney’s fees on the ground that the Ministry of Defense unjustifiably refused to abide by the arbitral award. Applying the American Rule, however, Judge Ozerden held that attorney’s fees were not warranted and declined Northrop Grumman’s request. Northrop Grumman Ship Systems, Inc. v. Ministry of Defense of the Republic of Venezuela, No. 1:02-cv-785 (S.D. Miss. Aug. 4, 2020) (Ozerden).
On August 18, 2020, Director Antonio A. Rios announced that the Office of Workers’ Compensation Programs is merging the Division of Longshore and Harbor Workers’ Compensation with the Division of Federal Employees’ Compensation. Director Rios will be the head of the new Division of Federal Employees’, Longshore and Harbor Workers’ Compensation. An organizational chart with the leadership of the Division can be found at https://www.dol.gov/owcp/dfec/leadership.htm.
In our June 2020 Update we discussed the opinion of Magistrate Judge Freeman, recommending that attorney’s fees not be awarded against bunker supplier Big Port Service in its dispute with China Shipping, finding that it takes more than presentation of unsupported arguments to demonstrate an intent to harass or qualify as bad faith. China Shipping Container Lines Co. v. Big Port Service DMCC, No. 15-cv-2006 (S.D.N.Y. May 15, 2020). On August 19, 2020, Judge Torres overruled China Shipping’s objections and adopted Magistrate Judge Freeman’s recommendations.
On the LHWCA Front . . .
From the federal appellate courts:
LHWCA, not state workers’ compensation act, applied to worker’s death on a platform in state waters where there was a nexus to oil and gas activity on the outer Continental Shelf from a third party but not from the worker’s employer; Mays v. Chevron Pipe Line Co., No. 19-30535 (5th Cir. Aug. 3, 2020) (Duncan).
James Mays was employed by Furmanite as a valve technician, servicing a valve on Chevron’s natural gas platform located in Louisiana state waters. The platform is part of the Henry System that includes platforms located on the outer Continental Shelf. The platforms are connected by pipelines, and Chevron had to shut off gas flow from two OCS platforms to the valve on which Mays was working. Mays was killed in an explosion on the platform in state waters caused by gas flowing from the platforms on the OCS. Mays’ widow brought this wrongful death action against Chevron in federal court in Louisiana, and Chevron asserted that the Louisiana workers’ compensation statute applied to Mays’ death and that Chevron was entitled to assert the “statutory employer” defense under the Louisiana statute. Ms. Mays argued that the state statute did not apply because the Outer Continental Shelf Lands Act extended the LHWCA as the applicable workers’ compensation act, even though Mays’ death occurred on a platform in state waters. The OCSLA extension of the LHWCA applies to the death “of an employee resulting from any injury occurring as the result of operations, conduct on the outer Continental Shelf for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf.” Chevron argued that Mays’ death had no nexus to OCS operations of Furmanite on the OCS. The district court did not agree with Chevron and submitted the question to the jury whether there was a substantial nexus between Mays’ death and Chevron’s OCS operations. The jury found that there was a substantial nexus and awarded damages based on a finding of 70% fault of Chevron. In its argument to the Fifth Circuit, Chevron focused on the language of Justice Thomas’ opinion in Pacific Operators Offshore, LLP v. Valladolid, which held that the worker’s injury did not have to occur on the situs of the OCS as long as there was a substantial nexus between the injury and extractive operations on the OCS. Justice Thomas stated that there must be “a significant causal link between the injury that [the employee] suffered and his employer’s on-OCS operations” (emphasis added by the Fifth Circuit). Writing for the Fifth Circuit, Judge Duncan stated that Chevron’s reliance on Valladolid was “misplaced.” Judge Duncan focused on the specific language of the OCSLA that required an injury to an employee that resulted from operations on the OCS. The reference to OCS operations omitted any reference to the employer, which Judge Duncan presumed must be “purposeful.” As the court considered the requirements of being an employee and of a nexus to OCS operations to be separate, a nexus to Chevron’s OCS operations was sufficient. Chevron did, however, have the right to argue that it was Mays’ employer and subject to immunity under the LHWCA. Chevron also attacked the jury’s fact finding that there was substantial nexus between Mays’ death and Chevron’s OCS activities. As the procedural posture in this case was the review of a jury verdict, which is an “especially deferential” standard, Judge Duncan cited the evidence from Ms. Mays’ expert that the gas that escaped from the valve was extracted from the OCS and was a direct factor in Mays’ death and held that the jury’s decision should not be disturbed. Finally, the Fifth Circuit declined to overturn the jury’s award of $2 million for Mrs. Mays’ loss of affection, noting that she and the decedent had been together since she was 17; they had been married nearly 40 years; and his mangled and gas-tainted body could not be buried in the wooden casket he had chosen. [Eric Richardson, Senior Account Manager, Carrier Practice, with Gallagher Bassett in San Diego, points out that the substantial nexus to OCS extractive activity has been briefed to the Fifth Circuit in Owensby & Kritikos, LLP v. Director, OWCP (Boudreaux), No. 19-60610, in connection with an injury to a worker in a traffic accident in south Louisiana on his way to the dock to meet a boat that was going to take him to a platform on the outer Continental Shelf].
Separation of powers challenge to administrative law judges must be asserted in the administrative process and not in a federal suit; Cochran v. Securities and Exchange Commission; No. 19-10396 (5th Cir. Aug. 11, 2020) (Costa).
After the Supreme Court’s Lucia decision in 2018 held that administrative law judges for the Securities and Exchange Commission were not properly appointed in accordance with the Appointments Clause of the Constitution, there have been challenges to the authority of administrative law judges of different agencies (Updates of October 2019, January 2020 with respect to administrative law judges for the Department of Labor). Michelle Cochran, who was the subject of an SEC enforcement action against her, brought suit in federal court seeking to enjoin the SEC’s enforcement action, asserting that there is a problem with how administrative law judges can be removed after appointment. The district court dismissed the action for lack of subject matter jurisdiction, and the Fifth Circuit agreed. Writing for the Fifth Circuit, Judge Costa reasoned that Congress intended to funnel this type of challenge through the statutory review scheme before it is addressed by the court of appeals. Thus, a challenge to the tenure protections of administrative law judges is subject to judicial review, but that review occurs after the issue has been raised and addressed during the administrative adjudication process.
Not opposing the defendant’s motion for summary judgment in claimant’s third-party action in exchange for $8,000 barred claimant’s LHWCA claim as an unauthorized third-party settlement; Simon v. Director, OWCP, No. 19-60215 (5th Cir. Aug. 20, 2020) (per curiam).
Clarence J. Simon was injured working for Longnecker Properties as a rigger, and he brought suit in federal court against Longnecker under the Jones Act. He amended his complaint six times to include additional defendants, and his action proceeded in federal court against those defendants after the judge dismissed Simon’s Jones Act claims (although Longnecker remained in the case). Simon also pursued an LHWCA claim against Longnecker. Defendants United Vision Logistics and Tri-Drill filed motions for summary judgment in the lawsuit, and Simon and United Vision filed a Motion to Consent Judgment Granting Motion for Summary Judgment that was granted by the court. Simon did not oppose Tri-Drill’s motion, stating that Tri-Drill and Simon had “compromised their differences.” Longnecker inquired about the agreements among the parties and learned that Simon had agreed to the consent judgment dismissing United Vision for $2,500, and that Simon had agreed not to oppose Tri-Drill’s motion for summary judgment in exchange for $8,000. Longnecker then opposed the dismissal of Tri-Drill, asserting that it would be inappropriate to enter a judgment in favor of Tri-Drill rather than dismissing the case as a settlement. Tri-Drill argued in response that Longnecker lacked standing to oppose the dismissal, but the district court agreed with Longnecker and granted its motion to confirm the settlement and dismiss Simon’s claims against Tri-Drill, dismissing Tri-Drill’s motion for summary judgment and Simon’s claims against Tri-Drill based on the settlement. Simon appealed the district court’s decision to the Fifth Circuit, which affirmed the decision of the district court. Longnecker then moved to dismiss Simon’s LHWCA claim, and Administrative Law Judge Kennington held that Simon was estopped from asserting that he had not entered into a settlement with Tri-Drill based on collateral estoppel from the finding of the district judge that had been affirmed by the Fifth Circuit (Judge Kennington did not find that Simon’s agreement to consent to United Vision’s motion for summary judgment in exchange for $2,500 was a settlement as the money was for costs and not as a settlement of his claim). Concluding that Simon’s LHWCA claim was barred by the unauthorized settlement with Tri-Drill, Judge Kennington granted Longnecker’s motion to dismiss the LHWCA claim. Simon appealed to the Benefits Review Board, challenging Judge Kennington’s application of collateral estoppel. Determining that the issue before the district court was the same issue raised in the administrative proceeding, the existence of a settlement; that the existence of a settlement was fully litigated in the district court; and that the settlement decision was necessary to the prior judgment; the Board affirmed Judge Kennington’s dismissal of the LHWCA claim. Finding no errors in law or fact, the Fifth Circuit agreed with the use of collateral estoppel and affirmed the dismissal of Simon’s LHWCA claim.
Ninth Circuit held “that credible complaints of severe, persistent, and prolonged pain can establish a prima facie case of disability, even if the claimant can literally perform his or her past work;” Jordan v. SSA Terminals, No. 19-70521 (9th Cir. Aug. 28, 2020) (Block).
Anthony Jordan was injured on September 17, 2014, when the truck he was driving for SSA Terminals was lifted and dropped by a crane. 85% of Jordan’s work for SSA involved driving a heavy truck. Jordan underwent spinal fusion surgery on March 28, 2018, but SSA’s LHWCA carrier disputed his disability for the period between April 2016 and his surgery in March 2018 based on surveillance showing Jordan lifting and carrying objects, engaging in physical activities such as bending and doing pushups, and attending sporting events where he appeared to sit and stand for long periods without difficulty. During that period, Jordan did not perform longshore work, but he did continue to work in his landscaping business. Administrative Law Judge Larsen was presented with testimony from Jordan and several physicians on the issue of whether Jordan was disabled between April 2016 and March 2018. Jordan testified that there was nothing he could not do, but it was painful or he could not do it for the amount of time that would be considered a job. He also continued some of the physical tasks of his landscaping business because he had no choice. Dr. Reynolds, who did not watch the surveillance videos, testified that Jordan was totally disabled from longshore work principally because he could not work an eight-hour day in a regular fashion. An osteopath, a neurologist, and an orthopedist, all of whom viewed the videos, testified that Jordan’s complaints were inconsistent with the videos and that he could return to work as a longshoreman without restrictions. Judge Larsen described Jordan’s testimony about his abilities to be “at best, ambiguous,” and his complaints of pain as “not wildly improbable.” He noted that the differences in Jordan’s self-described limitations and the activities depicted in the videos was “striking,” and the impact of the videos on the medical opinions was “remarkable.” Crediting the opinions of the physicians who viewed the videos, Judge Larsen ruled that Jordan was able to return to work without restrictions and therefore was not disabled. The Benefits Review Board affirmed Judge Larsen’s determination that Jordan did not establish that he was disabled for the period, and the Ninth Circuit was presented with the issue of whether Jordan’s complaints of pain described a covered disability. Writing for the Ninth Circuit, District Judge Block of the Eastern District of New York held “that credible complaints of severe, persistent, and prolonged pain can establish a prima facie case of disability, even if the claimant can literally perform his or her past work.” Noting the considerable range between the “poles” of pain (between “discomfort and torture”), Judge Block stated that “the level of pain must be sufficiently severe, persistent, and prolonged to significantly interfere with the claimant’s ability to do his or her past work.” He added that pain could be so severe that an employee literally cannot do the job or cannot perform the required work over a full workday. He also stated that employees do not have to perform work that would exacerbate the injury to a degree that significantly impedes the claimant’s ability to perform his or her past work. As Judge Larsen did not apply the new standard for the worker’s ability to perform his past work, the Ninth Circuit reversed the affirmance of his decision and ordered the Benefits Review Board to remand the case to Judge Larsen to decide if Jordan’s complaints of pain were credible and whether the pain affected his ability to do his past work as described by the Ninth Circuit. Judge Block added that if the administrative law judge finds that the complaints are not credible, he need not take them into account. [Thanks to Professor Michael Sturley of the University of Texas Law School for bringing this case to our attention].
