September 2024 Longshore/Maritime Update (No. 304)
Notes from your Updater:
On July 29, 2024, Judge Contreras of the United States District Court for the District of Columbia awarded damages in connection with the deaths and injuries of sailors on the U.S.S. COLE in the terrorist attack in Yemen on October 12, 2000. The suit was brought by 58 family members of the 17 sailors who were killed (Surviving Family Plaintiffs), 34 sailors who suffered physical injuries and emotional trauma (Navy Plaintiffs), and 22 family members of Navy personnel who experienced emotional trauma (Immediate Family Plaintiffs). After a default judgment was entered against the Islamic Republic of Iran, Judge Contreras awarded the surviving family plaintiffs $243 million in solatium damages; he awarded $188 million to the Navy Plaintiffs for pain and suffering; he awarded $58 million in solatium damages to the Immediate Family Plaintiffs; and he awarded $1,467,000,000 in punitive damages. See Gunn v. Islamic Republic of Iran, No. 21-cv-1187, 2024 U.S. Dist. LEXIS 132891 (D.D.C. July 29, 2024). Shortly thereafter, Chief Judge Boasberg of the same court authorized commencement of attachment and execution efforts (under the Foreign Sovereign Immunities Act) against the General Co. for Ports of Iraq (GCPI) with respect to an arbitration award in excess of a hundred million dollars in favor of Archirodon Construction (Overseas) Co., which contracted with GCPI to construct a staging pier and eastern breakwater for Al Faw Grand Port in Iraq. See Archirodon Construction (Overseas) Co. v. General Co. for Ports of Iraq, No. 22-cv-1571, 2024 U.S. Dist. LEXIS 146250 (D.D.C. Aug. 16, 2024).
On August 2, 2024, both the panel and the full Sixth Circuit declined to rehear the decision (August 2024 Update) that a seaman (tankerman, deckhand, and mate) on a tug who helped unload oil-based substances that emit hydrogen sulfide fumes failed to establish causation in his Jones Act and unseaworthiness claims after the striking of his expert testimony. See Adkins v. Marathon Petroleum Co., No. 23-3418 (6th Cir. Aug. 2, 2024).
On August 6, 2024, the United States Court of Appeals for the District of Columbia Circuit vacated the Federal Energy Regulatory Commission’s authorization of two liquefied natural gas export terminals in Cameron County, Texas (and a pipeline that would carry natural gas to one of the terminals). See City of Port Isabel v. Federal Energy Regulatory Commission, No. 23-1174 c/w No. 23-1221; No. 23-1175 c/w No. 23-1222, 2024 U.S. App. LEXIS 19565 (D.C. Cir. Aug. 6, 2024) (Garcia).
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). Back in the district court, 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). On August 7, 2024, the Fifth Circuit affirmed Judge Rosenthal’s decision “essentially for the reasons stated in the district court’s opinion.” Petrobras America, Inc. v. Samsung Heavy Industries Co., No. 23-20448, 2024 U.S. App. LEXIS 19852 (5th Cir. Aug. 7, 2024) (per curiam).
On August 8, 2024, the Eleventh Circuit declined to set aside an arbitration award under the New York Convention in favor of Commodities & Mineral Enterprise, Ltd. against Ferrominera Orinoco, C.A. in the amount of $187.9 million arising from a Transfer System Management Contract in connection with Ferrominera’s export of iron ore from Venezuela. The parties agreed to arbitrate disputes under the substantive general maritime law of the United States. The federal court in Florida confirmed the award, and the Eleventh Circuit rejected the public policy defense asserted by Ferrominera and affirmed the confirmation of the award. See Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco C.A., No. 21-14504, 2024 U.S. App. LEXIS 19944 (11th Cir. Aug. 8, 2024) (Jordan).
On August 12, 2024, the Washington Court of Appeals, Division One, upheld the assessment of Washington sales taxes on Matson Navigation for the services provided by SSA Terminals for inspection, cleaning, and repair of shipping containers coming through the Ports of Seattle and Tacoma, Washington, rejecting Matson’s argument that the containers “play an integral and necessary part in the operation of the containerships to carry cargo in interstate and foreign commerce” and fell within the exemption from sales tax of services for repairing and cleaning property (such as vessels) used in interstate commerce or property that becomes a component part of watercraft. See Matson Navigation Co. v. State of Washington, Department of Revenue, No. 85215-9-1, 2024 Wash. App. LEXIS 1635 (Wash. App. Div. 1 Aug. 12, 2024) (Chung).
On August 15, 2024, the Fourth Circuit held that a Maryland company that hired Nepalese-English interpreters domiciled in Virginia and North Carolina to work in Afghanistan was not subject to the Maryland Wage and Hour Law as the workers performed no work in Maryland. See Poudel v. Mid Atlantic Professions, Inc., No. 22-1400, 2024 U.S. App. LEXIS 20644 (4th Cir. Aug. 15, 2024) (Benjamin).
The Magnuson-Stevens Fishery Conservation and Management Act regulates fishing in coastal waters. The Act created the Regional Fishery Management Councils to develop annual catch limits for fisheries in their respective geographic regions. Commercial fishers challenged the constitutionality of the Gulf of Mexico Fishery Management Council on grounds that the Council members were improperly appointed under Article II, Section 2, Clause 2 of the Constitution and that the Council members were unconstitutionally insulated from removal. Judge McNeel of the United States District Court for the Southern District of Mississippi rejected their arguments, and the fishers appealed to the Fifth Circuit. On August 23, 2024, the Fifth Circuit reversed the decision of Judge McNeel, noting the intervening decision of the Fifth Circuit in Braidwood Management v. Becerra, in which the Fifth Circuit considered Appointments Clause challenges for different governmental bodies. The Fifth Circuit asked the district court to consider whether the Secretary had ratified (cured) the Appointments Clause issues before the court considered whether the members were validly appointed. See Arnesen v. Raimondo, No. 24-60055, 2024 U.S. App. LEXIS 21451 (5th Cir. Aug. 23, 2024) (Higginson).
On the LHWCA Front . . .
From the federal appellate courts
Charles Thompson sustained a back injury while working as a shipfitter for Resource Consultants. He received benefits from Resource Consultant’s carrier, CNA, and returned to work during a period that Travelers was the carrier. Resource Consultants eventually changed its named to Serco and was covered by Chartis on the last day that Thompson worked. Thompson brought claims under the LHWCA against Resource Consultants (Travelers) and Serco (Chartis) for cumulative injury to his back (he added neck and psychological injuries later). Thompson first engaged attorney Donald Cline to represent him. He engaged his second lawyer, Eric Dupree, in 2010, and his claims were referred to the Office of Administrative Law Judges in 2012. Dupree withdrew as counsel on December 5, 2013, while the case was pending before the OALJ (Dupree asserted that Thompson became combative in the attorney-client relationship after failing an opioid drug detox program and relocation to Virginia). Thompson then retained Robert Walsh as his third attorney. Walsh ultimately negotiated settlements with CNA, Travelers, and Chartis for $275,000 paid to Thompson and $25,000 paid to Walsh. Three settlement agreements were submitted to the Administrative Law Judge, and two of the agreements stated that Walsh agreed to be responsible for attorney fees to Dupree. None of the proposed settlements mentioned attorney Cline. On November 17, 2015, Administrative Law Judge Paul C. Johnson, Jr., approved the settlements and stated that the parties had agreed that attorney fees for prior counsel would be satisfied by the current counsel and that the ALJ would retain jurisdiction over any dispute over fees due to former counsel. The order stated that the liability of the employers and carriers for any additional fees was extinguished. Several years later, on May 28, 2019, Cline sent a letter to the ALJ, asserting that he had not been able to contact Walsh about payment for his work. ALJ Johnson issued an order giving Cline 30 days to submit a fee petition for services before the OALJ (sending a copy to Dupree). Cline submitted a fee request, and Dupree sent an itemization of his fees and costs for work before the OALJ ($53,644.36). Dupree later submitted to the ALJ an application for fees for his work before the OWCP ($18,157.95), recognizing that the ALJ probably did not have authority to make an award for work before the OWCP. ALJ Johnson denied Cline’s request as Cline’s work was performed before the OWCP, and he denied the requests from Dupree on the ground that he approved the settlement and could not award additional fees. He added that Dupree may have a cause of action as a third-party beneficiary of the settlement agreement, but he did not have authority to adjudicate that dispute. The Benefits Review Board agreed that the ALJ could not reopen the determination of attorney fees owed by the employers/carriers and that they were not liable for any additional fees. The Board reversed Judge Johnson, however, with respect to his finding that he did not have authority to adjudicate Dupree’s entitlement to a portion of the fees paid by the employers/carriers (the Board declined to award fees to Dupree’s appellate attorney, Norman Cole, as he did not succeed in obtaining fees for Dupree against the employers/carriers and the issue whether Dupree was entitled to fees from the award to Walsh was remanded to the ALJ). District Director Adame denied Dupree’s application for fees based on the decision of the Board that the ALJ was to determine the portion of fees from the award made to Walsh, and ALJ Johnson approved a settlement between Walsh and Dupree by which Walsh paid $18,750 from his $25,000 award to Dupree. Dupree appealed the denial by the District Director and ALJ Johnson’s approval of the settlement agreement on fees. As there was no appealable order from the District Director, the BRB remanded the case for the District Director to execute an order denying the fee petition. Dupree challenged ALJ Johnson’s order merely to raise the issue of the liability of the employers/carriers so that he could appeal to the Ninth Circuit. As the prior decision of the Board was the law of the case, the Board granted summary affirmance of ALJ Johnson’s award. Administrate Appeals Judge Buzzard dissented from the decision to remand the claim for fees before the District Director, considering the action of the District Director to constitute a “Decision.” District Director Adame issued an award denying the request for fees, and the Board agreed that the settlements discharged the employers/carriers from any further liability for fees/costs. Dupree then appealed to the Ninth Circuit, arguing that the ALJ lacked authority to discharge Dupree’s entitlement to fees and that his orders denied Dupree due process of law. The Ninth Circuit rejected Dupree’s arguments, answering that the settlement approvals extinguished the liability of the employers/carriers, and Dupree cannot collaterally attack the final settlements by appealing his separate motions for fees (Cole was not able to recover fees for the same reason—the finality of the settlement approval extinguishing the liability of the employers/carriers).
From the federal district courts
Albert Jackson injured his knee while working for Horizon Shipbuilding, and he brought a claim for benefits under the LHWCA against Horizon and its carrier, American Longshore Mutual Association. The case was referred to Administrative Law Judge Donaldson, and there were extensive discovery disputes. Eventually, ALJ Donaldson ordered Jackson to provide responses to interrogatories and requests for production, to submit to a medical examination, and to execute authorizations for medical records. When Jackson failed to comply, ALJ Donaldson issued an Order Certifying Facts to District Court with Recommendation for Dismissal of Longshore Proceedings based on Jackson’s failure to provide authorizations and to attend the medical examination. Horizon and ALMA then filed this suit in federal court in Florida, requesting that the federal court dismiss Jackson’s LHWCA claim with prejudice in accordance with Section 27(b) of the LHWCA. Magistrate Judge Cannon agreed that the sanction of dismissal was warranted, reasoning that Jackson was not free to disregard the orders of the ALJ even though he disagreed with them. She recommended that Jackson’s LHWCA claim be dismissed with prejudice, and Jackson appealed the recommendation to Judge Rodgers. As Jackson did not refute that he did not comply with ALJ Donaldson’s discovery orders, Judge Rodgers accepted the recommendation and dismissed Jackson’s LHWCA claim with prejudice (Judge Rodgers also rejected Jackson’s attempt to assert a constitutional challenge to the limitation on recording of ALJ proceedings under 29 C.F.R. § 18.86, noting that the Benefits Review Board had ruled that there is no constitutional right to record judicial or administrative government proceedings).
This case arises from the injury to Anthony McRae, an employee of SSA Terminals, at the Port of Oakland. After undergoing lumbar surgery, McRae suffered a stroke and died. Veronica McRae filed a claim for death benefits under the LHWCA, identifying herself as Anthony’s widow from a marriage on February 5, 2000. SSA and its insurer, Homeport, conducted an investigation and found no evidence of a divorce. They settled with Veronica for $425,000, and the settlement was approved by Administrative Law Judge Clark based on her representation that she was married to the decedent at the time of his death (the ALJ also approved an award of $15,000 to Law Offices of Daniel Weltin and $15,000 to Weltin, Streb & Weltin, LLP for attorney fees and costs). The next year, Anthony’s daughter contacted SSA and Homeport to advise that Anthony and Veronica were not married at the time of Anthony’s death. Their marriage was terminated by a default judgment 10 years before Anthony’s death. However, shortly before the settlement, Veronica moved to set aside the dissolution order (alleging that she was not served with the original suit, although the process server declared that he personally served her). The Superior Court judge held a trial and declined to set aside the divorce. Home Insurance then brought this suit in state court in Alameda County, California against Veronica McRae, attorney Daniel Weltin, and the firm Weltin, Streb & Weltin based on fraud, conversion, constructive trust, and unjust enrichment, seeking restitution of the $455,000 it paid plus an injunction to prevent the defendants from transferring or encumbering the funds and a lien against Veronica’s property. Weltin removed the case to federal court based on federal question jurisdiction, claiming that the LHWCA preempted the state-law claims asserted by Homeport Insurance. Homeport Insurance moved to remand the case, and Judge Gilliam held that Weltin had not established that the LHWCA exerts “unusually powerful” preemptive force that is “capable of converting Plaintiff’s state law fraud, deceit, conversion, and unjust enrichment claims into federal law causes of action.” Judge Gilliam believed that the LHWCA provides nothing more than a statutory defense to the state causes of action, which is a “classic circumstance of non-removability.” Therefore, he remanded the case to the California state court.
From the state courts
Matthew McGeady, an employee of Corman Marine Construction, was injured while working on the XAVIER, a floating crane barge owned by Corman Marine (and two related companies). The vessel was moored to the bed of the York River in Virginia as a stationary work platform and was serving as a staging area for a construction project to install a sewer pipe in the York River. The project was running behind schedule, and Martin Corcoran, president of Corman Marine, went to the site to speed up the process of sinking the pipe. One end of the pipe was on shore, and the other end was on the XAVIER with a pneumatic plug that expelled pressurized air from the pipe. Corcoran ordered the foreman to remove the plug (without first consulting the manual), and the plug exploded out of the pipe, resulting in McGeady being thrown to the deck. The OSHA investigation indicated that Corman Marine did not provide McGeady with safe working conditions. McGeady sought and received benefits under the LHWCA, and he brought this suit against Corman Marine in state court in Baltimore, Maryland, seeking to recover under Section 5(b) of the LHWCA. The case was tried to a jury, and Corman Marine moved for judgment that the evidence did not establish that its negligence arose out of its operations as vessel owner. The judge denied the motion, noting that the XAVIER was a vessel, and instructed the jury that it would have to find negligence as owner of the vessel and not as McGeady’s employer. However, the judge did not articulate to the jury the duties of a vessel owner as opposed to the duties of an employer. The jury returned a verdict in favor of McGeady in the amount of $8,687,233.19, and Corman Marine appealed. McGeady argued that the appellate court could affirm the judgment because the injury occurred on a Corman Marine-owned vessel, under the direction of a Corman Marine employee, during a project intended to further Corman Marine’s corporate interest. Writing for the Appellate Court of Maryland, Judge Ripken cited the federal decisions providing that for a dual capacity employer to be liable, the negligence must “be borne out of actions taken in the defendant’s capacity as a vessel” as reflected in the Scindia duties. Accordingly, the issue was whether “sufficient evidence was adduced at trial to allow a determination that Corcoran’s action in directing the deflation of the plug could be imputed to Corman Marine in its capacity as a vessel owner, as opposed to as an employer.” Judge Ripken noted that the only employees on the XAVIER at the time of the incident were the marine construction workers, and the separate crew that operated the vessel was not present. Neither the pipe nor the plug was part of the XAVIER, and Corcoran was present to assist with the project supervision. Judge Ripken divided the employer/shipowner into a hypothetical independent employer and independent vessel owner and found no support for the contention that Corcoran was aboard the XAVIER in the capacity as a representative of the shipowner—overseeing the XAVIER as a work platform—as opposed to in his capacity as manager of a construction project. Therefore, Judge Ripken held that there was no basis for a finding of vessel negligence under Section 5(b) of the LHWCA, and Corman Marine’s motion for judgment should have been granted.
Williams Saravia was employed as a laborer/painter by 5 Seasons LSB Corp., which contracted with Bayonne Dry Dock & Repair Corp. to provide services on the USNS RED CLOUD. Saravia, his supervisor, and four co-workers were directed to paint the inside of the RED CLOUD’s anchor chain locker. Prior to painting, the workers had to build scaffolding for the compartment (30 feet deep). The supervisor (whose first language is Korean), used hand signals to inform the crew to wait until he returned with fall protection such as safety harnesses. A co-worker did not wait, and Saravia (whose first language is Spanish) followed the co-worker, using only a rope secured to a pipe to descend. Saravia shouted that he was losing his grip, and he fell to the bottom of the anchor chain locker, resulting in his death. There were no employees of Bayonne Dry Dock in the area when Sarvia entered the anchor chain locker without safety equipment. Saravia’s Estate brought this suit against Bayonne Dry Dock in state court in New Jersey, and Bayonne Dry Dock moved for summary judgment. Judge Allende granted the motion, reasoning that Saravia died while performing a task controlled exclusively by his employer, 5 Seasons, relying on OSHA’s determination that 5 Seasons, not Bayonne Dry Dock, violated applicable laws and regulations by allowing Saravia to descend into the anchor chain locker without proper safety measures. Judge Allende also determined that Bayonne Dry Dock did not know or have reason to know that 5 Seasons’ workers would not be able to follow safety directions. The Appellate Division agreed that Bayonne Dry Dock did not owe a duty of care to Saravia, an employee of its subcontractor. Bayonne Dry Dock had no contractual duty to ensure that 5 Seasons employed the proper safety protocols (5 Seasons was solely responsible for its own employees’ safety in accordance with its subcontract), and Bayonne Dry Dock was neither supervising the work, nor was it present when the accident occurred (so that it could have controlled the work). If there was a language barrier that contributed to this accident, Bayonne Dry Dock was not responsible: “How 5 Seasons communicated to its employees was not under Bayonne Dry Dock’s control.”
And on the maritime front . . .
From the federal appellate courts
John and Jane Doe were on a cruise on the DISNEY FANTASY with their three-year old daughter, R.V., her seventeen-year-old half-brother, A.M., and A.M.’s girlfriend. The Does dropped off R.V. at the ship’s childcare facility. About 40 minutes later, R.V. went to the bathroom and emerged a few minutes later guided by a seven-year-old girl in a Princess Leia costume (P.L.). P.L. took R.V. to a staff member who appeared on the CCTV footage to comfort R.V. P.L. explained that she found R.V. crying in the bathroom. R.V. did not report an assault, but the next day her mother saw blistering and redness near R.V.’s genitals, which her mother attributed to her swimsuit being too tight. A month after the cruise, R.V. told her father that her brother, A.M. touched her private parts all the time. The family went to the police. A.M. was not charged and moved out of the house. The Does pieced together their belief that R.V. had been assaulted on the ship by P.L. Law enforcement concluded that no sexual assault occurred after viewing the CCTV footage, but the Does sued the cruise line in federal court in Florida for failing to protect R.V. from being sexually assaulted. Both the Does and the cruise line presented expert testimony on the issue whether there had been a sexual assault, but, after an “exhaustive fame-by-frame” review of the footage, Judge Dalton concluded that there was only innocent and normal casual touching and comforting between children with no evidence of a sexual assault by P.L. After granting summary judgment, the Does, now representing themselves pro se, moved for reconsideration, arguing that R.V. was sexually assaulted in the bathroom. Judge Dalton denied the motion on the ground that a motion for reconsideration was not a proper means to present an argument that was previously available but not pressed. The Does appealed to the Eleventh Circuit, and the appellate court was unpersuaded that the CCTV footage showed any sexual assault. As neither the video footage nor testimony from anyone in the room supported the sexual assault, the court agreed that summary judgment was proper. The appellate court also upheld the decision to decline consideration of the Does’ expert because the judge was perfectly capable of watching the video and deciding for himself whether there was an assault. Finally, the Eleventh Circuit upheld the denial of reconsideration on the ground that reconsideration is not appropriate to raise arguments or present evidence that could have been presented before entry of judgment, and that claim was abandoned (even with the liberal pleading requirements for pro se litigants).
This litigation arises from the crash of the Boeing 737 MAX (Lion Air Flight JT 610) in the Java Sea after taking off from Jakarta, Indonesia, resulting in the deaths of everyone on board. Numerous actions were filed against Boeing, and Boeing settled with the families of all but two of the decedents, Liu Chandra, an Indonesian businessman, and Andrea Manfredi, an Italian professional cyclist and entrepreneur. The Chandra plaintiffs filed suit in Illinois state court, alleging wrongful death under the Death on the High Seas Act and the Illinois Wrongful Death Act, and they included survival claims. Boeing removed the case to federal court based on the Multiparty, Multiforum, Trial Jurisdiction Act and based on the federal court’s admiralty jurisdiction. In an amended complaint after removal, the Chandra plaintiffs demanded a jury and based jurisdiction on diversity, DOHSA, and the MMTJA. The Manfredi plaintiffs filed suit in federal court in Illinois, invoking diversity and asserting claims for wrongful death, survival, and violations of the Illinois Consumer Fraud and Deceptive Practices Act and the federal Computer Fraud and Abuse Act. They demanded a jury trial and sought punitive damages. Boeing filed motions in both cases seeking a determination that DOHSA applies, that it preempts the non-DOHSA claims, and that it requires a non-jury trial. Recognizing the cases holding that DOHSA applies to deaths on or over the high seas, the Manfredi plaintiffs argued that over half of the flight occurred over land. They contended that the court should consider the location where the negligence was consummated into a “first” injury, and that Manfredi was first injured during the period where the flight was over land (suffering, at a minimum, emotional distress). However, the Manfredi plaintiffs lacked authority for the theory, and Judge Durkin cited the Fifth Circuit’s Motts case that held that the proper test looked to the location of the accident for the application of DOHSA. As the situs of pre-death (but non-fatal) injury did not matter for DOHSA, and as there were no factual disputes in this case about whether the death occurred over the land or water (as the complaint alleged that Manfredi’s death occurred when the plane crashed into the ocean), Judge Durkin held that DOHSA applied. Judge Durkin then addressed whether DOHSA’s application preempted other remedies that were sought and whether the plaintiffs were entitled to a jury trial. Based on the decisions of the Supreme Court in Tallentire and Dooley, Judge Durkin began with the principle that, where DOHSA applies, it is generally the exclusive source of applicable law and preempts state wrongful death claims as well as survival claims. Although the plaintiffs argued that some of the injuries occurred while the plane was over land, citing cases involving asbestos exposure that occurred in employment on land and over the water, Judge Durkin distinguished those cases as indivisible injury cases where the fatal injury occurred over many years and partially over land. Judge Durkin also held that DOHSA preempted claims for property damage and claims under the state and federal statutes (the federal statute would be displaced rather than preempted). The final question was whether the saving-to-suitors clause and diversity preserved a right to a jury trial for the DOHSA claims. Although the plaintiffs could bring maritime claims in diversity and obtain a jury trial, Judge Durkin noted that DOHSA is limited to “a civil action in admiralty,” and that does not carry the right to a jury trial. The Supreme Court explained in Tallentire that DOHSA’s saving clause allows state courts to hear suits under DOHSA, but it does not allow state causes of action to be brought in DOHSA cases or allow the plaintiffs to invoke common-law jurisdiction. The Chandra case was brought in state court where the plaintiffs would have had a jury trial, but when it was removed, federal procedural law controlled the right to a jury trial, and Judge Durkin held that there was no right to a jury trial in federal court in an admiralty claim. Diversity provided an additional basis for federal jurisdiction, but it did not enlarge the substantive remedy on which the claim was based—DOHSA. See February 2023 Update.
On May 25, 2023, Judge Durkin issued an amended opinion and order in which he reiterated the holdings, dismissing the claims for pre-death pain and suffering, emotional distress, property damage, and state and federal fraud claims. He held that both cases would be tried exclusively under DOHSA, which mandated that the cases be tried to the court’s admiralty jurisdiction in a bench trial. He did, however, certify for an interlocutory appeal the single issue of the plaintiffs’ entitlement to a jury trial, and the Seventh Circuit accepted the appeal. See June and August 2023 Updates.
