January 2011 HAPPY NEW YEAR!!!
Notes From Your Updater - A Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit has been filed with the U.S. Supreme Court in the case of Harrington v. Atlantic Sounding Co., Inc., et al., Docket No. 10A316 [see May 2010 Longshore Update]. The question presented is: Does the Jones Act permit an arbitration clause to restrict a plaintiff’s right to choose the forum in which his case will be heard?
OWCP/Longshore National Office has announced the hiring of Brandon Miller, as new Branch Chief of Insurance and Financial Management. Brandon will be joining the Longshore National Office Team on Monday, December 6, from Minneapolis, MN. His previous professional experience includes twelve years in leadership positions in the Minnesota Department of Labor & Industry’s Workers’ Compensation Division, with more than seven years managing the Minnesota Workers’ Compensation Special Fund. In addition, Brandon spent three years consulting with private companies on various risk management and insurance issues. He holds a Masters Degree in Finance and Risk Management. During his transition period, he worked closely with John Chamberlain to achieve as much knowledge transfer as possible before John’s retirement took effect. Check out his LinkedIn profile.
Great News About a Valuable Longshore Act Resource - John Chamberlain has returned to his home in Connecticut after retiring from the Department of Labor. He intends to continue studying and writing about the Longshore Act and its extensions, its history and its future. He is available as a consultant, researcher, teacher and mediator. John may be reached at john.chamberlain@johnchamberlainconsulting.com. His postal address is PO Box 987, Woodbury CT 06798-0987. He is currently developing his web site, http://www.johnchamberlainconsulting.com/.
5TH CIRCUIT WATERS DOWN ANDREPONT
CAREY V. ORMET PRIMARY ALUMINUM CORPORATION, ET AL.
Circuit Court Opinion
BRB Decision
ALJ Decision
James Carey was allegedly injured while working as a longshoreman for Ormet Primary Aluminum Corporation. Ormet voluntarily paid Carey benefits under the LHWCA based upon an average weekly wage of $1,423.92. Later, Ormet informed Carey that it believed that certain holiday, vacation, and container royalty benefits were improperly included in the calculation of Carey's AWW, and Ormet sought an informal conference to resolve the controversy. Ormet argued that Carey's AWW was properly calculated as $1,169.33, an amount that reflected the exclusion of premium pay. The district director rejected Ormet's argument and issued a written memorandum of informal conference recommending that Ormet continue to pay benefits based upon an AWW of $1423.92. Ormet contested the district director's decision by requesting a formal hearing, but continued to make payments to Carey based upon the AWW of $1423.92, which the District Director recommended. After a formal hearing, the ALJ rejected Ormet's argument that Carey's AWW should not include premium pay. Carey filed a petition for fees, seeking to shift liability to Ormet under §28(b). The ALJ denied the petition, finding that attorney's fees were inappropriate under § 28(b) "as no greater compensation was ever received after the informal conference." Carey moved for reconsideration, which the ALJ denied. Carey appealed to the BRB, which affirmed the ALJ's decision. Carey timely petitioned the circuit court for review, arguing that Ormet's decision to request a formal hearing before the ALJ to reargue the AWW was a refusal to accept the district director's recommendation. Ormet contended that, because it tendered the compensation recommended, it did not refuse that recommendation. Surprisingly, the appellate court held that, irrespective of any voluntary continuation of payment, Ormet sought to overturn the director's recommendation through litigation. The court characterized Ormet's attempt to avoid characterization of its actions as a refusal of the director's recommendation as bordering on frivolous. Ormet argued that because the ALJ-determined final award did not exceed the amount it voluntarily paid to Carey following the director's informal conference, the plain language of §28(b) precluded any shifting of attorney's fees. The appellate court cited Savannah Machine & Shipyard Co. v. Director, OWCP as being indistinguishable, where an ALJ awarded attorney's fees under § 28(b) and the BRB affirmed, finding that the employer's resistance to the claim necessitated the efforts of his attorney, and holding that the employer was liable for the attorney fees. Similarly, Ormet sought a formal hearing before an ALJ to argue for a reduction in the benefit amount it was paying, forcing Carey to utilize the services of an attorney. The court rejected Ormet’s argument that Andrepont compelled a different result and that Savannah Machine was no longer controlling precedent. Accordingly, consistent with Savannah Machine, the appellate court held that Carey had met the requirements of §28(b) and the ALJ and the BRB erred in denying him attorney's fees. The decision of the BRB was vacated and the case was remanded. (5th Cir, December 8, 2010) 2010 U.S. App. LEXIS 25029
Updater Note: This opinion puts me in the unusual situation of arguing that the BRB got it right and this panel of the 5th Circuit got it wrong. I simply do not see how a plain reading of the statute supports an attorney fee in this situation, where the employer voluntarily tendered the amount of compensation recommended by the District Director and the ALJ did not grant additional compensation; but awarded less. In my humble opinion, this decision infringes on the employer’s due process rights by essentially saying that if the employer asks for a formal hearing on any issue, the employer will be obligated to pay the claimant’s attorney fees.
THIS TIME THE PRICE WAS NOT RIGHT FOR PRICE
PRICE V. STEVEDORING SERVICES OF AMERICA, INC.,ET AL.
Circuit Court Opinion
BRB Decision
ALJ Decision
Arel Price was allegedly injured by a falling ship-lashing-chain on, while employed by Stevedoring Services of America, Inc. (SSA") and has been litigating his case for almost fifteen years now [see June 2004, February 2006, April 2009 and September 2009 Longshore Updates]. This latest appellate challenge dealt with the interest calculation on his past due disability payments. Price contended that the interest rate defined in 26 U.S.C. § 6621 (the provision of the tax code defining the interest rate applicable to over-or under-payment of taxes) or, in the alternative, annually compounded interest under 28 U.S.C. §1961(b) should apply to his past due payments. After hearing argument, the ALJ awarded Price simple interest on past due compensation at the rate established in 28 U.S.C. §1961(a), which defines interest for post-judgment interest payable on U.S. district court judgments and does not directly apply to compensation under the LHWCA. However, the ALJ noted that the BRB has used that section to award simple interest on past due payments since 1984. Price appealed the ALJ decision to the Board, making the same arguments he presented to the ALJ. The Board rejected Price's argument regarding interest, affirming the ALJ's decision to award simple interest at the rate determined by 28 U.S.C. §1961(a). On further appeal to the 9th Circus, Price argued that the interest rate defined in 26 U.S.C. §6621 better approximates the cost of borrowing money for a disabled employee. Price further contended that the Director's position (using an interest rate approximating interest earned on saved money) is unreasonable because, in reality, most disabled employees will actually need to borrow. The court noted that Price’s argument ignores the late payment penalty provisions of 33 U.S.C. §914 in arguing that interest awarded under 28 U.S.C. §1961(a) is unreasonable. Additionally, Price failed to provide any evidence to support his argument that most disabled employees must actually borrow funds while waiting for a determination of benefits. The court concluded that awarding simple interest at the rate defined in 28 U.S.C. §1961(a) is not an unreasonable method of compensating a claimant for past due compensation, since the statute ties the interest rate to the one-year U. S. treasury bill rate and adjusts with changes in the market. In the alternative, Price argued that, if the court upholds the Board's use of the interest rate in 28 U.S.C. § 1961(a), the interest rate must be computed as compound, not simple interest. The court rejected this alternative argument, holding that the Director is not bound to accept all the provisions of 28 U.S.C. §1961(b) in determining that simple interest at the §1961(a) rate is reasonable compensation for past due compensation in LHWCA cases. The court held that the Director's position regarding simple interest at the 28 U.S.C. §1961(a) rate Was not unreasonable and affirmed the BRB’s decision. (9th Cir, December 15, 2010) 2010 U.S. App. LEXIS 25504
Updater Note: In a refreshing concurring opinion, Judge O’Scannlain suggested that the time is now ripe for us the court to revisit the 9th Circuit's law governing the deference owed to the Director's litigating positions. Judge O’Scannlain argued that in his view, the Circuit’s rule mandating deference to the Director's reasonable litigating positions cannot be reconciled with Supreme Court precedent. Arguments like this make the 9th sound more like a Circuit, than a Circus.
