August 2023 Longshore/Maritime Update (No. 291)
Notes from your Updater:
On June 7, 2023, the Third Circuit affirmed the dismissal of the suit by purchasers of vehicle carrier services against Kawasaki Kisen Kaisha and “K” Line America alleging violation of state and federal antitrust laws stemming from the defendants’ alleged participation in a global conspiracy to fix prices and allocate the market and customers of vehicle carrier services. See Alban v. Kawasaki Kisen Kaisha, Ltd., No. 22-2754, 2023 U.S. App. LEXIS 14101 (3d Cir. June 7, 2023) (Chung).
In our March 2023 Update, we reported that the Supreme Court declined to grant a writ of certiorari to consider the decision of the Fifth Circuit in Chevron USA, Inc. v. Plaquemines Parish (No. 22-715). That appeal involved cases filed in Louisiana state court by coastal Parishes against energy companies seeking to recover restoration costs for loss of land along the Louisiana Gulf Coast allegedly resulting from production practices carried out by the energy companies going back to World War II. The Fifth Circuit affirmed the remand of the cases to state court.
After the Supreme Court declined to hear the petition from the energy companies, Judge Zainey of the United States District Court for the Eastern District of Louisiana issued an order remanding to state court the suit brought by Plaquemines Parish and the State of Louisiana against a host of energy companies. The energy companies argued that they had threaded the needle to satisfy the “acting under” requirement for federal officer removal because that case involved a World War II-era refinery contract. Judge Zainey was unpersuaded, answering that the refinery contract satisfied neither the acting-under or the related-to requirements (the energy company “may have acted under a federal officer when refining oil in Port Arthur, Texas but it did not act under a federal officer when producing that oil in Louisiana”). See Parish of Plaquemines v. Northcoast Oil Co., No. 18-5228, 2023 U.S. Dist. LEXIS 67290 (E.D. La. Apr. 18, 2023). The energy companies have appealed the order of remand to the Fifth Circuit (No. 23-30304), and Judge Zainey stayed the order of remand pending the appeal. Judge Morgan of the United States District Court for the Eastern District of Louisiana reached a similar result in Parish of Plaquemines v. Rozel Operating Co., No. 18-5189, 2023 U.S. Dist. LEXIS 81541 (E.D. La. May 10, 2023). The energy companies have appealed the order of remand (No. 23-30336), and Judge Morgan stayed the order of remand pending the appeal. See June 2023 Update. On June 13, 2023, Judge Summerhays of the United States District Court for the Western District of Louisiana declined to reconsider his decision remanding 42 lawsuits (removed under the Federal Officer Removal Statute) that were brought by several Louisiana parishes against energy companies based on violations of permits under the State and Local Coastal Resources Management Act of 1978 and associated regulations, rules, and ordinances in connection with the defendants’ oil exploration and production activities in coastal parishes. See Parish of Cameron v. Apache Corp. (of Delaware), No. 2:18-cv-688, 2023 U.S. Dist. LEXIS 103010 (W.D. La. June 13, 2023). Judge Summerhays granted a stay of the remand pending appeal, and the energy companies filed a notice of appeal to the Fifth Circuit (No. 23-30422). Judge Fallon also stayed remand orders pending appeal to the Fifth Circuit in Parish of Jefferson v. Destin Operating Co., No. 2:18-cv-5206 (appeal No. 23-30225); Plaquemines Parish v. Exchange Oil & Gas Co., No. 2:18-cv-5215 (appeal No. 23-30291); and Plaquemines Parish v. Great Southern Oil & Gas Co., No. 2:18-cv-5227 (appeal No. 23-30303).
The Update has reported the remand of climate change suits that were removed by energy companies on a number of grounds (including the federal jurisdiction granted under the Outer Continental Shelf Lands Act for cases involving controversies arising out of or in connection with any operation conducted on the outer Continental Shelf that involves exploration, development, or production of the minerals from the outer Continental Shelf). On April 24, 2023, the United States Supreme Court declined to hear the petitions seeking certiorari in several climate-change suits (that included claims for federal removal jurisdiction based on the OCSLA). See BP P.L.C. v. Mayor and City Council of Baltimore, No. 22-361, Chevron Corp. v. San Mateo County, California, No. 22-495, Sunoco LP v. Honolulu, Hawaii, No. 22-523, Shell Oil Products Co. v. Rhode Island, No. 22-524, Suncor Energy, Inc. v. Board of Commissioners of Boulder County, No. 21-1550. In the wake of the denial of certiorari, New Jersey argued that it was entitled to attorney fees because the energy companies removed the suit brought by New Jersey after the Third Circuit had ruled that a similar action was not removable, so the energy companies did not have an objectively reasonable basis for the removal. The energy companies argued that they removed the case to preserve their jurisdictional rights in the event the Supreme Court granted certiorari and allowed removal. Giving the defendants the benefit of the doubt, Judge Kirsch found that the New Jersey suit was “arguably, a non-‘obvious’ case in which removal was objectively reasonable under the circumstances,” and he declined to award attorney fees. Platkin v. Exxon Mobil Corp., No. 22-cv-6733, 2023 U.S. Dist. LEXIS 106046 (D.N.J. June 20, 2023) (Kirsch).
In our June 2022 Update, we noted that the courts continue to struggle with the application of the decision of the Supreme Court in Lucia v. SEC on the constitutionality of the appointment of administrative law judges. The United States Supreme Court granted a writ of certiorari to decide the question of whether a federal district court has jurisdiction to hear a suit in which the respondent in an ongoing SEC administrative proceeding seeks to enjoin that proceeding, based on an alleged constitutional defect in the statutory provisions that govern the removal of the administrative law judge who will conduct the proceeding. See Securities and Exchange Commission v. Cochran, No. 21-1239 (the Court had previously granted a writ of certiorari in Axon Enterprise, Inc. v. Federal Trade Commission, No. 21-86, to decide whether the courts had jurisdiction over constitutional challenges to the authority of the Administrative Law Judges in cases involving the Federal Trade Commission).
Two days after the Supreme Court granted the writ in Cochran, a majority of a panel of the Fifth Circuit handed down its decision in Jarkesy v. Securities and Exchange Commission, No. 20-61007, 2022 U.S. App. LEXIS 13460 (5th Cir. May 18, 2022), holding that the statutory removal restrictions for SEC administrative law judges are unconstitutional because the ALJs are sufficiently insulated from removal that the President cannot take care that the laws are faithfully executed. Accordingly, the Fifth Circuit held that the SEC proceedings were unconstitutional in that case because the respondents in the enforcement action were deprived of their Seventh Amendment right to a civil jury and because Congress unconstitutionally delegated legislative power to the SEC by failing to give the SEC an intelligible principle by which to exercise the delegated power (although the court held that the statutory removal restrictions for SEC ALJs are unconstitutional, the court did not address whether vacating the decision below would be appropriate based on that defect alone). Judge Davis disagreed that the layers of removal protection for SEC ALJs were unconstitutional and with the holding that the removal restrictions interfered with the President’s ability to take care that the laws be faithfully executed. The SEC sought rehearing en banc, and, on October 21, 2022, the full Fifth Circuit declined to grant rehearing en banc by a vote of 10 to 6 (with Judge Haynes writing a dissent from the denial of the petition for rehearing en banc). See Jarkesy v. Securities and Exchange Commission, No. 20-61007, 2022 U.S. App. LEXIS 29433 (5th Cir. Oct. 21, 2022). Jarkesy filed a petition for a writ of certiorari on April 10, 2023.
On April 14, 2023, the Supreme Court issued its decision in Axon Enterprise (consolidated with Cochran). Cochran and Axon Enterprise, who were respondents in enforcement actions instituted against them by the Securities and Exchange Commission and the Federal Trade Commission, each filed suit in federal district court challenging the constitutionality of the agency actions against them. They argued that the administrative law judges were insufficiently accountable to the President, in violation of principles of separation of powers. The question presented to the Supreme Court in these cases was not whether the administrative law judges for the agencies were constitutionally authorized to hear the administrative proceedings. The question was whether the federal district courts had the authority to hear the constitutional challenge in a separate suit. The Supreme Court unanimously agreed that the federal courts did have such jurisdiction. Writing for the Court, Justice Kagan cited the Court’s prior decision in Carr v. Saul, stating that “‘agency adjudications are generally ill suited to address structural constitutional challenges’—like those maintained here.” Consequently, Article III courts have jurisdiction to hear challenges to the constitutionality of the structure of the administrative adjudicatory process in federal agencies, including the argument that administrative law judges were insufficiently accountable to the President. Axon Enterprise, Inc. v. FTC, No. 21-86 c/w No. 21-1239, 2023 U.S. LEXIS 1500 (U.S. Apr. 14, 2023). See May 2023 Update. On June 30, 2023, the Supreme Court granted the writ of certiorari in SEC v. Jarkesy (No. 22-859) to decide: 1. Whether statutory provisions that empower the Securities and Exchange Commission (SEC) to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment. 2. Whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. 3. Whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection. Meanwhile, a panel of the Ninth Circuit held that the Immigration Judges and members of the Board of Immigration Appeals are inferior officers whose appointment may be vested in the head of a department (the Attorney General), so that their appointment and removal process does not violate the Appointments Clause in Article II of the Constitution. See Duenas v. Garland, No. 18-71987, 2023 U.S. App. LEXIS 19261 (9th Cir. July 27, 2023) (Lee).
The Update has reported the parallel proceedings with respect to the meaning of “Waters of the United States” for the coverage of the provisions of the Clean Water Act. Congress, the courts, and the presidential administrations have all been involved in the process of determining the scope of the Waters of the United States. While we awaited the decision of the Supreme Court in Sackett v. Environmental Protection Agency, No. 21-454, presenting the Supreme Court with the opportunity to revisit its decision in Rapanos on the scope of jurisdiction under the Clean Water Act, the Biden Administration promulgated a new definition for Waters of the United States that was disapproved by a joint resolution of Congress (227-198 in the House and 53-43 in the Senate). On April 6, 2023, President Biden vetoed the resolution, and the House was unable to override the veto on April 18, 2023.
In our April 2023 Update we reported that, on March 19, 2023, Judge Brown of the Southern District of Texas issued a preliminary injunction blocking the Biden Administration’s revised definition of Waters of the United States (that would have taken effect on March 20, 2023) noting that the Supreme Court heard oral argument in the Sackett case involving the proper test to determine the extent of Waters of the United States). The injunction applied in the states of Texas and Idaho, but Judge Brown declined to grant a nationwide injunction. See Texas v. United States EPA, No. 3:23-cv-17, 2023 U.S. Dist. LEXIS 45797 (S.D. Tex. Mar. 19, 2023). On April 12, 2023, Judge Hovland of the District of North Dakota issued a preliminary injunction blocking the implementation of the WOTUS Rule in 24 states. See West Virginia v. U.S. EPA, No. 3:23-cv-32 (D.N.D. Apr. 12, 2023). The Sixth Circuit also issued an administrative stay of enforcement of the Rule during the briefing and consideration for motions seeking an injunction filed by the Commonwealth of Kentucky and several private-sector organizations. See Kentucky v. United States Environmental Protection Agency, Nos. 23-5343/5345 (6th Cir. Apr. 20, 2023) (per curiam).
The Supreme Court issued its decision in Sackett on May 25, 2023, 2023 U.S. LEXIS 2202 (see June 2023 Update), concluding that the EPA’s interpretation of Waters of the United States was inconsistent with the text and structure of the Clean Water Act and that the CWA extends only to wetlands that are, as a practical matter, indistinguishable from waters of the United States. That requires that the adjacent body of water constitute waters of the United States (a relatively permanent body of water connected to traditional interstate navigable waters) and that the wetland have a continuous surface connection with that water, making it difficult to determine where the “water” ends and the “wetlands” begin.
After the decision in Sackett, the Sixth Circuit agreed to hold its case in abeyance until the EPA and the Army Corps of Engineers issue a new final rule amending the regulations defining the Waters of the United States under the Clean Water Act. See Kentucky v. United States Environmental Protection Agency, Nos. 23-5343/5345 (6th Cir. July 3, 2023). Similarly, Judge Brown agreed to stay the litigation by the State of Texas against the EPA until publication of the new rule amending the regulations defining the Waters of the United States. See Texas v. United States EPA, No. 3:23-cv-17 (S.D. Tex. July 10, 2023). And, the Eighth Circuit agreed to hold in abeyance (pending publication of the new final rule regarding the definition of “waters of the United States) the interlocutory appeal from the order of Judge Hovland of the United States Court for the District of North Dakota, who issued a preliminary injunction blocking the implementation of the Rule in 24 states in West Virginia v. U.S. EPA, No. 3:23-cv-32 (D.N.D. Apr. 12, 2023). See West Virginia v. U.S. Environmental Protection Agency, No. 23-2411 (8th Cir. July 17, 2023).
In our June 2023 Update we reported that Judge Durkin of the United States District Court for the Northern District of Illinois certified for an interlocutory appeal his ruling that suits brought against Boeing on behalf of two decedents in connection with the crash of the Boeing 737 MAX (Lion Air Flight JT 610) in the Java Sea would be tried to the bench under DOHSA, which mandated that the cases be tried in the court’s admiralty jurisdiction. See In re Lion Air Flight JT 610 Crash, Nos. 18 C 07686, 19 C 01552, 19 C 07091, 2023 U.S. Dist. LEXIS 92140 (N.D. Ill. May 25, 2023). On July 6, 2023, the Seventh Circuit granted permission to appeal. See In re Lion Air Flight JT 610 Crash, Nos. 23-8013, 23-8014 (7th Cir. July 6, 2023).
In our December 2023 Update we reported that the Kansas Supreme Court ordered the disbarment of attorney Jack R.T. Jordan of North Kansas City, Missouri, for violating the Kansas Rules of Professional Conduct during proceedings to obtain an email from the Department of Labor under the Freedom of Information Act in connection with his representation of his wife in a claim under the Defense Base Act for an injury at the U.S. Consulate in Erbil, Iraq. See In re Jordan, No. 124,956, 2022 Kan. LEXIS 111 (Kan. Oct. 21, 2022). The conduct that led to the disbarment is set forth in the following:
On July 6, 2023, the Supreme Court of New York, Appellate Division (1st Dept.), ordered that attorney Jack R.T. Jordan be disbarred in the State of New York as set forth in the following order. See In re Jordan, Case No. 2023-01872, 2023 N.Y. App. Div. LEXIS 3745 (N.Y. Sup. Ct. App. Div. 1st Dept. July 6, 2023).
Judge Gleason of the United States District Court for the District of Alaska permitted associations representing commercial fishing interests to intervene in a suit brought by Native Alaskan groups against the National Marine Fisheries Service, challenging the decision adopting annual catch limits for the groundfish fisheries of the Bering Sea and Aleutian Islands on the ground that the NMFS failed to conduct an analysis of the environmental effects of that decision, allegedly in violation of the National Environmental Policy Act. See Association of Village Council Presidents v. National Marine Fisheries Service, No. 3:23-cv-74 (D. Alaska July 13, 2023).
In our July 2023 Update, we reported that Judge Block of the United States District Court for the Eastern District of New York rejected the request by Simon Kinsella, a resident of the Wainscott hamlet of the Town of East Hampton, New York, for a preliminary injunction to halt construction of the South Fork Wind Farm, located 35 miles east of Montauk Point, Long Island, and the cables that export the energy produced by the windmills to the onshore electric grid in East Hampton (the offshore cables would involve seafloor construction in an area known for Atlantic cod spawning, and the onshore cables would run through trenches where the groundwater was contaminated with perfluoroalkyl and polyfluoroalkyl substances). Kinsella objected to the approval of the project by the Bureau of Ocean Energy Management, arguing that the project would result in irreparable harm to the drinking water near the onshore portion of the project and would harm the Atlantic cod population near the offshore portion of the project. Finding that Kinsella had not established irreparable harm, Judge Block denied the request for a preliminary injunction. See Kinsella v. Bureau of Ocean Energy Management, No. 23-cv-2915, 2023 U.S. Dist. LEXIS 87437 (E.D.N.Y. May 18, 2023). On July 17, 2023, Judge Block dismissed a suit brought by a different group of residents in the Wainscott hamlet of East Hampton, New York, seeking to halt construction of the South Fork Wind Farm (and South Fork Export Cable Project). Their suit claimed that the onshore trenching for the Cable Project would worsen the existing perfluoralkyl and polyfluoralkyl contamination in their groundwater. Judge Block held that the residents lacked standing because they failed to show that the defendants’ conduct was the likely cause of their injuries. See Mahoney v. U.S. Department of the Interior, No. 22-cv-1305, 2023 U.S. Dist. LEXIS 122761 (E.D.N.Y. July 17, 2023).
On July 18, 2023, the Sixth Circuit held that Midwest Terminals of Toledo, which operates the Toledo Port in Maumee, Ohio, plausibly stated a claim under the Labor Management Relations Act that the International Longshoremen’s Association coordinated with the Lakes Pilots Association to trap cargo ships around Midwest’s port with the object of forcing neutral shipping companies to sever ties with Midwest to pressure Midwest into signing a new collective bargaining agreement.
On July 19, 2023, Judge Barbier of the United States District Court for the Eastern District of Louisiana granted reconsideration to Weeks Marine and held that Wilco Marsh Buggies’ patent on amphibious excavators was invalid. See Wilco Marsh Buggies & Draglines, Inc. v. Weeks Marine, Inc., No. 20-3135, 2023 U.S. Dist. LEXIS 123984 (E.D. La. July 19, 2023).
On July 28, 2023, a majority of a panel of the Fourth Circuit upheld the decision of the National Labor Relations Board that a contract between the International Longshoremen’s Association and the United States Maritime Alliance (an association of carriers and other employers) that earmarked all container loading and unloading work on the East and Gulf Coasts for union members) and a suit brought by the ILA against the Alliance and its members for damages when ships docked at a South Carolina terminal that used non-union lift operators did not violate the National Labor Relations Act. See South Carolina State Ports Authority v. National Labor Relations Board, No. 23-1059, 2023 U.S. App. LEXIS 19518 (4th Cir. July 28, 2023) (Diaz).
On the LHWCA Front . . .
From the federal appellate courts
Barge owner Crounse delivered a barge to Mulzer Crushed Stone to clean the coal remnants in the barge after the coal was delivered to a power plant. Steven R. Smith, an employee of Mulzer, was operating a Bobcat skid-steer loader in the barge hold when the loader struck a scab sticking up from the floor of the hold (the scab was a break in the floor where a weld had broken apart). The scab was located under leftover coal debris that was about a foot deep and was not visible when Smith’s loader struck it. Smith’s seatbelt malfunctioned, and he was thrown into the safety bar and suffered injuries. Smith brought this suit against Crounse under Section 5(b) of the LHWCA, and Crounse moved for summary judgment, asserting that there was no evidence that the scab existed before the operation began, that the hazard, if it existed, was obstructed from the view of its deckhands by the coal, that Mulzer and Smith were aware of this type of hazard, and that it was the failure of the seatbelt and not a breach of the Scindia turnover duty that caused the injury. Smith answered that the accident occurred the first time he was near the defect, so it must have pre-existed, that Crounse failed to require inspection of the area by its deckhands and failed to provide regular maintenance that would discover the condition, that the scab had markings indicating it had been previously hammered into place (indicating a temporary fix), that the contract between the parties did not place a duty on Mulzer to inspect the barge for hazards, and that any contribution with respect to the seatbelt was an issue of comparative fault of Mulzer, which would not reduce the fault of Crounse under the decision of the Supreme Court in Edmonds. Chief Judge Pratt sided with Crounse, holding that Smith had not created a triable issue that a defect should have been known to Crounse in the exercise of reasonable care. Consequently, she granted summary judgment to Crounse. See February 2022 Update.
Smith appealed to the Seventh Circuit, which affirmed Chief Judge Pratt’s grant of summary judgment. Writing for the court, Judge Rovner stated that the issue on appeal involved Scindia’s turnover duty. Smith argued that Crounse should have been aware of the scab and warned Mulzer, noting that the scab appeared to be old damage, there were no new tears or breaks in the metal, the damage was rusty, and the scab had marks of prior repairs (showing that it had been hammered down and not welded in place). Chief Judge Pratt had declined to admit Smith’s lay opinions about whether the tears or breaks were fresh or old damage, how long the rust had been present, or whether the scab had previously been repaired by hammering and not welding, and Judge Rovner held that Chief Judge Pratt was within her discretion to admit Smith’s observations but not his opinions on the implications of the observations (matters for expert testimony and not lay testimony). Judge Rovner reasoned that Smith could only speculate as to how and when the scab was created. It was possible that a prior stevedore created the scab and hammered it in place, and it was possible that the scab was created by Smith so that Crounse would not have had an opportunity to detect it before turning over the barge to Mulzer for cleaning. Crounse’s corporate representative testified that split seams were common on barges of this age, but Smith did not produce evidence of industry standards for inspection or that Crounse’s inspection procedures were inadequate. The area of the scab had been under the control of the prior stevedore and was still covered with a layer of coal remnants at the time the barge was delivered to Mulzer to remove the remnants. As there was no evidence that Crounse should have known, in the exercise of reasonable care, of the defect in the floor of the barge, Judge Rovner affirmed the grant of summary judgment.