From the federal district courts:
Non-intentional wrongful death claims by beneficiaries of shipyard employee who died from asbestos-related cancer were barred by the LHWCA, including claims of second-hand exposure; sufficient evidence was presented to defeat the shipyard’s motion for summary judgment on the beneficiaries’ claims for punitive damages for an intentional tort under Louisiana law; Dempster v. Lamorak Insurance Co., No. 20-95, 2020 U.S. Dist. LEXIS 154812, 2020 U.S. Dist. LEXIS 154820 (E.D. La. Aug. 26, 2020) (Brown).
Callen Dempster was employed by Avondale Shipyard from 1962 to 1994, and his beneficiaries contended that his exposure to asbestos and asbestos-containing products was the cause of his death from lung cancer. His beneficiaries brought this suit against Avondale and various product suppliers, and the case was removed to federal court based on the Federal Officer Removal Statute. Chief Judge Brown previously ruled that there was sufficient evidence of an intentional tort to defeat Avondale’s motion for summary judgment that the LHWCA and state workers’ compensation act are the exclusive remedy for Callen’s death (May 2020 Update). In the first of the opinions issued on August 26, Chief Judge Brown held that the LHWCA was the exclusive remedy for all non-intentional tort wrongful death claims against Avondale. In doing so, she held that even though Callen’s exposure occurred during a period when the Louisiana workers’ compensation act provided concurrent jurisdiction with the LHWCA (prior to the amendment of the Louisiana act in 1989), Callen’s death occurred in 2018, and Louisiana law provides that wrongful death claims are controlled by the law applicable at the time of death. Therefore, the LHWCA, whose situs and status requirements were satisfied, afforded the exclusive remedy for all non-intentional injury claims. Callen’s beneficiaries argued that the LHWCA did not bar claims involving Callen’s exposure to asbestos while traveling home from work and from scrap materials and cloth that Avondale allowed workers to take home (citing the coming-and-going exception). Chief Judge Brown disagreed with application of the coming-and-going exception because the beneficiaries alleged both occupational exposure to asbestos at Avondale and second-hand exposure to asbestos carried home from Avondale. Chief Judge Brown also held that there was no dual-capacity liability of Avondale, as the beneficiaries did not present any evidence of negligence of Avondale in the capacity as owner of a vessel. In the second opinion, Chief Judge Brown reiterated the rulings she made with respect to the claims of an intentional injury that are summarized in the May 2020 Update. She held that there was no basis to reconsider the denial of Avondale’s motion by the state court prior to removal, and, even if she did reconsider the denial, she would deny the motion on the merits as there were genuine issues of material fact whether Avondale knew that it was substantially certain that Callen would contract lung cancer.
From the administrative agencies:
Provision in terminal’s employee handbook that prohibited its dock workers from participating in illegal strikes and taking moonlighting jobs did not violate federal labor law; Nicholson Terminal & Dock Co., No. 07-CA-187907 (N.L.R.B. July 30, 2020).
Although we do not ordinarily review decisions of administrative law judges or their oversight/review board, we consider including decisions that instruct our readers in their daily practice to be an exception to our general rule. Nicholson Terminal & Dock Co. handles maritime cargo at two facilities in Michigan with employees of the International Association of Machinists Local Lodge 698. The United States brought charges against Nicholson for violating the National Labor Relations Act by maintaining rules in its Personnel Handbook that barred calling or participating in illegal slowdowns, strikes, or walkouts, and that prohibited employees from holding another job that is inconsistent with Nicholson’s business or that could require devoting time and effort that would adversely affect the employee’s work with Nicholson (and requiring that the employee get approval before obtaining “any other employment”). An administrative law judge found that the word “illegal” was ambiguous and therefore restricted protected strike activity. She also found that the moonlighting rule could have an impact on employees’ work for the union and therefore violated the NLRA. The National Labor Relations Board disagreed, concluding that the term “illegal” did not reasonably prohibit activity protected by the statute. The Board also held that the moonlighting rule applied to outside paid employment and imposed no restrictions on becoming a member of the union or volunteering to work on its behalf. Moreover, if the work for the union were compensated, it would not violate the Handbook, as that work would not adversely affect employees’ work for Nicholson.
And on the Maritime Front . . .
From the federal appellate courts:
Power Authority’s submarine cable was an OPA facility, and the Authority’s claim against the vessel that damaged the cable fell within OPA and was not subject to limitation of shipowner’s liability; Power Authority of the State of New York v. M/V ELLEN S. BOUCHARD, No. 19-1140 (2d Cir. July 30, 2020) (Nardini).
The Power Authority of the State of New York owns and operates a power transmission cable system that spans Long Island Sound. The high-voltage cables contain a central duct filled with dielectric fluid (a petroleum-based oil) that acts as a coolant and lubricant to the electrical components of the cables. At each end of the cable there is a pressurization plant that keeps a constant pressure of fluid in the cables. On January 6, 2014, the Barge B. No. 280 was being towed through Long Island Sound and dropped its anchor. One of the cables then experienced a sudden drop in pressure and a fluid leak. In order to prevent water from entering the cable and destroying it, fluid was pumped into the cable to maintain pressure, resulting in a discharge of thousands of gallons of fluid before the cable was capped. The Authority paid $9,848,087.12 for the cost of remediation and brought suit against the barge and tug and their owners under the Oil Pollution Act of 1990 and the New York Oil Spill Law. The vessel interests simultaneously filed actions seeking exoneration/limitation of liability. The issue presented on appeal was the application of OPA and the Shipowner’s Limitation of Liability Act. OPA establishes a framework of liability and compensation with respect to discharges of oil into or upon navigable waters from vessels and onshore and offshore facilities. The district court held that the cable was not an OPA facility, and OPA therefore did not preclude the limitation actions. He ordered the Authority’s claims transferred to the limitation proceedings. Assuming that the application of OPA was limited to the cable and not to the pressurization plants, the Second Circuit disagreed with the district judge and held that the cables satisfied the definition of a facility in OPA (a structure or equipment that “is used for one or more of the following purposes: exploring for, drilling for, producing, storing, handling, transferring, processing, or transporting oil”). Judge Nardini reasoned that the statute only required that the cables be employed to transfer the dielectric fluid, and the cables did convey the fluid along the length of the cables between the pressurization plants. Judge Nardini rejected the vessel interests’ argument that the primary purpose of the cables is power transmission and that transmission of the fluid was an incidental use, reasoning that the definition only requires that the facility be used for one or more of the enumerated purposes. Consequently, Judge Nardini held that the decision to transfer the state claims to the limitation action (in the absence of an OPA claim) was erroneous.
National Marine Fisheries Service was not given authority to regulate aquaculture in the Gulf of Mexico; Gulf Fishermens Association v. National Marine Fisheries Service, No. 19-30006 (5th Cir. Aug. 3, 2020) (Duncan).
The Magnuson-Stevens Act creates eight Regional Fishery Management Councils tasked with the conservation and management of fishery resources off the coast of the United States. After the Gulf of Mexico Fishery Management Council established a plan to regulate and permit environmentally sound and economically sustainable aquaculture in the Gulf of Mexico, a coalition of fishing and conservation organizations challenged the rule that was enacted to implement the plan, asserting that the rule was outside the Council’s authority to regulate fisheries under the statute. Reasoning that an aquaculture facility is encompassed within the fisheries regulated by the statute, Judge Duncan, writing for a majority of the Fifth Circuit panel, held that the statute did not authorize the Council to regulate aquaculture. Judge Higginson dissented, stating that the grant of authority to the Council did not distinguish between methods of fishing, and mesh cages for aquaculture should not be distinguished from the pots, cages, lines, traps, nets, and other enclosures that have been used from time immemorial.
Eleventh Circuit reaffirmed (twice) that passengers cannot avoid the federal forum-selection clause in their ticket by pleading only a common-law remedy and not an admiralty claim in their federal suit; Siliakus v. Carnival Corp., No. 19-10755 (11th Cir. Aug. 4, 2020) (per curiam); Appleby v. NCL Bahamas, Ltd., No. 20-10332, 2020 U.S. App. LEXIS 25805 (11th Cir. Aug. 14, 2020) (per curiam).
In our August 2020 Update we discussed the decision of the Eleventh Circuit in DeRoy v. Carnival Corp., in which the Eleventh Circuit ruled that passengers could not escape the forum-selection clause in their ticket (selecting the federal court in Miami or, for those cases where the federal court lacks subject matter jurisdiction, the state court in Miami) by bringing a common-law claim under Florida law in the federal court and not asserting admiralty jurisdiction. In DeRoy, Judge Ungaro agreed with the passenger and held that the federal court lacked jurisdiction, but the Eleventh Circuit reversed her dismissal and held that the court had admiralty jurisdiction over DeRoy’s fall on the cruise ship even though DeRoy had not alleged that admiralty jurisdiction existed. Similarly, Ronald Siliakus was injured in a fall on a Carnival cruise ship and brought suits in state and federal court in Miami, arguing that the federal court lacked admiralty jurisdiction. As in DeRoy, Judge Ungaro dismissed the federal complaint brought by Siliakus, and Judge Gayles dismissed the complaint brought by Appleby. Bound by its decision in DeRoy, the Eleventh Circuit reversed the dismissals and held that the district courts had admiralty jurisdiction regardless of how Siliakus and Appleby pleaded their complaints.
Passengers’ class action suit against cruise line for violations of state law, claiming that the cruise line charged kickbacks and inflated prices for travel insurance, was subject to individual arbitration and could not be brought as a class action; Phillips v. NCL Corp., No. 19-12463 (11th Cir. Aug. 10, 2020) (per curiam).
Several passengers who purchased a Travel Protection Plan (bundling a travel insurance policy, cancellation fee waiver program, and worldwide emergency assistance) from Norwegian Cruise Lines as part of a cruise package brought a class action against the cruise line under the Florida Deceptive and Unfair Trade Practices Act and for unjust enrichment, alleging that the cruise line failed to disclose kickbacks from the sale of the travel insurance policies and by charging an inflated price for the policies. During the booking process for a cruise, passengers were required to elect or to waive the Travel Plan. If they agreed to the Travel Plan, they were charged a single price for the cruise ticket and the Travel Plan. The Guest Ticket Contract contained a mandatory arbitration provision for all claims other than personal injury claims and a provision for waiver of class actions. The Guest Ticket Contract did not refer to the Travel Plan or the travel insurance policy. Passengers who purchased the Travel Plan received the travel insurance policy contract, and it contained a permissive arbitration clause for claims relating to the insurance policy. The cruise line moved to compel arbitration and strike the class allegations pursuant to the terms of the Guest Ticket Contract, arguing that the Travel Plan could only be purchased during the cruise booking and was intertwined with the transaction from which the Guest Ticket Contract originated. Judge Scola granted the motion to compel arbitration and dismissed the suit, reasoning that the claims fell within the Guest Ticket Contract arbitration provision because the Travel Program was significantly related to that Contract and the passengers’ cruises. He also struck the class, applying the waiver from the Guest Ticket Contract for the same reason. Agreeing with Judge Scola, the Eleventh Circuit noted that the Guest Ticket Contract required arbitration for all disputes relating to or connected with that Contract or the passenger’s cruise. Reasoning that the deceptive acts and marketing that were alleged to have occurred during the booking process related to the Guest Ticket Contracts or the cruises because they were not an independent transaction and were wrapped up in the same transaction that resulted in the Guest Ticket Contract, the Eleventh Circuit held that the arbitration provisions and class action waivers in the Guest Ticket Contract were applicable to the suit.
Fifth Circuit judges indicated that the court’s precedents on seaman status are inconsistent with the teaching of the Supreme Court and that en banc consideration should be given “to bring our jurisprudence in line with Supreme Court caselaw;” Sanchez v. Smart Fabricators of Texas, L.L.C., No. 19-20506 (5th Cir. Aug. 14, 2020) (Davis).