3RD CIRCUIT CITES WINCHESTER TAKING A LIBERAL VIEW OF ADJOINING AREA
CONSOLIDATION COAL COMPANY V. BRB, ET AL. [SMITH]
Circuit Court Opinion
BRB Decision
ALJ Decision
Daniel Smith was a diesel mechanic for Consolidation Coal Company and worked in a maintenance garage at a Consolidation facility adjacent to the Monongahela River. Consolidation prepares and processes coal at the facility and receives "raw" coal from barges, moves the coal by conveyor belts through the processing plant, loads the processed coal back onto barges, or stockpiles and ships the coal later. Smith was allegedly injured while repairing a Terex machine that had become disabled while loading coal into the de-stock hopper belt, which was adjacent to the garage. While using a sixteen-pound sledgehammer to remove rusted hinge pins from the Terex, Smith allegedly injured his back. Smith initially was paid state workers’ compensation, but later claimed benefits under the LHWCA. The parties requested a formal hearing by Joint Motion asked that the issue of jurisdiction be bifurcated from all other issues in the case. The ALJ granted that request and held a formal hearing on the issue of jurisdiction, holding that Smith was eligible for compensation under the Act. Specifically, the ALJ held that Smith satisfied both the "status" and "situs" aspects of the jurisdictional test. The ALJ specifically found that Smith was responsible for servicing mobile equipment, including Terex machines, which were used to load coal from operations on land to barges. The ALJ also determined that Smith was injured on a covered "situs" under the Act. The ALJ reasoned that the garage was essential to the unloading of coal from vessels, was located within and around essential elements that comprise the loading process, and provided a site for repairs on equipment active in the loading process. Additionally, the ALJ noted that the Terex machine broke down in the midst of loading coal onto the de-stock belt, and was squarely within the facility’s loading or unloading area at the time. Consolidation appealed to the BRB, contending that Smith lacked status because the Terex was not used primarily to load coal and Smith had other duties unrelated to the loading/unloading process. The Board found that these uncontested facts were not dispositive, citing Schwalb to hold that a claimant's contribution to the loading process need not be constant. Further, the Board held that the ALJ rationally found that interruption of barge loading would occur if a mechanic did not service the heavy equipment used in the loading process. The Board also upheld the ALJ's decision that Smith's injury occurred on a covered situs; specifically affirming the finding that the garage was a covered situs. Consolidation filed a timely petition for review, arguing that the Board erred in affirming the ALJ's decision that Smith met both the situs and status tests under the Act. The appellate court concluded, base on its review of the record, that the Board acted in conformance with applicable law and the ALJ's decision was supported by substantial evidence. It found that Smith's injury placed him within the ambit of the Act's status and situs requirements. The appellate court began by rejecting Consolidation's argument that Smith failed to meet the status requirement, holding that the fact that Smith did not repair the Terex "at river's edge" was not dispositive. Although Smith's work was "land-based," because the ALJ found his work to be "integral" or "essential" to the loading or unloading operations, the appellate court held that he met the Act's status requirements. The court also rejected Consolidation's argument that the ALJ had no basis for finding that Smith's work was so integral or essential as to be covered by the Act. Noting that Consolidation did not challenge the ALJ's finding that the Terex was used at times to load processed coal ultimately deposited onto barges, the appellate court concluded that this aspect of Smith’s employment created a sufficient nexus to the loading and unloading of cargo. Finally, the appellate court rejected Consolidation’s contention that Smith was not injured on a covered situs because the garage in which he was injured was not an adjoining area customarily used by Consolidation for the loading, unloading, repairing, dismantling, or building of vessels. Citing Winchester favorably, the court held that an area adjoins the navigable waters of the United States if it is "close to" or "near" those waters. The court viewed the ALJ's finding that the garage was located within and around essential elements of the loading operation of the maritime component of the facility, specifically next to the stockpiled coal and 150 feet from the de-stock hopper, and had at least some maritime purpose, as evidence consistent with this conclusion. The appellate court affirmed the BRB’s holding that Smith's employment satisfied the status requirement and the garage where Smith was injured satisfied the situs requirement, concluding that the Board did not err in determining that Smith's claim fell within the intended scope of LHWCA. (3rd Cir, December 22, 2010) 2010 U.S. App. LEXIS 25979
SEQUENTIAL ANALYSIS REQUIRED IN MULTI-EMPLOYER OCCUPATIONAL CASES
ALBINA ENGINE & MACHINE V. DIRECTOR, OWCP, ET AL. [MCALLISTER]
Circuit Court Opinion
BRB 1; BRB 2; BRB 3
ALJ 1, ALJ 2, ALJ 3
James McAllister died of mesothelioma as a result of exposure to asbestos during his work as a carpenter for three shipyard employers; first for Willamette Iron & Steel Co., then for Albina Engine & Machine, and finally for a predecessor company to Lockheed. McAllister died in 2002 of mesothelioma and his widow, Karen McAllister filed a claim for death benefits, pursuant to §909 of the LHWCA, against all three shipyard employers. The principal issue to be decided by the ALJ at trial was the question of which employer - Lockheed, Albina or Willamette - should be liable for the payment of benefits. While the ALJ originally held Lockheed liable, after two BRB remands, another ALJ held Albina liable for the payment of benefits. In keeping with the BRB’s instructions, on the second remand, the ALJ weighed all of the evidence regarding decedent's exposure to asbestos at the three employers and determined that Lockheed's evidence was entitled to greater weight, noting that Willamette admitted that decedent was exposed to asbestos in its employ, and that decedent had done essentially identical work for Albina. The ALJ found that the evidence of asbestos exposure at Lockheed was weaker and determined that Lockheed had "met its burden of showing (more likely than not) the absence of exposure" during decedent's employment with Lockheed, and that there was no preponderance of evidence showing an absence of exposure at Albina. Because decedent worked for Albina after he worked for Willamette, Albina was held liable for the payment of benefits. The Board affirmed the third and final ALJ decision. Albina appealed arguing that the Board misconstrued existing law on the burden of proof in LHWCA proceedings against multiple employers, misapplied the "last employer" rule, and upheld the ALJ’s decision that was not supported by substantial evidence. Albina further contended that liability for payment of benefits should have been assigned instead to Lockheed, the decedent’s last employer. The appellate court initially noted that, contrary to the Board's repeated statements in its decisions in this case, the §20(a) presumption is relevant to the question of liability in a multi-employer case, and not just to the question of whether a claim is compensable in the first instance. The appellate court held that the analysis with respect to each employer is to be conducted sequentially, beginning with the last (most recent) employer, and need not be conducted for earlier employers once a responsible employer is found. Therefore, in multiple-employer occupational disease cases the fact-finder should conduct a sequential analysis, as follows: the ALJ should consider sequentially, starting with the last employer, (1) whether the §20(a) presumption has been invoked successfully against that employer, (2) whether that employer has presented substantial, specific and comprehensive evidence so as to rebut the §20(a) presumption, and (3) if the answer to the second question is yes, whether a preponderance of the evidence supports a finding that the employer is responsible for the claimant's injury. The appellate court then applied its sequential analysis to the facts of the case, finding that McAllister did submit some admissible evidence of asbestos exposure at Lockheed and Lockheed, on the other hand, did not submit any evidence, let alone substantial evidence, to rebut the evidence against it. As the last (most recent) employer to fail to rebut the § 20(a) presumption, the court held Lockheed liable for payment of death benefits. The judgment of the BRB was reversed. (9th Cir, December 10, 2010) 2010 U.S. App. LEXIS 25256
REDUCTION IN ATTORNEY FEE AWARD NOT ARBITRARY OR CAPRICIOUS
STALLWORTH V. NORTHROP GRUMMAN SHIP SYSTEMS, INC., ET AL.
Circuit Court Opinion
BRB Decision
ALJ Decision
Emmanuel Stallworth allegedly injured his shoulder at work, while employed by Northrop Grumman as a painter. Subsequently, Stallworth filed a claim for disability compensation pursuant to the LHWCA. Before the District Director, Stallworth's attorney largely focused his argument on the assertion that Stallworth's average weekly wage was $682.12. The ALJ, however, determined that Stallworth's AWW to be $581.76. Prior to this determination, Northrop Grumman had voluntarily been paying Stallworth an AWW of $588.07. After the ALJ issued his Decision and Order, Stallworth's attorney submitted a fee petition to the District Director seeking an attorney's fee of $4,871.25, representing 21.25 hours of legal services at $225.00 per hour, plus $90.00 of expenses. The District Director reduced counsel's hourly rate to $200, disallowed one of the itemized entries, and reduced the award by one-half. The District Director noted that Stallworth’s attorney's argument and presentation before the District Director focused mostly on the issue of AWW, an issue that Stallworth eventually lost since the ALJ awarded him an AWW lower than that he was already receiving from his employer. Stallworth appealed from a final order of the BRB, which affirmed the District Director's reduction of his counsel's attorney fees for services performed while Stallworth’s case was pending before the District Director. On appeal, Stallworth argued that the Board committed error in affirming the District Director's fee reduction since 1) the District Director's decision to reduce the fee award as a result of Stallworth's "losing on an issue" contravenes the Supreme Court's decision in Hensley; and 2) the District Director's decision to use a “fractional multiplier to reduce a fee award" was an act considered to be "arbitrary, capricious and/or abuse of discretion.” Affirming, the appellate court concluded that the District Director's order reducing the attorney's fee was supported by the substantial evidence in the record and was in accordance with the law. Accordingly, the court concluded that the Board did not err in affirming the District Director's fee reduction. The court disagreed with Stallworth’s contention that the decision to simply reduce the fee award by one-half - instead of meticulously calculating the exact number of hours the attorney spent on the "successful" versus the "non-successful" issue - constituted a decision that was arbitrary, capricious, and/or an abuse of discretion. An adjudicator could simply reduce the award to account for limited success. The decision of the Board was affirmed. (5th Cir, July 20, 2010, UNPUBLISHED) 385 Fed. Appx. 408; 2010 U.S. App. LEXIS 14873
ONLY AN ADMIRALTY CLAIM CAN SUPPORT A RULE B ATTACHMENT
ALPHAMATE COMMODITY V. CHS EUROPE, ET AL.