Lester Johnson, who described himself as a longshoreman, was injured when he fell overboard from a cargo barge moored in the Mississippi River near Darrow, Louisiana and landed on the deck of his employer’s weigh station vessel, AMERICA. His employer, Cooper T. Smith Stevedoring, paid him benefits under the LHWCA, and Johnson brought this action in federal court in Louisiana against Cooper T. as a seaman under the Jones Act and, alternatively, seeking to recover for vessel negligence under Section 5(b) of the LHWCA. Cooper T. owns and operates a number of vessels to assist in cargo operations on vessels moored in the Mississippi River, including weigh station vessels and crew boats used to ferry employees to and from shore. It hires the longshore workers from the local union on a daily basis, terminating employment at the end of each day. Longshore workers are not assigned to any vessel, and their duties vary, but Johnson mainly operated heavy machinery, moving cargo in and among the cargo vessels. Johnson worked for Cooper T. since 2008, and he did not sail aboard any Cooper T. vessel (other than riding to and from work locations on a crew boat). Cooper T. moved for summary judgment, and Judge Jackson agreed that Johnson failed the test for seaman status. Although Johnson contributed to the function or mission of more than one vessel, Judge Jackson held that he failed both the duration and nature elements of the connection test. Johnson failed the duration element because he did not establish what portion of his 20-year tenure with Cooper T. was spent aboard a vessel or fleet of vessels. Judge Jackson also held that Johnson failed to satisfy the Sanchez factors for the nature element because his allegiance was to a shoreside employer, not a particular vessel; his employment did not require sailing or sea-going activity; and his work on any particular vessel was limited to performing discrete stevedoring services, after which his connection to the vessel ended. Turning to the liability of Cooper T. under Section 5(b) in its capacity as owner of the AMERICA, Judge Jackson considered the Scindia duties and held that Johnson did not identify any defect in the AMERICA at the commencement of operations in connection with Scindia’s turnover duty. Although Johnson argued that Cooper T. breached the active control duty by failing to provide its longshore workers the means to safely remove ladders from holds, Judge Jackson rejected his argument because Johnson’s testimony established that he slipped due to excess cargo on the deck of the cargo barge, which Judge Jackson termed an open and obvious hazard common to stevedoring operations (Johnson did not present argument on the duty to intervene). Thus, Judge Jackson granted summary judgment and dismissed all of Johnson’s claims with prejudice. See August 2022 Update.
Johnson appealed to the Fifth Circuit, and, writing for the Fifth Circuit, Judge Douglas agreed with Judge Jackson that Johnson had not established his claims for seaman status or vessel negligence. Johnson argued that he satisfied the duration element of the substantial-connection test for seaman status because he had worked for Cooper for more than 20 years and was transported by a crew boat to the AMERICA on the night that he was injured. He argued that his work on a vessel that was located midstream in the Mississippi River and that was part of Cooper’s midstream operations was sufficient to satisfy the duration element. However, Judge Douglas responded that the evidence was missing the information about his assignments and work on the AMERICA to establish the duration. As Johnson failed to provide evidence of the duration element, it was not necessary for the court to address whether Johnson’s work satisfied the nature element of the substantial-connection test. Judge Douglas then reviewed Judge Jackson’s grant of summary judgment on Johnson’s claim under Section 5(b) of the LHWCA. Although Johnson argued that Cooper breached the turnover duty and the active control duty from Scindia, he did not cite any record evidence that Cooper violated either duty (and Judge Douglas did not find evidence of any breach from her review of the record). Consequently, the Fifth Circuit affirmed the summary judgment on Johnson’s claims as a seaman and under the LHWCA.
From the federal district courts
John T. McIsaac worked as a rigger at the Boston Naval Shipyard in Charlestown, Massachusetts in 1965 and from 1967 through the 1970s. He was diagnosed with mesothelioma, and he and his wife, Irene McIsaac, brought this suit in Massachusetts state court against suppliers of products containing asbestos that were installed on vessels on which he worked at the shipyard. The defendants removed the case to federal court, and John died from mesothelioma before he could be deposed. Irene continued the suit and settled with all of the defendants except Buffalo Pumps and General Electric. Buffalo Pumps moved for summary judgment that Irene could not satisfy the maritime standard that the exposure to its products was a substantial factor in causing the decedent’s mesothelioma. Irene was able to establish that there were Buffalo pumps on the vessels, and she presented the testimony of a co-worker that the co-worker and John worked on pumps. But, 50 years later, the co-worker could not recall the brand name or manufacturer of the pumps on which they worked. Therefore, Judge Gorton held that the evidence was insufficient to support the claim against Buffalo Pumps. Although Irene sought “additional discovery to gather expert opinions,” Judge Gorton declined the request, stating that an expert opinion could not overcome the lack of factual evidence of the decedent’s exposure to Buffalo pumps 50 years ago.
Paul Bourgeois was employed by Fire Protection Services as an inspector. He was injured when he tripped and fell over a retainer plate on the PETROCHEM TRADER, owned by U.S. Shipping, while the vessel was being stored and repaired at the Buck Kreihs facility in Algiers, Louisiana. Bourgeois brought this suit in Louisiana state court against the shipowner and shipyard, and U.S. Shipping removed the case to federal court based on diversity. Bourgeois and Buck Kreihs are both citizens of Louisiana, but U.S. Shipping argued that the shipyard was improperly joined and that its citizenship should be disregarded. Judge Africk noted that the complaint merely alleged that the vessel was being repaired at Buck Kreihs’ facility; however, Bourgeois contended in his motion to remand that there were fact questions pertaining to the work performed by the shipyard’s employees. U.S. Shipping submitted the affidavit of the CFO of the shipyard, asserting that the shipyard was hired to install a fan assembly and radiator in the Barge Machinery House and did not have anything to do with the retainer plate that was involved in the accident or with the work being performed by Bourgeois and Fire Protection Services. Although Bourgeois responded that the affidavit did not state whether the shipyard made any recommendations to U.S. Shipping for repairs or modifications to the walkway where Bourgeois was injured, Judge Africk did not consider that argument to support a claim for negligence against the shipyard, only offering a “mere theoretical possibility” of a viable claim. Consequently, Judge Africk dismissed the claims against the shipyard without prejudice and denied the motion to remand.
Ashley Cooper claims that she was employed by International Marine and Industrial Applicators (and two other International Marine entities) to perform industrial painting, blasting, cleaning and other related work on the U.S.S. WILLIAM P. LAWRENCE, which was located in a graving dock at the Pearl Harbor Naval Shipyard in Hawaii. While trying to remove contaminants, her arm was sucked into one of the hoses of the vacuum, and she brought this suit in state court in Hawaii against her employer under the Jones Act, her supervisor (Doug Eiss), the general contractor, and some subcontractors. The defendants removed the case to federal court, and International Marine and Eiss moved to dismiss the claims against them, arguing that the LHWCA provided Cooper’s exclusive remedy against International Marine and Eiss. Before addressing whether Cooper was a seaman, Judge Gillmor noted that the complaint simply stated that Cooper was employed by the three entities and did not specify which of the entities was the employer. Citing Cosmopolitan Shipping Co. v. McAllister, Judge Gillmor held that there can be only one Jones Act employer and the complaint did not specify the employer or allege facts establishing an employment relationship so as to support a Jones Act claim. Turning to the issue of seaman status, Judge Gillmor reasoned that a land-based worker who spends 100% of her time on a vessel but without any seagoing activity is not a seaman under the Jones Act. Thus, Cooper was required to assert facts to demonstrate the nature and duration of her employment, including the total amount of seagoing activity. Consequently, as she did not plead facts to establish that she was a seaman, her claims under the Jones Act and for maintenance and cure were dismissed, with leave to plead facts establishing seaman status. Eiss also moved to dismiss Cooper’s complaint, alleging that, as Cooper was not a seaman, Section 33(i) of the LHWCA barred her claim against him (a co-employee supervisor). Cooper asserted that Eiss was liable for willful and wanton misconduct, but Judge Gillmor ruled that the statements in the complaint were merely legal conclusions. She dismissed the count against Eiss with leave to replead a plausible claim that was not barred by the LHWCA.
From the state appellate courts
Carl W. Paddock worked as an equipment maintenance mechanic for the Port of Tacoma since 1999. His job required him to maintain straddle carriers that were used to stack, unload, and move containers. During his employment, Paddock filed multiple union grievances. In 2012, Robert Edwards, a longshore worker for the Port, was injured in an accident involving a straddle carrier, and Edwards subpoenaed Paddock to testify in Edwards’ suit against the manufacturer of the straddle carrier. During that deposition, Paddock testified that the day before the accident, someone had reported that the straddle carrier’s brakes were “chattering violently.” Paddock testified that he and another worker, Steve Hughes, inspected the brakes and found that the braking system was severely compromised. Paddock expressed confusion about the details and date for the incident, particularly when confronted with a timecard for Hughes indicating that Hughes was on vacation at the time of the incident. Nonetheless, Paddock did not retract his statement that, on the day before the accident, he tagged the straddle carrier to indicate it should not be used. An outside investigator engaged by the Port concluded that Paddock had knowingly provided false information and that he had a history of accusing the Port, supervisors, and co-workers of improper conduct, “often supporting his complaints with false allegations.” The Port terminated Paddock, and, while he was on administrative leave for the investigation, Paddock reopened a claim for a shoulder injury. Paddock underwent shoulder surgery and testified that he was physically incapable of doing the job after the surgery. Paddock also applied for Social Security disability benefits, claiming that he was unable to work because of the shoulder injury, and he was found to be restricted to performing sedentary work. Paddock brought this suit in the Superior Court of Pierce County, Washington, claiming wrongful termination, and the Port moved for summary judgment to dismiss his claim and, alternatively, seeking a ruling that Paddock was estopped from claiming lost wages after the determination of the Social Security Administration. The court of appeals reversed the dismissal of the wrongful termination claim, noting that the record contained conflicting testimony about whether Paddock lied, citing Paddock’s consistent testimony about his imperfect memory of an incident that occurred four years before his deposition. However, the appellate court did agree that Paddock was estopped to contend that he would have been able to work as a mechanic for the Port after his shoulder surgery (so that he lost wages as a result of his termination). The estoppel was based on his testimony in the industrial insurance proceeding where he gave sworn inconsistent testimony. The court declined to conclude that judicial estoppel prevented Paddock from contradicting the social security disability determination because the Port failed to establish what Paddock asserted in that proceeding.
Jerry A. Guzetta was hired by American K-9 Detection Services to work in Iraq or Afghanistan in 2011. He was sent for training for canine handlers in Pipe Creek, Texas, where he stayed at a La Quinta Inn owned by Brimhall. Guzzetta slipped and fell at the Inn, resulting in injuries, and he brought a claim under the Defense Base Act (through a Florida attorney) as well as a suit against Brimhall in Texas state court (through a Texas attorney). The suit against the Inn was settled with a Mediation Settlement Agreement in 2016 for $250,000, but the Texas attorney did not seek or receive approval of the settlement from his employer or carrier, which potentially barred his projected recovery of $1,260,000 in benefits under the DBA. Guzzetta then initiated years of “protracted, acrimonious litigation” seeking to postpone the conclusion of the settlement or “unwind” the Agreement until he received approval from the employer and carrier (so as to avoid forfeiting benefits under the DBA). In 2017, the state court granted Brimhall’s motion for summary judgment that the Agreement was binding and enforceable, allowed the Texas attorney to intervene for payment, and granted relief to the Texas attorney. In 2020, the parties agreed to set aside the summary judgment for thirty days to give Guzzzetta the opportunity to obtain the approval of his settlement. That approval was not forthcoming, and the state court entered a final judgment that awarded the Texas attorney his contingent fee of $100,000 plus costs. Guzzetta filed a motion for new trial and a counterclaim against the Texas attorney for legal malpractice, claiming that the settlement forfeited his right to recover under the DBA. The state judge declined to rule on Guzzetta’s requests, and Guzzetta appealed. As Guzzetta had not preserved these arguments in the district court, he had to show fundamental error, and the court of appeals held that he had not established fundamental error and had invited the error by agreeing to the order giving him 30 days to seek relief. Accordingly, the court of appeals declined to grant review to Guzzetta.
And on the maritime front . . .
From the federal appellate courts
Conti, owner of the M/V MSC FLAMINIA, chartered the vessel to Mediterranean Shipping Co., and the vessel carried cargoes for MSC for 12 years, calling at ports around the world, including the Port of New Orleans. In 2012, the vessel called in New Orleans to load three tanks of 80% divinylbenzene. The tanks of cargo exploded thirteen days later while the vessel was transiting the Atlantic Ocean, resulting in the deaths of three members of the crew, damage to cargo on the vessel, and damage to the vessel. The charter party contained a London arbitration clause, and Conti pursued its claims against MSC in a London arbitration that resulted in an award of approximately $200 million. There was also litigation in New York, including Conti’s limitation of liability action. Conti filed a suit in federal court in New Orleans to confirm the arbitration award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and MSC moved to dismiss the action for lack of personal jurisdiction. MSC argued that the underlying litigation was no longer relevant to the question whether the award was enforceable, but Conti argued that the issue was whether it was the beneficiary of an award resulting from the defendant’s forum activities in connection with the claim. After a thorough analysis of the language of the statute implementing the Convention, Judge Barbier concluded that in actions to compel arbitration or confirm arbitration, the court may “look through” the application to the underlying substantive controversy between the parties to determine whether it has personal jurisdiction. As the cargo that exploded was loaded and shipped in New Orleans, Judge Barbier held that Conti’s cause of action related to MSC’s contacts in Louisiana, and that there was personal jurisdiction over MSC to confirm the award. MSC also issued a letter of undertaking in which its insurer agreed to pay Conti any judgment up to $220 million issued by the Eastern District of Louisiana in exchange for Conti’s agreement not to arrest or attach MSC’s vessels or bring any proceeding for the enforcement of the arbitration award in any jurisdiction outside of the English jurisdiction other than the Eastern District of Louisiana. Concluding that the letter of undertaking demonstrated that MSC had consented to the jurisdiction of the Eastern District of Louisiana, Judge Barbier held that MSC had waived any personal jurisdictional defense it may have had to the federal court in Louisiana. See October 2022 Update. Judge Barbier confirmed the arbitration award in favor of Conti and against MSC on November 23, 2022, and MSC filed a notice of appeal to the Fifth Circuit on December 22, 2022 (No. 22-30808).
In the litigation brought in New York, Judge Forrest agreed to decide the issues in phases. The first phase determined the causes of the explosion. The second phase addressed liability for cargo loss and damage (the injury and death actions had been settled). The cargo (divinylbenzene or DVB-80) was manufactured by Deltech in its plant in Baton Rouge, Louisiana. The transportation was arranged through Deltech’s regular non-vessel operating common carrier, Stolt. Stolt provided three large shipping tanks (ISO containers) for the cargo and procured shipment on the FLAMINIA, owned by Conti and chartered by MSC. In the Phase I trial, Judge Forrest found that a spark ignited a cloud of vapor rising from the three tanks of DVB-80 that were stored in the hold of the vessel, and that the spark was generated by the efforts of the crew to fight what they perceived to be a fire in the hold. The cloud of vapor was the result of the DVB-80 undergoing a chemical process called auto-polymerization and reaching a thermal runaway. In Phase II, Judge Forrest found Deltech 55% at fault and Stolt 45% at fault, based on strict liability and failure to warn under the Carriage of Goods by Sea Act, and she found that Conti, MSC, and New Orleans Terminal were not liable. In particular, Judge Forrest found greater responsibility on Deltech for authorizing shipment of the DVB-80 from New Orleans in late June (increasing the chance of auto-polymerization) and for filling the ISO containers earlier than necessary for the expected embarkation date, leaving the containers sitting stagnant in the hot New Orleans sun. Judge Forrest found Stolt liable because it possessed extensive information on the heat-sensitive nature of the DVB-80 but failed to share that information with the charterer, MSC, and for its responsibility in the early loading and early transport of the chemical to New Orleans Terminal. Judge Forrest found strict liability against Deltech and Stolt pursuant to Section 4(6) of COGSA, which provides that a shipper of inflammable, explosive, or dangerous goods “shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment” when the carrier does not have knowledge of the “nature and character” of the goods. Judge Forrest imposed strict liability, finding that MSC could not have known that the DVB-80 had been exposed to the specific dangerous conditions that resulted in the explosion. Writing for majority of the Second Circuit, Judge Carney held that the notice threshold for the carrier is “relatively modest” and that notice of “the general dangerousness” of the cargo it agreed to carry can cause the strict liability theory to be unavailable. The evidence established that MSC had experience carrying DVB-80 and had received transport documents warning of the chemical’s heat sensitivity. Judge Carney held that this general knowledge surpassed the low threshold to preclude recovery for strict liability. The appellate court reached a different conclusion with respect to the claim of failure to warn based on Section 4(3) of COGSA that the shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from “any cause without the act, fault, or neglect of the shipper, his agents, or his servants.” Judge Carney explained that a shipper’s failure to adequately inform the carrier of the foreseeable dangers posed by cargo can constitute fault or negligent and give rise to a claim of negligent failure to warn. In this case, the general knowledge and experience of MSC did not save Deltech and Stolt: “But to require MSC to ‘associate the chemical properties it may know somewhere within its organization with a shipment of three discrete tanks’ would unreasonably allocate risk and burden among the parties—particularly when critical characteristics of those specific tanks were out of the ordinary.” Judge Carney added that the Master Bill of Lading Instructions (calling for above-deck temperature monitoring because of heat sensitivity) was insufficient to place MSC on reasonable notice of the dangerousness of the cargo. Turning to the issue of the finding that MSC was not at fault, Judge Carney cited the carrier’s duty under COGSA to “properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.” She concluded that, absent a booking request for on-deck stowage and temperature monitoring, the stowage of the tanks below deck was reasonable and foreseeable to Stolt and Deltech. She also affirmed the findings that the crew were not negligent and that New Orleans Terminal was not at fault (no special handling instructions for the cargo were provided to the terminal, and it handled the cargo in accordance with its published practices). Finally, pursuant to the terms of the Sea Waybills, Stolt and Deltech were required to indemnify MSC and Conti for their losses arising from dangerous or hazardous goods. Therefore, Judge Carney agreed with the district court that Stolt and Deltech were required to indemnify MSC and Conti. Judge Menashi dissented from the rulings that MSC was not negligent and that MSC was entitled to full indemnity from Deltech and Stolt.
Frank Scobbo Contractors chartered the barge NITE MOVES 11547 from John Gladsky and/or Seacoast Marine Services without a written agreement. The barge was damaged during the charter, and Gladsky/Seacoast brought suit in federal court in New York against Frank Scobbo based on breach of an oral charter agreement and maritime bailment. Frank Scobbo filed a counterclaim based on conversion and unjust enrichment. Judge Brown held a bench trial and awarded $75,000 to Gladsky/Seacoast and $27,966 to Frank Scobbo. Both sides appealed, and the Second Circuit affirmed the resolution by Judge Brown. The plaintiffs were awarded damages for the defendant’s failure to procure insurance, and that extended to Seacoast as the chartering party and also to Gladsky (because there was evidence that Gladsky owned the barge and was a third-party beneficiary of Frank Scobbo’s agreement to procure insurance). Judge Brown awarded the damages to Frank Scobbo based on the plaintiffs’ conversion of property left on the barge at the end of the charter. Gladsky/Seacoast argued that they had a lien on the property that allowed them to retain the property to offset damages. However, they argued in the district court for a lien for storage charges, and they failed to introduce any evidence to support the storage charges. Therefore, the Second Circuit affirmed the award for the value of the property (finding sufficient evidence of the value from the defendant’s testimony even though there were no invoices and there was no expert testimony as to the value.
This litigation involves the death of an 18-month old passenger on the defendant’s cruise ship FREEDOM OF THE SEAS when she fell from the arms of her grandfather, Salvatore Anello, through an open window and to the dock below. The plaintiffs moved for partial summary judgment on the cruise line’s comparative fault defense, and the cruise line moved for summary judgment that it owed no duty to warn because the damage of placing a child by or on an open window is open and obvious and that it had no notice of the risk-creating danger in connection with the claim of negligent failure to maintain. Starting with the notice argument, Judge Graham held that a prior incident in which a child climbed on top of furniture placed near an open window was not sufficiently similar to provide notice of the fall hazard in this case and that the cruise line’s warnings about sitting, standing, or climbing on railings did not indicate constructive notice of the risk of holding a child over a handrail. Similarly, the remedial measures taken with respect to rails and window heights did not reflect notice of the actual danger, which was lifting a child up to an open window. Noting that Anello testified that he reached his hand out to touch the window and did not feel any glass, Judge Graham held that a reasonable person would have known of the dangers associated with Anello’s conduct, so the cruise line had no duty to warn of the open and obvious danger of exposing his granddaughter to the open window and the dock below. As the cruise line did not establish that the girl’s parents were negligent, and as Anello was not a plaintiff in the suit, Judge Graham granted summary judgment to the plaintiffs dismissing the affirmative defense of comparative negligence. Finally, Judge Graham addressed the cruise line’s argument that the criminal act of Anello (he pled guilty to negligent homicide) was an intervening act and superseding cause that cut off any liability that the cruise line might have had. Although Judge Graham had denied the defense prior to discovery, he held that no evidence had been developed in discovery to establish that the cruise line knew or should have known that there was a risk of an adult lifting a child over the guardrail and through an open window. Applying the presumption that independent illegal acts of third persons are deemed unforeseeable and are therefore the sole proximate cause of the injury, Judge Graham found insufficient evidence to circumvent the presumption. (See August 2021 Update).
