September 2023 Longshore/Maritime Update (No. 292)
Notes from your Updater:
Judge Fisher of the United States District Court for the Central District of California resolved contractual disputes among NVOCCs Vanguard Logistics, Econocaribe Consolidators, and Groupage Services of New England by agreeing to enter judgment in favor of Vanguard Logistics on its contract claim against Groupage Services of New England, in favor of Econocaribe Consolidators on the claims of Vanguard Logistics against it, and in favor of Groupage Services of New England on its contract claim against Vanguard Logistics. See Vanguard Logistics Services (USA) Inc. v. Groupage Services of New England, LLC, No. 18-517, 2023 U.S. Dist. LEXIS 131057 (C.D. Cal. July 28, 2023).
In our July and August 2023 Updates, we reported that Judge Block of the United States District Court for the Eastern District of New York rejected the requests by residents of the Wainscott hamlet of the Town of East Hampton, New York, to halt construction of the South Fork Wind Farm, located 35 miles east of Montauk Point, Long Island. See Kinsella v. Bureau of Ocean Energy Management, No. 23-cv-2915, 2023 U.S. Dist. LEXIS 87437 (E.D.N.Y. May 18, 2023); Mahoney v. U.S. Department of the Interior, No. 22-cv-1305, 2023 U.S. Dist. LEXIS 122761 (E.D.N.Y. July 17, 2023). On August 4, 2023, Judge Talwani of the United States District Court for the District of Massachusetts rejected the challenge to the Vineyard Wind Project, a wind energy project off the coast of Martha’s Vineyard and Nantucket, that was brought by Thomas Melone, who owns a house on Nantucket Sound, and Allco Renewable Energy and Allco Finance, the owner/operator/developer of solar electric generating facilities. Melone claimed standing because he derives recreational, conservation, environmental well-being, and aesthetic benefits from the existence of the right whale so that he could challenge the alleged violation of the Marine Mammal Protection Act and the Administrative Procedure Act by the National Marine Fisheries Service. Judge Talwani held that Melone had “sufficiently alleged a small probability that the death of even one whale in connection with the Vineyard Wind Project may impact Melone’s ability to view right whales,” but she held that the NMFS did not act arbitrarily, capriciously, or unlawfully and granted summary judgment to the NMFS. See Melone v. Coit, No. 1:21-cv-1171, 2023 U.S. Dist. LEXIS 135701 (D. Mass. Aug. 4, 2023).
In 2017, Congress authorized an oil and gas leasing program on the Coastal Plain and amended the Alaska National Interest Lands Conservation Act by lifting the restriction on development that had been included in that Act. Lease sales were completed in January 2021, and when President Biden took office two weeks later, he temporarily halted all activities related to the leases on the Coastal Plain. Several state and business groups brought suit against President Biden, challenging his Executive Order, arguing that it violated the Administrative Procedure Act and was an ultra vires act (exceeding the President’s authority). Judge Gleason of the United States District Court for the District of Alaska disagreed and dismissed the suit, stating: “At worst, their actions are rooted in political motivations, which are not by themselves reason to find a delay unreasonable. Accordingly, the Court finds that the Agency Defendants’ delay in implementing the Program is reasonable and that to date Agency Defendants have not unlawfully withheld any action.” See Alaska Industrial Development and Export Authority v. Biden, No. 3:21-cv-245, 2023 U.S. Dist. LEXIS 136474 (D. Alaska Aug. 7, 2023).
After the State of Texas installed buoys on the Rio Grande River near Eagle Pass, Texas, a small business (along with its owner) that provides customers with kayak and canoe training and tours on the River brought suit in Texas state court in Travis County against the State of Texas, asserting that the installation of the buoys violated Texas law. The plaintiffs asked the court to declare that the installation of the buoys violated the Fourteenth Amendment to the United States Constitution. Their amended petition removed the reference to the Fourteenth Amendment but still asked the court to declare that the buoys were arbitrary and capricious because the State’s actions were preempted by federal law and a 1944 Treaty. Texas removed the case to federal court (Western District of Texas), and Judge Pitman remanded it to state court, holding that the plaintiffs were not directly asserting a federal claim and that “state law issues predominate over this action” so that the exercise of federal jurisdiction “would offend the congressionally approved federal-state balance.” See EPI’s Canoe & Kayak Team, LLC v. Texas, No. 1:23-cv-836 (W.D. Tex. Aug. 10. 2023). In a separate suit, the United States brought suit in the United States District Court for the Western District of Texas under the Rivers and Harbors Appropriation Act of 1899 against Texas and its Governor, Greg Abbott, seeking the removal of the floating barrier in the Rio Grande River at Eagle Pass. See United States v. Abbott, No. 1:23-cv-853 (W.D. Tex.). The case is pending before Judge Ezra.
In our September 2021 Update, we advised that the Fifth Circuit reversed the dismissal (based on the running of the statute of limitations) of the suit brought by Petrobras America against Korean shipbuilder Samsung Heavy Industries for fraud based on Samsung’s alleged bribery of Petrobras executives to complete a drilling contract with Pride Global Limited that was a lynchpin to Samsung’s contract to build a drilling vessel for Pride. See Petrobras America, Inc. v. Samsung Heavy Industries Co., No. 20-20338 (5th Cir. Aug. 11, 2021) (per curiam). On August 11, 2023, Judge Rosenthal of the United States District Court for the Southern District of Texas held that, “[d]espite the corruption that gave rise to this suit,” Petrobras did not establish the elements necessary to recover under the Racketeer Influenced and Corrupt Organizations Act and that Samsung would not recover on its counterclaim for the money Samsung had to pay Pride to settle the arbitration award for Samsung’s role in the bribery scheme. Although “[t]he corruption has already resulted in a large arbitration award against Samsung and criminal convictions for the individuals, employees of the plaintiff’s parent company, who took the bribes,” and the litigation “spans years” and “involves transactions that launched massive and expensive drill ships around the world, made by companies participating in an international industry that is central to modern life,” Judge Rosenthal concluded: It is perhaps anticlimactic for the court to find that neither side can win the relief it seeks.” See Petrobras America, Inc. v. Samsung Heavy Industries, Co., No. H-19-1410, 2023 U.S. Dist. LEXIS 140180 (S.D. Tex. Aug. 11, 2023).
In our July 2020 and August 2020 Updates, we discussed Judge Moss’s decisions in Matson Navigation Co. v. United States Department of Transportation, holding that the Maritime Administration violated the Administrative Procedure Act in approving the replacement of two vessels operating in the Maritime Security Program. Judge Moss ruled that the Approval Order should be vacated and the case remanded to MARAD, but he granted MARAD’S motion to dismiss the suit for lack of jurisdiction. See 466 F. Supp. 3d 177 (D.D.C. May 30, 2020). In our September 2022 Update, we noted that Judge Moss dismissed Matson’s suit seeking review of the Maritime Administration’s decision approving the replacement of a vessel operating under the Maritime Security Program, reasoning that the jurisdiction lay with the court of appeals to review the order. See Matson Navigation Co. v. United States Department of Transportation, No. 21-1606, 2022 U.S. Dist. LEXIS 139053 (D.D.C. Aug. 4, 2022) (Moss). On August 15, 2023, the United States Court of Appeals for the District of Columbia Circuit disagreed, holding that the appellate court lacked jurisdiction under the Hobbs Act and that Matson’s claims under the Administrative Procedure Act were “appropriately brought to the district court in the first instance.” Therefore, the case was remanded to the district court. See Matson Navigation Co. v. United States Department of Transportation, Nos. 21-1137, 22-1150, 22-5212, 22-5224, 2023 U.S. App. LEXIS 21242 (D.C. Cir. Aug. 15, 2023) (Rao).
On August 17, 2023, the Eleventh Circuit affirmed the dismissal of the qui tam/False Claims Act claim brought against subcontractor Nuflo, alleging that Nuflo supplied defective pipe fittings for the construction of Virginia-class nuclear attack submarines by General Dynamics Electric Boat Corp. and Huntington Ingalls (Newport News Shipbuilding Divisions). See United States ex rel. 84Partners, LLC v. Nuflo, Inc., No. 21-13673, 2023 U.S. App. LEXIS 21589 (11th Cir. Aug. 17, 2023) (Hinkle, sitting by designation).
On August 17, 2023, Judge McElroy of the United States District Court for the District of Rhode Island declined to allow Sparkman & Stephens, LLC, a naval architecture and brokerage firm that has designed yachts and other vessels since 1929, to rescind its donations of drawings and records to the Mystic Seaport Museum in Connecticut, leaving for resolution only the claims of Sparkman & Stephens for breach of contract for failure to properly preserve the materials and the Museum’s counterclaim for tortious interference with business relations and for a declaratory judgment of invalid copyrights. See Sparkman & Stephens, LLC v. [Mystic] Seaport Museum, Inc., No. 1:21-cv-29, 2023 U.S. Dist. LEXIS 145627 (D.R.I. Aug. 17, 2023).
On August 18, 2023, the Eleventh Circuit declined to vacate an arbitration award of more than a quarter-billion dollars from an arbitration arising out of construction work on the Panama Canal based on disclosures that arbitrators served on panels in unrelated arbitrations in which an arbitrator or counsel in the present arbitration also participated. See Grupo Unidos por el Canal, S.A. v. Autoridad del Canal de Panama, No. 21-14408, 2023 U.S. App. LEXIS 21750 (11th Cir. Aug. 18, 2023) (Marcus).
On August 18, 2023, the Second Circuit vacated the damage award in favor of the Estate of Bruce Kirby and Bruce Kirby, Inc. against LaserPerformance and Quarter Moon, Inc. in the long-running trademark dispute with respect to Laser sailboats. See Estate of Kirby v. LaserPerformance (Europe) Ltd., Nos. 21-519, 21-591, 2023 U.S. App. LEXIS 21687 (2d Cir. Aug. 18, 2023) (per curiam).
On August 21, 2023, Judge Oetken of the United States District Court for the Southern District of New York held that the injury claim of a passenger on an international flight was preempted by the Montreal Convention and was time-barred by its 2-year statute of limitations (with no equitable tolling). See Rodriguez v. Norwegian Air Shuttle ASA, No. 22-cv-10246, 2023 U.S. Dist. LEXIS 148451 (S.D.N.Y. Aug. 21, 2023).
On August 29, 2023, the Environmental Protection Agency and the Department of the Army (Corps of Engineers) issued the final rule to amend the Revised Definition of the Waters of the United States Rule that was published on January 18, 2023 (before the Supreme Court’s decision in Sackett v. Environmental Protection Agency, summarized in our June 2023 Update). This is the pre-publication version:
On the LHWCA Front . . .
From the federal appellate courts
This case involves a confrontation between a shipyard security guard at Detyens Shipyards in North Charleston, South Carolina, and a crew member of the USNS MAURY, which was drydocked at the shipyard. Harold James Hoblick, an employee of the shipyard, observed Travis T. Rose, a crew member on the vessel, park an unauthorized personal vehicle on the pier and then walk down the gangway onto the vessel. Although he was not permitted on the vessel, Hoblick followed Rose onto the vessel to request that he move his vehicle. A dispute ensued, and Hoblick claimed that Rose beat him like a drum. Rose claimed that Hoblick used racially offensive language and tripped while stepping backward from Rose. Hoblick brought this suit against the United States under the Public Vessels Act and Suits in Admiralty Act (based on negligent hiring, supervision, and retention), and the United States moved to dismiss the action for lack of admiralty jurisdiction. The United States conceded the locality aspect of the test for admiralty jurisdiction but contested whether the element that requires a connection to maritime activity was satisfied, particularly whether the incident had a potentially disruptive impact on maritime commerce. Judge Norton characterized the incident as an assault and battery of a non-invited person on a drydocked ship. He then reasoned that the assault on the drydocked ship could not immediately disrupt navigation like a collision or allision or even a plane crashing in the water (a crash in the water would require rescue efforts by commercial vessels). The fight was unlikely to spread to nearby vessels and cause damage (as in the case of a fire), and, as the fight was directed to a non-invited person on the vessel, it did not have the potential to delay the activity of the vessel in the same way than an injury to a repairman or crew member might. Concluding that there was no admiralty jurisdiction or waiver of immunity under the Public Vessels Act or the Suits in Admiralty Act, Judge Norton dismissed the suit. See April 2021 Update.
By dismissing the suit for lack of jurisdiction under the PVA and SIAA, Judge Norton did not address the alternative argument presented by the United States in its motion for summary judgment that the discretionary function exception applied. Hoblick filed a motion for reconsideration on the issue of admiralty jurisdiction, and, in addition to rejecting that argument, Judge Norton granted the motion for the United States and dismissed the suit based on the discretionary function exception in both statutes (sealed order). Hoblick appealed, pro se, and the Fourth Circuit affirmed the dismissal of the suit. The appellate court did not address the issue of admiralty jurisdiction and noted that Hoblick cited no government policy or regulation controlling how the United States hires or retains employees on the MAURY. Concluding that the decisions to hire and retain an employee are the type of discretionary decisions that are grounded in public policy, the Fourth Circuit affirmed the dismissal of the case.
From the federal district courts
Bradley Cadiere brought suit against Huntington Ingalls (successor to Avondale Shipyard) and asbestos suppliers, alleging bystander (secondary) and direct asbestos exposure to asbestos while he and two uncles, his brother, and his stepfather worked at Avondale Shipyard in Louisiana. In his original complaint, however, Cadiere repudiated a claim of direct exposure against Huntington Ingalls because of the exclusivity provision in the LHWCA. After the Fifth Circuit’s decision in Barrosse v. Huntington Ingalls (see July 2023 Update) that the LHWCA did not preempt state tort claims for a worker’s asbestos exposure in the zone of concurrent jurisdiction between the LHWCA and state law, Cadiere moved for leave to file an amended complaint against Huntington Ingalls to assert a claim for direct asbestos exposure. Huntington Ingalls opposed the amendment, arguing that Cadiere was barred by judicial estoppel because Cadiere had previously repudiated the claim he sought to add. Magistrate Judge Currault rejected that argument, however, as Cadiere did not take inconsistent positions. He alleged injury from both direct exposure and secondary exposure in his original complaint. He simply declined to pursue the claim for direct exposure because the cases at that time held that the LHWCA preempted his claim. His decision did not persuade the court to accept that position as there was no dispositive motion on preemption. Now that the law had changed, in the absence of a substantial reason for declining the amendment (as Rule 15(a) governed), Magistrate Judge Currault granted leave to file the amendment.
Roland Fiffie, Sr. brought suit in Louisiana state court against Avondale Shipyards (claiming he was employed on a cleanup gang and later as a shipfitter, pipefitter, and welder), other employers, and a number of suppliers of products containing asbestos, seeking to recover for asbestosis. Avondale removed the case to federal court based on the Federal Officer Removal Statute. In his deposition, Fiffie admitted that he settled an asbestosis claim he made against Avondale under the LHWCA in 2009 and that he believed he was first diagnosed with asbestosis prior to 1999. One of the suppliers and an insurer (Hopeman Brothers and Liberty Mutual) moved for summary judgment on the ground that Fiffie’s tort claims were prescribed because they were filed more than one year after Fiffie’s LHWCA claim was discharged and was no longer pending. Applying Louisiana law, Judge Ashe noted that Fiffie’s claim would have been time-barred a year after his diagnosis. However, Judge Ashe added that a claim under the LHWCA interrupts prescription of the tort claim. The LHWCA claim was resolved in 2009, and Fiffie waited more than a year to file this tort action in 2021. Therefore, his tort claims were untimely, and Judge Ashe granted summary judgment. See July 2023 Update.
Other defendants (Union Carbide, Taylor-Seidenbach, and First State Insurance) also filed motions for summary judgment, and Judge Ashe repeated that once the LHWCA claim was settled, the prescription period for the tort claims began running again. As Fiffie waited for more than a year after the LHWCA claim was resolved to file this tort action, his claims were prescribed, and Judge Ashe granted the motions for summary judgment.
Aries Marine owned the liftboat RAM XVIII, which was sent to house workers who were working on a platform in the West Delta region of the outer Continental Shelf off the coast of Louisiana (the workers were employed by Fluid Crane and United Fire). The vessel jacked up, and a construction crew worked until the next day when the vessel began to list and sank. Aries filed a limitation action in federal court in Louisiana, and seven workers on the rig filed claims against Aries under Section 5(b) of the LHWCA. Aries moved for summary judgment that it was entitled to exoneration of liability or, alternatively, limitation of liability. Judge Africk found a fact dispute whether the captain of the liftboat performed a preload before jacking up to ensure that the leg pads for the vessel were on stable ground and would not punch through the seabed. If the preload was not performed, Judge Africk concluded that the failure would constitute negligence under the vessel’s active control, in violation of the duty enunciated by the Supreme Court in the Scindia case. Turning to the limitation issue, Judge Africk noted that with respect to seagoing vessels, the privity or knowledge of the master at or before the beginning of the voyage is imputed to the owner. Aries did not dispute that the liftboat was a seagoing vessel (the accident did occur on the outer Continental Shelf more than 12 nautical miles from the coast). Thus, to the extent there was negligence of the captain before the voyage, it would be imputed to the owner. Judge Africk also cited evidence that the owner allegedly provided an unqualified captain whom it had failed to adequately train, and he declined to grant summary judgment as to limitation of liability. The vessel owner also moved to dismiss the punitive damage claims brought against it under Section 5(b) of the LHWCA on the ground that punitive damages are only recoverable against a third-party tortfeasor by a longshore worker who is injured in state territorial waters (and for lack of evidence of willful and wanton conduct). Judge Africk noted that the Fifth Circuit has not decided the question of whether punitive damages may be recoverable under Section 5(b), and he declined to grant summary judgment on the punitive damage claim. See February 2023 Update.
Fugro USA was hired to assist in positioning the liftboat by providing GPS positioning and performing a sonar scan for debris or obstructions on the sea floor. It provided plats that showed where prior vessels had been placed in the area, but the images Fugro provided only showed the impressions left by vessels that Fugro had helped to position. Therefore, it was possible that there were holes and impressions in the area that were not reflected in the data provided by Fugro to Aries. Fugro moved for summary judgment on the negligence claims asserted against it, noting that the claimants had placed the blame for the listing of the liftboat on Aries’ captain’s failure to conduct a preload (or on the conducting of an improper preload). In response to Fugro’s motion for summary judgment, the claimants argued that Fugro owed them a duty to advise the captain that there could be additional can holes in the area, that there were dark spots on the sonar images that might be additional can holes, and to exercise stop work authority when one leg of the liftboat penetrated deeper than had been expected. Judge Africk assumed for the motion that Fugro had a duty, but he could not find causation for any of the alleged failures because, ultimately, the accident occurred because, as the claimants alleged, the captain failed to properly preload the vessel. The claimants’ expert confirmed that when the failure of the vessel occurs after the preloading, the preload was not adequate. As the preloading was not the responsibility of Fugro, Judge Africk dismissed the claims against Fugro.
Fieldwood, the owner of the platform, chartered the liftboat to provide worker housing in support of operations taking place on its platform. Fieldwood moved for summary judgment on the ground that, as the time charterer, it had no control over the vessel and assumed no liability for the negligence of the crew. Judge Africk noted that time charterers owe a “hybrid duty” arising from contract and tort to avoid negligent actions within the sphere of activity over which they exercise at least partial control. He added that a time charterer may be liable for directing the vessel to encounter natural hazards, such as dangerous weather or sea conditions. The claimants argued that Fieldwood was negligent by directing the liftboat to be positioned on the east side of the platform when it knew the conditions were hazardous and by limiting the scope of the marine surveyor (Fugro) to not include geo-technical data. As the claimants’ expert opined that it was likely that either soil samples existed for the location or that penetrations were known by Fieldwood, which, if credited, would permit a finding that Fieldwood had notice of the hazardous conditions and contributed to the failure, Judge Africk denied summary judgment to Fieldwood.
Judge Africk then considered the contracts between the parties for their indemnity obligations. Fieldwood entered into Master Service Contracts with both Fluid Crane and United Fire (employers of the claimants) by which Fluid Crane and United Fire agreed to indemnify Fieldwood for injuries to employees of Fluid Crane and United Fire. The indemnity extended to Fieldwood’s contractors (such as Fugro and Aries) if they entered into contracts with Fieldwood to extend indemnity (for injuries to their employees) to subcontractors of Fieldwood (such as Fluid Crane and United Fire). Fieldwood and Fugro entered into a Master Service Contract by which Fugro agreed to provide similar indemnity to Fieldwood and its contractors. Likewise, Fieldwood and Aries entered into a Master Service Contract by which Aries agreed to provide similar indemnity to Fieldwood and its contractors. Therefore, the contracts between Fieldwood, on the one hand, and Aries, Fugro, Fluid Crane, and United Fire contained provisions by which each party agreed to indemnify the others for injuries to its own employees. Consequently, Fluid Crane and United Fire were obligated to indemnify Fieldwood, Aries, and Fugro for the claims brought by the employees of Fluid Crane and United Fire if the indemnity provisions were valid under applicable law. The validity question required a determination of whether Louisiana law or maritime law applied. If maritime law applied, the agreements were valid. If Louisiana law applied, the indemnity was invalidated by the Louisiana Oilfield Indemnity Act. Judge Africk applied the requirement from the Fifth Circuit’s Doiron case (whether the contract provided or the parties expected that a vessel would play a substantial role in the performance of the contract) to determine whether the contracts were maritime or not. The contracts at issue were the contracts between Fieldwood and Fluid Crane and United Fire to perform work on Fieldwood’s platform. Although Aries and Fugro were involved with the role of the liftboat, that expectation was not relevant to the contracts between Fieldwood and Fluid Crane and United Fire. Judge Africk distinguished cases in which the contract documents provided for the use of a vessel. In this case, “Aries and Fugro may have expected the vessel to play a substantial role in the completion of the work, but the same cannot be said of Fluid Crane and United Fire.” Therefore, Judge Africk concluded that Louisiana law applied, and he denied indemnity from Fluid Crane and United Fire to Aries and Fugro. He did not, however, hold that the LOIA invalidated the requirement for payment of defense costs when the indemnitee was found to be free from fault. Thus, if Aries were ultimately found free from fault, it would be entitled to reimbursement of its defense costs. Judge Africk had granted summary judgment on liability in favor of Fugro, so Fugro was entitled to recover its defense costs. Fluid Crane requested that Judge Africk order the defense costs be split evenly between Fluid Crane and United Fire, despite the fact that only one of the seven claimants was an employee of United Fire. Judge Africk agreed that, under Louisiana law, the defense obligation was incapable of division. Therefore, he ordered that the defense obligation be divided in equal portions between Fluid Crane and United Fire. See March 2023 Update).