Circuit Court Opinion
The US Court of Appeals for the Fifth Circuit ruled that only a prima facie admiralty claim can undergird a Rule B attachment. Alphamate Commodity obtained a Supp. R. Adm. or Mar. Cl. & Asset Forfeiture Actions B maritime attachment on a shipment of corn. Alphamate was owed money by the intended recipient of the shipment. Intervenors, the corn seller and its affiliate, moved to vacate the attachment. The trial court agreed with the intervenors on the merits and vacated the attachment. Alphamate appealed. The intervenors contended that they owned the corn because under the contract between the seller and the intended recipient, title transferred upon payment, which had not occurred. The appellate court held that the district court lacked maritime jurisdiction over the dispute between Alphamate and the intended recipient of the corn. Their contracts for sales of grain were not wholly maritime, nor were the demurrage and detention charges suffered by Alphamate severable from the alleged breaches of their sales contracts. A sale of goods was not maritime merely because the goods were to ship by sea. The demurrage charges, which were maritime in nature, were thoroughly intertwined with the non-maritime breach of contract claims and most likely stood or fell with the broader default claims. Accordingly, the appellate court held it could not exercise maritime jurisdiction over that aspect of the dispute. The court did not have the power to issue a Supp. R. Adm. or Mar. Cl. & Asset Forfeiture Actions B maritime attachment. The judgment of the district court was vacated and remanded. (5th Cir., November 29, 2010) 2010 U.S. App. LEXIS 24370
NO MARITIME RELATIONSHIP BETWEEN SHIPYARD AND DAMAGED VESSEL
LANDERS V. BOLLINGER AMELIA REPAIR, LLC
Circuit Court Opinion
An offshore supply boat owned and operated by Kevin Gros Offshore, L.L.C., arrived at Bollinger Amelia Repair, L.L.C.’s dock for repairs, after its starboard stern hull next to its water tank was punctured by an offshore platform. The gangway aboard the Kevin Gros vessel was unusable because it was defective and blocked by cargo. In any event, Bollinger requires that vessels tied to its dock use a Bollinger gangway. Steve Landers, an unlicensed engineer assigned to the Kevin Gros vessel, and Leonard Horne, another crew member, obtained a thirteen-foot aluminum gangway from the Bollinger dock and placed it between the dock and the vessel. An employee of Kevin Gros inspected the gangway before the crew used it and found it to be free of defects. Landers used the gangway several times without a problem. Kevin Gros determined that the vessel crew could repair the damage around the water tank without Bollinger’s assistance and never contracted with Bollinger for the repair work. While Landers and Horne were in the process of removing the gangway, later in the day, the gangway stopped and sprang back, allegedly injuring Landers’ back. Afterwards, Landers claimed to have observed a broken metal cross bar on the underside of the gangway. Landers filed suit against Kevin Gros, and later added Bollinger as a defendant, claiming Bollinger was negligent under maritime law for failing to provide a safe gangway. Landers eventually settled his claims against Kevin Gros. The district court granted Bollinger’s motion for summary judgment, holding that Bollinger did not have a maritime relationship with Landers, and that any claim under Louisiana law had expired under the one-year statute of limitations for tort claims. Landers filed an appeal, arguing that by requiring docked ships to use Bollinger’s gangways, Bollinger stepped into the vessel owner’s shoes and, as a result, assumed a maritime duty to provide a gangway free from hidden defects. Landers asked the appellate court to establish a new legal precedent, that when a dock owner assumes the vessel owner’s duty to provide equipment to a vessel, then the dock owner should be potentially liable under the general maritime law of negligence. The appellate court found that Landers failed to present any cogent basis for it to expand maritime jurisdiction in this manner, and declined to do so. The appellate court found no relevant facts or law to support a finding that a maritime relationship existed between Bollinger and the docked vessel’s crew member; hence that court found no admiralty status and affirmed the judgment of the district court. (5th Cir, December 9, 2010, UNPUBLISHED) 2010 U.S. App. LEXIS 25243
SUMMARY JUDGMENT REVERSED FOR GIVING MORE THAN WAS REQUESTED
MELTON V. HORTON, ET AL.
Appellate Court Opinion
Joseph Heath Melton was employed by St. James Stevedoring, LLC as an equipment operator and worked on a vessel, which was also owned and operated by St. James. While on board the vessel, Melton was allegedly physically confronted by fellow employee, Torrence Horton. As a result of the confrontation with Horton, Melton allegedly suffered serious injuries to his right knee. Melton filed suit against both Horton and St. James, which included allegations of vicarious liability on the part of St. James under the Jones Act and the general maritime law. Melton later filed a supplemental petition which alleged a new cause of action stemming from another incident which allegedly re-aggravated his right knee while lifting an industrial-sized tire. St. James filed a Motion for Partial Summary Judgment, arguing that St. James was entitled to a partial summary judgment as a matter of law regarding the claims against Mr. Horton, averring Horton and Melton were co-employees involved in horseplay at the time of the incident. St James further averred the actions of Horton were not for the benefit of St. James and the incident was unforeseeable. The trial court granted St. James’s motion and dismissed Melton's claims against it with prejudice. Melton appealed the trial court’s ruling, arguing that the trial court erred by granting summary judgment as to all of his claims and causes of action raised, even when St. James did not seek to have all of his claims dismissed in its Motion for Partial Summary Judgment. Melton averred that the trial court not only dismissed the claims against St. James relating to the incident with Horton, but it also dismissed all of his claims related to the subsequent alleged incident. Because the other claims raised by Melton were not addressed by St. James in its Motion for Partial Summary, the appellate court found that the trial court erred in dismissing those claims in the summary judgment. The appellate court reversed the trial court's grant of the summary judgment and remanded the matter to the trial court for further proceedings. (La. App. 5th Cir, December 14, 2010) 2010 La. App. LEXIS 1727
GET ALL THE LHWCA BENEFITS YOU CAN, AND THEN CLAIM TO BE A SEAMAN
MENDEZ V. ANADARKO PETROLEUM CORPORATION, ET AL.
Grixi Mendez, an Anadarko Petroleum Corp. employee, was allegedly injured while working on a floating oil-production facility located on the outer continental shelf. After his claimed injury, Mendez applied for benefits under the LHWCA. After he had received $61,268 in medical expenses and $133,246 in compensation payments, Mendez sued Anadarko in Texas state court, seeking benefits under the Jones Act. Anadarko removed on the basis that Mendez was not a Jones Act seaman because the platform on which he worked was not a "vessel" for the purposes of that Act. Mendez moved to remand and Anadarko responded. At the conclusion of a hearing at which counsel presented oral argument on the amended motion to remand and response, the court held that based on the pleadings, the motions and responses, the extensive record evidence, the arguments of counsel, and the applicable law, the platform at issue was not a vessel for the purposes of the Jones Act and remand was not appropriate. Anadarko then moved for summary judgment on the basis that Mendez has received all the compensation for his injuries he was entitled to under the LHWCA, precluding suit to recover damages for those injuries. Mendez continued to argue that the court should reconsider its earlier decision and find that the platform was a vessel and that he was a Jones Act seaman. Mendez also argued that removal was improper under §1441(b) because the OCSLA claims did not provide a basis for removal and that there was no other removable claim asserted. The court found Mendez's argument unavailing because it came too late, noting that the purpose of the thirty-day rule is to resolve the choice of forum at the early stages of litigation, and to prevent the shuffling of cases between state and federal courts after the first thirty days. Turning to Anadarko’s summary judgment motion, the court noted that Mendez continues to receive these LHWCA benefits and that Mendez did not dispute that he has received all benefits to which he is entitled under the LHWCA. Holding that the §905(a) exclusivity provision applied, Mendez's motions for reconsideration and remand were denied, and Anadarko's motion for summary judgment was granted. (USDC SDTX, December 20, 2010) 2010 U.S. Dist. LEXIS 134279
TIME CHARTERER ABSOLVED OF LIABILITY IN LHWCA §905(B) ACTION
DUCZKOWSKI V. HYUNDAI AMERICA SHIPPING AGENCY, INC, ET AL.