The plaintiffs appealed Judge Graham’s dismissal of the case, and, in the interim, Judge Graham addressed the plaintiffs’ arguments that the cruise line should be sanctioned for spoliation of evidence and failing to produce a document during discovery. Two days after the accident, the plaintiffs’ counsel requested that the cruise line preserve video of the area of the incident for 12 hours prior to the accident; however, the cruise line only preserved the footage for 30 minutes before the accident, considering the footage before then to be irrelevant. Judge Graham agreed that the footage was not relevant to the plaintiffs’ claim, rejecting the argument that they needed the footage to determine who opened the window as the plaintiffs’ liability contentions were based on failing to limit the width of the window with bars or screens, failing to provide signage or other markings to indicate when the window was open, failing to design windows that would clearly indicate they were open, and failing to comply with industry standards for window design and safety devices. Nonetheless, the cruise line had been clearly notified of the request, and the destruction indicated the intent to deprive the plaintiffs of the requested footage. As the plaintiffs were not prejudiced, Judge Graham did not believe that severe sanctions were warranted; however, he stated that it would be a dangerous precedent to allow the parties to destroy evidence based on their unilateral determination of its relevance prior to a ruling from the court. Therefore, he held that sanctions were appropriate and ordered the parties to brief the appropriate sanctions subsequent to the appeal. The second sanction involved the plaintiffs’ request that the cruise line describe and produce documents related to the application of ASTM standards on the ship. The corporate representative for the cruise line testified that the cruise line only utilizes ASTM standards with respect to pool vacuum suction. The plaintiffs’ counsel noted that in other litigation, the waterslide inspection policy authored by a third party referenced the ASTM standards, and that policy was produced alongside the cruise line’s policy, which did not mention the ASTM standards. The cruise line amended its responses in the other case to clarify that the policy mentioning the ASTM standards was not adopted by the cruise line, but the plaintiffs’ counsel sought sanctions, representing to the court that the waterslide inspection policy was the cruise line’s policy and was evidence that the ASTM standards were applicable on the defendant’s ships. Judge Graham was “deeply troubled by Plaintiffs’ counsel’s apparent continued disregard for the tenets of professionalism and ethical conduct . . . as their arguments appear to be misrepresentations of the record evidence.” Therefore, he ordered the parties to brief, subsequent to the appeal, the appropriate sanctions that should be issued. See September 2021 Update.
The appeal of the dismissal of the complaint proceeded in the Eleventh Circuit, which began its analysis by addressing the issues of duty and proximate cause for all three negligence counts brought by the plaintiffs (general negligence, negligent failure to maintain, and negligent failure to warn). The duty issue depended on whether the cruise line knew or should have known of the dangerous condition that caused the injury. Judge Graham considered the risk-creating condition to be Anello lifting a child up to an open window. Thus, the fact that the cruise line was on notice of the risk of children independently accessing and falling from windows was not relevant to establish a duty. The Eleventh Circuit disagreed, as the plaintiff is generally allowed to define the risk-creating condition, and the appellate court found no reason to reject the pleaded theory that fully-open windows created a risk. Nonetheless, the court considered that difference to be “largely academic” as the court found sufficient evidence to establish that the cruise line should have known not only that fully-open windows posed a risk, but also that there was a risk of adults holding children in front of fully-open windows. The latter notice came from the testimony of the chief security officer on the defendant’s ships that he saw adults holding children in front of open windows on that deck and that the issue was discussed in safety meetings. He had even told adults to bring the children back in and to close the windows. The Eleventh Circuit also cited the wood railing that keeps passengers 19 inches away from the open windows as a fall prevention measure for children and adults as well as the Guest Conduct Policy that prohibited passengers from sitting, standing, lying on, or climbing over any exterior or interior railings. The court noted that warnings are evidence that the cruise line was aware that passengers could fall overboard despite the railing. The appellate court then considered proximate causation—whether the fall was due to a later cause of independent origin that was not foreseeable. The plaintiffs argued that the superseding cause doctrine does not apply when the actor for the superseding cause (Anello) is not a party the litigation. The Eleventh Circuit disagreed, holding that a third party can break the causal chain. However, the appellate court did agree with the plaintiffs that they presented sufficient evidence of foreseeability to make superseding cause a question for the jury. The court noted that, generally, independent illegal acts of third persons (Anello pleaded guilty to negligent homicide) are deemed unforeseeable and are the sole proximate cause of the injury. The appellate court found the exception to the general rule from the testimony of the chief security officer that he watched adults lift children up to the railing in front of an open window and that he saw adults extend children from the rail to the windowsill when the window was open. Thus, the court held that there was sufficient evidence for the jury to find that Anello did not break the causal chain between potential negligence of the cruise line and the fall. Accordingly, the issues of general negligence and negligent failure to maintain had to be decided by the jury. The court of appeals did agree with Judge Graham that the claim for negligent failure to warn passengers about the danger of the open window should be dismissed because the danger was open and obvious. Anello testified that he did not know the window was open and did not believe the child was in danger, and the Eleventh Circuit held that this testimony would ordinarily create a fact question for trial. However, the court noted that there is not a “genuine” issue of fact when video evidence “blatantly contradicts” the testimony to the point that no reasonable jury would believe it. In this case, the video demonstrated that the passengers only approached the spot where the window was open so they could see and hear through the opening. As the objective evidence blatantly contradicted the position that a reasonable person could not tell that the window was open, the appellate court affirmed the grant of summary judgment on the duty to warn.
Airlift USA, a non-vessel operating common carrier contracted with MSC Mediterranean, an ocean common carrier of cargo, for the carriage of a shipment of granite slabs from India to New York. Airlift issued a bill of lading to the shipper, and MSC issued a bill of lading to Airlift. The shipper packed the slabs into wooden bundles that were placed in a container that was sub-leased to MSC. The container was delivered to the consignee’s facility in New Jersey where an employee of the consignee was injured while unpacking the slabs from the container. The worker brought suit in New Jersey state court against MSC, which settled with the worker for $730,000 and with the workers’ compensation carrier for $25,000. MSC then brought this action against Airlift, seeking indemnity based on the provisions in the bill of lading issued by MSC to Airlift. Clause 11.2 provided that MSC was not liable for loss or damage to the cargo caused by the manner in which the cargo was packed, stowed, stuffed, or secured in the container or because of the unsuitability or defective condition of the container. Clause 11.4 provided that Airlift shall indemnify MSC against any loss, damage, liability, or expense whatsoever and howsoever arising caused by one or more of the matters referred to in Clause 11.2, including but not limited to damage to the container, other cargo, and the vessel. After rejecting the argument that the terms of the bill of lading did not extend past the ocean carriage, Judge Cronan addressed the issue whether the indemnity was limited to property damage or included the personal injury. Although Clause 11.2 instructed that MSC was not liable for damage to the cargo, the “matters” referred to in Clause 11.4’s reference to Clause 11.2 were broader than damage to the cargo. Judge Cronan reasoned that the only limitation was that the loss, damage, liability or expense must have been caused by a matter identified in clause 11.2. As poor packing of the container was a matter referenced in Clause 11.2, an injury resulting from the poor packing would fall within the indemnity in Clause 11.4. Airlift argued that the indemnity provision was not written sufficiently to cover the negligence of the indemnitee, MSC, as it did not refer to MSC’s own negligence. Judge Cronan disagreed and held that the language (any loss, damage, liability, or expense whatsoever and howsoever arising) was sufficient to indemnify MSC for its own negligence. Finding that the poor packing of the container was both a but-for cause and a proximate cause of the accident, Judge Cronan awarded MSC the amount paid in settlement plus $133,692.81 in attorney fees and costs to defend the personal injury suit and prejudgment interest (finding reasonable the hourly rate of between $315 and $330 for MSC’s attorney as well as rates of between $145 and $250 an hour for associates and $350 an hour for a colleague with 40 years of litigation experience). See February 2022 Update.
Airlift appealed to the Second Circuit, which affirmed the award of indemnity. The appellate court agreed with Judge Cronan that the bill of lading continued to apply when the cargo was delivered and that the indemnity extended to the injuries allegedly caused by the packing of the cargo and the use of the container. The Second Circuit then addressed the framework to establish whether there was indemnity for the settlement. The court noted that, before agreeing to a settlement, the indemnitee must give the indemnitor the opportunity to approve the settlement or defend the case. If the indemnitor declines to approve the settlement or defend the case, the indemnitee is only required to prove its potential liability to the plaintiff in order to recover the amount of the settlement As MSC provided Airlift with the opportunity to approve the settlement or assume its defense, MSC only needed to show that it was potentially liable in the injury suit and not that it was actually liable. Airlift cited the tension between Judge Cronan’s findings that improper packing was the actual cause of the injury (to determine whether the indemnity provision applied) and the finding that MSC was potentially liable because of the allegedly defective floor in the container. The court emphasized that Judge Cronan was not required to find the actual cause of the injury, and it was only necessary that the indemnitee (MSC) establish its own potential liability to the plaintiff. That was satisfied in this case by the finding that MSC was potentially liable because of the defective container floor. That potential liability triggered the indemnity obligation because it implicated matters referred to in clause 11.2 of the bill of lading, as that clause included both the unsuitability or defective condition of the container and the manner in which the goods were packed. Consequently, the Second Circuit affirmed the award.
Jeremiah Womack purchased a 2019 Skeeter fishing boat and took it out on Caney Lake in Jackson Parish, Louisiana for a break-in drive. He noticed a little bit of a skip in the steering and called the dealer. There was a dispute about what he was told in this call, but Womack took the boat out again and was injured when the boat suddenly turned sharply to the right and hooked around. Three days later, Womack took the boat to a local dealer and the dealer sent the boat to the manufacturer, Skeeter. Skeeter did not find any fault in the steering system and sent the original steering system component parts to the steering manufacturer, Dometic, which found nothing wrong but sent new component parts to Skeeter. Skeeter replaced the parts on the boat with those that Dometic sent and returned the boat, with the new system, to Womack. There were no problems with the steering thereafter, and Dometic disposed of the original parts in accordance with its policy to dispose of the item after testing it and finding no defect. Womack brought this suit in federal court in Louisiana seeking to recover against Skeeter and Dometic under the Louisiana Products Liability Act (dangerous construction and failure to warn) for the injuries he suffered (and arguing that Dometic was guilty of spoliation for destroying the steering system). As Dometic was not on notice of any injury claim by Womack, Judge Doughty held that Womack had not established that Dometic had any obligation to preserve the steering system at the time it was destroyed. Therefore, Judge Doughty denied any sanction for spoliation. Judge Doughty also dismissed the claims based on a manufacturing defect as Womack could not develop evidence that the steering system deviated from the specifications or performance standards, and he held that the doctrine of res ipsa loquitor did not apply because the defendants were not in control of the boat when the accident occurred and there were other plausible theories for the accident, including operator error. Finally, Judge Doughty found nothing difficult to read, confusing, or inconsistent with the warnings and dismissed the claim that the vessel was unreasonably dangerous because of inadequate warnings. See April 2022 Update.
Womack appealed Judge Doughty’s grant of summary judgment to the Fifth Circuit. Womack argued that he had presented a case for an unreasonably dangerous condition of the boat, based on res ipsa loquitur, through the testimony of naval engineer Ken Smith, who, according to Womack, opined that there were only three reasonable hypotheses to explain the accident, a passing wave, user input, or failure in the system. As Womack eliminated the wave and user input by his testimony, he claimed that a jury could find, based on res ipsa loquitur, that the cause of the accident was a failure of the steering system. However, the Fifth Circuit answered that Smith identified a fourth possibility—“air entrained in the hydraulic system” that could come from insufficient hydraulic fluid or air not being properly purged from the steering system hydraulics. As Womack did not show that lack of hydraulic fluid is a deviation from the manufacturer’s standards rather than a routine maintenance issue for which Womack was responsible, he failed to demonstrate that insufficient hydraulic fluid was a product defect, and he could not use res ipsa loquitur as there was a reasonable explanation apart from a product defect. For the claim based on a failure to warn, Womack had to provide evidence about the cause, frequency, severity, or consequences of the dangerous question. Womack argued that there was an inherent danger in the use of the steering system that if too much air entered the system the system could fail. Smith’s expert report did contain conclusory statements about the way the defendants warned users to check the fluid, but the report did not provide evidence that the warnings were disproportionate to the risk of accident. Womack was aware that operating the boat without checking the steering system could result in an accident, testifying that he reviewed the manual’s warnings before taking out the boat. Accordingly, the claim for failure to warn also failed.
From the federal district courts
This dispute arose on Lost Lake, across the Atchafalaya River from Butte Larose in St. Martin Parish, Louisiana. Devin Thibodeaux, a commercial crawfisherman, was harvesting his crawfish traps in water over property owned by Kenneth Bernhard, whose son Adam Bernhard manages the property, when Bernhard intercepted and collided with the skiff occupied by Thibodeaux. Bernard declared that Thibodeaux was trespassing, and ordered him to retrieve his traps, exit the property, and never return. Bernard then summoned a sheriff’s deputy who issued a citation to Thibodeaux for criminal trespass. Thibodeaux brought this action in federal court under the court’s admiralty jurisdiction, asserting a conversion claim under Louisiana state law. Bernhard moved to dismiss the case for lack of admiralty jurisdiction, claiming that Thibodeaux did not sufficiently allege the location of the incident for the locality portion of the test for admiralty jurisdiction, nor did he allege how the actions of the defendant had a connection to traditional maritime activity. Magistrate Judge Whitehurst agreed that the allegations were insufficient, but she gave Thibodeaux an opportunity to amend the complaint to provide more specific allegations on the elements of the test for admiralty jurisdiction. See October 2021 Update.
After Thibodeaux filed an amended complaint and Bernhard again moved to dismiss the complaint for lack of admiralty jurisdiction, Magistrate Judge Whitehurst classified the incident as interference with the plaintiff’s ability to harvest crawfish from their traps with the potential to disrupt maritime commerce, but she recommended that the case be dismissed because the general character of the activity giving rise to the plaintiff’s claims (described as harassment, verbal accosting, declaration of trespass, and ordering the plaintiff to leave the property) was not sufficiently related to traditional maritime activity. Judge Joseph found the characterization to be deficient in two important respects—it failed to encompass the allegation that the plaintiff was forcefully intercepted and stopped, an alleged intentional obstruction of a navigable vessel, and it failed to account for the reason for the conduct—impeding the plaintiff from freely navigating in the waterway while conducting commercial crawfishing. Judge Joseph instead described the defendant’s activities as “alleged physical obstruction of a navigable vessel, verbal threats, and other intimidating actions designed to impede commercial fishing and navigation. Accordingly, Judge Joseph concluded that the maritime nexus test was satisfied and remanded the matter to Magistrate Judge Whitehurst to make factual findings on whether the locality test was satisfied. See July 2022 Update.
Magistrate Judge Whitehurst then held an evidentiary hearing and found: Lost Lake is a perched lake (a perched lake is one in which the bottom of the lake is above the mean level of water in the surrounding river channels) situated in a crook of undeveloped swampland between the Atchafalaya River and the Butte LaRose Cutoff Channel. Lost Lake’s bottom is perched 1 to 2 feet above mean river stage at Butte La Rose. When the Atchafalaya River is at high stage (19 feet), Lost Lake is accessible in various routes through the woods. Otherwise, access to Lost Lake is only through a 10- to 20-foot-wide drainage channel from the Atchafalaya River. The Lake is accessible through flooding and/or the ditch about 30%, or about 110 days in the crawfish season, annually.” Magistrate Judge Whitehurst summarized: “Lost Lake, a privately owned, non-state claimed, flood-prone area, which standing alone, without the seasonal access provided by [a] drainage ditch, is not navigable.” That raised the question: “But what of the drainage ditch, which has permitted limited navigation relatively recently?” Rather than determining the difficult question whether the Lost Lake was navigable for admiralty jurisdiction, Magistrate Judge Whitehurst ruled that there was a sufficient possibility of a federal navigational servitude that the court could exercise federal question jurisdiction with supplemental jurisdiction over the plaintiffs’ state-law claims. Judge Joseph, however, chose to supplement the lengthy factual findings of Magistrate Judge Whitehurst and concluded that Lost Lake was navigable-in-fact and that the case fell within the court’s admiralty jurisdiction. The defendants argued that Lost Lake did not form an interconnected highway of commerce because it only seasonally “communicates” with the Atchafalaya River, but Judge Joseph answered that the Fifth Circuit had found that seasonal accessibility does not preclude a finding of navigability. Judge Joseph agreed with Magistrate Judge Whitehurst’s finding that Lost Lake was accessible to the Atchafalaya River about a third of the year through the short ditch, which “wholly coincides with crawfish season,” and is “commercially significant” for that Basin. Judge Joseph concluded: “Lost Lake is navigable-in-fact, and therefore a navigable body of water for the purposes [of] this Court’s admiralty jurisdiction.” The defendants filed a notice of appeal on June 21, 2023 (No. 23-30405 in the Fifth Circuit). [Compare Judge Joseph’s analysis with that of Judge Griggsby in Baltimore Gas & Electric Co. v. Coastline Commercial Contracting, Inc., No. 22-cv-696, 2023 U.S. Dist. LEXIS 120585 (D. Md. July 11, 2023), which is discussed below].
Baird Stokes purchased a sailboat in 2019. The sailboat needed repairs, and Stokes sailed the boat to the Belhaven Shipyard in North Carolina. Belhaven dry-docked the vessel and began performing repairs. Stokes lived on the vessel, and Belhaven provided utilities for the boat. In exchange for the services, Stokes performed work for Belhaven in a barter arrangement. When the barter arrangement soured, the sailboat remained dry-docked, and Stokes never paid Belhaven. Stokes filed for bankruptcy under Chapter 7 in the Eastern District of North Carolina, and Bankruptcy Judge Callaway found that the sailboat was Stokes’ residence. Stokes demanded that Belhaven turnover the sailboat, and Bankruptcy Judge Callaway found that the boat had a value of $10,000 and that Belhaven had a maritime lien on the boat for $7,752.67. He also found that Belhaven could retain possession of the boat until the lien was fully paid, and that an additional storage fee of $10 per day would accrue on the vessel if the lien was not paid. Stokes appealed the order to the district court, arguing that Belhaven did not have a valid maritime lien, that the lien should be barred by laches, and that the bankruptcy judge should have required Belhaven to return possession of the sailboat to Stokes. Judge Boyle was unpersuaded, answering that if Stokes wanted the return of the boat, he should pay the lien. Judge Boyle agreed that Bankruptcy Judge Callaway correctly found that the services provided by the shipyard (storage, repairs, and utilities) were necessaries that were provided to the vessel at the owner’s request at a reasonable price. Although there was conflicting testimony and evidence for the amount of the lien, Judge Boyle was satisfied that the finding of $7,752.67 was not clearly erroneous. Therefore, he affirmed the finding of the amount of the lien. Judge Boyle also agreed that the $10 storage fee (post-petition) was reasonable and that the automatic stay from the bankruptcy proceeding did not prevent the accumulation of post-petition charges. Judge Boyle also rejected Stokes’ argument that laches barred the lien, concluding that there was no unreasonable delay in asserting the lien (noting that the lien was asserted within the statute of limitations, which was evidence that the delay was not unreasonable). Finally, Judge Boyle rejected Stokes’ argument that an in rem action was necessary to effectuate the lien, answering that a maritime lien is properly perfected the moment the necessary services are performed and that it does not require recording or filing a claim against the vessel. Although Stokes argued that the sailboat should have been returned once he filed the bankruptcy petition, Judge Boyle held: “Because the Shipyard possessed the Sailboat when Stokes filed for bankruptcy, the Shipyard’s possession did not disturb the ‘status quo of estate property.’”