Gilbert Sanchez’ suit makes its fourth appearance in the Update (July 2019, April and May 2020). Sanchez was employed by Smart Fabricators as a welder for 67 days. He spent 61 of those 67 days on two Enterprise jack-up vessels. He worked 48 days (72% of his employment) on the ENTERPRISE WFD 350, a jack-up rig adjacent to an inland pier, and 13 days (19% of his employment) on the ENTERPRISE 263, a jack-up rig on the outer Continental Shelf. Sanchez was injured on the ENTERPRISE 263, but his work on that rig was less than 30% of his employment. More than 70% of his employment was spent on a rig that was jacked up above the water, “a step away from and adjacent to the shoreside pier.” Sanchez brought this suit against Smart Fabricators in state court under the Jones Act, and Smart Fabricators removed the case, arguing that the Jones Act was improperly pleaded and did not prevent removal. Judge Rosenthal agreed that the Jones Act case was improperly pleaded, denied Sanchez’s motion to remand, and granted summary judgment that Sanchez was not a seaman. Writing for the Fifth Circuit, Judge Davis agreed with Judge Rosenthal that Sanchez satisfied the duration element for seaman status as he spent 72% of his time on the ENTERPRISE WFD 350 and 19% of his time on the ENTERPRISE 263 (both of which are jack-up vessels). The Fifth Circuit disagreed, however, with Judge Rosenthal’s conclusion that the nature element for seaman status was not satisfied because Sanchez was a shoreside worker whose work on the ENTERPRISE WFD 350, jacked up in the harbor, did not expose Sanchez to the perils of the sea. When Justice Kennedy defined the requirement for the nature element of the seaman status test in the Supreme Court’s Papai case, he stated that the inquiry “must concentrate on whether the employee’s duties take him to sea.” Nonetheless, the Fifth Circuit’s decisions in Endeavor Marine and Naquin v. Elevating Boats had not required that the worker’s duties actually take him to sea and instead held that the nature element could be satisfied by a worker’s exposure to the perils of the sea “on the brown waters of the Mississippi River.” Bound by the court’s decisions in those cases, Judge Davis held that Sanchez’s work on the jacked up rig in the harbor (going home every evening after work) satisfied the nature element of seaman status. Therefore, as Sanchez presented a fact question of Jones Act status, Judge Davis ordered that Sanchez’s suit could not be removed and had to be remanded to state court. Judge Davis and the other two judges on the panel (Judges Jones and Willett) wrote a concurring opinion in which they expressed that they “were persuaded that our case law is inconsistent with the teaching of the Supreme Court.” Citing Kenneth G. Engerrand, Escape from the Labyrinth: Call for the Admiralty Judges of the Supreme Court to Reconsider Seaman Status, Judge Davis stated that the Endeavor Marine and Naquin cases did not properly follow Papai, as the duties of those workers on dockside vessels and in a canal adjacent to a shipyard did not take the workers to sea or expose them to its perils. Similarly, as Sanchez’s work on the ENTERPRISE WFD 350 was performed while the rig was jacked up adjacent to the dock and he did not sail with the vessel, he was a land-based worker whose duties did not expose him to the perils of the sea. The three judges suggested that the court should take the case en banc “and bring our jurisprudence in line with Supreme Court caselaw.”
Disclosing witness and photographs two weeks before second trial supported finding of bad faith and permissive adverse inference instruction; passenger was entitled to recover amount billed (list price) for medical care and was not limited to amount actually accepted as payment by the medical providers; Higgs v. Costa Crociere S.P.A. Co., No. 19-10371, 2020 U.S. App. LEXIS 25793 (11th Cir. Aug. 14, 2020) (Marcus).
Joyce Higgs brought this suit against Costa Crociere to recover for the injuries she suffered in a fall when she tripped over a bucket on the COSTA LUMINOSA. Higgs sought production of photographs taken by a security officer, but the cruise line did not produce the photographs or identify the officer until two weeks before the second trial of the case. District Judge Cohn found that the cruise line had engaged in a bad-faith pattern of discovery violations to conceal evidence, and the judge instructed the jury that it could infer that the testimony of the witness and the timely production of the photographs would have been unfavorable to the cruise line. Concluding that the instruction was a restrained option in the arsenal of sanctions available to the district judge, the Eleventh Circuit held that Judge Cohn did not abuse his discretion in giving the instruction. The Eleventh Circuit then addressed the amount that can be recovered under the general maritime law for medical expenses–the list price charged by the medical providers or the amount the medical providers actually accepted (usually from an insurer) in payment for their services [the Fifth Circuit has held that the plaintiff can recover the amount accepted by the providers in DePerrodil v. Bozovic Marine and Manderson v. Chet Morrison Contractors]. Higgs’ health care providers had charged approximately $61,000 for her medical treatment, but they had accepted $16,000 from her insurer in satisfaction of those charges. Judge Cohn instructed the jury that it should consider the reasonable value for the medical care and should not reduce the amount awarded on account of payments made by health insurance or other sources of payment. Following the instructions, the jury awarded the full amount that was billed for past medical expenses, but Judge Cohn reduced that amount to the amount actually accepted by the medical providers. Writing for the Eleventh Circuit, Judge Marcus reversed, holding that the appropriate measure of damages for past medical expenses in a maritime tort case is the amount determined by the jury to be reasonable. The jury’s decision can be based on the amount billed, the amount paid, expert testimony, and other relevant evidence submitted by the parties. In this case, the cruise line did not introduce evidence as to the reasonableness of the charges other than the amount that was accepted by the providers. Thus, the Eleventh Circuit affirmed the verdict, finding that the verdict was supported by the attestations accompanying the bills that the amounts represented the necessary and reasonable expenses for the services.
Eleventh Circuit reaffirmed that a motion to dismiss was not the proper method to assert the one-year time limitation to file suit in the passenger’s ticket; Roberts v. Carnival Corp., No. 19-14993 (11th Cir. August 24, 2020) (per curiam).
On August 24, 2020, the Eleventh Circuit vacated the opinion it issued in this case on July 28, 2020 (August 2020 Update), holding that a motion to dismiss was not the proper method for the cruise line to assert the one-year time limit in the passenger’s ticket. The appellate court substituted an opinion that reached the same result but which added language rejecting the cruise line’s argument that the contractual limitation period was a condition precedent to suit. Equating contractual and statutory limitations, the court held that the limitation period was not central to the passenger’s claims, and, consequently, the district court erred when it considered the ticket in the motion to dismiss as it was outside of the complaint. The district court should have converted the motion to dismiss to a motion for summary judgment.
From the federal district courts:
Federal court declined to reconsider its decision to allow salvor to remove the Marconi wireless device from the wreck of the TITANIC; R.M.S. Titanic, Inc. v. Wrecked and Abandoned Vessel, No. 2:93-cv-902, 2020 U.S. Dist. LEXIS 135812 (E.D. Va. July 30, 2020) (Smith).
Salvor R.M.S. Titanic sought leave from the court that is exercising jurisdiction over the salvage of the TITANIC to minimally cut into the wreck to access the Marconi Suite and to detach the Marconi wireless device and associated artifacts. The court granted the motion and allowed the expedition to occur, and the United States sought leave to intervene to request that the court reconsider the order so as to consider whether to order that the salvor be enjoined from conducting any operations that would alter or disturb the wreck site until it had obtained approval from the Secretary of Commerce in accordance with the requirement in the Department of Commerce Appropriations Act of 2017 (based on the International Agreement between the United States, Canada, the United Kingdom, and France setting standards for expeditions to the Titanic wreck site). Holding that the statute did not bar the court from deciding the limited issue whether to modify its previous order to allow the limited expedition, and noting that the United States had already filed a notice of appeal, Judge Smith held the motion for leave to intervene in abeyance and denied the motion to reconsider. Judge Smith did extend the time for the expedition at the salvor’s request based on difficulties from the COVID-19 pandemic.
Parent company of a party to a maritime contract did not have standing to bring a maritime suit for breach of that contract; Crowley Maritime Corp. v. Robertson Forwarding Co., No. 20-20151, 2020 U.S. Dist. LEXIS 135131 (S.D. Fla. July 30, 2020) (Scola).
Crowley Puerto Rico Services entered into a contract to transport cargo on ocean vessels and trucks, and its parent company, Crowley Maritime Corp. brought this action for breach of the contract. Holding that Crowley Maritime Corp. lacked standing, in the capacity as the parent of a subsidiary company that entered into the contract, to bring the action for breach of contract, Judge Scola held that the court lacked admiralty jurisdiction (there was no maritime contract to which Crowley Maritime was a party and on which it could base this suit). Rule 17 (c) did not save the case from dismissal as it allows time for the real party in interest to be substituted into the action. As more than five months had elapsed since the court ordered the parties to show cause regarding the court’s jurisdiction and no effort had been made to substitute the proper party, Judge Scola ordered the complaint to be dismissed without leave to amend.
Performing several dredging projects in Louisiana was insufficient to establish general jurisdiction over a dredging company for an accident in Florida; Gamboa v. Great Lakes Dredge & Dock Co., No. 20-18, 2020 U.S. Dist. LEXIS 135002 (M.D. La. July 30, 2020) (deGravelles).
Jose Gamboa was injured while working as a deckhand on a barge owned and operated by Great Lakes while it was engaged in dredging operations near Jacksonville, Florida. Gamboa, a resident of Louisiana, brought this action against Great Lakes in federal court in Louisiana, and Great Lakes moved to dismiss the action for lack of personal jurisdiction. There was no question that the Louisiana court lacked specific jurisdiction over the Florida accident, but Gamboa argued that there was general jurisdiction over Great Lakes in Louisiana because of its continuous and systematic contact in Louisiana. Judge deGravelles first noted that the standard cited by Gamboa was not the proper test for general jurisdiction and the defendant’s contacts had to be so continuous and systematic as to render the defendant essentially at home in the forum state. Gamboa’s reference to several dredging projects conducted by Great Lakes in Louisiana in the past, its office and agent for service of process in Louisiana, and its upcoming project in Louisiana were insufficient where the defendant’s state of incorporation and principal place of business were outside the state. Judge deGravelles dismissed the suit without prejudice.
Court reduced security for vessel after holding that the seaman’s wage claim must be arbitrated and the seaman could not bring this case as a class action; Llagas v. Sealift Holdings Inc., No. 2:17-cv-472, 2020 U.S. Dist. Lexis 136742 (W.D. La. July 31, 2020) (Cain).
Daniel Gonzales Llagas, a citizen of the Philippines, brought suit in state court in Louisiana seeking unpaid wages on behalf of himself and a putative class of seamen aboard a fleet of Sealift vessels. Sealift removed the case to federal court based on diversity, federal question, and the New York Convention (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards). Sealift then sought to compel arbitration in accordance with Llagas’ employment contract and the incorporated Standard Terms and Conditions of the Philippine Overseas Employment Administration, and Judge Cain ordered arbitration and eventually appointed the arbitrator in accordance with the POEA Terms (April 2020 Update). In order to avoid attachment of its vessel, Sealift provided Llagas with a letter of undertaking in the amount of $7.5 million based on the class allegations. After Judge Cain ordered Llagas’ claim to arbitration and declined to certify the class (for lack of standing) in light of the individual arbitration, Sealift moved to reduce the security to $41,750 in accordance with Llagas’ individual claim. Llagas argued that the federal case was now stayed pending arbitration and that he was going to request that the Philippine arbitrator determine class status. Therefore, he argued that the court should leave the security in place based on the amount asserted in the petition he filed in state court. Judge Cain disagreed and held that he had the authority to reduce the security as Llagas did not have status to bring the class action. As Llagas did not contest the reduced amount asserted by Sealift, Judge Cain ordered that the security be set at $41,750.
Vessel owner/employer held liable for the negligence of the captain and shoreside doctor in providing medical care to a seaman on the vessel, and the negligence claim for the acts of the doctor was not subject to the state statute of limitations under 46 U.S.C. § 30510; owner/employer held liable for gross negligence of the captain for failing to provide medical care to the seaman; Adams v. Liberty Maritime Corp., No. 16-cv-5352, 2020 U.S. Dist. LEXIS 136278 (E.D.N.Y July 31, 2020) (Morgan).