Joseph Duczkowski, an employee of Delaware River Stevedores, Inc, was performing his duties as a crane operator discharging cargo off a vessel owned and operated by defendant Daria Shipping Limited, and under a time charter to Hyundai America Shipping Agency, Inc., when he allegedly slipped on oil as he descended the crane's access ladder. Duczkowski filed suit, under §905(b) of the LHWCA, against both defendants claiming that they were liable for his injuries due to their negligence. Duczkowski claimed that Hyundai exerted control over the vessel's maintenance, and specifically with regard to the crane, and it therefore can be held responsible for his injuries. Hyundai moved for summary judgment, arguing that the vessel owner and the crew retained responsibility for the vessel's maintenance and repair through a Time Charter agreement, and it did not otherwise assume control over its maintenance and repair. Because it was not responsible for the maintenance and repair of the vessel and its cranes, Hyundai contended that it could not be liable for Duczkowski’s injuries as a matter of law. Duczkowski opposed Hyundai's motion. Hyundai pointed out that courts uniformly hold that in order for liability to attach to a time charterer, it is critical that there be an independent act of negligence that is the direct cause of the injury or that the time charter agreement specifically allocates the responsibilities to the time charterer. Hyundai also relied upon the fact that the vessel's crew repaired and inspected the crane, and Hyundai did not in any way direct, supervise, control or participate in the repair of the crane. The court rejected Duczkowski’s arguments opposing summary judgment as unavailing, finding the undisputed evidence in the record showed that the vessel's crew endeavored to fix a broken crane, and in doing so, apparently spilled oil on the crane's intermediate decking, which ended up on the ladder, allegedly causing Duczkowki's fall and injuries. The undisputed evidence also showed that Hyundai had no involvement in the inspection or repair of the crane. The only evidence showing Hyundai's involvement in the crane functioning is a general command from the port captain to repair any broken cranes in order to facility the discharge of its cargo. The court concluded this was insufficient to establish Hyundai's liability for plaintiffs' injuries. Additionally, Duczkowski failed to point to any provision in the Time Charter that would hold Hyundai liable for the crew's negligence, despite Hyundai's own lack of culpability. Consequently, because Duczkowski could not establish Hyundai's negligence or its assumption of liability for plaintiffs' injuries, summary judgment was entered in Hyundai's favor. (USDC NJ, December 20, 2010) 2010 U.S. Dist. LEXIS 134288
LHWCA EMPLOYER HELD NOT TO BE AN AGENT OF VESSEL OWNER
ALFRED V. SUPERIOR ENERGY SERVICES, INC., ET AL.
Zachery Alfred, an employee of SMI Companies, Inc, alleged that he sustained personal injuries while working as a sandblaster/painter on or adjacent to a vessel owned and operated by Superior Energy Services, Inc. SMI had been contracted to perform sandblasting and painting work on a platform adjacent to the vessel. Alfred and other workers were transported from the deck of the Superior vessel to the platform on which they were working and back by way of a spider basket. The basket was hoisted by a crane located on the vessel, and the crane was operated by a Superior employee. Alfred claimed that as he began to climb over the basket fence to exit, the crane operator gave slack in the line, which caused the basket to tilt and resulted in Alfred falling and sustaining injuries. Alfred sued Superior for its crane operator's negligence in causing his injuries and for its failure to furnish a safe place to work. Alfred also sued SMI for its negligence in failing to provide a safe place to work and failing to supervise. SMI pointed out that Alfred is a covered employee under the LHWCA and that under §905(a), the liability of an employer under the LHWCA is exclusive and in place of all other liability of such employer to his employee. Accordingly, SMI moved for summary judgment, arguing that there is no basis upon which it can be held liable, and therefore summary judgment must be granted and SMI must be dismissed from Alfred’s suit. Alfred claimed that SMI became an agent of Superior when Superior permitted the company to place its equipment on the vessel's deck and left it without a Superior supervisor or other designated agent. The court found that while Alfred’s argument was novel, it was contrary to traditional agency principles as well as established jurisprudence regarding §905(b). The court concluded that the actions taken by Superior in allowing SMI to place its equipment on the vessel's deck and not providing a designated agent of Superior on that specific portion of the vessel could not be construed to constitute a manifestation of Superior's intent to have SMI act on its behalf and subject to its control, nor consent by SMI to do so. The court held that no agency relationship existed between the two independent companies. As such, the relationship underlying the doctrine of "dual capacity" does not exist, and this line of cases clearly does not apply. Moreover, even assuming that Superior effectively turned over control of the deck of the vessel to SMI, which SMI disputed, such action has not been held to render an independent employer an agent of the vessel. The court found there was no additional basis upon which SMI could be held liable; therefore, its Motion for Summary Judgment was granted. (USDC EDLA, December 17, 2010) 2010 U.S. Dist. LEXIS 134468
THREE POTENTIAL EMPLOYERS EQUALS THREE DEEP POCKETS
MADDUX V. UNITED STATES OF AMERICA, ET AL.
James Maddux was a contracted employee of Honeywell Technology Solutions, Inc., employed as a seaman on a time-chartered vessel under contract between the United States government, as charterer, and Expresser, as contractor. Expresser is a subsidiary of Maersk, and Maersk was the operator of the vessel. Honeywell was Maddux’s direct employer in relation to his work as a mechanic, but Maddux also had duties to Maersk, the vessel operator. Maddux was allegedly injured while the vessel was moored in Guam. While returning from shore leave, Maddux allegedly fell from a stairway and into a safety net that was defective and improperly rigged causing him to fall fifteen feet to the deck below. Maddox suffered a complete spinal cord injury at T10-12 and was rendered a paraplegic. Maddux filed suit for his injuries under the Jones Act and the general maritime law of the United States, or in the alternative the LHWCA, alleging that Honeywell, Maersk, and Expresser were negligent and that the vessel was unseaworthy. Maddux further claimed Jones Act negligence, maintenance and cure, and punitive damages for willful failure to maintain a seaworthy vessel. Maersk and Expresser moved for summary judgment arguing that because Maddux was employed by Honeywell, he can only assert liability claims against Honeywell. Defendants also argued that punitive damages for unseaworthiness are unavailable as a matter of law, or in the alternative, that Maddux had failed to show evidence of any punitive conduct. Maddox responded arguing that a question of fact existed about who was his employer. He claimed to have been an employee of Honeywell as well as a borrowed servant of Maersk and Expresser. Maersk and Expresser argued that the evidence compelled rejection of the borrowed-servant doctrine here because Maersk or Expresser did not exercise control over Maddux, supervise his work, issue paychecks to him, or have the right to make decisions about his employment. The court found that Maddux had shown sufficient facts to indicate that Maersk and Expresser had actual control and the right to control Maddux’s mode and manner of work. While Honeywell may have controlled his work as a mechanic, Maddux had many duties owed directly to Maersk, and more specifically, duties that he owed directly to the captain of the vessel, who was a Maersk employee. Additionally, Maersk had responsibility for the vessel's safety and controlled Maddux’s participation in safety drills, fire drills, lifeboat drills, security drills, and first-aid drills. Finding that a jury could reasonably find for Maddux on the evidence he had presented, the court held that Maddux could assert liability against all three defendants and denied the motion for summary judgment as to the borrowed servant issue. The court reserved judgment on the motion for summary judgment with respect to the availability of punitive damages for unseaworthiness, indicating it would issue an opinion and order regarding this issue before the trial. (USDC SDOH, December 15, 2010) 2010 U.S. Dist. LEXIS 132466
Updater Note: the court did not even attempt to do a worthwhile analysis of the Ruiz factors with respect to borrowed servant status. It is clear what the court is doing here . . . leave all the defendants potentially exposed, hoping to force a settlement in this unfortunate personal injury case. And shame on the court for leaving the punitive damage issue hanging like a chad on a ballot.
I NEED THE VESSEL OWNER TO HELP ME PROVE MY §905(B) CLAIM (CONT.)
SCIONEAUX V. ELEVATING BOATS, L.L.C., ET AL.
Antonie Scioneaux was an employee of Elevating Boats, LLC (EB). for approximately fifteen years prior to his death from acute myelogenous leukemia ("AML"). While employed with EB, Scioneaux worked in the shop, in the yard, and on numerous vessels owned by EB. Throughout his employment, Scioneaux was allegedly required to use numerous heavy, toxic chemicals to perform certain tasks. Scioneaux also allegedly had to use chemicals supplied by EB owned vessels to perform certain tasks during his time at EB. On June 24, 1999, Scioneaux submitted an injury report stating that he came into contact with a high detergent soap that caused a serious chemical burn on his leg and ankle. Prior to his death, Scioneaux allegedly told his wife and his physician that he believed that he had contact with numerous benzene containing chemicals while cleaning EB's vessels. Scioneaux was diagnosed with AML and he died a little more than three months later. Scioneaux's widow filed this action alleging that Scioneaux developed and died from AML as a result of being exposed to benzene while working at ED. The widow further alleged that Scioneaux was a longshoreman, and bought claims under the LHWCA against EB as a vessel owner under §905(b). EB moved for summary judgment, contending that there is no evidence that Scioneaux was exposed to benzene on a vessel owned by EB, or that benzene exposure caused his death. The court denied EB’s initial motion for summary judgment, agreeing with the widow that EB’s responses to discovery were imperative to her ability to pursue her case and, therefore, summary judgment was premature without further discovery [see August 2010 Longshore Update]. Following discovery EB renewed its motion for summary judgment arguing that Scioneaux had not offered an expert report that establishes that Scioneaux's AML was caused by benzene exposure that occurred on EB's vessels. The court noted that Scioneaux had provided the report of a purported expert toxicologist. EB did not contest that the report provided evidence of general causation; rather EB argued that the report failed to provide any analysis regarding specific causation, entitling it to summary judgment. The court rejected EB’s position, holding that the report raised issues of fact as to whether the specific level of exposure to which Scioneaux was subjected caused his illness, which must be resolved at trial. EB’s renewed motion for summary judgment was denied. (USDC EDLA, December 17, 2010) 2010 U.S. Dist. LEXIS 133847
THESE PRO SE CASES ARE USUALLY PRETTY ENTERTAINING
ELLISON V. CADDELL CONSTRUCTION CO INC.