Dr. Frank Opaskar and South Shore Marine were negotiating the purchase of a new boat with the trade-in of Dr. Opaskar’s 33-foot vessel, THIRD LADY. Dr. Opaskar set out in the THIRD LADY across Lake Erie with Christopher Kedas, a salesman for South Shore, and Christopher’s minor son. The boat’s engine exhaust malfunctioned during the trip, and all three passengers on the boat were found dead on the vessel, probably from carbon monoxide poisoning. There was a dispute whether ownership of the vessel had transferred by the trade-in, and limitation actions were filed by South Shore Marine and Dr. Opaskar’s widow (Gail). A separate Rule D action was brought by Gail Opaskar to litigate ownership of the vessel between the Opaskars and South Shore Marine. Three motions to dismiss were filed in the limitation actions, challenging whether the petitioners adequately pleaded ownership of the vessel as both limitation actions denied that the petitioner was the owner of the vessel and claimed the right to exoneration/limitation in the alternative in the event the petitioner was found to be the owner. Judge Gwin held that the constitutional injuries alleged by the petitioners were actual and concrete. The petitioners were subject of suits that had to be defended, and those suits gave the petitioners standing to seek exoneration/limitation. As to whether the pleadings satisfied the Iqbal/Twombly standard for lack of privity or knowledge, Judge Gwin held that, although sparse, the allegations were sufficient. See May 2022 Update.
Four claims were filed in the South Shore limitation action, and a default order was entered at the end of the period to file claims. Just over a month later, Chagrin River Marine filed a motion to reopen the time to file claims and to set aside the default. Chagrin River, a defendant in state-court suits, desired to present a contribution claim against South Shore Marine. As Chagrin River had not received actual notice of the limitation action (despite being named as an interested party), and as the addition of one claim would not result in prejudice or delay after four claims had been filed, Judge Gwin held that Chagrin River had met the “low bar” to file a late claim. Although South Shore Marine argued that Chagrin River had forfeited its right to file a claim in the limitation action by failing to sue South Shore Marine in state court, Judge Gwin found no authority to support that argument and set aside the default. See June 2022 Update.
After ruling that the limitation actions were appropriate, Judge Gwin asked the parties for briefing whether the limitation actions should be stayed in light of the fact that the issue of ownership of the vessel was being litigated in the Rule D action. After weighing the economy of time and effort and the competing interests, Judge Gwin exercised his discretion to stay both limitation suits so that the Rule D action could determine the ownership of the vessel. Thus, the stay of litigation from the limitation actions remained in place, except for the Rule D action. See September 2022 Update.
Gail Opaskar then sought, in the Rule D petitory action, to disclaim the Opaskars’ ownership of the THIRD LADY at the time of the accident, and the parties filed motions for summary judgment. Gail argued that South Shore Marine owned the vessel based on how far the parties had progressed in the trade-in process for the THIRD LADY. Gail and her daughter Amanda had identified a new vessel that they wished to purchase on June 15, 2021, and Christopher Kedas had looked over the THIRD LADY. The Opaskars put down an initial deposition on the new boat, and a Buyer’s Quote had been issued with the options for the boat and the buyers agreeing to close the sale no later than June 26, 2021. On June 21, 2021, Amanda and Gail went to South Shore Marine to discuss the financing, and they brought the title to the THIRD LADY, but Shouth Shore Marine would not accept it, advising that a mechanical inspection of the THIRD LADY was necessary and that Frank Opaskar, title owner, would need to sign the title over in front of a notary. The inspection was arranged for June 23, 2021, and that is when Frank Opaskar, Christopher Kedas, and Kedas’ son left the dock to take the boat to South Shore Marine’s facility. At the time of the casualty, the title still remained in the name of Frank and Gail Opaskar. The first issue to be decided was whether the court had admiralty jurisdiction over the petitory action (there was no diversity among the parties). There were two possible bases for admiralty jurisdiction: 1) if the trade-in agreement was maritime in nature, and 2) if this action was a valid petitory suit to try title to the vessel under Rule D. Magistrate Judge Parker reasoned that Gail’s argument involved rights created under the purported trade-in agreement, and that agreement was analogous to a contract for sale of a vessel, which is not a maritime contract. In order to decide whether to place the burden of ownership of the vessel on South Shore Marine, the court would have to decide whether title passed. Accordingly, Magistrate Judge Parker held that the court lacked jurisdiction over the suit under a maritime-contract theory. Gail and South Shore Marine argued that the suit fell within Supplemental Rule D, providing: “(iii) a titled owner may bring a petitory action to ‘try title’ to the vessel.” Kedras’ Estate disagreed. Neither Gail and South Shore Marine, nor Magistrate Judge Parker could find a case in which the holder of title to a vessel sought to use Rule D in the “unprecedent manner” to disclaim ownership to the vessel. Although Magistrate Judge Parker did not believe that Rule D could be used in this fashion, he also rejected the attempt to try title to the vessel in the facts of this case. Gail was not trying to prove that title by documentary evidence. Instead, she argued that the court should base its decision on the conduct of South Shore Marine evincing indicia of ownership so that there was an equitable passage of title. However, Magistrate Judge Parker returned to the fact that the disagreement was nothing more than a contract dispute involving the trade-in agreement, which was not maritime. Characterizing the attempt to bring a petitory action out of an underlying non-maritime contract as “grasping,” Magistrate Judge Parker held that the court lacked jurisdiction over the petitory action. Thus, the title dispute would have to be decided by the judge handling the limitation actions: “It will simply be a different judge who decides whether the parties’ efforts to disclaim ownership of The Third Lady or to limit their liability can float.”
Moidrag Cakarevic, a crew member on the cruise ship HORIZON, contracted COVID-19 during a cruise in March 2020. He brought this suit in Florida state court against the cruise line for unseaworthiness and maintenance and cure, and the cruise line removed the suit to federal court and moved to compel arbitration under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). The cruise line argued that Cakarevic’s employment agreement with Pullmantur Ship Management contained an arbitration agreement that covered the claims in this suit, and that the arbitration agreement was enforceable under the New York Convention. Although the cruise line was not a party to the agreement, it argued that the agreement encompassed the claims in the suit and that it could enforce the arbitration agreement by principles of equitable estoppel. Judge Scola agreed that the seaman was equitably estopped from disclaiming the arbitration provision in the employment agreement. Judge Scola held that the “plain terms” of the employment agreement covered all disputes connected with Cakarevic’s service whether they were asserted against the shipowner, ship operator, or vessel. The provision included disputes that arose by contract, statute, common law, tort, or otherwise. As all of Cakarevic’s claims fell within the scope of the agreement, Judge Scola held that Cakarevic was equitably estopped from avoiding the arbitration provision of the agreement. He compelled arbitration and dismissed the claims with prejudice.
Roberto Elorreaga died from mesothelioma that he claimed was from exposure to asbestos while serving in the Navy on the USS RUPERTUS (machinist mate) and USS COWELL (fireman’s apprentice and electrician’s mate), and he and his wife (his beneficiaries were added after his death) brought suit in California state court against suppliers of asbestos products. The case was removed to federal court based on the Federal Officer Removal Statute, and defendant General Electric filed a motion to dismiss the claims for punitive damages and loss of consortium. The plaintiffs argued that punitive damages should be permitted based on the decision of the Supreme Court in Atlantic Sounding. Following the framework enunciated in Batterton, however, Judge Gilliam found no evidence that punitive damages were historically available in the claims asserted in this case, and he dismissed the punitive damage claims. As to the claim for loss of consortium, Judge Gilliam did not believe that Atlantic Sounding provided a basis for the court to decline to apply the existing rule in the Ninth Circuit from Smith v. Trinidad that damages for loss of consortium are not available under the Jones Act or general maritime law, particularly in light of Batterton. Judge Gilliam did not, on a motion to dismiss, believe that it was appropriate to dismiss the claims brought under California law as it was not yet known for certain whether Elorreaga may have been exposed to asbestos while working on the land at a shipyard. See August 2022 Update.
As the plaintiffs had to prove that the specific products of the product defendants were a substantial factor in causing Elorreaga’s illness (under maritime law or state law), the defendants sought to exclude the testimony of several of the plaintiffs’ experts on the basis that their opinions addressed “every exposure” or “cumulative dose” causation. They argued that none of the experts provided opinions about the amount or duration of Ellorreaga’s exposure attributable to their specific products. Judge Gilliam agreed that the Ninth Circuit had rejected the “every exposure” theory under the general maritime law (it undermined the substantial factor test and would permit imposition of liability on the manufacturer of any product containing asbestos to which the worker had the briefest of encounters). Consequently, he examined the expert opinions to determine whether they were based on the “every exposure theory.” Although none of the experts detailed the proximity, frequency, or regularity of exposure to a specific product, Judge Gilliam declined to exclude the opinions, reasoning that they were still helpful to the fact finder and noting that the plaintiffs would still have to introduce evidence from which the fact finder could infer that each product was a substantial factor in causing Elorreaga’s mesothelioma. However, to the extent an expert attempted to offer an “every exposure” opinion, Judge Gilliam advised that the testimony would be excluded.
The plaintiffs and some of the defendants filed cross-motions for summary judgment on the government-contractor defense from the Supreme Court’s Boyle case (the defendants argued that they simply complied with Navy specifications when supplying the products containing asbestos). The plaintiffs argued that the Boyle defense was based on preemption concerns with respect to state law claims that are not involved in a case brought under federal maritime law. Although the defendants cited cases in which the courts considered the government-contractor defense in the context of federal claims, Judge Gilliam answered that the courts simply applied Boyle without any analysis of the Supreme Court’s concerns about preemption. Therefore, Judge Gilliam granted partial summary judgment to the plaintiffs that the defense did not apply in this case because the claims were premised on federal maritime law (the defendants did not raise a Yearsley defense). Finally, several product defendants moved for summary judgment that the plaintiffs did not provide sufficient evidence of exposure to asbestos from their products and that any exposure was a substantial contributing factor. Judge Gilliam found fact questions on the exposure and that the evidence on the substantial factor issue was “not especially strong” but was sufficient to avoid summary judgment. See May 2023 Update.
Several defendants then moved the court to certify for interlocutory appeal, the determination that the Boyle government contractor defense did not apply to the federal maritime law claims in the case. Judge Gilliam reasoned that the question was purely legal in nature and did not require any factual inquiry, that there were substantial grounds for difference of opinion on the issue, and that an immediate appeal would avoid the case proceeding to trial in which the defendants would have no opportunity to introduce evidence on a defense that could provide a complete defense. Therefore, Judge Gilliam agreed to certify the case for an interlocutory appeal on the government contractor defense and stayed the suit. The appeal is docketed in the Ninth Circuit as No. 23-80056.
This case involves goods that were transported by ship from Spain to Houston and then were scheduled to be delivered overland from Houston to California. During the overland transportation, the goods were driven into a bridge in Houston. The owner of the goods brought suit in Texas state court against the party hired for the inland transportation and the inland carrier, and they removed the case to federal court in Texas under the Carmack Amendment. One of the defendants filed a third-party claim under Rule 14(c), seeking to have the third-party defendants, including the freight forwarder, warehouseman, and cargo seller, be held liable directly to the plaintiff. Judge Rosenthal rejected the pleading, noting that Rule 14(c) only applies to admiralty claims. Although the subject matter of the suit involved goods that had been transported by ship to Houston, the dispute arose from the overland journey under contracts that did not involve the ocean carriage. Therefore, the defendant could not demand judgment for the plaintiff, rather than itself.
The tale of woes recited in this suit brings to mind the quote from a weeping Aeneas at the end of his arduous struggles with Achate in The Aeneid (used in the conclusion to the argument by Attorney General William Wirt to the Supreme Court in Gibbons v. Ogden): “Quis jam locus, Quae regio in terris nostri non plena laboris!” (What place, what region of the Earth is not filled with the stories of our hardships). Aurelia Emily Allbert was a passenger on a 35-day round-trip cruise from California to Hawaii and Tahiti on the ZUIDERDAM (her husband remained in New York). She claims that shortly after departing from San Diego, she was sexually assaulted in her cabin by three different men on three occasions (believed to be the ship’s food and beverage manager, a man who allegedly owns a Holland American entity, and a traveling lecturer). She was troubled greatly by these incidents but did not report them to the ship’s management. Allbert also experienced other annoying incidents, including a broken mini-fridge, a water leak, a noisy passenger in the adjoining cabin, and problems with her security access card. She was treated disrespectfully when she requested a new card, believing the treatment was the result of racial discrimination because she was born and raised in China. She also complained that the crew confiscated bottles of alcoholic beverages that she purchased ashore and intended to sell when she returned home to New York. As the crew declined to address her complaints, Allbert decided “to do something dramatic to get management’s attention.” While the vessel was moored in Raiatea, she climbed over a railing onto a narrow platform above the water and waited for the crew to ask her what she was doing. The crew eventually brought her back on deck, and she was informed that she should prepare to leave the vessel. While she was packing, the ship’s doctor told her to report to the medical center right away, but she was concerned about what might happen in the medical center. The doctor denied her requests to speak to her husband or friends but told her that she could return to her cabin if she had a blood test. Once she was in the medical center, she was injected with an unknown medication without consent. Before passing out, she heard the ship’s security manager ask another member of security to turn off his body camera. She was held in the medical center without consent for five days and was denied her requests for a change of clothing. She believes she was injected with anti-psychotic medications. She claims that the doctor incorrectly diagnosed her with mania and psychotic symptoms after consulting with an osteopath in Miami who had some training in psychiatry (the diagnosis was to justify her detention in the ship’s medical center). When the vessel reached Tahiti, the ship’s doctor arranged for an ambulance to take Allbert to a psychiatric hospital in Papeete (charging $16,000 to her credit card without her consent for the medical treatment in the ship’s medical center). A physician at the hospital called the vessel and was informed that the cruise line would pay for Allbert’s return travel to New York, but the cruise line failed to arrange the travel, and Allbert remained in the hospital for 6 ½ weeks, where she was subject to multiple depressing conditions and was sexually assaulted by a hospital staff member. The hospital billed her $89,000 for her stay. The hospital then released Allbert with a “clean bill of health,” but she did not have money to travel home, and social services in Tahiti placed her in two shelters for another 6 ½ weeks where she was sexually assaulted by a local man on probation. Eventually, local immigration authorities required the cruise line to arrange for her travel, and she then brought this action in federal court in Washington against the cruise line, its affiliates and subsidiaries, employees, and independent contractors for breach of contract, negligence, unlawful imprisonment, assault and battery, intentional infliction of emotional distress, conversion/theft, and medical malpractice. Allbert argued that the cruise line breached its contract, identifying only the website statement that the employees are committed to providing a truly extraordinary experience for the passengers. Judge Zilly held that this assertion was insufficient to state a claim for breach of contract and that Allbert would be allowed to amend to identify specific provisions of the contract that were breached. Albert alleged that the cruise line had a duty to ensure that its passengers were not exposed to acts of aggression, sexual advances, or discriminatory treatment and that it breached the duty by failing to train and/or monitor its employees and independent contractors. As she did not plead any facts alleging that the cruise line negligently implemented and operated a training program that caused the individuals to sexually assault her or that caused the doctor to provide inadequate medical care or failed to investigate or take corrective action after receiving notice of an employee’s unfitness, the negligence claim was dismissed with leave to amend (Judge Zilly similarly dismissed claims that suggested that the cruise line should be held liable for the intentional conduct of its employees and independent contractors). In response to the claim for unlawful imprisonment (intentional deprivation of movement or freedom to remain in the place of one’s lawful choice), the cruise line argued that its crew’s conduct was justified by Allbert’s actions on the vessel. Taking Allbert’s allegations as true for the motion to dismiss, Judge Zilly did not consider the defense and denied the motion to dismiss. For the claim of assault and battery for six sexual assaults and the injection of anti-psychotic drugs without her consent, Judge Zilly could not tell whether Allbert was alleging that the cruise line was liable for its own negligence or whether Allbert was claiming that the cruise line was vicariously liable for the criminal actions of individuals committed outside the scope of their employment. Therefore, he dismissed the claim with leave to amend. Judge Zilly then considered whether the allegations of intentional infliction of emotional distress were sufficient to cross the high bar of conduct that is so outrageous and extreme as to go beyond all bounds of decency. Allbert’s allegation regarding her security access card, the state of her cabin, and the confiscation of alcoholic beverages did not rise to that level, and the allegations with respect to the actions of the doctor were insufficient “in light of Plaintiff’s decision to climb over the vessel’s railing.” Therefore, this count was dismissed with leave to amend. In response to the claim for conversion/theft for confiscation of alcoholic beverages and charging her credit card for the care she received in the ship’s medical facility, the cruise line argued that Allbert could not recover noneconomic damages. Judge Zilly answered that she might not recover noneconomic damages but she alleged that she suffered financial harm. Therefore, he declined to dismiss the count alleging conversion/theft. Finally, Allbert alleged that the vessel’s doctor and the osteopath in Florida committed medical malpractice when they diagnosed her with mania and psychotic symptoms. As Judge Zilly was uncertain whether Allbert was asserting these claims against the cruise line or the doctor (the shipowner is only liable if it negligently selects the physician), he dismissed this count with leave to amend.
X.E.M. was a passenger on the RHAPSODY OF THE SEAS. She was 14 years old and attended a minors-only event (ages 13 to 17) where she met a 19-year old (assailant). They later were walking to a New Year’s Eve party for teenagers when the assailant allegedly pushed X.E.M. into a bathroom and sexually assaulted her. This lawsuit was brought on behalf of X.E.M. against the cruise line in federal court in Florida, alleging negligent failure to warn, negligent security, and general negligence. The plaintiff also alleged that the cruise line made a business decision not to warn customers of the danger of assaults so to avoid scaring away prospective passengers and that punitive damages were recoverable for this willful and outrageous conduct. The cruise line moved to dismiss the complaint and to strike the demand for punitive damages. The cruise line argued that the three negligence claims failed to plead factual allegations making it reasonably foreseeable that the plaintiff would be sexually assaulted after meeting a 19-year old at a minors-only event when the assault happened at a different time and place. Unlike an Eleventh Circuit case in which the allegations did not support a plausible inference that the cruise line was aware of assaults, the complaint in this case cited past incident reports of sexual assault that Judge Huck believed would make the danger of sexual assaults known to the cruise line (Judge Huck also cited publicly available data of incidents of shipboard assaults). Judge Huck disagreed that, at the pleading stage, the plaintiff was required to specify how many vessels of the cruise line’s fleet resulted in the reports of sexual assault. He also rejected the argument that the use of incident reports to establish foreseeability was akin to holding the cruise line strictly liable for any sexual assault by a passenger. The cruise line also argued that the complaint failed to allege proximate cause because the sexual assault was unconnected to the negligence of allowing the assailant into the minors-only event because the plaintiff and assailant voluntarily met at another time and place where the assault took place. Judge Huck responded that the plaintiff alleged breaches that were unrelated to the minors-only event, such as failing to warn passengers of the dangers of sexual assaults on its vessels and failing to promulgate and enforce policies and procedures designed to prevent sexual assaults on passengers (and specifically on minors). Accordingly, Judge Huck declined to dismiss the complaint. Turning to the claim for punitive damages, Judge Huck noted the intra-district split on the issue of whether punitive damages are allowed in maritime tort claims. He did not have to join in the dispute, however, as he held that the complaint did not make the necessary allegations to demonstrate intentional misconduct. Although the plaintiff alleged that the cruise line knew of the risk of sexual assault on cruise ships and failed to disclose that risk for financial reasons, there were no allegations that there was a high probability that the plaintiff would be sexually assaulted. Thus, the allegations of negligence did not rise to the level of intentional misconduct necessary to find an exceptional circumstance for which punitive damages may be warranted, and Judge Huck struck the claim for punitive damages.
Order on motion to alter judgment
Harvey Smith brought this suit in federal court in California seeking to recover injuries that he suffered as a crew member on the M/V HORIZON SPIRIT (ultimately asserting that Sunrise Operations was his Jones Act employer and the operator of the vessel). Smith alleged that he injured his back while moving crates at the direction of the captain. The case was tried with a jury verdict on March 9, 2023 finding that Smith was 95% at fault and Sunrise was 5% at fault. The jury awarded damages of $7,620,000, and the court entered judgment on the verdict in the amount of $381,000. Smith moved to set aside the finding of contributory negligence, claiming that the determination was based on a finding that Smith was not ordered to perform the task that resulted in his injury. Judge Chesney noted that the captain testified that it was his practice to “request” rather than to “order” the crew to perform tasks and that Smith could have given a reasonable response that he wanted to “go get something” or that he wanted to “do something different.” Smith argued that the court should treat “requests” by superior officers as the equivalent of orders, but Judge Chesney pointed out that the Ninth Circuit has recognized a distinction between requests and orders, explaining: “When a seaman completes an ordinary task, even if requested by a superior, contributory negligence may mitigate damages if an injured seaman has alternatives available, and chose the unreasonable course in completing the task.” Accordingly, Judge Chesney declined to alter the judgment. Smith also moved for a new trial in light of the “stronger testimony” that he was ordered to perform the task and because the court erred in not admitting a report about the condition of the vessel and in admitting two weather reports submitted by the defendant. Judge Chesney rejected the testimonial argument as it is up to the jury to resolve conflicting testimony, and she declined to change her rulings on the reports. Therefore, she denied the motion for a new trial.