Francis Adams, who suffered from high blood pressure and diabetes, was cleared for duty and sailed as a bosun on the LIBERTY EAGLE. He began experiencing problems during the service, and his symptoms were provided to his employer’s telemedicine services provider, Future Care. Future Care relayed the information to Dr. Brian Bourgeois, a physician in Louisiana, but Dr. Bourgeois did not properly diagnose Adams’ conditions as congestive heart failure and atrial fibrillation, causing damages that Adams’ would not have suffered if his condition had been timely and properly diagnosed. Adams brought suit against the vessel owner/employer, the captain of the vessel, and Future Care, and the case was tried to Judge Morgan. Judge Morgan held that the ship was not unseaworthy for failing to adequately train the crew or to have adequate procedures for handling medical emergencies, and that the employer was not liable for negligence in selecting Future Care as its medical services provider. However, Adams’ employer was vicariously liable under the Jones Act for the negligence/malpractice of Dr. Bourgeois. The question was then presented whether the three-year maritime statute of limitations or the one-year Louisiana limitation for malpractice applied with respect to the employer’s liability for Dr. Bourgeois’ malpractice. 46 U.S.C. § 30510 provides that vicarious liability of the employer/vessel owner for malpractice occurring at a shoreside facility is subject to statutory limits of liability applicable to the medical provider in the state in which the shoreside medical care was provided. As the medical care was not provided “at a shoreside facility,” Judge Morgan held that the three-year statute was applicable and the suit was timely. Judge Morgan also held that the captain was liable for failing to provide medical care to Adams, but that both the employer and captain were only liable for damages suffered by Adams until he reached maximum medical improvement from the events on board the LIBERTY EAGLE, which ended when his conditions were caused by his longstanding diabetes and not by the events on the vessel. Adams’ medical bills up to that point were a little over $300,000, but he had only paid $6,771.85 after payments from his employer and insurance, and Judge Morgan held that this sum was all that Adams could recover for cure. Adams’ employer paid maintenance at the contractually stipulated rate of $16 per day, but once the payments stopped, Adams had to sell his home and vehicles to pay his bills. As Adams did not establish when the payments ended compared to the court’s finding of maximum cure, Judge Morgan held that Adams was not entitled to any additional maintenance or to punitive damages for failure to properly pay maintenance and cure. However, Judge Morgan did find that the captain was grossly negligent in the providing of medical care to Adams. That led Judge Morgan to address the circuit split on the application of respondeat superior to conduct of employees of a corporation, as noted by the Supreme Court in Exxon Shipping Co. v. Baker (which did not resolve the dispute because of a 4-1-4 division of the Justices). Finding a “distressing lack of oversight” of the captain, Judge Morgan held that his employer should share the blame for the captain’s gross negligence. Therefore, Judge Morgan awarded Adams $72,150 in lost wages, $216,450 in pain and suffering, and punitive damages in the amount of attorney’s fees of $98,475 (stated to be one-third of the total recovery, but not actually one-third, which would be $98,457).
Welder injured in conversion of a shrimp boat to a scallop fishing boat was held to present a fact question of seaman status; Woolery v. Atlantic Capes Fisheries, Inc., No. 19-16465, 2020 U.S. Dist. LEXIS 136037 (D.N.J. July 31, 2020) (Bumb).
Travis Woolery was injured while working on the conversion of the F/V ALLIANCE from a shrimping vessel to a scallop fishing vessel in Cape May. Woolery brought this action as a seaman, and his employer contested his seaman status. Judge Bumb held that there were fact questions to be resolved on all of the elements of seaman status. With respect to the requirement that Woolery’s duties contribute to the function or mission of the vessel, Judge Bumb held that a fact dispute existed whether his welding and installing scallop fishing equipment contributed to the new mission of scallop fishing, and that Woolery had also done work of maintaining the vessel, including checking bilge pumps, tightening lines, and serving as de facto night watchman. His employer also argued that the ALLIANCE was no longer in navigation while in Cape May for conversion as the ALLIANCE was still out of service after three years. However, Judge Bumb noted that Woolery was injured after the repairs had been in progress for four months and that a jury could find that the repairs were not so significant as to take the vessel out of navigation because of the limited period before his injury and because the ALLIANCE remained operational to a sufficient degree that Woolery could reside on it while it was in port. Judge Bumb’s analysis of the two requirements that the worker’s connection to the vessel must be substantial in both nature and duration was confusing, stating that the test does not require that the 30 percent of the time spent on the vessel be “at sea”—“it is a ‘status test’ rather than a ‘voyage test.’” Rather than addressing the inquiry that “must concentrate on whether the employee’s duties take him to sea” as stated by Justice Kennedy in Harbor Tug & Barge Co. v. Papai, Judge Bumb held that there was sufficient evidence of the connection requirement because Woolery remained in service of the vessel day and night, performing seaman’s activities “which exposed him to the typical perils of shipboard life” while the vessel was at the dock. Finally, Judge Bumb addressed the employer’s argument that Woolery’s claims were barred by the exclusive remedy provisions of the LHWCA and the New Jersey workers’ compensation statute. Noting that the employer had not paid compensation to Woolery under the LHWCA, Judge Bumb reasoned that the failure to pay compensation under the LHWCA created a fact question whether the employer had secured payment of compensation under the LHWCA so as to be entitled to the immunity defense. As to the state act, Judge Bumb held that, if Woolery is not a seaman, the immunity defense from the state act could not bar a claim under general maritime tort principles.
Vessel was not unseaworthy because of unsafe condition of floating dock that seaman had to cross in boarding and departing the vessel; Campbell v. Delma Ann, LLC, No. 6:20-cv-591, 2020 U.S. Dist. LEXIS 136388 (D. Ore. July 31, 2020) (McShane).
Danny Campbell, was serving as a deckhand on the F/V DELMA ANN, which was moored at the Port of Newport’s commercial marina. He was injured when he fell due to an unmarked chain on the surface of the floating dock that he had to cross when boarding or departing the vessel. He brought this suit against the owner of the vessel and the Port of Newport for negligence under the Jones Act and general maritime law and against the owner of the vessel for unseaworthiness of the DELMA ANN. The owner moved to dismiss the unseaworthiness claim, and Judge McShane agreed. Campbell did not assert that the dock was an appurtenance of the DELMA ANN; however, he argued that the duty to provide a seaworthy vessel includes providing a method of safely boarding and departing the vessel and that his injuries occurred in an area where he was required to be in performance of his duties in the service of the vessel. Holding that the seaworthiness warranty ended with the gangway and did not extend to the dock, Judge McShane dismissed the unseaworthiness count with prejudice, holding that it would be futile to allow an amendment.
Skipping more than 75% of the seaman’s physical therapy sessions forfeited the seaman’s right to maintenance and cure; Boatner v. C&G Welding, Inc., No. 18-10043, 2020 U.S. Dist. LEXIS 135997 (E.D. La. July 31, 2020) (Feldman).
Ira Boatner injured his shoulder while working as a rigger for C&G Welding on a derrick barge. Dr. Felix Savoie performed arthroscopic surgery on Boatner’s shoulder and noted that Boatner would require 18 physical therapy sessions to return to heavy duty work and that it was “absolutely critical” that once started the therapy not be interrupted. Boatner did attend 6 sessions, but he stopped after that because of transportation issues and did not tell C&G about his transportation troubles. Boatner’s shoulder deteriorated, and Dr. Savoie could not release Boatner to return to work. Dr. Savoie again ordered Boatner to attend physical therapy, but Boatner skipped 16 of the 18 sessions (in total missing 28 of the 36 sessions). Boatner then brought this suit against C&G under the Jones Act and general maritime law, including counts for maintenance and cure and failure to pay maintenance and cure (seeking compensatory and punitive damages and attorney’s fees). C&G moved for summary judgment on the maintenance and cure claim, arguing that Boatner forfeited his right to maintenance and cure because he had failed to attend over 75% of the physical therapy sessions his surgeon ordered. Judge Feldman agreed, rejecting Boatner’s excuse of “extenuating circumstances” (transportation problems), stating that the troubles did not render his excuse reasonable. Judge Feldman found no reasonable explanation for missing 77% of the sessions—he “willful[ly] rejected them.” Judge Feldman found Boatner’s second excuse “as flawed as his first.” Boatner argued that the evidence did not establish that the missed sessions were “significant enough.” Judge Feldman answered that Dr. Savoie advised that Boatner would have recovered over 8 months ago if he had completed the sessions. Holding that paying maintenance and cure was no longer justified, Judge Feldman held that Boatner forfeited his right to maintenance and cure and dismissed the maintenance and cure claim with prejudice.
Port of Lake Charles was held liable to a terminal lessee for failing to secure dredging permits that would allow larger vessels access to the terminal; Lake Charles Harbor & Terminal District v. IFG Port Holdings, LLC, No. 16-cv-146, 2020 U.S. Dist. LEXIS 136743 (W.D. La. July 31, 2020 (Kay).
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 would be entitled to damages to be determined plus its attorney’s fees and costs.
Repair contractor that was sued by the vessel owner for failing to perform work on the vessel in a workmanlike manner was sanctioned for taking pictures of the vessel without permission or court order; Trevelyn Enterprises, LLC v. SeaBrook Marine, LLC, No. 18-11375, 2020 U.S. Dist. LEXIS 137242 (E.D. La. Aug. 3, 2020) (van Meerveld).
This case involves painting of the bottom hull of the yacht M/Y FAIR SKIES by SeaBrook Marine. The yacht owner brought this suit alleging that the work was not performed in a workmanlike manner, damaging the vessel, and SeaBrook counterclaimed for unpaid invoices. The yacht owner also added Seahawk Paints as a defendant in the suit for failing to ensure that SeaBrook properly applied the primer and top coats in accordance with Seahawk’s technical data sheets. The vessel was inspected on March 3, 2020, and experts for both the yacht owner and Seahawk participated. After the reports were exchanged between the parties, Seahawk’s counsel requested the opportunity to inspect the bottom of the hull due to opinions provided by the owner’s expert. He advised that the inspection was for a paint/coatings expert named Bill Wolf. The owner’s counsel refused, and Seahawk’s counsel responded that he would file a motion. A few days later the beneficial owner of the yacht saw a man taking photographs of the yacht while it was on blocks at a shipyard in Pensacola. The photographer said that he was a boat captain from Tampa, but the beneficial owner identified him as Bill Wolf, an employee of Seahawk. The yacht owner sought sanctions, and Seahawk and SeaBrook responded that Wolf did not inspect the vessel at their direction and that he had stayed in the public area of the shipyard while taking the pictures. Finding that Seahawk’s action was inappropriate and in violation of its discovery obligations, Magistrate Judge van Meerveld issued sanctions tailored to the violation. She required Wolf to provide an affidavit or declaration of what he did and did not do, including whether he took measurements, samples, notes, etc. She ordered that nothing from the inspection could be used by Seahawk or SeaBrook in the litigation. She ordered that all information and tangible materials obtained by Wolf could not be provided to any expert witness retained by Seahawk or SeaBrook and that counsel certify that any information or materials were destroyed. Finally, Magistrate Judge van Meerveld ordered that Seahawk pay the owner’s reasonable attorney’s fees and costs.
Spoliation sanctions were denied against cruise line that modified stairs after a passenger’s fall, but the cruise line was ordered to produce photographs of the stairs taken after the accident; Hoover v. NCL (Bahamas) Ltd., No. 19-22906, 2020 U.S. Dist. LEXIS 139513 (S.D. Fla. Aug. 5, 2020) (Goodman).
Barbara Hoover, a passenger on the cruise ship BLISS, was injured when she slipped while walking down an outdoor stairway leading from one deck to the other. Hoover was in discussion with NCL’s claims division about her claim after the accident, but she did not request an inspection. She retained counsel who filed suit almost a year after the accident without sending any demand. More than four months after the accident, the cruise line placed black, anti-slip strips on the edge of the stairs in addition to adding grooves to the stairs some time before then. Hoover sought a spoliation sanction against the cruise line, arguing that her expert could not adequately inspect the stairs. The cruise line responded that the expert did not ask for the strips to be removed and that the surveillance footage of the fall demonstrated that Hoover’s fall did not occur on the part of the steps that now contained grooves. In denying the request for sanctions, Magistrate Judge Goodman noted that the cruise line was aware that Hoover was pursuing a claim and could have postponed making the alterations until notifying Hoover about them and giving her a chance to inspect them, but its failure to do so was at most negligent and not done in bad faith. The legal department of the cruise line was handling claims and suits involving 26 ships, and it would have been a significant burden to postpone repairs on any of its ships until passengers/crewmembers or their attorneys were contacted and given the opportunity to inspect the vessel, which could be at sea or in different parts of the world for extended periods of time. Regardless of the result of the spoliation claim, Magistrate Judge Goodman did order the production of photographs taken of the stairs before they were repaired based on an exception to the work-product privilege as Hoover could not obtain the information depicted in the photographs from any other source.