One of the workers employed by Fluid Crane, Gilberto Gomez Rozas, was an undocumented immigrant who was not authorized to work in the United States. During his deposition and in discovery, Rozas repeatedly invoked the protection against self-incrimination in the Fifth Amendment, refusing to answer questions related to his citizenship and personal history. Aries argued that his claim should be dismissed with prejudice because Rozas had perpetrated a fraud on the court (and to deter future parties from similar conduct). In the alternative, Aries sought a sanction that Rozas be precluded from recovering past and future lost earnings at United States’ wage rates. Judge Africk noted that the party invoking the Fifth Amendment cannot hope to gain an unequal advantage against the party he has chosen to sue and that the defendant should not be required to defend against a party who refuses to reveal the very information that might absolve the defendant of liability. Thus, the Fifth Circuit has enunciated a balancing test that dismissal is appropriate only when less burdensome remedies would be an ineffective means of preventing unfairness to the defendant. In this case, Rozas did not commit perjury or provide false documents, but his invocation of the Fifth Amendment during depositions and discovery impeded Aries’ ability to investigate the claim for damages. Consequently, Judge Africk decided that the lesser sanction of precluding Rozas from seeking future wage loss awards at United States’ rates was the appropriate sanction. With respect to past wage loss, Rozas testified that he had not been working, and it had been four years since he prepared tax returns. The parties did not brief the issue of extending the sanction to past wage losses, so Judge Africk did not address the issue of past wage losses at this time. See April 2023 Update.
Aries moved for reconsideration of the decision on the contractual allocations involving Aries, Fugro Marine, United Fire, and Fluid Crane that was discussed in the March 2023 Update. Aries, Fugro, United Fire, and Fluid Crane were parties to contracts with Fieldwood that contained indemnity provisions that were enforceable under the general maritime law but that were unenforceable under Louisiana law. Applying the Fifth Circuit’s Doiron test, Judge Africk held that the contracts with United Fire and Fluid Crane were not maritime because there was no evidence that United Fire and Fluid Crane expected the vessel RAM XVIII would play a substantial role in the completion of the contract. Aries asked Judge Africk to reconsider that decision, arguing that Judge Africk erred by not considering Fieldwood’s expectations as to the use of the RAM XVIII. Judge Africk agreed that the expectations of Fieldwood were relevant (as it was a party to each of the contracts), but he answered that Aries did not cite any authority that the expectations of one party could establish that the parties expected that a vessel would play a substantial role. Thus, further discussion of Fieldwood’s expectations would not have changed the court’s analysis. Aries also argued that Judge Africk had added a third prong to the Doiron test—”did the vessel in fact play a substantial role in the completion of the contract?” Judge Africk disagreed, stating that the decision was based on the expectations of the parties and not on the use of the vessel (he noted that the actual use was only relevant, according to Doiron, when the parties’ expectations were unclear). Consequently, Judge Africk denied Aries’ motion for reconsideration. See June 2023 Update.
United Fire also sought reconsideration of Judge Africk’s decision to divide the defense costs equally between United Fire and Fluid Crane despite the fact that six of the seven claimants were employees of Fluid Crane and only one was an employee of United Fire. United Fire cited an opinion from Judge Vance of the United States District Court for the Eastern District of Louisiana that, absent a clear agreement to the contrary, insurers who owe a co-equal duty to defend must share the cost equally. However, United Fire did not identify any portion of the contracts that constituted a “clear agreement” to share defense costs in an unequal proportion, so Judge Africk held that relief was not available for arguments that had been previously considered and rejected (Judge Africk was not impressed with the analogy to seven individuals who had dinner together and split the bill for the appetizer so that each paid 6/7 of the cost, reasoning that defense costs “cannot be divided amount the claimants in the same manner that an appetizer would be shared among diners”).
As Fluid Crane and United Fire were the employers of the workers who were injured when the RAM XVIII capsized in the Gulf of Mexico, their LHWCA carriers (American Longshore Mutual Association and the Louisiana Workers’ Compensation Corp.) paid benefits under the LHWCA for their injuries. ALMA and LWCC then brought subrogation claims to recover the benefits paid from the defendants. Fieldwood, Aries, and the plaintiffs moved for summary judgment, arguing that ALMA and LWCC had agreed to waive their rights of subrogation pursuant to the terms of the Master Services Contracts between Fieldwood and Fluid Crane and United Fire. Judge Africk noted that the policies provided for waiver of subrogation when required by written contract, so he considered the requirements of the underlying contracts. The waiver in the MSCs extended to the “Company Group,” which was defined to include Fieldwood and its “invitees.” ALMA and LWCC argued, however, that Aries and the plaintiffs also fell under the definition of “third Party Contractor Group,” which would render the language of the indemnity and insurance sections of the contracts superfluous because all parties and contractors/subcontractors would be members of the Company Group. Fieldwood answered that there was no prohibition against an invitee satisfying another definition in the contract and that this interpretation would not lead to circular indemnity or absurd results. Therefore, Judge Africk addressed whether Aries and the claimants were, in fact, invitees, citing Louisiana law that defines an invitee as a person who goes onto premises with the expressed or implied invitation of the occupant on business of the occupant or for their mutual advantage. Fieldwood argued that it was the occupant of the platform (one who has possessory rights in, or control over, certain property or premises) and the RAM XVII (a time charterer is an occupant of the vessel because the vessel is under the ultimate direction, control, and command of the time charterer). It also argued that Fluid Crane and United Fire were invited by Fieldwood to the platform to work by their contracts and that they, and their employees, who performed the work that benefited Fieldwood, were, therefore, invitees. Judge Africk agreed that the employees of Fluid Crane and United Fire were invitees of Fieldwood and that LWCC and ALMA were required to waive subrogation in favor of the claimants. With respect to Aries, Fieldwood argued that the RAM XVIII, owned by Aries, was invited to erect itself within the boundaries of Fieldwood’s mineral lease to assist in the platform work, so Aries qualified as an invitee. Although Aries argued that no employee of Aries ever stepped foot on the platform, it did not dispute that the vessel was attached to the platform via a walkway and that its presence benefitted Fieldwood. Having concluded that Aries and the workers were invitees so that subrogation was waived, Judge Africk considered the validity of the waiver under Louisiana state law, which he had previously held was applicable to the contracts so as to invalidate the indemnity provisions. Citing the Fontenot decision from the Louisiana Supreme Court, Judge Africk noted that a waiver of subrogation provision does not violate the Louisiana Oilfield Indemnity Act if the contract does not also require indemnity. As there was unenforceable indemnity in this case, Judge Africk held that the statute did not void the waiver of subrogation (there was no evidence of payment for a “Marcel” Endorsement that would create an exception to the LOIA). Consequently, the subrogation claims of ALMA and LWCC were dismissed. See July 2023 Update.
ALMA and LWCC filed motions for reconsideration of the granting of Fieldwood’s motion for summary judgment on their subrogation claims as LHWCA carriers. LWCC argued that, notwithstanding the waiver of subrogation, it had a claim for an offset, pursuant to Section 33(f) for the net tort recovery of plaintiff Glenn Gibson. Fieldwood did not disagree with the legal proposition asserted by LWCC, but it argued that LWCC had insufficiently raised the argument in a single paragraph in its opposition with citation to facts or legal authority, resulting in waiver of the contention. Judge Africk agreed that “LWCC’s briefing on this issue was less than clear;” however, he acknowledged that dismissal of the claim for an offset would be “legal error.” Therefore, he amended the granting of summary judgment to reflect that the order did not affect LWCC’s claim for an offset pursuant to Section 33(f). ALMA moved for reconsideration that it was not conclusively established that the vessel was attached to the platform via a walkway and that Aries did not meet the definition of an “invitee” under applicable precedent. Judge Africk, however, did not believe that the arguments were sufficient to grant reconsideration, and he denied them. Like LWCC, ALMA argued that it retained a right to claim an offset pursuant to Section 33(f). Fieldwood reiterated the argument that ALMA’s claim was waived, but, as Fieldwood did not contest the legal basis for the argument, Judge Africk granted the same relief to ALMA, that it retained the right to assert an offset against the LHWCA claim pursuant to section 33(f).
Kendrick Anthony was employed by Weeks Marine as a longshore worker on a coastal restoration project in Fourchon, Louisiana. When a hurricane threatened the area and it was all but impossible to transport the workers, Weeks Marine hired Deep South, which owns a fleet of airboats, to ferry Anthony and other employees. Deep South hired contract operators for the airboats, and it engaged Clint Boudreaux to operate the airboat for this job. While carrying the workers, the airboat ran aground on a sandbar, and Anthony was injured when he was thrown from the vessel. Anthony brought suit against Deep South in federal court in Louisiana, and Deep South filed this action in federal court seeking to limit its liability to the value of the airboat. At the end of discovery, Deep South moved for summary judgment in the limitation action that it was entitled to limitation because it did not have privity or knowledge with Boudreaux’s navigation error. Anthony opposed the motion, asserting that there were fact questions whether Deep South was aware of complaints about Boudreaux’s operation of the vessel and because Deep South failed to provide adequate safety policies and procedures for the passengers on its airboats. Although Denny Adolph, owner of Deep South, denied that anyone had complained to him about Boudreaux’s operation of the airboat, an employee of Weeks testified that he and other employees had complained to their supervisors about the way Boudreaux drove the airboat. They believed that Deep South must have been advised of the complaints because Boudreaux “would tone it down” after each complaint but then he would eventually go back. Judge Ashe agreed that “by the thinnest of margins” there was a fact dispute whether Deep South had privity of the alleged negligent operation by Boudreaux. Additionally, as it was undisputed that Deep South did not have safety manuals or procedures, there was a fact question whether that omission caused the accident. Judge Ashe concluded that “this hardly means that Anthony has carried the day on limitation but only that the question remains for trial. If Anthony’s proof of Deep South’s privity or knowledge is not shorn up by then, a different outcome portends on a weighing of all the evidence.”
Dominic Ross, a Black male, was hired to serve as a tire mechanic in the maintenance shops of Ports America and Ceres Gulf. He brought this suit alleging race-based discrimination, and most of his claims were dismissed. This opinion addresses Ceres Gulf’s motion for summary judgment to the claims of race-based discrimination in violation of Title VII and the Louisiana Employment Discrimination Law. After reviewing the evidence presented on the elements required to support the asserted cause of action, Judge Zainey held that Ross was not able to establish a prima facie case that similarly situated employees outside of his protected class were treated more favorably than Ross: “In the absence of a single comparator, it is the failure to produce a prima facie case on this fourth element alone that supports a motion for summary judgment” for Ceres Gulf.
From 2001 to 2004, Jesse Staples served in the United States Army and was deployed to Iraq during the Iraq War. Staples suffered head injuries in combat and endured prolonged, traumatic combat-related experiences. After leaving the Army, but before being hired by Taylors International, Staples traveled to Iraq without incident. In 2014, Staples was hired by Taylors as Director of Procurement and Executive Director for its office in Dubai, United Arab Emirates. In 2015, he traveled to Iraq to conduct an inventory and to meet with Taylors’ President of Operations for Europe, the Middle East, and Asia. Staples claimed that this trip triggered mental and physical health-related issues rooted in his prior military service. Unlike his last trip, Staples was in the same location where he had been in combat; there was nearby gunfire, and they were unarmed with no security; and they had to walk by Iraqis in military uniforms (and were told that there had been sniper fire days before they arrived). Following the trip, Staples began to suffer mental health symptoms, and he was diagnosed with PTSD and TBI related to his combat service. Staples’ original one-year contract was renewed three times, but it was not renewed and expired in 2018. Staples filed a claim with the Department of Labor, seeking LHWCA benefits pursuant to its extension by the Defense Base Act, alleging that the 2015 trip to Iraq triggered his PTSD symptoms. Staples settled that DBA claim with a Section 8(i) agreement for $160,000 in compensation and $25,000 in medical benefits. Staples also brought this suit in federal court in Louisiana against Taylors for discrimination and retaliation in violation of the Americans with Disabilities Act. Taylors filed a motion for summary judgment that was denied by Judge Summerhays (finding that a reasonable juror could conclude that the reasons proffered for the termination were pretextual). Taylors also filed a motion for summary judgment, arguing that it was entitled to a credit (in the ADA suit) against any award of past or future wages for the amount of the compensation paid in the settlement of the DBA claim. Taylors argued that the 8(i) agreement included an award for past and future loss of wages and that Staples was not entitled to a double recovery of the same lost wages in the ADA suit. Judge Summerhays did not believe that Taylors was entitled to summary judgment. First, the injuries in the DBA claim involved PTSD symptoms, and the injury in the ADA suit was the wrongful termination. There may be factual overlap, but the claims were grounded on incidents that occurred three years apart. Second, the Findings with the 8(i) agreement simply provided a lump sum with no detail as to the components of the compensation. Judge Summerhays stated that Taylors may ultimately be entitled to some credit, but the credit could not be determined from the documents submitted from the DBA claim for the purpose of summary decision.
Robert M. Warrington, Sr. worked as a painter in the Paint Shop Division of the Philadelphia Naval Shipyard, and three of the ships on which he worked (USS SARATOGA, USS CONSTELLATION, and USS KITTY HAWK) contained General Electric turbines that were supplied by GE under contract with the Navy in accordance with Navy specifications. Warrington was present within a few feet from the locations where gaskets in the turbines allegedly containing asbestos were removed and replaced. Warrington brought this suit against suppliers of products containing asbestos in Pennsylvania state court, the case was removed to federal court based on the Federal Officer Removal Statute, and GE moved for summary judgment. Applying maritime law because of the exposure on Navy ships, Judge Kenney held that the evidence was insufficient to establish that the gaskets in the turbines supplied by GE contained asbestos. Instead, the evidence showed that the turbines were shipped “bare metal” in accordance with Navy Specifications and were insulated by the Navy’s shipbuilders after installation. Therefore, Warrington’s claim of failure to warn had to satisfy the “tightly cabined” bare-metal test set forth by the Supreme Court in DeVries. Warrington failed to satisfy the first element of the test as the evidence did not show that GE directed the incorporation of asbestos-containing gaskets or that it incorporated the asbestos-containing gaskets itself (he also failed to establish that the turbines would be useless without asbestos-containing gaskets). Judge Kenney also concluded that Warrington failed to show that GE knew or should have known that a danger existed when the turbines were installed decades before Warrington’s exposure. Consequently, Judge Kenney granted summary judgment to GE on the claim of failure to warn. As Warrington failed to prove the causation element with respect to his exposure and GE’s turbines, Judge Kenney also dismissed the claim for breach of the implied warranty of merchantability.
Fariba Rashidiasl claims that she was injured when she fell off her bed during a nightmare while deployed in Afghanistan by Mission Essential Personnel as a linguist. She brought this suit in federal court in California, alleging that she was denied medical benefits and compensation under the Defense Base Act by defendants, MEP (ESIS/Arch/Chubb) and Iqarus (International SOS). She attached a description of what happened as well as medical reports, emails, and a response to requests for admissions filed with the Office of Administrative Law Judges. Rashidiasl requested that she be allowed to proceed in forma pauperis, and she moved for appointment of counsel. Finding the information provided about her assets to be insufficient, Judge Curiel denied Rashidiasl’s motion to proceed in forma pauperis (advising that Rashidiasl could refile with an affidavit identifying all of her assets). Judge Curiel then reviewed the complaint, sua sponte, and held that the documents that Rashidiasl submitted for her complaint did not state a claim. Accordingly, Judge Curiel dismissed the complaint (with leave to amend). Judge Curiel also noted that the complaint may be barred by res judicata in light of litigation previously brought in the same federal court by Rashidiasl’s employer and carrier to enforce a discovery order by Administrative Law Judge Alford (resulting in dismissal of the DBA claim as a sanction). As the case was dismissed for failure to state a claim, Judge Curiel declined to appoint counsel for Rashidiasl. See July 2023 Update.
Judge Curiel’s leave to amend expired on June 30, 2023. On June 29, Rashidiasl mailed a motion seeking an extension of time to file an appeal to the Ninth Circuit. As the Ninth Circuit would not have jurisdiction over an order granting leave to amend, Judge Curiel granted another extension for Rashidiasl to file an amended complaint and an amended motion for leave to proceed in forma pauperis (to August 4). Instead of filing the amended complaint or motion, she wrote two letters to the court around August 3, complaining about the court’s procedures in this case and presenting facts to support her grievance against the defendants in connection with her claim under the LHWCA/DBA. Despite Judge Curiel’s efforts to accommodate the pro se plaintiff, he could not construe the letters as an amended complaint, and he struck them from the docket. He did, however, grant Rashidiasl one final opportunity to file an amended complaint and an amended motion by September 15 (advising that he would dismiss the action if a complete amended complaint and motion (or filing fee) are not filed by that date.
Sandino Brito Diaz was employed as a longshore worker by Crowley Caribbean Services at Crown Bay Marina in St. Thomas, Virgin Islands. He claims that he was injured when a metal bar used to secure containers on the DENEB J fell on him because it was dropped by a crew member of the vessel or someone under the control of the vessel. Diaz brought this suit against the vessel interests in federal court in the Virgin Islands, and his wife brought a claim for loss of consortium. The vessel interests moved to dismiss the claim for loss of consortium, citing cases holding that loss of consortium or society is not compensable under the general maritime law. Although Judge Molloy was “mindful” of the concerns about inconsistencies in the remedies available under the general maritime law, he was persuaded by the Supreme Court’s Alvez decision and held that a loss of consortium claim was not barred for a longshore worker injured in territorial waters. Therefore, Judge Molloy declined to dismiss the claim.
And on the maritime front . . .
From the federal appellate courts
The Gray Group, owner of the HELLO DOLLY VI, insured its yacht with Great Lakes Insurance for $1.9 million with a named-windstorm deductible of $228,000. The policy contained a choice-of-law provision for New York law when there are no entrenched maritime principles. The Application Form provided that the vessel’s primary mooring location between July 1 and November 1 would be at the Orleans Marina in New Orleans (and the application stated that it was incorporated into the policy). The Hurricane Questionnaire/Plan provided steps that would be taken if a hurricane threatened the yacht’s dockage at the Orleans Marina. In the Spring of 2020, the yacht was moved from the Orleans Marina to the Roscioli Shipyard in Fort Lauderdale, Florida, and on July 19, 2020, it was moved to Pensacola, Florida, where it was moored at the home of Michael Gray, a member of Gray Group. In September 2020, Hurricane Sally (subject of the Skanska opinion below) struck Pensacola, and the yacht was a total loss. Great Lakes denied coverage for the loss based on alleged breach of warranties by Gray Group, and Great Lakes brought this declaratory judgment action in federal court in Louisiana against Gray Group. Judge Vance held that Gray Group breached the location provision of the Hurricane Questionnaire/Plan and that the breach voided the policy ab initio. Although she considered the term “application for insurance” to be ambiguous, she decided (applying New York law), from extrinsic evidence, that the parties intended the “application for insurance” to include the Hurricane Questionnaire/Plan. She concluded that the location in the Hurricane Questionnaire/Plan (the Orleans Marina) was a warranty by Gray Group that was breached when the vessel was not moored at the Orleans Marina for the majority of hurricane season. Gray Group appealed and argued that the “application for insurance” unambiguously referred only to the Application Form and not to the Hurricane Questionnaire/Plan. Writing for the Fifth Circuit, Judge Wilson agreed with Judge Vance that “application for insurance” was ambiguous and that it implied a broader set of documents, including the Application Form and those submitted by Gray Group during the underwriting. He also agreed that Judge Vance had not erred in concluding that the Hurricane Questionnaire/Plan had been incorporated into the policy (noting the bold header labeled “WARNING” that advised that “this declaration and warranty shall be incorporated in its entirety into any relevant policy of insurance.” The prior course of dealings also included notice that another Great Lakes policy would expire if Gray Group did not provide documents that included a hurricane protection plan. Judge Wilson also affirmed Judge Vance’s finding that the representation regarding the yacht’s marina meant the place where the vessel was to be moored for the majority of the hurricane season, which was the Orleans Marina. As the insured warranted that the vessel would be located at the Orleans Marina during hurricane season, Judge Wilson affirmed that the breach of warranty voided coverage and that Great Lakes properly denied coverage. Thanks to Professor Michael J. Sturley, Fannie Coplin Regents Chair at the University of Texas School of Law, for bringing this case to our attention.