Ted Miles Ellison, a former employee of Caddell Construction Co., Inc., contended that he was injured while working at a construction site of the U.S. Consulate, located in Juarez, Mexico. Specifically, Ellison contended that while he was under the duress of his alleged job-related injuries, agents of Caddell, conspired, and did, cause him additional harm by injecting him with a substance intended to mask his job-related injuries and acted with gross negligence in subsequently failing to provide proper medical care. Caddell moved to dismiss Ellison’s case, contending the Defense Base Act (DBA) was his exclusive remedy. The court noted that it was not surprised that Ellison, as a pro se litigant, had made little substantive rejoinder. The court did acknowledge, however, that Ellison had astutely argued, albeit, in a single sentence, that Caddell had not supported its position that the DBA is the exclusive remedy for his "assault and battery claim," the implication being that the DBA does not preclude suits for intentional torts. The court pointed out that Ellison’s suit, in no respect, sought justice for the job-related injury, initially suffered, which was ostensibly accidental. Rather, it complained of the subsequent and allegedly intentional acts, which Ellison believes produced intended or, rather, expected additional injury. On the face of the Complaint, therefore, the court found that Ellison had alleged non-accidental injury, which would appear to remove the entire case from the DBA's ambit, in light of the way the court construed the Act. Caddell’s motion to dismiss was denied. (USDC SC, November 10, 2010) 2010 U.S. Dist. LEXIS 130652
TRAVEL REIMBURSEMENT RATE INCREASED
IRS INCREASES MILEAGE REIMBURSEMENT RATE EFFECTIVE 1/1/11
On December 3, 2010, the Internal Revenue Service released the optional standard mileage rates to use for 2011 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. Beginning Jan. 1, 2011, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
• 51 cents per mile for business miles driven;
• 19 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service to a charitable organization.
The charitable standard mileage rate is set by law. The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile.
Updater Note: You can check out the revised IRS mileage rates here. The Office of Government-wide Policy, GSA also sets mileage reimbursement rate for use of a privately owned automobile (POA) on official travel. GSA published their 2011 rates on December 21, 2010 and you may review the bulletin here. However, by law, GSA may not exceed the standard mileage reimbursement rate for a privately owned automobile (POA) established by the Internal Revenue Service (IRS). Which rate should you be using to reimburse travel under the Longshore Act? That is a question you may want to consult with your attorney on.
OFFICE OF ADMINISTRATIVE LAW JUDGES
SUPPLEMENT TO THE 2008 EDITION OF THE JUDGES’ BENCHBOOK:
BLACK LUNG BENEFITS ACT
The Office of Administrative Law Judges has posted its Supplement to the 2008 Edition of the Judges’ Benchbook: Black Lung Benefits Act, as of December 21, 2010. Hopefully, we will be seeing an updated Supplement (or preferably a complete Benchbook update) to the Longshore Act sometime in the New Year.
The last full supplement to the Longshore Benchbook was published in January 2005. However, OALJ has published an index that provides a cross-reference between Benchbook Topics and U.S. Supreme Court, Federal District and Circuit Courts, and Benefits Review Board decisions, issued since 2004 and covered in OALJ's "Recent Significant Decisions Monthly Digest."
And on the Admiralty front . . .
NONSENSICAL DOUBLE TALK FROM THE SEVENTH CIRCUIT
DEERING V. NATIONAL MAINTENANCE & REPAIR, INC.
Circuit Court Opinion
Vincent Ray Deering, employed as a river-boat pilot by National Maintenance & Repair, Inc., sued National for injuries he allegedly sustained in an accident. National counterclaimed for serious damage that it alleged Deering had caused the boat - namely, sinking it. The district court dismissed the counterclaim, precipitating National's interlocutory appeal The appeal presented questions of admiralty law and of jurisdiction over interlocutory appeals in admiralty cases. In deciding whether it had jurisdiction over the appeal, the court found that the appeal raised a controlling question of law and also an issue that arose from a separate claim within the meaning of Fed. R. Civ. P. 54(b), i.e., whether National should be allowed to counterclaim for property damage was a separate issue from the merits of Deering’s personal injury claim or National’s limitation of liability claim; thus, it was the kind of interlocutory matter that was frequently allowed even in non-maritime cases. Although National’s notice of appeal was untimely, its FRCP 59(e) motion met the notice requirements and served as a notice of appeal. After reviewing the case law and the history of the Jones Act and the Federal Employers' Liability Act, the court concluded that combining a property-damage counterclaim with a limitation of liability in order to wipe out a substantial personal injury claim under the Jones Act was a liability-exempting device forbidden by 45 U.S.C. §55. The court did not resolve whether a shipowner who did not seek to limit his liability was forbidden to set off damages for negligent damage to property against a Jones Act claim. The court affirmed the dismissal of defendant's counterclaim. (7th Cir, December 2, 2010) 2010 U.S. App. LEXIS 24580
Updater Note: The 5th Circuit got it right in Withhart v. Otto Candies, L.L.C., when it observed that comparative fault has long been the accepted risk-allocating principle under the maritime law and held that there is no statutory provision in the Federal Employers' Liability Act, and consequently, the Jones Act, that prohibits a shipowner-employer from pursuing a claim against its negligent seaman-employee for property damage. When an employee is injured in an accident which causes damage to property, and the employee sues the employer, the employer may counterclaim for property damage against the plaintiff whose negligent acts allegedly caused the property damage. Judge Posner’s nineteen pages of double talk, trying to equate a justifiable negligence claim by the employer to a FELA-defined “device” to exempt itself liability and ridicule the 5th Circuit, is ludicrous. Instead of trying to call the employer’s claim a device or setoff, call it what it really is - comparative fault. Hopefully, Judge Posner’s similarly feeble attempt to avoid a circuit court split on the issue, by confining it to limitation of liability cases, will also not withstand further appellate scrutiny.
ENY, MEANY, MINEY, MOE - WHICH POLICY PROVIDES COVERAGE?
CAL-DIVE INTERNATIONAL, INC., ET AL. V. SEABRIGHT INSURANCE COMPANY
Circuit Court Opinion
David Brown was allegedly injured and filed a Jones Act suit against his employer, Coastal Catering, and Horizon for failing to provide him with a reasonably safe workplace aboard the a vessel owned by Horizon. Coastal had entered into a contract to provide catering services aboard Horizon's vessel, and Coastal sent Brown to work on the vessel pursuant to that contract. In his complaint, Brown alleged that both Coastal and Horizon were his employers. According to the Horizon-Coastal Contract, Coastal was obligated to defend Horizon, which Coastal did through State National Insurance Company (SNIC), its Maritime General Liability (MGL) insurer. Coastal also had in effect a Maritime Employer's Liability (MEL) policy with Seabright, and Seabright defended Coastal in the Brown litigation. After the underlying litigation was settled with the insurers each paying 50% of the agreed settlement amount, the MGL insurer sought reimbursement from the MEL insurer for the costs the MGL insurer incurred in defending Horizon. The trial court granted summary judgment in favor of the MGL insurer. The MEL insurer appealed. The appellate court determined that the MEL insurer had no obligation to defend Horizon because coverage of Horizon was excluded under the MEL policy's protection and indemnity exclusion, which excluded coverage if its insured maintained a protection and indemnity policy that covered injuries to its crew, and it was uncontested that Horizon had such a policy. Horizon maintained a protection and indemnity policy with AEGIS covering the crew on its vessel. The appellate court reversed the summary judgment entered by the district court and rendered judgment in favor of the MEL insurer. (5th Cir, November 22, 2010, Revised December 22, 2010) 2010 U.S. App. LEXIS 24017
MARINER MUST EXHAUST ADMINISTRATIVE REMEDIES BEFORE BRINGING SUIT
DRESSER V. MEBA MEDICAL & BENEFITS PLAN, ET AL.