Writing for the Seventh Circuit, Judge Ripple noted that the plaintiffs asked the court to certify two questions, whether DOHSA preempted non-DOHSA claims and whether the plaintiffs were entitled to a jury trial under DOHSA. Although Judge Durkin only certified the jury-trial issue, Judge Ripple held that the Seventh Circuit would consider both issues, explaining that resolution of the preemption issue would influence the decision on the jury-trial question. Turning to the plaintiffs’ claims under state law, Judge Ripple noted that the plaintiffs conceded that DOHSA preempted their wrongful death claims. However, they argued that their survival claims were not fully preempted, so that they could recover for the decedents’ pain and suffering. The plaintiffs were confronted with the decision of the Supreme Court in Dooley, that rejected survival claims brought under the general maritime law for deaths on the high seas, concluding that “there can be no general maritime survival action for such damages.” The plaintiffs sought to avoid the holding in Dooley by asserting state-law claims for pain and suffering experienced on the overland portion of the flight and for the property the decedents lost in the crash. Judge Ripple disagreed, answering that the plaintiffs could not avoid the preemption of DOHSA, citing the Supreme Court’s analysis that DOHSA would preclude all other causes with respect to deaths on the high seas and the decision of the Eleventh Circuit that an accident was governed by DOHSA for a crash on the high seas even though the alleged negligence and much of the flight was going to be over land. Judge Ripple then addressed the issue whether the plaintiffs were entitled to a jury trial on their DOHSA claims. He cited the saving-to-suitors clause that allows maritime plaintiffs with in personam claims to bring suit in state court. He added that the 1966 merger of the law, equity, and admiralty spheres of federal courts did not materially change the options of a maritime plaintiff, who could sue in state court and obtain a jury trial or bring a suit in federal court in admiralty without a jury. The plaintiffs argued that they were entitled to bring their claims in state court as common-law claims with a jury, but the defendants argued that DOHSA provides that a plaintiff “may bring a civil action in admiralty.” Judge Ripple reasoned that the “natural, ordinary reading” of the statute supported the defendants’ argument that no jury was available in a DOHSA claim. He noted that other courts have held that cases involving only DOHSA claims brought in federal court must proceed without a jury. The plaintiffs cited the Supreme Court’s decision in Romero for the “historic option of a maritime suitor” to pursue a common-law remedy and select the forum. However, he did not believe that allowing a jury trial was consistent with the language of DOHSA. Judge Ripple recognized “the potential anomaly in allowing defendants to effectively extinguish a plaintiff’s jury trial right by removing a case to federal court,” adding that DOHSA claims are typically tried by juries when they are in state court. However, as the cases were now pending in federal court, no jury trial was available (Judge Ripple did note that the court did not have to address the issue whether the saving-to-suitors clause might serve as an objection to removal, citing the Lu Junhong decision in which removal of a maritime case was upheld when an objection was not timely raised, but the court stated: “Perhaps it would be possible to argue that the saving-to-suitors cause itself forbids removal, without regard to any language in § 1441.”).
After the DEEPWATER HORIZON/Macondo blowout, several attorneys formed a joint venture to solicit and engage subsistence claimants (Gulf Coast residents who harvested fish and seafood in the coastal area for their dietary consumption). Three groups of claimants (Henry, Billiot, and Pierce) brought suits in Louisiana state court after their claims were denied, naming the attorneys and their insurers. The cases, which asserted causes of action for malpractice and fraud, were removed to federal court based on diversity, and the attorneys and insurers filed motions to dismiss the suits because of peremption/prescription under Louisiana law and for failure to sufficiently plead fraud under Rule 9(b). The peremption/prescription issue required Judge Vitter to consider the Mississippi choice-of-law provision in the contracts between the claimants and attorneys. Applying Louisiana choice-of-law principles in the cases removed from Louisiana state court under the diversity jurisdiction, Judge Vitter held that the choice-of-law provision applied to contract claims and not to tort claims arising out of the contractual relationship. As Louisiana law views peremption/prescription as procedural in nature, Judge Vitter applied Louisiana’s one-year prescriptive period for tort actions (and not the statute for legal malpractice claims that applies only to attorneys licensed in Louisiana because none of the attorneys were licensed in Louisiana). As the tort statute only accrued when the claimants had constructive knowledge of the alleged legal malpractice, and as the limitation periods were extended in response to the COVID-19 pandemic, Judge Vitter held that the malpractice claims were not time-barred. However, the fraud pleadings failed to contain specific details of the who, what, when, where, and how of the alleged fraud. Consequently, Judge Vitter held that the fraud pleadings failed to satisfy the standard for pleading fraud under Rule 9(b). As the claimants had been on notice of the deficiencies in their fraud allegations for more than a year and had not sought to correct them, Judge Vitter dismissed the fraud claims with prejudice and without leave to amend. For the same reasons, Judge Vitter dismissed the fraud claims against the insurer defendants but declined to dismiss the malpractice claims. Finally, Judge Vitter considered the motion of the insurer defendants to consolidate a fourth suit by subsistence claimants (Gaudet v. Nations). The Gaudet suit was brought as a class action and involved allegations of malpractice and fraud in connection with the untimely filing of or failing to file subsistence claims. The claimants opposed consolidation, arguing that the claims in the consolidated Henry, Billiot, and Pierce actions involved claims of malpractice and fraud after the subsistence claims were filed—during the post-review process. Finding no risk of inconsistent adjudications if the cases were tried separately, different stages of preparedness of the suits, and a risk of confusion by the jury, Judge Vitter declined the motion to consolidate the Gaudet suit with the previously consolidated Henry/Billiot/Pierce actions. See April 2022 Update.
The plaintiffs moved for reconsideration based on newly discovered evidence in discovery, but Judge Vitter held that reconsideration under Rule 59(e) was unavailable because no final judgment had been issued. She considered the request under the more flexible standard under Rule 54(b) and noted that leave to amend was denied in the first order because of the dilatory motive of the plaintiffs, their repeated failure to cure deficiencies in the pleadings, and the undue delay that would be caused. Nothing in the motion for reconsideration addressed that analysis. The focus of the motion was the newly discovered evidence, but Judge Vitter held that an amendment based on that evidence may be futile as well. Accordingly, she declined to reconsider her previous ruling. See July 2022 Update.
As trial in the Gaudet litigation approached, Magistrate Judge van Meerveld held a settlement conference with the parties in all of the cases. No agreement was reached, but Magistrate Judge van Meerveld submitted a Mediator’s Proposal thereafter. There were communications back and forth among the parties, and Magistrate Judge van Meerveld announced that a settlement had been reached and that counsel for the Plaintiffs would circulate a term sheet. The defendants asserted that no agreement had been reached, and they did not agree to the terms on the term sheet. The plaintiffs moved to enforce the settlement, and, on June 1, 2023, Magistrate Judge van Meerveld signed an order enforcing the settlement. The defendants appealed to the Fifth Circuit, and, writing for the court, Judge Graves used a de novo standard of review to the interpretation of the agreement. He first rejected arguments that the district court lacked subject matter jurisdiction over the claims involving the Ackman plaintiffs (whose lawsuit was pending in Mississippi state court) because the defendants insisted upon a global settlement that included the Ackman suit, and the Magistrate Judge simply helped mediate a settlement that included a dismissal of that suit. As to the suit by the Gaudet plaintiffs, Judge Graves reasoned that the district court had subject matter jurisdiction either under the Class Action Fairness Act, or it could have exercised supplemental jurisdiction under Section 1367. Judge Graves then addressed the issue whether there was an offer and acceptance to constitute a valid compromise agreement under Louisiana law. After the mediation, Magistrate Judge van Meerveld issued a Mediator’s Proposal that identified a monetary amount from each defendant to contribute to a global settlement of the claims of the Gaudet, Henry, and Ackman suits. The proposal included full dismissal of all the suits and releases from all claimants. Insurer Maxum responded that it had eroding policy limits and would have to finalize an accounting to determine that it could pay the required amount, and that the release should include a no-admission-of-liability provision and include standard defense and indemnity provisions. That same day, Magistrate Judge van Meerveld emailed that several defendants came in woefully short of what was needed, and she asked them to reconsider in light of the erosion of the Maxum limits. Three days later, Magistrate Judge van Meerveld announced that the parties had reached a tentative settlement, and she followed that with an email that the plaintiffs would circulate a term sheet. Counsel for the plaintiffs sent a term sheet that added new conditions, and Maxum’s attorney responded that there was no settlement until releases were executed by all 148 plaintiffs. Maxum also reiterated the conditions in its earlier email that were not listed in the term sheet and advised that it was awaiting the results of its audit. Maxum later circulated a draft of a settlement agreement, including the defense and indemnity agreement, and terms that included obtaining notarized releases. The plaintiffs responded with deletion of the indemnification agreement and the requirement that the releases be notarized (together with other edits). Judge Graves reasoned that the communications between the parties, containing new terms that were significant changes and deletions, were new offers and counteroffers. As the emails changed terms or made different additions, the defendants did not agree to any offer/counteroffer, and Judge van Meerveld erred in finding that there was an enforceable settlement. Judge Graves concluded that “there is no evidence of a signed offer or acceptance by either party—because there was none.”
Shanon Roy Santee was employed by Oceaneering International as a remote operated vehicle technician. He was injured on the drillship, M/V DEEPWATER CONQUEROR, which was performing drilling operations on the outer Continental Shelf off the Louisiana coast. Santee brought this suit in state court in Houston, Texas against his employer Oceaneering, drilling contractor Transocean, and well operator Chevron, asserting claims under the Jones Act and general maritime law. Chevron removed the case to federal court based on federal question jurisdiction under the Outer Continental Shelf Lands Act (arguing that the Jones Act claim was improperly pleaded and did not prevent removal), and Santee moved to remand the case to state court, presenting Judge Hittner with two questions. The first question was whether Santee sufficiently pleaded a Jones Act claim against Oceaneering so as to invoke the bar to removal of Jones Act/FELA cases in Section 1445(a). Judge Hittner held that that Santee’s work as an ROV technician contributed to the function of the vessel and that the 763 days he spent aboard the DEEPWATER CONQUEROR pursuant to Oceaneering’s contract with Chevron (96% of his work time for Oceaneering over the last five years) satisfied the duration element of the connection test for seaman status. Judge Hittner then analyzed the factors set forth by the Fifth Circuit in the Sanchez case with respect to the nature element of the connection test, and he held that Santee’s allegiance was to Oceaneering, a shoreside employer, and not to the DEEPWATER CONQUEROR; that Santee was a transitory worker who performed discrete services on the vessel pursuant to a contract and was not permanently assigned to the vessel; but that Santee’s work was sea-based. Reasoning that the sea-based nature of Santee’s work was insufficient by itself to satisfy the nature element of the connection test, Judge Hittner held that Santee was not a seaman and the bar to removal of Jones Act cases was not applicable. Judge Hittner then considered whether there was jurisdiction under the OCSLA, and, as the drillship was attached to the OCS and was involved in exploration and development of oil and gas resources on the OCS, there was federal question jurisdiction under the OCSLA, and the case was removable. See March 2022 Update.
Oceaneering moved for summary judgment (claiming it was immune from tort liability under the LHWCA), and Santee moved for reconsideration of its motion to remand. Judge Hittner stated that, as Santee was injured as a result of oil and gas operations on the OCS, his exclusive remedy was in the LHWCA and that his employer only needed to establish that it had LHWCA insurance at the time of the accident in order to invoke the exclusive remedy provision in the Act. Santee responded with a declaration detailing his job duties to show he was a seaman as well as with the maintenance checks he received from his employer. However, Judge Hittner held that Santee’s seaman status was no longer an issue and that, regardless, his evidence did not create a genuine issue of material fact as to whether the exclusive remedy of the LHWCA was applicable. Holding that Oceaneering was immune from tort actions under the LHWCA, including actions under the Jones Act, Judge Hittner granted summary judgment to Oceaneering. See August 2022 Update.
Chevron and Transocean then moved for summary judgment. Chevron argued that Santee was an independent contractor and that Chevron did not exercise sufficient operational control over his work to impose vicarious liability for negligence under the general maritime law. Santee argued that Louisiana law applied and that Chevron retained sufficient operational control to impose vicarious liability on Chevron. Judge Hittner did not have to decide whether maritime law or Louisiana law applied as he concluded that the result was the same under either body of law. Judge Hittner cited the terms of the contract between Chevron and Santee’s employer, Oceaneering, that Oceaneering had complete control over the work performed and that its work was performed as an independent contractor. Despite Santee’s contention to the contrary, Judge Hittner noted that the facts presented did not show that Chevron directed Santee to perform the activity that caused his injury or that Chevron dictated how Santee was to perform that activity. Chevron argued that Santee’s unseaworthiness claim failed because Chevron did not own the vessel, but Santee argued that Chevron had operational control over the vessel that was sufficient to create a fact question for the unseaworthiness claim. Judge Hittner held, however, that Chevron only had a superintendent on the vessel to oversee the drilling operations and did not have a full crew to operate the vessel. Therefore, he denied Santee’s unseaworthiness claim. Judge Hittner analyzed Santee’s claims against Transocean under the Scindia duties for a negligence claim under Section 5(b) of the LHWCA. The turnover duty failed because the equipment Santee was using (and on which he was performing maintenance) was owned by Oceaneering. Santee argued that the area on the vessel where he performed the work was inadequate, making his work more dangerous (not large enough to accommodate his equipment), but Judge Hittner concluded that Santee failed to show that Transocean should have known that the area was not large enough for the work. As to the active control duty, Santee similarly argued that Transocean had control over the deck area and failed to warn Santee or remedy the hazard created by the lack of sufficient space to perform the maintenance on the Oceaneering equipment. However, Judge Hittner found that this argument failed because it was Santee and the other Oceaneering employees who were using the deck to perform their work, and Transocean did not have active control of the equipment or the area where the work was being performed. With respect to the duty to intervene when the vessel owner has actual knowledge of the dangerous condition, Judge Hittner held that Santee was unable to show that Transocean had actual knowledge of the allegedly dangerous condition. Finally, Judge Hittner held that, as the LHWCA applied to Santee’s claims, his unseaworthiness claim was replaced by the negligence remedy under Section 5(b) and failed as a matter of law. See March 2023 Update.
Santee appealed to the Fifth Circuit from the denial of his motion to remand and the summary judgments that were granted in favor of the defendants. He first argued that the defendants waived their argument that the Jones Act claim was improperly pleaded because they failed to mention it in their notice of removal and first raised it in response to Santee’s motion to remand the case on the ground that he pleaded a non-removable Jones Act claim. Writing for the Fifth Circuit, Judge Stewart disagreed. He noted that the defendants had raised federal question (OCSLA) and admiralty jurisdiction in their notice of removal and added that the defendants are not required to anticipatorily rebut all potential arguments that the plaintiff may raise in opposition to the removal. He concluded: “The fact that they did not anticipate the arguments made in Santee’s subsequent motion to remand is not fatal to their arguments on appeal.” Santee next argued that he was a seaman and that his suit was not removable. Judge Hittner found that Santee could not satisfy the nature element of the connection test because he failed two of the three elements—that his allegiance was to a land-based employer, not to the vessel, and because he was assigned as a transitory worker limited to performing discrete tasks (he was free to take other jobs between hitches). Judge Stewart noted that the Fifth Circuit uses a “summary judgment-like procedure” when considering whether a claim has been fraudulently/improperly pleaded in a suit that has been removed to federal court. Santee challenged the conclusion that his allegiance was to a shoreside employer, arguing that for five years he had spent more than 96% of his working hours (763 out of 788 days worked) on the DEEPWATER CONQUEROR. Although he was employed by Oceaneering, he claimed that he reported to the company man for Chevron, “who was in charge of the vessel,” and he was “integrated into the vessel’s crew, including its chain of command.” Santee argued that his extensive employment history on the vessel established a “dual allegiance” situation (that his allegiance was to both Oceaneering and to the vessel). Thus, he argued that he satisfied two out of the three Sanchez factors, unlike Sanchez who only satisfied one of the factors, and he should therefore be considered to be a seaman. The Fifth Circuit disagreed. Judge Stewart answered: “Santee’s attempt to recast himself as an entrenched crewmember of the vessel is not enough to establish allegiance to the vessel. Just as in Sanchez, where a transient employee of a contractor to a vessel spends nearly all of his total employment time with the vessel, that alone is not enough to satisfy the nature prong of the Jones Act seaman inquiry.” Judge Stewart added: “This court’s jurisprudence does not consider duration of service on one vessel as evidence of allegiance to that vessel. Rather, we have considered such evidence as necessary to establish only the duration prong of the seaman status test.” Judge Stewart rejected Santee’s attempt to “create new law as to this factor from Sanchez.” Santee next argued that even if he was not a Jones Act seaman, there was no federal jurisdiction under the OCSLA because he did not allege in his complaint that the DEEPWATER CONQUEROR was attached to the seabed. Judge Stewart easily disposed of that argument as the affidavits provided by the defendants established that the DEEPWATER CONQUEROR was attached to the seabed of the OCS at the time of the accident. Judge Stewart then turned to the motions for summary judgment of the defendants. As Santee was not a seaman, his claims against Oceaneering were barred by the exclusive remedy of the LHWCA. With respect to Transocean, Judge Stewart rejected Santee’s challenges for each of the three Scindia duties under Section 5(b) of the LHWCA. He disagreed with Santee that there was a fact question whether the condition of the equipment was open and obvious or the equipment was subject to the control of Santee, noting that the turnover duty does not extend to open and obvious hazards. For the active control duty, Santee argued that Transocean controlled the “folks on th[e] drill ship” and that it took precautions to ensure the safety of everyone on the vessel by ordering basic safety training. Judge Stewart answered that summary judgment was proper based on Santee’s testimony that he installed the equipment and that it was under his control, reasoning that “[t]he daily presence of the vessel’s agents to apprise the progress of work or to ensure some degree of orderliness is not ‘active control.’” As to the duty to intervene, Judge Stewart rejected the “conclusory assertions” that Transocean actually knew of the impropriety of the procedure. As Santee was covered under the LHWCA, his unseaworthiness claim failed by the enactment of Section 5(b) that replaced unseaworthiness with negligence (applicable both to Transocean and to Chevron, which was the charterer of the DEEPWATER CONQUEROR). Finally, Judge Stewart rejected Santee’s argument under Louisiana law that Chevron had undertaken operational control by conducting safety checks and requiring Oceaneering to comply with safety instructions, citing the terms of the contract between Chevron and Oceaneering that designated Oceaneering as an independent contractor with complete control over its workers and the manner of performance of the services. See April 2024 Update.
Santee sought rehearing en banc from the decision of the panel, supported by amicus curiae briefs, and, on May 21, 2024, the panel treated the petition as a petition for panel rehearing and withdrew the original opinion. See June 2024 Update. The panel then issued a new opinion on August 7, 2024. In this opinion, the panel distinguished the result reached by the full court in Sanchez, noting that in Sanchez most of the factors of the nature element weighed against Sanchez: “failing to satisfy exposure to perils of the sea, assignment, and seagoing nature factors.” The panel in Santee now believed that Santee satisfied the sea-based work and perils of the sea factors, reasoning: “The record shows that he was exposed to the perils of the sea, his work was sea-based, his allegiance lied with both his shoreside employer and the Deepwater Conqueror, and that his assignments were not limited to the performance of a discrete task after which his connection to the vessel ended,” stating that the “allegiance factor contemplates that a worker may have allegiance to both the vessel and his shoreside employer.” Writing for the Fifth Circuit, Judge Stewart stated that “a maritime worker may possess allegiance to both a vessel on which he has had longstanding employment and his shoreside employer.” The evidence that Santee spent over 96% of his employment in the past five years assigned to the DEEPWATER CONQUEROR, reported to Chevron’s project leader, and took orders from Chevron and the captain of the vessel was “sufficient to create at least some fact issue that survives the limited summary determination in a fraudulent pleading inquiry” (Judge Stewart added that Santee’s assignment was not a discrete, transient job like the work done by a longshoreman when a vessel calls in port). As Oceaneering did not establish as a matter of law that the Jones Act claim was fraudulently pleaded, the panel held that the case was not properly removed and should be remanded to state court [the panel did not address the fact that the suit was properly removed under the OCSLA based on the court’s federal question jurisdiction (as the panel held in its original opinion) so that only Santee’s non-removable Jones Act claim should be severed and remanded to state court while Santee’s other claims should remain in federal court].
Basilio Gallo, an Italian citizen, worked on Carnival’s cruise ships for nearly 40 years, entering into several employment contracts with the cruise line. In his final year of employment, 2009, Gallo signed an employment agreement with Golden Falcon International that contained an arbitration clause. The agreement contained an integration clause that superseded any prior contract between the parties, and his contracts in 2006 and 2007 contained identical arbitration clauses. Gallo died from mesothelioma in 2020, allegedly attributable to asbestos exposure on cruise ships, and his beneficiaries (residents of Italy) filed suit in state court in Houston, Texas against Carnival (under the Jones Act and general maritime law) and several companies that allegedly supplied products containing asbestos. The cruise line removed the action to federal court in Texas, where the plaintiffs filed a motion to remand, and the cruise line filed a motion to compel arbitration. Judge Hanks severed the claims against the cruise line and transferred them to the federal court in Florida. He remanded the product liability claims against the suppliers to the Asbestos MDL Pretrial Court. Chief Judge Altonaga in the Florida federal court then considered the motion to remand in which the beneficiaries argued that the arbitration agreements at the end of Gallo’s employment were insufficiently related to the asbestos exposure that occurred during his prior employment. The beneficiaries expressly disclaimed the right to seek recovery for any exposures that occurred during the years in which Gallo’s employment agreement included an arbitration clause. Chief Judge Altonaga was persuaded that the beneficiaries could disclaim the right to recover for exposure during the years when there was an arbitration agreement, but the cruise line argued that there were arbitration agreements for all years of Gallo’s employment because the final contract’s integration clause imposed the arbitration clause on all of the previous contracts. The parties disagreed on the question of which state’s law should apply to the interpretation of the contract (and its integration clause). The contract contained an express choice of law for the law of the flag of the vessel on which Gallo was assigned at the time that the cause of action accrued. The cruise line argued that the applicable law was that of The Bahamas (because the final cruise ship on which he worked flew the flag of The Bahamas). Chief Judge Altonaga disagreed, considering the cruise line’s interpretation to be contrary to the language of the contract that focused on the vessel on which Gallo was assigned at the time the cause of action accrued. Chief Judge Altonaga bemoaned that following the facts of the case had “taken the Court around the world, and the parties do not explain why the laws of any particular state should govern.” She reasoned that it was not incumbent on the Court to do research for the parties, and she did not have sufficient information to determine the law to apply. Although she agreed that both parties had “contributed to this conundrum,” it was the cruise line that had the burden to establish federal jurisdiction. Concluding that the Court did not have sufficient information to interpret the arbitration agreement that the cruise line used as the basis for federal jurisdiction, Chief Judge Altonaga remanded the case to the state court in Houston. See January 2024 Update.
The cruise line appealed to the Eleventh Circuit, and, in answer to jurisdictional questions, the cruise line asserted that it was challenging a portion of the Chief Judge Altonaga’s order that allegedly denied the cruise line’s motion to compel arbitration. The Eleventh Circuit disagreed that the order denied that motion and added that the motion to compel arbitration was previously denied as premature. Concluding that the cruise line was challenging “a non-existent ruling,” the Eleventh Circuit held that the cruise line lacked appellate standing and dismissed the appeal.
The Army Corps of Engineers contracted with RLB Contracting for pipeline dredging in the Houston Ship Channel, and RLB furnished a surety bond from Travelers in accordance with the Miller Act. RBL contracted with Harbor Dredging to assist in the project, and Harbor Dredging contracted with Diamond Services. As the work progressed, the parties encountered conditions that differed materially from those represented by the Corps in its project specifications, and RLB requested equitable adjustments from the Corps with respect to the amounts set forth in the prime contact. Ultimately, the Corps and RLB reached a settlement for an equitable adjustment of $6,000,000, but RLB could not reach agreement with Diamond and Harbor Dredging on allocation of the $6,000,000. Diamond brought this suit against RLB, Harbor Dredging, and Travelers in federal court in Texas (based on the Miller Act and supplemental jurisdiction and, in the alternative, under the court’s admiralty jurisdiction), seeking to recover against RLB and Harbor Dredging for breach of contract, implied contract, and quasi contract, and under the Miller Act against Travelers. Diamond Services amended its complaint to designate the case as an admiralty claim within the meaning of Rule 9(h), and RLB filed a counterclaim (demanding a jury trial). Harbor Dredging and RLB filed motions for summary judgment on the Diamond claims. Judge Brown dismissed Diamond’s contract claims against Harbor on the ground that there was no evidence demonstrating an oral contract modification. As to the claim for quantum meruit (Diamond declined to accept $950,000 from the equitable adjustment), Judge Brown noted that Diamond did not produce evidence of the reasonable value of the work it performed or the materials it furnished. Accordingly, he granted summary judgment to Harbor Dredging on Diamond’s quantum meruit claim on February 14, 2023. Judge Brown previously dismissed (on November 14, 2022) Diamond’s contract claims against RLB with respect to contracting with a tug to transport Diamond’s barges, and, in the February 14 decision, he dismissed the quantum meruit claims for the same reason as in the summary judgment for Harbor Dredging—failure to produce evidence of the reasonable value of the work that was performed or the materials that were supplied. As to the Miller Act claim, Judge Brown ruled that the Miller Act did not permit recovery of profits on expenditures attributable to delay and that Diamond did not establish that the equitable adjustment segregated any costs of Diamond. The only live claims that remained in the case were RLB’s counterclaims. In answer to the counterclaims, Diamond demanded a jury trial and gave notice that it was withdrawing its Rule 9(h) designation. The defendants moved to strike the notice of withdrawal and jury demand, and Judge Brown noted that Diamond had not sought to excise from its complaint the statements that invoked admiralty jurisdiction, and that it had not satisfied the obligation under Rule 16 (as there was a scheduling order in this case) for amending to drop its Rule 9(h) designation. The fact that the defendants had demanded a jury and then sought to withdraw it (improperly) did not affect the analysis as the jury demands were ineffective in light of the Rule 9(h) designation. Consequently, Judge Brown granted the motion to strike. See March 2023 Update.