Skanska was engaged by the Florida Department of Transportation to rebuild the Pensacola Bay Bridge. During Hurricane Sally in September 2020, several barges used in the construction broke free and caused damage to the bridge and other property. Numerous businesses and property owners brought suits in state courts and brought claims in the limitation proceedings brought by Skanska with respect to its barges. Several of the claimants moved to dismiss Skanska’s limitation action for lack of maritime jurisdiction and, alternatively, on the merits—asserting that Skanska could not establish that it was entitled to limitation of liability. Skanska moved to dismiss the claims of numerous businesses that sought to recover for economic loss resulting from the bridge being out of service (citing the Robins Dry Dock economic loss rule), as the businesses had not suffered any physical damage. The claimants conceded that the first prong of the admiralty jurisdiction test (locality) was met because the damage was caused by barges on navigable waters during the bridge construction. The claimants also did not take issue with the first part of the connection test that there was a potential to disrupt maritime commerce. The claimants argued that the general activity giving rise to the incident was not substantially related to traditional maritime activity, describing the activity as constructing a bridge. Judge Collier was persuaded by the Supreme Court’s characterization in Grubart (damage to buildings in downtown Chicago from work in the Chicago River driving pilings around a pier supporting a bridge). Judge Collier described the work performed by Skanska as “bridge construction and repair performed from vessels on a navigable waterway,” and he did not require that the work must result in an improvement to maritime activity. Finally, although the claimants asserted that the barges did not constitute vessels, they did so to argue that Skanska did not present a viable limitation action, not to argue that the court lacked admiralty jurisdiction over the damage to the bridge on navigable waters. Consequently, Judge Collier denied the motion to dismiss for lack of admiralty jurisdiction. Judge Collier then addressed the claimants’ motion to dismiss the complaint on the ground that Skanska could not establish that it was entitled to exoneration or limitation from liability. This argument included the contention that the barges were used as construction platforms and not vessels. Skanska countered that the barges were used for transportation purposes to and from the worksite and around the bridge area during the construction. Citing the decision of the Supreme Court in Stewart v. Dutra, Judge Collier noted that the primary use of the barges need not be for transportation, and that the barge could lose its status as a vessel only if it were rendered incapable of transportation. He rejected the argument that the barges failed to qualify as vessels and found fact questions for trial as to the negligence and privity of Skanska. Judge Collier then addressed Skanska’s motion to dismiss the economic loss claims. Viewing the issue as relating to damages and not liability, he invoked the limitation procedure that the court would hear the liability and limitation issues first. If Skanska did not succeed on its limitation argument, then Judge Collier held that the resolution of the damages, including the application of the economic loss rule, would be addressed by the court tasked with determining damages under the saving-to-suitors clause. See August 2021 Update.
The claimants sought production of electronic discovery from Skanska, including production of cell phone data, but cell phone data was deleted or lost for five of the 13 custodians of cell phone data. The custodians had received a written litigation hold notice, but Magistrate Judge Cannon concluded that Skanska did not take reasonable steps to preserve the cell phone data for these custodians, allowing employees to delete text messages, not requiring cell phone data to be backed up, and not suspending its routine document destruction policies. Although some of the deleted messages were produced from other custodians, Magistrate Judge Cannon did not find that offering the deposition of the custodians was sufficient to remedy the loss of the data. Concluding that the spoliation constituted bad faith (lack of effort to collect the data until seven months after the litigation hold), Magistrate Judge Cannon held that the evidence was presumed to be prejudicial. Magistrate Judge Cannon did not find that dismissal of Skanska’s limitation actions was appropriate, but she did conclude that adverse inferences were justified, including an inference that the information in the cell phone data was favorable to the claimants. Finally, Magistrate Judge Cannon declined to issue a monetary sanction in the amount of the limitation funds (over $7 million) and instead held that the claimants were entitled to fees and costs incurred in prosecuting the motion for sanctions. Judge Collier agreed with the decision. See September 2021 Update.
Judge Collier held a bench trial of the liability and limitation issues in October 2021 and issued his decision on December 29, 2021. Judge Collier first began by reversing the burden of proof under THE LOUISIANA Rule (when a moving ship strikes and damages a stationary object, the moving ship is presumed to be at fault). He then found that Skanska’s preparations for the hurricane were inadequate and that Skanska did not overcome the presumption. Similarly, he rejected Skanska’s claims that the hurricane was a vis major, which human skill and caution could not have prevented based on his finding that Skanska did not take reasonable precautions for the storm. Turning to limitation, Judge Collier found that Skanska’s negligence sprang from executive-decision-making that established privity or knowledge. Consequently, he dismissed the limitation proceedings and dissolved the injunction that had stayed the many suits filed in state court. See February 2022 Update.
Skanska appealed to the Eleventh Circuit, arguing that Judge Collier violated the Limitation Act by failing to adjudicate the merits of the economic loss claims before deciding whether there was privity or knowledge. After giving a lengthy history of the statute, the Supplemental Rule enacted by the Supreme Court to provide the practice used in limitation cases, and the relationship between the statute and the Saving-to-Suitors Clause, Judge Grant addressed the argument that Judge Collier should have decided whether Skanska owed a duty to the economic loss claimants before denying limitation for those claims. Although there is typically a two-part procedure by which the court determines the acts of negligence or conditions of unseaworthiness and then decides whether there is privity or knowledge with respect to those acts/conditions, Judge Grant held that the procedure is not mandatory when it is impossible under any set of circumstances for the vessel owner to demonstrate the absence of privity or knowledge. When limitation is no longer an issue, “the basis for exoneration vanishes.” Therefore, Judge Grant concluded that “whenever the court finds that the vessel owner cannot establish a lack of privity or knowledge, it is appropriate to dismiss the petition to protect the claimants’ rights under the saving to suitors clause—even if that means forgoing (in part or in entirety) a decision on the vessel owner’s liability.” Judge Grant added that the language in Supplemental Rule F that the owner “may demand exoneration from as well as limitation of liability” merely preserved the right to contest liability while seeking limitation and did not “create a freestanding right to exoneration from liability in circumstances where limitation of liability is not an issue.” Accordingly, the Eleventh Circuit held that Judge Collier did not abuse his discretion in dismissing the limitation actions without determining whether there was liability for the economic loss claims. Skanska also challenged evidentiary rulings as well as the finding that Skanska did not exercise reasonable care (based on the application of THE LOUISIANA Rule), and these issues were easily rejected by Judge Grant. Turning to the finding of spoliation, the Eleventh Circuit agreed that the “intent to deprive” standard in Rule 37(e)(2) is the same as the bad faith standard used in other spoliation contexts. Judge Grant found the issue of whether sanctions should be issued to be “a close question,” reasoning that there was no direct evidence of bad faith and it was plausible that Skanska was “‘just’ grossly negligent.” However, the issue was whether there was clear error in the finding of bad faith, and Judge Grant responded that “Skanska’s utter failure to implement even the most basic data-protection safeguards” was “so egregious that an inference of bad faith is easy to make.” In response to Skanska’s argument that “much of the evidence was destroyed through ‘routine document destruction policies,” Judge Grant stated that “a hands-off implementation of an ordinary corporate destruction policy is not a silver bullet.” Finally, Skanska argued that a finding of bad faith based on circumstantial evidence requires an “affirmative act,” but Judge Grant disagreed, as Rule 37 provides for sanctions “when electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it . . . .”
While the M/V OKALOOSA was departing the First Street Wharf in New Orleans with two loaded barges, a rope became entangled in the vessel’s propeller, stopping the engine and causing the vessel to allide with property across the river. The City of Gretna filed a claim in the limitation action filed by the owner of the OKALOOSA, and the owner of the OKALOOSA filed a third-party complaint in the limitation action against the owner and operator of the First Street Wharf (the Board of Commissioners of the Port of New Orleans and Empire Stevedoring). The owner and operator of the wharf moved for summary judgment that there was no evidence that the rope was not debris in the River as opposed to a rope that was hanging from a bollard on the wharf that was owned and operated by the Board and Empire. The Board and Empire presented Judge Milazzo with photographs showing that the line found tied to the bollard after the incident had eyes at both ends (which, they suggested, demonstrated that the rope had not been broken at all). The owner of the OKALOOSA, however, presented the opinion of its expert, Robert Bartlett, who opined that the section of rope that was removed from the OKALOOSA’s propeller and the segment of rope hanging from the bollard at the wharf were from the same rope (the captain of the OKALOOSA also stated that he believed the vessel had caught a line from the wharf). As there was a dispute as to whether the rope that entangled the propeller of the OKALOOSA was part of the rope hanging from the wharf or was debris floating in the River, Judge Milazzo denied the motion for summary judgment. See March 2022 Update.
Judge Milazzo held a nonjury trial and, believing the captain of the OKALOOSA, found that the rope was tied to a bollard at the wharf about 100 feet upriver from the point where the OKALOOSA was moored. As it was night, the captain could not see how far the rope hung under the water. The fouling of the propeller on the OKALOOSA by the rope was the cause of the tow breaking free from the wharf so that the OKALOOSA drifted to the water intake facility across the river, where it contacted dolphins protecting the water treatment pump. Assuming that THE LOUISIANA Rule or THE OREGON Rule applied in this case to the allision between the OKALOOSA and the dolphins, Judge Milazzo held that the vessel owner had carried its burden to show that the vessel acted with reasonable care. Judge Milazzo then addressed the duty of Empire and the Port to provide a safe berth and to remove hazards from the wharf. As the wharf was closed for the weekend, there were no employees working on the day of the accident, and Judge Milazzo found no fault on the part of the wharf or stevedoring company as they could not have known about the line placed on the bollard while the wharf was closed. As the sole fault was of an unidentified third party that left the line on the bollard hanging into the water, Judge Milazzo dismissed the claims of the City of Gretna as well as the claims of the owner of the OKALOOSA for damage to the vessel. See May 2022 Update.
Gretna appealed, arguing that Judge Milazzo erred in deciding that Empire and the Board of Commissioners discharged their duty as wharfingers to provide a safe berth and that the court held the owner of the OKALOOSA to the wrong legal standard of care and incorrectly concluded that the OKALOOSA’s captain was not negligent in operating the vessel. The Fifth Circuit rejected the arguments, affirming Judge Milazzo “essentially for the reasons stated in [her] comprehensive findings of fact and conclusions of law following the bench trial.”
Judith Willis was a passenger on the ANTHEM OF THE SEAS. She was directed to participate in a mandatory muster drill in the theater on deck four of the vessel. As she was late, crew member Valeriya Artyushenko told her to hurry up and get a seat, directing her to an open seat. Willis responded that she was too old and fat to get to the seat, but the crew member told Willis to follow her down a step to the seat: “I said, I can’t fit in there. . . . I said I can’t go in there. I can’t climb. I’m old. I’m fat. So she says, oh, come on, follow me.”). While holding the railing, Willis stepped down and fell. Willis brought this suit against the cruise line in federal court in Florida based on negligence of the cruise line and for vicarious liability of the crew member. The cruise line moved for summary judgment as there was no one directly in front of Willis on the steps, nothing was blocking her view, the lighting was adequate, and she did not slip on any foreign substance or tripping hazard. Willis argued that the defendants owed her a heightened duty of care because a muster drill is a unique maritime peril and because the defendants created the hazardous condition from the rushed process in the drill. She asserted that it was a combination of her physical condition and the rushing that supported the negligence of the defendants. Although recognizing that muster drills are uniquely maritime, Judge Moore found no basis to diverge from the duty of reasonable care owed to passengers. After rejecting Willis’ citation to other incidents as evidence of constructive notice (they did not involve rushing an old and fat passenger by a crew member), Judge Moore held that the direct negligence claims against the cruise line should be dismissed for lack of constructive notice. With respect to the claim of vicarious liability based on the conduct of the crew member, Judge Moore did not have to reach the issue of the negligence of the crew member because Willis did not designate her doctors as expert witnesses, and the letter she submitted from her doctor did not contain an opinion correlating her problems with her fall. Therefore, Judge Moore granted summary judgment on the vicarious liability claim. See June 2022 Update.
Willis appealed to the Eleventh Circuit, raising several arguments. However, writing for the court, Judge Branch only considered the issue of causation as it is an element of all of the negligence claims. Willis argued that Judge Moore erred in holding that she failed to elicit medical expert evidence on causation, citing her deposition testimony that she hurt her neck when she fell, her MRI showing injuries to her neck, and the letter from her treating physician referencing the neck injury. The causation issue then “boils down to the following question: What does a plaintiff need to show to prove causation in a maritime negligence claim involving non-observable medical injuries?” Judge Branch noted that the rule applied by Judge Moore had its origin in state cases and had been applied by the district courts in the Eleventh Circuit as well as in an unpublished decision from the Eleventh Circuit. Concluding that there was no indication that the rule would “frustrate national interests in having uniformity in admiralty law,” Judge Branch agreed to “formally recognize in the maritime context that non-readily observable injuries require medical expert testimony to prove causation.” Judge Branch then considered the evidence and noted that Willis’ testimony about her neck injury and the MRI were not expert testimony and did not establish proximate cause (the MRI report established the condition of her neck, but it did not give any explanation of the causation). Finally, the letter from her physician did not contain any opinion about the cause of her injury. Accordingly, the Eleventh Circuit held that Judge Moore correctly granted summary judgment on all counts asserted against the cruise line.
From the federal district courts
In the Clear Spring case, Big Toys’ 2019 45’ Azimut was involved in a collision in Biscayne Bay, Florida. The vessel was insured by Clear Spring Property & Casualty with hull coverage of $860,000. The policy contained a “Fire Suppression Warranty” (including required equipment and weighing and certifying the tanks once a year), and it also provided that breach of a warranty will void the policy from the inception. The policy also contained a choice-of-law provision for New York law in the absence of entrenched maritime law. Big Toys submitted a claim for damages, and Clear Spring denied the claim, asserting that the policy was void because Big Toys violated the Fire Suppression Warranty (even though the breach of warranty was unrelated to the collision). Clear Spring then brought this action in federal court in Florida, seeking a declaration that the policy was void and afforded no coverage for the collision damage. The parties filed cross-motions for summary judgment, and Judge Bloom agreed with Clear Spring and granted its motion. The determination of whether a breach of the Fire Suppression Warranty voided the policy turned on whether Florida or New York law governed. Big Toys argued that Florida law applied, including its anti-technical statute that would preclude enforcement of the warranty. Big Toys also argued that Clear Spring waived its right to rescind the policy by failing to return the premiums. Clear Spring argued that New York law requires that express warranties be literally complied with, regardless of whether the omission had a causal connection to the loss, and that Big Toys had breached the warranty by its admission that it did not weigh the fire suppression bottle in the 12 months preceding the collision. In the absence of a controlling case in the Eleventh Circuit, Judge Bloom reviewed the law in other circuits and noted the conflict between the Raiders decision in the Third Circuit (remanding the case to determine whether the choice of New York law would contravene a strong public policy of the state of Pennsylvania) and the decisions of the Fifth and Ninth Circuits (as well as the Southern District of Florida) that the public policy to consider is that of the maritime law, which upholds the policy’s choice of state law unless the chosen state has no substantial relationship to the parties or transaction. Judge Bloom then agreed that New York had a substantial relationship based on Clear Spring’s assertion that it is an admitted carrier in New York, is subject to service of process in New York, and New York is a major maritime jurisdiction with a well-developed body of maritime law and insurance law. Accordingly, Judge Bloom concluded that the policy had an enforceable clause designating New York law, that there was no entrenched federal law governing the Fire Suppression Warranty, that the Warranty unambiguously required that the tanks be weighed at least once a year, and that Big Toys breached the warranty by failing to weigh the equipment, even if that breach was not related to the loss. Finally, Judge Bloom rejected the argument that Clear Spring waived its right to void the policy by failing to return the policy premiums prior to filing suit, holding that it acted appropriately in filing the lawsuit seeking the declaratory judgment. She ordered the refund of premiums.
In the Great Lakes case, the sailboat HANALEI, owned by the Myers Regulinski 1996 Revocable Trust, was struck by lightning and damaged while in Panama. The Trust made a claim under the insurance policy issued by Great Lakes Insurance SE, but the insurer denied the claim on the ground that the vessel’s fire extinguishing equipment had not been maintained in good working order and the tanks had not been weighed, certified, and tagged. Great Lakes brought this action in federal court in Washington, seeking a declaration that the policy was void because of the breach of the policy’s warranty with respect to the fire extinguishing equipment. The policy contained a choice-of-law provision for New York law in the absence of entrenched maritime law. Asserting that Washington law applied, the Trust asked the Washington court to stay the suit until resolution of the Supreme Court of the Raiders case. Judge King did not consider Great Lakes to be prejudiced by the stay, stating that “/as the Trust notes, Great Lakes currently holds the money based on its denial of the Trust’s claim.” Judge King added that the stay would impose some hardship on the parties, but “the hardship that could result from conflicting rulings would be far greater.” Therefore, she stayed the case pending the decision from the Supreme Court.
After the M/V ATINA allided with Cox Operating’s offshore platform, Cox Operating arrested the vessel and named the vessel’s master as a defendant in the suit in federal court in New Orleans. The owner, bareboat charterer, and managers of the vessel then filed a limitation action in the same court, and the two suits were consolidated. The order in the limitation action stayed all claims against the vessel, her officers, and crew, and Cox Operating asked the court to modify the stay so that it could pursue its claim against the master of the vessel in the first suit. The vessel defendants responded that Judge Milazzo should use her inherent power over her docket to continue the stay against the master, arguing that it was a waste of time and effort to allow the claim to proceed against the master because he was not a party to the vessel’s P&I insurance and recovery against him was unlikely. Reasoning that the language of the statute was plain that the limitation act does not affect the liability of the master, Judge Milazzo declined to extend the stay to the master and ordered that Cox Operating could proceed with the claim against the master. See January 2022 Update.
The parties filed cross-motions for summary judgment with respect to the punitive damage claims, which arose in the aftermath of the replacement of the captain of the boat (Edin) who began acting erratically and sending threatening messages while he was at the helm of the vessel in the Mississippi River. The managers established an emergency response team at their office in Turkey and arranged for a captain (Er) to board the vessel. Captain Er recommended replacing Captain Edin, but Captain Er could not sail with the vessel because of his visa status. The managers hired Captain Hurmuzlu to take over as captain, and he was flown from Turkey to Louisiana (more than 24 hours before boarding the vessel at the Southwest Pass Anchorage). He had not slept in 52 hours when he took the helm, and the handover by the Chief Officer to Captain Hurmuzlu violated the manager’s safety manual. After dropping off the pilot, the vessel anchored near Cox’s platform, but a dispatcher with the Associated Branch Pilots of New Orleans requested that the vessel relocate because the Association liked to keep a 4-mile buffer zone around the sea buoy. It was during the relocation that the ATINA allided with the platform. The managers argued that the accident was a result of a mistake by the second officer who mistook the platform for a vessel, and there was confusion on the vessel whether the platform was moving (and its speed and direction). Cox argued that there was evidence of conduct that was sufficiently outrageous to award punitive damages because the managers did not want to wait for proper training, rest, and handover of captains in order to avoid putting the vessel off hire and losing money, allowing a sleep-deprived captain to take the helm of the vessel in the middle of the river at night. Cox argued that fatigue caused Captain Hurmuzlu to lose situational awareness and to mistake the platform for a vessel. The managers responded that there was no evidence of motivation by money or that any fatigue played a role in the allision. Rather, it was a mistake by the second officer that caused the allision. Judge Milazzo noted that the managers had reacted swiftly to a difficult situation, that there was no evidence that they were aware of any fatigue of Captain Hurmuzlu, and that they knew that he would be assisted by a river pilot, a second officer, and a chief officer in navigating to the anchorage location. Therefore, Judge Milazzo dismissed the punitive damage claims. See May 2023 Update.
Cox Operating moved for reconsideration of Judge Milazzo’s decision on punitive damages, submitting excerpts of transcripts of post-allision interviews with the master and second officer of the ATINA that were taken as part of the investigation by the Coast Guard/NTSB. The managers moved to strike the exhibits, arguing that they were inadmissible under 46 U.S.C. Section 6308(a) (providing that no part of a report of a marine casualty investigation (including findings of fact, opinions, recommendations, deliberations, or conclusions) is admissible or subject to discovery in a civil proceeding. Cox argued that the transcripts were not “part of” the report and should not be excluded, but Judge Milazzo found compelling Judge Barbier’s reasoning in another case that the interviews were part of the investigation for the purpose of taking measures to promote safety of life and property and not to fix civil responsibility. Therefore, she held that the transcripts were not admissible, distinguishing a case in which Judge Porteous held that photographs did not provide findings, opinions, recommendations, deliberations, or conclusions and were admissible as they merely illustrated the condition of the objects depicted as they existed on the date of the incident and investigation. As the wiring that was at issue in that case was replaced before the parties could inspect it, the photographs provided the only evidence depicting the condition at the time of the incident. Turning to the motion for reconsideration, Cox argued that Judge Milazzo erred in making four factual findings. Without the transcripts, there were no new facts, and Judge Milazzo was easily able to reject reconsideration as a rehash of the arguments previously presented. She reiterated that punitive damages are limited to cases of “enormity” and that, even assuming the managers were motivated by money, their decisions did not exhibit the type of “outrageous, egregious conduct warranting punitive damages.”
Boss Lady Adventures entered into a contract with Portier Fabrication in Louisiana to construct a 78-foot steel fishing vessel (BOSS LADY) for $410,000. During the construction, Boss Lady became concerned about the work, and Boss Lady instructed Portier Fabrication to halt work on the vessel and eventually advised Portier Fabrication that it would take possession of the vessel to have the inadequate performance corrected. Boss Lady brought this suit in federal court in Louisiana against Portier Fabrication, Robbie Portier, and Ashley C. Portier, seeking to recover the cost to correct the deficiencies as well as for fraudulent billing. Portier Fabrication submitted expert reports from Robbie Portier and Chad Portier, and Boss Lady filed a Daubert motion to exclude their opinions, claiming that the Portiers lacked the qualifications to provide expert testimony, that they failed to use any discernible methodology for their opinions, and that their opinions were not unbiased and reliable due to the nature of their relationship with the defendant. Judge Fallon disagreed, reasoning that the defendants were not offering the Portiers as experts on industry standards but to testify as to the construction of steel fishing vessels by the defendants. Their years of experience and knowledge qualified them despite their lack of formal training or education. Judge Fallon also rejected the objection to their methodology (“simply looking at a vessel”) as the Portiers have the experience “to know what to look for when inspecting a vessel under construction.” Although their reports were “short and unconventionally formatted,” the Portiers’ opinions were more fully presented in their depositions. Finally, Judge Fallon held that the claims of bias and reliability could be addressed by cross-examination.