This decision follows the appeal to the Ninth Circuit that considered the timeliness of two limitation actions. Jennifer Horazdovsky was killed on Flat Lake, Alaska, when the raft in which she was riding in tow of a vessel operated by her husband, Andrew, was involved in a collision with a 21-foot recreational vessel being operated by Reagan Martz, son of the boat’s owners, William and Jane Martz. Andrew Horazdovsky’s attorney Timothy Lamb sent a letter to Reagan Martz on June 18, 2018, advising that he was searching for insurance coverage and inquiring about insurance for the accident. Four months later, attorney Carl Cook emailed counsel for the Martzes and requested insurance on the boat and information on the property where Reagan Martz was staying. There was an exchange between counsel about the absence of insurance, property ownership, and whether an insurer was paying for the attorney for the Martzes, including a criminal lawyer for Reagan Martz. On December 4, 2018, a third attorney, Robert Stone, wrote to counsel for the Martzes to seek clarification of the insurance coverage, noting that Reagan was a permissive user of the boat, and advising of the investigation of whether William or Jane Martz would bear any responsibility. He advised that he “would like to avoid unnecessarily naming parties to a lawsuit.” On June 4, 2020, Andrew Horazdovsky brought an action in Alaska state court against Jane and William Martz, and the Martzes filed their limitation action three weeks later on June 25, 2020. Horazdovsky moved for summary judgment on the timeliness of the action, and Judge Gleason considered the letters that were sent by the three lawyers for Horazdovsky. Although the first two letters were “fairly limited in scope,” Judge Gleason found the third letter was far more substantive, “outlining a theory of liability that implicated the Martzes (the notation that Reagan Martz was a permissive user of the boat). The letter mentioned a lawsuit by stating that the lawyer would like to avoid unnecessarily naming parties to the suit, and Judge Gleason used that language to conclude that the representation that the lawyer wanted to avoid unnecessarily naming parties to the suit was notice that the Horazdovsky intended to bring a lawsuit. Although the letter was “undoubtedly tentative,” Judge Gleason held that it was sufficient notice to trigger the running of the period to file the limitation action. See December 2020 Update. The Martzes moved for an injunction pending appeal, arguing that they had complied with the statutory requirements of the Limitation Act and the injunction should remain in place as long as the appeal was pending. Although Judge Gleason assumed that there was a sufficient chance of success on the merits of the appeal, she did not find that the Martzes would suffer irreparable harm absent an injunction pending appeal or that the balance of hardships was in their favor. Consequently, she exercised her discretion to deny the request for an injunction pending appeal.
In a separate matter, thirteen-year-old T.T. drowned during the Discover Scuba Diving Experience provided by the owners and owners pro hac vice of the DIVE BARGE, who filed a limitation action. The incident occurred on January 5, 2019, and counsel for the boy’s personal representative wrote a letter to the owners requesting preservation of evidence related to the incident. There were no further communications from the claimant’s counsel prior to the filing of the suit in Hawaii state court more than six months later on September 19, 2019. Within two months of the filing of the suit, but more than six months from the letter requesting preservation of evidence, the owners/owners pro hac vice of the DIVE BARGE filed their limitation action. The personal representative filed a claim in the proceeding and then sought dismissal or summary judgment that the limitation action was untimely. Judge Kobayashi declined to dismiss the action but addressed the timeliness issue on a summary judgment standard. The owners/owners pro hac vice argued that the preservation letter was insufficient to constitute written notice of a claim because it did not assign blame, fault, or liability for the death. However, Judge Kobayahsi considered the tenor of the letter as notice that there was a potential claim. If there were doubt as to whether the letter was giving notice of a claim, Judge Kobayashi stated that the owner/owners pro hac vice could have sought clarification. See December 2020 Update.
The vessel owners in both cases appealed to the Ninth Circuit, which reversed the decisions of the district courts. Writing for the Ninth Circuit, Judge Miller considered two issues of first impression in the Ninth Circuit. The first was whether the six-month requirement in the Limitation Statute is a jurisdictional rule (as the Fifth Circuit recently addressed in the Bonvillian Marine case, see January 2022 Update). Noting the disagreement among the appellate courts, Judge Miller agreed with the Bonvillian line of cases that the six-month rule is an ordinary statute of limitations and is not jurisdictional. Thus, the timeliness of the limitation action is a “merits issue” that should be raised by a motion for summary judgment. Judge Miller then turned to the meaning of the requirement of a “written notice.” He began by noting that the factual circumstances of an accident did not constitute written notice and that actual knowledge of damage/injury is not a substitute for written notice. He added that written notice does not require a particular form of words but that the notice must be of a “claim,” and the claim must be one for which the vessel owner could reasonably seek limitation of liability. Judge Miller differed in his analysis from the district courts, reasoning that a “reasonable possibility” of a claim or a “potential claim” is not enough. Instead, “the writing must convey to the vessel owner the claimant’s actual intent to initiate a claim.” The claimants argued that the limitation period should be strictly construed as the Limitation Act is “a relic of an earlier era.” However, Judge Miller was unpersuaded that policy arguments provided any reason to deviate from the statutory language and held that neither claimant provided written notice of a claim before filing suit. Counsel’s letters in the Martz case equivocated on whether a claim would be asserted against William and Jane Martz and did not demand anything from them or assert an entitlement to recovery from them. Similarly, the letter in the Hawaii case did not state any intention to bring a claim against the vessel owners. It did use legal terms, such as evidence, spoliation, and waiver, but “[r]eferences to legal concepts without a definite statement of an intent to file suit—or to assert a legal right in some other way—are insufficient to provide notice of a claim.” Judge Miller also noted that the Hawaii letter was unclear whether it would extend to the liability of the vessel as it did not mention the involvement of any vessel in the death. See June 2022 Update.
On remand from the Ninth Circuit, Horazdovsky moved for judgment on the pleadings based on lack of subject matter jurisdiction and for failure to state a claim. Horazdovsky argued that his claim against the Martzes was for negligent entrustment (of the vessel to their son) and that if the Martzes knew enough to be liable for negligent entrustment, they would have privity or knowledge and would not be able to limit their liability, and if they were not negligent in entrusting the vessel, there would be no need for limitation of liability. Because the district court could not grant relief to the Martzes, Horazdovsky concluded that the court should dismiss the case for want of subject matter jurisdiction. Judge Gleason noted the confusion that had arisen with respect to admiralty jurisdiction and the Limitation of Liability Act, resulting from the decision of the Supreme Court in 1911 in Richardson v. Harmon that the Limitation Act provided an independent basis for federal jurisdiction. That case, involving limitation for a barge that allided with a bridge, was decided before the enactment of the Admiralty Extension Act, which obviated the need for the jurisdictional holding in Richardson. Judge Gleason held that the court’s jurisdiction arose from the grant of admiralty jurisdiction in Section 1333, and the court had jurisdiction because the case involved a boating accident on a navigable waterway. Turning to the issue of whether the Martzes could ever limit liability (failure to state a claim) because of the pleading for negligent entrustment, Judge Gleason noted that Horazdovsky had pleaded other causes of action, such as strict liability under an Alaska statute. Additionally, the key elements for limitation of liability and negligent entrustment were different—“knew or should have known” for negligent entrustment compared to “privity or knowledge” for limitation. Concluding that the Martzes had plausibly stated a claim for limitation, Judge Gleason declined to dismiss the limitation action. See June 2023 Update.
Horazdovsky then moved to dissolve the injunction in the limitation action and to stay the federal proceeding so that he could proceed in Alaska Superior Court. Horazdovsky filed his suit in state court in three capacities: 1) in his individual capacity, 2) as next friend to his minor son, and 3) as personal representative of the Estate of Jennifer Horazdovsky. Although the Ninth Circuit has not decided whether a single claim situation is presented when a claimant brings the action in multiple capacities, Judge Gleason noted that several circuits have held that the single claim exception is presented despite the several capacities. As Horazdovsky submitted the required stipulations, the only remaining issue was whether lifting the stay would prejudice the Martzes’ ability to limit their liability, and Judge Gleason held that the additional expense, delay, and inefficiency from the lifting of the stay were not sufficient to establish prejudice for the purpose of lifting the stay. Consequently, she lifted the injunction in the limitation action and stayed the limitation action pending the resolution of the state case.
Dawn Earls brought suit in Texas state court alleging that she was a guest passenger on a boat owned and operated by Kimon Papasideris and Orange Beach Adventures and that she was injured when she fell into a gap between the sun deck and hull of the vessel. The defendants removed the case to federal court based on the court’s admiralty jurisdiction, and Earls moved to remand the case to state court. Following the majority rule that the court would have had original jurisdiction if the action had been filed in state court but that “‘original jurisdiction’ evaporated” when Earls filed suit in state court, Magistrate Judge Bryan recommended that the case be remanded to state court. Citing the language from the Fifth Circuit in the Sangha v. Navig8 decision that the issue of removability of maritime cases “is not clear,” Magistrate Judge Bryan recommended that Earl’s request for attorney fees and expenses to oppose the removal be denied. See April 2023 Update.
In a brief opinion, Judge Eskridge noted that, although the defendants presented “an issue upon which the Fifth Circuit hasn’t specifically ruled,” he agreed with the reasoning of Magistrate Judge Bryan, and he ordered remand of the case. He also agreed with the denial of attorney fees. Thanks to Hal Watson with Chaffe McCall in Houston, Texas for bringing this case to our attention.
Travis Jones made a claim for symptoms resulting from exposure to crude oil and dispersants from the DEEPWATER HORIZON/Macondo spill while he was swimming at Gulf Shores, Alabama, Pensacola, Florida, and Moss Point, Mississippi. Hamid Alizadeh claimed that he suffered from B-cell lymphoma from his work as a clean-up worker in Lafitte and Grand Isle, Louisiana and throughout the Barataria Basin of the Gulf of Mexico. BP moved for summary judgment on their claims because Jones and Alizadeh did not identify any expert to carry their burden to establish causation. Without any expert evidence on causation, Judges Vance and Africk dismissed their cases with prejudice.
Shonte Nicole Brown, Aaron Johnson, Earl Gilliam, and Lisa Walker claimed exposure to crude oil and dispersants from the DEEPWATER HORIZON/Macondo spill from their work as onshore cleanup workers. Danielle Rose Cranmer and Larry Jones asserted exposure as onshore and offshore cleanup workers. Bruce Hunt, Marcine Ryenell Goldsmith, Thomas Hines, Jr., Anthony Demond Jackson, Taijahrell S. Kenner, Jeremy Ladyde McGill, Vonshea Reanea Chatman, Fred Joe Conley, Ernest J. Giusti, Jr., Samuel O’Neal, Juanita Toler, Jeremy Watts, Howard Jones, David Alan Flournoy, Sr., Elbert Lee, Jr., Jimmie Thomas, Misha N. Sewer, Aaron Willis, Kimberly Nicole Taylor, DeForrest Darrell Thompson, and Glynn Charles Walker brought medical cases arising out of the spill. These plaintiffs presented the expert report of Dr. Jerald Cook to support the general causation requirement for their claims. BP moved to exclude Dr. Cook’s opinions, and Brown, Cranmer, Johnson, Gilliam, Jones and Walker asked the court to allow Dr. Cook’s expert testimony as a sanction for BP’s alleged spoliation of evidence of the plaintiffs’ exposure. Judges Vance, Milazzo, and Guidry agreed that Dr. Cook’s opinions should be excluded and Judges Vance and Milazzo added that the spoliation contention did not change that result. They noted that spoliation is a sanction for the destruction of evidence, but the plaintiffs argued in these cases that BP should have gathered data. Without a duty to collect the data (and as no such evidence existed), there could be no spoliation. Additionally, the admission of a deficient expert report would not be the cure even if there were spoliation. Finally, plaintiffs Brown, Johnson, Gilliam, and Jones noted that some judges had denied summary judgment to BP for symptoms that were transient or temporary. Judge Vance responded that the summary judgment motions in those cases were premised on specific causation, and that Dr. Cook’s opinions on general causation were not challenged in those cases. In these cases, however, BP argued that Dr. Cook’s opinions were insufficient on general causation and specific causation. As evidence of general causation was required, regardless of whether the condition was transient or temporary, and as there was no expert evidence of general causation after the striking of the opinion of Dr. Cook, Judges Vance, Milazzo, and Guidry dismissed all of these suits with prejudice.
After Judge Morgan struck the opinion of Dr. Cook in the suit brought by James C. Alexander, the plaintiff sought rehearing based on an affidavit from Linda S. Birnbaum, Ph.D., who was the director of the National Institute of Environmental Health Services and the National Toxicology Program. However, the affidavit was submitted by Alexander to oppose the exclusion of Dr. Cook’s testimony and was considered by Judge Morgan when she granted summary judgment. As Alexander presented no new argument, Judge Morgan found no basis to reconsider her previous dismissal of the case (she also declined to delay ruling on the motion for reconsideration pending an appeal to the Fifth Circuit in a similar case).
Vernon Davis Baggett, Victor Maurice Blackston, Debra Goree Butler, Benny Dardar, Sr., Vantavious Latrell Ducksworth, Charles M. Franklin, Jr., Patrick Lamar Laster, Jr. Flint James Martin, Larry Stephen McCammon, Jeffari S. McMillan, Denise L. Pettaway, Willie Louis Casey, Jr. Christopher Charles Clay, Sr., Brandon Anthony Newton, Brian Lars Robinson, Susan Gail Barnes, Larry Allen Davenport, Dana Patterson, Wayde P. Bonvillain, Sandra Pettway, April Wensel, Brian Thompson, Terry Weathersby, Victoria Washington, Jerome Harry, Mitchell Hendrix, Calvin Price, Sr., and Bobby J. Slaughter moved to reconsider the decision of Judge Guidry in their cases, excluding the testimony of Dr. Cook and granting summary judgment to BP. These plaintiffs moved for reconsideration based on the theory that BP improperly blocked discovery on the issue of biomonitoring and that reconsideration of the exclusion was appropriate as a sanction. As the plaintiffs did not argue that the discovery they sought would cure the need for particularized causation evidence for each plaintiff (and as there was no new evidence or change in law), Judge Guidry declined to reconsider the exclusion and dismissal in these cases.
This case involves water damage to two shipments of processed natural rubber (for Goodyear and Michelin) from Indonesia to New Orleans, Louisiana. CEVA, the carrier, chartered the INTAN DAYA 7 to transport the cargo from Indonesia to Thailand and the AMBER STAR to carry the goods from Thailand to New Orleans. CEVA hired Coastal, a stevedore and terminal operator, to receive and store the shipments upon their arrival in New Orleans. Goodyear and Michelin allege that the bales of rubber were damaged during the ocean carriage and further damaged after unloading when they were stored outside and uncovered at the Port of New Orleans. Goodyear and Michelin brought this suit in federal court in Louisiana against CEVA and Coastal alleging claims for carrier liability, bailment, negligent hiring and instruction of Coastal, and a declaratory judgment with respect to the provisions for limitation of liability. CEVA and Coastal filed motions to dismiss some of the counts in the complaint that were addressed in this opinion from Judge Ashe. CEVA argued that Goodyear improperly relied on unsigned proposals for ocean charter services because the agreement provided that it must be signed to be effective. Goodyear argued that there was an exchange of emails that incorporated the unsigned agreements to provide the terms for the carriage, and Judge Ashe agreed that Goodyear had sufficiently pleaded the entry into a contract by email so as to survive a motion to dismiss (Judge Ashe also held that there was no reason to dismiss the count seeking a declaratory judgment on this issue). CEVA also argued that the bailment claims pleaded by Goodyear and Michelin were displaced by COGSA; however, Goodyear and Michelin responded that the bailment claims related to the post-discharge damage for which CEVA was not acting as the COGSA carrier. As the bailment claims were pleaded in the alternative to, and to the extent they were not displaced by, COGSA, Judge Ashe declined to dismiss the claims at this early stage of the proceedings. CEVA next argued that Goodyear and Michelin failed to allege a factual basis supporting a duty of care for CEVA in selecting, hiring, and instructing the stevedore/terminal and that the allegations failed to establish that CEVA knew or should have known that the stevedore/terminal was incompetent or irresponsible. However, Judge Ashe held that the pleading (that CEVA had a duty of care to make sure that the stevedore/terminal had the requisite capabilities and facilities to safely store and care for the shipment and a duty to instruct as to the proper method to care for and store the rubber and that these duties were breached by the failure to insure that the stevedore/terminal had the requisite capabilities and facilities and by the failure to give instruction on the storing and caring for the rubber) was sufficient to state a claim. The stevedore/terminal moved to dismiss the bailment claims against it on the ground that the contracts of carriage included a Himalaya Clause that extended protections to stevedores and terminal operators (“servants shall not have any liability to the cargo owner”). Similar to the argument asserted against the CEVA, Goodyear and Michelin argued that the bailment claims were pleaded in the alternative because CEVA had denied liability for damage to the cargo after discharge. Although the stevedore/terminal argued that the contracts of carriage must continue to apply during the period after discharge from the vessel, Judge Ashe noted that there were factual disputes about the application of the contract terms after discharge that permitted, at this stage, the pleading of a bailment theory in the alternative. Therefore, Judge Ashe declined to dismiss the complaint.
This suit is one of several actions involving alleged damage to oyster leases in Louisiana from oil and gas operations. See In re Hot Energy Services, Inc., Nos. 20-3242, 21-45, 2022 U.S. Dist. LEXIS 162540 (E.D. La. Sept. 8, 2022) (October 2022 Update). The plaintiffs in this case held oyster leases in the coastal waters of Plaquemines Parish, Louisiana. They brought suit in Louisiana state court against two vessel owners and dozens of other defendants who are alleged to be responsible for oil and gas exploration and production projects in Louisiana territorial waters. The plaintiffs claim that the defendants introduced brine and other toxic substances (products of underwater extraction of crude oil) in the vicinity of their leases, causing oyster mortality. The defendants removed the case to federal court in Louisiana based on diversity, arguing that a non-diverse defendant was improperly joined. Ultimately, the court dismissed the non-diverse defendant and denied the plaintiffs’ motion to remand the case. The defendants moved to dismiss the complaint for failure to state a claim, and the plaintiffs moved for leave to amend the complaint. These motions were considered by Judge Fallon after Magistrate Judge North denied the motion for leave to amend the complaint on the ground that the amendment failed to state a plausible claim for relief. The defendants argued that the plaintiffs simply lumped all of the defendants together and did not allege which specific acts and operations of each defendant caused the damage for which relief was sought. The plaintiffs argued that they had pleaded facts to state a plausible claim because they alleged tortious acts that meet the standards to state a claim under the general maritime law and under the Louisiana Oyster Lease Law. Judge Fallon agreed with the defendants that the plaintiffs’ allegations were speculative, conclusory, and unspecific to any individual defendant (plaintiffs did not provide a when, where, what, why, or how for the actions of each defendant). Judge Fallon credited the plaintiffs’ allegations that their oyster beds died, and that there was a significant spike in salinity that could have caused these deaths. However, he concluded that the plaintiffs did not point to any specific action or inaction by any of the defendants that caused the spike in salinity. Judge Fallon then considered the plaintiffs’ request for a review of the order of Magistrate Judge North that the plaintiffs should be denied leave to file an amended complaint. Noting that Magistrate Judge North had denied leave to amend because the amended complaint did not do any better in stating plausible claims against the defendants, Judge Fallon declined to allow an amendment. Finally, Judge Fallon did not grant the plaintiffs additional time to conduct discovery so that they could try one more time to amend their complaint, stating: “It is unfair and prejudicial to the Defendants to loop them into this litigation and force them to incur costs and attorney’s fees so that the Plaintiffs can explore whether any Defendant engaged in any conduct that could have caused the damage alleged.”
Goodloe Marine engaged the services of Caillou Island Towing Co. to tow its dredge PERSEVERANCE and Idler Barge from Texas to Florida, but the dredge sank while in tow of the defendant’s tug, CHARLES J. CENAC. Goodloe Marine then brought a six-count complaint against Caillou Island Towing (and others related to the tug), and the defendants moved to dismiss or to strike irrelevant allegations (Caillou Island Towing also filed a limitation action). The defendants objected to the phrase, maritime transportation services, in the negligence counts, arguing that transportation or affreightment is distinguishable from towing. While agreeing with that distinction, Judge Barber declined to dismiss or strike the portions of the negligence counts using the term, maritime transportation services, which was used in the parties’ contract, as it was clear that Goodloe Marine was suing for negligence in towing as opposed to transportation or affreightment. Although the complaint did not set forth the specific facts that constituted gross negligence, Judge Barber considered the allegation that the defendants were “so reckless or wanting in care as to constitute a conscious disregard or indifference to life, safety, or rights of persons and property exposed to such conduct” as sufficient to put the defendants on notice of the claim against them. Arguing that the cause of action for damage to a tug is ex delicto and not ex contractu, the defendants objected to the count alleging breach of contract. Judge Barber noted that Goodloe had alleged negligence counts (ex delicto), but the count for breach of contract sought to recover not for damage to the tug but for the tow not being delivered to the contracted destination. Therefore, he considered the count for breach of contract to be sufficient. Finally, the defendants objected to the count asserting a breach of the warranty of workmanlike service. Citing the divergent lines of cases whether the tower owes a warranty of workmanlike service or only a negligence duty, Judge Barber declined to dismiss the count and advised that the parties may revisit the issue through summary judgment after developing facts to determine whether the warranty may apply to the defendants’ conduct. See July 2020 Update.