Service of Jones Act suit on the chief engineer of the defendant’s vessel was insufficient; Symington v. BVAJ Marine, Ltd., No. 20-60761, 2020 U.S. Dist. LEXIS 140828 (S.D. Fla. Aug. 5, 2020) (Smith).
Robert Symington brought this Jones Act suit against BVAJ Marine for an injury he suffered on the M/Y STARFIRE and served the suit on the chief engineer for the STARFIRE. The defendant moved to quash the service and dismiss the suit for improper service. Symington argued that he had successfully served the vessel owner under Florida law (pursuant to Fed. R. Civ. P. 4(h)), but Judge Smith disagreed. The defendant was not licensed or qualified to do business in Florida, so service could not be made on any employee at the corporation’s principal place of business or any employee of the registered business. Additionally, there was no evidence that the chief engineer was “any agent transacting business” for the defendant in Florida, nor was there any evidence that he was “any officer or business agent” of the defendant. Therefore, the motion to quash was granted, and Symington was given until September 4, 2020, to serve the defendant properly and avoid dismissal of the suit.
Harbor worker on crane barges engaged in loading and unloading vessels in the Mississippi River was a seaman as to his borrowing employer, but there were fact questions whether he was entitled to maintenance and cure because of possible forfeiture and a McCorpen defense; Meaux v. Cooper Consolidated, LLC, No. 19-10628, 2020 U.S. Dist. LEXIS 140433 (E.D. La. Aug. 6, 2020) (Ashe).
Meaux was hired by Savard Marine Services to work for Cooper Consolidated as a flagger/utilityman with respect to Cooper’s crane barges, loading and unloading ships and barges in the Mississippi River. Meaux was helping the crane operator of the BAYOU SPECIAL to put covers on another barge when he was struck in the head by a cover. He injured his back and neck, and Savard authorized medical treatment. Meaux’s neck injury was treated with an epidural and physical therapy, but Meaux quit going to physical therapy, asserting that it caused him too much pain. Instead, Meaux underwent surgery, and he was supposed to attend physical therapy thereafter but he did not. Savard then denied maintenance and cure for Meaux based on his failing to attend physical therapy before and after his surgery. Meaux brought this action against both Savard and Cooper under the Jones Act and general maritime law, including claims of maintenance and cure and punitive damages for the failure to pay maintenance and cure. Alternatively, Meaux sought to recover under the LHWCA. Meaux contended that he was a borrowed servant of Cooper and that Cooper owed him maintenance and cure. Weighing the Ruiz factors, Judge Ashe noted that Meaux worked exclusively for Cooper, performing Cooper’s work, for the entire time he was employed by Savard. As most of the factors, including the most important factor—control—favored Meaux’s status as a borrowed servant, Judge Ashe held that Meaux was Cooper’s borrowed employee. Cooper spent considerable effort analyzing the amount of time that Meaux physically spent on Cooper’s vessels and argued that Meaux did not spend 30% of his time on Cooper’s vessels so as to satisfy the threshold for the duration element for seaman status. Distinguishing the cases of itinerant maritime workers, such as wireline operators, who have assignments to unrelated vessels, Judge Ashe noted that all of Meaux’s work, whether on Cooper vessels or on vessels whose cargo was being loaded or unloaded, was related to his attachment to the Cooper vessels. Therefore, Judge Ashe ruled that Meaux satisfied the duration element of the connection test for seaman status. Citing the Fifth Circuit’s Endeavor Marine case that conflates work on the Mississippi River with duties that take a worker to sea, as set forth in Papai, Judge Ashe held that Meaux also satisfied the nature element of the connection test and was therefore a seaman. However, Judge Ashe declined to order the payment of maintenance and cure as there were fact questions whether Meaux forfeited his right to maintenance and cure when he stopped going to physical therapy and because of the McCorpen defense asserted that Meaux failed to disclose a pre-existing back injury prior to his employment.
Tort claims arising out of an alleged conspiracy to wrongfully abandon a vessel in Brazil were dismissed for lack of admiralty jurisdiction; Great Lakes Insurance SE v. American Steamship Owners Mutual Protection and Indemnity Association, No. 19-cv-10656, 2020 U.S. DIST. LEXIS 140912 (S.D.N.Y. Aug. 6, 2020) (Abrams).
George and Efstathios Gourdomichalis purchased the M/V ADAMASTOS (with a market value of no more than $6 million) in the name of Adamastos Shipping and then used a financing scheme to mortgage the vessel for more than $24 million. Adamastos Shipping and the operator of the vessel, Phoenix Shipping, then insured the vessel for P&I and FD&D (freight, demurrage, and defense) coverage with the American Club. Adamastos Shipping chartered the vessel to Pacific Gulf, which subchartered the vessel to Intergis. Pacific Gulf and Intergis obtained insurance coverage through the Charterers P&I Club. While loading a cargo of soybeans in Rio Grande, Brazil, the Brazilian authorities noted no fewer than 42 deficiencies with the vessel, and the vessel broke free from her moorings and grounded (with almost 60,000 metric tons of soybeans aboard). The vessel did not return to the dock, remained under detention, failed to load the remainder of the cargo, and failed to complete the voyage, resulting in numerous claims against the vessel, including a claim for the value of the cargo of at least $18 million. Asserting that the vessel interests conspired to abandon the vessel in Brazil in order to avoid paying claims and that the American Club abandoned its obligations, as insurer of the vessel, to cover the claims, the Charterer’s Club brought this action based on prima facie tort, promissory fraud, civil conspiracy, unjust enrichment, and negligence. The defendants asserted that the court lacked admiralty tort jurisdiction over the claims, and Judge Abrams agreed. Judge Abrams first held that the tort did not occur on navigable water as the fraud (although related to a vessel on navigable water) occurred on land (the defendants were not on board the vessel or on navigable waters when they allegedly conspired to abandon the vessel or terminate its insurance). Although the ruling on navigable waters was sufficient to hold that the court lacked admiralty jurisdiction, Judge Abrams also addressed the question whether the connection part of the test for admiralty tort jurisdiction was satisfied. Judge Abrams reasoned that the general type of incident was the abandonment of a detained vessel on navigable water and the termination of the vessel’s insurance coverage, and he concluded that this incident did not have a potentially disruptive impact on maritime commerce as it would not obstruct the free passage of commercial ships on navigable waterways. Additionally, Judge Abrams did not consider that the abandonment of a detained vessel on navigable waters and the termination of the vessel’s insurance coverage had a significant relationship to traditional maritime activity. He therefore dismissed the complaint and declined to give leave for an amendment as additional pleading would be futile on the jurisdiction issue.
Bunker delivery note did not modify the parties to the fuel supply contract and bind an affiliate of the fuel supplier to the arbitration clause in the fuel supply contract; Monjasa A/S v. Mund & Fester GmbH & Co., No. 19-cv-6143, 2020 U.S. Dist. LEXIS 140904 (S.D.N.Y. Aug. 6, 2020) (Caproni).
Monjasa Lda agreed to supply fuel to the M/V BBC SCOTLAND on order of that vessel’s charterer, Angola de Navegacao. Monjasa Lda sent the M/V GOLDEN OAK, a bunker tanker, to deliver the fuel, but there was a collision between the SCOTLAND and the GOLDEN OAK, which damaged the GOLDEN OAK. The agreement between Monjasa Lda and Angola incorporated the Monjasa Terms, which included an arbitration agreement. As the GOLDEN OAK was unable to deliver the fuel, another tanker, the DUZGIT VENTURE delivered the fuel to the SCOTLAND on behalf of Monjasa Lda with a bunker delivery note stating that the sale was governed by the terms and conditions between the vessel and Monjasa A/S, acting as principal. The owners of the GOLDEN OAK sought damages from the owners of the SCOTLAND, and that demand was resolved by a payment of $300,000 by the insurer for the SCOTLAND. The SCOTLAND’s insurer then sent an arbitration demand to Monjasa A/S seeking contractual indemnity based on the reciprocal indemnity clause of the Monjasa Terms that were incorporated into the bunker delivery note. Monjasa A/S responded by bringing this lawsuit against the SCOTLAND’s insurer seeking a declaratory judgment that it was not bound by the arbitration agreement in the Monjasa Terms or by the reciprocal indemnity agreement in the Terms. Judge Caproni agreed with Monjasa Lda, reasoning that the bunker delivery note was not indicative of any action taken by Monjasa A/S. It merely confirmed that the fuel was delivered. Moreover, the reference to Monjasa A/S as principal in the bunker delivery note was insufficient to establish apparent authority as there was no evidence that Monjasa A/S authorized the DUZGIT VENTURE to provide that Monjasa A/S was the principal. Consequently, Judge Caproni held that Monjasa A/S was not a party to the arbitration agreement between Monjasa Lda and was entitled to the declaratory judgment.
Court declined to allow a jury trial in an admiralty case even though the parties filed a stipulation agreeing to a jury trial; Welch v. Royal Caribbean Cruises, Ltd., No. 20-22466, 2020 U.S. Dist. Lexis 141407 (S.D. Fla. Aug. 7, 2020) (Scola).
Shaytayya Welch was injured while participating in laser tag on Royal Caribbean’s vessel and, in accordance with the forum-selection clause in her ticket, brought this suit against Royal Caribbean in federal court in Miami. Her complaint asserted that she wanted to proceed with her case at law, with a right to a jury trial in accordance with her “constitutional right pursuant to the Savings to Suitors Clause, 28 U.S.C. 1333” [she did not explain how a statute gave her a constitutional right], but there was no diversity so she brought the suit pursuant to the court’s admiralty jurisdiction. Welch and Royal Caribbean then filed a stipulation agreeing to a jury trial, but Judge Scola declined to approve the parties’ stipulation as it was incompatible with a case proceeding solely under the court’s admiralty jurisdiction. Judge Scola ordered that the clerk strike the parties’ stipulation.
American plaintiff and defendant must litigate in Greece with respect to an injury in a collision in Greece, even though the damages would be capped and the plaintiff would not have a jury trial; Curtis v. Galakatos, No. 19-10786, 2020 U.S. Dist. LEXIS 143704 (D. Mass. Aug. 11, 2020) (O’Toole).
Cindy Curtis, a resident of New York, brought this suit in federal court in Massachusetts against Nicholas Galakatos, a resident of Massachusetts, in connection with injuries suffered when the boat in which she was a passenger was involved in a collision in Greece with a boat owned by Galakatos. Galakatos moved to dismiss the suit on the basis of forum non conveniens, and Judge O’Toole agreed that the case should be litigated in the courts of Greece. Although her damages would be capped in Greece and she would not be entitled to a jury trial, those factors did not deprive her of the ability to have the claims fairly decided in Greece and did not outweigh the fact that much of the evidence was in Greece and the court would apply Greek law.
Mooring the largest lift vessel ever built in the United States in the Sabine River did not render the lift vessel strictly liable when it broke free from its moorings in a storm and allided with another vessel; Beacon Maritime, Inc. v. HEAVY LIFT VB-10,000, No. H-19-3811, 2020 U.S. Dist. LEXIS 144042 (S.D. Tex. Aug. 11, 2020) (Rosenthal).
The largest lift vessel ever built in the United States, the HEAVY LIFT VB-10,000, broke free from its moorings at Port Arthur, Texas, drifted down the Sabine River, and allided with several vessels and structures. After settlements, the claim of the owner of the CECIL PROVINE remained, based on negligence, unseaworthiness, and strict liability. The lift vessel moved to dismiss the strict liability claim, and the CECIL PROVINE’s owner argued that mooring the largest lift vessel ever built in the United States in the Sabine River was an ultra-hazardous activity for which the lift vessel should be subject to strict liability under the general maritime law (citing principles developed for ultra-hazardous activities under the common law). Chief Judge Rosenthal rejected that argument, reasoning that the general maritime law has not accepted strict liability causes of action in the context of allisions and requires findings of fault and causation as the basis for liability. Therefore, she dismissed the strict liability claim.