Sero Services, a Maryland company, owns a 32-foot aluminum passenger yacht, LIQUID LIMO, which operates in Maryland waters from its home port in Ocean City, Maryland. Sero procured insurance for the vessel through its agent in Maryland (Deeley Insurance) with a policy issued by Accelerant Specialty Insurance, an Arkansas corporation with its principal place of business in Georgia. The policy contained a lay-up period during which the insured warranted that the vessel would be ashore in Ocean City, Maryland and would not be used or navigated. The LIQUID LIMO sank during the lay-up period while moored in Maryland. As the vessel was moored at a slip, and was not ashore, Accelerant denied coverage based on breach of the express policy warranty and brought this suit in federal court in Houston, Texas, seeking a declaration that it owed nothing under the policy. Sero moved to dismiss the case for lack of jurisdiction/venue or to transfer the case to a court of proper venue. Accelerant argued that there was venue in Texas by the forum-selection clause, designating the federal court for the venue where the insured resides or where the insurance agent resides. As the policy named Trident Marine Managers as Sero’s agent, with a street address in Houston, Accelerant argued that the federal court in Houston was a proper location for the suit, even though none of the parties resided in Texas, none of the facts occurred in Texas, and Trident was not a party to the suit. Judge Werlein agreed that the case was properly filed in federal court in Houston, accepting at face value the recitation that Trident was Sero’s agent with a Houston street address. He then noted that when there is exclusive jurisdiction in either of two federal courts, the movant must show good cause to transfer the case. Judge Werlein then weighed the private interest factors and public interest factors and held that they “decidedly establish that the District of Maryland is the more convenient forum for adjudication of this coverage dispute.” In ordering the transfer, Judge Werlein concluded that “the record reveals no reason for Accelerant to file this case in Texas other than to cause the Assured Sero to suffer great inconvenience, unnecessary expense, and substantial procedural obstacles, and possibly, and totally impermissibly, to accommodate its attorneys who office in Houston.”
This litigation arises from services provided to the S/V RED SKY by Nautor Swan Global. Nautor Swan arrested the vessel in this proceeding in federal court in Rhode Island, and the vessel was released by the posting of security in the amount of $750,000. The ship (not its owner) then filed a counterclaim for wrongful arrest and breach of contract (unauthorized work, overcharges, and damaged materials), and, because the vessel does not have legal standing to claim breach of contract, Nautor filed an amended complaint under Rule B directly against the owner of the vessel. The property to be attached was the security that was posted to release the vessel. Although the parties argued whether Spanish law or American maritime law applied, Magistrate Judge Almond answered that the applicable law was not material to “the validity of the Rule C arrest that took place in this case after the Owner chose to bring the Vessel to this District.” The vessel objected to Nautor Swan’s request to utilize Rule B to attach the security already posted by the vessel as the basis for the in personam claim for breach of contract/quantum meruit against the vessel owner. However, Magistrate Judge Almond recommended that the $750,000 that was deposited in the registry of the court could be used as security for the related Rule B claim for breach of contract/quantum meruit against the owner. Finally, the counterclaim and briefing of the vessel included a request for countersecurity under Rule E(7). Magistrate Judge Almond noted that countersecurity was not available for the claim for wrongful arrest (citing Judge Brown’s decision in Incas v. M/V SANG JIN). As the request was not properly pleaded, Magistrate Judge Almond recommended that the owner be allowed to amend the counterclaim to present a proper claim.
Marianne Hazelitt, a passenger on the HARMONY OF THE SEAS, injured her knee while disembarking a ferry to access the “Blue Lagoon Island Deluxe Beach Break” excursion in Nassau Harbor. Hazelitt brought this suit in federal court in Florida against the cruise line and excursion operator, and the cruise line moved to dismiss all of the courts. The cruise line argued that the counts for misleading advertising and negligent misrepresentation were devoid of facts supporting the contention that the representations made by the cruise line were false (and that the alleged misrepresentations were contradicted by materials such as the Passenger Ticket Contract). Judge Bloom did not believe that the allegations in the complaint were limited to general promises of a safe, reliable excursion and that they contained sufficient specifics to avoid dismissal. Similarly, she agreed that the allegations of negligent selection and retention of the excursion by the cruise line and negligent failure to warn and general negligence contained sufficient detail. Judge Bloom did dismiss the claims for vicarious liability based on apparent agency or agency by estoppel, negligence (based on joint venture), and third-party beneficiary as they were contradicted by the materials referenced in the complaint and the Tour Operator Agreement between the cruise line and the tour operator. Finally, Judge Bloom dismissed the claim for breach of a non-delegable contractual duty to provide a reasonably safe excursion as there was no explicit contractual provision providing for that duty.
The Naval Sea Systems Command awarded National Steel and Shipbuilding (NASSCO) a contract to perform repair work on the USS BONHOMME RICHARD, which was pier-side at the San Diego Naval Base. NASSCO subcontracted to California Marine the work of flushing, cleaning, and making gas free the tanks throughout the vessel. A fire broke out on the vessel, and some of California Marine’s equipment was destroyed, preventing it from completing its work. The Navy determined that it was failures by the Navy that caused the fire. California Marine brought this action against the United States in federal court in California under the Public Vessels Act, and, alternatively, under the Suits in Admiralty Act, seeking to recover on a maritime tort theory. The United States argued that California Marine had not exhausted its remedies under the Contract Disputes Act and that California Marine could not avoid the jurisdictional bar contained in the CDA by alleging this contract dispute in the language of a tort claim. Judge Burns agreed that NASSCO could not sue the United States on a contract claim until it exhausted its remedies in the CDA, but that did not preclude California Marine from bringing a maritime tort claim (California Marine did not have a contract with the Navy, and it did not assert any contract claim). The United States argued that California Marine’s equipment was only on the ship because of the contract for repair, but Judge Burns did not believe that the location and context of the tort rendered the claim contractual in nature. Finally, the United States argued that California Marine’s subcontract provided that the parties would settle all disputes through the CDA process. However, Judge Burns responded that the regulations for the CDA process “shouldn’t be read to radically alter tort liability or sovereign immunity across the vast web of government contracts.” Consequently, Judge Burns declined to dismiss California Marine’s tort claims.
Main Industries brought this suit in the Circuit Court for Hampton, Virginia, alleging that Metro Machine (d/b/a General Dynamics) breached a subcontract for repair work on the USS MITSCHER. Metro Machine removed the case to federal court based on original admiralty jurisdiction, and Main Industries moved to remand the case. Joining the majority of district courts, Judge Smith held that the case could not be removed without a basis for jurisdiction other than original admiralty jurisdiction. In its response to the motion to remand, Metro Machine argued that uniquely federal interests in the case provided an independent basis for federal jurisdiction, citing Boyle and arguing that the dispute implicated the Navy’s obligation to pay an equitable adjustment on the prime contract. However, Judge Smith did not find any conflict between federal interests and state law as Main Industries was not seeking to impose a duty contrary to the duty imposed by the government contract. Metro Machine also argued that Main Industries had waived the right to seek a remand by agreeing to the jurisdiction of the federal court in Virginia contained in the forum-selection clause in Metro Machine’s general terms and conditions. However, Judge Smith was not convinced that Main Industries actually agreed to the clause or that the clause, if applicable, had been triggered, stating: “It is inappropriate for the federal court to litigate such a battle-of-the-forms when the propriety of removal is in doubt.” Consequently, Judge Smith agreed to remand the case, but she declined to award attorney fees to Main Industries “considering the conflicting case law” on maritime removal.
Hoodblue needed to move machinery from Baltimore, Maryland to Iquique, Chile. It hired Roll on Roll off, a freight forwarder and non-vessel operating common carrier, to arrange the shipment. RORO booked the carriage with Shipco, a non-vessel operating common carrier, and Shipco issued bills of lading for carriage on the MAERSK GATESHEAD and the DUBLIN EXPRESS. The bills of lading identified Hoodblue as the shipper, Swisscorp as the consignee, Saco Shipping as the notify party, and RORO as the forwarding agent. Saco was the only party that signed the bills of lading. RORO and Shipco separately entered into a Carrier to Carrier Agreement. The cargo was successfully carried to Chile, but neither the consignee nor the notify party claimed the cargo in a timely manner, and Shipco sustained $130,000 in carrier and port charges. Shipco (a New Jersey entity) brought this suit in federal court in New York against RORO (a Florida entity), basing personal jurisdiction on the New York forum-selection clause in the bills of lading. RORO objected to personal jurisdiction in New York as it has no office, employees, or property in New York; as the transaction did not involve New York; and because it was not a party to the Shipco bills of lading. Shipco argued that the court should apply the “closely related” test (followed by some district judges in the Second Circuit) that a signatory to a contract containing a forum-selection clause may enforce the clause against a non-signatory when the non-signatory is closely related to a signatory. However, the courts have declined to apply the rule when the signatory and non-signatory have a separate preexisting contractual relationship in which they had an opportunity to agree to a forum-selection clause but did not do so. As RORO and Shipco had entered into the separate Carrier to Carrier Agreement that did not include a forum-selection clause, Judge Stanton held that Shipco would not be allowed to receive the “windfall” from a contract provision to which RORO did not consent. And, even if the closely related test applied, Judge Stanton did not believe that RORO was so closely related to Saco that it should be liable for the failure of Saco’s customer to retrieve the cargo (as it was Saco and not Hoodblue that signed the bill of lading, Judge Stanton did not have to address whether RORO was closely related to Hoodblue). Judge Stanton also rejected the argument that RORO was closely related to the dispute as a third-party beneficiary of the bills of lading, stating that RORO was “more like the driver of a rented taxi, with no concern for the business interest of its passengers.” Finally, Shipco was unable to establish either specific or general jurisdiction over RORO, even though it had booked cargo to depart from New York on nine instances, as there was no nexus between those transactions and the claim involved in this suit.
Pan Ocean chartered the AFRICAN WREN from MUR Shipping and contracted with World Fuel Services to provide bunkers to the vessel in Singapore. The bunkers were provided to the ship by BP Singapore, but they did not comply with the contract specifications because they contained excessive water and sodium. MUR refused to consume or pay for the bunkers, and MUR requested that Pan Ocean arrange for de-bunkering. Pan Ocean made World Fuel aware of the request, but World Fuel declined to remove and replace the off-spec bunkers. MUR then removed and sold the off-spec bunkers, resulting in a loss of $407,023.60 to Pan Ocean. Pan Ocean then brought this action against World Fuel in federal court in Florida, seeking to recover its damages from the sale/removal plus loss of hire. World Fuel moved to dismiss the claim on several grounds. First, World Fuel argued that Pan Ocean failed to take all reasonable actions to eliminate or minimize damages associated with off-specification bunkers as required by its General Terms and Conditions. Chief Judge Altonaga held that this argument was an affirmative defense and not an attack on the sufficiency of the complaint. Therefore, it was appropriate for a motion for summary judgment and not a motion to dismiss for failure to state a claim. Similarly, Chief Judge Altonaga declined to dismiss the complaint based on the argument that Pan Ocean failed to satisfy a condition precedent of providing notice of a claim in writing within seven days after delivery (as required in the General Terms and Conditions), noting that the complaint sufficiently alleged compliance and the argument relied on emails and testimony. Chief Judge Altonaga instructed: “Defendant should know that ‘[s]atisfaction of conditions precedent . . . is not a matter that is adjudicated on a motion to dismiss.’” Finally, Chief Judge Altonaga declined to dismiss the claim for damages that World Fuel contended were not allowed by the General Terms and Conditions, stating that the argument would require the court “to engage in contract interpretation and resolve fact issues.”
Christhian M. Oliver Gonzalez, a citizen of Panama, was employed as an Art Steward on the MV CELEBRITY BEYOND, owned by Celebrity Cruise Lines, which has its principal place of business in Miami. After cleaning areas and transporting items for art auctions, Gonzalez felt pain in his lumbar spine and numbness and tingling in his fingers. He signed off the vessel and was evaluated by an orthopedist in Florence, Italy, but he claims that his requests for medical treatment were ignored. He brought this suit in federal court in Florida as a seaman under the Jones Act and general maritime law (alleging a single count of unseaworthiness), and the cruise line moved to dismiss the complaint on the basis of forum non conveniens pursuant to the forum-selection clause in the Independent Contractor Agreement between Gonzalez and Caribbean Staffing Solutions that mandated the Turks and Caicos Islands as the venue for arbitration. Judge Bloom noted that the Supreme Court has determined that a valid forum-selection clause should be given controlling weight in the forum non conveniens analysis in all but the most exceptional cases. Although Gonzalez argued that the agreement did not reflect that he had signed it or that it was effective at the time of his injury, the cruise line produced evidence demonstrating that Gonzalez signed the agreement and that it was effective by its terms. Judge Bloom then reviewed the terms of the agreement and held that the unseaworthiness count fell within the scope of the forum-selection clause (any controversy, claim, or dispute that arose out of the service for any cruise line). Gonzalez argued that the court could deny the motion because the action he asserted was well-established under the Jones Act and general maritime law. Judge Bloom noted, however, that Gonzalez had not cited any case law that his seaman status invalidated the forum-selection clause. Instead, she reasoned that the courts have declined to hold that the Jones Act prohibits a foreign seaman from being bound by a contract provision mandating a specific foreign forum for disputes under the contract. Finally, considering the forum non conveniens factors, Judge Bloom held that the Turks and Caicos Islands provide an adequate available alternative forum to hear the claim, and she granted the motion to dismiss for forum non conveniens (because she could not transfer the case to a foreign court).
The Tennessee Valley Authority is a corporate instrumentality of the United States that is statutorily charged with the development and regulation of the Tennessee River system, including the Guntersville Reservoir (a large impoundment on the Tennessee River in northeast Alabama). The TVA acquired real estate outside the original river channel property and then deeded some of the property to Jackson County, Alabama by an Indenture. The Indenture gave Jackson County the right to construct and maintain piers, docks, and other facilities on the property and in the abutting water. The Indenture reserved to the United States the right to enter the area to carry out any functions, activities, or programs provided for in the TVA Act and that the TVA was liable for injuries or property damaged caused by the sole negligence of the TVA. As part of Jackson County Park and Marina, Jackson County designed, built, owned, operated, and maintained Dock B, a wood-framed covered dock with a metal roof and of two uncovered and 36 covered slips. The DIXIE DELIGHT, a 43-foot liveaboard houseboat owned by Tim Parker, was berthed in slip 36 of Dock B—the slip closest to the shore. A fire broke out on the vessel, and the fire spread to neighboring vessels and to Dock B. As the fire spread to the dock, it prevented occupants of vessels located farther from shore from using the dock to make it to shore, and the fire resulted in injuries, deaths, and property damage. The fire originated in the inner walls within the hull of the DIXIE DELIGHT between the electrical panel and its storage closet. Each of the slips on Dock B had a breaker box and a meter box to deliver and meter electricity. Jackson County had performed maintenance work on the slip 36 breaker box less than two weeks before the fire. Suits were filed in federal court in Alabama against the TVA, seeking to recover for the injuries, deaths, and property losses, and suits were also filed against Jackson County in Alabama state court. The TVA moved to dismiss the federal suits for several reasons. The TVA argued that the plaintiffs could not hold it liable as owner of the dock or submerged land, but Judge Maze did not have to address the issue of whether the TVA owned the dock because the plaintiffs alleged that it owned, managed, and/or controlled the dock. Noting that the contractual agreements gave the TVA rights of inspection, that the TVA performed inspections, and that the plaintiffs alleged that the TVA voluntarily assumed a duty to warn of hazards based on findings from its inspections, Judge Maze concluded that the plaintiffs had alleged enough facts to support a finding of control of the dock by the TVA to survive a motion to dismiss. The TVA next argued that the Indenture with Jackson County provided that the TVA would not be liable for injuries, deaths, or property damage unless caused by the sole negligence of the TVA. As the plaintiffs brought suits alleging the negligence of both the TVA and the County and the negligence of the TVA was based on the deficiencies in the construction and operation of the dock by the County, the TVA argued that the incident could not have resulted from the sole negligence of the TVA and the claims against the TVA had been released. Judge Maze responded that the Indenture was an indemnification agreement from the County and not a release of third parties. Additionally, Judge Maze reasoned that it would be redundant for the County to indemnify the TVA from liability to third parties if the third parties had released the TVA from that liability. Judge Maze also rejected the argument that the plaintiffs’ entry onto Dock B was under the County’s title, so the plaintiffs could have no rights against the TVA that are greater than the rights of the County. He could not conclude that the language extended beyond the County and, at most, provided that the County would indemnify the TVA for the injuries/damages. Additionally, Judge Maze reasoned that, even if the language did operate as a release, the sole negligence exception precluded granting a motion to dismiss. Judge Maze noted that the plaintiffs’ allegations asserted that the TVA undertook the duty to inspect and warn, which could make it liable for its own conduct and not only vicarious liability for the failings of the County. Finally, Judge Maze rejected arguments that the TVA was not liable under the Good Samaritan Doctrine or because the County had superior knowledge, as those issues were better resolved after discovery.
Bonny Coney was a passenger on the ALLURE OF THE SEAS. She claims that the cruise line overserved her large quantities of alcoholic beverages that caused her to fall over the bed in her cabin, fracturing her spine. Coney brought this suit in federal court in Florida, alleging nine counts of negligence against the cruise line, the doctor in the ship’s medical center, and against the ship’s spa (for the negligence of its acupuncturist). The cruise line moved to dismiss the count alleging general negligence as a shotgun pleading. Judge Martinez agreed, noting that Coney asserted twenty claims of general negligence in the count. Concluding that the “attempt to cram multiple theories into one claim” was a shotgun pleading, Judge Martinez dismissed the count without prejudice.
Ilyasha Davis was a passenger on the CARNIVAL FREEDOM. While walking on Deck 5 of the vessel, she slipped and fell on a transitory liquid, resulting in her injuries. She brought this suit against the cruise line in federal court in Florida, alleging causes of action for both vicarious liability and direct liability of the cruise line. The cruise line moved to dismiss the claims of direct liability for lack of notice and the claims for vicarious liability as an improper attempt to circumvent the notice requirement for direct liability. Magistrate Judge Reid disagreed, first noting that vicarious liability is a valid theory even when it overlaps with a claim for premises liability. Davis only needed to plead duty/breach with respect to the crew member. In this case, Davis alleged that there were three crew members near the area at the time of the incident and that they observed the dangerous condition and should have warned of it or removed it. This was sufficient to allege liability of the crew members that could be imputed to the cruise line. Magistrate Judge Reid added that it was not necessary that Davis specifically name the crew members. Finally, Davis did not comingle the allegations of crew negligence with the negligence of the cruise line. Turning to the direct liability claim, Magistrate Judge Reid reasoned that Davis’s allegations of the presence of the crew in the area, that the crew observed the condition, and that one of the crew members cleaned the spill after the incident (depicted in a photograph) were sufficient to push her claims across the line from conceivable to plausible. Accordingly, Magistrate Judge Reid recommended that the motion to dismiss be denied.
Darryl Cole alleges that he was working as a crane operator for Oceaneering on its vessel, the M/V OCEAN PATRIOT. He was supplied to Oceaneering by Huisman North America pursuant to a Purchase Order by which Huisman was to supply a crane operator to Oceaneering. Cole began feeling dizzy, light-headed, and nauseated while on the vessel; he vomited; he felt pain and numbness from his neck to his eyes; and he became delusional and fell in and out of consciousness. He was eventually evacuated from the vessel by helicopter and was determined to have suffered a stroke. He brought this suit against Oceaneering in federal court in Louisiana under the Jones Act, general maritime law, and state law, and he added Huisman as a defendant in an amended complaint, seeking maintenance and cure. Oceaneering brought a claim for indemnity against Huisman pursuant to the terms of the Purchase Order, and Huisman argued that the terms of the Purchase Order were preempted by a prior Mutual Indemnity and Waiver Agreement that provided for indemnity only for an injury or illness that arises out of or is incident to the services provided by Huisman (crane operations). Claiming that Cole’s stroke did not arise out of or relate to the crane operations, Huisman argued that it did not owe indemnity to Oceaneering. Oceaneering countered that the Purchase Order provided that its terms superseded all agreements and, alternatively, that Cole’s stroke arose out of or related to the services provided by Huisman because it occurred while Cole was on the vessel to perform the services. Judge Vitter did not have to decide which document governed as they contained the same limiting language in their indemnity agreements—that the injury or illness arise out of or as a result of the services provided by Huisman. She then concluded that Cole’s stroke did not arise out of the services. Judge Vitter recognized that the Fifth Circuit interprets the term “arising under” broadly, but she did not find any evidence suggesting that a stroke is an activity reasonably incident to or anticipated by the provision of crane operation services. She rejected the argument that the Fifth Circuit’s Fontenot case only requires the worker’s presence on the vessel for an injury to arise under a contract, holding that there had to be a causal connection between the stroke and the services provided by Huisman (also rejecting the argument that Huisman could not “avoid its contractual responsibilities simply because [Cole] was not performing the specific services contemplated by the Purchase Order at the moment of injury”). Consequently, Judge Vitter granted summary judgment to Huisman on Oceaneering’s indemnity claim.