Diamond filed an interlocutory admiralty appeal to the Fifth Circuit of Judge Brown’s dismissal of its claims, and, writing for the Fifth Circuit, Judge Higginson noted that the deadline to file an interlocutory appeal of the dismissal of the contract claim for tug expenses was December 14, 2022, and Diamond did not file an interlocutory appeal until after the February 14, 2023 decision. Therefore, Judge Higginson held that the court lacked jurisdiction to consider the decision on Diamond’s contract claim (Judge Higginson did note that Diamond did not lose the right to appeal the dismissal of the contract claim; it would just have to wait for a final judgment). Judge Higginson then considered whether there was appellate jurisdiction over the dismissals in the February 14 decision. RLB argued that Diamond’s claims for additional proceeds from the equitable adjustment based on quantum meruit and the Miller Act did not give rise to admiralty jurisdiction. Judge Higginson considered the primary object of the contract between Diamond and Harbor Dredging, dredging a navigable waterway in a port that services international commerce, to have a direct effect on maritime services and commerce. The amended complaint invoked Rule 9(h), although Diamond later requested a jury trial. This setting presented the question of “whether a maritime case can become unmoored from its status as a maritime case after a court dismisses a plaintiff’s principal maritime claims (Diamond’s contractual and tug-expense claims). Judge Higginson found the case law “difficult to reconcile,” but he was persuaded that the “plain language” of Section 1292(a)(3) and Rule 9(h) applies to admiralty “cases” and not merely admiralty “claims.” As the remaining claims still arose from the underlying work of dredging a navigable waterway, Judge Higginson held that the claims dismissed in the February 14 order comprised a maritime case that was subject to an interlocutory appeal. Turning to the merits of the appeal, Judge Higginson agreed with Judge Brown that Diamond did not present a valid quantum meruit claim because the subcontract covered the damages that Diamond sought in the quantum meruit claim and because Diamond did not introduce evidence of the reasonable value of the work performed or materials furnished for which it had not already been compensated (which foreclosed recovery under the Miller Act). Therefore, the Fifth Circuit affirmed the dismissal of claims from the February 14, 2023 decision and dismissed the appeal from the dismissal of claims from the November 14, 2022 decision.
Jerome Clyde Smith brought a Back-End Litigation Option suit, seeking to recover from BP 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 after the DEEPWATER HORIZON/Macondo blowout. 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 responded 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. See September 2023 Update.
On appeal, Smith argued that the discovery he sought could provide data on tar ball, dispersant, and toxicity testing that were necessary for him to establish specific causation. The Fifth Circuit answered that it is not enough that the sought-after discovery might be necessary to the party’s case. The party must show how the additional discovery will defeat the summary judgment motion. The appellate court explained that Smith had the burden of introducing expert evidence on both general and specific causation. The data sought were pertinent to specific causation and did not bear on general causation—whether exposure to a chemical can cause a specific injury in the general population. Therefore, Judge Vitter did not abuse her discretion in denying the extension of time for discovery. Smith also argued that BP was estopped from arguing that the exposure data were not relevant to both specific and general causation because BP has argued in prior litigation that exposure data are relevant to general causation. However, the Fifth Circuit held that the argument was forfeited because it was not raised until Smith’s reply brief on appeal. Although the Fifth Circuit had discretion to consider judicial estoppel sua sponte, the court did not believe that the instances cited by Smith were plainly inconsistent with its current position or that the stance had been accepted by a court. As there was no expert evidence on general causation (necessary in a toxic tort case), the court affirmed the grant of summary judgment.
Lawrence Edwards, a resident of Louisiana, was employed as an anchor handler by InterMoor and was injured while working on the M/V PACIFIC DUCHESS, a Tidewater anchor-handling vessel, off the coast of Veracruz, Mexico in the Bay of Campeche. Edwards was engaged in the mooring of the Valaris DPS-5, a semi-submersible rig owned by Eni Mexico. Edwards brought suit in state court in St. Mary Parish, Louisiana against InterMoor and Tidewater, asserting claims under the Jones Act, general maritime law, and Louisiana law. InterMoor removed the case to federal court in Louisiana based on diversity, arguing that the Jones Act claim was fraudulently pleaded to prevent removal. Edwards moved to remand the case on the ground that he was a seaman under Louisiana maritime law, and he asked the federal court to certify the issue of seaman status to the Louisiana Supreme Court, arguing that his petition in state court invoked the saving-to-suitors clause which entitled him “to the application of maritime law as interpreted by the Supreme Court of Louisiana . . . .” InterMoor provided work records that Edwards was paid for 324 days of work and was assigned as an onshore rigger for 187 of those days. The remaining 137 days were spent on offshore platforms and vessels. He spent 17% of his employment on vessels, which included 5 days (2% of his time) on the M/V PACIFIC DUCHESS. Magistrate Judge Whitehurst noted that Edwards did not contest that he spent well under 30% of his employment on a vessel. Instead, Edwards cited the exception for a change in status, arguing that he was an anchor handler and not a rigger at the time of his accident. Edwards cited the decision of the Louisiana Supreme Court in Wisner that “divers may be seaman even if they do not meet the jurisprudential requirement that reserves seaman status to those who have a substantial connection to a vessel or fleet of vessels under common control . . . .” He also cited the pre-Chandris decision of the Fifth Circuit in Bertrand for the proposition that his job as an anchor handler was sufficient to convey seaman status, despite the modification to the seaman status test thereafter in the Fifth Circuit (Barrett) and Supreme Court (Wilander, Chandris, and Papai). The unrefuted evidence established that Edwards was never retained to navigate or crew vessels, and that his assignments to work on vessels were temporary. Magistrate Judge Whitehurst concluded that his assignment as an anchor handler did not constitute a true change in status as there was no evidence that he was permanently assigned to a vessel or fleet. Therefore, she recommended that the court hold that Edwards was not a seaman and that the motion to remand be denied. She also declined Edwards’ request that the federal court should certify the issue of seaman status to the Louisiana Supreme Court based on its Erie obligation to follow the law of the forum state—Louisiana. Judge Joseph adopted the recommendation, denied the motion to remand, and entered a final judgment after Edwards decided not to pursue Tidewater. Edwards appealed the decision on his seaman status, arguing that the district court erred by applying Fifth Circuit law instead of Louisiana maritime law. Edwards argued that the suit was filed in Louisiana state court under the saving-to-suitors clause and was removed based on diversity. Therefore, as in other diversity cases under the Erie doctrine, the federal court should have applied Louisiana decisions such as the Wisner case from the Louisiana Supreme Court. The Fifth Circuit answered that Magistrate Judge Whitehurst “appropriately applied federal law to determine Edwards’s Jones Act seaman status under the Supreme Court’s Chandris test.” The court added: “Contrary to Edwards’s arguments, there is no question of Louisiana law to certify to the state’s supreme court. The district court did not err in refusing to do so.” Although federal law applied, the Fifth Circuit did consider the Louisiana decisions that Edwards cited and noted that Louisiana courts have limited the application of Wisner. The Fifth Circuit reiterated, however, that if there was any disagreement between the application of Wisner and the test adopted in Chandris, the test enunciated in Chandris controlled. Edwards cited the recent opinion of the Fifth Circuit in Santee (discussed above) in which there were fact issues on whether Santee was a seaman that defeated the argument for fraudulent joinder (Santee’s assignment was not a discrete, transient job), but that decision did not alter the conclusion that Edwards was not a seaman. Finally, the court rejected Edwards’ argument for a change in assignment, answering that Edwards did not explain how his assignment as an anchor handler was a new assignment in which his essential duties had changed from his previous work. Therefore, the Fifth Circuit affirmed the dismissal of the case.
From the federal district courts
Nicholas Reed Magee was a deckhand on the M/V JOHN PASENTINE, owned by Florida Marine. He fell into the Ohio River near Catlettsburg, Kentucky while traversing a fuel flat and dock to unload trash from the vessel. Magee brought this suit in federal court in Louisiana against Florida Marine under the Jones Act and general maritime law, and Florida Marine moved for summary judgment on the Jones Act and unseaworthiness counts. Magee responded that Florida Marine either misunderstood the bases of his theories of liability or mischaracterized them. Magee argued that Florida Marine failed to provide Magee with a safe method to accomplish the task of removing trash from the vessel, failed to provide an adequate number of crew, and failed to warn Magee of the wake from a passing vessel. Florida Marine argued that it had no duty to instruct Magee on matters known by an experienced seaman. Judge Papillion found sufficient evidence of failure to provide a safe place to work, including the fact that Magee had to step over a gap between the fuel flat and dock while the Master of the vessel was standing nearby. As to unseaworthiness, Judge Papillion noted that Florida Marine focused on the very specific task of disposing of the trash to argue that the crew was not engaged in an unsafe method of work. However, he found evidence that the vessel was undermanned because two of the three deckhands were “green” and required Magee’s assistance to perform their duties and that the Master and Wheelman of the vessel were ill-trained. Therefore, Judge Papillion declined to grant summary judgment to Florida Marine on the Jones Act and unseaworthiness claims.
Florida Marine sought to exclude the opinions of Magee’s liability experts, Steven Cunningham and Michael Berry, on the ground that their opinions were conclusions that the fact finder could reach by using common sense. Cunningham opined that the fuel barge was in motion at the time of the accident, and the movement was most likely a result of the vessel TRI STATE passing by a few minutes before. Cunningham used the Automatic Identification System records together with his experience on the effects of a passing vessel to reach his conclusion. Judge Papillion disagreed with Florida Marine, answering that it was likely that Cunningham’s testimony would be helpful to the jury. Florida Marine challenged Berry’s opinions that Florida Marine violated its company policies and federal regulations, and Judge Papillion agreed that the opinions were not helpful because the Court could make that determination itself after reviewing the policies and regulations (but he declined to strike the testimony as to the standard of care in the industry). As with Cunningham, Judge Papillion found helpful the opinion regarding movement of the fuel barge. Florida Marine objected to the opinions of Dr. Charles A. Czeisler with respect to fatigue risk management on the ground that his opinions were beyond the scope of his expertise and unreliable. Judge Papillion disagreed and held that Dr. Czeisler is qualified to testify about whether fatigue was a factor in causing Magee’s injury and about whether the fatigue management policies of Florida Marine were sufficient. Florida Marine next sought to exclude the testimony of Dr. Susan Kahn as to the abilities of Magee because she did not perform a physical examination of Magee or ask him to demonstrate his abilities to perform the tasks addressed in her opinion. Judge Papillion disagreed, as Dr. Kahn was asked to assess whether she believed he would be able to perform the tasks. Similarly, Judge Papillion declined to exclude Florida Marine’s vocational and economic experts. Finally, Judge Papillion declined to exclude the job offer made by Florida Marine to Magee (Magee argued that it was not a “real” job offer but was only submitted to reduce his damage claim). Judge Papillion held that he would consider the weight to be given the offer after hearing all of the evidence. See August 2024 Update.
Magee originally filed his seaman’s suit with a jury demand. After the case was assigned to Judge Papillion, Magee filed a motion to withdraw his jury demand so that the case could proceed with a bench trial. Florida Marine recognized that a Jones Act seaman can withdraw his jury demand without the traditional consent required of the defendant. However, Florida Marine argued that significant motion practice and discovery had occurred with the objective of a jury trial, and that nearly all pre-trial deadlines had passed. Judge Papillion disagreed, answering that Florida Marine had not shown how it would be “truly prejudiced” by the conversion of this matter to a bench trial. Judge Papillion also pointed out that the case involved a limitation defense sought by Florida Marine, and the withdrawal of the jury demand would be more efficient as all claims and defenses would be tried together. Accordingly, Judge Papillion granted Magee’s motion to withdraw the jury demand.
As Magee allegedly slipped and fell while walking between the fuel flat and dock, Florida Marine filed a third-party action under Rule 14(c) against McNational, Inc. (d/b/a Mid-America Fuels), which Florida Marine asserted had custody of the fuel flat and dock. Mid-America Fuels filed a motion to dismiss for lack of personal jurisdiction, and Judge Papillion granted the motion. Florida Marine then filed a suit against Mid-America Fuels in federal court in Kentucky, seeking to recover the maintenance and cure it paid as well as contribution for any tort liability to Magee. Florida Marine moved to transfer the Magee suit to the federal court in Kentucky so that all claims arising from the incident could be litigated in one setting. Florida Marine also moved for reconsideration of the dismissal of Mid-America Fuels for lack of personal jurisdiction and asked the court to transfer the suit rather than dismissing the third-party claim. With respect to the reconsideration of dismissal so that the case could be transferred, Florida Marine argued that Mid-America Fuels was brought into the case under Rule 14(c) so that a transfer was appropriate to a court where jurisdiction would have been proper. Judge Papillion answered that, at the time of the dismissal, the suit was still pending as a seaman’s suit under the Jones Act with a jury demand and not as an admiralty case with a Rule 9(h) designation. Thus, Judge Papillion did not believe that transfer of the plaintiff’s suit would have been appropriate. However, even if there were a proper tender under Rule 14(c), Judge Papillion would not have transferred the suit because there was no evidence that the Kentucky federal court would have been able to exercise personal jurisdiction over McNational (d/b/a Mid-America Fuels), whose principal place of business is in Ohio (although the incident occurred in Kentucky). Turning to the separate motion to transfer to the federal court in Kentucky where Florida Marine’s suit against Mid-America Fuels is pending, there was no dispute that Magee’s suit against Florida Marine could have been brought in Kentucky. The issue was whether transfer would be for the convenience of the parties and witnesses and in the interest of justice. Judge Papillion noted that Florida Marine focused primarily on the fact that the federal court in Kentucky was the only forum that would permit Magee to pursue his claims against Florida Marine and Florida Marine to pursue its claims against Mid-America Fuels in one setting. However, that was only one factor, and many of the other private and public interest factors favored Louisiana, where both Magee and Florida Marine are domiciled and many of the potential witnesses reside. Judge Papillion denied the motion to transfer, concluding that Florida Marine had failed to show that Kentucky was a “clearly more convenient forum.”
Magee moved for summary judgment that Florida Marine could not assert a defense of comparative negligence (and that Florida Marine was guilty of negligence per se) for violation of the statutory requirement to log Magee’s working hours and because the vessel was undermanned in violation of the Towing Safety Management System’s manning regulation. Although it was undisputed that Florida Marine violated the logging requirement, there was a dispute whether it violated the manning requirement. Nonetheless, Magee would still have to prove that any violation contributed to his injury, and Judge Papillion noted that there were “numerous theories of causation in this case, many of which are intertwined.” Accordingly, Judge Papillion ruled that he, as fact finder, would make a decision on causation at trial and then determine whether Magee could be found guilty of any comparative fault.
Ihor Levytsky was employed as an engineer on the M/V MSC SHRISTI. While the vessel was traveling along the west coast of the United States on a voyage from Manzanillo, The Philippines, to the west coast of Canada, Levytsky appeared to suffer from a stroke, with severe headaches, high blood pressure, a high pulse, and poor vision. The operator of the vessel decided to disembark him in Seattle, Washington for medical treatment, and Levytsky was eventually sent back to his residence in Ukraine to continue his medical treatment. Levytsky brought this action in federal court in Washington against the owner and operator of the vessel, alleging that he was not provided prompt and appropriate medical care, seriously worsening his injuries. The defendants moved to dismiss the complaint, based on forum non conveniens, citing the forum-selection clause in his employment agreement, selecting the country of the seafarer’s official residence (Ukraine) and the application of the law of that country. Judge Martinez considered whether Ukraine is an adequate alternative forum and whether the public interest factors favor dismissal. He concluded that Ukraine was a proper forum and that the public interest factors favored dismissal, reasoning that the courts in Ukraine are better suited to address the issues presented by this case under controlling Ukraine law. Therefore, Judge Martinez dismissed the case based on forum non conveniens.
Jessica Iacoli, a passenger on the SEASCAPE, slipped and fell on the marble deck surface of the ship while walking on Deck 16 from the Marketplace Buffet. She asserts that the deck was unreasonably wet and slippery, that a crewmember was present in the area within 10 to 15 feet from the area, and that a caution cone depicting a stick figure slipping and a wall-mounted placard with the same icon and a warning, “Floor Slippery When Wet,” were in the area. Iacoli did not see the cone or placard before her fall because she was distracted by a Christmas tree. Iacoli brought this suit against the cruise line in federal court in Florida, alleging five negligence counts, and the cruise line moved to dismiss all of the counts. After dismissing the cruise line’s initial argument that the complaint was premised on conclusory boilerplate allegations, Judge Altman considered the argument that Iacoli failed to plausibly plead actual or constructive notice. The cruise line argued that Iacoli failed to demonstrate that the wet floor caution cone and placard were intended to warn of the specific condition that caused Iacoli’s fall. Judge Altman rejected that argument as “absurd,” answering that Iacoli alleged a sufficient connection “by alleging that the wet-floor caution cone was meant to warn passengers about a wet floor.” Judge Altman also rejected the cruise line’s argument that photos of the warnings taken several days after the accident were insufficient to establish the connection between the warnings and the danger, stating that “the pictures are just icing on a sufficiently crafted cake.” He added: “We won’t penalize Iacoli for giving us more—allegations plus photos—than was necessary.” Judge Altman also found the allegation of the presence of the crewmember looking in the direction of the subject surface was sufficient to establish notice, rejecting as “yet another bout of frivolity,” the argument that the complaint did not plausibly allege that the crewmember was aware of the risk creating condition. Judge Altman considered there to be a fact question why the crewmember should have been aware of the danger when Iacoli was not. Further, Judge Altman did not require Iacoli to do more than allege that it was a crewmember who was present, stating, “we don’t much care that Iacoli doesn’t know the name (or the specific job description)” of the crewmember. The cruise line also argued that Iacoli did not properly plead the claim for failure to warn, reasoning that she “can’t have it both ways” by arguing that the cruise line was on notice of the danger because of the presence of the cone and was negligent for failing to warn. Judge Altman answered that there was nothing inconsistent about alleging that the cone evinced notice while at the same time alleging that it did not properly warn Iacoli. The evidence presented fact questions to be resolved by the jury. Finally, Judge Altman found that the allegations of negligent design were sufficient (the cruise line provided design elements to the shipbuilder and/or approved of design elements that include the area where the accident occurred).
Jamie and Kimberly McAtee, who are residents of Kansas, sought to purchase a yacht to use in Cabo San Lucas, Mexico. They were referred to Off the Hook Yacht Sales and started working with its boat broker Al DiFlumeri. The McAtees purchased the yacht (moored in Texas) through their company, Arch Nemesis, intending to move the yacht to Cabo San Lucas for commercial and personal purposes. Arch Nemesis worked with an insurance broker, West Coast Real Estate and Insurance, to place insurance on the yacht, and West Coast worked with Concept Special Risks, an independent underwriter acting for insurer Clear Spring Property and Casualty. Clear Spring issued the policy to Arch Nemesis on February 14, 2022, and Arch Nemesis paid premiums to its broker, West Coast. The yacht sailed to Mexico with no issues. On May 28, 2022, the designated captain took the yacht out without permission, and it ran aground on rocks, causing the yacht to sink. Arch Nemesis submitted an insurance claim, and Concept conducted an investigation and issued a reservation letter stating that the policy was void from its inception and that the claim was excluded. Arch Nemesis responded to the reservation letter, and Clear Spring followed with a denial of the claim and this declaratory judgment action in federal court in Kansas based on the court’s admiralty jurisdiction. Arch Nemesis counterclaimed against Clear Spring (pleading both contractual and extracontractual claims) and filed third-party claims against Concept (fraud and negligent misrepresentation), Off the Hook Yacht Sales (negligence and negligent misrepresentation), and West Coast (constructive fraud, negligent misrepresentation, negligence, and breach of contract). Arch Nemesis based its claims on the court’s diversity jurisdiction and demanded a jury. Off the Hook and Concept moved to dismiss the complaint against them for lack of personal jurisdiction. The Off the Hook defendants are North Carolina and Maryland limited liability companies that did not solicit business from Arch Nemesis. No representatives of the entities had ever visited Kansas, and the yacht never entered Kansas. However, the broker for Off the Hook, DiFlumeri, communicated with McAtee in Kansas, and Judge Crabtree believed that the communications with a Kansas resident to purchase a boat established minimum contacts with Kansas to justify specific jurisdiction over the Off the Hook defendants. Concept is incorporated and operates under the laws of the United Kingdom, but Judge Crabtree was persuaded that there were minimum contacts with Kansas because Concept’s engagement with Arch Nemesis, a Kansas LLC, spanned the application process and the claim handling. Concept argued that, as a foreign company, it was not properly served with process because it was not served under the Hague Convention. Arch Nemesis responded that it could serve Concept under the insurance policy provision for suit on Mendes & Mount in New York. Concept responded that it was neither a signatory nor a party to the insurance contract, leaving Judge Crabtree to determine Concept’s status under the policy and whether it fell within the term “Underwriters” in the clause addressing service. Judge Crabtree complained that the parties had “left the court rudderless in a sea of potentially applicable law,” so he reasoned that the court was sitting in diversity and that the court would apply the law of the forum (Kansas) under the well-known rule from Klaxon v. Stentor, in the absence of a showing that a different law should apply. Judge Crabtree noted that the parties argued “ardently” about whether the contractual choice-of-law provision could bind Concept as a non-signatory, but in order “to resolve this non-signatory question by applying the choice of law specified in the contract seems circular.” In the absence of a binding contractual choice of law, Judge Crabtree applied the law of the forum, Kansas. As the insurance contract did not define the term “Underwriters,” and as Judge Crabtree declined to find that the contract bound Concept as a non-signatory under the other theories proposed by Arch Nemesis, Judge Crabtree concluded that Concept had not been properly served. Judge Crabtree gave Arch Nemesis the opportunity to serve Concept properly within 90 days.
As Clear Spring based its declaratory judgment complaint on the court’s admiralty jurisdiction, Clear Spring moved to strike the jury demand of Arch Nemesis on its counterclaim against Clear Spring. Magistrate Judge James noted that the courts are split on the issue that she described as “whether Plaintiff’s election to proceed under admiralty without a jury should take priority over Defendant’s Seventh Amendment right to a jury under the saving to suitors clause merely because Plaintiff filed its declaratory judgment claims first.” Agreeing with Arch Nemesis, Magistrate Judge James reasoned that neither the Seventh Amendment nor any statute or rule forbids jury trials in maritime cases, and that the result sought by Clear Spring would “incentivize a race to the courthouse in cases such as this.” That left the issue whether the insurer’s claims should also be tried to the jury even though they were brought pursuant to Rule 9(h). Magistrate Judge James stated, “Trying first either Plaintiff’s declaratory judgment claims to the court or Defendant’s counterclaims to the jury would necessarily prejudice the other by determining the entirety of the issue before the other has its opportunity to litigate in its chosen mode of trial.” As “the mere fact that Plaintiff won the race to the courthouse and filed its declaratory judgment action first should not deprive Defendant of its constitutional right to a jury trial,” Magistrate Judge James ordered that the entire case would be tried to a jury. See November 2023 Update.
Concept sought a “second bite from the proverbial apple,” renewing its motion to dismiss that the court did not possess personal jurisdiction over it. There were two intervening events. First, Arch Nemesis did properly serve Concept. Second, third-party defendant, West Coast Real Estate & Insurance, filed cross claims against Concept and other third-party defendants. Concept argued that the issue of personal jurisdiction was not present in the earlier ruling that addressed whether there was sufficient service of process. Arch Nemesis responded by producing additional evidence to substantiate Concept’s contacts with Kansas. Although Judge Crabtree recognized that he could reconsider a decision on personal jurisdiction that was made at the stage of a motion to dismiss, he did not find the basis to do so when the case was still at the same stage in the proceeding and the evidence was essentially the same, reasoning: “To reconsider Concept’s personal jurisdiction objection now would waste judicial resources and interfere with the court’s Rule 1 mandate to secure a speedy determination of this action.” Judge Crabtree then addressed the personal jurisdiction of Concept for the cross claims filed by West Coast Real Estate. Judge Crabtree responded that “the court’s personal jurisdiction over Concept on Arch Nemesis’s third-party claims, as provisionally determined by the court’s previous Order—enables the court to exercise pendent personal jurisdiction over West Coast’s cross-claim, even if no independent basis for it exists.”
Judge Crabtree then considered the objection to the decision of Magistrate Judge James that the entire case would be tried to the jury, even though the case was brought as an admiralty case with a Rule 9(h) designation. The parties each argued that the majority of appellate decisions supported their position, and Judge Crabtree noted that the Fifth and Eleventh Circuits supported a non-jury trial and that the Fourth and Ninth Circuits supported a jury trial. The tie-breaking case was the Koch Fuels case from the Eighth Circuit, which took a middle path. Nonetheless, Judge Crabtree reasoned that “none of this majority-minority squabbling matters all that much” as there was still a split in the caselaw, and the Tenth Circuit (in which Kansas sits) was silent on the issue. Accordingly, Judge Crabtree could not find that Magistrate Judge James misapplied the law in an opinion that took one side in the circuit split. Judge Crabtree also agreed with the reasoning that a jury trial was appropriate because the declaratory judgment context of the case presented a “flipped-parties posture” with respect to the jury demand. Had the insurer not won the race to the courthouse by filing the declaratory judgment action on the same day that it denied the claim for coverage, Arch Nemesis would have brought the suit, and its demand for a jury would have governed the litigation. Clear Spring took issue with the “unseemly” and “inappropriately outcome-driven” order (citing Magistrate Judge James’ statement, “Plaintiff’s argument is akin to that of the boy who killed his parents and threw himself on the mercy of the court as an orphan”), but Judge Crabtree did not believe that he should “reject a magistrate judge’s order because its tone missed the mark.” Therefore, he denied the objection to the order for a jury trial on all issues.