Circuit Court Opinion
Christopher J. Dresser was a licensed marine engineer. The U.S. Coast Guard initiated a Suspension and Revocation (S&R) action against Dresser’s license after the Coast Guard was notified that Dresser had tested positive for tetrahyrdocannabinol (THC), a metabolite detected in the urine of those who have ingested marijuana. Dresser maintained that he tested positive as a result of his ingestion of hemp seed oil as a dietary supplement, not from the use of marijuana. After a full hearing, a Coast Guard ALJ directed the revocation of Dresser’s license for illegal drug use. Dresser appealed to the Commandant, who upheld the ALJ decision. Dresser then brought suit in federal district court, asserting that the Coast Guard decision was unconstitutional. The district court ruled against Dresser, holding that the court had no subject matter jurisdiction as Dresser had failed to exhaust his administrative remedies. Dresser appealed and the appellate court affirmed. The US Court of Appeals for the Fifth Circuit ruled that federal courts lack jurisdiction to review a decision of the Commandant of the US Coast Guard to revoke a mariner’s license where the mariner has not appealed that decision to the National Transportation Safety Board. (5th Cir., December 22, 2010) No. 10-30301
APPELLATE COURT IGNORES DISTINCTION BETWEEN LAND-BASED & SEAGOING
NAVARRE V. KOSTMAYER CONSTRUCTION COMPANY, INC.
Appellate Court Opinion
Jason Navarre filed suit against Kostmayer Construction Company, Inc., for alleged injuries sustained as a result of the alleged negligent operation of a crane spud barge. Navarre was employed as a welder by Kostmayer and allegedly broke an ankle while he was in a basket, suspended from a crane, cutting pilings that were holding the barge in place. Kostmayer filed a Motion for Summary Judgment, arguing that Navarre was a land-based employee and did not satisfy the standards and criteria of a Jones Act seaman. The trial court granted Kostmayer’s motion for summary judgment. Navarre appealed, assigning as error the trial court's grant of Kostmayer’s motion for summary judgment and the trial court's finding that Navarre failed to satisfy the requirements of a Jones Act seaman. Kostmayer argued that the trial court got it correct, noting that Navarre would drive to a job site, perform the welding repair, either on land, docks, or spud barges that were fixed in place. Navarre never ate any meals nor stayed overnight on any vessel, but returned home when his shift was complete at the end of each day. Navarre argued that he performed repairs to the hull of the barge itself; spent 60-70% of his work day aboard the barge; and that his duties included tying and untying mooring lines, and spudding and unspudding of the barge, which he maintained are traditional deckhand duties. The appellate court initial observed that Navarre's extensive work on the barge established that the first prong of the Chandris test was met; accordingly, only the second prong, whether Navarre's connection to the barge was substantial in nature and duration, was at issue. Although the appellate court acknowledged Richard’s holding that a welder helper's work in connection with the vessels was "not substantial in nature or duration," the court nevertheless pointed to insignificant distinctions between Navarre and the employee in Richard to find that summary judgment as to seaman status was inappropriate. Instead the court held that, considering the totality of the circumstances surrounding Navarre's employment, his connection to the barge was substantial in both duration and nature, and that he was entitled to a trial on the merits of his Jones Act claim. The lower court's grant of Kostmayer’s motion for summary judgment was reversed. (La. App. 4 Cir, November 24, 2010) 2010 La. App. LEXIS 1617
Updater Note: This is a disheartening appellate opinion. Rather than looking at the totality of Navarre’s employment, the appellate court appears to have focused on a six month period of that employment, when Navarre was doing a lot of work with this particular barge. The appellate court clearly ignored Chandris’s holding that land-based maritime workers do not become seamen when they happen to be working aboard a vessel, and seamen do not lose Jones Act coverage when their service to a vessel takes them ashore.
SPOLIATION INSTRUCTION TO JURY RESULTS IN REVERSAL
WILLIS V. INDIANA HARBOR STEAMSHIP CO., L. L. C., ET AL.
Appellate Court Opinion
Daniel J. Willis was employed by Indiana Harbor Steamship Co. And was working as a crewman of a vessel, when he was allegedly injured on a dock owned by Duluth, Missabe & Iron Range Railway Company (DM&IR). Willis was handling one of his vessel’s mooring lines when he slipped on the dock and fell. Willis alleged that at the place where he fell the dock was covered by a slime of water and limestone, and that his knee hit both the dock and taconite pellets that were obscured by the milky limestone mixture. Willis’s alleged fall occurred on a Friday and, although Central Marine Logistics was informed of the accident on that afternoon, DM&IR was not notified of the incident until the following Monday. Willis eventually was diagnosed with deep vein thrombosis stemming from the injury to his knee. Willis sued his employers, a charterer, and the dock owner under the Jones Act and general maritime law. The case was tried to a jury and, because of the late reporting of the accident to DM&IR and the fact that the condition of the dock was not maintained, the trial court gave a negative-inference jury instruction as a sanction based on its interpretation of the doctrine of spoliation. The trial court entered a judgment in favor of Willis on a jury's verdict that awarded damages totaling $1,818,898. The defendants appealed the judgment, challenging a negative-inference jury instruction based on spoliation, the determination that damages were governed by Minnesota law; the amount of damages awarded; and the denial of a request to determine collateral sources under Minn. Stat. §548.251. The primary argument on appeal was that, because they lacked control over the dock and its condition, they could not be subject to a spoliation sanction for changes to the condition of the dock after the accident. The appellate court found nothing in the record that indicates that defendants had any control of the dock or when the dock was cleaned. The only party who had control over the dock or would have cleaned the dock, and thus destroyed the spill evidence, was DM&IR. The district court, however, concluded that a spoliation-based negative-inference instruction was appropriate despite the fact that the other defendants never had control over the dock or the condition related to the spill. The appellate court found that giving the negative-inference instruction based on spoliation was reversible error, as the evidence did not show that they actually controlled the dock. The appellate court also noted that because the case was a Jones Act case, and federal laws expressly applied to Jones Act claims, the federal maritime standard of premises liability applied as substantive law. The appellate court found that the challenges to the damages awards were without merit but that the giving of a negative-inference instruction was reversible error. As a result, it partly affirmed the trial court's judgment, partly reversed that judgment, and remanded the case to the trial court for further proceedings.(Minn. App, October 19, 2010) 790 N.W.2d 177; 2010 Minn. App. LEXIS 153
CIRCUIT SPLIT IN LA OVER WHETHER STATE EMPLOYEE MAY PURSUE JONES ACT
JAMES V. STATE OF LOUISIANA, DEPARTMENT OF WILDLIFE & FISHERIES
Appellate Court Opinion
Joey James was employed by the State of Louisiana, through the Department of Wildlife & Fisheries (the department), as a Senior Wildlife Enforcement Agent, when he was allegedly injured. James alleged a number of deficiencies in his assigned boat and its operation, and its lack of seaworthiness, claiming remedies under the Jones Act and general maritime law. The department responded with a number of exceptions, all based upon its contention that James's exclusive remedy lay in workers' compensation. The trial court denied those exceptions. The department appealed the summary judgment granted in favor of James, declaring that James, an employee of the department, was entitled to pursue his remedies under the Jones Act. The appellate court reversed the trial court’s ruled, holding that a state that has not waived sovereign immunity or otherwise consented to being sued is arguably not subject to suit under the Jones Act. The third circuit specifically rejected a holding by an en banc panel of the fourth circuit, which held that the department is subject to Jones Act claims, creating a split in the state circuit courts. The court found that while the state may be sued in contract or tort, the legislature retains the right to define the circumstances under which it is liable and limit the amount of its liability. The pertinent question that follows is whether the legislature has limited the department's liability to a seaman it employed. The court opined that the answer was obvious: James is a state employee and, therefore, La. R.S. 23:1034 applied. State employees are not entitled to make claims under the Jones act or any other statutorily created remedy. Workers' compensation is the exclusive remedy for state employees without exception. The appellate court held that the State of Louisiana has, through the legislature, chosen to limit its liability to employees injured on the job to the benefits afforded by the Workers' Compensation Act. This exclusivity of remedy admits of no exception. The judgment of the trial court granting summary judgment in favor of appellee, James, was reversed and costs of this appeal were taxed to James. (La. App. 3rd Cir, December 22,2010) 2010 La. App. LEXIS 1762
Updater Note: Judge Painter dissented from the majority opinion. I expect this issue is headed to the Louisiana Supreme Court. See Fulmer v. Louisiana Department of Wildlife and Fisheries, et al., in the November 2010 Longshore Update, for the conflicting circuit opinion.
NEGLIGENT ACT, IN AND OF ITSELF, DOESN’T CONSTITUTE SUPERSEDING CAUSE
THERRELL V. ROWAN COMPANIES, INC.