Oceaneering filed a motion for summary judgment that Cole was not a seaman, seeking a dismissal of his seamen’s claims against Oceaneering. Cole was employed by Huisman as a crane operator from November 2017 until February 2021, working 23 hitches. His first 19 hitches were for Hornbeck Offshore Services, and his last four hitches were scheduled for Oceaneering on the OCEAN PATRIOT. Cole claims that he spent 100% of his time working on vessels during his employment by Huisman; however, Oceaneering countered that only 48 days of that time were spent on the vessel owned by Oceaneering, and 462 days were spent working for Hornbeck. Oceaneering argued that Cole did not satisfy the duration element of the connection test for seaman status because he spent less than 10% of his employment with Huisman working on the Oceaneering vessel (48 days out of 510 days). Cole responded that he spent 100% of his time with Huisman (and Oceaneering) working on vessels. Judge Vitter turned to the en banc decision of the Fifth Circuit in Sanchez, noting that the worker would have to spend at least 30% of his total employment aboard the vessels owned by his Jones Act employer in order to satisfy the duration element. Although Cole argued that he satisfied the 30% rule-of-thumb for the duration element because he spent 100% of his working time on the OCEAN PATRIOT in service of the vessel, Judge Vitter answered that Cole’s argument failed to address the holding in Sanchez that the court had to consider the substantiality of the duration in terms of his entire employment with Huisman. As his work on the OCEAN PATRIOT was less than 10% of that time, Judge Vitter ruled that Cole was not a seaman, and she dismissed the seaman’s claim against Oceaneering. See May 2023 Update.
Cole moved for reconsideration of Judge Vitter’s decision on seaman status, arguing that he satisfied the duration prong of the substantial connection test. Cole argued that the 30% analysis only applies to workers who perform work on land and on vessels and that it does not apply in this case where Cole worked 100% of the time for Huisman in service of vessels. Cole also claimed that he was permanently assigned to the OCEAN PATRIOT because he was scheduled to work for four hitches on that vessel. Judge Vitter was persuaded by Judge Ashe’s analysis in Meaux v. Cooper Consolidated, LLC (see June 2022 Update) that considered for the duration element only the length of employment with the alleged Jones Act employer and not with the worker’s direct employer. [Interestingly, Judge Ashe ultimately held that Meaux was not a seaman because he failed the nature element for seaman status]. In this case, Cole worked two hitches for Oceaneering on the OCEAN PATRIOT from December 11, 2020 to February 21, 2021. Thus, after going to work for Oceaneering on the OCEAN PATRIOT, Cole only worked on that vessel and did no work on land or non-Oceaneering vessels. Although Huisman’s corporate representative testified that none of their workers are assigned to a vessel, he admitted that once the worker goes to work for a client, he “is theirs.” Oceaneering’s vessel log listed Cole as part of the crew and reflected that he was assigned to the vessel. As the evidence demonstrated that Cole worked exclusively aboard the OCEAN PATRIOT once the assignment began, Judge Vitter found that Cole was “permanently assigned” to the vessel and that he satisfied the duration element for seaman status. This finding then required that Judge Vitter address the issue of whether Cole satisfied the nature element of the seaman status test, as defined by the Fifth Circuit in Sanchez. Cole took his orders from the vessel (captain, chief mate, chief engineer, and dive crew), and Huisman’s corporate representative stated that Cole was to meld in and function as part of the crew. Thus, he owed his allegiance to the vessel and not to Huisman. His work was all sea-based, and he sailed with the vessel from location to location. Consequently, Judge Vitter found Cole satisfied the nature element and that he was a seaman as a matter of law, granting summary judgment to Cole.
Oceaneering and Cole then moved for summary judgment on the issue whether Cole was a borrowed servant, arguing whether the Ruiz factors demonstrated that Cole was employed by Oceaneering or Huisman. Oceaneering argued that Huisman directed which employees would be sent offshore, but Huisman’s representative testified that its responsibility ended when the worker got on the boat to be transported to the Oceaneering vessel. Once on the OCEAN PATRIOT, Cole did what he was told to do by the captain, chief mate, chief engineer, or dive crew. Judge Vitter reasoned that the selection of the individual was not relevant to the determination of which party had control over the individual’s work once he was present on the vessel. Likewise, the requirement that Cole report to his supervisors at Huisman at the end of each day and submit a Daily Report with details of his work did not overcome the fact that if Cole had an issue on the vessel, he was to report it to the vessel. Judge Vitter found the direction/control factor and the factor about whose work was being performed weighed in favor of Cole’s status as a borrowed servant. Turning to the question of whether there was an agreement between the parties, Oceaneering cited the Purchase Order stating that Huisman was an independent contractor. However, the terms did not reference Huisman’s employees, and Judge Vitter concluded that this factor did not weigh in favor of either party. For the factor looking to whether the employee acquiesced in the new work situation, Oceaneering argued that Cole had only been working on the OCEAN PATRIOT for a short period of time compared to his employment with Huisman, but Judge Vitter considered this factor to weigh in favor of status as a borrowed servant because Cole complied with his role without objection, and the Fifth Circuit has held that a month is sufficient time for an employee to appreciate new work conditions (however, she found the factor that considered whether the new employment was over a considerable length of time to be neutral). Judge Vitter considered the factor looking to whether the original employer terminated its relationship with the employee to be neutral because Cole was required to maintain contact with Huisman while he was receiving instruction and supervision from Oceaneering. As Oceaneering supplied the tools and place for performance of the work and could remove Cole from the OCEAN PATRIOT, those factors weighed in favor of status as a borrowed servant. Finally, with respect to the obligation to pay Cole, Judge Vitter noted that the Fifth Circuit had held that when the funds used to pay the employee are received from the entity to which the employee is loaned, the borrowing entity, in effect, pays the employee. However, the parties submitted conflicting evidence on the issue, so Judge Vitter considered this factor to be neutral. As five of the factors favored Cole being a borrowed servant of Oceaneering and four were neutral, Judge Vitter found that Cole was Oceaneering’s borrowed servant, and she granted summary judgment to Cole.
The medic who treated Cole on the OCEAN PATRIOT, Keith Thompson, was provided pursuant to a contract between Oceaneering and Pharma-Safe Industrial Services. Oceaneering and Cole disagreed on the issue of whether the medic was an independent contractor, and they filed motions for summary judgment on the issue of whether Oceaneering was vicariously liable for any negligent treatment provided by the medic. Judge Vitter explained that there are two theories by which a Jones Act employer may be held vicariously liable–when it exercises operational control over the work and when the work is an operational activity (one that is necessary or vital to the employer’s operations)–so that, under Hopson v. Texaco, the employer is vicariously liable for the negligent acts of those who perform, under contract, the operational activities. As Oceaneering had a non-delegable duty to provide prompt and adequate medical care to its seaman (Cole), Oceaneering was vicariously liable for the conduct of the agent to whom it delegated the obligation to perform that duty (Thompson and Pharma-Safe). Accordingly, Judge Vitter granted summary judgment to Cole. See August 2023 Update.
Oceaneering then moved for summary judgment on its claim for defense, indemnity, and insurance coverage from Huisman based on the terms of the Purchase Order by which Huisman supplied Darryl Cole to work for Oceaneering as a crane operator (and Huisman cross-moved for summary judgment). Oceaneering relied on a 2021 Purchase Order stating that “these Terms and Conditions supersede all representations, understandings, or agreements and shall prevail notwithstanding any variance with terms and conditions of any order submitted prior. Acceptance of this Purchase Order is deemed acceptance of the terms and conditions.” Huisman relied on the 2013 Mutual Indemnity and Waiver Agreement between Oceaneering and Huisman and argued that the 2021 Purchase Order was not applicable because it only applied “unless otherwise agreed in writing” and the 2013 Agreement was such an agreement in writing. Judge Vitter noted that she previously decided that Oceaneering was not entitled to indemnity from Huisman. That left the issue for this opinion—whether Huisman breached its obligation under the 2021 Purchase Order by failing to obtain the required insurance to protect Oceaneering from the claims asserted against it by Cole (Huisman’s insurer, State National Insurance Co., declined to provide insurance coverage to Oceaneering). Judge Vitter accepted that both the Purchase Order and the 2013 Agreement were maritime contracts, and she initially concluded that the 2018 Purchase Order applied to the insurance obligations. However, the Purchase Order provided that when the Purchase Order was made under an existing written contract, the terms of that contract prevailed in the event of a conflict. Thus, Judge Vitter reviewed the terms of the 2021 Purchase Order (incorporating the terms of the 2018 Purchase Order) to determine whether the insurance clause conflicted with the obligation in the 2013 Agreement. The 2018 Purchase Order, relied on by Oceaneering, contained a broad insurance obligation in favor of Oceaneering; however, the 2013 Agreement limited Huisman’s insurance obligation to the defense and indemnity obligations that Huisman assumed in the Agreement. Therefore, Judge Vitter concluded that the provisions conflicted and that Huisman was only obligated to obtain insurance for Oceaneering to the extent of Huisman’s indemnity obligation. As Judge Vitter previously held that Oceaneering was not entitled to indemnity from Huisman, she held that Huisman had not breached its contract with Oceaneering by failing to provide insurance coverage. Finally, Judge Vitter rejected Oceaneering’s argument that the insurance and indemnity provisions were separate and that the insurance should not be limited by the indemnity agreement. She answered: “[S]imply because the duties to indemnify and maintain insurance may be separate and independent does not prevent them from also being congruent; that is, a contract may reasonably be construed as extending the insured’s additional insured status only to the extent of the risk the insured agreed to assume.” Therefore, Judge Vitter granted summary judgment to Huisman that it was not liable for failing to provide insurance to Oceaneering.
Judge Vitter then addressed the motion for summary judgment filed by Pharma-Safe (and the cross-motion filed by Huisman) that Pharma-Safe is entitled to defense and indemnity from Huisman pursuant to a 2013 Mutual Indemnity and Waiver Agreement between Oceaneering and Huisman that requires Huisman to defend and indemnify Oceaneering and its contractors and subcontractors (which include Pharma-Safe) in connection with employees of Huisman (such as Cole). Similar to the argument presented by Oceaneering when it sought defense and indemnity from Huisman, Pharma-Safe argued that but for the Purchase Order between Huisman and Oceaneering, Cole would not have been aboard the OCEAN PATRIOT. Consequently, Cole’s injury “arises out of or is incident to the services.” Huisman responded, as it did to Oceaneering, that there was no evidence showing a causal link between Cole’s stroke and the crane operation services that Huisman agreed to provide to Oceaneering. Judge Vitter agreed that the 2013 Agreement applied and that Pharma-Safe fell within the scope of the defense and indemnity owed by Huisman. However, she reiterated her conclusion that Cole’s injuries did not arise out of and are not incident to the crane operation services that Huisman agreed to provide to Oceaneering. Consequently, she granted summary judgment to Huisman and dismissed Pharma-Safe’s cross-claim against it.
Huisman brought a third-party action (both under Rule 14(a) and 14(c)) against Dr. Robert Davis, the on-shore physician who was alleged to be an employee or agent of Pharma-Safe, seeking contribution or indemnity (and direct liability to Cole) on the ground that, if Cole was injured as alleged, his injuries were the result of the negligence or gross negligence of Dr. Davis. Dr. Davis moved to dismiss the claims on the ground that the court lacked admiralty jurisdiction over the claims because the malpractice that was alleged did not satisfy the locality or nexus requirements for a maritime tort. Alternatively, Dr. Davis argued that the Louisiana Medical Malpractice Act supplemented maritime law and required dismissal of the claim. With respect to the locality test, Judge Vitter did not agree with Dr. Davis’ argument that Judge Vitter should apply the factors enunciated by the Fifth Circuit in 1973 in Kelly v. Smith, which was decided more than 20 years before the Supreme Court’s Grubart decision that declined to apply the Kelly factors. As Cole alleged that he suffered the stroke while he was on the vessel, and as Dr. Davis knew he was providing a medical consultation to the onboard medic for a crew member on a vessel at sea, Judge Vitter concluded that Huisman’s claims against Dr. Davis satisfied Grubart’s locality test. Judge Vitter also held that rendering medical advice for crew members on a vessel at sea is a traditional maritime activity, quoting, “it is difficult to conceive of a tort more intimately related to maritime activities than causing illness to a seaman during the course of a voyage.” As Judge Vitter concluded that maritime law applied, she considered Dr. Davis’ argument that maritime law should be supplemented by state law due to a lack of traditional maritime regulation of medical malpractice and the strong state interest in regulating medical malpractice. Dr. Davis cited the Fifth Circuit’s Joiner opinion: “We can find absolutely no support for the proposition that an ordinary, onshore physician who treats an injured sailor has thereby submitted himself to the rules of maritime commerce.” Judge Vitter, however, found “a national interest in uniformity of law and remedies for seamen who seek medical treatment while aboard a vessel at sea,” agreeing with Cole that “subjecting medical malpractice claims like these, which stem from a shoreside physician rendering a medical consultation to a seaman aboard a vessel at sea, to the law of whatever state in which the onshore physician happens to be located at the time of consultation, could result in inconsistent, and even contradictory, results depending on the location of the onshore physician.” Judge Vitter declined to supplement the general maritime law where the alleged malpractice was committed by a shoreside physician who knew that he was consulting for crew members aboard a vessel at sea.
Franco Cruz and ten of his family members purchased vacation packages on a Carnival cruise ship departing Galveston, Texas in March 2022. The family members included a 3-year-old and a 6-month-old. When they arrived at the Port, Cruz was told that the children under the age of five would be prohibited from attending the ship’s daycare (Camp Ocean) because the vaccine for COVID-19 was not available for young children. Cruz was also informed that they would need to pay additional fees for a “bubble tour” in order to disembark the ship because of the unvaccinated children. As a result, the family stayed on the ship for the week, sleeping, eating, and walking around the ship on port days, as that was all that was available to them. They felt as though they were “captives.” The family brought this suit against the cruise line in state court in Bexar County, Texas, and the cruise line removed the action to federal court based on diversity and original admiralty jurisdiction. The cruise line then moved to transfer the case to federal court in Florida based on the forum-selection clause in the Cruise Ticket Contract. Comparing the case to the Supreme Court’s decision in Carnival Cruise Lines v. Shute, Judge Rodriguez concluded that the forum-selection clause was valid and enforceable and that the case should be transferred to the federal court in Florida.
Quentin M. Brown was engaged to work as a wiper on the M/V PRESIDENT WILSON. Brown alleges that he was subject to “relentless, exhausting, and damaging emotional and physical advances” from Yasin Berber, a reefer technician aboard the ship. Brown claims that his supervisors and other crew members were aware of and witnessed this conduct and that he was eventually sexually assaulted by Berber. Berber then reported the assault to the Chief Engineer, Captain, and designated shoreside supervisor, all of whom failed to act, after which he experienced retaliatory harassment. Berber was allowed to remain on the ship for the next voyage, but Brown was required to pay for and take a psychological evaluation. Brown filed suit in federal court in California, claiming constructive discharge and bringing claims against American President Lines under the Jones Act, under the general maritime law for unseaworthiness, under Title VII of the Civil Rights Act, and for intentional and negligent infliction of emotional distress. He brought claims against Berber for the intentional tort of sexual assault, battery, harassment, and intentional and negligent infliction of emotional distress. American President Lines and Berber moved to dismiss the claims. American President Lines argued that it did not have notice of any of Berber’s alleged conduct before the “single unrepeated” assault and that it was not vicariously liable for Berber’s actions that were not taken in the course of his employment. Brown did not contest the argument on the course of employment, but he argued that he had pleaded sufficient notice of conduct that was allegedly witnessed by supervisors that would put the employer on notice. Consequently, Chief Magistrate Judge Ryu declined to dismiss the Jones Act count. American President Lines argued that the assault was not sufficiently “savage and vicious” to cause the vessel to be unseaworthy. Chief Magistrate Judge Ryu disagreed, reasoning that the allegation that Berber “forcibly insert[ed] a finger inside [Brown]’s anal area” did not fall “within the usual and customary standards of the calling” and was sufficient to support the unseaworthiness claim. As Brown did not allege that he was actually discharged or resigned from his employment, Chief Magistrate Judge Ryu dismissed the claim of sex discrimination under Title VII (with leave to amend), but she found the claim for retaliation to be sufficiently pleaded. American President Lines argued that Brown had not sufficiently pleaded that the work environment or the employer’s conduct after notice of the alleged assault was extreme and outrageous so as to support the claim for intentional infliction of emotional distress. The employer argued, in particular, that sexual harassment and assault are not within the scope of employment. However, the cases cited by American President Lines did not examine agency liability in the context of a claim for intentional infliction of emotional distress. Therefore, Chief Magistrate Judge Ryu held that the argument should be presented in a motion for summary judgment on a fuller legal and factual record. As American President Lines did not analyze the claim for negligent infliction of emotional distress under the general maritime law’s zone of danger test, Chief Magistrate Judge Ryu denied the motion to dismiss that claim without prejudice. Turning to Berber’s motion, Brown agreed to dismiss the claim for negligent infliction of emotional distress. Berber argued that the claim for intentional infliction of emotional distress could not be sufficiently extreme and outrageous because Brown argued that the actions were within the course of employment (“conduct within the course and scope of one’s employment might be negligent, but such conduct cannot be outrageous and extreme”). Berber cited no authority for that argument, and, taken as true, Chief Magistrate Judge Ryu held (as she had ruled with respect to the employer) that the allegations were sufficient to state a claim. Finally, Berber argued that the claim for sexual assault, battery, and harassment contained three separate claims with distinct elements. Chief Magistrate Judge Ryu agreed that in an amended complaint, Brown should present each of the torts as a separate claim for relief instead of lumping them together.
This litigation involves four artifacts recovered from the wreckage of the TITANIC–a gold coin, two $5 bills, and a piece of coal. Strongbow Holdings claims that the items were gifted by RMS Titanic, Inc. to G.M. Harris (leader of the first expedition to the TITANIC) and then were transferred at a bankruptcy sale to Maureen Daly through Mobile Grocers. When RMS Titanic asserted a claim on the artifacts, Daly sold the artifacts to Strongbow. RMS Titanic brought suit in the New York County Supreme Court against Strongbow (seeking a declaratory judgment and injunction), Mobile Grocers, and Daly, and Strongbow removed the suit to federal court based on diversity of citizenship between Strongbow and RMS Titanic, arguing that the court should disregard the citizenship of Mobile Grocers and Daly on the ground that they were fraudulently joined. Strongbow also brought a separate action against RMS Titanic in federal court in New York on the same day it removed the action filed in state court. RMS Titanic moved to remand the action it filed, arguing that it was seeking a declaratory judgment that Mobile Grocers and Daly did not have any interest in the artifacts, and it moved to dismiss the action filed by Strongbow in federal court based on the first-filed rule. Judge Ramos answered that in order for there to be a justiciable controversy, there must be a real dispute between the parties. As neither Daly nor Mobile Grocers claimed ownership in the artifacts, and as neither had possession of the items, Judge Ramos held that they were fraudulently joined, stating that a judicial declaration was unnecessary. Therefore, he held that there was diversity between the relevant parties and that removal was proper. As that left both actions pending in the same federal court, Judge Ramos declined to dismiss the action filed in federal court, reasoning that the first-filed rule was only applicable with concurrent jurisdiction in different courts (he similarly declined to stay the second action). Finally, Judge Ramos declined to award attorney fees (for the unnecessary multiplication of proceedings by pursuing claims against Daly and Mobile Grocers), finding that the conduct of counsel for RMS Titanic did not rise to the level of bad faith (“no evidence has been provided that would lead the Court to find that RMST’s counsel was motivated to delay the proceedings”).
Craig Painter, who was employed by Parker Drilling to work on its RIG 55B that was docked at a shipyard in Amelia, Louisiana, injured his back and knee when he slipped while cleaning tanks. Parker Drilling began paying maintenance and cure to Painter, but it stopped paying and filed this declaratory judgment action against Painter in federal court in Louisiana, claiming that Painter denied any back and knee injuries and prior drug use during his pre-employment physical examination. Parker Drilling sought a declaration that it did not owe maintenance and cure based on a McCorpen willful concealment defense. Two months later, Painter filed suit against Parker Drilling in the Louisiana state court in Iberia Parish, bringing claims under the Jones Act and under the general maritime law (unseaworthiness and maintenance and cure), and alternatively under Section 5(b) of the LHWCA. The same day, he moved to dismiss Parker Drilling’s federal suit based on the Trejo factors enunciated by the Fifth Circuit to consider when there is a motion to dismiss a federal declaratory judgment action. In response, Parker Drilling recognized the authority for dismissal of preemptive employer suits, but it argued that courts had granted declaratory relief to employers “when faced with viable McCorpen defenses.” Magistrate Judge Ayo distinguished those cases, however, because the employee had filed a counterclaim or a federal suit, and the court did not have to apply the Trejo factors in those cases. As application of the Trejo factors favored dismissal, Magistrate Judge Ayo recommended dismissal of the federal suit, and Chief Judge Doughty agreed with the recommendation and dismissed the case without prejudice on August 14, 2023.
Opinion Bowens, Spencer, Treme, Yarbrough, and Hayes
Opinion Hakenjos, Harris, Hudson, and Gaines
Cynthia Jones opted out of the Medical Benefits Class Action Settlement Agreement for the DEEPWATER HORIZON/Macondo spill and brought this action against BP for exposure around her residence in Mobile, Alabama and from consuming contaminated seafood. BP moved for summary judgment on her claim because Jones did not identify any expert to carry her burden to establish causation. Without any expert evidence on causation, Judge Vance dismissed her case with prejudice.