This case arises from a fire at Lighthouse Marine’s shipyard in Port Bolivar, Texas. The fire started on the S/V NINO and spread to the M/V MS MONICA, owned by Boat Services of Galveston and chartered to Rodi Marine. Boat Services and Rodi Marine brought this suit in federal court in Texas against Lighthouse Marine, and they added Peninsula Marine as a defendant. They brought the suit under the court’s admiralty jurisdiction, and they added that the court had supplemental jurisdiction over state law claims in their amended complaint. The plaintiffs sought punitive damages under maritime law and Texas law. Believing that the fire was started by unknown arsonists, the defendants, Lighthouse Marine and Peninsula Marine, sought leave from the court to designate John Doe (arsonist) as a responsible third party under Texas law. Such a designation would, under Texas law, result in reduction of the damages for the fault of the John Doe defendant. The designation by Peninsula Marine was in accordance with Texas law, the plaintiffs did not object, and Magistrate Judge Edison granted leave for the designation by Peninsula Marine. The plaintiffs objected to the designation by Lighthouse Marine, because it was not filed within 60 days of its original answer, and Lighthouse Marine answered that the first time that the plaintiffs added state claims was in the amended complaint. Therefore, Lighthouse Marine filed the designation in its original answer to state claims. It was not necessary, however, for Magistrate Judge Edison to “wander down” the road to address this “fascinating academic debate on the meaning of the phrase ‘original answer,’” as he held that a person designated as a responsible third party by one defendant is available for apportionment of fault by any other defendant. Therefore, Magistrate Judge Edison denied the request of Lighthouse Marine to designate John Doe as a responsible third party as moot. See May 2024 Update.
As the suit was brought as an admiralty claim for breach of a maritime contract for vessel repairs together with a claim for state-law negligence and bailment, an issue was presented whether the case would be tried to a jury or to the bench. The plaintiffs requested a trial by jury, and the defendants opposed that request, moving to strike the jury demand. The Amended Complaint only alleged admiralty jurisdiction under Section 1333, but it did not contain a designation under Rule 9(h). The plaintiffs argued that they were entitled, under Rule 9(h), to choose between a jury or bench trial when a claim for relief is within the admiralty jurisdiction and also within the court’s subject-matter jurisdiction “on some other ground.” Magistrate Judge Edison agreed, but he added that the plaintiffs had overlooked that a claim brought under supplemental jurisdiction is not brought within the court’s subject-matter jurisdiction “on some other ground” (explaining that supplemental jurisdiction does not “operate to get a case into federal court” and only becomes relevant after the pleading has invoked an independent basis to get the case into federal court). As admiralty was the sole source of subject matter jurisdiction, Magistrate Judge Edison held that the plaintiffs had no right to a jury trial, and he granted the motion to strike the jury demand. See August 2024 Update.
Lighthouse Marine moved for summary judgment on the claim that it breached an implied warranty of workmanlike performance, and Rodi Marine moved for summary judgment that Lighthouse Marine had breached the warranty and its bailment obligations. Lighthouse Marine argued that the scope of the agreements between the parties did not encompass any repair work or other services that proximately caused the fire and damage to the vessel. Magistrate Judge Edison declined to address that issue in motion practice, preferring to decide the issue after the parties fully present their positions at trial. Turning to the bailment claim, Magistrate Judge Edison explained that Rodi Marine would have to establish that a bailment relationship existed. Lighthouse Marine argued that Rodi Marine never relinquished control of its vessel to Lighthouse Marine and that Lighthouse Marine never took control of Rodi Marine’s vessel. Lighthouse Marine contended that, at most, it provided space at its shipyard for Rodi Marine to store its vessel. Magistrate Judge Edison agreed that there was a fact dispute on the bailment claim, and he denied all of the motions.
Landon Perry, an employee of Halliburton, asserts that he was injured while working as a seaman on the M/V STIM STAR III when the chemicals he was mixing exploded. Perry brought this suit in state court in Harris County, Texas against Halliburton, alleging claims under the Jones Act and general maritime law. Halliburton removed the case to federal court in Texas based on the jurisdiction of the Outer Continental Shelf Lands Act, denying that Perry was a seaman and alleging that the Jones Act claim was only brought to frustrate federal jurisdiction. Perry argued that suits alleging claims under the Jones Act (statutory bar in 28 U.S.C. Section 1445) and claims under the general maritime law (judicial interpretation of the Saving-to-Suitors Clause) are not removable, but Magistrate Judge Bennett answered that application of maritime law did not displace the grant of federal jurisdiction in the OCSLA. Magistrate Judge Bennett then determined whether there was jurisdiction under the OCSLA, citing Perry’s work to mix chemicals for use in fracking on a rig located on the OCS, approximately 125 miles off the Louisiana coast in the Gulf of Mexico. As there would have been no accident were it not for the mixing of the chemicals, the only reasonable inference was that Perry’s injury was related to the exploration and development of resources on the OCS. Therefore, Magistrate Judge Bennett recommended that remand be denied for the maritime claims, including the maintenance and cure claim. Although Halliburton argued that the Jones Act claim was fraudulently pleaded, Judge Bennett declined to conduct the inquiry into the viability of the Jones Act claim, reasoning that the inquiry was unnecessary to prevent the frustration of federal jurisdiction because federal jurisdiction was upheld under the OCSLA. Therefore, Judge Bennett recommended that the Jones Act claim be severed from the federal suit and remanded to the state court. Perry objected to the recommendations, and Judge Hanen overruled the objections and adopted Magistrate Judge Bennett’s recommendations.
Randall Pittman, chairman of the board of a Michigan hospital, is the principal of Eyrie Holdings, LLC, which owns the TERRY LEAH. Monty Biggs, an employee of the hospital, maintains the TERRY LEAH along with vessels owned by the hospital. On April 8, 2022, Randall Pittman and his wife Mary Pittman were on the TERRY LEAH (captained by Biggs), traveling southbound on the Gulf side of Estero Island when the vessel struck a shoal, damaging the propeller. Pittman asked Biggs to contact a company to assist the vessel, and Biggs contacted Marine Towing and Salvage, which dispatched Captain Stephen Lilly. The parties dispute the condition of the TERRY LEAH when Captain Lilly arrived, but Captain Lilly towed the vessel to a dock and then had Biggs sign a salvage contract. Captain Lilly wanted Pittman to be present when the contract was signed, but he left shortly after the vessel was docked. After Pittman declined to pay for the contracted salvage, Marine Towing & Salvage brought this suit against the vessel, Biggs, and Eyrie Holdings in Florida federal court, seeking to recover for breach of the salvage contract and quantum meruit. The defendants moved for partial summary judgment on the claims against Biggs and on the claims for quantum meruit and for a maritime lien. With respect to the claims against Biggs, there was no dispute that Biggs acted as an agent for the vessel’s owner when he executed the contract, which he disclosed to Captain Lilly. Thus, Judge Chappell granted summary judgment on the claim for breach of contract. Judge Chappell noted that, in response to the summary judgment, Marine Towing & Salvage argued that an oral contract was formed between Biggs and Marine Towing & Salvage when the services were requested. Judge Chappell found this argument to be “curious,” given that the existence of an oral contract for salvage is “typically a defense to a pure salvage claim.” Nonetheless, a party may not amend its complaint in an opposition to a motion for summary judgment, so Judge Chappell denied the new claim for breach of an oral contract. As to the quantum meruit claim against Biggs, Judge Chappell reasoned that Marine Towing & Salvage could not satisfy the element that it conferred a benefit on Biggs because the benefit was conferred on the TERRY LEAH and its owner, not on Biggs. Judge Chappell then considered the argument of the vessel and owner that quantum meruit was not a proper theory because it was inconsistent with the salvage claim. Judge Chappell rejected the argument because the claims could be pleaded in the alternative, and the salvage claim had not yet been proven. Finally, Judge Chappell addressed the argument that the lien against the vessel was not proper because the parties had agreed to a letter of undertaking, which discharged the lien against the vessel. Judge Chappell found that argument misplaced, answering that the posting of security substitutes the security for the vessel. The lien is simply transferred to the letter of undertaking. Therefore, the in rem claim remains, and dismissal of that count was improper.
Gary Beaumont entered into an agreement with Vanguard Logistics to ship a crate containing his personal property (a hand-built Italian motorcycle, a bicycle, and other goods) from Sydney, Australia to New York. Vanguard issued a bill of lading for the shipment through its non-vessel operating common carrier in Hong King, and the reverse side of the bill of lading contained a LIMITATION OF LIABILITY that the value of the cargo would be deemed to be $500 per package unless otherwise provided. The back also mentioned the Carriage of Goods by Sea Act. The shipment arrived in New Jersey where the cargo was damaged when a much larger item was dropped on top of the crate. Beaumont brought suit in state court in New Jersey against Vanguard, and Vanguard removed the case to federal court in New Jersey based on diversity and admiralty. Vanguard moved to transfer the case to New York pursuant to a forum-selection clause on the back of the bill of lading. Beaumont opposed the motion on the grounds that there was no admiralty jurisdiction for the shoreside damage, that COGSA did not apply for the same reason, and that the clause was an unenforceable contract of adhesion (and that a reasonably prudent person would not have been aware of it from its location in “very tiny” print on the back of the bill of lading). The New Jersey court held there was admiralty jurisdiction (contract for ocean carriage) and that COGSA was applicable to the damage based on the language of the bill of lading. The judge transferred the case to New York, and Beaumont filed an amended complaint that included claims under COGSA and the New Jersey Consumer Fraud Act. Vanguard moved for summary judgment after the case was transferred, arguing that its liability was limited to $500 under COGSA, which preempted Beaumont’s other claims. In response, Beaumont argued that he placed the shipping order via email and that only the top half of the bill of lading was sent to his shipping agent. Although Vanguard contended that this argument was rejected by the court in New Jersey, Judge Vyskocil answered that the arguments presented in New Jersey did not address the issue whether Beaumont had received sufficient notice so as to have a fair opportunity to declare a higher value for his cargo, so she considered the fair opportunity issue. Vanguard argued that the front of the bill of lading gave notice of the opportunity to declare a higher value, stating: “FOR EXCESS AD VALOREM VALUE SEE CLAUSE 19 ON REVERSE SIDE.” However, the front of the bill of lading also stated: “Page 1 of 1” (indicating that there was no second page). Concluding that there was a fact question whether the front of the bill of lading provided Beaumont with a fair opportunity to declare a higher value to avoid the package limitation, Judge Vyskocil declined to grant summary judgment to Vanguard. See November 2023 Update.
Vanguard sought reconsideration of Judge Vyskocil’s decision, arguing that the transfer order established that the bill of lading offered by Vanguard was the governing contract of carriage. However, Judge Vyskocil dismissed this argument as the issue of whether Beaumont received the reverse side of the bill of lading (containing the package limitation) was not addressed in that decision. Judge Vyskocil also rejected the argument that the terms and conditions of the bill of lading were effectively incorporated by reference to the website, as Vanguard did not raise that argument until its reply brief. She reiterated that, as it was unclear whether COGSA imposed any limitation on Vanguard’s liability, it was premature to decide whether COGSA preempted Beaumont’s state-law claims, cautioning that she would “not tolerate further frivolous delays, and both parties should be prepared to litigate this case expeditiously.” See January 2024 Update.
The parties then reached an agreement to settle their dispute, contingent on the court vacating its prior opinions, and they jointly filed a motion to vacate. The parties represented that relief was appropriate to conserve judicial resources in light of the settlement, but Judge Vyskocil did not agree, stating that “the parties, particularly VLS, have already litigated this case to the hilt. VLS cannot buy back unfavorable judicial decisions, but it is free to settle the claims against it without vacatur of the Opinions.” Judge Vyskocil added that “the parties could have settled before litigating two futile motions. If litigants can neutralize unfavorable rulings through settlement, they may be encouraged to expend judicial resources (and the resources of their opponents) with abandon. Therefore, she denied the motion to vacate.
This case involves a dispute between the owner of offshore drilling rigs (Ensco) and the operator of offshore oil and gas platforms (Cantium). Ensco filed the suit in federal court in Louisiana seeking to recover for unpaid invoices. The complaint alleged subject matter jurisdiction in two paragraphs. One paragraph stated: “This Court has original jurisdiction over this action as it arises out of a maritime contract governed by federal maritime law. 28 U.S.C. § 1331(1) [sic].” The second allegation stated: “Additionally, or alternatively, this Court has federal question jurisdiction over this action pursuant to 28 U.S.C. § 1333 [sic], as the action arises out of the laws of the United States. Specifically, this action arises out of the Outer Continental Shelf Lands Act . . . .” The complaint did not contain a specific designation with respect to Rule 9(h) and did not demand a jury. Cantium filed an answer and counterclaim, alleging that Ensco was liable for failing to provide adequate equipment and personnel and failing to perform operations in a workmanlike manner. Cantium included a jury demand in its answer and counterclaim. Ensco then filed an amended complaint with a Rule 9(h) designation and a motion to strike Cantium’s jury demand. In assessing whether to strike the jury demand, Judge Ashe only considered the original complaint because the amended complaint was filed after Cantium had answered and demanded a jury. Judge Ashe noted that when the complaint does not expressly cite Rule 9(h), the courts look to the totality of the circumstances to determine if the plaintiff made the required statement to invoke the court’s admiralty jurisdiction under Rule 9(h). Cantium relied on the decision of the district court in LeBlanc v. Panther Helicopters in which Judge Barbier held that the complaint’s allegation that the court had jurisdiction over the case pursuant to admiralty jurisdiction and pursuant to LHWCA Section 5(b) and that the claimant brought suit pursuant to the OCSLA was not a sufficient identification of the claims under Rule 9(h). Judge Ashe was persuaded, however, by the Fifth Circuit’s T.N.T. decision in which the court held that the allegation that the suit was “for breach of contract, civil and maritime, and for maritime tort” was a sufficient “simple statement asserting admiralty or maritime claims under the first sentence of Rule 9(h).” As in T.N.T., the allegation that the action “arises out of a maritime contract governed by federal general maritime law” constituted a Rule 9(h) designation. Therefore, Judge Ashe struck Cantium’s jury demand. See May 2024 Update.
Ensco then filed a motion for partial summary judgment on Cantium’s counterclaim in which Cantium sought more than $22.8 million for loss of the Kings Hill Well and more than $4.5 million in other damages as a result of Ensco’s failing to provide competent people, failing to provide adequate equipment, and failing to perform in a workmanlike manner. Ensco argued that the Master Service Contract between the parties contained a release for all consequential damages and that the sole remedy for a lost well is for Ensco to redrill the well to its prior depth at a negotiated redrill rate (but only if the loss was due to Ensco’s gross negligence or willful misconduct). With respect to the claim for consequential damages, Cantium argued that the limitation in the indemnity section that it did not apply to gross negligence should be applied to the provision in the contract that neither party would be liable to the other for consequential damages. Judge Ashe disagreed, stating: “No reasonable interpretation of the MSC results in applying the gross negligence exception from section 15.16 to limit the parties’ waiver of consequential damages in section 15.21.” As the waiver of consequential damages was unambiguous, Judge Ashe agreed that Ensco was entitled to summary judgment on the claims for consequential damages. Judge Ashe then addressed the provision in the contract that Cantium’s sole remedy when a well is lost or damaged is to have Ensco redrill the well at the redrill rate—if the well was lost because of Ensco’s gross negligence or willful misconduct. As Ensco had already redrilled the well, it fulfilled its sole responsibility to Cantium and was not liable for any other damages for the loss of the well.
Encore Dredging bareboat chartered the MUDD TUG 14 from M&C Oilfield Services. The vessel was tied up to an anchor barge during dredging operations at the Bayport Flare near the Houston Ship Channel when it partially sank in an “unexpected weather event.” Encore was in control of the vessel, and its crew were onboard during the partial sinking. The injured crewmembers brought suit against Encore in Texas state court, and both Encore and M&C Oilfield filed limitation actions in Texas federal court. M&C Oilfield moved to lift the stay in the Encore limitation action so that M&C Oilfield could bring its contractual claims against Encore in state court in Cameron Parish, Louisiana, in accordance with the forum-selection clause in the bareboat charter for the vessel, asserting that the contractual claims were not subject to limitation under the personal contract doctrine. Magistrate Judge Bennett agreed that charter party provisions for indemnity and insurance are personal contracts and that the personal contract doctrine defeated Encore’s claims that it would be overly expensive, complicated, and duplicative to litigate the issues in different forums. He similarly rejected Encore’s argument that a separate trial should not be granted under Rule 42(b), as the Rule provides that the court “may” order a separate trial. As the claims that M&C Oilfield sought to pursue fell outside of the limitation concursus and were subject to the forum-selection clause, Magistrate Judge Bennett recommended limited lifting of the stay. The crewmembers moved to bifurcate the limitation proceedings so that the issues of negligence and unseaworthiness would be tried in Phase 1; privity or knowledge would be tried in Phase 2 (if necessary) with the court apportioning liability if it finds liability but no privity and awarding damages in Phase 3. If the court finds privity, it would dismiss the limitation proceedings so that the claimants could proceed in state court. Judge Bennett agreed that bifurcation was appropriate, but he held that there would be two phases. The federal court will first address negligence and unseaworthiness, privity or knowledge, and apportionment of fault. If necessary, damages will be assessed in a separate state proceeding. Finally, Judge Bennett considered the motion of crewmember Hipolito Rodriguez to file a late claim in the limitation actions (9 months after the deadline). Magistrate Judge Bennett noted that Rodriguez sought leave before the deadlines passed for discovery and expert designations, but the deadlines had now passed, and motions were due in a week. As a majority of the scheduling order deadlines had passed, Magistrate Judge Bennett was not inclined to add a new claim as it would adversely affect the rights of the parties, particularly when Rodriguez failed to provide any reasoning for a lack of actual notice, such as a language barrier or geographical issue.
This case involves the carriage of 26 containers of soybeans by Hapag-Lloyd that were spoiled by the time the consignee obtained them. Genuine Energy shipped 679 tons of soybeans to Qingdao, China in two shipments, scheduled to arrive on May 24, 2022 and June 8, 2022. The shipments arrived in June and July, but they were not picked up by the consignee until November 21, 2022. The shipper, Genuine Energy, asserted that the delays were caused by the Chinese government issuing a COVID-related lockdown, by Hapag-Lloyd overbooking vessels, by Hapag-Lloyd failing to correct errors on the bills of lading, and by Hapag-Lloyd refusing to release the cargo to customs while wrongly asserting that there were outstanding charges owed by Genuine Energy. Genuine Energy filed this suit against Hapag Lloyd in federal court in Georgia on November 14, 2023, seeking damages under the Carriage of Goods by Sea Act and for breach of contract, and Hapag-Lloyd moved for summary judgment that the case was barred by the one-year statute of limitations in COGSA or, alternatively, that liability was limited to $500 per package. Before addressing whether the suit was brought within a year from the date of delivery or the date when the goods should have been delivered, Judge Thrash rejected Genuine Energy’s argument that the statute of limitations did not apply because Hapag-Lloyd was guilty of an unreasonable deviation, reasoning that a deviation in the delivery terms “creates no greater risk that plaintiff will not be able to file suit within the statutory period.” As to when the deliver occurred, Hapag-Lloyd cited the Fifth Circuit decision that delivery occurs when the carrier places the cargo “into the custody of whomever [sic] is legally entitled to receive it from the carrier.” Genuine Energy relied on dictionaries and a case from South Carolina that the consignee must either actually or constructively receive the goods. Judge Thrash also noted a case from New York that delivery requires, if not received by the consignee, “at least notice to him and opportunity to accept delivery.” Even under the Fifth Circuit test, Judge Thrash reasoned that the custom of the port of delivery affects when delivery has occurred. Genuine Energy submitted an announcement purportedly from the province where Qingdao is located to support its argument that Hapag-Lloyd was still responsible until the containers cleared customs, and Hapag-Lloyd provided notice of its intent to use the testimony of Chinese maritime lawyer Yu Changqing. Faced with conflicting evidence and standards, Judge Thrash declined to grant summary judgment, stating that “more discovery is needed in this case before the Court will adjudicate what the laws and customs of the port of Qingdao were.” Judge Thrash then considered Hapag-Lloyd’s argument that its liability was limited to $13,000 ($500 for each of the 26 containers). Genuine Energy raised a defense that there was an unreasonable deviation that would preclude use of the package limitation and that it did not have an opportunity conduct discovery on the defense. Judge Thrash agreed with Genuine Energy and held that Hapag-Lloyd could raise the defense after Genuine Energy had an adequate opportunity for discovery.
Radford Klotz, owner of the catamaran LUCEY BLUE, purchased hull insurance for the vessel with Accelerant Specialty Insurance Co. The vessel was damaged by fire during the policy coverage while it was at the Harbour Towne Marina in Dania Beach, Florida, and Klotz submitted a claim to Accelerant. Accelerant denied the claim because of the breach of two warranties (fire suppression warranty and survey compliance warranty) and brought this action in federal court in Florida seeking a declaration that the policy was void from the inception. Accelerant moved for summary judgment with respect to the fire suppression warranty, which requires that, if the vessel is fitted with fire extinguishing equipment, the equipment be tagged and certified annually or in accordance with manufacturer’s recommendations (if more frequent). Klotz argued that the warranty was not applicable because the vessel was not “fitted with fire extinguishing equipment;” however, Magistrate Judge Strauss noted that Klotz admitted in his discovery answers that the vessel was fitted with fire extinguishing equipment at the time of the loss. Holding that Klotz was bound by the admission, Magistrate Judge Strauss concluded that Klotz had breached two portions of the fire suppression warranty. Magistrate Judge Strauss then addressed whether the breach voided the policy, and Klotz argued that, under New York law, the breach had to be material. Magistrate Judge Strauss disagreed, answering that New York law requires strict compliance with warranties in marine insurance policies. Accordingly, Accelerant was entitled to judgment as a matter of law that there was no coverage under the policy because the policy was void from the inception.
Stephen Dufrene was employed by Tradewinds Towing as an engineer on vessels. He was injured on the M/V REBEKAH when the winch he was replacing allegedly malfunctioned and crushed his foot. Dufrene sued Tradewinds Towing in state court in King County, Washington, and he also sued Foss Maritime as the owner of the REBEKAH. Tradewinds Towing and Foss Maritime filed limitation actions in federal court in Washington. Before Foss Maritime’s limitation action was filed, Dufrene sought discovery from Foss Maritime, but the case was stayed before Dufrene’s expert could inspect the winch. Foss Maritime advised Dufrene that it was planning to bareboat charter the vessel (“a near outright transfer of [the vessel’s] ownership”), and Dufrene filed a motion in the Foss Maritime limitation action requesting the court to temporarily enjoin the bareboat charter (or alternatively for an order preserving evidence). Judge Whitehead reasoned that with the bareboat charter, “Foss will transfer possession and control of the winch to a non-party who has no duty to preserve evidence in this case” and that “the prospective bareboat charterer would have the authority to alter or even destroy the winch.” Judge Whitehead did not believe that Dufrene could satisfy the requirements for a temporary restraining order or preliminary injunction; however, he did not want Foss Maritime to enter the charter without a preservation order in place. As the charter was not expected to be finalized for a couple of weeks, Judge Whitehead ordered that no one remove, alter, destroy, or otherwise tamper with the winch on the REBEKAH for 30 days (but the order did not prevent use of the winch for regular operations).
Leviathan Offshore, an offshore diving company that provides inspection, installation, and repair services on marine structures and equipment, contracted with W&T Offshore to inspect three of W&T’s offshore platforms. Leviathan also contracted with Petrofac to inspect ten of its offshore platforms. Leviathan subcontracted with Baker Marine to perform remote operated vehicle services for both projects. Baker Marine successfully performed work on two of the three W&T platforms, but Leviathan asserts that Baker Marine failed to complete the third W&T inspection and did not complete any of the work on the Petrofac platforms. Baker Marine submitted invoices for all of the inspections it performed, whether successful or not, and Leviathan offered to pay for the two successful inspections and requested reports of the inspections. Leviathan alleges that Baker Marine submitted the report for one inspection but declined to submit the other report until Leviathan paid its invoices. Leviathan then had to re-do the second inspection so that it could fulfill its contract with W&T. Leviathan brought this suit in federal court in Louisiana, alleging that Baker Marine breached its contracts and violated the Louisiana unfair/deceptive trade practices statute. Leviathan sought attorney fees and treble damages. Baker Marine filed a motion for summary judgment that Leviathan had not sufficiently pleaded a case under the Louisiana statute and that the claims for attorney fees and treble damages were preempted by the general maritime law, that does not allow recovery for attorney fees and that requires gross negligence for recovery of punitive damages. Judge Fallon held that Leviathan had stated a colorable claim of unlawful coercion to invoke the Louisiana statute, and he then addressed the argument that maritime law preempted recovery for attorney fees and treble damages. However, Judge Fallon declined to address the issue, stating that he would wait to determine whether the Louisiana claim succeeded on the merits before deciding whether maritime law preempted recovery.
Tammy Knieling was employed as a chef and mate on the sailing vessel SOMEWHERE HOT, owned by William Poston and captained by Don Fung Fook. After purchasing the SOMEWHERE HOT, Poston ran charters on the vessel in the Virgin Islands, with Fook as the captain. Knieling claims that on July 3, 2021, Fook negligently instructed her to let out the dinghy line and that her hand became entangled between the line and the cleat. She sustained an injury to her left middle finger and rope burns on both hands, and a medical student who was a guest on the vessel cleaned the wound and wrapped it in a compression wrap. Knieling made an appointment at a medical center on July 9, 2021, the last day of the charter, and the doctor advised her to go to the emergency room where she was diagnosed with an avulsion fracture of her finger. She was given home exercises because she is often out to sea, and she scheduled her follow-up appointment around her charter schedule. Her pain continued in 2023, and she had laser treatment and injections to improve the quality of the scar and pigmentation. Her doctor continued to order physical and occupational therapy. Knieling brought this suit in 2022 in federal court in the Virgin Islands against Fook and Poston, alleging claims for Jones Act negligence, maintenance and cure, and unseaworthiness, seeking compensatory and punitive damages for each count. The defendants moved for summary judgment on the claim for maintenance and the claim for punitive damages for failure to pay maintenance and cure, and Knieling moved for summary judgment on her claim for maintenance and cure. The defendants argued that Knieling was provided food and lodging on the SOMEWHERE HOT until her employment was terminated in August 2021, she never requested maintenance or time off, she said she was “good to go” without limitations, and she continued to work on other vessels after she left the service of the SOMEWHERE HOT. The defendants added that her doctor said that her fracture was healed in August 2021, she stopped attending physical therapy in September 2021, she stopped seeing a doctor for more than a year, and her doctor said her injuries were permanent. The defendants argued that treatment thereafter was palliative, not curative. Knieling cited her testimony that she was precluded from performing certain tasks and was, accordingly, incapacitated. She argued that she had not reached maximum cure, had returned to work out of necessity, and was entitled to maintenance at the rate of $91.30 per day. Based on the conflicting argument and evidence, Magistrate Judge Miller held that there were fact questions that precluded summary judgment on the claim for maintenance and cure (Magistrate Judge Miller also noted that Knieling had resided in Florida since December 2021, and her attorney had not provided any evidence of her food and lodging expenses in Florida). As to the claim for punitive damages for willful failure to pay maintenance and cure, the defendants argued that they had immediately agreed to pay medical expenses and later declined to pay when the treatment was palliative. Reasoning that the defendants are entitled to investigate and require corroboration of the claim, Magistrate Judge Miller found no basis for an award of punitive damages and granted summary judgment with respect to that claim. See July 2024 Update.