Cruise line was ordered to provide discovery concerning accidents on other excursions than the one on which the passenger died and to double-check the accuracy of its response with respect to the excursion on which the passenger died; Sweeney v. Carnival Corp., No. 19-24444, 2020 U.S. Dist. LEXIS 145737 (S.D. Fla. Aug. 13, 2020) (Goodman).
Dennis Brown died during an All-Terrain Vehicle excursion in St. Lucia while he was a passenger on the cruise ship FASCINATION. His personal representative brought this suit against the operators of the cruise ship and the excursion and sought discovery from the cruise line about incidents where passengers were injured or killed on ATV excursions during the three-years prior to Brown’s death. The cruise line answered that there were no prior incidents during the St. Lucia excursion, but objected to answering with respect to other ATV incidents in other locations. As the plaintiff asserted that the cruise line should have known of the risks inherent in ATV excursions anywhere in the world, Magistrate Judge Goodman ordered the cruise line to answer with respect to all of the ATV excursions. In the event the cruise line was unable to obtain complete information from the excursion operators, the cruise line was ordered to list the specific excursion operators who failed to cooperate in providing the required information. Magistrate Judge Goodman then stated that he was “surprised (and somewhat bewildered)” that the cruise line had answered that there were no other prior incidents involving the St. Lucia ATV excursion in the three-year period prior to Brown’s death, and he stated that “I think it prudent for Carnival to double-check the accuracy of its earlier ‘no-prior-incidents’ response.”
Vessel owner was ordered to pay the custodial costs of its arrested vessel as a sanction for failing to return the commercial use permit for the vessel; Barnes v. Sea Hawai’i Rafting, LLC, No. 13-2, 2020 U.S. Dist. LEXIS 145798 (D. Haw. Aug. 13, 2020) (Kay).
Chad Barnes’ arduous effort to collect maintenance and cure (June, July, September, and November 2019 and February and April 2020 Updates) continues to take a turn in his favor. After Judge Kay sanctioned the defendant for bad faith misrepresentations that led to the transfer of the arrested vessel’s commercial-use permit, Judge Kay issued enhanced sanctions when the defendant did not return the permit. The monetary sanctions to compensate Barnes, who is living on social security disability payments, were the custodial costs for the vessel during its arrest in light of the delay in sale of the vessel resulting from the defendant’s conduct.
Asset purchaser from supplier of products containing asbestos was not liable for the death of a Navy seaman from mesothelioma; evidence that the product containing asbestos was designed for the Navy was insufficient to establish a government-contractor defense; evidence of exposure to suppliers’ products was sufficient for some suppliers but not for others; court limited the damages recoverable by the deceased seaman’s beneficiaries; McAllister v. McDermott, Inc., No. 18-361, 2020 U.S. Dist. LEXIS 146892 (M.D. La. Aug. 14, 2020) (Dick).
James T. McAllister developed mesothelioma that he alleged was caused by exposure to asbestos products while serving as a seaman on United States Navy vessels. He brought this suit against suppliers of products containing asbestos, and his wife and adult sons substituted as plaintiffs after his death. Several of the suppliers moved for summary judgment, and Judge Dick granted some of the motions and denied others. Following Louisiana law, she granted the motion of Tate Andale, which purchased the assets of supplier Andale. Judge Dick held that the purchase of the assets of Andale did not cause Tate Andale to assume the liabilities of Andale. Judge Dick denied the motion of Spirax Sarco that it was entitled to assert the government-contractor defense (because its products were designed specifically for the Navy and only sold to the Navy) as that did not satisfy the elements necessary to establish the defense. McAllister was able to give his deposition prior to his death, and his testimony was sufficient to create a fact question of exposure to some products but not others, and Judge Dick granted and denied summary judgments accordingly. Although the plaintiffs withdrew their request for punitive damages, the parties disagreed as to what elements of compensatory damages were recoverable. As seamen can recover for their own pain and suffering, Judge Dick held that McAllister’s estate could recover for his pain and suffering and other losses during his lifetime. As McAllister’s answers to interrogatories stated that no one was dependent on him, Judge Dick held that his wife and adult sons could not recover for loss of support and loss of household services except that his estate could recover for the loss of income and services prior to his death.
An NVOCC was not required to attach the bill of lading to its complaint to survive a motion to dismiss for lack of personal jurisdiction or for failure to plead a breach of contract; Laufer Group International, Ltd. v. Standard Furniture Manufacturing Co., No. 19-cv-10885, 2020 U.S. Dist. LEXIS 147000 (S.D.N.Y. Aug. 14, 2020) (Oetken).
Laufer Group, a non-vessel operating common carrier, contracted with Standard Furniture Manufacturing and International Furniture Marketing (Alabama companies) to transport goods from Asia to the United States. When SFM and IFM did not pay for the shipments, Laufer Group brought this suit in federal court in New York against SFM, IFM, and Alabama residents that it identified as principals of SFM and IFM. The defendants moved to dismiss the action on the ground that there was no personal jurisdiction over the defendants in the action brought in New York, and Laufer Group cited the New York forum-selection clause in its bills of lading. The defendants responded that the actual bills of lading were not before the court because Laufer Group had only attached generic, unnamed bills to its complaint. Judge Oetken disagreed, reasoning that the plaintiff can defeat a motion to dismiss by pleading legally sufficient allegations of jurisdiction, and it is not necessary to attach the actual bills of lading in order to plead that there was jurisdiction in New York in accordance with the forum-selection clause. Similarly, Judge Oetken denied the defendants’ motion to dismiss for failure to allege a claim of breach of contract because of the failure to attach the bills of lading. All that was necessary was that Laufer Group plead the elements of breach of contract, and Laufer Group did not have to attach the actual bills of lading to do that. Finally, the individual defendants challenged that they were principals of SFM and IFM, so that they did not fall within the terms of the bills of lading that extended liability for freight charges to principals of the named shippers. As the evidence established that one individual was a principal and the other was not, Judge Oetken granted Laufer Group leave to amend to establish that the non-principal executed credit agreements binding her to the terms of the bills of lading.
Navy seaman’s exposure to asbestos did not establish causation as to any specific defendant’s product; Hailey v. Air & Liquid Systems Corp., No. 18-2590, 2020 U.S. Dist. LEXIS 146955 (D. Md. Aug. 14, 2020) (Chasanow).
Charles Anthony Shockley served as a machinist mate aboard the USS HENDERSON, a Navy destroyer whose original construction included numerous products containing asbestos. Over time, the ship was modernized and was subject to overhauls. Mr. Shockley died from mesothelioma, which his experts attributed to asbestos exposure on the HENDERSON, but Mr. Shockley died before he could describe the source of his exposure. As it was impossible for Mr. Schockley’s experts to attribute his exposure to any specific products, Judge Chasanow held that his beneficiaries failed to carry their burden of proving that any products were a substantial factor in causing his mesothelioma under either maritime law or state law, and she granted the defendants’ motions for summary judgment.
Anthony Kozur brought this action under the Jones Act and general maritime law (unseaworthiness and maintenance and cure) after he slipped and fell while serving as a seaman on the fishing boat ATLANTIC BOUNTY. Every time Kozur went on a fishing trip for the defendant, he signed the ship’s manifest that was on the galley table open to the signature page. He never read the document or saw the arbitration clause in the manifest, and the captain never explained to him that the manifest contained an arbitration clause. Kozur did know that there were terms on the other pages of the manifest and signed the signature page without looking to see what the terms were. Concluding that there was no obligation to alert Kozur to the arbitration clause, Judge Rodriguez held that the clause was applicable and was clear and unambiguous. However, as the clause was in a seaman’s employment contract, it was exempt from enforcement under the Federal Arbitration Act. Kozur’s employer argued that the clause was enforceable under New York law, applicable to the enforceability of the arbitration clause under the terms of the manifest, but Kozur responded that the FAA prohibited enforcement of arbitration clauses against seamen under state law. Judge Rodriguez rejected that argument, finding no conflict between state and federal law. Judge Rodriguez then addressed Kozur’s argument that contracts limiting choice of venue are void under the FELA, and that the FELA rule should apply in Jones Act cases. Citing cases that have rejected application of the FELA’s venue provision in Jones Act cases, Judge Rodriguez held that nothing in the Jones Act prohibited a seaman from waiving the right to a jury trial and agreeing to arbitration. Finally, noting that admiralty’s uniformity requirement is relaxed when dealing with procedural doctrines, Judge Rodriguez held that the general maritime law does not preclude application of state law to the issue of arbitration. Consequently, he granted the motion to compel arbitration.
Award of 100% military-related disability by the VA did not estop the plaintiff from bringing a claim for disability from a fall on a vessel; Doucet v. R. & R. Boats, Inc., No. 17-421, 2020 U.S. Dist. LEXIS 149101 (M.D. La. Aug. 18, 2020) (Jackson).
Elroy Doucet alleged that he fell on a vessel owned by R. & R. Boats while being transported to an offshore job location in the Gulf of Mexico. After receiving records from the Department of Veterans Affairs confirming that Doucet had been awarded 100% disability by the VA related to his exposure to Agent Orange during his service in Vietnam, R. & R. Boats moved to dismiss Doucet’s claims for loss of wages or wage-earning capacity based on the doctrine of judicial estoppel. Reasoning that the standard for VA disability is different from the standard in a maritime tort claim, Judge Jackson held that R. & R. Boats had not established that Doucet’s disability award was “plainly inconsistent” with his claim for disability under the general maritime law. Additionally, Doucet’s testimony, four years after the accident (that he did not feel that he was disabled now due to the fall and that “his back injury and shoulder injury is gone”) did not prove that he had not suffered some disability after the accident.
Diver who suffered compression sickness while working on a tunnel under the Suez Canal was able to establish a fact question of seaman status and to survive his employer’s motion to dismiss for lack of subject matter jurisdiction; Southard v. Ballard Marine Construction, Inc., No. C19-5971, 2020 U.S. Dist. LEXIS 150938 (W.D. Wash. Aug. 19, 2020) (Settle).
Nicholas Southard’s Jones Act suit returns to the Update after Judge Settle dismissed his suit but gave Southard leave to amend (June 2020 Update). Southard was employed by Ballard Marine as a commercial diver, alternating between wet-diving on marine construction projects and compressed-air work on dry-tunnel projects. Southard developed decompression sickness and distal small fiber neuropathy while constructing a tunnel on dry land for two highway roads connecting Egypt and the Sinai Peninsula beneath the Suez Canal. Judge Settle initially held that Southard’s essential duties changed when he was assigned to the tunneling assignment and considered only his duties on that assignment to determine that he was not a Jones Act seaman and that the court lacked admiralty jurisdiction over his land-based injury. Judge Settle gave Southard leave to amend, and then held that Southard had alleged sufficient facts to create a fact question whether his essential duties remained the same on land and in the water and whether his assignment to the tunnel work was sufficiently permanent that his duties should be considered from his entire employment (during which he spent 45% of his time in the service of his employer’s vessels). As there was now a fact question of seaman status, Judge Settle denied the motion to dismiss as there was evidence to support federal jurisdiction from the Jones Act.
Failure of boat yard/marina to obtain damage waivers from vessels stored at the facility voided its insurance coverage based on misrepresentation and uberrimae fidei; Atlantic Specialty Insurance Co. v. Karl’s Boat Shop, Inc., No. 19-11219, 2020 U.S. Dist. LEXIS 150619 (D. Mass. Aug. 20, 2020) (Young).