Appellate Court Opinion
Christopher Therrell was a seaman employed by Rowan Companies, Inc. as a driller and crew member assigned to work on a semi-submersible drilling rig vessel. Therrell was allegedly injured while troubleshooting, testing, and using a man-lift. At the time of the accident, Rowan was refurbishing the vessel at Rowan's dock. In order to refurbish the vessel, Rowan had contracted with Tidewater Dock, Inc./Blue Tide, Inc. ("Tidewater") to provide contract welders and necessary equipment, including a barge and two man-lifts. Tidewater, in turn, had contracted with NES to provide the man-lifts to be used on the Rowan project. The man-lift at issue was manufactured by JLG Industries, Inc. As a result of the accident, Therrell sued Rowan under the Jones Act and under general maritime law for his injuries. Rowan then filed third-party claims against NES, Tidewater, and JLG, seeking contribution under general maritime law. According to Rowan, a post accident investigation revealed that the man-lift had a broken pin in the boom's retraction chain, which, at the time of the accident, was hidden from the operator's view. Rowan further contended that the retraction chains themselves were in such a degraded or sub-standard condition that the equipment would not have passed a proper pre-use inspection, had such occurred. In response to Rowan's third-party demands, JLG, NES, and Tidewater each filed separate motions for summary judgment, making the common argument that Rowan’s instructions to Therrell to try to make the man-lift work, after being told by the contract welders that the man-lift was not working properly, constituted a "superseding cause" of Therrell’s accident, thereby releasing the third-party defendants from any liability as a matter of law. After hearing arguments on the third-party defendants' motions for summary judgment, the trial court found that the actions of Rowan's employee/supervisor in ordering Therrell to attempt to fix the man-lift without calling for a repair and without first giving notice to Tidewater, JLG, and NES, constituted a superseding cause of Therrell’s accident relieving these parties of liability for the ensuing accident. Accordingly, the trial court granted the motions for summary judgment and dismissed with prejudice all claims asserted by Rowan against the third-party defendants. On appeal, Rowan contended in its sole assignment of error that the trial court erred when it held, as a matter of law, that its supervisor’s instruction to Therrell to see if he could determine what was wrong with the man-lift was a superseding cause of Therrell’s accident and injuries, which thereby relieved NES of any liability. The appellate court initially noted that the fact that an intervening act of a third person is negligent in itself or is done in a negligent manner does not make it a superseding cause of harm to another, which the actor's negligent conduct is a substantial factor in bringing about, if: (a) the actor at the time of his negligent conduct should have realized that a third person might so act; or (b) a reasonable man knowing the situation existing when the act of the third person was done would not regard it as highly extraordinary that the third person had so acted; or © the intervening act is a normal consequence of a situation created by the actor's conduct and the manner in which it is done is not extraordinarily negligent. Given the testimony of Rowan’s supervisor, that Rowan employees had routinely "looked at" the unit to see if they could fix the problem before calling either Tidewater or NES to send a mechanic to repair it, The appellate court held that the supervisor’s actions, while ultimately contributing to the accident, could equally be characterized as a "normal consequence" and not so "highly extraordinary considering the whole of the circumstances" as to rise to the level of an independent, superseding cause, as a matter of law. Finding merit to Rowan's assignment of error, the motion to dismiss the appeal filed by NES was denied and the judgment of the trial court, dismissing Rowan's third-party demand against NES and granting summary judgment in favor of NES, was reversed and the matter is remanded to the trial court for further proceedings. (La. App. 1st Cir. 12/22/10, UNPUBLISHED) 2010 La. App. Unpub. LEXIS 761. In a separate opinion, the appellate court also reversed and remanded the trial court’s judgment in favor of Tidewater. Therrell v. Rowan Companies, Inc., (La. App. 1st Cir, December 22, 2010, UNPUBLISHED) 2010 La. App. Unpub. LEXIS 755. In a separate opinion, the appellate court also reversed and remanded the trial court’s judgment in favor of JLG Industries, Inc. Therrell v. Rowan Companies, Inc.; (La. App. 1st Cir. 12/22/10) 2010 La. App. Unpub. LEXIS 772
SOME JUDGES NEED TO LEARN HOW TO AUTHOR A BETTER OPINION
BENNETT V. CENAC TOWING COMPANY, LLC, ET AL
Calbert George Bennett alleged that he was injured twice during his employment with Cenac Towing Co., LLC; once while assisting in the loading of groceries onto his vessel and on another occasion while lifting a hatch aboard Cenac's barge in order to wash his laundry. Bennett sued Cenac for maintenance and cure, Jones Act negligence and unseaworthiness. Cenac moved for summary judgment on Bennett’s claims. In his opposition, Bennett did not oppose Cenac's motion for summary judgment with respect to liability for the injury allegedly sustained while loading groceries. Accordingly, the court granted Cenac's Motion for Summary Judgment to the extent that it sought summary judgment dismissal of Bennett’s Jones Act and unseaworthiness claims related to the first alleged incident. The court denied Cenac’s motion with respect to Bennett’s Jones Act and unseaworthiness claims stemming from the second alleged incident, finding that there were genuine issues of material fact. Interestingly, the court declined to make any findings with respect to what those genuine issues of material fact were. The court also noted that there were undefined genuine issues of material fact as to Cenac's McCorpen defenses stemming from both of Bennett’s alleged injuries. However, without resolving whether or not Cenac had successful McCorpen defenses the court nevertheless granted Cenac's Motion for Summary Judgment to the extent that it seeks summary judgment dismissal of Bennett’s maintenance and cure claim for any more than what Cenac had already paid Bennett. (USDC EDLA, December 16, 2010) 2010 U.S. Dist. LEXIS 133849
Updater Note: In my humble opinion, this is a poorly written decision, consisting of a bunch of rulings without any explanation behind those rulings. This type of decision is extremely frustrating to all parties and represents a lack of proper consideration by the court.
PORT ENGINEER MAY SPEND 80% OF TIME ON VESSELS, BUT IS NOT A SEAMAN
CASSER V. MCALLISTER TOWING AND TRANSPORTATION COMPANY, INC, ET AL.
Charles Cassar allegedly sustained injuries on two separate occasions, more than two years apart, while he was employed as a port engineer by McAllister Towing & Transportation Co., Inc. Casser eventually brought a lawsuit pursuant to the Jones Act. McAllister moved for summary judgment, arguing that the undisputed evidence demonstrated that Cassar was a land-based maritime worker at the time of the accidents and thus did not qualify as a "seaman" entitled to relief under the Jones Act. After reviewing the evidence and hearing oral argument, the court found that when the Cassar became a port engineer, he went from being a seagoing worker to an office worker. The records reflected that Cassar had allowed his seaman’s license to lapse and, after becoming a port engineer, Cassar had 23 days of sea time in 2002, 30 days of sea time in 2003, 23 days of sea time in 2004, 49 days of sea time in 2005, 29 ½ days of sea time in 2006, 10 ½ days of sea time in 2007, no sea time in 2008, and 4 ½ days of sea time in 2009. Although the court acknowledged that one of Cassar’s two alleged injuries occurred while he was boarding a tug, and Cassar did spend a good deal of his work time aboard McAllister’s vessels, the court nonetheless held that Cassar could not qualify as a seaman under the Jones Act because his connection to the vessel or fleet of vessels was not substantial in duration or nature. The court noted that the vessels Cassar works on are typically at dockside over 90% of the time and the sea records confirm that Cassar is only very rarely on vessels that are actually underway. Even if Cassar were to satisfy the temporal component of the second Chandris prong, the court concluded that Cassar would still fail to satisfy the functional component, because his connection to the vessels is not substantial in nature. McAllister’s motion for summary judgment was granted and Cassar’s claims were dismissed with prejudice. (USDC SDNY, December 7, 2010) 2010 U.S. Dist. LEXIS 130462
SEAMAN CLAIMS RETALIATORY DISCHARGE FOR REPORTING SAFETY HAZARD
POLEK V. GRAND RIVER NAVIGATION COMPANY, INC.
This is a retaliatory discharge case brought under the Seaman's Protection Act, 46 U.S.C. § 2114. Jeffrey Polek was employed by Grand River Navigation Company, Inc. as a 3rd Assistant Engineer aboard one of Grand River’s vessels. Polek reported a leak in the starboard side bow of the vessel and, when nothing was allegedly done about it, Polek reported the situation to the Coast Guard, asking that his name not be revealed as he was still serving on the vessel. After Coast Guard officials contacted the vessel to inform the captain that someone had reported that there was a hole or a crack in the hull, the vessel’s chief engineer approached Polek on the deck and they had a conversation. The substance of that conversation was in dispute. Polek alleged that he was fired; Grand River asserts that Polek quit. In any event, Polek departed the vessel shortly thereafter. Prior to his departure, Polek informed the ship's captain that he had contacted the Coast Guard. The Seaman's Protection Act provides in relevant part that "[a] person may not discharge or in any manner discriminate against a seaman because the seaman in good faith has reported or is about to report to the Coast Guard or other appropriate Federal agency or department that the seaman believes that a violation of a maritime safety law or regulation prescribed under that law or regulation has occurred. After suit was filed by Polek, Grand River moved for summary judgment on the grounds that Polek could not prove that he was discharged, the evidence failed to show that Grand River had knowledge that Polek had called the Coast Guard, and Polek’s report to the Coast Guard was not a good faith report of a violation of a maritime safety law or regulation because the leak was "minor.” Grand River also moved for summary judgment on Polek’s prayer for punitive damages, asserting that punitive damages were inappropriate under the circumstances. The court found that the conflicting testimony surrounding the circumstances of Polek’s departure from the vessel created a genuine dispute over a material issue of fact regarding whether Polek quit or was terminated. Accordingly, the court concluded that summary judgment on the ground that Polek could not prove he was discharged was not appropriate. The court also had no trouble concluding that a jury, after reviewing the evidence in the case, could reasonably come to the conclusion that Polek was asked to leave the vessel because his superiors believed he had reported or was about to report the leak to the Coast Guard. Accordingly, Grand River was not entitled to summary judgment on this basis. The court also found that the evidence clearly showed that Polek honestly and in good faith believed that a safety violation was occurring. Whether the leak subsequently was categorized as severe enough to meet the technical definition of "hazardous condition" is irrelevant under Gaffney. Because a factfinder could reasonably find in favor of the non-movant on this issue, summary judgment was deemed inappropriate. Finally, viewing the evidence and inferences therefrom in the light most favorable to Polek, the court declined to grant summary judgment on the prayer for punitive damages. (USDC EDMI, November 30, 2010) 2010 U.S. Dist. LEXIS 133494
FEEBLE EFFORT TO PROVE UNSEAWORTHINESS OR JONES ACT NEGLIGENCE
WHATLEY V. WATERMAN STEAMSHIP CORP.