Magistrate Judge Miller held a bench trial from June 3 to June 6, 2024, and announced her findings of fact and conclusions of law. She concluded that Knieling was employed by Poston, who was responsible for any negligence of Captain Fook under the Jones Act. Knieling argued that Fook was negligent for not providing gloves to her to use when handling lines, but Magistrate Judge Miller did not find any applicable law or safety regulation requiring use of gloves for the routine task of letting out a dinghy line. Magistrate Judge Miller found it was not credible that Fook had not explained or demonstrated how to let out the dinghy line, and she added that Knieling had properly performed the task the day before. However, Judge Miller did find that Fook did not act with reasonable care when he instructed Knieling to let out the line while the vessel was moving at an unsafe speed, and that Poston was liable under the Jones Act. Magistrate Judge Miller awarded Knieling $9,599.41 for past unpaid medical expenses and no future medical expenses as Knieling did not testify that she intended to schedule any future treatment. Magistrate Judge Miller awarded $15,000 for past and future pain and suffering. Magistrate Judge Miller did not find that the vessel was unseaworthy, reasoning that the lack of gloves did not render the method of work improper and that a single act of operational negligence was not unseaworthiness. With respect to maintenance, Magistrate Judge Miller observed that there was no clear finding of maximum cure, particularly in August or September of 2021 as Poston claimed. However, she has not had an appointment after May 2023, and Magistrate Judge Miller considered that her treatment would be palliative and not curative. Knieling never took off time from work to heal and made it clear that she did not want to miss any charters. She has continued to work as a chef after leaving the SOMEWHERE HOT (she worked on the SOMEWHERE HOT until she had a falling out with the captain) and has done well on other ships. Accordingly, Magistrate Judge Miller did not find any obligation to provide maintenance. Magistrate Judge Miller did not find any unreasonable failure to pay medical bills as there were issues with the amounts due and Poston offered to pay $2,000 to cover outstanding bills. Additionally, Poston had a reasonable basis to believe that it did not owe maintenance and cure after 2021 based on its belief that Knieling had reached maximum cure. As Poston was already liable for the medical bills under the Jones Act, Magistrate Judge Miller awarded nothing to Knieling on the claim for maintenance and cure.
Debra Land, a passenger on the CARNIVAL VALOR, was injured while walking on the exterior/open area of the Lido Deck of the vessel when she stepped on a wet, slippery, transitory, and/or foreign substance on the deck. Land alleged that she observed water coming down from the retractable roof, causing the deck to be unreasonably and dangerously slippery. Land brought this suit against the cruise line in federal court in Florida, alleging counts of negligent maintenance, negligent failure to correct, and negligent failure to warn. The cruise line moved to dismiss the counts on the ground that they failed to sufficiently allege that the cruise line had notice of the risk-creating condition and that they lack merit. Land argued that she sufficiently alleged constructive notice because the exterior/open deck area of the Lido Deck where she fell was in a high-traffic area where there was a risk of wet, slippery/transitory substances on the deck because of the proximity to the aft pool and nearby dining areas. Magistrate Judge Reid did not consider the allegations to be too conclusory, and she believed that it was plausible that the cruise line would have notice of the slippery condition because of the proximity to the pool. Magistrate Judge Reid also believed that the prior incidents pleaded by Land involving passengers who slipped and fell on the Lido Decks of other cruise ships owned by the cruise line were sufficiently similar and detailed as to the date, vessel name, and hazardous condition to provide the cruise line with constructive notice of the condition on the VALOR. On the merits, the cruise line argued that Land had actually pleaded a vicarious liability claim, but Magistrate Judge Reid answered that the claims were pleaded as direct liability claims and that they would not be dismissed in light of the sufficient pleading of notice. She also declined to dismiss the claims on a motion to dismiss for lack of sufficient pleading that the condition was not open and obvious, reasoning that the question should only be resolved after development of the factual record. On July 30, 2024, Judge Williams approved the recommendations of Magistrate Judge Reid without objection. See August 2024 Update.
The cruise line then moved for summary judgment for two reasons: the condition was open and obvious, and the cruise line lacked notice of the risk-creating condition. The cruise line cited Land’s testimony that she saw water coming down from the retractable roof and noticed the wetness of the floor. Magistrate Judge Reid responded that just observing the wet condition did not establish that the deck was unreasonably and dangerously slippery, particularly when the cruise line’s corporate representative testified that the deck had a slip-resistant material and there were other incidents involving falls that reflected that the danger may not be obvious. As to notice, Magistrate Judge Reid found other slip-and-fall accidents on the Lido deck to be sufficiently similar, even though the slippery condition in this case did not arise from the pool or food station. Additionally, the cruise line’s former occupational safety manager testified that the Lido Deck was prone to accumulating water (including rainwater) that made it slippery. Therefore, Judge Reid recommended that the motion for summary judgment be denied.
Mark Benson, Felicia Benson, Malika James, Amy Curtis, Stephen Dubois, Anthony Moss, and Richard Jasper were passengers on the CARNIVAL SUNRISE. They took an excursion to an island called Half-Moon Cay and boarded a bus, which began to move without a driver. The bus crashed, injuring the passengers, and the passengers brought this suit in federal court in Florida against the cruise line, alleging (in their second amended complaint) negligent failure to remedy, negligent failure to warn, and vicarious liability. The cruise line moved to dismiss the complaint, asserting that the claims for direct liability failed to establish that the cruise line knew or should have known of the dangerous condition of the bus. The complaint alleged that the cruise line should have known of the dangerous condition because the driver’s supervisor stated that an employee tried to pull the emergency brake within a minute after the accident and the supervisor said it was “already too late for that.” The complaint also alleged that cruise line employees were in the vicinity, close enough to arrive within a minute of the accident and that the cruise line had received reviews about the danger of the bus. Judge Scola agreed with the cruise line that the allegations did not establish that the cruise line plausibly had notice of defective brakes. Similarly, the allegation that crewmembers were close enough to notice and remedy the danger was too vague to establish that the employees should have seen the bus while it rolled. Finally, the review claiming that the bus broke down and the guests had to wait for 45 minutes did not involve an incident that was sufficiently similar to a bus moving without a driver. Accordingly, Judge Scola dismissed the direct liability counts. The vicarious liability count asserted that the last employee to use the bus negligently failed to engage the brakes and that the cruise line was vicariously liable. Although the cruise line argued that this count was duplicative of the counts for direct liability, Judge Scola responded that the passengers were permitted to plead that count in the alternative, and the cruise line did not argue that the allegations in that count failed to state a claim. Therefore, Judge Scola denied the motion to dismiss the vicarious liability count. See April 2024 Update.
The passengers then moved to strike the cruise line’s affirmative defense that it was entitled to a set-off for moneys paid on behalf of the passengers for their medical care as well as any money received from collateral sources for the damages they alleged in their complaint. The cruise line argued that its defense was sufficient under the Higgs decision of the Eleventh Circuit because the cruise line was entitled to have a jury determine the reasonable amount of damages including the amounts billed and the amounts written off. However, Magistrate Judge Louis noted that the argument was not what the affirmative defense pleaded. The affirmative defense pleaded for an offset, which is not an affirmative defense allowed by the Eleventh Circuit. Therefore, Magistrate Judge Louis recommended that the affirmative defense be stricken.
Markel American Insurance insured a 57-foot Carver Voyager motor yacht owned by the Knight Living Trust. The vessel, which was moored at The Marina at Edison Ford in Lee County, Florida, was a total loss after Hurricane Ian, and Scott P. Knight, trustee of the Trust, brought suit against Markel American Insurance in state court in Lee County, Florida. After conducting discovery to obtain jurisdictional facts, Markel American removed the case to federal court in Florida based on diversity jurisdiction and admiralty jurisdiction, and Knight moved to remand the case on the ground that it was not removed within 30 days. Judge Steele upheld the removal and noted that the case fell both within the court’s admiralty and diversity jurisdiction. As there were two viable bases for jurisdiction, Judge Steele addressed whether the case would proceed at law. As Knight’s pleadings in both state court and his amended complaint in federal court did not designate the case as arising in admiralty, and as there was jurisdiction based on diversity, Judge Steele agreed that the case would proceed at law.
Corey Darcoa, an employee of Cooper T. Smith Mooring Co., injured his back while handling a shackle while the M/V MISS CHERYL (owned by Cooper T. Smith Mooring) was pulling Barge GM 5001 off ground near Bonnet Carre Anchorage in the lower Mississippi River. Darcoa filed suit against Cooper Mooring in state court in St. Charles Parish, Louisiana, seeking to recover under the Jones Act and general maritime law, and Cooper Mooring then brought this action in federal court seeking to limit its liability to the value of the MISS CHERYL. Darcoa moved to lift the stay in the federal proceeding, and Cooper Mooring filed a motion for summary judgment on Darcoa’s seaman status. Judge Milazzo initially declined to lift the stay because Darcoa’s stipulation failed to adequately protect Cooper Mooring’s right to limit liability. Darcoa submitted an amended stipulation to present a single-claimant situation and protect Cooper Mooring’s right to limit liability, and Cooper Mooring argued that the court should rule on the motion for summary judgment before ruling on the motion to lift the stay. Judge Milazzo disagreed, reasoning that the saving-to-suitors clause saves a common-law remedy, and the Jones Act remedy sought by Darcoa was a common-law remedy. It did not require consideration of the merits of Darcoa’s claim to determine whether it was a common-law remedy that was saved, and Cooper Mooring did not cite any state remedy that would change the substantive admiralty law to be applied in the state proceeding. Accordingly, Judge Milazzo declined to consider Darcoa’s seaman status and then considered the propriety of the stipulations and motion to lift the stay in the limitation action. As Darcoa waived any claim of res judicata relevant to the issue of limited liability based on any judgment obtained in state court, conceded Cooper Marine’s right to litigate all issues related to limitation in the federal proceeding, and agreed not to enforce a greater damage award until the federal action had been heard, Judge Milazzo lifted the stay so that Darcoa could proceed with his state suit.
The death of Raeshon Willis in a jet-ski accident in South Lake Tahoe returns to the Update (see June 2019, November 2019, December 2019, August 2020, and January 2022 Updates). Willis, an employee of Zip, Inc. and Berkeley Executives, was on a work trip with fellow employees Thomas Smith and Kai Petrich. As part of a team-building activity, Smith and Willis were riding together in Lake Tahoe on a wave runner that was rented from Williams Sports Rentals. Smith was operating the wave runner when it hit a wave, and Willis was thrown overboard and drowned. Williams Sports Rentals filed a limitation action as the owner of the wave runner (posting security of $5,000), and Willis’ mother sought to lift the limitation stay so she could litigate her claim against Williams Sports Rentals in state court. Judge Mendez declined to lift the federal stay, and the Ninth Circuit ordered Judge Mendez to reconsider his analysis. Instead of lifting the stay, however, Judge Mendez ruled that the owner of the jet ski should be exonerated and dismissed the case. The Ninth Circuit then ordered Judge Mendez to lift the stay in the limitation action, and Judge Mendez considered that order to be “unequivocal.” Although agreeing to lift the stay, Judge Mendez did address whether the trial of the limitation question should proceed in federal court or await the trial of the liability issue in the state court (based on efficient use of judicial resources). As the Sacramento federal courthouse was closed to the public until further notice, Judge Mendez held that the limitation action should be stayed until the completion of the suit in state court.
Willis’ mother had filed a suit in state court in Alameda County against Zip, Inc., Berkeley Executives, Smith, and Petrich. After the limitation stay was dissolved, his mother added Williams Sports Rentals as a defendant. Williams Sports Rentals twice moved to transfer the case from the Alameda County Superior Court to the South Lake Tahoe Branch of the El Dorado Superior Court, and the judge transferred the case, concluding that a trial in El Dorado County would be vastly more convenient than a trial in Alameda County (the principal place of business of Zip and Berkeley and the residence of Smith and Petrich). The Court of Appeal, however, held that the trial court abused its discretion in granting the transfer because Williams Sports Rentals had not carried its burden to show that both the convenience of witnesses and the ends of justice would be promoted by a transfer. The lower court had found that it “cannot determine what delay might result from changing venue,” and that was insufficient to satisfy the requirement that the ends of justice would be promoted by the transfer. Consequently, the appellate court issued a peremptory writ of mandate directing the superior court to vacate its order transferring the case.
The basis for the lifting of the stay of the federal limitation action was that only the Willis estate had filed a claim in the limitation action, and the Willis estate filed the necessary stipulations for a single-claimant exception. The court lifted the federal stay of state-court litigation and substituted a stay of the limitation proceeding pending a resolution of liability in the suit in state court. Several parties in the Willis state-court suit filed cross-claims for indemnity and attorney fees against Williams Sports Rentals. The cross-claimants declined to stipulate to Williams Sports Rentals’ limit of liability. One of the insurers of a cross-claimant also sought to intervene in the limitation action. Williams Sports Rentals then sought to lift the stay of the limitation action as the limitation action no longer presented a single-claimant situation. Chief Judge Mueller agreed that the federal action no longer presented a single-claimant exception, and she lifted the stay of the federal action and enjoined the state-court litigation. See January 2023 Update. On May 9, 2023, Chief Judge Mueller set aside the default judgment entered against Kai Petrich and allowed Petrich and two insurers to intervene in the limitation action.
The Willis estate filed a notice of appeal of the order finding that the case no longer fell within the single claimant exception and lifting the stay of the federal action, and the estate moved the district court to stay proceedings in the limitation action pending resolution of the appeal. The estate argued that it had a substantial case for relief on the merits of its appeal because the cross-claims against Williams Sports Rentals were “manifest shams” that did not threaten the right to limitation in “any real way.” Chief Judge Mueller did not find any support for that argument in the briefing and continued to conclude that the single claimant exception no longer applied. The estate also argued that the injunction was overbroad because it enjoined not just the state proceedings that had been filed against Williams Sports Rentals but the continued prosecution of any legal proceedings. As there was no indication of any other proceedings, Chief Judge Mueller did not find any likelihood of success on the part of the estate. Finally, the estate argued that it would suffer irreparable harm during the pendency of the appeal because the breadth of the injunction would cause “disorder” (arguing that the Ninth Circuit would probably not decide the validity of the injunction before the estate lost the June 2023 trial date in state court). However, the deadline to try the state case did not expire until 2026, and a stay of the proceedings in the federal limitation action would not affect the June trial setting because the court had already enjoined the state action. Therefore, there was no showing of irreparable harm in the decision not to stay the proceedings in the limitation action. See June 2023 Update.
The Ninth Circuit set forth the lengthy procedural history of the case that resulted in the appellate court’s previous holding that the case involved a single claimant and that Willis had entered the necessary stipulation to lift the stay in the limitation action. However, the assertion of claims for indemnity, contribution, and attorney fees changed the analysis. Willis agreed to the stipulation that she would not seek damages from Williams Sports Rentals beyond any limitation imposed by the federal court, but the other parties made no such stipulation. Writing for the Ninth Circuit, Judge Miller noted that there is a split in the circuit courts on the issue of whether contribution and indemnity claims create a multiple-claimant situation. He did not have to take a position on the circuit-court split, however, as the claimants also sought attorney fees, and he held that the claims for attorney fees created a multiple-claimant situation. Willis argued that the new claimants should be disregarded because the Ninth Circuit had previously held that the case presented a single-claimant situation, but Judge Miller answered: The record no longer reflects that, and we are not required to pretend that it still does.” He also rejected the argument that the court should disregard the new claims as shams, reasoning: “With a limitation fund of $5,000 to cover pending claims for wrongful death, survival, indemnity, contribution, and attorney’s fees, the district court could fairly conclude that an injunction was necessary to protect [Williams Sports Rental’s] limitation right. Judge Miller then addressed the breadth of the injunction, which barred prosecution of “any legal proceedings of any nature” except in the limitation action. Thus, the injunction barred Willis from pursuing claims in state court against any party, not just the owner—Williams Sports Rentals. Judge Miller recognized that the district court has discretion to stay the action against other parties when the parties share an insurance policy and the stay is necessary to protect the owner’s insurance. However, the other parties had no claim to the insurance maintained by Williams Sports Rentals, and a judgment against the other parties would not impair the owner’s right to limit its liability. Accordingly, Judge Miller vacated the injunction with instructions to narrow it to proceedings against Williams Sports Rentals. See February 2024 Update.
On remand, Willis sought to lift the stay against Williams Sports Rentals (narrowing the scope of the limitation injunction as directed by the Ninth Circuit) and to abate the federal limitation action while related litigation proceeds in state court. Willis argued that the stipulation that she and the other claimants signed “converted this case into the functional equivalent of a single-claim case.” Although Chief Judge Mueller noted disagreement in the courts on the issue whether a multiple claimant case can be effectively converted into a single claimant case, she was persuaded by the analysis in the Eleventh Circuit’s Beiswenger decision and evaluated the stipulation of all of the claimants that, in the event Williams Sports Rentals was entitled to limit liability, they would not seek to enforce any judgment that would require Williams Sports Rentals to pay damages exceeding the amount of the limitation fund and stipulating regarding the priority of claims against the limitation fund. Chief Judge Mueller found that this stipulation sufficiently protected Williams Sports Rentals’ right to limit liability, and she dissolved the stay. Chief Judge Mueller then considered Williams Sports Rentals’ argument that the issue of limitation of liability should proceed in the federal action and that the federal action should not be stayed pending determination of liability in the state suit. Williams Sports Rentals argued that it was inefficient for the state and federal courts to address overlapping issues, and Chief Judge Mueller agreed that “it is an understatement to say this case has not been a model of efficient litigation.” However, she believed that the purpose of the Limitation Act was to serve as a shield to protect the shipowner and that allowing the limitation question to be resolved first would turn the statute into a sword, rather than a shield. Chief Judge Mueller was reluctant to occasion further delay, but her concern was mitigated by the fact that the state action was set for a jury trial to begin this fall. Therefore, she abated the limitation action until the conclusion of the state proceedings (at which time she will decide what issues remain to be resolved in the limitation action).
Eastern Metal Recycling and Camden Iron & Metal chartered three hopper barges from Marine Steel and Thornton Transportation for the carriage of scrap metal. Claiming that the barges were damaged during the transportation of the scrap metal and were not repaired by the charterers based on the damages reflected in the off-hire surveys, Marine Steel and Thornton Transportation brought this suit in federal court in New York, asserting causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud in the inducement to contract, and negligence/gross negligence. The defendants moved for summary judgment on the counts alleging fraud in the inducement and negligence/gross negligence, and Judge Block agreed that the owners did not state valid claims for these counts. Judge Block explained that a party may be liable in tort for fraudulently inducing another to enter into a contract, but that claim involves the current ability to perform and not the failure to perform future acts required by the contract. As the fraudulent inducement claim was based on statements concerning the promise to repair the barges, the remedy was limited to damages for breach of contract. The owners sought to recover lost profit as a result of being unable to use the damaged barges for other jobs. Judge Block noted that consequential damages are generally available in tort cases but not for breach of contract in the absence of the plaintiff showing that such damages were foreseeable and within the contemplation of the parties at the time the contract was made. As the duties in this case arose out of the contractual relationship, the owners were not entitled to recover on a theory of negligence/gross negligence. Finally, the charterers argued that the owners were aware of the damage being caused during loading operations and that the failure to act barred recovery. Although the cases cited by the charterers involved tort claims, Judge Block noted that there was a similar doctrine in contract cases based on failure to mitigate damages. He held that the suit would proceed in a bench trial based on breach of contract, with the defendants entitled to assert that the owners were responsible for the damage and with the owners seeking a determination that lost profits were reasonably foreseeable and contemplated by the parties at the time of the agreement (as well as whether the cost of repairs exceeded the fair market value of the barges). See July 2023 Update.
The claims of Marine Steel against Eastern Metal were tried by Judge Block in January, February, and April 2024. Judge Block found that Marine Steel had agreed to make three barges available for Eastern Metal along with a tug. For several years the tug towed the barges to scrapyards where the barges were loaded with scrap metal and then towed to Eastern Metal’s facility where the scrap metal was unloaded. The parties did not enter into a written agreement, and Marine Steel billed Eastern Metal for damage to the barges that occurred during unloading and unloading. Eastern Metal paid the bills, and it also agreed in writing to pay for debris removal and steel repairs other than normal wear and tear for one of the barges. Based on this course of dealing, Judge Block found that Eastern Metal assumed a contractual duty to pay for repairs of the barges beyond normal wear and tear. When Eastern Metal terminated the at-will arrangement, surveys of the barges revealed damage caused during the loading operations, and quotes indicated that it would cost approximately $150,000 to return the barges to serviceable condition and approximately $300,000 to return them to a condition “as built.” Judge Block then considered the appropriate measure of damages and stated that maritime law awards the difference between the market value before and after the injury, subject to the limitation that damages cannot exceed the cost of repair. Eastern Marine argued that Marine Steel failed to mitigate damages because it had knowledge that the companies where the scrap metal was loaded were improperly using a grapple to load the barges. Judge Block disagreed, answering that the duty to mitigate damages arises for claims of negligence and not breach of contract as the breaching party has the same opportunity to prevent the damages. Eastern Marine also argued that the court should allocate fault to the loading entities who had entered into settlements with Marine Steel (based on the Supreme Court’s AmClyde decision). Judge Block disagreed that the proportionate fault rule from tort cases should apply in this case for breach of contract, and he agreed to apply the “one satisfaction” rule, reducing the recovery so that the plaintiff will not receive double recovery. Turning to the amount owed for repair of the barges, Judge Block rejected Eastern Metal’s argument that it only owed repairs that would put the barges in serviceable condition, as he believed the agreement was to repair all damages caused during the use of the barges—to return the barges to their condition prior to the hire of the barges. Judge Block found that the quotes provided by Marine Steel accurately reflected the cost of restoring the barges to their prior condition, resulting in total damages of $299,163. Judge Block did agree that the damages should be reduced by the amounts received by Marine Steel when it sold the three barges ($119,661) and by the amount received from the settling entities ($53,500). Therefore, he awarded damages to Marine Steel in the amount of $126,002 plus prejudgment interest. Judge Block denied Marine Steel’s request for attorney fees, subject to establishing that it was entitled to attorney fees for defending a frivolous counterclaim.
KLM Consulting, a Wyoming limited liability company headquartered in Texas, exports products from Texas to Douala, Cameroon. KLM arranged with Maersk Agency, the general agent in the United States for ocean carrier Maersk A/S, to ship personal property from Houston to Cameroon. The cargo arrived in the United Arab Emirates and did not arrive until months later in Cameroon. Claiming that the delay resulted in lost revenue of $250,000, KLM brought suit in Texas state court against Maersk Agency, and the freight forwarder, Panacea Shipping. Maersk Agency removed the case to the federal court in Texas, and Judge Hittner held that the case was removable under the Carriage of Goods by Sea Act, which governed the claim for delay. He transferred the case to the federal court in New York, in accordance with the forum selection clause in the Sea Waybill issued by Maersk, and Maersk Agency moved for summary judgment based on the provision in the Sea Waybill that prohibited any claim against any agent of the carrier (the Sea Waybill even identified Maersk Agency as an agent of the carrier, Maersk A/S). KLM did not oppose the motion, and Judge Engelmayer agreed with Maersk Agency and held that KLM’s case against it failed as a matter of law. See December 2024 Update.
After granting summary judgment to Maersk Agency, the court entered a default against Panacea and referred the amount of damages to be awarded to KLM to Magistrate Judge Cave. KLM submitted proposed findings of fact and conclusions of law to support an award in excess of $250,000. As Judge Hittner had held that KLM’s claims were subject to COGSA, Magistrate Judge Cave reviewed the terms of the bill of lading to determine the application of the package limitation. The bill of lading described the cargo as “1 Container Said to Contain 3 UNITS.” KLM did not declare a higher value. As there was no indication that KLM was charged separate amounts for the items, the parties appeared to have computed the freight based on the shipment of the container. Therefore, Magistrate Judge Cave recommended that KLM’s damages be limited to $500 (along with prejudgment interest).