Karl’s Boat Shop operates a boat yard and marina that stores vessels. Karl’s obtained liability insurance with Atlantic Specialty with a requirement that Karl’s cause all owners of vessels stored at its facility to sign a waiver that indemnified Karl’s from all claims. However, Karl’s routinely failed to require vessel owners to sign the waivers, and, when a fire at the facility damaged several vessels stored at the facility, Atlantic Specialty brought this action seeking a declaration that it could void its policy based on the doctrines of misrepresentation and uberrimae fidei (utmost good faith). Karl’s argued that the maritime law was not applicable (and that Massachusetts law applied) as the insurance policy, covering a storage facility located inland, was not a maritime contract. However, Judge Young disagreed, noting that the policy covered repair work, hauling/launching, storage, and marine risks such as pollution. Regardless of whether Massachusetts or maritime law applied, Judge Young concluded that the misrepresentation that Karl’s would obtain waivers was a material breach of a condition precedent in the policy that rendered the policy voidable. Similarly, as maritime law applied, Judge Young held that the misrepresentation allowed the policy to be voided under the uberrimae fidei doctrine, rejecting arguments that the insurer had to demonstrate reliance and that the uberrimae fidei doctrine was obsolete [all circuit courts that have examined the doctrine since the Fifth Circuit’s decision in 1991 in Albany Insurance Co. v. Kieu have adopted the doctrine].
Maritime claims asserted against trucking company for damage to a vessel in connection with land transportation of the vessel were displaced by the Carmack Amendment; Razipour v. Joule Yacht Transport, Inc., No. 8:20-cv-729, 202 U.S. Dist. LEXIS 151023 (M.D. Fla. Aug. 20, 2020) (Covington).
Sirous Razipour purchased the M/V CHE JAC, and contracted with Molly’s Marine Service to prepare the vessel for shipment and with Joule Yacht Transport to truck the vessel from Naples, Florida, to Newport Beach. There were delays in the shipment of the yacht, and when the vessel finally arrived in Newport Beach it had suffered significant damage to its interior and operating systems. Razipour brought suit against Molly’s and Joule, and Molly’s filed a cross-claim against Joule for contribution under the general maritime law. Molly’s based its claim on its work being necessary for the operation of the ship and because Molly’s business of maintaining vessels at a marina on navigable waters is a traditional maritime activity. Judge Covington did not have to address whether the cross-claim was properly a maritime claim or not as Joule’s liability fell within the Carmack Amendment, and the courts cannot supplement that remedy with federal common-law remedies. Therefore, Judge Covington dismissed the cross-claim with prejudice.
Claims of and on behalf of passengers who developed COVID-19 after departing the cruise ship failed to sufficiently allege causation, but the court allowed repleading and allowed the punitive damage claims to survive; Wortman v. Princess Cruise Lines Ltd., No. 2:20-cv-4169 (C.D. Cal. Aug. 21, 2020) (Fisher); Rumrill v. Princess Cruise Lines Ltd., No. 2:20-cv-3317 (C.D. Cal. Aug. 21, 2020) (Fisher).
Pamela Wortman, Edward Mireles, David Rumrill, and Donna Rumrill were diagnosed with COVID-19 after disembarking from the RUBY PRINCESS on a cruise that departed from Sydney, Australia, on March 8, 2020. Mireles died from the virus, and these actions were brought by the passengers and on behalf of Mireles, seeking recovery from the cruise line for negligence and gross negligence. The cruise line moved to dismiss the claims, and Judge Fisher noted that the allegations of injury of the living passengers were grammatically confusing and somewhat ambiguous, but were sufficient to survive a motion to dismiss. However, the allegations of causation only asserted that the passengers tested positive after returning home from the cruise. Without any allegation of the amount of time between the alleged exposure and the date the passengers began experiencing COVID-19 symptoms or received a positive test result, it was impossible to determine whether causation was plausible or merely possible. Therefore, Judge Fisher dismissed the complaints with leave to replead. Judge Fisher declined, however, to strike the claims for punitive damages for gross negligence, concluding that the law on the subject was not clear and undisputed. Nor did he dismiss the punitive damage claim on behalf of the deceased passenger based on the application of the Death on the High Seas Act as neither party had briefed the issue. Judge Fisher did note that DOHSA applies to negligence that occurs on land in the defendant’s corporate office or where the death occurs on land when the site of the accident is on the high seas.
Contractor hired by the United States to contain an oil spill was immune from suit for acts that did not exceed the scope of its authority; Taylor Energy Co. v. Luttrell, No. 18-14046 2020 U.S. Dist. LEXIS 151742 (E.D. La. Aug. 21, 2020) (Guidry).
Taylor Energy’s platform in the Gulf of Mexico collapsed during Hurricane Ivan, and Taylor Energy and the Coast Guard engaged in collaborative acts to contain and remove oil from the site. In November 2018, the Federal On Scene Coordinator selected Couvillion Group as a contractor to assist in containment of the spill. Taylor then sought declaratory and injunctive relief that Couvillion did not have authority to act and that Taylor Energy was not liable for any damages that may arise as a result of Couvillion’s activities. Couvillion responded that it was entitled to immunity when it acted within the scope of the governmental authority, and Judge Guidry agreed. He therefore dismissed Taylor Energy’s claims against Couvillion with prejudice.
Amendment to complaint to designate Rule 9(h) resulted in the denial of the defendant’s request for a jury trial; Shore Offshore Servs., LLC v. JAB Energy Solutions II, LLC, No. 18-1288, 2020 U.S. Dist. LEXIS 153950 (E.D. La. Aug. 25, 2020 (Guidry).
Shore Offshore brought this suit in federal court against JAB Energy for failure to pay for work performed under a Master Services Agreement, pleading admiralty and diversity jurisdiction and demanding a jury. JAB Energy did not demand a jury in its answer and denied that Shore Energy was entitled to a jury. JAB Energy filed a counterclaim as well as a third-party complaint without a jury demand. Shore Offshore later filed a motion for leave to file an amended complaint that contained a Rule 9(h) election and a withdrawal of its jury demand, and the motion was granted. JAB Energy then filed an amended answer, counterclaim, and third-party complaint in which it objected to the withdrawal of Shore Offshore’s demand for a jury trial and stated that it relied on Shore Offshore’s previous jury demand. JAB Energy filed a motion for a jury trial, but Judge Guidry denied the motion, holding that the claims raised in the counterclaim and third-party demand were distinct from the claims in Shore Offshore’s complaint and that JAB Energy could not rely on Shore Offshore’s original jury demand. Under Rule 38, JAB Energy was therefore required to file a jury demand within 14 days from the last pleading directed to that issue (the answers to the original counterclaim and third-party complaint). As JAB Energy did not demand a jury trial at that time, Judge Guidry held that JAB Energy waived its right to a jury trial on its counterclaim and third-party complaint.
Seaman’s claims for maintenance, cure, and negligence for a back injury when he turned to throw a piece of steel were dismissed for lack of sufficient evidence; Upper River Services, L.L.C. v. Heiderscheid, No. 19-cv-242, 2020 U.S. Dist. LEXIS 154364 (D. Minn. Aug. 25, 2020) (Nelson).
Andrew Heiderscheid’s claim to recover for a back injury against Upper River Services returns to the Update after Judge Nelson previously rejected Heiderscheid’s claim that he was a land-based worker entitled to state workers’ compensation and held that he was a seaman (February 2020 Update). Upper River Services operates two shipyards and a fleet of vessels to move barges on the Mississippi River. Heiderscheid was hired by Upper River as a deckhand and laid off at the approach of winter; however, he accepted a temporary position working in Upper River’s on-shore fabrication shop. While working in the shop, Heiderscheid claimed that he felt a pull in his back when he picked up a piece of steel and turned to throw it into a bin. He filled out an injury report in which he stated that he did not have a history of back pain or injuries and that he did not feel as though Upper River did anything to cause his injury. When Upper River was presented with the notes from Heiderscheid’s visit to the emergency room (indicating that he had been suffering from back pain for four weeks before the incident), Upper River terminated his employment. Heiderscheid filed a state workers’ compensation claim, and Upper River filed this action seeking a declaration that Heiderscheid was a seaman and that Upper River was not liable for negligence or maintenance and cure. Heiderscheid counterclaimed, asserting that if he were held to be a seaman, he sought recovery for negligence under the Jones Act, maintenance and cure, and punitive damages. The Minnesota workers’ compensation judge dismissed Heiderscheid’s claim without prejudice, and Judge Nelson granted summary judgment in the declaratory judgment action that Heiderscheid was a seaman. In this opinion, Judge Nelson held that Upper River was not liable under the Jones Act. Although Judge Nelson recognized that expert evidence is unnecessary in Jones Act cases in which the jury is capable of drawing conclusions without the need for special training, she did not believe this was such a case. As Heiderscheid had reported an injury to his back a month before the incident and alleged an injury with no obvious origin, he needed to present medical evidence establishing that his injury resulted from the incident in the fabrication shop. His failure to present that evidence led Judge Nelson to dismiss his Jones Act claim with prejudice. Judge Nelson also denied Heiderscheid’s maintenance claim as he was a resident in a halfway house at the time of the accident and did not claim to incur any rent obligation until after his employment was terminated. Although he testified that he was paying $575 per month in rent, he did not provide any documentary support of the rent payments, and Judge Nelson held that his failure to present any “real evidence” of his actual living expenses was fatal to his maintenance claim. Heiderscheid received medical care for all of his complaints, but he argued that he should recover for the amounts that had been paid on his behalf because the medical insurer, which paid for his treatment, might now pursue him for reimbursement. As Heiderscheid had not paid for any of the medical expenses, and as there was no evidence of any reimbursement claim against him, Judge Nelson dismissed the claim for cure. Finally, as Judge Nelson dismissed the claims for maintenance and cure with prejudice, she also dismissed Heiderscheid’s claim for punitive damages and attorney’s fees for willful failure to pay maintenance and cure.
Another ad interim stipulation in a limitation action that did not identify a surety and only promised to provide security was rejected; In re B. & J. Martin, No. 20-2360, 2020 U.S. Dist. LEXIS 156254 (E.D. La. Aug. 27, 2020) (Africk).
As in In re Paradise Family, LLC (August 2020 Update), the petitioner in this limitation action sought to comply with the provision in Supplemental Rule F (1) that the petitioner shall deposit with the court a sum equal to the value of the owner’s interest in the vessel and pending freight, or approved security therefor, by filing an ad interim stipulation without any independent surety but agreeing to provide a bond, letter of undertaking, or payment of the amount ordered by the court. And, as in Paradise Family, Judge Africk found the ad interim stipulation to be inadequate and dismissed the limitation action without prejudice.
Court lifted the stay in a limitation action despite delay of the claimants in requesting that the stay be lifted until less than a month before trial was scheduled; In re Weber Marine, No. 18-6359, 2020 U.S. Dist. LEXIS 155692 (E.D. La. Aug. 27. 2020) (Guidry).
The owner of the crew boat M/V WILD WES brought this limitation action on June 29, 2018, after its captain fell asleep and the crew boat allided with a moored barge in the Mississippi River. All claimants had filed claims in the limitation action by September 28, 2018. A final pretrial conference was held in the case on March 4, 2020, and a bench trial was set to commence on April 6, 2020. A week after the final pretrial conference (March 11, 2020), the claimants filed a joint motion to lift the limitation stay so that they could proceed with their claims in state court. The owner of the crew boat objected that upsetting trial at this late date caused undue prejudice and a waste of resources, but Judge Guidry discerned no palpable prejudice to the owner in lifting the stay to allow the claimants to proceed in state court. Therefore, he granted the claimants’ motion.
Diversity in the claims between the defendants did not give the defendants the right to a jury trial when the seaman brought the suit in admiralty under Rule 9(h); Ruiz v. Turn Services, LLC, No. 19-1400, 2020 U.S. Dist. LEXIS 155690 (E.D. La. Aug. 27, 2020) (Fallon).
Trevor Ruiz was injured while working as a crew member on Turn Services’ M/V AFFIRMED when he was struck by a tow line that broke. He brought suit against Turn Services under the Jones Act and general maritime law, invoking Rule 9(h). Turn Services answered and sought a jury trial, but Judge Fallon struck the jury demand. Ruiz amended his complaint to name Al Cenac Towing, the owner of the vessel from which the cable originated, and Cenac filed a third-party action against HWC Wire & Cable. Turn Services then brought a cross-claim against Cenac, and Ruiz amended his complaint to include claims against HWC. Cenac and HWC prayed for a jury trial, and Ruiz moved to quash the demands. The jurisdictional basis for Cenac’s claim against HWC was diversity, and HWC argued that the Fifth Circuit’s decision in Luera v. M/V ALBERTA, in which the Fifth Circuit allowed a jury trial when the plaintiff brought claims based on both admiralty and diversity, supported the argument that a jury should be allowed in this case in which there were claims based on admiralty and diversity. Judge Fallon disagreed, as Ruiz brought all of his claims against the defendants in admiralty pursuant to Rule 9(h). Therefore, Judge Fallon declined to entertain a jury trial on any of the claims brought by Ruiz against Turn Services, Cenac, or HWC.