Jerome Smith brought a Back-End Litigation Option suit, seeking to recover for later-diagnosed injuries that allegedly resulted from his work cleaning up oil and oil-covered debris from the beaches and coastal areas in Mississippi. As with the opt-out cases, Smith was required to prove that his medical conditions were caused by exposure from the spill. Smith failed to provide an expert report by the already extended deadline in his case, and he filed another motion for an extension that was denied by Judge Vitter. BP moved for summary judgment on the ground that there was no expert evidence on causation, and Smith responded with an affidavit from Dr. Ranajit Sahu (an environmental, energy, and engineering consultant), explaining that he needed information from BP’s contractors, Exponent and CTEH, that was essential to tabulate a harmful level of exposure, and time to review the documents to determine the failures and limitations of the sampling data collected after the spill. Smith argued that the discovery would demonstrate that BP “intentionally manufactured scientific doubt in the ‘dose’ data and secondary publications related to the science of the Deepwater Horizon Oil Spill as part of a litigation strategy.” Judge Vitter noted that the evidence sought was pertinent to specific causation, but it did not bear on general causation. There was no impediment to Smith consulting the entire universe of relevant epidemiological studies to provide an opinion on general causation. As there was no evidence on whether exposure to a particular substance from the spill can cause a specific injury in the general population, Judge Vitter granted summary judgment to BP.
Jessica Ann-Marie Clark and Robert Nicholas Clark, II brought suit against BP, seeking to recover for injuries sustained by their minor son from exposure when Robert would hold his son after returning from clean-up work and his clothes were saturated with oil and chemicals. Jessica also washed Robert’s clothes with their son’s clothes. The Clarks assert that their son developed leukemia and other conditions from the second-hand exposure. In response to BP’s motion for summary judgment, the Clarks asked for more time to obtain documents and evidence from third parties, Exponent, Champion (NALCO), and Battelle, and, as with the Smith case above, they produced a declaration from Dr. Ranajit Sahu that the information was necessary to reconstruct the environments to which the workers were exposed. Noting that the declaration did not address general causation or exposure from a worker’s clothing, Judge Guirola agreed with Magistrate Judge Myers that the extension should not be granted and that summary judgment should be granted in the absence of expert evidence.
Clifton King claimed exposure to crude oil and dispersants from the DEEPWATER HORIZON/Macondo spill from his work as an on-an-offshore cleanup worker and as a resident of Mississippi. Julian Marquise Fowler alleged exposure to crude oil and dispersants from his work as an onshore cleanup worker. Carrie Robertson and Alexzander Payton asserted exposure from their work as onshore cleanup workers and as residents of Mississippi. Robert Daniels claimed exposure from his work as an onshore and offshore cleanup worker and as a resident of Alabama. These plaintiffs presented the expert report of Dr. Jerald Cook to support the general causation requirement for their claims. BP moved to exclude Dr. Cook’s opinions, and the plaintiffs asked the court to allow Dr. Cook’s expert testimony as a sanction for BP’s alleged spoliation of evidence of the plaintiffs’ exposure. Judge Vance agreed that Dr. Cook’s opinions should be excluded, and she added that the spoliation contention did not change that result. Judge Vance reasoned that spoliation is a sanction for the destruction of evidence, but the plaintiffs argued in these cases that BP should have gathered data. Without a duty to collect the data (and as no such evidence existed), there could be no spoliation. Additionally, the admission of a deficient expert report would not be the cure even if there were spoliation. Finally, the plaintiffs noted that some judges had denied summary judgment to BP for symptoms that were transient or temporary. Judge Vance responded that the summary judgment motions in those cases were premised on specific causation and that Dr. Cook’s opinions on general causation were not challenged in those cases. In these cases, however, BP argued that Dr. Cook’s opinions were insufficient on general causation and specific causation. As evidence of general causation was required, regardless of whether the condition was transient or temporary, and as there was no expert evidence of general causation after the striking of the opinion of Dr. Cook, Judge Vance dismissed all of these suits with prejudice.
Tavarish Penn, Thomas Bodiford, Antonio Reed, Charles Anthony Bowens, Rita Spencer, Josh Treme, Daniel Yarbrough, Rodney Hayes, Lakesha Butler, Jamerson Hakenjos, Ezzard Harris, Jr., Mark Hudson, Shawndaius Gaines, and Patrick Packer sought reconsideration of Judge Vance’s decision to exclude the opinion of Dr. Cook and requested that she reconsider granting summary judgment to BP on the grounds that it was error to require Dr. Cook to identify a harmful level of exposure to particular chemicals that cause the conditions experienced by these plaintiffs, that BP had a duty to protect the cleanup workers and violated the duty by failing to conduct biomonitoring (based on the affidavit of Dr. Linda Birnbaum and explaining why there is inadequate data on causation), and that the GuLF (Gulf Long-term Follow-up) Study represents the “state of the art” and is a reliable basis for Dr. Cook’s opinions. Judge Vance answered that these arguments (or nearly identical ones) had already been presented in opposition to the motions for summary judgment. Reasoning that “recitation of duplicative and meritless arguments that have already been exhaustively considered does not entitle [these plaintiffs] to a second bite at the apple,” Judge Vance denied the motions for reconsideration.
Bruce Carter, an employee of Chevron, was a crew member of its floating production storage and offloading vessel off the coast of Nigeria. He was injured when he stepped in a hole in a poorly illuminated parking lot while preparing to board a helicopter in Nigeria to be taken to the FPSO. Carter filed this suit in Texas state court against various Chevron entities as well as several entities of the transportation company (Bristow) that contracted with Chevron to take Carter (and other crew members) back and forth between the FPSO and the mainland. Carter sued Chevron under the Jones Act, and he sued Bristow under a premises liability theory. As one of the Bristow entities was non-diverse, the case was not immediately removable. More than a year after the suit was filed, Carter amended his state pleading and dismissed all claims against Bristow without reaching any settlement with Bristow. Chevron then removed the case to federal court, arguing that Carter engaged in bad-faith forum manipulation by suing Bristow, whose presence destroyed diversity. Noting the death of Carter’s attorney 11 months after the commencement of the suit and Carter’s hiring of a new attorney more than a year after the suit was filed (who dismissed Bristow), Judge Hanks declined to find bad faith and remanded the case (as he remanded the case for failure to remove it within a year, Judge Hanks did not have to address the issue whether the Jones Act claim was improperly pleaded).
Susan Arnone alleges that she was injured as a passenger on a Powerquest Cruiser that was owned and operated by David Knab while the vessel was being operated on Lake Erie. Arnone brought suit against Knab in New York State Supreme Court of Erie County, and Knab removed the case to federal court based on the court’s original admiralty jurisdiction. Knab then filed a limitation action in the same New York federal court. More than a year after the filing of the limitation action and 18 months after the removal of the action filed in state court, Arnone moved to remand the suit she filed to state court and also moved to lift the stay in the limitation action. The motion to remand presented the question of whether the federal court lacked subject matter jurisdiction, so that the delay in filing the motion to remand would be irrelevant, or whether the court had subject matter jurisdiction so that she waived her right to seek a remand by failing to file the motion within 30 days after the removal. Judge Vilardo noted that a number of judges have “reasoned that federal courts do not actually have admiralty jurisdiction over cases brought in state court under the saving to suitors clause because the plaintiff brought the case ‘at law’ in state court,” citing the Coronel and Sanders cases for the proposition: “[W]hen a maritime claim is filed in state court under the [s]aving[] to [s]uitors [c]lause, it is transformed into a case at law, as opposed to admiralty.” Judge Vilardo disagreed, stating that “the fact that a case is not removable does not necessarily mean that a federal court lacks subject matter jurisdiction over it” (after all, the Supreme Court in Romero stated: “All suits involving maritime claims, regardless of the remedy sought, are cases of admiralty and maritime jurisdiction within the meaning of Article III whether they are asserted in the federal courts or, under the saving clause, in the state courts. Romero’s claims for damages under the general maritime law are a case of admiralty and maritime jurisdiction.”). Finding that the boating injury on Lake Erie fell within the admiralty jurisdiction, Judge Vilardo held that he could not remand the case to state court. Thanks to James Mercante of Rubin, Fiorella, Friedman & Mercante in New York City for bringing this case to our attention.
Alfred Broderick was diagnosed with pulmonary asbestosis that he claimed was caused by exposure to asbestos during his service as a boiler tender on the U.S.S. CONE from 1957 to 1961 and thereafter in land-based employment. Broderick and his wife brought this action in the Philadelphia Court of Common Pleas against suppliers of asbestos products, and one of the suppliers removed the case to federal court. Both Broderick and his wife died, and the administrator for their estates continued the action. The suppliers of products to the CONE argued that maritime law applied to the claims asserted against them and that the administrator lacked standing to bring the action because Broderick was survived by no beneficiaries who qualified under the schedule in the FELA (incorporated into the Jones Act), and it was only those beneficiaries who could bring survival claims under the general maritime law. As Broderick was serving as a seaman on the CONE, Judge Younge held that schedule of beneficiaries applicable in a Jones Act claim applied to preclude the claims of the administrator, whether brought under the general maritime law or state law. Judge Younge found further support for his decision in the schedule of beneficiaries in the Death on the High Seas Act, reasoning: “An assessment of the schedule of beneficiaries found in the Jones Act/FELA and the DOHSA suggests Congressional intent to place limits on the individuals/relatives of a decedent who could bring a wrongful death or survival action for the death of an individual who was working as a seaman and/or died on the high seas.” Applying the limits on beneficiaries in the Jones Act and DOHSA to the wrongful death and survival claims under the general maritime law, Judge Younge granted the motions to dismiss the suppliers of marine products.
Montaze Broz, owner of a 2019 Ford Raptor F-150, booked a shipment of the truck from Miami, Florida to Bremerhaven, Germany with NVOCC Global Ocean Line (reflected in a Booking Confirmation). That Booking Confirmation did not refer to any terms and conditions, and no bill of lading was issued as the vehicle was stolen before it was loaded on a vessel. Montaze Broz brought this suit in federal court in Florida against Global Ocean Line, asserting a single count for negligence. Global Ocean Line moved to dismiss the tort claim, arguing that the maritime economic loss rule barred the claim because Montaze Broz had not alleged any damage other than the loss of the cargo and because the relationship between the parties was contractual, regardless of whether a bill of lading had been issued or Global Ocean Line’s Terms and Conditions had been incorporated into the booking documents. As the procedural context was a motion to dismiss, Judge Bloom was presented with a situation in which a bill of lading had not been issued and in which there was no evidence that Montaze Broz agreed to be bound by the Terms and Conditions. Consequently, Judge Bloom reasoned that Global Ocean Line failed to show that the parties’ relationship was contractual or arose from a contractual agreement. Global Ocean Line argued that it is the standard practice in the industry for bills of lading to be issued after the cargo is loaded on the vessel, but Judge Bloom considered it premature to conclude at this stage of the litigation that the parties were in contractual privity. Therefore, she declined to hold that the allegedly negligent conduct was within the scope of a contract between the parties to invoke the maritime economic loss rule.
Paycargo Finance claims that it loaned funds to Bay Maritimes in connection with specific freight shipments in which Bay Maritimes acted as an NVOCC and that Bay Maritimes provided Paycargo Finance with bills of lading documenting that the financing was for shipment-related activities. Paycargo Finance also alleges that it paid vendors of transportation and logistics services on behalf of Bay Maritimes and guaranteed payment of freight shipments to facilitate the expeditious release of cargo that Bay Maritimes was transporting. Bay Maritimes obtained a surety bond from Aspen American Insurance, and when Bay Maritimes failed to pay Paycargo Finance, Paycargo Finance obtained a default judgment against Bay Maritimes. Paycargo Finance sought to collect on the surety bond that was obtained by Bay Maritimes and brought this action in federal court in Florida against Aspen American. Aspen American moved to dismiss the complaint on the ground that the claims fell outside the scope of the bond because Bay Maritimes was not acting as an NVOCC in the transactions with Paycargo Finance (arguing that the bond only covered transactions in which Bay Maritimes furnished transportation-related services to the claimant on the bond (Paycargo Finance), and that the only transactions with Paycargo Finance were those of a debtor toward a creditor. As the procedural context for the dispute was a motion to dismiss, Magistrate Judge Sanchez considered only the allegations in the complaint. As alleged, Bay Maritimes was acting as an NVOCC in transportation-related freight shipments, and the claims arose from the non-payment of Bay Maritimes for services that were provided by Paycargo Finance to facilitate the shipments. Accordingly, Magistrate Judge Sanchez believed that the complaint should survive the motion to dismiss and recommended denial of the motion. Whether Bay Maritimes was actually acting as an NVOCC and how the funds were used were issues that would have to be resolved later.
Hussein Al Qari was employed as a steward’s assistant on American Steamship’s vessel M/V H. LEE WHITE. He claims that he was injured while climbing a flight of stairs while carrying a box containing six jars of coffee grounds. He had one hand on the handrail, but he let go of the handrail when the box began to slip, and he lost his balance and fell. Al Qari brought this suit against American Steamship in federal court in Michigan, seeking to recover for Jones Act negligence, unseaworthiness, and maintenance and cure. He submitted an expert report on liability from Dr. John Morse, Ph.D., P.E., a mechanical engineer whose experience was primarily with OSHA cases. Dr. Morse opined that Al Qari should have been equipped with an alternative means of carrying the coffee cans, and he cited four OSHA regulations to support his opinion. American Steamship moved to exclude Dr. Morse’s opinions, arguing that OSHA regulations do not apply on a Coast Guard-inspected vessel such as the H. LEE WHITE. Al Qari argued, in response, that not all of Dr. Morse’s opinions referenced OSHA regulations and that some courts have allowed non-binding OSHA regulations as evidence of the proper standard of care. Judge Borman rejected both of Al Qari’s arguments. He noted that Dr. Morse did not cite any Coast Guard standards, and the reference to OSHA standards could cause confusion and unfair prejudice. He distinguished cases allowing OSHA regulations as non-binding evidence of the standard of care and held that Dr. Morse’s testimony would be excluded.
American Steamship also moved to exclude or limit the testimony of Al Qari’s liability expert, Captain Daniel Franklin. American Steamship did not object to Captain Franklin’s qualifications. However, it did object that Captain Franklin’s first report was based on the unsworn declaration of Al Qari, and his second report was based on a cherry-picking of facts from Al Qari’s deposition testimony. Judge Borman agreed that the declaration could not be considered as evidence supporting the initial report; however, the complete deposition had been provided and was used to prepare the subsequent report. American Steamship continued to object to the reliability of Captain Franklin’s opinions as he ignored testimony, such as Al Qari’s testimony that his fall was an accident, on the ground that “I don’t think it is relevant to this case.” Judge Borman did not consider the picking and choosing of data on which to base an expert’s opinion to require its exclusion. Instead, he held that it was a subject for cross-examination. American Steamship also objected to the opinion that Al Qari could not safely climb the stairs carrying materials like the coffee cans on the ground that it was within the province of the jury and was not helpful, and Judge Borman agreed that it should be excluded (along with testimony on legal conclusions such as that American Steamship was negligent or that there was an unseaworthy condition). Finally, Al Qari sought to elicit opinions beyond those in the reports during the deposition of Captain Franklin (Captain Franklin asserted that he reserved the right to supplement his opinions based on new information). Judge Borman held that Captain Franklin would not be allowed to express an opinion beyond those contained in his reports or deposition.
This suit involves a shipment of Ford Ranger pickup trucks from Thailand to Taiwan. The trucks were first carried from Thailand to Singapore on the TIANJIN HIGHWAY and then were transferred to the DIAMOND HIGHWAY for shipment from Singapore to Taiwan. A fire occurred on the DIAMOND HIGHWAY, and Ford claimed it sustained damage to the trucks in excess of $7 million. Ford entered into a Transportation Services Main Agreement with Kawasaki Kisen Kaisha (K-Line), and the contract was signed on behalf of K-Line by its United States subsidiary, “K” Line America. Six years earlier, K-Line chartered the DIAMOND HIGHWAY from Diamond Car Carriers, and Diamond Car Carriers entered into a contract with “K” Line RoRo Bulk Ship Management Co. (KRBS) to manage the vessel. Ford brought this suit in federal court in Michigan against K-Line, KRBS, and “K” Line America, alleging claims for breach of contract, bailment, and maritime tort. KRBS moved to dismiss the suit for lack of personal jurisdiction, showing that it had no contacts with Michigan, that it had no offices, employees, or property in the United States, and that it managed no vessels owned by United States companies. Ford argued, however, that KRBS (although not a signatory to the Transportation Services Main Agreement) was bound by the forum-selection clause in that Agreement—the Eastern District of Michigan where this suit was filed. Ford cited the “closely-related doctrine” and argued that KRBS was closely related and should be bound. After reviewing the decisions considering the doctrine, Judge Borman held that the issue was “whether the non-signatory should have reasonably foreseen that he might be required to appear in another jurisdiction.” Judge Borman first concluded that KRBS was not sufficiently closely related to the contractual dispute to be bound by the forum-selection clause. KRBS only contracted with Diamond, and that contract had been in place for six years before K-Line agreed to carry trucks for Ford. KRBS owed its contractual duties to Diamond, and it was paid without regard to the items carried on the vessel. Judge Borman then addressed whether KRBS was sufficiently closely related to K-Line so as to be bound by the forum-selection agreement in the contract between K-Line and Ford. Ford argued that K-Line and KRBS work in tandem in a vertical integration to carry out the shipping contracts entered into by parent company K-Line; however, KRBS presented evidence on the separate existence of the entities and that the companies were not alter egos. Judge Borman declined to find that KRBS was acting as the in-house ship management company for K-Line, noting again that the contract to manage the DIAMOND HIGHWAY was entered six years before K-Line agreed to carry the trucks. As there was no basis for personal jurisdiction other than the forum-selection clause, Judge Borman held that the court lacked personal jurisdiction over KRBS.
Lonnie Stripling was hired by Ingram Barge as a cook for the crews of Ingram vessels. She claims that, while assigned to the M/V ROBIN B. INGRAM, its captain, Mark Davidson, harassed her, remarking that he was “untouchable” and could do “whatever I want.” Stripling asserted that she was caused severe emotional distress, and she brought a suit in federal court in Tennessee against Ingram for sexual harassment, hostile work environment, and gender discrimination. More than a year after filing the first suit, and after the deadline to file an amended complaint, Stripling filed a second suit in federal court in Tennessee with the same factual allegations but seeking to recover on counts for maintenance and cure, unseaworthiness, and Jones Act negligence. Ingram moved to dismiss the second suit as violative of the doctrine against claim splitting (“claim splitting is the same as res judicata but with a presumption of a final judgment instead of an actual final judgment”). Stripling argued that maintenance and cure “is not subject to the prohibition on claim splitting because the claim for maintenance and cure was not ripe until she reached ‘maximum cure,’” and her attorney claimed that he did not know of the maritime claims until after the deadline to amend had passed. Judge Campbell easily rejected the contention that maintenance and cure did not accrue until the seaman reaches maximum cure, noting that the claim accrues when the seaman knows or has reason to know of an injury that is the basis of the action. Judge Campbell reasoned that Stripling’s claim for maintenance and cure accrued no later than her last day of employment and could have been brought in the first suit. Turning to the application of the claim-splitting doctrine, Judge Campbell noted that the court should look to the elements of res judicata. As the second suit involved the same parties and the same facts (copied and pasted from the first suit), he held that Stripling “could have, and should have, sought leave to bring the maritime claims” in the first suit “rather than circumventing the Court’s case management order by filing a separate case,” adding: “The resulting inefficiency and waste of resources for both the parties and the Court is precisely what claim splitting is designed to prevent.” Accordingly, Judge Campbell dismissed the second suit.
Slade Mongelli is the owner of a 21-foot Polar Boats Runabout that struck a submerged object while being operated in Sarasota Bay, Florida, injuring passenger Cary O’Donnell. Mongelli brought this limitation action in federal court in Florida, seeking to limit liability to the value of the vessel at the end of the voyage ($4,904.45). Mongelli submitted an Ad Interim Stipulation, stating that he would issue a letter of undertaking within 15 days of demand by a claimant or that he would deposit a surety bond into the registry of the court within 15 days after entry of an order confirming the report of a commissioner to be appointed to appraise the value of the vessel, if demanded by a claimant. Noting that the Stipulation was not accompanied by the letter of undertaking or other security, Magistrate Judge Tuite “was not persuaded” that the Stipulation would protect claimants as contemplated by the Limitation Act and Supplemental Rule F. Accordingly, Magistrate Judge Tuite declined to approve the Ad Interim Stipulation or to direct issuance of the monition and injunction.
Thomas Bodkin claimed that he was injured on the cruise ship SEASHORE when he slipped and fell while descending the spiral staircase in the lobby of the yacht club between Deck 18 and Deck 16. Bodkin brought this suit against the cruise line in federal court in Florida, enumerating a list of risk-creating conditions that caused him to fall. The cruise line moved to dismiss the counts alleging failure to inspect, failure to maintain, failure to remedy, and failure to warn on the ground that the complaint failed to allege notice of the risk-creating conditions with sufficient particularity. Judge Gayles agreed, stating that the allegation that there was a sign present on the stairs was insufficient when the pleading did not provide any specifics as to what the sign said. The allegation that crewmembers used the stairs and were in the vicinity likewise provided no specifics as to how that gave notice of the risk-creating conditions. The listing of two cases involving falls was insufficient because there were no details explaining how those cases were substantially similar to the incident in this suit. Finally, the allegation that the cruise line should have known about safety standards for the stairs provided no notice when the standards were not named. Therefore, Judge Gayles dismissed those counts without prejudice. As to the count involving negligent design and installation of the stairs, Bodkin alleged that the cruise line participated in the design process by generating design specifications; it approved the design of the stairs; and it maintained the right to participate, review, modify, and reject the design plans and drawings. Judge Gayles held that these allegations were sufficient to state a claim for negligent design.