Dequian Vincent was employed by Dupre Brothers Construction as a deckhand on its vessel M/V SJ. He asserts that he was injured on September 29, 2023 when he slipped and fell while climbing off the vessel. He brought this suit in federal court in Louisiana against Dupre Brothers, seeking to recover for negligence under the Jones Act, and unseaworthiness and maintenance and cure (including willful and arbitrary failure to pay maintenance and cure) under the general maritime law. Dupre Brothers paid for treatment to Vincent’s knee and back, but it stopped paying maintenance and cure on May 15, 2024 and moved for partial summary judgment that Vincent was not entitled to recover punitive damages for the failure to pay maintenance and cure. Vincent argued that he had not reached maximum cure, and Dupre Brothers argued that, even if its termination was improper, it was not guilty of arbitrary and capricious conduct to justify an award of punitive damages. Dupre Brothers submitted the report of Dr. Kevin M. Watson that Vincent’s back claim was not related to his workplace injury and that Vincent had reached maximum cure. Vincent submitted the reports of treating physicians Dr. Suneil Jolly and Dr. Erik Davis that Vincent’s injuries were most likely caused by his fall and that his treatment was curative because it improved his physical condition, eliminated or reduced his chronic pain, and allowed faster recovery and cure of anatomical and symptomatic issues. Judge Africk agreed with Dupre Brothers that treatment intended to manage pain and improve function is palliative and does not entitle the seaman to maintenance and cure. However, Judge Africk did not believe that Dr. Watson’s report was sufficient to unequivocally conclude that Vincent had reached maximum cure, as “treatment for pain can be curative if it addresses the root causes of pain or if it corrects a physical abnormality.” Judge Africk noted that Dr. Watson’s report concluded that Vincent did not receive benefit from the interventions to his back, but that did not establish that other interventions would be ineffective or that his back pain was permanent. And, with the contrary opinions from Vincent’s physicians, Judge Africk concluded that Dupre Brothers had not established unequivocally that Vincent had reached maximum cure. As to whether the evidence was sufficient to support an award of punitive damages, Judge Africk concluded: “Because defendant terminated payments in reliance on its own physician, while plaintiff’s physicians disagreed that MMI had been reached, there are genuine issues of fact as to whether defendant terminated plaintiff’s payments arbitrarily and capriciously.”
This litigation arises from the allision between the M/V YOCHOW and the barge OSG 243 that was moored at a dock in the Port of Houston. The allision damaged both the barge and the dock where the barge was moored. The YOCHOW was owned by Grand Famous Shipping, which entered into a ship management contract with Beikun Shipping and time chartered the vessel to China Navigation Co. (New York Produce Exchange form). Judge Ellison heard motions for summary judgment of several of the parties and issued rulings on them. He granted the motion of OSG, denying the claim of the YOCHOW interests that OSG’s docked barge was not properly lighted. Judge Ellison rejected the testimony of the Captain of the YOCHOW that neither he nor the compulsory pilot on the YOCHOW saw the barge, as the pilot’s testimony, video evidence, and an email from the Coast Guard Marine Safety Specialist established that the barge was illuminated prior to the incident. Judge Ellison concluded that the lack of expert testimony, coupled with the presumption of fault from THE OREGON, caused there to be no genuine issue of material fact regarding the negligence of OSG. The YOCHOW interests also contested the allegations of unseaworthiness asserted against the YOCHOW, arguing that the warranty of seaworthiness only applies to claims of crew members. Citing cases in which the Fifth Circuit analyzed evidence of unseaworthiness proffered by non-seamen limitation claimants, Judge Ellison denied the YOCHOW interests’ argument. Additionally, as he was going to have to hear evidence of negligence, Judge Ellison declined to dismiss the claims of gross negligence on the part of the YOCHOW. Finally, Judge Ellison addressed the arguments of the Port of Houston, whose dock was damaged by the allision, that the YOCHOW was liable to the Port for breach of the Port’s tariff. As the YOCHOW owner and manager had not signed the berth application (containing the terms and conditions of the tariff), and as the charterer of the vessel was the party who received the services of the Port, Judge Ellison dismissed the Port’s claims for breach of contract against the YOCHOW owner and manager. See August 2020 Update. On September 15, 2020, however, Judge Ellison granted reconsideration and sustained the Port’s motion for summary judgment that the YOCHOW was subject to the Port’s tariff. The application of the Port’s tariff was raised again when OSG, owner of the docked vessel that was exonerated of fault, moved for summary judgment on the contract claims presented by the Port against OSG. The Port cited Subrule 059 that provided for liability for “Users causing damage” to Port property or facilities. As the Port presented “no evidence to indicate that the Barge served as anything other than a big metal bumper” between the YOCHOW and the dock, Judge Ellison held that Subrule 059 could not be the basis for contractual liability of OSG. The Port also cited Subrule 052(5)(a), which provided that Users are responsible for all damages or injury to Port property or facilities occurring during the occupation or use, without regard to who caused it. Judge Ellison did not apply that provision to OSG as it conflicted with Subrule 059. Additionally, the context of the Subrule and the evidence militated in favor of a narrow reading. After OSG filed its motion, the YOCHOW sought to reconsider the ruling from a year earlier that the tariff applied to the YOCHOW. Judge Ellison did not find a sufficient reason for giving the YOCHOW a “third bite at the apple,” noting that it appeared that YOCHOW had “read OSG’s Motion and regretted not making the argument.” However, if he were to consider the argument, Judge Ellison did not consider it to be sufficiently persuasive to qualify for reconsideration. See December 2021 Update.
Judge Ellison then considered the motion for summary judgment of China Navigation that it was not liable for damages to the dock. He first addressed the language of the charter and held that the charter reserved navigation to the owner. As there was no evidence that China Navigation directed the operations of the vessel or meddled in its procedures, Judge Ellison rejected the dock’s theory that China Navigation should be considered the de facto owner of the YOCHOW. Judge Ellison then considered the decisions holding that the charterer’s duties do not stem solely from the charter (contract principles) but also arise from independent principles of tort law. The lessor of the dock asserted that China Navigation was negligent for chartering the vessel without vetting the owner’s finances or the vessel’s safety protocols, but Judge Ellison declined to extend a duty to the time charterer to vet the owner’s financial stability or safety protocols in the traditional time charter context. See January 2022 Update.
The lessor of the dock appealed, presenting questions whether the charterer exercised sufficient operational control over the vessel so that it should be considered its de facto owner and whether the time charterer should have a duty to vet a vessel owner prior to executing a time charter. With respect to the control, the dock did not argue that the time charter contractually transferred control over the vessel to the charterer. Instead, the dock argued that the charterer held itself out to the world as the owner because it was allowed to rename the vessel, paint the vessel its house colors, paint its logo on the vessel, and fly its house flag. The charterer was listed as the “Manager” in Lloyd’s Register of Ships, and the charterer directed the vessel’s captain to download its reporting software so that he could send data to the charterer. Writing for the Fifth Circuit, Judge Clement stated that the dock’s arguments were “unmoored from reality.” She noted that if the parties had wanted to shift responsibility to the charterer, they could have done so. “There’s a charter party for that—a demise charter. But they didn’t.” She found the allegations of control to be “unpersuasive” as they reflected the division of responsibility set forth in the charter party, which did not give the charterer operational control over the vessel. Judge Clement then turned to the argument that the charterer acted negligently by failing to vet the owner’s finances and safety management protocols prior to executing the time charter (asserting that diligent investigation would have discovered that the owner and manager were “woefully insufficient”). Judge Clement was “on board” with the charterer’s response that the duties of a time charterer to a third party are well-defined and do not extend beyond certain “spheres” of activity—negligently conducting its activities as time charterer. Thus, the charterer could be liable for negligence even though it did not assume control of the vessel. However, time charterers are not liable, as a matter of law, for acts taken outside the spheres unless the parties agree by contract or custom. As ensuring the competence of a contractual counterparty does not fall within the traditional sphere of activity over which time charterers exercise control, and as there was no indication that the parties intended to vary the spheres of responsibility, Judge Clement held that the charterer did not owe a duty to vet the owner’s finances or safety management protocols prior to executing the time charter. [Judge Clement also held that the charterer was not responsible for discovering the owner/manager’s work/rest standards and for violating Stubb’s twelfth commandment, “sleep when you can,” citing Herman Melville, Moby Dick]. Accordingly, the Fifth Circuit affirmed the dismissal of the charterer. See September 2022 Update.
Judge Ellison then held a bench trial on the issues of liability, limitation, and damages. He found that the cause of the collision was the fault of the helmsman, Nan Win, mistakenly steering the YOCHOW hard to port instead of hard to starboard. Judge Ellison did not find that Win was fatigued or that any fatigue was the cause of the allision. Judge Ellison also found that Captain Xiaofei Yang had been on duty for a continuous 18 hours before the allision, in violation of 46 C.F.R. Section 15.1111, invoking the presumption of causation from THE PENNSYLVANIA Rule; however, as Captain Yang was not present on the bridge during the allision (the Second Officer had assumed control), Judge Ellison did not find that Captain Yang’s fatigue was a cause of the allision. Although Win is able to speak only Burmese and maritime English, Judge Ellison did not find any evidence to suggest that Win’s faulty turn was the result of a language or communication issue. Therefore, he concluded that the only relevant act of negligence that proximately caused the allision was Win’s steering error. This conclusion led to his finding that the vessel was not unseaworthy, as there was no condition of the vessel that caused the faulty steering. Judge Ellison then considered whether the owner had privity or knowledge of the cause of the allision. Judge Ellison found no evidence that the owner failed to exercise reasonable care in hiring or training Win or that Win had a history of navigational errors of which the owner should have been aware. Although there was evidence that the owner had some shoddy recordkeeping with respect to the hours worked, Judge Ellison did not believe that proper recordkeeping would have caught any violation relevant to the accident “as there was no violation to catch.” Judge Ellison believed that this was a steering error for which the owner was entitled to limit liability. He then turned to the claims against the total limitation fund of $18,983,949.99, stating that the damages in this case were governed by the “new for the old rule,” that the injured party “is entitled to recover only that which is necessary to restore his damaged property to the same condition as existed immediately prior to the delict.” TPC Group, which leased the dock from the Port of Houston Authority, completed temporary repairs on the dock so that it would be serviceable while a new dock was constructed. The owner of the YOCHOW argued that the repairs adequately restored the dock to its condition prior to the accident and that the recovery should be limited to the cost of those repairs. Judge Ellison concluded that the repairs did make the dock serviceable, but they were insufficient to return the dock to its pre-allision condition because of the inability to install a new vertical support system under the dock. Judge Ellison then addressed whether the allision caused the dock to suffer a total loss, constructive total loss, or partial loss. As the temporary repairs could not return the dock to its pre-allision condition, Judge Ellison concluded that the dock was a total loss. He noted that this was not the archetypal total loss case because the dock was still standing and was in use at the time of the trial, but he could not find that the dock was a constructive total loss or partial loss because it could not be repaired [how can you determine if repair costs exceed the pre-allision value if the dock cannot be repaired?]. Accordingly, Judge Ellison sought to determine the market value of the dock at the time of the allision. As there was no applicable market value for the dock, Judge Ellison used replacement cost less depreciation and betterment for the measure of damages. He found that replacement of the dock would cost $25,406,154, that the new dock had an expected life of 75 years, and that the original dock had a remaining useful life of 25 years. Therefore, he reduced the replacement cost by two thirds (not including the cost of demolition of the old dock). This resulted in replacement damages of $9,068,718. As he held that the dock was a total loss, Judge Ellison ruled that the dock lessor was not entitled to recover consequential damages for the temporary repairs that it performed. In summary, Judge Ellison awarded the dock lessor $9,068,718; he awarded the owner of the barge $3,600,000 in physical damage and loss of use in accordance with the stipulation of the parties; and he held that the owner of the YOCHOW was entitled to limit its liability (but the damages were within the limitation fund).
Janita Mathis was a passenger on the MARGARITAVILLE AT SEA PARADISE. She took a shower in her cabin in the small basin surrounded by a shower curtain, and she noticed that the water was not draining properly. When she finished her shower, she stepped out onto the floor and slipped. As she lay on the floor, she noticed that the floor was wet with soapy water that had flowed out of the shower basin. Mathis brought this suit against the cruise line in federal court in Florida, and the cruise line moved to dismiss the complaint. The cruise line argued that Mathis failed to plead a plausible claim that the cruise line had notice of the shower drainage problem and related slipping hazard. Mathis cited her pleading that, before the cruise, an unknown crewmember was required to clean the cabin, including running water in the shower to clean the basin. The crewmember should have known that the water was not draining properly, creating a hazard. Additionally, Mathis pleaded that she and her husband had talked to other passengers after the accident, and they advised that their showers were not draining properly. Mathis’ cousin stated that a crewmember on a subsequent cruise on the same vessel admitted that drainage was a constant problem. Magistrate Judge McCabe believed that these assertions were sufficient to support notice to the cruise line and denied the motion to dismiss the direct liability counts. The cruise line sought dismissal of the vicarious liability counts because they were based on the same conduct of the crewmember who cleaned the cabin before the cruise and who should have corrected the condition of the shower or warned of it. Magistrate Judge McCabe questioned how, if the pleadings of the first two counts were true, the crewmember could be responsible for a ship-wide problem. However, Mathis asserted that the vicarious liability counts were pleaded in the alternative and assumed that the problem was a one-time drainage problem confined to Mathis’ cabin. Therefore, there was plausible negligence of the crewmember for failing to make sure that the shower was properly working or to report it for maintenance (or failure to warn of that drainage problem). Accordingly, Magistrate Judge McCabe recommended that the motion to dismiss be denied. See May 2024 Update.
The cruise line appealed the recommendation to Judge Cannon, who agreed with and adopted the recommendation. With respect to the counts for direct liability, Judge Cannon distinguished the cases cited by the cruise line with respect to notice of “one-time” hazards and concluded that there was a reasonable inference that the cruise line was on notice of shower drainage problems causing overflowing shower basins, even if the allegations did not pinpoint with specificity the exact point at which the drainage issue came into being. Turning to the vicarious liability counts, the cruise line argued that there was a conflict between the direct and vicarious liability claims against the same principal defendant when both claims arise from the same negligent maintenance of the premises, reasoning, how can a single agent be negligent for failing to cure or warn of a dangerous condition (vicarious liability) while being held liable for a broader pattern of conduct resulting in a dangerous condition that is not attributable to one specific agent (direct liability)? Judge Cannon answered that the passenger was entitled to plead the counts in the alternative and added that whether the passenger could produce evidence to support the negligence of the crewmember was an issue better reserved for a motion for summary judgment.
The Update has discussed cases involving limitation of the owner’s liability and the criminal liability of the captain in connection with the fire on the CONCEPTION (moored off Santa Cruz Island) in 2019 that resulted in the deaths of 34 people (see August 2021, December 2023 and May 2024 Updates). The personal representatives of the decedents brought this action in federal court in California against the United States, pursuant to the Suits in Admiralty Act, alleging that the Coast Guard was negligent in inspecting and certifying the CONCEPTION. The United States pleaded the discretionary function defense in its motion to dismiss, arguing that the court lacked jurisdiction over the claims. The plaintiffs allege that, seven months before the fire, the CONCEPTION underwent an annual inspection and hull exam while the vessel was in dry dock. The Coast Guard allowed the vessel to continue operating without requiring the vessel to repair or replace wiring that the plaintiffs believe contributed to the fire and without identifying plastic trash cans and furnishings as safety hazards. The plaintiffs argue that the applicable regulations impose mandatory obligations on inspectors; however, Judge Anderson disagreed, answering that the regulations “actual impose obligations on vessel owners and grant to the Coast Guard and its inspectors considerable discretion when conducting vessel inspections. Judge Anderson concluded that the statutes, regulations, and policies governing the Coast Guard’s inspection of passenger vessels vest the Coast Guard with the type of discretion that satisfies the test enunciated by the Supreme Court for application of the discretionary function exception. Therefore, Judge Anderson dismissed the suit for lack of subject matter jurisdiction.
This litigation arises from a collision in the Mississippi River between the M/V REPOSE, owned by Intracoastal Tug, and the M/V LOUISE, owned by M/V Kristin, LLC and operated by Magnolia Fleet. Intracoastal Tug brought suit in federal court in Louisiana against Magnolia Fleet and the LOUISE for repair costs and lost charter hire, and Magnolia Fleet and M/V Kristin instituted a limitation action in the same court with respect to the LOUISE. The cases were consolidated, and Quinices Hill, a seaman on the REPOSE, brought a claim for injury sustained in the collision. The only claims in the limitation action were those of Hill and Intracoastal. Hill moved to bifurcate the limitation and non-limitation issues in the litigation, citing the procedure adopted by the district courts in the Eastern District of Louisiana in multiple claimant cases in which liability, limitation, and apportionment of fault are tried in the federal forum, and, in the event limitation of liability is denied, damages are tried in the forum of the claimant’s choosing. Magnolia Fleet and Intracoastal argued that the complexity of the case disfavored bifurcation as there were overlapping issues that included Intracoastal’s claims for reimbursement of maintenance and cure and recovery of its property damage. Judge Lemelle disagreed, concluding that “the limited nature of the staged inquiry should not elongate these proceedings and, instead, will very likely streamline the issues initially under consideration.” Accordingly, Judge Lemelle agreed to the bifurcation.
Laura Dumont, who is visually impaired and requires a walker to ambulate, booked a cruise on the CARNIVAL MARDI GRAS, notifying the cruise line’s booking agent of her legal blindness and requesting a handicap accessible room. When Dumont entered her room on the ship, she walked into a central beam in the middle of the room and was injured. Dumont brought this suit against the cruise line in federal court in Florida alleging a count for the booking agent’s negligence (vicarious liability) and a count for direct liability of the cruise line. The cruise line moved to dismiss the complaint, and Judge Moore agreed that the direct liability count was an impermissible shotgun pleading because it combined claims for failure to warn, failure to maintain, negligent training, and possibly others. As the count “plainly commits the sin of not separating into a different count each cause of action or claim for relief,” Judge Moore did not reach the cruise line’s argument that Dumont did not properly plead notice. As to the claim for vicarious liability, the cruise line argued that Dumont did not plausibly allege what negligent or tortious acts the booking agent committed for the cruise line to be vicariously liable. Judge Moore disagreed, finding the pleading sufficiently stated a claim based on the allegations that the booking agent was made aware of Dumont’s disability and selected a room that was inappropriate based on her disability. Therefore, the count for vicarious liability was sufficient, but Dumont would have to amend the count for direct liability.
Malcolm A. McInnis served as a naval helicopter mechanic on the USS MIDWAY, ENTERPRISE, NEW ORLEANS, and RANGER, repairing Sikorsky SH-3 helicopters at sea and at naval bases. The helicopters allegedly contained component parts made with asbestos that McInnis would routinely handle and replace. McInnis was diagnosed with lung cancer and died, and his widow brought suit in state court in Philadelphia, Pennsylvania against suppliers of products that allegedly contained asbestos. The case was removed to federal court in Pennsylvania and was transferred to the federal court in Delaware. Sikorsky and Hexcel moved for summary judgment, and Magistrate Judge Fallon noted that the parties agreed that the claims were governed by maritime law when McInnis worked on naval vessels and under California law when he worked on naval bases. Hexcel argued that the plaintiff had not presented evidence that McInnis worked in the vicinity of its adhesives or honeycomb core during his time in the Navy or that any honeycomb to which he may have been exposed contained asbestos. The plaintiff produced evidence that McInnis had worked with Hexcel products, but the witnesses could not identify specific Hexcel products that contained asbestos. Accordingly, Magistrate Judge Fallon recommended that Hexcel’s motion be granted. Judge Fallon found sufficient facts of exposure to asbestos-containing materials used in the helicopters to deny Sikorsky’s motion. Sikorsky objected that the testimony relied on by the plaintiff was hearsay because the witness learned the partis contained asbestos through parts manuals that had not been produced in discovery. However, Magistrate Judge Fallon held that hearsay statements can be considered in response to a motion for summary judgment if they are capable of admission at trial. Magistrate Judge Fallon also found sufficient evidence that Sikorsky did not supply a bare-metal helicopter and that the helicopters were equipped with asbestos-containing components. Therefore, she recommended denial of Sikorsky’s motion. Magistrate Judge Fallon then addressed Sikorsky’s government contractor (Boyle) and derivative sovereign immunity (Yearsley) defenses. She found fact disputes that caused her to recommend denial of both defenses (noting that “ordinarily . . . defendants are not entitled to summary judgment pursuant to the government contractor defense”). Finally, Magistrate Judge Fallon recommended granting the defendants’ motion to exclude Dr. Peter Tkacik (mechanical engineer) as an expert because he lacked experience in industrial hygiene, occupational health, or material science as it relates to asbestos and because he did not review materials, such as drawings or specifications for the alleged asbestos-containing component parts of the helicopter, but she recommended denial of the defendants’ objections to the expert opinions of Dr. Arthur Frank, a board-certified physician in the field of Internal and Occupational Medicine and an expert on disease caused by asbestos, and Dr. Jonathan Gelfand, a practicing pulmonologist who ahs been giving expert testimony since the 1990s.
Major Glen Corp. owned the PATRIYACHT, a 33-foot private pleasure vessel that cruised on Lake Michigan. During the winter, the vessel was stored at the Marine Services marina in Dolton, Illinois, which is connected to Lake Michigan by the Little Calumet River. The parties agreed that Marine Services would provide indoor heated storage for the vessel for the winter of 2021-2022. A fire erupted in the building in which the PATRIYACHT was stored in May 2022, and the vessel was a constructive total loss. Five months later, Major Glen filed this limitation action in federal court in Illinois, and one claim was filed within the time set by the court—a claim by Progressive as the insurer for Robert Wojnovich, owner of a Sea Ray Sundancer that was damaged in the fire. That claim settled, and the court entered a default against all other claims resulting from the fire and closed the limitation action. A month after the court closed the case, Nationwide Casualty, insurer for Marine Services, sought to vacate the defaults so it could bring a subrogation claim against Major Glen. Marine Services had received notice of the limitation action, but it did not notify its insurer, Nationwide Casualty. Judge Seeger began his analysis by considering whether the court had admiralty jurisdiction over the limitation action, noting that the tests for tort and contract jurisdiction are different. The complaint evoked both tort and contract: “The Fire and any claimed injuries and damages therefrom were not caused or contributed to by any breach of contract, fault, neglect, or wrongdoing on the part of Plaintiffs . . . but rather, [were] caused in whole or in part by the breach of contract, fault, carelessness, and negligence of third parties . . . .” With respect to tort claims, Judge Seeger concluded that the claims ran aground on the locality part of the test as the vessel was “a dry boat on dry land.” Therefore, he held that the court lacked subject matter jurisdiction to the extent the complaint sought to limit liability for tort-based claims. Judge Seeger reached a different conclusion with respect to contract claims, quoting that it is “widely accepted that a contract to store a boat for the winter season is a maritime contract . . . regardless of whether the boat is kept on land or in water.” Accordingly, he held that a contract claim between Marine Services and Major Glen would fall within the court’s admiralty jurisdiction. The wrinkle with contract claims, of course, is the personal contract doctrine: “Personal contracts entered into by a shipowner are not subject to the Limitation Act.” Judge Seeger then had to consider the effect of the final judgment and concluded that the Limitation Act covered any claims involving potential claimants. Nationwide sought to vacate that judgment for lack of subject matter jurisdiction. The question was presented whether the personal contract doctrine involved the merits or jurisdiction. Judge Seeger noted the disagreement in the courts on what is a jurisdictional challenge to limitation of liability, but he concluded that the court had jurisdiction over any contract claim, and Nationwide’s challenge to the jurisdiction to enter the default failed. To the extent that Nationwide challenged the default based on the personal contract doctrine, that was a merits challenge that was too late. Therefore, Judge Seeger vacated the default to the extent it covered tort claims, but he did not vacate the judgment to the extent that it covered contract claims.
Edmund John Healy and his wife Deborah Healy were passengers on the NORWEGIAN BLISS for their 14th cruise with the cruise line. They booked the ATV Adventure & Village Tour shoreside excursion in Mexico, operated by Vallarta Shore Excursions. The tour guide took the group on ATVs on a cobblestone road down a hill when the guide stopped suddenly, resulting in Edmund and his ATV colliding with the guide’s ATV. Deborah was right behind Edmund, but she was able to stop her ATV before colliding with Edmund or the guide. Edmund’s ATV landed on him, resulting in Edmund’s death. Deborah and Stephen Healy brought this action in federal court in Florida against the cruise line for negligence, negligent selection and retention, negligent misrepresentation, vicarious liability (apparent agency), and negligent infliction of emotional distress, and the cruise line moved for summary judgment on all of the claims. The cruise line argued that the plaintiffs did not establish that the cruise line had notice of the dangerous condition that caused the incident from its ten-year history of working with the excursion operator. However, Judge Moore found evidence that the cruise line should have known of the dangerous conditions of driving on cobblestone roads down hills with blind corners and steep turns with inadequate helmets and safety instruction as the cruise line had a practice of routine inspection of the excursion. Judge Moore’s conclusion was supplemented by a prior incident in which a vehicle struck a branch (an incident that may not have been factually similar but which should have put the cruise line on notice of the lack of proper safety equipment and instructions that were alleged as faults in that case). The cruise line also argued that the dangers of operating an ATV were open and obvious, and Judge Moore agreed that there is an inherent danger that a vehicle might be involved in a collision with a vehicle that was carelessly driven by another person; however, Judge Moore believed it is unreasonable to posit that the danger of driving with inadequate training and equipment is a foreseeable risk that a participant assumes on an ATV excursion. Judge Moore also rejected the argument that the plaintiffs failed to establish that the faults they asserted were the proximate cause of the harm as their expert opinions supplied the causation. The cruise line challenged the counts for negligent selection and retention for lack of evidence that the cruise line should have known of any particular unfitness of the excursion operator prior to the incident. Judge Moore found sufficient evidence of negligent retention, reasoning that the cruise line should have known of the dangerous terrain, inadequate equipment, and inadequate safety instruction. He added that the cruise line was apparently unaware that the excursion operator subcontracted the tour, in violation of its contract with the cruise line. As to the selection of the excursion operator, the cruise line no longer had any documents from its selection process ten years earlier, and Judge Moore concluded that the cruise line could not establish that there were no fact questions with respect to its investigation of the excursion operator. Turning to the misrepresentation claim, Judge Moore reviewed the statements made by the cruise line about the excursion and found them to be sufficiently factual and not merely non-actional puffery. The cruise line argued that the plaintiffs failed to establish that the representations were untrue, but Judge Moore found a dispute whether representations such as a “detailed safety instruction” were satisfied. In light of the language of the passenger ticket, the plaintiffs conceded that they could not establish that the excursion operator was an agent of the cruise line, and Judge Moore granted summary judgment on the apparent agency claim. Finally, Judge Moore agreed with Deborah that she was in immediate risk of physical harm so that she could maintain a claim for negligent infliction of emotional distress.