Calculating whether there has been an unreasonable delay in releasing arrested vessels is based on the date of the original arrest and not the date of the mortgagee’s arrest of the vessels; E.N. Bisso & Son, Inc. v. M/V BOUCHARD GIRLS, No. 2:19-cv-14765, 2020 U.S. Dist. LEXIS 156595 (E.D. La. Aug. 28, 2020) (Vitter).
The litigation between E.N. Bisso and Bouchard Transportation continues (see April 2020 Update involving Bisso’s arrest of the M/V DONNA J. BOUCHARD and Barge B. No. 272). In this case, Bisso arrested the M/V BOUCHARD GIRLS and Barge B. No. 295 in December 2019, and Wells Fargo, mortgagee for the vessels, intervened, also arrested the vessels in June 2020, and obtained an order substituting its own custodian for the vessels. Wells Fargo then moved the court for an interlocutory sale and sought approval to submit a credit bid on the vessels at the sale. After considering the factors governing interlocutory sales, Judge Vitter ordered the interlocutory sale of the Bouchard vessels. Judge Vitter rejected Wells Fargo’s argument that the vessels were subject to deterioration as she had appointed National Marine Services as substitute custodian at the request of Wells Fargo and authorized the custodian to take reasonable measures to protect and maintain the value of the vessels. Judge Vitter also concluded that the custodial costs were not disproportionate as Wells’ Fargo’s claim was for $165,623,469.74, the vessels were valued at $36,250,000, and the custodial costs were only approximately $6,000 per day. However, Judge Vitter did conclude that the delay in securing the release of the vessels (now eight months since they were arrested in December 2019) was unreasonable—noting that the vessel owner is usually given at least four months to post security. Bouchard argued that Wells Fargo was measuring the delay against the wrong arrest, and the court should give Bouchard at least four months since Wells Fargo arrested the vessels on June 12, 2020, not since Bisso arrested the vessels on December 27, 2019. As Wells Fargo was not required to arrest the vessels independently, and as eight months had passed since the original arrest, Judge Vitter held that the delay was unreasonable. Finally, Judge Vitter rejected Bouchard’s argument that she should exercise her equitable powers in admiralty to delay the sale in light of Bouchard’s financial difficulties and numerous lawsuits that had put a strain on Bouchard’s business, recognizing Bouchard’s efforts to resolve or improve its financial condition and resolve these claims under “less-than-ideal circumstances.” Concluding that a poor business climate is not an excuse to delay the sale of the vessels and that the court is not in a position to predict what the future would hold for the economy, Judge Vitter held that equity did not require delaying the sale. As credit bidding is a recognized practice in the Fifth Circuit, Judge Vitter allowed Wells Fargo to credit bid up to the value of its mortgage under the condition that it post bond for the custodia legis costs that Bisso paid before Wells Fargo’s custodian was substituted for Bisso’s custodian. [Thanks to Matthew Ammerman of Houston, Texas for bringing this case to our attention].
From the state courts:
P&I insurer, which paid maintenance and cure to an injured shipwright who was held to be subject to state workers’ compensation, was not entitled to subrogate for its payments when the employer was self-insured; Arlet v. Workers’ Compensation Appeal Board, No. 1722 C.D. 2018, 2020 Pa. Commw. LEXIS 612 (Pa. Commw. Ct. July 29, 2020) (Wojcik).
Robert Arlet worked as a shipwright for Flagship Niagara League, a non-profit educational association that maintained the U.S. Brig NIAGARA and the Erie Maritime Museum. Arlet was injured when he fell on an icy sidewalk on his employer’s premises, and his employer’s insurer paid him maintenance and cure pursuant to the Protection and Indemnity Clauses of a Commercial Hull Policy. Arlet, however, sought benefits under the Pennsylvania workers’ compensation statute. Although Arlet was assigned to work only on the Brig NIAGARA, and his supervisor was the captain of the Brig, he performed most of his work on the vessel when it was docked, and he had not sailed on the vessel since 2000. After a workers’ compensation judge determined that Arlet was a seaman, the Workers’ Compensation Appeal Board reversed that decision and held that Arlet was not a seaman and was entitled to seek an award of state compensation benefits. The P&I insurer then sought to subrogate and recover the maintenance and cure payments it had made from Arlet’s recovery of state benefits. That presented a problem in that Arlet’s employer stopped maintaining state workers’ compensation coverage three days before Arlet’s accident. Arlet’s employer first argued that there was coverage under the P&I policy for injuries to crew members, and the finding that Arlet was not a seaman did not preclude a finding that he was a crew member under the P&I policy. The court rejected that argument, however, reasoning that the terms “seaman” and “crew member” have been held to be synonymous or interchangeable. Arlet’s employer also argued that it was the named insured for the P&I coverage, and it had no insurance coverage for the state workers’ compensation benefits. Therefore, the insurer would be subrogating against the payments from its own insured. The court agreed and held that the insurer was not entitled to subrogate against its own insured for the maintenance and cure payments.
Crew member of a tug was permitted to bring a claim for unseaworthiness of the barge on which he was injured, and his unseaworthiness claim against the tug, was permitted to proceed based on a pattern of negligent acts; Williams v. Dann Marine Towing, LC, No. K18C-05-039, 2020 Del. Super. LEXIS 1559 (Del. Super. Ct. Aug. 6, 2020) (Clark).
Bruce Williams, an engineer and crew member on the tug M/V PALM COAST, was injured while throwing a mooring line on the barge DS-204, which was in tow of the PALM COAST. He brought this action against his employer, Dann Marine, owner of the tug, for negligence, maintenance and cure, and unseaworthiness of both the tug and barge. Dann Marine moved for partial summary judgment that the tug was not unseaworthy and that it was not liable for unseaworthiness of the barge, and Judge Clark denied the motion as to both vessels. Dann Marine cited the case law from the Fifth Circuit that the seaman is not owed the warranty of seaworthiness with respect to vessels to which he has not attained seaman status (in this case the barge). However, Judge Clark stated that the decision of the Fifth Circuit in Smith v. Harbor Towing and Fleeting “does not address the warranty of seaworthiness.” [The Fifth Circuit actually stated the opposite: “we hold that a Jones Act seaman, who possesses the full range of traditional seamen’s rights and remedies, cannot maintain a Sieracki seaworthiness action against a vessel on which he is not a crew member”]. Judge Clark then held that there was a fact question whether Dann Marine had operational control over the barge so as to owe the warranty of seaworthiness. With respect to the unseaworthiness claim against the tug, Judge Clark rejected Dann Marine’s argument that its alleged negligence in the docking practice for the tug could constitute unseaworthiness. Concluding that a pattern of negligent acts can amount to unseaworthiness in operation, he held that there was a fact question of unseaworthiness of the tug because the relief captain used the same docking maneuver each time that he docked the barge at the facility where Williams injury occurred.
Louisiana company was not subject to personal jurisdiction in suit in Texas by Mississippi seaman who was injured on a barge in Louisiana even though the Louisiana defendant was working for a Texas company and could have been sued in Texas if the action arose from that contract; DWB Consulting, LLC v. Ratliff, No. 01-19-00867, 2020 Tex. App. LEXIS 6221 (Tex. App.—Houston [1st Dist.] Aug. 6, 2020) (Keyes).
Benjamin Ratliff, a Mississippi resident, was injured while working on the inland barge BAYOU BLUE in Louisiana waters. He brought this suit against Hilcorp Energy, a Texas resident, and DWB Consulting and Baywater Drilling, Louisiana residents, in the county court at law in Galveston County, Texas. Ratliff asserted that DWB was acting as Hilcorp’s agent, overseeing Hilcorp’s operations in Louisiana, that DWB’s exclusive business relationship as a consultant had been with Hilcorp, that DWB benefitted from doing work for the Texas corporation, and that DWB could have been sued in Texas if a dispute arose between Hilcorp and DWB. After the county judge denied DWB’s special appearance, DWB filed an interlocutory appeal to the court of appeals. Justice Keyes noted that Ratliff’s case was about DWB’s actions and conduct on the BAYOU BLUE, not DWB’s consulting contract. Instead, she reasoned that DWB’s contracting with a Texas company to provide consulting services in Louisiana did not justify a conclusion that DWB could reasonably anticipate being called into a Texas court to answer Ratliff’s claims of negligence that occurred on a vessel in Louisiana. The court of appeals ordered that Ratliff’s claims against DWB be dismissed for lack of jurisdiction.
Federal Shipping Act of 1984 preempted antitrust, bad faith, tortious interference, and breach of contract claims under state law brought by cargo shipper against ocean carriers for conspiring to overcharge the shipper; Mercedes-Benz USA, LLC v. Nippon Yusen Kabushiki Kaisha, No. A-3850-18T3, 2020 Super. Unpub. LEXIS 1570 (N.J. Super. Ct. App. Div. Aug. 10, 2020) (per curiam).
Mercedes-Benz brought suit against NYK Line, Wallenius, and others in New Jersey state court alleging violations of the New Jersey Antitrust Act, tortious interference, breach of contract, and breach of the covenant of good faith and fair dealing in connection with Mercedes’ purchase of Ro-Ro (roll-on, roll-off) services from the defendants’ vessels for the shipment of Mercedes automobiles to and from the United States. As all of the allegations were based on anticompetitive behavior from a conspiracy of the defendants to overcharge Mercedes for the shipments, the New Jersey appellate court dismissed the claims as preempted by the Federal Shipping Act of 1984.
Shipper’s suit under state law for missing laptops was barred by COGSA’s one-year statute of limitations that was incorporated into the NVOCC’s bill of lading; Mauricio Importadoro y Exportadora v. Jet Speed Logistics (USA), LLC, No. 3D19-2430 (Fla. App. (3d Dist.) Aug. 26, 2020) (Gordo).
Mauricio Importado is a Chilean importing company that hired Jet Speed, a non-vessel operating common carrier to ship 3,500 laptop computers from Miami to Chile. The shipment included delivery of the laptops to a warehouse in Miami, transportation of the laptops to Port Everglades, loading the laptops onto the ocean carrier, and transportation of the laptops to Chile. More than 1200 laptops were missing when the shipment arrived in Chile, and Mauricio Importado brought this suit more than a year later in the circuit court of Miami-Dade County, Florida, based on negligence, conversion, and replevin. Although the suit only alleged causes of action under state law, Jet Speed moved for a directed verdict based on the one-year statute of limitations in the Carriage of Goods by Sea Act, as COGSA was incorporated in the bill of lading issued by Jet Speed for the shipment. The trial court granted Jet Speed’s motion, and the Florida Court of Appeal affirmed the decision. Citing Norfolk S. Ry. Co. v. Kirby, Judge Gordo reasoned that the contract of carriage was a maritime contract, even though it contained some carriage on land, and that the incorporation of COGSA was effective throughout the carriage, including the pre-loading activities. As the application of COGSA preempted state law, COGSA’s one-year statute of limitations barred the action.
Thanks to Monica Markovich for her help in preparing this Update.
Kenneth G. Engerrand
Brown Sims, P.C.
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The development of maritime and admiralty law has a rich history. From our nation’s founding, which owed much of its origin to wooden-hulled vessels navigating the Atlantic Ocean, the law of admiralty has been an essential component of our legal history. So much so that its development was central to the thesis that a national constitution was essential in order for a federal judiciary to adjudicate maritime matters.
Schultz v. Royal Caribbean Cruises, Ltd., No. 18-24023, 2020 U.S. Dist. LEXIS 98949 (S.D. Fla. June 5, 2020) (Magistrate Judge Edwin G. Torres) (citing Alexander Hamilton, The Federalist No. 80).
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