Caillou Island Towing then brought a third-party complaint against RJA, Ltd, which was hired by Goodloe to survey the tow and certify its fitness, seeking indemnity and contribution. RJA moved to dismiss the indemnity claim, and Judge Badalamenti agreed that maritime service contractors, such as the surveyor, must perform their services in compliance with a warranty of workmanlike performance and that failure to do so is a breach of contract (citing Ryan Stevedoring). Judge Badalamenti added that privity of contract is not required for the warranty claim and that Caillou Island Towing, the entity that towed the dredge, was a foreseeable third party of RJA’s warranty. However, the mere existence of the warranty did not make RJA liable for indemnity. Caillou Island Towing also had to show that RJA had a duty to indemnify for liability arising out of the breach. Judge Badalamenti stated that the clear trend in maritime cases has been to reject all-or-nothing indemnity in favor of allocation based on comparative fault, and he found that indemnity was inappropriate in this case for two reasons. First, he held that, based on the “unique services” performed by surveyors and classification societies, courts have regularly held that these entities do not have a duty to indemnify owners and third parties for damages. In this case, RJA was hired to conduct a Trip in Tow survey and did not create any hazards or defects for which indemnity would be appropriate. Second, citing authority that the WWLP has been “virtually abandoned” for property damage cases, Judge Badalamenti declined to find indemnity was available and dismissed the indemnity claim. It was therefore unnecessary to determine whether the contract between RJA and Goodloe excluded indemnity. Finally, Judge Badalamenti held that Caillou Towing’s third-party complaint against RJA sought judgment against RJA and also in favor of Goodloe based on Rule 14(c). As such, he ordered RJA to answer the claims of Goodloe as well as the claims of Caillou Island Towing. See December 2021 Update.
Nearly two years after the initiation of litigation, Caillou Island Towing moved to dismiss the suit brought by Goodloe Marine and the claim brought by Goodloe Marine in Caillou Island Towing’s limitation proceeding on the basis that Goodloe Marine’s insurer, RKH Specialty, had paid Goodloe Marine $1.9 million for the total loss of the dredge. Although Judge Badalamenti was concerned about the timing and sequence of events, he held that standing is a jurisdictional issue and that the court could consider whether Goodloe Marine was the real party in interest. Goodloe Marine argued that it had not been fully compensated for the contents of the dredge and barge, for damages flowing from Caillou Island Towing’s breach, and for punitive damages. Reasoning that Goodloe Marine was seeking to recover for both insured and uninsured losses, Judge Badalamenti held that Goodloe Marine was an appropriate party and declined to dismiss the suit and claim. See November 2022 Update.
Goodloe then moved for summary judgment as to Caillou Island Towing’s claims for exoneration and limitation. The dredge sank in weather and wave conditions that were in excess of the Trip in Tow survey. As a judge in Florida, Judge Badalamenti was sympathetic to the variable and fast-changing nature of weather conditions in the Florida Gulf. Finding that Caillou Island Tug had warnings of the high seas, Judge Badalamenti found that Caillou Island Towing failed to exercise reasonable care and maritime skill, and he granted summary judgment to Goodloe on its negligence claim. Caillou Island Towing argued that there was no causation from its negligence as the dredge sank because it was unseaworthy. There was ample evidence from inspections after the dredge sank that it was not properly watertight (exposed openings that would allow flooding of the compartments); however, Caillou Island Towing did not establish that unseaworthiness alone was the cause of the sinking. At the time the dredge sank, there were winds of 30 to 40 miles per hour and seas of three to five feet with occasional swells of seven feet. As the sinking was caused at least in part by Caillou Island Towing’s negligence, Judge Badalamenti held that Caillou Island Towing was at least partially liable for the sinking. Turning to privity or knowledge, Goodloe provided evidence of communications with the crew on the tug about the weather. However, Goodloe did not introduce evidence that any Goodloe employees who were not on the tow were directing the tow on how to proceed. Therefore, Judge Badalamenti held that there was a fact question precluding summary judgment on the issue of whether Caillou Island Towing was entitled to limitation of liability. Finally, Goodloe argued that it was entitled to summary judgment that Caillou Island Towing breached its contract with Goodloe by failing to tow the dredge to the final destination. It was disputed, however, whether Goodloe failed to furnish a seaworthy vessel. Judge Badalamenti agreed that Goodloe had a duty to furnish a sound vessel and to prepare it in such a way that the tug would be able to successfully negotiate the conditions that the tow was expected to encounter. There is an exception that the tug cannot complain about the unseaworthiness of the tow when it had reason to know of the condition and failed to use reasonable care under the circumstances. Although there was noncompliance with the obligation to deliver the dredge, there was a fact dispute whether Caillou Island Towing had reason to know of the allegedly compromised condition of the dredge and failed to use reasonable care. Therefore, Judge Badalamenti denied summary judgment on Goodloe’s claim for breach of contract.
This litigation arises from a boating accident on May 21, 2022 in the Cole’s Bay area of Lake Pleasant, Arizona. Daniel Ellington owned a 33-foot Sun Sport Cruiser, and his son, Christopher Ellington, was operating the boat with his wife and children and with Tehanah Smith and her four minor children. Christopher was towing an innertube with his daughter and Tehanah Smith’s daughter when the rope connecting the tube to the boat snapped and the two girls fell off the tube into the Lake. Tehanah Smith dove into the water to assist the girls, but she was struck by the boat’s props, resulting in injuries that caused her death. Following her death, Smith’s children were split among family members. In the summer of 2022, one of the family members (Bethany Martin) had discussions with Christopher about making claims for Smith’s death. Christopher informed his father, Daniel, and Christopher let Martin know that claims had been opened with the insurance carrier. In December 2022, Martin requested a copy of the insurance policy from Christopher and provided the name of her attorney. On October 18, 2022, Daniel Ellington filed this action in federal court in Arizona, seeking exoneration/limitation of liability. The action named all of the passengers on the boat. An order was issued instructing Ellington to publish service and to mail copies of the notice of the action to all known claimants. Ellington published the notice, but he did not mail notice to any of the passengers on the boat. None of the passengers filed a claim before the deadline of January 17, 2023, and entry of default was entered on February 27, 2023. On April 13, 2023, the court entered a default judgment exonerating Ellington from liability. On February 6, 2023, counsel for Smith’s four minor children left a voicemail with Ellington’s insurance carrier requesting the insurer’s claim number. The insurer gave the lawyer the name of Ellington’s counsel, and the claimants’ paralegal provided the insurer with a letter of representation and indicated she would contact counsel for Ellington. On February 7, 2023, Ellington’s counsel emailed to the paralegal that the deadline passed for the filing of claims on January 17, 2023 and that it was Ellington’s position that the claims were time barred. After the entry of the judgment exonerating Ellington, the claimants filed a motion on May 5, 2023 to set aside the default and for leave to file claims. In response to the claimants’ argument that they had not been mailed notice of the limitation action, Ellington argued that there were no known claimants to which notice had to be mailed because no one had presented a claim in response to the published notice, and, once notice was provided, Ellington’s attorney advised of the limitation action and that the deadline had passed to file a claim. Judge Brnovich reasoned that this notice, after the deadline, did not satisfy the requirement of providing notice to the minors as the federal rules prohibit entry of a default against minors before their guardian makes an appearance. Moreover, as there had been an exchange of text messages in December 2022 informing Christopher of the claims, written notice was not properly mailed in accordance with Rule F. Consequently, Judge Brnovich vacated the default and granted leave to the claimants to file claims.
This case involves payment for the shipment of a cargo of aviation jet fuel from Singapore to California that Valero purchased from Koch Refining. Milos, the owner of the SEAWAYS MILOS, entered into a voyage charter party with GP Global on a SHELLVOY 6 form. The charter provided that freight and other charges were due on completion of discharge and that, if original bills of lading were not available at the discharging port, the owner would release the cargo in line with the charterers’ instructions against a letter of indemnity. Valero requested documentation regarding the charter from GP Global, and it was provided information that included the provisions on discharge and freight, including wiring instructions from Milos. Valero agreed to purchase the cargo from Koch on CIF/CFR terms (so that the seller would pay the costs and freight for the shipment). The negotiable bills of lading issued for the shipment listed GP Global as the shipper and Valero as the notify party. Milos released the cargo at the Vopak Terminal in Wilmington, California in accordance with GP Global’s letter of indemnity, directing that delivery be made to Valero, and Valero paid Koch more than $15 million for the fuel. In lieu of the original bills of lading, Koch issued a letter of indemnity certifying that it transferred title to the cargo to Valero in accordance with the agreement for sale of the cargo. Milos was not paid the freight, demurrage, or speed-up charges (a total of $1,054,456.74), and GP Global had financial difficulties and commenced a debt restructuring process in which Milos submitted a proof of claim. Milos brought this suit against Valero in federal court in California, seeking to recover on the grounds that Valero agreed to be bound by the bills of lading (incorporating the terms of the charter party), that Valero is bound by the charter party under applicable English law, and that Valero assumed an implied obligation to pay the freight when it accepted the cargo. With respect to the claim that Valero had an express contractual obligation to pay freight because it was bound by the bills of lading and the incorporated charter party, Valero argued that its listing as the notify party on the bills of lading at most established that it was a third-party beneficiary of the bills of lading and did not impose obligations on it. There was no course of conduct by which Valero could be said to have consented to be bound by the bills of lading, and Valero had not brought a suit under the bills of lading that would adopt their terms. The issue was therefore whether Valero consented to be bound by the bills of lading by its acceptance of the cargo. Judge Snyder noted that judges have held that a non-party to the bill of lading became bound by its terms when it presented the original bill of lading and took possession of the cargo. However, she found sufficient evidence that Valero consented to be bound by the bills of lading because it organized the discharge operations and provided the discharge orders to the vessel, received and accepted the cargo pursuant to a letter of indemnity because the charter party instructed that delivery should be made by letter of indemnity in the event the original bills of lading were not available, and because the original bills of lading were endorsed to Valero. Judge Snyder then noted that the charter party did not expressly identify the party that was responsible for paying the freight, stating that the freight must be paid immediately upon completion of discharge as per owner’s telexed/emailed invoice. In this case, Milos sent an email to Valero, Koch, and others stating that freight was due and instructed that payment was to be made directly to Milos as the owner. Judge Snyder considered this email to demonstrate that Milos looked to Valero, among others, for payment of the freight charges as set forth in the email. In view of this holding, Judge Snyder did not address the argument that Valero was bound to pay the charges under English law, but she did address the argument that Valero assumed an implied obligation to pay freight by its acceptance of the cargo on discharge as the owner of the cargo. Judge Snyder agreed with that contention, holding that, by accepting and taking possession of the cargo that it owned throughout the voyage, Valero benefitted from the carriage and was subject to an implied obligation to pay the freight. Consequently, Judge Snyder granted summary judgment to Milos and entered judgment in its favor against Valero in the amount of $1,054,456.74.
Leonard Anders, a passenger on the CARNIVAL MAGIC, was injured after going down a water slide when the next passenger going down the slide crashed into Anders before Anders cleared the slide. Anders brought this suit against the cruise line in federal court in Florida, asserting claims for the cruise line’s negligence and for vicarious liability for the negligence of the crew member posted at the top of the slide who sent the next passenger down too soon. The cruise line moved to dismiss the complaint, and Chief Judge Altonaga agreed that the complaint improperly comingled the claims for direct and vicarious liability, stating: “Plaintiff’s failure to adequately plead the elements of a vicarious liability claim—seemingly caused by a cut-and-paste job gone wrong—requires dismissal on this ground alone.” She instructed Anders that “he must carefully delineate between Defendant’s direct negligence and its employee’s negligence and include only the relevant elements for each.” Anders argued that, despite the shortcomings of the complaint, the claims were “perfectly clear” so that the cruise line could understand the allegations against it. Chief Judge Altonaga responded by quoting the Eleventh Circuit that when improper pleadings are allowed to survive past the pleading stage, “all is lost—extended and largely aimless discovery will commence, and the trial court will soon be drowned in an uncharted sea of depositions, interrogatories, and affidavits.” She concluded: “Simply put, Plaintiff cannot play fast and loose with the federal pleading standards.” Although Chief Judge Altonaga ruled that the complaint had to be dismissed, she addressed the cruise line’s argument that Anders had not sufficiently pleaded notice (in order to curtail the argument from being raised again after the amended complaint is filed). The cruise line argued that Anders’ allegations of notice were conclusory and formulaic and that the reliance on similar incidents did not provide specifics of those incidents. Chief Judge Altonaga answered that the passenger may establish actual notice with evidence that the cruise line has taken corrective action. Corrective action is typically proven with actions such as the posting of warning signs. In this case, however, the cruise line stationed a crew member at the top of the slide to ensure that the type of accident that injured Anders did not occur. She concluded that it was “more than reasonable to infer that Defendant’s posting of an employee at the top of the slide to ensure sufficient time elapsed between guests means Defendant knew someone going down the slide too quickly posed a danger and took steps to prevent that harm.” Accordingly, the complaint plausibly alleged that the cruise line was on notice of the danger.
Peter Herzig, a resident of Manhattan, bought the 62-foot yacht CRESCENDO in 1998 for approximately $1.4 million. In 2015, the yacht was insured with AIG for $600,000 when it was struck by another vessel. There was a dispute about the damage/repair, and Herzig retained attorney Adam Heffner to represent him. Eventually, Herzig settled with AIG for the face value of the policy even though the repairs turned out to be less than $270,000. Herzig then retained a retail insurance broker, Crystal & Co. to obtain new coverage for the yacht, and he sought coverage in the amount of $600,000 while stating that the vessel had been purchased for that amount and was undergoing repair in the amount of $270,000. There were discussions why AIG paid $600,000, but Great Lakes’ underwriter/claims agent, Concept Special Risks, issued a policy with coverage for the CRESCENDO, effective from May 26, 2016, subject to a valuation survey (the survey did value the vessel at $625,000). A few months later, on October 7, 2016, the yacht was damaged while in port in Jacksonville by Hurricane Matthew. Concept became concerned about the value of the vessel, with its underwriting manager stating that it was common sense that a vessel purchased in 1998 for $600,000 would not be worth $600,000 twenty years later. Concept issued an endorsement reducing the coverage to $300,000. Meanwhile, Herzig obtained repair quotes ranging from $155,000 to $490,000, and he proposed a settlement for $300,000 with the policy remaining in effect for its full term (until May 2017). Attorney Heffner represented Herzig in negotiations that eventually resulted in a policyholder release for $175,000. A week before the execution of the release, Great Lakes filed this suit against Herzig in federal court in New York, seeking a declaration that it owed no more than $175,000 as the reasonable cost of repair of the damage. A few months later, Great Lakes amended the complaint to seek a declaration that the release was valid and binding. Herzig counterclaimed for fraud, rescission, breach of contract, and breach of the covenant of good faith and fair dealing, and Great Lakes filed another amended complaint, seeking declarations that the policy was void ab initio. Great Lakes moved for summary judgment on its claims and, after attorney Heffner died, moved to strike Heffner’s unsworn declaration that was filed in opposition to the motion for summary judgment. The declaration provided the only evidentiary support for Herzig’s claims that he had to accept the “exploding” settlement offer or Great Lakes would cancel the policy and pursue its claims against him and that the endorsement reducing coverage was applicable. Herzig argued that Heffner’s declaration was admissible under the residual exception to the hearsay rule, but Judge Gardephe did not find that the declaration was particularly trustworthy under Fed. R. Evid. 807, and he added that it was not subject to challenge through cross-examination and was uncorroborated on material points. Thus, Judge Gardephe struck the declaration. Turning to the validity of the release, Judge Gardephe applied New York law in accordance with the policy’s choice-of-law clause (choosing New York law in the absence of well-established, entrenched principles of admiralty law). Judge Gardephe agreed with Herzig that there was a material issue of fact about whether Herzig relied on representations concerning the endorsement; however, he did not believe it was reasonable for Herzig to rely on Concept’s statements about the endorsement being in effect because Herzig could have easily discovered the facts and legal doctrines about the endorsement actually being in effect and retroactive to the loss. Judge Gardephe also rejected Herzig’s duress argument because Herzig accepted the offer before the allegedly unlawful threat to cancel his insurance. Therefore, Judge Gardephe held that the release was valid and enforceable, which disposed of Great Lakes’ argument that it was entitled to restitution of the $175,000 that Great Lakes paid as consideration for the release: “Having granted Great Lakes summary judgment on its claim that the Release is a valid and binding contract, this Court cannot now dismantle that same contract and direct Herzig to return the consideration that is a key element in the formation of any binding contract.” Finally, Judge Gardephe noted that Great Lakes had not moved for summary judgment on Herzig’s counterclaims, so he asked Herzig to advise the court whether he intended to proceed on his counterclaims (in light of the analysis in the opinion). See July 2023 Update.
Herzig filed a motion for reconsideration and a response to the court’s order to advise whether he was continuing to proceed on his counterclaims. Judge Gardephe declined to grant reconsideration, reiterating that the Heffner declaration (and corresponding portions of Herzig’s declaration) were inadmissible hearsay in connection with the threats and misrepresentations allegedly made to Heffner. Herzig argued that the statements in his declaration about what Heffner told him were admissible to establish the state of mind of Heffner and Herzig, but Judge Gardephe called that argument “nonsense.” Similarly, Judge Gardephe rejected the contention that the statements contained probative facts on Heffner’s discussions that induced Herzig to agree to the low-ball settlement, answering that the statements were offered to establish the truth of what the declaration said—that Goldman made misrepresentations and threats to Heffner. Judge Gardephe also disagreed with Herzig’s argument that the court was required to give the parties notice and a reasonable opportunity to respond so that the court might consider the admissibility of the Herzig declaration because Great Lakes did not seek to strike the Herzig declaration (as opposed to the Heffner declaration). Judge Gardephe answered that Rule 56 provides clear notice that declarations must be admissible in order to be considered. Herzig also presented an argument that Judge Gardephe described as “likewise nonsense,” that the issue of whether Herzig reasonably relied on Great Lakes’ misrepresentations was not a ground on which Great Lakes sought summary judgment. However, Herzig asserted fraudulent inducement as a defense to the motion for summary judgment and justifiable reliance. Herzig had the burden on this defense to enforcement of the release and was aware that the court would consider whether he had proffered sufficient evidence on the defense that he had raised. As the claimed misrepresentations were contradicted by the policy and endorsement in Herzig’s possession, he could not have reasonably relied on any of the purported misrepresentations and was not fraudulently induced to sign the release. Judge Gardephe then turned to Herzig’s counterclaims. Instead of addressing why the release did not bar his claim, Herzig argued the merits for his contention that he was owed more than the release sum of $175,000. That contention simply demonstrated that the release covered what he was claiming, and Judge Gardephe held that the fourth counterclaim (breach of contract) would be dismissed because that claim was barred by the release. However, as Great Lakes “inexplicably” did not move for summary judgment on Herzig’s counterclaims and the time had passed for it to do so, Judge Gardephe held that the other counterclaims would proceed to trial.
This litigation arises from the allision between the offshore supply vessel, M/V ELLIOT CHERAMIE, and a pipeline connected to a platform located in the Gulf of Mexico off the coast from Port Fourchon, Louisiana. Cheramie Dive owned the vessel, and Cheramie Marine operated the vessel. The allision resulted because the mate, Kenneth Forbes, employed by Cheramie Marine, fell asleep while piloting the vessel. Faced with claims for injuries (passengers) and property damage (pipeline), the Cheramie parties filed a limitation action in federal court in Louisiana. The claimants filed motions for summary judgment that limitation of liability should be denied because the vessel interests had privity or knowledge of the negligence and unseaworthiness that contributed to the accident, including the lack of training on proximity alarm systems on the vessel and lack of a bridge navigation watch alarm system, the lack of training of the crew with respect to fatigue management, and the failure to implement measures to reduce the risk of fatigue. Cheramie argued that the captains aboard the vessel knew of the alarms but chose not to use them, but Judge Barbier held that this contention did not establish that Cheramie did not have constructive knowledge that its captains were unprepared to use the radar alarms on the vessel. Additionally, Forbes violated the regulation (and Cheramie Fatigue Management Policy) that limits the work of masters or pilots to no more than 12 hours in a consecutive 24-hour period. Forbes testified that he believed that he had adequate sleep before he took over the wheel, and Cheramie was unaware of the violation in this case. However, Judge Barbier noted that Cheramie did not monitor or enforce its fatigue management policy. Thus, Judge Barbier held that Cheramie was not entitled to limit its liability, and he vacated the stay of claims against Cheramie. Finally, Judge Barbier rejected Cheramie’s objection to evidence about its installation (after the allision) of a bridge navigation watch and alarm system, finding exceptions to the non-admissibility of subsequent remedial measures to impeach expected testimony that Cheramie’s policies were adequate and demonstrating knowledge of a dangerous condition.