This is another case arising from the efforts to recover the cargo of the S/S ISLANDER, which was lost off the coast of Alaska in 1901 while carrying a cargo of gold. See August 2022 and October 2022 Updates. Pacific Survey Group, owner of the research vessel OCEAN TITAN entered into a time charter with Tyche High Seas Capital that included the OCEAN TITAN and its remote-operated vehicle. Pacific Survey invoiced Tyche, and Tyche acknowledged that the amount invoiced was due, but Tyche only made a partial payment and claimed that Pacific Survey was in breach of the charter by failing to turn over to Tyche all of the information that was collected by the ROV. Pacific Survey brought this suit against Tyche in federal court in Washington, seeking to recover the remaining charter hire plus attorney fees, and Tyche counterclaimed for breach of contract, breach of the implied covenant of good faith, violation of the Washington Consumer Protection Act, and unjust enrichment. Pacific Survey moved summary judgment, and Tyche argued that the case should be dismissed based on Tyche’s insolvency and commencement of an insolvency action in Florida. Judge Robart disagreed, noting that state statutes that purport to allow debtors to discharge debts are preempted by federal bankruptcy law. Judge Robart added that the case was not moot under the doctrine of prudential mootness as the federal court was the appropriate forum to decide the claims and could provide meaningful relief (he also noted that Pacific Survey had asserted in rem claims against the data). Turning to Pacific Survey’s motion for summary judgment, Judge Robart reasoned that Pacific Survey had performed its obligations and that it did not materially breach the charter by failing to deliver survey data. Therefore, he granted summary judgment on Pacific Survey’s claim for hire and denied Tyche’s claim for breach of the Washington Consumer Protection Act. He ordered Pacific Survey to submit its motion for attorney fees.
This case involves the death of Cherish Pankey, a passenger on the CARNIVAL MIRACLE. On December 10, 2021, Pankey and her companion, the father of her minor child, attended a comedy show on the vessel, and crew members witnessed the couple engage in verbal and physical altercations. Instead of intervening, the crew questioned the altercation as part of the comedy’s open routine, leading Pankey to become more distraught. The couple continued to fight on their return to their room, leading to complaints from other passengers. At around 3:00 a.m. on the next day, Pankey had fallen overboard. Her body was never found, and there were no further allegations about the circumstances that led to her death. Suit was brought by beneficiaries of Pankey in federal court in Florida, and the cruise line moved to dismiss several of the counts in the complaint. The beneficiaries alleged that the cruise line breached its statutory duty requiring vessels to integrate technology that can be used for capturing images of passengers or detecting passengers who have fallen overboard and the duty to render assistance to any individual found at sea who is in danger of being lost. The beneficiaries argued that the cruise line was presumptively negligent and liable under THE PENNSYLANIA Rule. The cruise line responded that negligence per se and THE PENNSYLANIA Rule merely shift the burden of proof regarding causation and do not provide a cause of action apart from negligence. Additionally, the technology statute was too general to impose a clear duty on the defendant, and the rescue duty could not be used as the basis for negligence per se because it is a penal statute and because it is intended to aid passengers of other ships. Judge Bloom noted the case law dismissing a claim for negligence per se that was sufficiently subsumed within a general negligence claim. As there was already a county for negligence, she dismissed the counts alleging negligence per se. Judge Bloom dismissed the count entitled Death on the High Seas Act, as DOHSA is “not a valid cause of action” and is a statute that allows the representative to bring a cause of action. She dismissed the count asserting a claim under Panamanian law as it is preempted by DOHSA. She dismissed the request for survival damages (pre-death pain and suffering) as they are not allowed under DOHSA, and she held that the beneficiaries had not properly asserted a claim for punitive damages by merely inserting the word “willfully” to allegations that otherwise sounded in negligence. Finally, Judge Bloom dismissed the individual claims of the personal representative, as DOHSA only permits the personal representative to bring claims for the benefit of the designated beneficiaries and not to assert claims individually.
Lewis Youngman, a mobility-impaired passenger on the MARINER OF THE SEAS, was injured when he lost control of his scooter on the gangway of the ship. He brought suit against the cruise line in federal court in Florida, alleging counts for 1) negligent inspection and maintenance of the gangway, 2) negligent failure to warn, 3) operational negligence—breach of the duty of aid and assistance, and 4) negligent failure to suspend, delay, or stop disembarkation. The cruise line moved to dismiss the last count, arguing that it was a claim for negligent mode of operation that is not recognized in the maritime law. Before considering the pleading, Judge Bloom noted that the negligent mode of operation theory is that the specific mode of operation selected by the premises owner/operator resulted in the creation of a dangerous or unsafe condition. The theory looks to the defendant’s choice of a particular mode of operation and not the events surrounding the plaintiff’s accident. The theory is “at odds with admiralty law’s requirement that a cruise ship must have notice of the dangerous condition.” Youngman’s pleading asserted that the cruise line failed to suspend or delay embarkation procedures until the known dangers could be addressed and the gangway was made safe for embarking. In response to the motion to dismiss, Youngman argued that he did tie the allegations of negligence to the specific circumstances of the accident, citing his allegations that the cruise line had notice that Youngman was using a scooter and knew that mobility-impaired passengers require assistance beyond that afforded to passengers in general. Judge Bloom answered that Youngman’s argument was more related to the claims for negligent inspection and maintenance and negligent failure to warn. To the extent that the last count was based on the condition of the gangway at the time Youngman was injured, it was duplicative of the first count. To the extent it sought to hold the cruise line liable for its policies and practices with respect to mobility-impaired passengers in general, it was a mode of operation claim. Accordingly, Judge Bloom dismissed the last count with prejudice.
Saray is a Turkish company that imports resin from the United States to make architectural windows. This case involved the purchase of 1500 metric tons of resin from Oxyde Chemical in Houston to be shipped CIF Istanbul (Saray paid for the cost, insurance, and freight to ship the goods to Istanbul). Oxyde engaged MTS Logistics, an NVOCC, to ship the resin to Istanbul in 65 containers, and MTS Logistics engaged Mediterranean Shipping Co. to provide the containers and transport them. The vessel SEALAND NEW YORK set sail with the cargo, and MTS sent the original bills of lading to Oxyde. Saray paid Oxyde, and Oxyde sent the original bills of lading to Saray. During the first leg of the voyage (Houston to Sines, Portugal), U.S. Customs issued a redelivery notice directing that the resin be returned to the Port of Houston for further examination. The resin was offloaded at Sines, and Mediterranean Shipping arranged for the resin to be shipped back to Houston and charged MTS Logistics for the additional freight. The resin arrived back in Houston, and Oxyde refused to pay MTS Logistics for the additional freight, arguing that the carrier had failed to perform its contract. The resin sat on the dock in Houston, accruing detention and demurrage charges, and MTS Logistics’ counsel wrote to Oxyde that it intended to foreclose on a lien against the resin in the event that Oxyde continued to decline to pay the additional freight. U.S. Customs then informed Mediterranean that the resin was no longer under investigation and could be released and re-exported, and Mediterranean billed MTS Logistics for the additional fees that the resin incurred while it sat on the dock (under investigation). Oxyde disclaimed ownership of the resin and advised MTS Logistics of its belief that Saray was the owner (and requested that the resin be re-exported to Saray in Istanbul). Eventually, Mediterranean Shipping warned MTS Logistics that the resin had to be picked up or it would go into the General Order (the warehouse operated by the government for abandoned, condemned, or contraband cargos that are ultimately sold or destroyed). MTS Logistics was able to obtain the agreement of Mediterranean Shipping to reduce the detention/demurrage charges and requested payment from Oxyde to avoid the cargo going into the General Order. Oxyde responded that it had heard from Saray and that Saray needed more time to respond. MTS Logistics then agreed to pay the charges to avoid “sale at public auction for cheap.” With no further response from Saray, MTS Logistics advised Oxyde that it had one more chance to pick up the cargo and reimburse MTS Logistics for the expenses or MTS Logistics would sell the cargo (MTS Logistics forwarded its communications to Saray). Saray then appeared by initiating this litigation in federal court in Houston, seeking a declaration that MTS Logistics did not have a lien on the resin and requesting an injunction that prevented MTS from selling the resin. Judge Atlas provisionally enjoined the sale on the condition that Saray post a bond for $820,000; however, Saray did not post the bond, and Judge Atlas denied Saray’s application and ordered that MTS Logistics sell the cargo to recover its costs (reserving Saray’s rights to pursue its claims against MTS Logistics or any other party). MTS Logistics successfully sold the resin for $1,238,528, reimbursed itself $846,590.54 for its expenses, and attempted to return the remaining $344,310 to Oxyde. Oxyde responded that the remainder should be paid to Saray, and MTS Logistics then paid the balance to Saray (there was a discrepancy of $47,627.46).
The case was transferred to the United States District Court for the Southern District of New York, and Saray amended its complaint to assert a single claim against MTS Logistics under COGSA and dismissed its remaining claims with prejudice. MTS Logistics counterclaimed for unjust enrichment and legal fees. The parties then filed cross-motions for summary judgment. Saray argued that it had established a prima facie case of liability under COGSA and that MTS Logistics had raised no valid defenses. MTS Logistics argued that Saray was not a party to the MTS Logistics bills of lading and lacked standing to bring the suit, that COGSA did not apply because the cargo was not damaged or lost, that MTS Logistics properly sold the cargo, and that its liability under COGSA was limited to $500 per container. As a preliminary matter, Judge Cronan addressed the question of whether Saray’s COGSA pleading was timely as it was added more than a year after the incident. As all of the assertions involved the same transaction and the same bills of lading, Judge Cronan held that the COGSA claim was not barred by COGSA’s statute of limitations. Judge Cronan next addressed whether Saray had standing to bring a COGSA claim. Sarah argued that its listing as a “Notify Party” on the MTS Logistics bills reflected an intent to benefit Saray, but Judge Cronan cited cases holding that “notify” status generally confers no rights upon a party. Saray also argued that the MTS Logistics bills contained a “Merchant Clause” that defined a “merchant” as the shipper, consignee, receiver, or holder of the bill and provided that the “merchant” was jointly and severally liable to the carrier for all charges and for performance of the obligations under the bill. Judge Cronan held that the broad Merchant Clause would give the owner or person entitled to the goods a right to sue; however, there was a fact question of whether Saray qualified as a merchant under the clause. Judge Cronan then considered whether COGSA was applicable to the non-delivery of the cargo on the ground that the goods were not damaged or lost, and he held that this was not a situation where cargo was merely delayed and was comparable to situations where cargo was delivered to the wrong party. Thus, he concluded that Saray had made a prima facie case under COGSA. Considering whether MTS Logistics was permitted to sell the cargo to pay for its additional costs, Judge Cronan noted that a rule that permits carriers to sell cargo when faced with any additional charges finds no support in COGSA. Finally, Judge Cronan ruled that the bags were the packages for the COGSA package limitation, but there was a fact question of whether the failure to deliver the goods was an unreasonable deviation that would prevent MTS Logistics from limiting its liability under COGSA. See May 2021 Update.
Judge Cronan held a bench trial and made three primary conclusions of law: 1) Saray had standing to sue under the Merchant Clause of the bills of lading; 2) any duty by MTS Logistics to Saray under COGSA, the Pomerene Act, or the bills of lading ceased upon the return of the resin to Houston in accordance with the re-delivery notice from U.S. Customs; and 3) MTS Logistics’ sale of the resin was an exercise of a valid maritime lien against the resin as recognized in the bills of lading. Thus, Judge Cronan held that MTS was not liable to Saray and that Saray was liable to MTS Logistics for attorney fees for MTS Logistics’ successful recovery in exercising the carrier’s lien. At the time Judge Cronan considered summary judgment, he was unable to determine, based on the disputed evidence, whether Saray was the holder of the bills of lading and fell under the definition of merchant. After trial, Judge Cronan held that Saray was a merchant (no one else claimed possession of the original bills of lading). He added that the bills, which were negotiable or “to order” allowed the possessor to take delivery of the resin and that Sary was in possession of the bills. Although Saray established a prima facie case for non-delivery of the cargo, Judge Cronan held that MTS Logistics established a defense of “restraint of princes” under COGSA and the bills of lading based on the action by U.S. Customs, rejecting Saray’s argument that the re-delivery notice was insufficient to constitute a seizure or restraint by the United States. Saray also argued that the focus should be on the choices made by MTS Logistics after the cargo was cleared for re-export and that the sale of the resin was an unreasonable deviation. Judge Cronan rejected that argument, reasoning that neither COGSA nor the bills of lading continued to govern following re-delivery in Houston. Judge Cronan cited the language in the bills that the liability of the carrier ceased on disposition of the goods in accordance with the orders of a government authority. He also held that COGSA ceased to apply after return of the resin to the Port of Houston because the resin was no longer in the care, custody, or control of MTS Logistics. And, even if COGSA or the bills of lading applied, MTS Logistics had established the defense of restraint of princes (Judge Cronan also held that the defense applied to any liability under the Pomerene Act). Judge Cronan then addressed the validity of MTS Logistics’ sale of the resin, noting that the carrier (including an NVOCC) has the right to retain possession of the goods until freight is paid and that the lien was set forth in the bills of lading. That provision granted the carrier the right to enforce the lien by public or private sale, and Judge Cronan held that MTS Logistics was not liable for the sale of the resin (also noting that MTS Logistics only sold the resin after being authorized to do so by Judge Atlas). [If the lien is possessory, how did it apply after the resin was no longer in the care, custody, and control of MTS Logistics?]. Finally, Judge Cronan considered MTS Logistics’ claim for attorney fees. As the bills of lading stated that the carrier’s lien applied to “the costs of recovering [sums due under the contract], inclusive of attorney fees,” Judge Cronan held that the proper method for MTS Logistics to obtain reimbursement for fees was to exercise its lien, and the sale of the resin was a valid exercise of the lien. The amount that MTS Logistics could recover in fees was limited to the surplus from the sale of the resin after deducting the reimbursement for return freight, detention, and demurrage. Additionally, the recoverable fees would not include unsuccessful matters such as the motion for summary judgment or the abandoned claim for unjust enrichment.
Juan Martinez was injured while working as a Dredge Field Engineer on a vessel owned and operated by Crosby Dredging when an elevated walkway flipped over and fell on top of Martinez, injuring his legs, knees, and back. Martinez brought this suit in federal court in Louisiana against Crosby Dredging under the Jones Act and for unseaworthiness and maintenance and cure under the general maritime law. When Martinez applied for employment, he completed a pre-employment medical history questionnaire in which he denied any history of injured back/back pain, injured leg, back surgery/injury, ruptured/herniated disc, recurrent neck/back pain, any other disease/surgery, and MRI. Martinez admitted in this litigation, however, that he had previously suffered a workplace injury that resulted in surgery on his right knee; that he had previous injuries to his finger, low back, and rib cage when he was hit by a car; that he was in an auto accident after which he received treatment for severe pain in his neck, low back, and mid back; that he was treated for neuropathy and low-back pain for at least three years beginning in 2013; and that he had received two MRIs of his lumbar spine that found disc protrusions and bulges. Crosby Dredging paid maintenance to Martinez after the incident, but Martinez then demanded surgery to his right knee and a lumbar fusion. Crosby Dredging declined to pay for the surgeries and moved for summary judgment that it did not owe cure based on the McCorpen willful concealment defense. Judge Vance agreed that Crosby Dredging carried its burden of establishing all three elements of the defense as a matter of law and dismissed the claim for cure with prejudice. Martinez provided false answers on the questionnaire, and Judge Vance found that he “knew the information on the application was not correct” and that there was willful concealment because he had the literacy to understand the questions. As the job description for a Dredge Field Engineer provided that the job involved a heavy physical demand level, Judge Vance concluded that the inquiries were material to Crosby Dredging’s decision to hire Martinez for this position. Finally, the causal link element of the McCorpen test was satisfied as the newly alleged injuries and the two surgical procedures were to the same areas of his body as were involved in the prior treatments that Martinez denied.
Charlotte Smith slipped and fell on a foreign liquid substance while a passenger on the CARNIVAL VISTA and brought this suit against the cruise line in federal court in Florida to recover for her injuries. She asserted claims for direct liability of the cruise line and vicarious liability for the conduct of a crew member, and the cruise line moved to dismiss the complaint as inadequately pleaded. Judge Bloom agreed that the complaint needed to be repleaded for two reasons. First, the count whose title indicated it was intended for vicarious liability included language for a claim of direct liability, which would have to be brought in a separate count. Additionally, although Smith did identify the crewmember whose conduct was involved (including the date and location for the action), there were no allegations setting forth the duty that was breached by the crewmember. Smith set out the duty breached by the cruise line but did not identify how the crewmember breached a duty that caused her injury. Consequently, the pleading did not state a claim as a matter of law and had to be repleaded. See December 2022 Update.
After Smith filed her amended complaint and the deadline passed to amend pleadings, she moved for leave to add a claim for punitive damages based on newly discovered facts. The cruise line opposed the motion on several grounds, but Judge Bloom focused on the objection that the amendment was futile because Smith did not provide any factual allegations to show that the cruise line’s conduct was intentional rather than negligent. Smith responded that prior incidents could constitute a basis for the award of punitive damages, citing 19 prior incidents of passengers who slipped and fell in the same area and the fact that the cruise line did not change the surface. Smith cited cases from different states where this type of evidence was sufficient to support an award of punitive damages. However, Judge Bloom answered that the standards are different in those states than the intentional requirement applicable in maritime cases in the Southern District of Florida, in which the court previously stated: Plaintiff’s allegation that Defendant knew the defect was dangerous and failed to implement appropriate corrective measures is merely a traditional negligence claim, summarily alleged to have been done intentionally.” As Smith’s pleading was insufficient to allege an intentional tort, Judge Bloom denied the motion to amend.
Christopher Dudley was a passenger on the NORWEGIAN SKY. While participating in the Blue Lagoon Segway and Beach with Lunch excursion in The Bahamas, Dudley was injured when he was thrown from a Segway, was run over by it, and the Segway fell on top of him. Dudley brought suit in federal court in Florida against the cruise line and Dolphin Encounters, the operator of the excursion. The cruise line moved to dismiss four counts of the complaint on the grounds that they asserted claims that were premised on duties not owed under the maritime law, were unsupported by sufficient factual pleading, or were contradicted by documents submitted by the cruise line. In Count 1, Dudley pleaded that the cruise line owed him non-delegable duties, including a duty to warn of dangers of which the cruise line knew or should have known, and that the duty extended to places on the excursion as the excursion was advertised, marketed, and sold by the cruise line. The cruise line argued that after the passenger leaves the ship, the cruise line only owes the passenger the duty to warn of known dangers in areas where the passenger is reasonably expected to visit. Dudley responded that under state law the inherently dangerous activity doctrine imposes a nondelegable duty to perform, or to have others perform, the activity in a reasonably safe manner. Judge Bloom rejected that argument based on decisions from the Eleventh Circuit that the cruise line does not owe a special duty related to inherently dangerous activities. However, applying the maritime standard, Judge Bloom did not find Count 1 to be “foreclosed” as it articulated the correct duty for reasonable care to warn of known dangers beyond the ship. Judge Bloom also declined to dismiss the negligence allegations in Count 1 on the ground that the hazard was open and obvious, rejecting the argument that the warning in the Ticket Contract that “it is possible to sustain injury” while participating in recreational activities was sufficient to satisfy the cruise line’s duty to warn. Finally, Judge Bloom held that Dudley had sufficiently pleaded notice of the insufficiency of the operating instructions for the Segway from the cruise line’s visits and participation in the excursion as part of the initial and renewal process and the length of time the condition existed. With respect to Count 2, negligent selection and retention of the excursion operator, Judge Bloom cited the claims that the cruise line should have known that the operator was unfit and provided insufficient training and instruction as well as the complaints received by the cruise line from previous passengers about the unsafe operation of the excursion and held that the Count was sufficiently pleaded. Judge Bloom also considered the count alleging vicarious liability for negligence of the excursion based on apparent agency or agency by estoppel to be sufficient because Dudley alleged that he relied on representations, materials, and assurances from the cruise line that created ambiguity on the relationship between the cruise line and excursion (considering the marketing materials and advertising from the cruise line). However, Judge Bloom dismissed the allegation of vicarious liability for the negligence of the excursion based on a joint venture because it was contradicted by the terms of the Standard Shore Excursion Agreement submitted by the cruise line. Although Dudley argued that the Agreement could not be considered at the stage of a motion to dismiss because it was not part of the Complaint, Judge Bloom held that it was referred to in the Complaint when the passenger alleged that the cruise line and excursion entered into an agreement that the cruise line would sell the excursion to the passengers.