Naval Logistic (d/b/a Middle Point Marina) brought this action in federal court in Florida on June 27, 2023 to enforce a maritime lien for repairs to the vessel M/V FAMILY TIME, owned by Commercial Holdings Group, whose principal is Andrew Vilenchik. The dispute centered on whether the vessel’s condition was worse than what was disclosed, necessitating additional repairs. The vessel was arrested on September 7, 2023, and Middle Point Marina was appointed substitute custodian. Vilenchik appeared and sought reconsideration of the appointment of the marina as substitute custodian (and return of custody of the vessel to the U.S. Marshal), arguing that the marina had caused damage to the vessel and was not an appropriate custodian. Judge Scola noted that the courts routinely appoint substitute custodians on an ex parte basis based on allegations that the custodian had experience caring for vessels and acting as a substitute custodian. In this case the marina had made the proper allegations and provided the required indemnification. Judge Scola was not persuaded that the owner’s concerns for the fate of its vessels in the marina’s hands were well-founded, as the marina had the incentive to preserve the vessel to protect its own recovery. Therefore, he declined to reconsider his order appointing the marina as substitute custodian. See December 2023 Update.
On January 9, 2024, Middle Point Marina filed a motion for an interlocutory sale of the vessel, arguing that the costs of storage and maintenance were disproportionate to the value of the vessel and that the owner had unreasonably delayed in securing the release of the vessel. The marina stated that the vessel was accruing storage charges of $135 per day, and the amount that had accrued by February 2, 2024 was $23,704.79, excluding the salvage claim for saving the vessel from a maritime peril. The marina argued that two of the three grounds for an interlocutory sale under Rule E(9) were satisfied because almost six months had passed since the arrest on September 7, 2023 (longer than the four months usually consider to be sufficient) and because the expenses were disproportionate to the value of the vessel (estimated to have a value between $50,000 and $99,000). The owner did not offer an explanation for the delay, and Judge Scola held that the sale was warranted by the unreasonable delay. Although one of the conditions in Rule E(9) was sufficient, Judge Scola also addressed the argument that the expenses were disproportionate. The owner disputed the marina’s evidence, but it did not argue that the vessel was worth more than $100,000. Weighing the cost of storage against the value of the vessel, even at the high range of the marina’s estimate, Judge Scola concluded that an interlocutory sale was justified. Finally, the owner argued that the interlocutory sale would prejudice the counterclaim that it recently sought to file. Judge Scola responded that the interlocutory sale was merely a substitution of the proceeds of sale for the vessel and would not prejudice the counterclaim. Therefore, Judge Scola ordered the interlocutory sale of the vessel. See April 2024 Update.
The parties then filed cross-motions for summary judgment. Middle Point Marina argued that it notified Vilenchik that he would have to remove the vessel after he refused to approve the revised estimates for the cost of additional repairs, and this was a breach of the Agreement for which storage charges were owed. Vilenchik argued that he created a fact question on Middle Point Marina’s contract claim because he submitted an affidavit in which he argued that Middle Point Marina had caused damage to the vessel. Judge Scola answered that the claims made by Vilenchik were not responsive to the claim that Middle Point Marina provided necessaries (storage) for the vessel and that Vilenchik breached the contract by failing to remove the vessel. Vilenchik also argued that Middle Point Marina had not refuted the affirmative defenses raised by Vilenchik in the answer, but Judge Scola responded that the defendant, not the plaintiff, has the burden of proof with respect to affirmative defenses. Therefore, Judge Scola granted Middle Point Marina’s motion for summary judgment, but deferred ruling on the amount of damages, costs, and attorney fees until the conclusion of the case. Vilenchik moved for summary judgment that he was not individually liable as the principal of the vessel owner, Commercial Holdings Group. However, Judge Scola noted that Vilenchik had signed the Shipyard Agreement and placed his name on the line marked “Owner.” Additionally, Middle Point Marina disputed whether Vilenchik ever mentioned that Commercial Holdings Group was the owner. Therefore, Judge Scola denied Vilenchik’s motion.
On May 4, 2019, Jeffery Bardwell, a resident of Louisiana, injured his arm on a rig owned, operated, or managed by Valaris PLC and Ensco Inc. while the rig was working offshore near Abu Dhabi. Bardwell brought suit in state court in Harris County, Texas against Valaris and Ensco on October 22, 2021, seeking to recover under the Jones Act and general maritime law. The defendants moved to dismiss the claims as having been discharged in the bankruptcy proceeding filed by Valaris PLC in federal court in Texas on August 19, 2020. Bardwell did not file a claim before the bar date in the bankruptcy, but he sought emergency relief from the discharge to allow him to pursue his state claim. Before the hearing on the motion for relief, Valaris and Ensco moved to exclude the testimony of Bardwell’s expert physician, Dr. Matthew Hyzy, who was hired to create a life care plan for Bardwell. At a hearing on the motion seeking relief from the discharge, Dr. Hyzy testified that Bardwell’s anxiety was caused by the injury on the Valaris rig. During the cross examination of Dr. Hyzy, he was asked if he discussed Bardwell’s relationship with his ex-wife during his interview with Bardwell, and he responded: “No sir. That was not something that we discussed.” When asked if the breakup of his marriage could be a cause for depression, Dr. Hyzy answered: “That’s something that I’m not prepared to opine on. I didn’t have that discussion with Mr. Bardwell.” Bankruptcy Judge Isgur asked for briefing after the hearing, and Dr. Hyzy submitted a declaration that he had explored with Bardwell potential causes of his anxiety that could have arisen both before and after his injury and that he was able to consider potential alternative causes for the future anxiety. Bankruptcy Judge Isgur responded that Dr. Hyzy “does not get to change his testimony from the hearing by submitting the declaration. It is clear Hyzy did not consider Bardwell’s marital problems in reaching his diagnosis of Bardwell’s anxiety.” Bankruptcy Judge Isgur concluded that “Hyzy’s failure to consider this obvious alternative factor makes Hyzy’s opinion unreliable.” The question was whether Dr. Hyzy was, nevertheless, qualified to opine on some future needs. Bankruptcy Judge Isgur answered that “if a physician is willing to give testimony about one area of his supposed expertise and does so in a remarkably unprofessional manner, it raises serious questions about whether the physician is qualified to give any testimony.” He concluded: “Based on Hyzy’s lack of rigor with respect to his psychological analysis, and his willingness to reach conclusions on long term physical limitations without any meaningful examination, the Court concludes that Hyzy is not qualified under Daubert.” See June 2024 Update.
After the Judge excluded Hyzy’s testimony, Bardwell filed a motion for reconsideration, asserting that the Judge should not have excluded Hyzy’s testimony as to Bardwell’s physical injuries. Bardwell argued that Hyzy was retained to opine on the future medical costs of rehabilitating his crushed hand and not to testify as to causation or damages for mental anguish. Bankruptcy Judge Isgur noted that Bardwell did not narrow the testimony at trial only to physical injuries, and he reasoned that Hyzy’s direct testimony and the reasons for which he was offered placed the issue of his diagnosis of anxiety squarely before the court. Thus, the court could consider Hyzy’s diagnosis of anxiety in the assessment of the admissibility of Hyzy’s testimony. Bankruptcy Judge Isgur stated the issue that was presented: “It is whether Hyzy reliably applied the standard principles and methods of the practice. The Court must determine whether it is accepted medical practice to not explore other potential causes of anxiety before expressing views about anxiety.” Bankruptcy Judge Isgur held that Hyzy’s failure to consider the obvious alternative factor made his opinion unreliable, reiterating his previous conclusion: “Based on Hyzy’s lack of rigor with respect to his psychological analysis, and his willingness to reach conclusions on long term physical limitations without any meaningful examination, the Court concludes that Hyzy is not qualified under Daubert.”
Dorothy Bazan was a passenger on the CARNIVAL PARADISE. She attended a shopping program in the ship’s Normandie Lounge (auditorium). A raffle was conducted, and Bazan and others were invited to approach the stage and place ballots into a ballot box located on the floor of the auditorium stage next to the center staircase that leads up to the stage. The video reflects that Bazan walked down the middle aisleway of the Lounge until she reached the base of the staircase. She walked up to and around the curved base of the staircase to get to the ballot box, just to the right of the staircase. Bazan was aware of the staircase as she dropped her card in the ballot box and turned away from the stage and toward the staircase. Without looking down, she tripped on the side of the staircase and fell to the ground. She admitted that she did not notice the curved base of the staircase because she “didn’t pay attention” to it. Bazan brought this suit against the cruise line in federal court in Florida, and the cruise line moved for summary judgment. Bazan argued that the cruise line negligently failed to control a crowd of passengers who were rushing to the front of the Lounge, but Magistrate Judge Sanchez responded that the video contradicted that argument. The line was orderly, and no one stood between Bazan and the staircase. Magistrate Judge Sanchez added that there was no evidence that the cruise line breached any duty, reasoning that the mere fact that Bazan was injured during the event did not mean that the individuals who attended the event presented a reasonably foreseeable unsafe or dangerous condition. Magistrate Judge Sanchez also rejected Bazan’s claim that the cruise line failed to properly inspect and maintain the staircase. Bazan relied on the existence of chipped paint on the staircase and a work order detailing the repair of chipped paint. However, Bazan did not establish how any chipping of paint caused her injury. Bazan also argued that having a flared staircase leading to the center stage caused her fall, but Bazan did not produce any evidence that the cruise line was aware that the flare was a dangerous condition. Magistrate Judge Sanchez also rejected the argument that the staircase deviated from a number of codes and standards, but Bazan did not establish how the standards were applicable to this case. Finally, Magistrate Judge Sanchez held that the cruise line did not have any duty to warn of the crowd or condition of the staircase as the cruise line did not have notice of any dangerous condition, and the condition of the staircase was open and obvious. Consequently, Magistrate Judge Sanchez recommended that the cruise line’s motion for summary judgment be granted.
This is the first of two opinions dealing with bed bugs on cruise ships (see Orth v. Carnival Cruise Line below). Nedeva Coq was a passenger on the NORWEGIAN EPIC. She claims that there were bed bugs in her room, which bit her and infested her luggage, causing her to have to dispose of the luggage. She brought this suit in federal court in Florida against the cruise line for negligence, negligent infliction of emotional distress, and fraudulent concealment, and the cruise line moved to dismiss the complaint. Coq alleged that the cruise line knew or should have known that her cabin would have bed bugs that would bite her, but she did not allege any facts to support the claims. Her statement as to notice to the cruise line was “conclusory and relatively fact-free,” that she was informed and believed that the cruise line knew of infestations “from prior similar incidents as evidenced by numerous online and social media complaints.” Therefore, Magistrate Judge Goodman recommended that the complaint be dismissed for failure to allege notice with plausible facts. Magistrate Judge Goodman then addressed the cruise line’s objection to the claim for punitive damages. Magistrate Judge Goodman noted that some judges within the Southern District of Florida have held that punitive damages are not available in maritime passenger personal injury cases based on the Eleventh Circuit’s Amtrak decision, while other judges have held that punitive damages may be available upon a showing of intentional misconduct. Magistrate Judge Goodman did not have to join the dispute because Coq’s complaint did not allege intentional misconduct (the plaintiff must show that the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage would result, yet the defendant intentionally pursued the course of conduct, resulting in the injury). Magistrate Judge Goodman stated that the allegations were too vague and conclusory to support the conclusion that there was a high probability of a bed bug attack in her room. Therefore, Magistrate Judge Goodman recommended that the punitive damage allegations be stricken. Finally, Magistrate Judge Goodman held that Coq did not adequately allege a claim for fraudulent concealment because the count did not allege that the cruise line had a duty to disclose, and the other allegations did not meet the heightened pleading requirements of Rule 9. In summary, Judge Goodman recommended that the complaint be dismissed with leave to amend except for the claims for punitive damages because the facts in this case are not intentional or extreme enough to warrant recovery of punitive damages.
Central Boat picked up two deck barges, two spud barges, and one mud tug for Pontchartrain Partners, charterer, and transported them to a work site at Grand Lake Bridge and then to a jobsite at the Houston Ship Channel. Central Boat then submitted an invoice for $45,667.08 and brought this admiralty suit in federal court in Louisiana to collect the invoice, plus interest and attorney fees, after Pontchartrain Partners did not pay the invoice. After exchange of disclosures, Central Boat filed a motion for summary judgment, and Pontchartrain Partners responded that it needed discovery to obtain facts about the contract. After the parties exchanged discovery, Central Boat renewed its motion for summary judgment, and Pontchartrain Partners responded that Central Boat had not provided proof about the agreed upon amounts, terms, contractual authority, payment arrangements, or interest rate. Judge Ashe believed that Central Boat had presented sufficient evidence with the invoice and its declaration that a maritime towage contract existed and was performed and that the invoice had not been paid. Pontchartrain Partners did not refute any of the assertions, only complaining that no written towage agreement had been produced. Therefore, Judge Ashe granted summary judgment in the amount of the invoice together with prejudgment interest as the suit was an admiralty action for breach of contract. Judge Ashe did decline, however, to award attorney fees to Central Boat (based on the Louisiana open account statute), as the statute did not apply in a maritime case, and Central Boat did not cite any contractual provision supporting an award of attorney fees.
Shell Nigeria Exploration and Production, a Nigerian oil and gas company, hired Raytheon Energy for repair work on an offshore oil storage facility (TELFORD 31), and Raytheon hired the employer of Aaron Petry as a subcontractor. Petry was injured during a crane lift and brought suit against several entities in state court in Texas. Petry added Shell International as a defendant in an amended pleading, and Shell International removed the case to federal court based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Shell International argued that Petry’s claims related to arbitration agreements entered into 18 years earlier between Shell entities. Shell International argued that a non-signatory can be bound by the agreement if “it could conceivably affect the outcome of the plaintiff’s case.” Judge Rosenthal noted that Petry could embrace the contracts by knowingly seeking and obtaining direct benefits from the contracts or by asserting claims that must be determined by reference to the contracts. Neither situation was applicable as Petry did not knowingly claim benefits under the contracts, and he was not suing to enforce the terms of the contracts with his claims under the Jones Act and general maritime law. Therefore, the New York Convention did not provide a basis for removal (even if the New York Convention applied Judge Rosenthal held that Shell International had waived the right to remove by waiting 14 months to remove the case during which it conducted extensive discovery and file a motion for summary judgment). Consequently, Judge Rosenthal remanded the case to state court.
Columbia Diesel Castings operates a machine shop in Columbia, Mississippi as its sole place of business. It regularly does business with Pan American Power, providing crankshafts and other parts for Pan Am’s work of reconditioning and rebuilding diesel engines. Pan Am shipped the crankshaft involved in this case to Columbia Diesel for repair, and Columbia Diesel shipped the crankshaft back to Pan Am’s office in Louisiana. Pan Am reconditioned the engine and later sold it to Three Girls Fishing, based in Portland Maine. Rockland Marine installed the engine on Three Girls’ vessel, and two years later the engine failed because the crankshaft counterweight became unsecured from the crankshaft fasteners. Three Girls and its insurer (Western World Insurance) brought this suit in federal court in Maine against Pan Am for breach of contract, breach of warranties, and negligence, and Pan Am asserted a third-party complaint against Rockland Marine and Columbia Diesel for indemnity and contribution (Rockland Marine and other third-party defendants asserted a crossclaim against Columbia Diesel). Columbia Diesel moved to dismiss the claims against it for lack of personal jurisdiction, which presented the issue of whether there was specific jurisdiction over Columbia Diesel for this incident. Judge Torresen began by discussing relatedness, which requires the plaintiff to show a demonstrable nexus between its claim and the defendant’s forum-related activities such that the action arises directly out of the defendant’s specific contacts with the forum state. Pan Am and the other claimants argued that the engine failure arose of Columbia Diesel’s forum-based conduct because it repairs crankshafts for Pan Am and others that are sold across the United States, including in Maine. Columbia Marine responded that it only performs work in Mississippi, and it sent the engine to Pan Am in Louisiana. Judge Torresen agreed with Columbia Marine that the claimants did not show that Columbia Marine engaged in any activity in Maine that led to the engine failure. Although this conclusion would ordinarily resolve the jurisdiction issue, Judge Torresen considered the purposeful availment aspect of the specific jurisdiction test because the claimants contended this was a stream-of-commerce case (a defendant’s regular regular course of sales in the forum can demonstrate purposeful availment). Judge Torresen noted that Columbia Diesel did not communicate with anyone in Maine or have a relationship with customers in Maine. There was no evidence that it generated any revenue from customers in Maine, and it mostly contracted with companies based in Mississippi and eastern Louisiana. It was those companies that distributed Columbia Diesel’s products nationwide, not a distributor engaged by Columbia Marine to send its products into the stream of commerce. Therefore, Judge Torresen dismissed the claims against Columbia Diesel for want of personal jurisdiction.
Mark E. Ryon filed a limitation action in federal court in Florida, seeking to limit liability to the value of his 42-foot Mystic Powerboat in connection with an accident near Cape Coral, Florida in which Betty DeBoe was injured. Kenneth and Debra Bextermueller filed a limitation action in federal court in Florida, seeking to limit liability to the value of their Sea Ray Bow Rider 280 in connection with an incident during Hurricane Ian near Fort Myers, Florida. Ryon stated that the value of his vessel was $425,000 and that he would provide a security bond if a claimant made a demand after entry of an order confirming the report of a commissioner appointed to appraise the value of his interest in the vessel. The Bextermuellers stated that the value of their vessel was $21,392.50, and they identified Florida Farm Bureau General Insurance, the vessel’s insurer, as surety. They promised that Florida Farm would pay the vessel’s value as the court orders. Magistrate Judges Dudek and Mizell declined to approve the security and issue the stay, reasoning that the promises of the petitioners did not satisfy the requirements of Rule F. The Magistrate Judges denied the requests to approve the ad interim stipulations without prejudice.
Dahlia Orth and Lauren Meyer were passengers on the CARNIVAL MAGIC, assigned to stateroom 2280. They allege that the room was infested with bed bugs that “latched onto the Plaintiffs while they slept and sucked their blood until they were gorged.” Orth and Meyer brought this suit in federal court in Florida against the cruise line for negligence, negligent infliction of emotional distress, and fraudulent concealment. However, the negligence count alleged multiple theories, failure to inspect, failure to maintain, failure to warn, and failure to train. As the theories are conceptually different and require different proof, Judge Altman dismissed the complaint without prejudice to separate the negligence theories into different counts.
Scott Matz and others were passengers on United Airlines Flight 1722 from Hawaii to California when the plane took a “precipitous dive” and “came within seconds of crashing into the Pacific Ocean” before the pilots regained control of the plane. Malz and other passengers on the plane brought suit against United Airlines in the Circuit Court of Cook County, Illinois, alleging that United was negligent and seeking damages for emotional harm. United removed the case to federal court based on admiralty and diversity. The plaintiffs moved to remand the case, arguing that the saving-to-suitors clause barred removal, and United argued that diversity provided an independent basis for removal. It was undisputed that there was diversity between the plaintiffs and United; however, United is a citizen of the forum state (Illinois), and the plaintiffs invoked the ban on removal of diversity cases by forum defendants. United responded that the forum-defendant rule only bars removal when the sole basis for federal jurisdiction is diversity and that there was federal jurisdiction in this case based on admiralty and diversity. United relied on the decision in Curry v. Boeing, which denied a motion to remand on the basis that the forum-defendant rule is a question of “removal procedure unrelated to the substantive question of whether the suit in fact falls within the federal procedure.” Thus, when the substantive requirements of complete diversity and the amount in controversy are satisfied, “that was sufficient to avoid remand based on the saving-to-suitors clause regardless of the forum defendant rule.” Judge Durkin disagreed with Curry and instead followed the decision in Riyanto v. Boeing, in which the court considered each basis for removal separately. Therefore, Judge Durkin held that United could not remove under admiralty jurisdiction because of the saving-to-suitors clause, and it could not remove under diversity because of the forum-defendant rule, stating that “two-half jurisdictions” do not make a whole. Consequently, he granted the motion to remand.
Opinion Norwegian Cruise Lines
Jane Doe was a passenger on the NORWEGIAN SKY for its Summer Cruise Fest (Doe was celebrating her 33rd birthday). The cruise line hired Almighty Protection Services to provide security for the weekend. Almighty hired John Roe as a security guard. On July 3, 2023, Jane was feeling very intoxicated and became lost and confused on the way to find her cabin. She asserts that Roe approached her and offered help, but he took her to a different cabin and sexually assaulted her. Jane brought this suit in federal court in Florida against the cruise line (alleging negligence and strict liability and seeking punitive damages) and against Almighty (alleging negligence and negligent hiring/supervision and seeking punitive damages). Almighty moved to dismiss Jane’s first amended complaint, and the court agreed that the complaint was a shotgun pleading but that Jane had a viable cause of action and should be allowed to replead. Almighty moved to dismiss the second amended complaint for lack of subject matter jurisdiction and for conflating theories of liability. Jane argued that Almighty waived its argument on lack of jurisdiction by not raising it in its first motion to dismiss, and Judge Bloom easily rejected the argument as the court can dismiss the case for lack of subject matter jurisdiction at any time, even if it is not raised by the parties. Judge Bloom then addressed the allegations in the second amended complaint that there was jurisdiction based on diversity and admiralty (demanding a jury trial). Almighty argued that Jane failed to establish diversity and that she did not cite Section 1333 as a basis for admiralty jurisdiction. Judge Bloom responded that her allegation of a sexual assault on the vessel by an employee of a company hired to provide security on the vessel was sufficient to establish admiralty jurisdiction. Judge Bloom then turned to the two counts alleged against Almighty. Count 3 of the second amended complaint alleged that Almighty is liable for John Roe’s actions based on respondeat superior and for failure to train, vet, and supervise Roe. As the count committed the sin of not separating each cause of action or claim for relief into a different count, it was an impermissible shotgun pleading that required dismissal. Similarly, count 4 combined theories of negligent hiring and supervision. Therefore, Judge Bloom dismissed that count as an impermissible shotgun pleading. Jane sought leave to replead the complaint against Almighty, but Judge Bloom noted that she had filed three complaints and had sought leave from the court twice to amend. When Judge Bloom granted leave to file the second amended complaint, she explained that the complaint that Jane attached did not correct the problems in the prior complaint and that the court would dismiss the complaint with prejudice the next time if Jane did not correct the shotgun pleading. As Jane again submitted a shotgun pleading, Judge Bloom kept her word and dismissed the counts against Almighty with prejudice.
Jane brought two counts against the cruise line, negligence and strict liability. The cruise line argued that the negligence count must be dismissed because Jane could not recover on a negligence theory when she alleged a strict liability claim premised on the same tort. The cruise line also argued that the negligence count should be dismissed because it failed to allege that the assault was foreseeable. Finally, the cruise line sought dismissal of the claim for punitive damages because there were no allegations of intentional misconduct. Judge Bloom agreed that Jane could not plead causes of action for negligence and strict liability for the same tort. Jane argued that she was allowed to bring claims in the alternative, but Judge Bloom answered that alternative claims were not proper when premised on the same intentional tort. As the parties fully briefed the foreseeability argument, Judge Bloom also held that Jane had failed to allege any facts to support the argument that the assault was foreseeable to the cruise line (as opposed to Almighty). Therefore, the lack of allegations with respect to foreseeability was an additional reason for the dismissal of the negligence count against the cruise line. Finally, Judge Bloom noted the narrow exception for punitive damages for extraordinary intentional conduct, which was applicable whether the complaint alleged negligence or strict liability. Jane argued that punitive damages were warranted because the cruise line should have provided extra protection “given the rowdy nature of the cruise.” However, Judge Bloom did not consider that allegation to be sufficient to plead wanton, willful or intentional wrongdoing. Therefore, the claim for punitive damages was dismissed (for both counts). Citing the warning given after leave was given for the second amended complaint, Judge Bloom denied leave for Jane to replead the negligence count.
On December 31, 2022, the Motor Yacht ½ BARRELL was navigating in The Bahamas when water entered the vessel’s engine room. The yacht was taken to Willis Custom Yachts in Stuart, Florida and the vessel’s insurer, New Hampshire Insurance, paid the owner $276,820.65 for the repair (the owner retained a deductible of $14,350). Logan Marine serviced the vessel in 2021 and 2022, before it sailed to The Bahamas, for a cost of $170,719.61. New Hampshire, as subrogee of the vessel owner, brought this suit against Logan Marine for breach of contract, breach of the warranty of workmanlike performance, and negligence, asserting that Logan Marine failed to properly reconnect the port engine’s inboard riser exhaust cooling raw water hose. Logan Marine countered with the testimony of the workers who performed the work that they did not touch the hose during the work. Judge Rosenberg held a bench trial and found Logan Marine’s witnesses to be credible (they take turbochargers off every day without having to remove the raw water exhaust hoses). Therefore, Judge Rosenberg held that New Hampshire failed to establish any breach of contract, breach of warranty, or negligence and entered judgment in favor of Logan Marine.