Brandon Earl Truxillo died of cardiac arrest while serving as a captain of Excell Marine’s tug. His widow brought this suit in federal court in Louisiana against various parties, including Excell Marine, alleging negligence and unseaworthiness. After dismissing claims against the other defendants, the plaintiff sought to amend her complaint to add a claim for punitive damages and attorney fees for the employer’s failure to provide cure by failing to have a defibrillator on the vessel. Excell Marine opposed the motion on the basis of futility. Excell Marine conceded that punitive damages are available for failing to provide cure on the vessel, but it argued that the failure was, at best, negligence and not gross negligence. Magistrate Judge Currault began by stating that the plaintiff would have to establish “reckless or callous disregard for the rights of others, or actual malice or criminal indifference” and that “[o]perational recklessness or willful disregard is generally insufficient to visit punitive damages upon the employer.” She added that the conduct would have to emanate from corporate policy or a corporate official with policy-making authority. The plaintiff argued that certain associations and regulations have recommended that defibrillators be located on vessels. Judge Currault found that the failure was, “at most, operations negligence that falls short of what is required to establish the civil equivalent of a crime or conduct that is ‘so egregious as to conduct gross negligence.’” Accordingly, Magistrate Judge Currault denied the motion for leave to file an amended complaint.
Truxillo then filed a second motion for leave to file an amended complaint (seeking punitive damages), which Magistrate Judge Currault treated like a motion for reconsideration. The proposed amended complaint contained more factual allegations and theories, particularly that the defendant’s failure to follow regulations and policies resulted in its failure to conduct a hazard assessment and its failure to adopt an emergency evacuation plan or have an AED onboard, and these inactions constituted a willful and wanton failure to provide cure. However, Magistrate Judge Currault again responded that the allegations constituted operational negligence or failure to follow regulations and were insufficient to state a claim for punitive damages, stating: “Otherwise, every garden-variety general-maritime-law negligence case would be transformed into a punitive damages case rather than limiting punitive damages claims to cases involving the civil equivalent of a crime or conduct that is ‘so egregious as to constitute gross negligence, reckless or callous disregard for the rights of others, or actual malice or criminal indifference.’” Consequently, she denied the motion for leave to amend.
This litigation arises out of insurance on the yacht LOVE LIFE, owned by AZ55S. The owner contacted insurance broker Flinsco.com in December 2020 to place coverage on the yacht, and the broker placed insurance with Axis that included hull coverage in the amount of $785,000. Although the owner intended for the policy to apply in the inland and coastwise waters of the United States and Canada, the policy was written on a port risk basis until the insurer was provided confirmation of compliance with recommendations of a surveyor. The policy was renewed at the end of 2021, and it continued to be written on a port risk basis (as the insurer never received confirmation of compliance with the recommendations). The owner alleged that it was not advised of the necessity to provide this evidence in order to activate coverage for navigation. In July 2022, the vessel flooded and sank on the sandy bottom of the Intra Coastal Sandbar due to a failure of the exhaust hose from an engine overheat, and Axis denied the claim as the vessel was in navigation. The yacht owner then brought this suit in federal court in Florida against the broker, seeking to recover for the failure to procure proper insurance for the yacht (breach of contract, breach of fiduciary duty, and negligence). The broker moved to dismiss each of the claims in the complaint, and Magistrate Judge Valle addressed the arguments with respect to each of the claims. The broker argued that the claim of breach of contract for failure to procure proper insurance failed under the statute of frauds because the contract was an oral agreement by which the broker had an ongoing obligation to procure coverage. As that ongoing obligation could not be performed within one year, the contract allegedly violated the statute of frauds. Magistrate Judge Valle disagreed, reasoning that each renewal of the insurance policy resulted in a new contract, and the agreement between the owner and broker was to procure insurance to replace the expiring policy. In response to the claim of breach of fiduciary duty, the broker argued that even if the proper coverage had been placed, there would not have been coverage because the mechanical failure was not covered by the policy. However, Magistrate Judge Valle believed that a challenge to causation based on exclusions in the policy was better addressed by the trier of fact and not by a motion to dismiss. The broker also argued that the owner had not established a special relationship between the parties to support a fiduciary duty, but Magistrate Judge Valle disagreed, holding that the owner had pleaded a sufficient relationship and that the issue should be decided by the trier of fact. As with the count for breach of fiduciary duty, the broker argued that the negligence count should be dismissed for lack of causation based on the defenses in the policy, and Magistrate Judge Valle repeated that this argument was better addressed to the trier of fact. Therefore, Magistrate Judge Valle recommended that the motion to dismiss be denied (she also recommended denial of the broker’s motion for a more definite statement as to the damages being sought). Judge Williams adopted the recommendation on July 17, 2023 with no objection.
Three days after the vessel sank on July 4, 2022, the owner sold the vessel for salvage without notice to the broker, even though the owner was actively appealing the denial of the insurance coverage. Claiming that the inability to inspect the vessel precluded its defense that the loss would not have been covered because of the policy’s mechanical damage exclusion, the broker filed a motion for sanctions for spoliation of evidence. The owner responded that it sold the vessel for salvage to mitigate its damages and that it did not act in bad faith. Magistrate Judge Valle agreed with the broker that three of the elements of spoliation were established: 1) the missing evidence existed (the vessel was recovered after it sank on July 4; 2) the alleged spoliator had a duty to preserve the evidence (although the owner argued that it was not instructed to refrain from preserving or salvaging the vessel, the policy required that the insurer be allowed to inspect and appraise all damaged property before it was repaired or disposed of); and 3) the evidence was crucial to the broker’s defense that the policy exclusion would have precluded coverage regardless of the port risk restriction. Magistrate Judge Valle declined, however, to find the fourth element—bad faith. She noted that bad faith does not require malice or ill-will, but the conduct must be more than negligence. As the owner credibly explained its reason for selling the vessel for salvage (to mitigate its damages), Magistrate Judge Valle did not believe that the sale was intended to harm the broker or to obstruct its defense. Therefore, she recommended that the motion for sanctions be denied. Judge Williams adopted the recommendation on July 17, 2023 with no objection.
David Welch served in the Navy from 1965 to 1969 as a fireman in the pipefitters’ welding shop on the USS CARRONADE and USS PRINCETON, which were being recommissioned for active service, including work on various valves and pumps and cleaning a “big mess” of asbestos packing. Although Welch also worked as a welder and pipefitter at a shipyard and refinery after his service in the Navy, he brought this suit against Velan and Crane, two suppliers of products containing asbestos from his work in the Navy, seeking to recover for his mesothelioma. After he died, Welch’s widow substituted as the plaintiff in the suit filed in federal court in Washington. The defendants moved for summary judgment, arguing that the plaintiff failed to show that exposure to asbestos from the defendants’ products was a substantial contributing factor in causing his mesothelioma. Although Velan supplied approximately 60 high-pressure steam valves for the CARRONADE and 1000 high-pressure steam valves on the PRINCETON, the evidence did not establish that Welch was within the vicinity of that equipment or that he was exposed to asbestos dust from that equipment. Accordingly, Judge Jones granted summary judgment to Velan. In contrast, Welch testified to working on valves during his tenure on the CARRONADE and how the valves were encased in asbestos. He recognized a photo of a Crane valve and testified that it would have been covered in asbestos. His testimony was bolstered by that of expert Andrew Ott about the Crane supplied valves containing asbestos gaskets and packing on both ships. Finally, Crane argued that the plaintiff failed to satisfy the Devries test, but Judge Jones held that the plaintiff did present evidence on the elements of the test so as to avoid summary judgment. Therefore, Crane’s motion for summary judgment was denied.
Christopher McDermott was the owner and operator of the M/V FRICKA, a 23-foot Sea Ray vessel that was operating in the Atlantic Ocean just south of the Palm Beach Inlet. The vessel swamped in rough seas, and McDermott issued a May Day call to which several vessels responded. One vessel was the Sea Ray yacht, M/Y COUNTRY BOY. Another vessel that responded was the salvage/rescue vessel UNIT 4, owned by Towboat One. Robert Dykes, owner of the COUNTRY BOY entered the water to rescue two women from the FRICKA, and he was killed when he was pinned between the COUNTRY BOY and UNIT 4. Towboat One filed a limitation action in federal court in Florida, and a claim was made by Dykes’ estate in the suit. Towboat One filed a third-party complaint in that action against Christopher J. Fox, captain of the COUNTRY BOY. McDermott filed a motion for an extension of time to file a claim in the UNIT 4 limitation action, which was granted. McDermott also filed a limitation action with respect to the FRICKA, and McDermott arrested the COUNTRY BOY via a third-party complaint against the estate of Dykes and Captain Fox. McDermott then reached a settlement with the Dykes estate and dismissed the third-party complaint against the COUNTRY BOY, Estate of Dykes, and Captain Fox. Towboat One filed a claim for contribution in the McDermott limitation action. Towboat One then moved for a consolidation of the two limitation actions, and McDermott objected on the ground that he had settled with the Estate of Dykes, the sole claimant against Towboat One, and that Towboat One did not have any contribution claim against McDermott under the maritime law. Towboat One conceded that it did not have any claim against McDermott, but it argued that all of the tortfeasors needed to be consolidated into the same legal proceeding so that the court could properly apportion liability among Towboat One, McDermott, Captain Fox, and Dykes. Citing a case stating that the “Eleventh Circuit has held that it is erroneous to apportion fault between a party and a non-party in a federal maritime action, because determinations of liability and causation should be settled ‘between two live opponents,’ rather than by a plaintiff and a defendant, in the absence of the non-party to whom liability is being apportioned,” Magistrate Judge Matthewman recommended that the cases be consolidated even though McDermott had reached a settlement in his limitation action. See May 2023 Update.
Judge Middlebrooks adopted the recommendation for consolidation of the cases, and the Estate of Dykes moved to lift the stay in the consolidated federal action so that the Estate could file a suit in state court. The parties disputed the language necessary to present a single-claim situation, and Magistrate Judge Matthewman recommended that the following stipulations would be sufficient (besides the usual stipulations with respect to the determination of limitation issues) and agreed to lift the stay: issues of contribution and indemnity will be determined by the federal court; and, if limitation is awarded, claims for attorney fees and costs will have priority to the limitation fund and the Estate will share in the remaining limitation fund in proportion to the value that the Estate’s claim bears to the value of all remaining claims.
Platypus Marine performed repair on the yacht ALASKAN GRANDEUR, owned by Alaska Legacy and operated by Glacier Guides. After the owner declined to pay what Platypus Marine charged for the repair, Platypus Marine brought this suit against the yacht, in rem, and its owner and operator, in personam. Alaska Legacy posted security of $178,091.85 for the release of the vessel and also filed a counterclaim, alleging that Platypus Marine performed work that was unauthorized and that was defective. Alaska Legacy then sought countersecurity pursuant to Supplemental Rule E(7), and Platypus Marine objected, arguing that the counterclaim did not plead an amount in damages and was frivolous. Judge Holland rejected the arguments, stating that the court was “unpersuaded that it should read Rule E(7) out of existence if a counterclaim does not state a damages amount.” Alaska Legacy submitted a value for its counterclaim through its expert witness ($224,810), and Judge Holland ordered countersecurity in that amount.
Jeff Harrington was riding on a fishing vessel owned by Jack’d Up Charters when it struck a Weeks Marine dredge pipe being towed by Madere & Sons’ tug, KENNETH M, and Weeks Marine’s tug, MASTER MYLES, down Tiger Pass in Venice, Louisiana. Harrington brought a suit in Louisiana state court, and Jack’d Up Charters and Madere filed limitation actions in federal courts in Louisiana. Madere, Weeks, and Harrington filed claims in the Jack’d Up limitation action, and Jack’d Up, Weeks, and Harrington filed claims in the Madere limitation action. Weeks filed a third limitation action, and the three limitation suits were consolidated (and a non-jury trial was scheduled). Harrington then moved to bifurcate the issues of liability, limitation, and apportionment of fault, proposing that the issue of damages could be tried separately in state court if he was successful in defeating limitation of liability in the first phase. The petitioners argued that the bifurcation of damages was improper because the limitation stay cannot be lifted unless the parties stipulate that the value of the limitation funds exceeds the value of the claims asserted. Chief Judge Brown disagreed, reasoning that the petitioners’ argument applies when the claimants seek to proceed in state court simultaneously with the limitation proceeding (and to strip the federal court of jurisdiction to decide the limitation claims). The proposed bifurcation did not present a risk that Harrington could seek a damage award exceeding the limitation fund because Harrington could only proceed in state court in the event of denial of limitation. Chief Judge Brown also concluded that separating the damage trial would expedite and economize the limitation proceeding as the parties and court would only need to expend resources on liability and privity, and the damage phase might be unnecessary. Finally, Chief Judge Brown noted the balance that the district judges in the Fifth Circuit have reached between the protection of the owner’s right to limitation and the claimant’s right to a jury trial under the Saving-to-Suitors Clause, which favors the right to a jury trial over judicial economy as long as the federal court maintains the right to decide the limitation issues. Accordingly, she agreed to the bifurcation.
Lamar Fawcett, a passenger on the CARNIVAL MAGIC, claims that he slipped on a wet or slippery transient foreign substance on the ship’s Lido Deck near the pool. He brought this suit in federal court in Florida against the cruise line with counts for negligent maintenance and negligent failure to warn of the hazard. The cruise line moved to dismiss both counts for failure to adequately plead notice, and Chief Judge Altonaga agreed that some of the allegations were conclusory, such as the statements that the cruise line had notice because of the length of time the condition existed and because of the high traffic nature of the Lido Deck. Similarly, references to the inspection schedule and cleaning policies without facts setting forth what the schedule/policies were or how their implementation would have created notice were insufficient. However, Chief Judge Altonaga held that Fawcett’s identification of numerous slip-and-fall incidents on the MAGIC and on a vessel of the same class, with dates and cases, was sufficient to push the claims “beyond mere conclusory recitals,” noting that the substantial similarity doctrine does not require identical circumstances and “allows for some play in the joints.” The cruise line also objected to the pleading of the claim for failure to warn as the complaint did not suggest that the substance on which Fawcett slipped was not open or obvious. And, in response to the cruise line’s motion to dismiss, Fawcett did not address the argument. Accordingly, Chief Judge Altonaga dismissed the claim of failure to warn.
Darryl Cole alleges that he was working as a crane operator for Oceaneering on its vessel, the M/V OCEAN PATRIOT. He was supplied to Oceaneering by Huisman North America pursuant to a Purchase Order by which Huisman was to supply a crane operator to Oceaneering. Cole began feeling dizzy, light-headed, and nauseated; he vomited; he felt pain and numbness from his neck to his eyes; and he became delusional and fell in and out of consciousness. He was eventually evacuated from the vessel by helicopter and was determined to have suffered a stroke. He brought this suit against Oceaneering in federal court in Louisiana under the Jones Act, general maritime law, and state law, and he added Huisman as a defendant in an amended complaint, seeking maintenance and cure. Oceaneering brought a claim for indemnity against Huisman pursuant to the terms of the Purchase Order, and Huisman argued that the terms of the Purchase Order were preempted by a prior Mutual Indemnity and Waiver Agreement that provided for indemnity only for an injury or illness that arises out of or is incident to the services provided by Huisman (crane operations). Claiming that Cole’s stroke did not arise out of or relate to the crane operations, Huisman argued that it did not owe indemnity to Oceaneering. Oceaneering countered that the Purchase Order provided that its terms superseded all agreements and, alternatively, that Cole’s stroke arose out of or related to the services provided by Huisman because it occurred while Cole was on the vessel to perform the services. Judge Vitter did not have to decide which document governed as they contained the same limiting language in their indemnity agreements—that the injury or illness arise out of or as a result of the services provided by Huisman. She then concluded that Cole’s stroke did not arise out of the services. Judge Vitter recognized that the Fifth Circuit interprets the term “arising under” broadly, but she did not find any evidence suggesting that a stroke is an activity reasonably incident to or anticipated by the provision of crane operation services. She rejected the argument that the Fifth Circuit’s Fontenot case only requires the worker’s presence on the vessel for an injury to arise under a contract, holding that there had to be a causal connection between the stroke and the services provided by Huisman (also rejecting the argument that Huisman could not “avoid its contractual responsibilities simply because [Cole] was not performing the specific services contemplated by the Purchase Order at the moment of injury”). Consequently, Judge Vitter granted summary judgment to Huisman on Oceaneering’s indemnity claim.
Oceaneering filed a motion for summary judgment that Cole was not a seaman, seeking a dismissal of his seamen’s claims against Oceaneering. Cole was employed by Huisman as a crane operator from November 2017 until February 2021, working 23 hitches. His first 19 hitches were for Hornbeck Offshore Services, and his last four hitches were scheduled for Oceaneering on the OCEAN PATRIOT. Cole claims that he spent 100% of his time working on vessels during his employment by Huisman; however, Oceaneering countered that only 48 days of that time were spent on the vessel owned by Oceaneering, and 462 days were spent working for Hornbeck. Oceaneering argued that Cole did not satisfy the duration element of the connection test for seaman status because he spent less than 10% of his employment with Huisman working on the Oceaneering vessel (48 days out of 510 days). Cole responded that he spent 100% of his time with Huisman (and Oceaneering) working on vessels. Judge Vitter turned to the en banc decision of the Fifth Circuit in Sanchez, noting that the worker would have to spend at least 30% of his total employment aboard the vessels owned by his Jones Act employer in order to satisfy the duration element. Although Cole argued that he satisfied the 30% rule-of-thumb for the duration element because he spent 100% of his working time on the OCEAN PATRIOT in service of the vessel, Judge Vitter answered that Cole’s argument failed to address the holding in Sanchez that the court had to consider the substantiality of the duration in terms of his entire employment with Huisman. As his work on the OCEAN PATRIOT was less than 10% of that time, he was not a seaman, and Judge Vitter dismissed the seaman’s claim against Oceaneering. See May 2023 Update.
Cole moved for reconsideration of Judge Vitter’s decision on seaman status, arguing that he satisfied the duration prong of the substantial connection test. Cole argued that the 30% analysis only applies to workers who perform work on land and on vessels and that it does not apply in his case where he worked 100% of the time for Huisman in service of vessels. He also claimed that he was permanently assigned to the OCEAN PATRIOT because he was scheduled to work for four hitches on that vessel. Judge Vitter was persuaded by Judge Ashe’s analysis in Meaux v. Cooper Consolidated, LLC (see June 2022 Update) that considered for the duration element only the length of employment with the alleged Jones Act employer and not with the worker’s direct employer. [Interestingly, Judge Ashe ultimately held that Meaux was not a seaman because he failed the nature element for seaman status]. In this case, Cole worked two hitches for Oceaneering on the OCEAN PATRIOT from December 11, 2020 to February 21, 2021. Thus, after going to work for Oceaneering on the OCEAN PATRIOT, Cole only worked on that vessel and did no work on land or non-Oceaneering vessels. Although Huisman’s corporate representative testified that none of their workers are assigned to a vessel, he admitted that once the worker goes to work for a client, he “is theirs.” Oceaneering’s vessel log listed Cole as part of the crew and reflected that he was assigned to the vessel. As the evidence demonstrated that Cole worked exclusively aboard the OCEAN PATRIOT once the assignment began, Judge Vitter found that Cole was “permanently assigned” to the vessel and that he satisfied the duration element for seaman status. This finding then required that Judge Vitter address the issue whether Cole satisfied the nature element of the seaman status test, as defined by the Fifth Circuit in Sanchez. Cole took his orders from the vessel (captain, chief mate, chief engineer, and dive crew), and Huisman’s corporate representative stated that Cole was to meld in and function as part of the crew. Thus, he owed his allegiance to the vessel and not to Huisman. His work was all sea-based, and he sailed with the vessel from location to location. Consequently, Judge Vitter found Cole satisfied the nature element and that he was a seaman as a matter of law, granting summary judgment to Cole.