Verplanck Fire District is an all-volunteer fire district that provides fire protection and ambulance and EMS services to the hamlet of Verplanck in Westchester County, New York. Troy Dyckman has been a volunteer firefighter with the district since 2013. The majority of the calls for assistance are land-based, but the district also owns a 25.5-foot vessel, MARINE 1, which is used to perform services in and around the Hudson River in northern Westchester County from April through mid-November. Dyckman did not take the training to operate the vessel, but he was permitted to respond to calls on the river on the vessel after completing a boating safety class. Dyckman was injured on August 9, 2020 on the vessel in a near collision in the Hudson River near Croton Point Park, New York, when he extended his leg between the two vessels to try to push the other vessel away. Dyckman applied for and received benefits under the New York Volunteer Firefighters Benefit Law, and the district filed this limitation action in federal court in New York, seeking to limit its liability to the value of the MARINE 1. Dyckman filed a claim in the limitation action, seeking to recover for Jones Act negligence and unseaworthiness. Alternatively, he sought to recover as a Sieracki seaman and for general maritime negligence. The district moved for summary judgment on all of the claims. With respect to the claims as a seaman for Jones Act negligence and unseaworthiness, the district argued that Dyckman’s vessel-related activities were only 3.8% of his total activities, far below the 30% guideline to satisfy the duration element of the connection test from Chandris. Dyckman responded that the volunteers “are permitted a flexible schedule—and therefore so should what is needed for them to be considered [a] Jones Act seaman.” Judge Halpern was unaware of any authority supporting the proposition that volunteers should be considered under a relaxed standard, and he held that Dyckman’s connection was insufficient in both duration and nature. Turning to the claim that Dyckman could recover for unseaworthiness as a Sieracki seaman because he was doing a seaman’s work and was incurring a seaman’s hazards, Judge Halpern stated that the key was whether Dyckman was an independent contractor under New York law. However, under New York law, the relationship of a volunteer firefighter and the district is statutorily defined as that of employer and employee. Consequently, Judge Halpern held that Dyckman was not entitled to recover under Sieracki, “which is a doctrine that ‘was developed precisely for independent contractors.’” Additionally, Judge Halpern stated that the Sieracki doctrine (as well as the warranty of seaworthiness) was not intended to extend to land-based workers like Dyckman, noting that Dyckman’s activities on the vessel were merely temporary or transitory in nature (of course, Sieracki’s duties as a longshore worker on the S.S. ROBIN SHERWOOD were temporary or transitory). Finally, Judge Halpern considered the district’s argument that Dyckman’s claim for maritime negligence was barred by the exclusive remedy provision of the New York Volunteer Firefighters Benefit Law. He reasoned that “New York’s interest in applying the VFBL outweighs a relatively weak federal interest in allowing a person such as Claimant to assert a general maritime tort claim against his employer.” Concluding that the exclusive remedy provision was not preempted by the maritime law, Judge Halpern held that the maritime negligence claim was barred by Dyckman’s receipt of benefits under the VFBL.
Ronald Kent was employed as a seaman on the M/V FRANK HOLLOMAN, which was owned/operated by Southern Towing. He and the vessel’s mate were moving a trash pump from an adjacent barge to the deck of the vessel when the pump slipped from the mate’s grasp, causing the weight of the pump to transfer to Kent, resulting in an injury to Kent’s back. Kent brought this suit in federal court in Louisiana against Southern Towing, alleging negligence and unseaworthiness for directing the movement of the pump with insufficient manpower assistance. Southern Towing moved for summary judgment, arguing that the task being performed was a two-person task that could have been safely performed by Kent and the mate. Therefore, there was no insufficiency in the manpower. In response, Kent revised his theory of liability, asserting that the pump did not slip from the mate’s hands as it was being moved. Instead, the pump was placed on the handrail of the vessel’s catwalk as the pump was being transferred from the barge. The mate intentionally let go of the pump to reposition himself, and the pump’s weight shifted to the plaintiff during the mate’s repositioning. Kent now argued that the mate’s decision to release the pump was negligent. He claimed that the mate had sought the assistance of the vessel’s engineer before they began the job of moving the pump, but the engineer was unavailable. Although the allegations had changed, Judge Guidry held that summary judgment was appropriate under either theory. As to the insufficient manpower theory, Judge Guidry noted that both Kent and the mate had testified that two workers could safely move the pump. As to the negligence of the mate in resting the pump on the handrail, Judge Guidry noted that the mate had testified that he informed Kent of his intent to rest the pump on the rail prior to releasing the pump from his grasp. As there was no evidence that one worker was incapable of steadying the pump as it rested on the handrail and there was no evidence that the mate caused the pump to shift when he took his hands off the pump, Judge Guidry found that the shifting of the weight of the pump was “an unfortunate circumstance” and was not the result of negligence of the mate. As there was no evidence of insufficient manpower or any defect in the gear or appurtenances of the vessel, Judge Guidry also concluded that there was no basis for unseaworthiness. Therefore, he dismissed the claims for negligence and unseaworthiness.
Canpotex Shipping chartered the M/V KAVO PLATANOS from its owner, Indy Maritime. Canpotex contracted with OW Bunkers for the delivery of bunker fuel to the vessel in Vancouver, OW Bunkers contracted with Aegean Maritime to deliver the fuel, and Aegean Maritime delivered the fuel to the vessel (accepted by the chief engineer). Canpotex was supposed to pay OW Bunkers, which was supposed to pay Aegean Maritime, but no payments were made when OW Bunkers declared bankruptcy. Aegean brought this suit in federal court in Washington against the vessel, in rem, and its owner (Indy Maritime), its charterer (Canpotex), and its manager (Gourdomichalis Maritime), in personam. The claims were based on American maritime law and the Commercial Instruments and Maritime Lien Act. The court denied the defendants’ motions to dismiss or transfer the action, but it did stay the case for six years while similar cases filed in the Southern District of New York were resolved. After the stay was lifted, the defendants moved to dismiss the complaint, and Aegean Maritime filed an amended complaint asserting claims based on Canadian law. Canpotex moved to dismiss the amended complaint. Judge Chun noted that in the New York litigation the courts generally held that a subcontractor/supplier (like Aegean) did not have a valid maritime lien unless it could show that the general contract’s middleman (like OW Bunkers) was acting as agent of the vessel, and the courts generally held that it was not acting as agent of the vessel. Judge Chun admonished the parties to conduct a careful choice-of-law analysis, but the parties’ arguments were not satisfying to the court. Based on the court’s own evaluation of the Lauritzen factors, Judge Chun tentatively assumed that Canadian law applied to the providing of fuel in Vancouver, Canada. Judge Chun then applied Canadian law to determine whether Aegean and Canpotex formed a contract. Aegean Maritime cited the clause in the contract between OW Bunkers and Canpotex that the physical supply of the bunkers was being undertaken by a third party/supplier and that the supplier (Aegean Maritime) insists that the buyer (Canpotex) is bound by the supplier’s terms and conditions. Judge Chun cited skepticism that this clause created a contractual relationship between Aegean Maritime and Canpotex, but Canadian cases reflected that there was a form of contractual privity from this language. The result was the incorporation of Aegean Maritime’s terms and conditions in the contract between Canpotex and OW Bunkers with the third-party terms controlling in the event of conflict. Reading the terms together, Judge Chun held that United States law applied to the existence of a maritime lien, and Greek law governed the contract performance and enforcement. Applying U.S. maritime law, the lien claim failed because Aegean Maritime abandoned the claim when it removed the claim under American law and only pleaded a claim under Canadian law. Judge Chun noted that, even if Greek law applied, the lien claim would fail because Greek law does not recognize a lien for necessaries such as fuel oil. Although Aegean Maritime’s expert suggested that Greek law required application of U.S. choice-of-law rules, which pointed to application of Canadian law, Judge Chun believed that the suggestion would produce a loop that kept repeating and never ended. Reasoning that under either choice of law the lien case failed, Judge Chun dismissed Aegean Maritime’s claim for a maritime lien. Turning to the contract claim, Judge Chun held that Canadian law governed the contract formation and that there was a valid choice-of-law provision for application of Greek law for the interpretation and enforcement of the contract. Canpotex argued that the contract was sufficient to bind the parties to the choice of law but that it was not sufficient to give contractual remedies to Aegean Maritime under Greek law. Judge Chun declined to accept that approach, however, because the court lacked sufficient information about Greek law. Judge Chun then considered the claim for unjust enrichment. Canpotex argued that Washington state law should apply to the claim; however, Judge Chun tentatively assumed that Canadian law applied because Canada has a stronger connection to the dispute than the United States. Based on Canadian law, Judge Chun held that Aegean Maritime stated a plausible claim for unjust enrichment. Finally, Aegean Maritime asserted “causes of action” for the arrest of bunkers on the vessel and for maritime attachment/garnishment. Although Canpotex argued that these “causes of action” failed with the dismissal of the lien claim, Judge Chun was uncertain if the claims could continue to exist with the contract and unjust enrichment claims that were still pending. Judge Chun invited the parties to brief that issue.
John Borman, who resided in Guatemala, was recruited to serve as the captain of the F/V KNOT E Z for the summer of 2022. Borman claims that he arrived in Anchorage, Alaska, waiting to be driven to Seward, Alaska, or was in Seward, Alaska on June 4 or June 5. His employer, Corey Potter, says that Borman arrived at the vessel on the evening of June 6. Borman first observed blood in his urine on June 7 or 8, 2022 and went to the emergency room on June 8, reporting that he experienced a medical problem three days before June 8. Borman later claimed that he was not sure when he began experiencing the urinary tract problems, but he was sure that the problems began after he arrived in Seward to start work on the vessel (he could not explain the note in his medical records that he had the problem for three days before June 8). Borman did not return to the vessel until he was cleared to return to duty on September 25, 2022. Borman brought this suit in federal court in Washington seeking to recover maintenance and cure, wages, and attorney fees for failure to pay maintenance and cure. The case was transferred to the federal court in Alaska, and Borman filed a motion for partial summary judgment that he was entitled to recover maintenance and cure, wages, and attorney fees. Potter opposed the motion, citing the evidence from the medical records that Borman had the condition for three days, which would be before he reported for duty on the vessel. Judge Holland, however, considered the disagreements in the facts to be immaterial to the disposition of the claims. Judge Holland did not consider the date of origin of the medical problem to be material because Borman first sought medical care on June 8, 2022, after reporting to the vessel (reasoning that the seaman is entitled to maintenance and cure from the time he first incurred liability for medical care). Accordingly, Judge Holland held that Borman was entitled to maintenance and cure from June 8 to September 25. Potter argued that Borman was not entitled to any wages because he was only on the vessel for a few hours and never performed any duties. That contention was also immaterial to Judge Holland, because Borman traveled to the vessel, showed up for work, and his employment was never terminated. Consequently, Judge Holland awarded him wages until September 25. Judge Holland denied the motion with respect to attorney fees because the issue of whether the withholding of maintenance and cure was arbitrary and capricious was not adequately developed.
Brad and Ronalda Angasan own the fishing vessel NOVARUPTA (Brad is the captain). Just prior to the 2022 Bristol Bay salmon season, they lost one of their crew and sought a replacement. Gracie Bodo responded, and the Angasans agreed to hire her. Bodo requested a contract, but Ronalda Angasan was unable to send one, in part due to a lack of sufficient internet/wireless connection. Bodo requested a crew share of 10%, but the Angasans’ policy was to offer 5% to the lowest-ranking crew member and 10% for the highest share (for the NOVARUPTA, 10% was paid to crew members with at least 10 years of fishing experience). Bodo claimed that she had received 10% in her last two years as a deckhand, but Ronalda Angasan did not agree to that figure, and Brad Angasan told her she would be the lowest-ranking crew member. The parties did not agree to the share, and Bodo went to work on the vessel with no written contract. Bodo worked on the vessel for just over two weeks, and the Angasans claimed that she lacked the skills to even receive a 5% share. Alleging that she was harassed and threatened by the owners and essentially forced off the vessel and constructively discharged, Bodo brought this suit in federal court in Alaska against the Angasans and the vessel, seeking to recover wages and punitive damages and attorney fees. She moved for partial summary judgment that she should recover at least the “undisputed” 5% crew share plus attorney fees. She argued in her motion that the Angasans had sent two checks for $10,000 to Bodo, but one check was not processed and the other was returned for insufficient funds (claiming that these purported payments and the failure to pay even 5% demonstrated bad faith). Judge Gleason did not consider the attempted payments or emails regarding the payment to be summary judgment evidence of Bodo’s entitlement to a share, and the evidence was disputed whether she was entitled to at least 5%. Accordingly, Judge Gleason declined to grant summary judgment to Bodo on the wage claim and the claim for attorney fees.
Poonam Bakshi, a passenger on the CARNIVAL FREEDOM, was injured when a “heavy-set” passenger lost his balance, fell on Bakshi, and rolled over her left knee/leg while trying to get up. Bakshi brought this suit in federal court in Florida against the cruise line, and Bakshi moved to strike some of the cruise line’s affirmative defenses. Magistrate Judge Goodman noted that some judges had stricken the defense that the suit was governed by and subject to the terms of the Passenger Ticket Contract; however, Judge Scola reasoned that the defense functioned, at worst, as a denial of the passenger’s claims and that the appropriate remedy was to treat it as a denial that could be addressed by a motion for summary judgment. Consistent with that analysis, Magistrate Judge Goodman recommended denial of the motion for that defense. Similarly, Magistrate Judge Goodman held that the defense that the cruise line discharged its duty and adhered to the guidelines for onboard medical facilities should be treated as a specific denial and not an affirmative defense and should not be stricken. As the defendant was not required to plead specific facts to raise the defense that the passenger’s damages were caused or exacerbated by intervening and superseding factors, Magistrate Judge Goodman declined to strike that defense. Magistrate Judge Goodman declined to strike the affirmative defense that the passenger had a duty to mitigate damages, stating that it was merely a statement of law and not a defense because the cruise line did not state that the passenger failed to mitigate damages. The defense gave notice that the cruise line intended to argue at trial that Bakshi failed to mitigate damages. Magistrate Judge Goodman recommended that the defenses that the passenger’s damages were caused by an intervening or superseding medical condition or event and that the damages were the result of a pre-existing condition (so that the passenger was only entitled to reimbursement for any aggravation) were proper because they put the passenger on notice of the issue of causation. Finally, Magistrate Judge Goodman recommended striking the defense that the passenger’s damages were caused in whole or in part by the action or inaction of third parties for whom the cruise line was not responsible because the defense sought to apportion fault in a manner that is not permitted by the joint and several liability of the general maritime law.
From the state courts
Julius Copeland, a resident of Missouri, worked as a seaman on boats owned and operated by Western Rivers Boat Management, a Delaware company with its principal place of business in Kentucky. WRBM contacted Copeland in Missouri and gave him an assignment to join the crew of the M/V TATE OGLESBY near Burlington, Iowa on a voyage to Wisconsin. The vessel had already traveled up the Mississippi River from St. Louis, Missouri to Iowa. While working as a leadman on the vessel, Copeland was injured while pulling heavy equipment as the vessel took on water. Copeland brought this suit against WRBM in the Circuit Court of the City of St. Louis, and Judge Moriarty granted WRBM’s motion to dismiss the suit for lack of personal jurisdiction. Copeland appealed to the Missouri Court of Appeals, arguing that his claims arose from 1) WRBM’s transaction of business in Missouri, 2) its employment relationship with him that included the transaction of business in Missouri, and 3) the commission of a tortious act in Missouri. Copeland argued that WRBM has customers in Missouri, its vessels are regularly within Missouri, and that his claim arose out of that business because his accident would not have occurred without the work in Missouri. Writing for the appellate court, Judge Stevens noted that the court had rejected a “but-for” causation test for personal jurisdiction. As the tort claim did not arise from the work in Missouri, the first argument failed to provide for jurisdiction. Although Copeland received work assignments in Missouri, there was no evidence that acceptance of his employment contract occurred in Missouri, so the employment contract could not be the basis for specific jurisdiction in Missouri. Finally, Copeland argued that a tort was committed in Missouri because the vessel had defects in the hull that should have been identified and repaired while the vessel was in Missouri (where it had been serviced on several occasions). However, as the complaint did not allege any tortious act in Missouri, this ground was likewise insufficient to support personal jurisdiction in Missouri, and the appellate court affirmed the judgment that dismissed the suit (without prejudice).
Gerald Metals purchased 25,250 tons of alumina from Shezou Shenhuo Trading, a Chinese aluminum smelter, for $9,090,000. The material had been shipped from Australia, a receipt was issued for it to Gerald Metals from a warehouse at the Port of Qingdao, China, and Gerald Metals gave instructions to the warehousing company to release the material. However, the alumina was never delivered to Gerald Metals. Gerald Metals purchased all-risk marine cargo insurance policies from Lloyd’s covering transport and storage of insured goods. Gerald Metals made a claim against Lloyd’s for the loss of the alumina, and Lloyd’s declined to pay based on several defenses. Two days before the case was scheduled for trial, Lloyd’s sent a supplemental discovery response that, unbeknown to Lloyd’s, Gerald Metals had been engaged in an arbitration before the London Metals Exchange with the vendor of the alumina (Shezou Shenhuo) and that counsel for Gerald Metals would not disclose details because of the confidentiality of the proceedings. The court continued the trial and ordered production of all filings in the arbitration. Gerald Metals originally argued in the arbitration that the alumina was stolen, but the evidence eventually established that the receipt was forged, that the material actually belonged to someone else, that it never belonged to Gerald Metals, that it was not stolen, and that it was seized and sold at auction with no proceeds paid to Gerald Metals. The arbitration tribunal awarded Gerald Metals its claim of $9,090,000 because Shezou Shenhuo did not convey title or possession of the alumina to Gerald Metals. Lloyd’s moved for summary judgment, arguing that the findings in the arbitration were binding on Gerald Metals by collateral estoppel/judicial estoppel and that Gerald Metals did not establish a prima facie case for coverage under the policy because there was no loss or damage to the alumina. Although Gerald Metals argued that there could not be collateral estoppel/judicial estoppel from an arbitration proceeding, Judge Lee disagreed and held that the award could be used for collateral/judicial estoppel, that the foreign findings were entitled to the same force and effect as a domestic arbitration, that the doctrines could be used offensively or defensively, and that the doctrines could be used where the prior proceeding was an arbitration and the inconsistent position was presented in litigation. As Judge Lee found that collateral and judicial estoppel applied, the findings in the arbitration became undisputed: absence of theft, no transfer of title or possession, forgery of the warehouse documents, seizure of the material by the local authorities, and sale of all the alumina at auction. Based on those findings, Judge Lee concluded that Gerald Metals did not have an insurable interest in the goods, that it did not demonstrate physical loss or damage from any external cause, and that Lloyds had established that the FC&S exclusion (free of capture and seizure) barred recovery. Accordingly, Judge Lee granted summary judgment and held that Lloyd’s could submit a motion for sanctions.
This suit is one of many arising from the voyage of the OVATION OF THE SEAS to New Zealand and the excursion to White Island, an active volcano that erupted when passengers were on the island. As noted in the November 2022 Update, Magistrate Judge Goodman in the United States District Court for the Southern District of Florida dismissed the suit against the cruise line that was pending before him based on the waiver of liability in the passenger ticket and shore excursion ticket (the parties in that suit settled shortly thereafter).
Ean-Hui Ooi, an Australian citizen, filed this suit in Florida state court in Miami against Royal Caribbean Cruises, which moved to dismiss the suit based on a forum-selection clause (for New South Wales, Australia) in the passenger ticket contract between Ooi and RCL Cruises, a related United Kingdom entity that is the operator of the OVATION OF THE SEAS. Royal Caribbean Cruises brought a suit in the Federal Court of Australia, seeking a declaration that disputes it had with Australian passengers would be subject to the exclusive jurisdiction of the courts of New South Wales, but the court held that Royal Caribbean was not a party to the passenger ticket contract and that the forum-selection clause did not extend to Royal Caribbean Cruises. The Australian court declined to grant an injunction against suits by Australian passengers against Royal Caribbean Cruises in Florida. Ooi then filed this suit in Florida state court against Royal Caribbean Cruises and the tour operator. Royal Caribbean Cruises moved to dismiss the suit for improper venue (based on the forum-selection clause), requesting a hearing and submitting affidavits setting forth the commercial relationship between RCL Cruises and Royal Caribbean Cruises. The trial court denied the motion without an evidentiary hearing, and Royal Caribbean appealed, arguing that it could enforce the forum-selection clause as a non-signatory or that an evidentiary hearing was necessary to determine whether the relationship between RCL Cruises and Royal Caribbean Cruises was such that Royal Caribbean Cruises could enforce the forum-selection clause. Writing for the court of appeal, Judge Emas agreed that the ticket contract did not extend to Royal Caribbean Cruises, citing the language in the forum-selection clause: “We both agree that . . . .” Additionally, Judge Emas held that Royal Caribbean Cruises was not entitled to an evidentiary hearing as the affidavits it submitted did not place any relevant fact in dispute. He explained that the complaint described the Australian decision (rejecting the application of the forum-selection clause to Royal Caribbean Cruises and declining to issue the anti-suit injunction), and he held that the affidavits did not refute any of the claims. Moreover, the interpretation of the unambiguous terms of the contract presented a question of law. Finally, Judge Emas held that the argument that Royal Caribbean could enforce the forum-selection clause as a non-signatory had not been properly preserved and could not be raised in the appeal. Therefore, the decision of the trial court was affirmed.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
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Miami
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Quote:
Hello, Dolly
Well, hello, Dolly
It’s so nice to have you back where you belong . . . .
Great Lakes Insurance, S.E. insured the Hello Dolly VI, a boat owned by Gray Group Investments, L.L.C. The Hello Dolly sank in Pensacola, Florida, during a hurricane. Gray Group filed a claim under the insurance policy, Great Lakes denied coverage, and Great Lakes then sought a declaratory judgment that it properly did so. Ironically, the question largely turned on whether, contra her musical namesake, the Hello Dolly was “back where [she] belong[ed],” for purposes of coverage. The district court agreed with Great Lakes that she was not. We affirm.
***
The Hello Dolly VI never got “back where [she] belong[ed].” Gray Group’s representations to the contrary were validly incorporated into the policy as warranties, and Gray Group’s breach of its warranties justified Great Lakes’s denial of coverage when the Hello Dolly sank. Accordingly, the district court properly granted summary judgment for Great Lakes.
Great Lakes Insurance, S.E. v. Gray Group Investments, L.L.C., No. 22-30041, 2023 U.S. App. LEXIS 19825 (5th Cir. Aug. 1, 2023) (Wilson), quoting the Musical Production “Hello Dolly!” with music and lyrics by Jerry Herman, © 1963.
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© Kenneth G. Engerrand, August 31, 2023; redistribution permitted with proper attribution.