Colyn Rich borrowed $94,850 from Machias Savings to purchase the F/V RICH ENDEAVOR and granted Machias a first preferred mortgage on the vessel. Rich defaulted after two modifications of the terms of the loan, and Machias brought this action against the vessel on January 30, 2024, resulting in the arrest of the vessel on February 9, 2024. Rich filed an answer on February 20, 2024, in which he denied some of the statements in the complaint, but he did not answer requests for admissions or seek to release the vessel from the arrest. On June 14, 2024, Machias moved for an interlocutory sale (and for permission to submit a credit bid), asserting that the vessel was subject to deterioration and the cost of keeping the property was excessive/disproportionate. Rich did not respond, and Magistrate Judge Nivison ordered the interlocutory sale. Although the court had not entered a judgment in favor of Rich, Magistrate Judge Nivison ruled that Machias had established that it had a maritime lien of not less than $86,838.47 (plus interest, costs, and custodia legis expenses) and that no one else had asserted a lien. Therefore, he authorized Machias to submit a credit bid up to $86,838.47. See August 2024 Update.
No objections were filed, and Chief Judge Walker agreed that the vessel was liable to deteriorate and that there was an unreasonable delay in securing release of the vessel. Therefore, he ordered the interlocutory sale. Chief Judge Walker also held that Machias had a priority lien by virtue of the ship mortgage of not less than $86,838.47 plus interests, costs, and custodia legis costs. Therefore, he agreed that Machias could make a credit bid up to $86,838.47
Jeremiah Hill was injured while serving as a seaman on the M/V BLIZZARD, owned and operated by Jackson Offshore. Jackson Offshore paid maintenance and cure benefits to Jackson and paid additional amounts to Hill in consideration of his signing an Advanced Wage and Benefits Agreement under which Hill agreed to submit his claims under the Jones Act and general maritime law to binding arbitration before the Society of Maritime Arbitrators. Jackson Offshore did treat Hill well, paying his net wages and renting him a furnished apartment in Harvey, Louisiana. The CEO of Jackson Offshore visited Hill frequently, reminding him that Jackson Offshore would provide ongoing financial support, but threatening that the company assistance would end if he retained an attorney. Judge Zainey described the events surrounding the execution of the agreement as “troubling to say the least,” and Hill stated that he would not have signed the agreement had he been allowed to consult an attorney based on what he now understands as his rights as a seaman. Hill did consult an attorney and brought this suit in federal court in Louisiana under the Jones Act and general maritime law. Jackson Offshore moved to stay the suit and to compel arbitration, and Hill argued that the court should declare the agreement null and void. Jackson Offshore cited the delegation clause in the agreement and argued that the arbitrators, not the court, should decide the issues of fraud, coercion, and duress because those issues challenge the agreement as a whole and not just the delegation clause. Judge Zainey was not persuaded that Hill was challenging only the agreement as a whole without also challenging the delegation clause. Accepting Hill’s allegations, Judge Zainey considered it plausible that fraud and duress vitiated his consent to the delegation provision of the agreement and potentially the arbitration clause itself. Consequently, Judge Zainey denied the motion to compel arbitration and allowed discovery to proceed, limited to the issue of the enforceability of the arbitration agreement (after which Jackson Offshore may renew its motion to refer the claims to arbitration).
Prospect Yacht Club entered into a contract with Carrier Marine Services to remove a submerged tree trunk and stump from Prospect’s dock in Prospect, Kentucky. The contract provided that Prospect would pay $6,400 for the services to be paid at the end of the day and provided Carrier Marine with a maritime lien against the vessel or vessels, cargo and/or equipment for all amounts due. Carrier Marine was unable to remove the tree stump and trunk in one day, and Prospect asked it to return a second day, but it was still unable to complete the work on the second day. Prospect then instructed Carrier Marine to stop the work, and Carrier Marine submitted an invoice for $12,992. Carrier Marine filed a UCC financing statement with the Kentucky Secretary of State, asserting a lien against the dock. Prospect then brought this suit in federal court in Kentucky, seeking a declaratory judgment that Carrier Marine cannot assert a maritime lien because the dock is not a vessel, that the contract does not establish a security interest, and that Prospect only owes Carrier Marine $6,400. Although the parties disputed whether Prospect agreed to a maritime lien in the contract, Judge Jennings stated that the contract had no bearing on whether Carrier Marine was entitled to a maritime lien, as a maritime lien can only arise by operation of law. She added that the existence of the lien depended on whether the dock is a vessel under 1 U.S.C. Section 3 and capable of being subject to a lien under the Commercial Instruments and Maritime Liens Act. Carrier Marine argued that the dock is a vessel because it is a LASH barge that can be readily moved and is engaged in commerce by pumping fuel aboard boats that visit the dock. Prospect responded that the dock holds a bar, restaurant, and other fixtures and is connected to shore by a ramp. Carrier Marine did not argue that the dock does move, only that it could be moved if necessary. As the dock does not transport fuel or food somewhere else to be served, Judge Jennings concluded that the dock lacked the hallmarks of a structure that a reasonable observer would find was designed to a practical degree to carry people or things over water (Lozman test). Carrier Marine also argued in the alternative that it was entitled to a salvage award for helping another at sea, but Judge Jennings answered that salvage is not available when there is a contract between the parties and as Carrier Marine did not provide assistance to a vessel. Finally, Judge Jennings noted that Prospect did invite Carrier Marine to come back the second day so that Carrier Marine would be entitled to $12,800 based on the hourly rate in the contract. Therefore, she declined to grant summary judgment to Prospect on its request for a declaratory judgment that it only owed $6,400. She did not grant a judgment to Carrier Marine for $12,800 as it did not file a counterclaim.
Ronald Fitch, a passenger on the CARNIVAL CELEBRATION, died while participating in the St. John Champagne Catamaran Sailaway snorkeling excursion in the U.S. Virgin Islands. According to his beneficiaries, Fitch, who had a heart condition, drowned in the strong ocean current while trying to swim to a location to watch turtles. Fitch’s grandson, on his own behalf and on behalf of other beneficiaries of Fitch who were also participants in the excursion, brought this suit in federal court in Florida against the cruise line and the excursion operators, and the defendants moved to dismiss the complaint. The defendants objected to the claims of misleading advertising and negligent misrepresentation, arguing that the statements were either true, irrelevant, or both. The plaintiffs focused on the core misrepresentation that the excursion was easy when it was in fact difficult. Judge Bloom agreed with the plaintiffs that the allegation was not a general promise about the safety of the excursion. Taken together with the claim that the excursion was suitable for four-year olds, Judge Bloom believed that it was possible to infer that the excursion was suitable for a man with a heart condition. As the cruise line requires that the excursion operators provide the cruise line with a draft description of the excursion that the cruise line uses in its marketing, Judge Bloom held that the excursion operators were also responsible for the representations about the excursion. The defendants also argued that the counts for negligent selection, negligent retention, negligent failure to warn, and general negligence should be dismissed because they failed to sufficiently allege notice of any dangerous condition. Judge Bloom first described the dangerous condition as a combination of the strong current, insufficient instructions, and insufficient equipment. She then agreed that the plaintiffs sufficiently alleged that the cruise line should have been aware of the dangerous condition from its approval process and yearly inspections. Additionally, the plaintiffs cited a death by drowning involving the same snorkeling excursion, although it was nine years before this incident. With respect to the failure-to-warn claim against the cruise line, Judge Bloom noted that the failure to warn is the most relevant duty for off-vessel excursions. In this case, Judge Bloom agreed that the plaintiffs had sufficiently alleged that the cruise line breached its duty to warn passengers of the dangers of the excursion for which she found the defendants had notice. Judge Bloom then addressed whether the claims failed because the danger associated with the excursion was open and obvious. She agreed that there is an open and obvious danger to swimming in the ocean; however, there was a fact question whether the danger in this case, the combination of the strong current with inadequate instruction and equipment, was open and obvious. Finally, the defendants challenged the commingling of causes of action under the general maritime law and the law of the U.S. Virgin Islands, Indiana, and Florida. The parties agreed that the general maritime law can be supplemented by additional state-law remedies; however, Judge Bloom stated that the claims under different laws must be pleaded in separate counts, complete with allegations explaining why the law is applicable. Accordingly, Judge Bloom gave the plaintiffs leave to replead the wrongful death claims to support the application of different laws.
Venita Michel, a passenger on the CARNIVAL CONQUEST, claims that she was injured while descending the ladder attached to the top bunk in her cabin when the ladder shifted violently to one side. She brought this suit in federal court in Florida, alleging vicarious liability for the fault of the crewmember who improperly and insufficiently secured the ladder and direct liability of the cruise line for negligent failure to warn and failure to maintain. The cruise line moved to dismiss all of the counts for failure to sufficiently plead notice. Judge Cohn agreed with respect to the counts alleging direct liability. Michel simply pleaded conclusions that the cruise line should have known of the condition because it existed for a sufficient length of time and because the cruise line should have acquired knowledge through prior incidents and maintenance and inspection of the area. As there were no factual allegations, the pleading was insufficient. Michel did refer to a case involving a ladder for a bunk bed on a different vessel, but the situation was too dissimilar to afford notice in this case. Michel also argued that she satisfied the notice requirement because of the nature of the hazard and the involvement of a crewmember with the hazard, but Judge Cohn answered that the contention lacked legal support because the Eleventh Circuit has rejected the argument that the cruise line can be liable without notice simply because its crewmember created the dangerous condition. The condition was distinguishable from the hot soup in the Fadraga case (see June 2024 Update) in which the high temperature of the soup was readily observable by the preparer. Accordingly, Judge Cohn required that the direct liability counts be repleaded with respect to notice. Judge Cohn rejected the cruise line’s argument that notice of the cruise line had to be pleaded in the count alleging vicarious liability, disagreeing with the position that the count was actually a direct negligence count disguised as a count for vicarious liability. Judge Cohn believed that Michel had sufficiently pleaded a claim for the crewmember’s failure to properly secure the ladder. The cruise line also objected to the count for failure to warn on the ground that Michel did not plead that the danger was not open and obvious. Although Michel did not use the words “open and obvious,” she did “just barely” plead facts that would allow the court to infer that a reasonable person would have been unable to readily appreciate how the ladder was meant to be secured and the risk associated with the ladder not being secured. Finally, Judge Cohn agreed that Michel had commingled some direct and vicarious allegations that should be properly separated in the amended pleading. See August 2024 Update.
After Michel filed an amended complaint, the cruise line moved to dismiss the counts asserting direct liability for failure to sufficiently plead notice. Michel added that the cruise line should have noticed the hazard during its inspections of the cabin (conducted at the beginning of each cruise) and that the cruise line was on notice because of a prior similar accident involving an unsecured bunk bed ladder on a different vessel. Additionally, Michel alleged that the cruise line instructs its crew on how to properly set up the cabins, including how to use the bunk beds and where to attach and secure the ladders. With respect to the inspection, Judge Cohn answered that the theory that a crewmember should have noticed that a ladder in its usual location was not stabilized by the grommets and slots that attach it to the top bunk was not sufficiently plausible to plead notice. Judge Cohn also rejected similarity of the prior incident because an additional bed was added to the cabin in that case, causing the placement of the ladder to be altered. It was plausible in that case that a crewmember would have noticed that the ladder was placed in a different position to accommodate the extra bed. Finally, the allegation that the cruise line instructs the crew on how to attach and secure the ladders did not establish that the improperly secured ladder was readily observable to the crewmember that had contact with it. Therefore, Judge Cohn dismissed the direct liability counts with prejudice for failure to adequately plead notice.
The yacht M/V SIRENA is owned by Mermaid Marine Holdings, which is beneficially owned by Nicholas Stocking and his wife Jennifer Blake. Stocking managed and operated the yacht through his wholly owned company, Aquarius East Tours. After purchasing the yacht, Stocking signed two identical Yacht Management Agreements with Maverick Yacht Management, LLC on behalf of Mermaid and Aquarius. Maverick is owned and managed by Johann Faubel and Juan Meireles. In preparation for the approach of Hurricane Ian in 2022, Faubel and/or Meireles decided to transport the yacht to its home dock in North Bay Village, despite 10-foot waves in the Atlantic Ocean near Haulover Inlet (off the coast of Miami-Dade County). Faubel made a sharp maneuver in response to an approaching wave, and the yacht violently slammed several times. An inspection revealed that the yacht had sustained substantial damage with repairs exceeding $800,000. Mermaid and Aquarius brought this suit in federal court in Florida against Maverick, Faubel, and Meireles, asserting claims for negligence and gross negligence, and adding a claim for breach of contract against Maverick. The defendants argued that the negligence counts should be dismissed because of the indemnification provision in the Yacht Management Agreements that the owner must indemnify Maverick for any loss arising from the use of the yacht or Maverick’s management of the yacht or services rendered. The plaintiffs argued that the indemnity did not apply to navigating or transporting the yacht because those are not services included in the agreement. Judge King agreed, at the motion to dismiss stage, that the decision to transport the vessel without obtaining the consent of the owner may not be a covered use of the yacht and that the services may not include navigating the vessel. The defendants also argued that the negligence counts should be dismissed because the economic loss rule provides that a tort action is not available where the basis for liability arises from a contract. As with the indemnity claim, Judge King found that there were sufficient allegations that the actions taken were outside the duties specified in the contract to defeat the application of the economic loss rule at the pleading stage. Judge King did dismiss the claims for gross negligence, as the plaintiffs merely repeated their negligence actions, and he found the allegations against Faubel and Meireles in their personal capacities as owners of Maverick were insufficient to pierce the corporate veil (although he noted that the allegations could be pleaded against them in an individual capacity). As Aquarius was no longer an active corporation, Judge King held that Aquarius could not maintain this action. However, he did grant Mermaid leave to amend its complaint to correct the deficiencies in its pleading.
Harbor Dredging contracted with Central Boat Rentals to charter barges for a dredging project in Texas for Stolt Tankers. After Central Boat’s invoices remained unpaid, it brought this suit in federal court in Louisiana against Harbor Dredging, which filed a third-party complaint against Stolt Tankers pursuant to Rule 14(c) (demanding judgment for both Harbor Dredging and Central Boat Rentals against Stolt Tankers). Harbor Dredging’s counsel withdrew, and Harbor Dredging failed to enroll new counsel. Central Boat Rentals then sought leave to file an amended complaint naming both Harbor Dredging and Stolt Tankers as defendants as an oblique action under the Louisiana Civil Code that provides: “If an obligor causes or increases his insolvency by failing to exercise a right, the obligee may exercise it himself, unless the right is strictly personal to the obligor.” The statute adds: “For that purpose, the obligee must join in the suit his obligor and the third person against whom the right is asserted.” Central Boat Rentals contended it is an aggrieved obligee entitled to bring an oblique action against Stolt Tankers. Magistrate Judge Dossier reasoned that in order for Central Boat Rentals to proceed with the amendment, it would have to establish that maritime law is silent on the availability of an oblique action, that Louisiana law fills that gap, and that Central Boat Rentals properly pleaded an oblique action. Stolt Tankers argued that maritime law is not silent because Rule 14(c) sets forth the maritime practice for impleader (which had been invoked by Harbor Dredging on behalf of Central Boat Rentals). However, Central Boat Rentals noted that maritime impleader is not interchangeable with an oblique action because maritime impleader does not allow Central Boat Rentals to step into Harbor Dredging’s shoes to pursue Harbor Dredging’s claims against Stolt Tankers. As maritime law is silent on the oblique action, Magistrate Judge Dossier believed it was appropriate to look to state law to fill the gap. With respect to the law to fill the gap, Magistrate Judge Dossier noted that the contract between Harbor Dredging and Stolt Tankers contained a choice-of-law provision for Texas law and that if Central Boat Rentals wants to step into the contractual shoes of Harbor Dredging, it can only do so through Texas law (although she added that, in the absence of the choice-of-law provision, maritime law would apply Texas law to the work in Texas by a Texas company for a company with its principal office in Texas). As Texas law would fill the gap, Magistrate Judge Dossier held that the amendment based on Louisiana law was futile and should be denied.
Hwy 31 Exchange, a Tennessee corporation, contracted with Shiplane Transport, a non-vessel operating common carrier located in Chicago, Illinois, to transport goods from Hwy 31’s warehouse in Columbia, Tennessee to Savannah, Georgia and then to Caucedo, Dominican Republic. According to Shiplane, Hwy 31 was the designated shipper for the transactions, and Mark Anthony Hafner and Tania Renee Oropesa (officers of Hwy 31) were listed as consignees on the bills of lading for the shipments. Shiplane claims that Hwy 31 did not pay the freight for the shipments ($186,540), resulting in the goods being held at the port to which they were shipped for which an additional $217,149.50 was owed in demurrage. Shiplane brought this suit against Hwy 31, Hafner, and Oropesa in federal court in New York, asserting that there was personal jurisdiction over the defendants in accordance with the forum-selection clause in the bills of lading. Shiplane attached bills of lading from prior shipments reflecting Hwy 31 as shipper (but not identifying Hafner or Oropesa as consignee), but Shiplane did not attach bills of lading for the shipments involved in this suit. The defendants moved to dismiss the suit for lack of personal jurisdiction, submitting declarations that they had not seen the bills of lading or forum-selection clause. In the absence of the bills of lading or sufficient evidence that the forum-selection clause had been communicated to Hwy 31, Judge Caproni dismissed the suit for lack of personal jurisdiction (she declined to transfer the case to Tennessee as Shiplane did not believe Tennessee was an appropriate venue).
These consolidated cases from the allision between the crewboat M/V MR. CADE (chartered by Alliance Offshore) and Southern Oil’s Corvus Platform located on the outer Continental Shelf offshore Louisiana. Jeremy Turner, a seaman on the vessel, was injured. Southern Oil brought suit in federal court in Louisiana against Alliance Offshore for damage to its platform, and Alliance Offshore brought a limitation action in Louisiana federal court. Southern Oil and Jeremy Turner brought claims in the limitation action, and Turner filed a motion to bifurcate so as to preserve his right to proceed in state court before a jury. He asked the limitation court to divide the litigation into three phases: 1) negligence of the vessel; 2) privity or knowledge of the bareboat charterer followed by the apportionment of liability or dismissal of the limitation proceeding and allowing Turner to proceed in the forum of his choice; and 3) stay the federal proceedings to allow Turner to try his damages to a jury. Magistrate Judge Currault noted that bifurcation had been denied in complex cases but that this case was more similar to cases in which judges found bifurcation to be appropriate. Balancing the interest of Turner under the saving-to-suitors clause with judicial economy and expediting the proceedings, Magistrate Judge Currault held that the court would try the issues of liability, limitation, and apportionment in a bench trial, and Turner’s personal injury damages would be tried separately. See June 2023 Update.
Alliance Offshore alleged that Southern Oil’s platform was not properly lighted, and Southern Oil added Sabik Oy as a defendant, alleging that Sabik Oy designed and sold a defective lantern that was placed on the platform by Southern Oil (the installer obtained the lantern from another platform, and there was no evidence that Southern Oil was the purchaser). Sabik Oy moved for summary judgment, which was initially opposed by Alliance, but Alliance withdrew its opposition, leaving Southern Oil arguing that there were material fact disputes whether the light was defective in design or construction–primarily the use of an ineffective bird deterrent and premature power depletion of the battery. Southern Oil also argued that although there had been extensive discovery, depositions were ongoing, including the deposition of Sabik Oy’s non-retained expert and the deposition of Southern Oil’s expert. Magistrate Judge Currault was not convinced by the argument on discovery as the deadline for discovery had passed, there was no motion to extend the deadline, and Southern Oil did not identify any facts to be obtained that might influence the summary judgment motion. As to the merits, Magistrate Judge Currault noted that Southern Oil had brought a claim based on maritime products liability as well as a redhibition claim under Louisiana law (akin to a claim for breach of implied warranty but without a requirement of privity). Magistrate Judge Currault explained that application of maritime law does not necessarily preclude application of state law, and that the only reported decision addressing application of redhibition in a maritime case held that redhibition supplemented maritime law to the extent it did not conflict with maritime products liability principles derived from the Restatement. Based on the evidence produced, Magistrate Judge Currault held that Southern Oil had created a fact dispute whether there was a product defect related to a higher output draw on the battery that caused premature depletion as well as an issue whether Southern Oil was a buyer for purposes of redhibition. Therefore, she denied the motion for summary judgment. See July 2024 Update.
Magistrate Judge Currault then held a trial to determine fault and privity or knowledge. The parties cited the presumptions from THE OREGON and THE PENNSYLVANIA, but Magistrate Judge Currault held that Southern Oil and Alliance had presented evidence regarding fault and causation, leaving no “vacuum” to be filled with an evidentiary presumption. Turning to the liability of the parties, Magistrate Judge Currault found that when the lantern left the control of Sabik Oy it was in good working order and that Southern Oil did not prove that the lantern was defective in design or manufacture (as opposed to being damaged through misuse or improper care) or that Sabik Oy made any false statement about the product that induced Southern Oil to use it. Therefore, Magistrate Currault concluded that Sabik Oy had no fault. Magistrate Judge Currault then considered the conduct of Captain Tyndall on the MR. CADE. She found that, when Captain Tyndall changed course after passing a shrimp trawler, he failed to consult the Rose Point system to determine whether there were obstructions in the new path, and he left the wheelhouse to get coffee before returning the vessel to its charted path (although he was aware that the vessel was in an area of many obstructions). After returning to the original course, he again failed to consult the Rose Point system or review maps to determine whether there were obstructions on the course back to the original plan. She also found that Alliance failed to train Captain Tyndall properly on the use of the radar and Rose Point systems so that the platform would have shown on his course, concluding that the vessel would not have run into the platform had the equipment been operating and used properly. Magistrate Judge Currault also found Southern Oil violated the federal regulation for lights on the platform and that it was negligent for failing to properly inspect the lantern before installation and failing to check the lantern’s battery health after installation. She concluded that the fault should be apportioned 50% to Alliance and 50% to Southern Oil. Magistrate Judge Currault concluded that Alliance was liable to Turner both under the Jones Act (negligence) and for unseaworthiness for failing to train Captain Tyndall on the proper use of the navigational equipment. With respect to limitation of liability, the finding that Alliance failed to properly train Captain Tyndall established the privity or knowledge that caused Magistrate Judge Currault to deny limitation of liability. Magistrate Judge Currault announced that the second phase of the trial (damages and willful failure to pay maintenance and cure) will commence on September 23, 2024.
From the state courts
Thomas Peak was employed by the Washington State Department of Transportation as an oiler on the Washington State ferry M/V TILLIKUM. Peak and the relief chief, Michael Fleetwood, were involved in fueling the ferry when Fleetwood slipped on a mat and injured his knee. Later that evening, Peak was descending stairs when he slipped at the top of the stairs and slid down the stairs on his back (reporting in his accident report that he slipped on the mat at the top of the stairs). Peak brought this suit against the Department of Transportation under the Jones Act and general maritime law, and the Department of Transportation moved for summary judgment on causation. The Department of Transportation argued that Peak testified that he did not know what caused him to slip and fall down the stairway and that he did not remember the mat slipping out from under him. In response to the motion for summary judgment, however, Peak submitted his declaration that his report after the accident was an accurate description of how he was injured. He also submitted a declaration from Fleetwood that the mat was inadequately secured, giving it a propensity to slide, and that when he viewed the mat after Peak’s accident it had moved from the position it was in when Fleetwood fell. The district court granted Peak’s motion, but the court of appeals disagreed, believing that Peak had presented a fact question whether an unsecured mat contributed to Peak’s fall. Therefore, Peak’s negligence and unseaworthiness claims would have to be resolved by the jury. With respect to maintenance and cure, Peak admitted that his doctors determined that he reached maximum cure, that his last visit to the doctor for his back was in 2021, and that the Department of Transportation had paid his medical bills and maintenance to the point he reached maximum cure. However, he argued that summary judgment was inappropriate because his vocational counselor stated that Peak would require future treatment for his injury (40 to 60 visits “involving chiropractic, massage and/or acupuncture” although the physician who had recommended the treatment did not believe that the treatment would improve Peak’s chronic injuries but would help with flareups). As there was no evidence that Peak had not reached maximum cure, the appellate court held that the district court did not err in dismissing the claim for maintenance and cure.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
1990 Post Oak Blvd
Suite 1800
Houston, TX 77056
O 713.629.1580
New Orleans
365 Canal Street
Suite 2900
New Orleans, LA 70130
O 504.569.1007
Gulfport
1110 Cowan Road
Suite B #214
Gulfport, MS 39507
O 228.867.8711
Miami
2801 SW 149th Ave
Suite 120
Miramar, FL 33027
O 305.274.5507
Quote:
In this action to quiet title, I seek the just and proper equitable resolve that does not make a new right, but declares the old, because adjudication is the declaration of a right, and by adjudication the right is newly revealed which has long been hidden.
Therefore, I allege Arbitrary Abuse of Power per Moral Turpitude Aforethought for breach of trust of a probated perfected freehold estate in fee simple, the res judicata of the Probate Court has been definitively settled by judicial decision, The Supreme Law of the Land trumps Arbitrary Abuse of Power by those products administering admiralty maritime law to subjects not in their jurisdiction by rule of law, the rules in equity calls on the court clergy to see to the exclusive equitable rights and remedies of the nominal beneficiary of the testamentary will.
Judge Joel M. Carson III, quoting the Petition Requesting Leave to File a Pro Se Initial Pleading in Nissen v. P.O.T.U.S., No. 1:24-cv-533, 2024 U.S. Dist. LEXIS 107534 (D. N. Mex. June 17, 2024).
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© Kenneth G. Engerrand August 30, 2024; redistribution permitted with proper attribution.