Oceaneering and Cole then moved for summary judgment on the issue whether Cole was a borrowed servant, arguing whether the Ruiz factors demonstrated that Cole was employed by Oceaneering or Huisman. Oceaneering argued that Huisman directed which employees would be sent offshore, but Huisman’s representative testified that its responsibility ended when the worker got on the boat to be transported to the Oceaneering vessel. Once on the OCEAN PATRIOT, Cole did what he was told to do by the captain, chief mate, chief engineer or dive crew. Judge Vitter reasoned that the selection of the individual was not relevant to the determination of which party had control over the individual’s work once he was present on the vessel. Likewise, the requirement that Cole report to his supervisors at Huisman at the end of each day and submit a Daily Report with details of his work did not overcome the fact that if Cole had an issue on the vessel, he was to report it to the vessel. Judge Vitter found the direction/control factor and the factor about whose work was being performed to weigh in favor of Cole’s status as a borrowed servant. With respect to the question of whether there was an agreement between the parties, Oceaneering cited the Purchase Order stating that Huisman was an independent contractor. However, the terms did not reference Huisman’s employees, and Judge Vitter concluded that this factor did not weigh in favor of either party. For the factor looking to whether the employee acquiesced in the new work situation, Oceaneering argued that Cole had only been working on the OCEAN PATRIOT for a short period of time compared to his employment with Huisman, but Judge Vitter considered this factor to weigh in favor of status as a borrowed servant because Cole complied with his role without objection, and the Fifth Circuit has held that a month is sufficient time for an employee to appreciate new work conditions (however, she found the factor that considered whether the new employment was over a considerable length of time to be neutral). Judge Vitter considered the factor looking to whether the original employer terminated its relationship with the employee to be neutral because Cole was required to maintain contact with Huisman while he was receiving instruction and supervision from Oceaneering. As Oceaneering supplied the tools and place for performance of the work and could remove Cole from the OCEAN PATRIOT, those factors weighed in favor of status as a borrowed servant. Finally, with respect to the obligation to pay Cole, Judge Vitter noted that the Fifth Circuit had held that when the funds used to pay the employee are received from the entity to which the employee is loaned, the borrowing entity, in effect, pays the employee. However, the parties submitted conflicting evidence on the issue, so Judge Vitter considered this factor to be neutral. As five of the factors favored Cole being a borrowed servant of Oceaneering and four were neutral, Judge Vitter found that Cole was Oceaneering’s borrowed servant, and she granted summary judgment to Cole.
The medic who treated Cole on the OCEAN PATRIOT, Keith Thompson, was provided pursuant to a contract between Oceaneering and Pharma-Safe Industrial Services. Oceaneering and Cole disagreed whether the medic was an independent contractor, and they filed motions for summary judgment on the issue of whether Oceaneering was vicariously liable for any negligent treatment provided by the medic. Judge Vitter explained that there are two theories by which a Jones Act employer may be held vicariously liable, when it exercises operational control over the work and when the work is an operational activity (one that is necessary or vital to the employer’s operations) so that, under Hopson v. Texaco, the employer is vicariously liable for the negligent acts of those who perform, under contract, the operational activities. As Oceaneering had a non-delegable duty to provide prompt and adequate medical care to its seaman (Cole), Oceaneering was vicariously liable for the conduct of the agent to whom it delegated the obligation to perform that duty (Thompson and Pharma-Safe). Accordingly, Judge Vitter granted summary judgment to Cole.
William Tisdale was employed by Marquette Transportation as an uncovered steersman on the M/V ST. JOHN. While performing deckhand work on the vessel in a barge fleeting operation on the Houston Ship Channel, Tisdale picked up a lock line on the starboard side of a barge in tow of the ST. JOHN and felt a pop on the right side of his lower back/hip. He was initially diagnosed at an urgent care facility with a back strain, but, when he returned home to Mississippi, he underwent an MRI that reflected disc degeneration at L3-4 with a disc bulge and bulging discs at L4-5 and L5-S1. He was treated by neurosurgeon Donald Dietze, who opined that Tisdale’s disc herniation at L3-L4 was related to his accident and that the conditions at his L4-L5 and L5-S1 levels were aggravations of pre-existing disease (testifying that the aggravation of Tisdale’s spine at the L5-S1 level was caused by the accident). Dr. Dietze recommended that Tisdale undergo a lumbar fusion at L3-L4, but he recommended postponing the surgery as long as possible and that Tisdale undergo a radio frequency ablation procedure to relieve pain but not to treat the underlying condition causing the pain. Marquette did not approve the radio frequency ablation. Tisdale brought this suit in federal court in Louisiana against Marquette, seeking to recover under the Jones Act and under the general maritime law for unseaworthiness and maintenance and cure. Eventually, Dr. Dietze recommended that Tisdale undergo a three-level fusion from L3 to S1. In response to the recommendation for the multi-level fusion, Marquette Transportation retained neurosurgeon John Davis, IV to perform an examination on Tisdale (and review his records). Dr. Davis opined that Tisdale’s low back pain was causally related to the injury, and he recommended a L3-L4 minimally invasive procedure to decompress the L3 nerve root. He found no indication for the surgery at L4-L5 or L5-S1, because Tisdale had “modest age-appropriate degenerative changes” at those levels and there was “not so much as a hint of any nerve root compression at either of those levels” (nor was there any evidence of instability). After the competing opinions had been completed, Tisdale underwent an MRI on November 21, 2022, and Dr. Dietze concluded that there was a new paracentral disc herniation with right L5 and S1 nerve root compression (consistent with Tisdale’s complaint of new right foot weakness). Dr. Dietze opined that this was a failure of the injured disc superimposed onto a degenerative disc (to support his diagnosis of symptomatic progressive degenerative changes at L5-S1). Dr. Davis noted that the protrusion at L5-S1 was a “new finding” that was “not present” on the prior MRI scan. He stated that this new herniation was not related to the work injury and that his recommendation for an L3-L4 minimally invasion procedure remained unchanged. Marquette denied Tisdale’s request for the three-level fusion, and Judge Guidry held a trial on the issue of Tisdale’s entitlement to cure. Tisdale claimed that he was entitled to cure that included the radio frequency ablation procedure and the three-level fusion recommended by Dr. Dietze. Judge Guidry first ruled that the radio frequency ablation procedure was a “palliative treatment that will not serve to improve Tisdale’s back injury.” Therefore, he held that the procedure did not fall within the scope of Marquette’s cure obligation. With respect to the dispute over the extent of surgery, Judge Guidry found Dr. Davis to be more credible than Dr. Dietze, and he agreed with Dr. Davis’s opinion that the three-level fusion was not related to Tisdale’s accident on the vessel and with Dr. Davis’ recommendation for the minimally invasive transforaminal lumbar interbody fusion at the L3-L4 level. Therefore, Judge Guidry held that Marquette’s cure obligation did not encompass the three-level fusion recommended by Dr. Dietze. Finally, Judge Guidry held that Tisdale was not entitled to punitive damages because Marquette was under no obligation to pay for the palliative procedure and because its denial of the multi-level fusion was not arbitrary and capricious.
Arnold L. Pritt and his wife, Ruth A. Pritt, brought this suit in Massachusetts state court, asserting that Arnold was exposed to the defendants’ asbestos products while he worked in shipyards and on ships at sea and in port during his employment by the Navy. The case was removed to federal court, and Ruth continued to prosecute the claim after Arnold died. Ruth sought to amend her complaint, and John Crane objected to her survival claim for pain and suffering and medical bills, her claim for loss of consortium and society in the wrongful death claim, and her claim for punitive damages for the wrongful death claim, claiming that they were not permitted by the Jones Act or the Death on the High Seas Act. Ruth argued that the Jones Act was not applicable because John Crane was not the employer of her husband and that DOHSA did not apply because Arnold’s injuries were indivisible between the high seas and territorial waters. Magistrate Judge Bowler agreed with Ruth on both points, stating that the Jones Act did not apply because the complaint was against a product manufacturer and not Arnold’s employer [contrary to Scarborough v. Clemco Indus., 391 F.3d 660 (5th Cir. 2004)], and that DOHSA did not limit the recoverable damages when the exposure to asbestos occurred on the high seas and in territorial waters. Finding no overlap between statutory and decisional law, Magistrate Judge Bowler held that punitive damages and damages for loss of consortium could be recovered by Ruth under the general maritime law and that there were “no established and inflexible rules that would convince [her] to withhold the remedies sought by plaintiff under the Massachusetts wrongful death statute.” Finally, reasoning that “it makes little sense to recognize plaintiff’s right to wrongful death damages but strip her of the rights that were afforded to her husband prior to his death,” Magistrate Judge Bowler held that a survival remedy was available in this case.
This case involves damage to an electrical cable owned by Baltimore Gas & Electric that is buried under the waters of Eli Cove, near Baltimore, Maryland. Candice Bateman and Raymond Bostic purchased property in Pasadena, Maryland and contracted with Coastline Commercial Contracting to extend an existing pier into the waters of Eli Cove. The project required that Coastline excavate portions of the bottom the Eli Cove and install new pilings for the extension of the pier. During the transport of the barge and pilings, Coastline struck the cable, causing damage for which Baltimore Gas & Electric brought this suit in federal court in Maryland under the court’s admiralty jurisdiction. Coastline moved to dismiss the suit for lack of admiralty jurisdiction, and Judge Griggsby began by addressing whether Eli Cove was a navigable waterway. The facts established that Eli Cove is a part of the tidal waters of Chesapeake Bay and that its waters flow into Stoney Creek, which flows into the Patapsco River and Chesapeake Bay. However, Judge Griggsby was persuaded by the fact that Eli Cove is “a separate body of water that is distinct from Stoney Creek” and that abuts residential properties. She reasoned that “the cove allows for water access from these residential properties to Stoney Creek, but it is not part of Stoney Creek.” Judge Griggsby then noted that there are marinas and a boat launch on Stoney Creek, but not on Eli Cove. Therefore, although Stoney Creek was used or susceptible of being used as a highway for commerce, she did not believe that Eli Cove, which provided access to Stoney Creek, was similarly used or susceptible of being used as a highway for commerce. Consequently, she held that Eli Cove was not a navigable waterway and that the court lacked admiralty jurisdiction. Judge Griggsby added that Baltimore Gas & Electric also failed to establish that the incident had the potential to disrupt maritime commerce and had a substantial relationship to maritime activity. She rejected the argument that in an emergency the Coast Guard and other rescue vessels would have to go to Eli Cove via the Patapsco River and Stoney Creek to render aid, creating a potentially disruptive impact on maritime activity, and the argument that the presence of a barge on the water to extend a pier had a substantial relationship to maritime activity.
Patrick Burnett was employed by Premier Offshore Catering as a catering hand on the derrick barge THOR, owned and operated by the Thor Interests. As Hurricane Zeta approached Port Fourchon, Louisiana, the THOR sought safe harbor and was tied to the Martin Energy Services Dock No. 16 with its assist tug, CROSBY ENDEAVOR, operated by Crosby Tugs. The storm surge from the hurricane caused the THOR and CROSBY ENDEAVOR to break away from the dock on October 28, 2020 and to come into contact with other vessels and property along the Bayou Lafourche channel. Burnett and another Premier catering hand, Lewis Andrews, filed suit in Texas state court against Premier, the operator of the THOR, and others, and Burnett’s suit was removed to federal court where it has been stayed by the filing of limitation actions by the Thor Interests and by Crosby Tugs. Burnett filed claims in both limitation actions, and, beginning in December 2020, the Thor Interests requested that Burnett undergo an independent medical examination. However, Burnett has undergone at least four invasive surgeries, three of which occurred after the court ordered him to submit to a medical examination (five days after the order, Burnett allegedly underwent a five-level lumbar surgery, and he had two subsequent corrective surgeries). The Thor Interests and Premier then moved for sanctions. Magistrate Judge Roby noted that both Burnett and his attorney had a duty to preserve evidence of Burnett’s back condition, and the duty arose when Burnett made a claim for cure and the THOR interests made the demand for a medical examination. As there was a duty to preserve the pre-surgical condition of his back, Magistrate Judge Roby addressed whether there was intentional spoliation of evidence of that condition when Burnett underwent surgery without having the requested and ordered IME, and she concluded that there was. She described the response of Burnett and his counsel to the defendants’ request: “However, rather than cooperate in the process, Burnett’s counsel challenged the request, the form of the evaluation, and in response to the Motion to Compel, filed a motion to bifurcate. This type of conduct disregards the Federal Rule of Civil Procure 1, which requires cooperation in the discovery of evidence.” She found that the conduct “could not have been asserted for any reason other than intentional delay resulting in a change in Burnett’s presurgical condition” and she described the contention from Burnett’s counsel about the timing of the back fusion in short proximity to the court’s order (a “unique scenario that led to the surgery being performed days after the Court’s IME order”) to be “ludicrous.” The question was then presented whether there was prejudice from the spoliation. The defendants argued that Burnett’s physical condition had been irreversibly changed, resulting in a total of more than $1 million in medical expenses. Magistrate Judge Roby agreed that “prejudice abounds.” After finding that Burnett’s lawyer acted in bad faith, Magistrate Judge Roby considered whether Burnett acted in bad faith. She ordered a limited deposition of Burnett, and she found that portions of his testimony were “not accurate” and were “totally unbelievable.” She concluded that “Burnett’s counsel failed to uphold his duty of candor to the Court” and that “Burnett and his counsel’s deliberate and intentional disregard of this Court’s Order and their duty of candor, warrants sanctions.” Consequently, she recommended sanctions against Burnett and his attorney that the cost of the five-level laminectomy and fusion ($459,735) should not be recovered, that post-laminectomy procedures in the amount of $377,551.87 should not be recovered, that an adverse inference should be given regarding the precursor surgery ($142,828), and that attorney fees should be awarded to the Thor Interests and Premier for the filing of the motion for sanctions.
Luciano Susino died from mesothelioma that his beneficiaries claimed was caused by his exposure to asbestos while serving as a seaman on vessels owned or operated by Overseas Shipholding while the vessels were docked at the Hess Oil refinery in St. Croix, Virgin Islands. The beneficiaries brought suit against Overseas Shipholding and different product and premises defendants in the Superior Court of the Virgin Islands under the Jones Act and general maritime law, and defendant 3M removed the case based on diversity and federal question (claiming that some of the counts alleged violations of federal law). The plaintiffs moved to remand the case, and Overseas Shipholding argued that the court had jurisdiction as the matter related to its prior bankruptcy reorganization. Hess filed a bankruptcy petition and a notice of the automatic stay and argued that the Chapter 11 filing stayed the action against Hess. Chief Judge Molloy agreed that the proceedings were stayed by the bankruptcy petitions of both Overseas Shipholding and Hess (which barred the commencement or continuation of proceedings against these defendants). However, Chief Judge Molloy held that the motion for remand did not require the court to reach the merits of the case and was not contrary to the stay. Therefore, he addressed the grounds for removal. As Overseas Shipholding did not argue within 30 days that bankruptcy was a ground for jurisdiction, Chief Judge Molloy declined to uphold the removal on that basis. Chief Judge Molloy reviewed the citizenship of the parties and found that there was not complete diversity. Finally, reasoning that admiralty claims do not arise under federal law, he rejected the argument that the counts brought under the Jones Act and general maritime law alleged violations of federal law so as to permit removal. Therefore, he ordered the remand of the case.
Gulf Island Contractors was engaged by Texas Petroleum Investment Corp. to perform Hurricane Ida cleanup work (removing oil field debris and structures) in the Clovelly Oil and Gas Field in Louisiana. Reginald Patterson was a laborer supplied by a temporary labor contractor to Gulf Inland to work as a rigger, hooking and unhooking lines on fixed structures in the Field and removing the marsh grass and other debris that covered some of the fixed oil and gas platforms. Gulf Inland used several assets to assist in the work, including a quartersbarge, airboats, and various crane and junk barges. Patterson was assigned to eat and sleep on the quartersbarge, but he was working on a fixed platform at the time he was injured. The platform was permanently moored to the bed of a waterbody and was not capable of being moved. Patterson was injured when he fell three or four feet while boarding the platform to work on its demolition, and he brought this suit in federal court in Louisiana as a seaman under the Jones Act and general maritime law. Gulf Island moved for summary judgment on the seaman status of Patterson, arguing that Patterson did not operate, work on, navigate, maintain, or equip any of Gulf Island’s vessels. Patterson responded that he spent at least 30% of his time operating the spuds that held the quartersbarge in place and in rigging and cleaning on the deck of the quartersbarge. He added that he assisted in efforts to unmoor the barge and that he and other workers would ride on the barge to the next work site (claiming that a reasonable observer could consider the quartersbarge to be designed to a practical degree to carry people over water. Judge Morgan did not have to decide whether transportation was an important or only an incidental purpose of the barge because she concluded that Patterson’s connection to a vessel was not sufficiently substantial in duration. With respect to the duration element of the connection test, Gulf Inland argued that the work Patterson performed in service of the quartersbarge was incidental to his primary responsibility to work as a rigger on the fixed platforms in the field (calculating that Patterson may have spent a total of 90 minutes in his six weeks on the job raising spud winches, a task in service of helping the quartersbarge be towed from one location to another (Patterson did not offer any estimate of the actual amount of time he spent cleaning up or rigging on the deck). Patterson’s conclusory statement that he spent 30% of his time performing the work on the quartersbarge, which was not supported by time sheets, logs, employment records, or other evidence, did not raise a fact question to satisfy the duration element. Therefore, Judge Morgan held that Patterson was not a seaman as a matter of law and could not bring claims under the Jones Act or for unseaworthiness or for maintenance and cure.
This case has been through a bench trial before a judge who has retired, two opinions of the Fifth Circuit, and an opinion of the Texas Supreme Court. Fire Protection Service became an authorized dealer for life rafts and other maritime safety products of Survitec Survival Products. After Survitec terminated the dealer agreement, Fire Protection demanded that Survitec repurchase the unsold inventory based on the requirement contained in the Texas Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, which obligates suppliers of covered equipment to a dealer to repurchase unsold inventory of the covered equipment after the supplier terminates the dealer agreement. The statute includes several enumerated types of equipment, including machinery or equipment used for, or in connection with, “industrial, construction, maintenance, mining, or utility activities or applications.” Fire Protection argued that the life rafts are used in connection with offshore oil drilling, and that oil drilling falls within the statutory coverage for mining or industrial activity. Judge Rosenthal disagreed, reviewing the use of these terms in other statutes and holding that the Texas Legislature has not equated oil drilling with mining. Additionally, Judge Rosenthal held that the life rafts and equipment could not be said to be used for or in connection with mining. She agreed that marine life rafts are present in a variety of industries, including offshore construction and maintenance, offshore drilling, undersea mining, and work on utility lines that are over or under bodies of water. However, she responded: “The fact that marine life rafts are often, even required, to be present when offshore industrial activities, offshore construction, maintenance, mining, or other activities or applications are performed, does not mean that the rafts themselves are used in those activities or applications.” As the dealer agreement was outside the scope of the statute, Judge Rosenthal dismissed the claims of Fire Protection. Thanks to Matthew Ammerman of Houston, Texas for bringing this case to our attention.
From the state appellate courts
George A. Saba was an “Elite” customer of Princess Cruise Lines (having cruised on its ships at least 23 times). He booked a cruise for himself and his wife on the MAJESTIC PRINCESS departing from Los Angeles on December 4, 2021. He received the cruise line’s booking confirmation form that included notice that the passengers agreed to the terms of the Passage Contract (available at an address on the cruise line’s web site). Shortly thereafter, Saba’s wife was diagnosed with Guillain-Barre Syndrome, which caused her to be paralyzed from the waist down. Saba emailed Kreykes, a cruise line agent and vacation planner, to cancel the cruise and rebook it later, and there were extensive discussions that were not resolved to Saba’s satisfaction. Saba then brought this action in the Superior Court of Riverside County, California against the cruise line and Kreykes for breach of contract, fraud, and negligent misrepresentation, claiming that the defendants misrepresented the “Cruise with Confidence” policy. The cruise line moved to dismiss the suit based on the forum-selection clause in the Passage Contract requiring suit be brought in the state or federal court in Los Angeles. The superior court judge dismissed the action as to both defendants, and Saba appealed. Saba argued that Kreykes was not a party to the Passage Contract and was not a moving party in the cruise line’s motion to dismiss, but the court of appeals disagreed. Writing for the court, Judge McKinster stated: “Because the passage contract (including the forum selection clause) existed between Saba and Princess, it follows that it (including the forum selection clause) also applies to Princess’ employees, who were its agents and closely involved in their employer’s contractual relationship with Saba.” Saba argued that the contract was vague and ambiguous when it stated that its terms governed all “dealings” between Saba and the cruise line, but Judge McKinster disagreed and held that “dealings” included the booking of the cruise. Finally, Judge McKinster rejected the argument that the clause from a contract of adhesion was unconscionable, noting that the clause would be unreasonable if the selected forum was unavailable or unable to accomplish substantial justice. As Saba could not establish the unconscionability of the clause, the appellate court affirmed the dismissal of the suit.
Kenneth G. Engerrand
President, Brown Sims, P.C.
Houston
1177 West Loop South
Tenth Floor
Houston, TX 77027
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
4000 Ponce De Leon Blvd
Suite 630
Coral Gables, FL 33146
O 305.274.5507
Quote:
The court held a status conference on June 7, 2023, in which the parties provided an overview of the case and recent efforts to save the vaquita, and confirmed that they intend to dismiss this action with prejudice. But today’s dismissal is far from a bill of health for the vaquita. It is simply an acknowledgement that Plaintiffs brought one claim, and that one claim has been satisfied by Interior’s decision to certify Mexico. As the court recognized in NRDC IV and stresses now, “every death [of the vaquita] brings it perilously close to disappearing from the planet forever. . . . [T]he need for vigorous international enforcement against its continuing threat is a compelling one.” The panda of the sea, the little cow, is irreplaceable.
Center for Biological Diversity v. Haaland, No. 22-00339, 2023 Ct. Intl. Trade LEXIS 92 (Ct. Int’l Trade June 14, 2023) (citations omitted) (Katzmann).
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