Mary J. Whatley was employed as a cook aboard a vessel operated by Waterman Steamship Corporation. The vessel was anchored off the coast of Saipan, and Waterman arranged for a third party to provide launch services to ferry the crew to the island for shore leave and back to the vessel. Whatley took overnight shore leave. Early the next morning, while walking back to the launch, she stepped in a pothole and fell, suffering several broken bones. Waterman paid maintenance and cure. Whatley filed suit seeking recovery under the Jones Act and under general maritime law for unseaworthiness. Waterman moved for summary judgment arguing that unseaworthiness provides no remedy for injuries suffered off the vessel. Waterman also argued that it had no duty under the Jones Act with respect to Whatley’s travel toward the launch. The court agreed with Waterman’s argument that an unseaworthiness remedy is not available for injuries which occur on shore during the loading or unloading process and which are not caused by a vessel on navigable water. Noting that Whatley offered no rebuttal to this doctrine, the court concluded that Whatley had no viable claim for unseaworthiness. Extrapolating from FELA, Whatley argued that Waterman could be held liable under the Jones Act if the Port was its agent, performing Waterman’s operational activities. Assuming without deciding that this is a correct proposition of law, and assuming further that returning to the vessel from shore leave constitutes an "operational activity," the court noted that Whatley admitted that agency requires a "contractual relationship," and she further admits that she did not know whether the vessel or Waterman had a contract or other relationship with the Port of Saipan. The court also found inadequate Whatley’s argument that the mere fact the Port suffered crew of this vessel and others to traverse its property would allow a properly functioning jury to find the Port to be the vessel's agent. Waterman’s motion for summary judgment was granted. (USDC SDAL, December 23, 2010) 2010 U.S. Dist. LEXIS 135916
NON-PECUNIARY DAMAGES NOT AVAILABLE IN SURVIVOR ACTION
IN RE: OMEGA PROTEIN, INC.
This case involved a claim by the survivor of, Willie Boggs, Jr., as well as the fishing vessel owner's request for exoneration. Boggs drowned after jumping of the fishing boat, on which he served as a crew member, in order to avoid ammonia released from the steamer's ammonia system relief valve. The owner of the fishing vessel, Omega Protein, Inc., requested dismissal of all claimants who were not the personal representative of Willie Boggs, on the grounds that only the personal representative is the proper party to bring an action against Omega. Omega also requested dismissal of all claims for non-pecuniary damages, as they are unavailable under the Jones Act and general maritime law. Boggs' mother, Sandra Walker, brought a wrongful death action under the Jones Act and the general maritime law. Omega argued that there was no evidence that Sandra Walker is the decedent's personal representative. The court found that, while this may have been true at the time Omega’s motion was filed, Walker had now submitted an Order appointing her Administratrix of Boggs' estate. Thus, it appeared that Walker was now a proper party plaintiff in this suit and Omega was not entitled to summary judgment on the basis of standing. With respect to the categories of damages requested by Walker, the court found that Omega had shown that Walker would not be able to recover loss of society, loss of consortium, and past and future loss of enjoyment of life. To that extent, the court granted Omega's Motion for Partial Summary Judgment. (USDC SDMS, December 13, 2010) 2010 U.S. Dist. LEXIS 132308
ARBITRATION RULE IN INSURANCE CONTRACT MAKES CASE REMOVABLE
ADAMS V. OCEANEERING INTERNATIONAL, INC., ET AL
Michael Cody Adams filed a Seaman's Petition for Damages in state court seeking to recover under the Jones Act and general maritime law for injuries he allegedly sustained while working for Oceaneering International, Inc. aboard its vessel. Adams later amended his petition to bring a claim against Oceaneering's insurer. The insurer removed the action to federal court under the Federal Arbitration Act and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, because the insurer’s rules provided for mandatory arbitration in London pursuant to the English Arbitration Act of 1996. Adams moved to remand the matter to state court, pursuant to 28 U.S.C. §1447(c), on grounds that the insurer’s Notice of Removal was insufficient to establish the existence of removal jurisdiction, as it fails to set out sufficient facts to establish the existence of a valid arbitration agreement in the case. Adams also sought attorney's fees on grounds that the insurer did not have an objectively reasonable basis for removal. Adams further contended that his Jones Act claim is nonremovable because arbitration would impair his substantial rights as a Jones Act seaman and that the arbitration agreement between the insurer and Oceaneering is void under Louisiana law for lack of consent because Adams was not a signatory to the agreement. Applying Section 205 as well as the jurisprudence setting out the Fifth Circuit's liberal standard for removal under the Convention, the court found that the litigation is related to the arbitration clause in the insurer’s and Oceaneering's insurance contract. Because the arbitration agreement fell under the Convention pursuant to Section 202, and the litigation related to the agreement, pursuant to Section 205, the court concluded the insurer had established that the court had removal jurisdiction and may enforce the arbitration clause at issue. As to Adam’s contention that his Jones Act action is nonremovable under the Convention, the court found Adams had not supported his position with any jurisprudence contrary to Freudensprung. Adams’ Motion To Remand was denied. (USDC WDLA, December 21, 2010) 2010 U.S. Dist. LEXIS 135581
MOTION TO DISMISS VESSEL OWNER’S LIMITATION ACTION HELD PREMATURE
IN RE: ISLAND MARITIME SERVICES, INC.
A tug belonging to Island Maritime Services, Inc. sank in international waters and Island Maritime filed this action for exoneration from or limitation of liability after being sued in state court by various claimants, each alleging injury stemming from the sinking of the tug. Total Ventures filed suit to recover damages for cargo lost when the tug sank. Total Ventures claims that the tug was carrying 12,964 gallons of fuel oil, valued at $33,965.68, on behalf of Total Ventures when it sank. Total Ventures moved to dismiss Island Maritime ‘s limitation complaint, contending that its claims against Island Maritime did not arise from the voyage described in the limitation complaint, but instead arose three months earlier, when Island Maritime accepted Total Ventures' fuel oil for safe keeping. Total Ventures also argued that dismissal of the limitation proceedings was appropriate on the basis of the personal contract doctrine. Island Maritime responded that the arguments in Total Ventures’ motion to dismiss were prematurely asserted. The court agreed with Island Maritime’s position, finding that the issue of when Total Ventures’ claims arose was not subject to final adjudication on the present, limited record. The complaint asserted that Total Ventures’ claims arose from the sinking of the tug, and at this point in the proceedings, the court concluded it must accept Island Maritime’s allegation as it was maintained in the complaint. Furthermore, the court noted that Island Maritime persuasively argued that there is a logical relationship between the sinking of its tug and Total Ventures’ claimed loss. The court also held Total Ventures’ second contention, that the personal contract doctrine will prevent Island Maritime from limiting their liability, was also prematurely asserted. At this stage of the proceedings, the court found it could not make a determination as to whether Island Maritime’s purported contract with Total Ventures was personal in nature. Total Ventures’ motion to dismiss Island Maritime ‘s Complaint for Exoneration from or Limitation of Liability was denied. (USDC MDFL, December 21, 2010) 2010 U.S. Dist. LEXIS 135103
Quotes of the Month . . . "He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has." -- Epictetus
“A life spent making mistakes is not only more honorable but more useful than a life spent in doing nothing.” --George Bernard Shaw
"The struggle is always between the individual and his sacred right to express himself and... the power structure that seeks conformity, suppression and obedience."--Justice William O. Douglas
Tom Langan
Corporate Risk Manager
Weeks Marine, Inc.
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Notes From Your Updater - A Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit has been filed with the U.S. Supreme Court in the case of Harrington v. Atlantic Sounding Co., Inc., et al., Docket No. 10A316 [see May 2010 Longshore Update]. The question presented is: Does the Jones Act permit an arbitration clause to restrict a plaintiff’s right to choose the forum in which his case will be heard?
OWCP/Longshore National Office has announced the hiring of Brandon Miller, as new Branch Chief of Insurance and Financial Management. Brandon will be joining the Longshore National Office Team on Monday, December 6, from Minneapolis, MN. His previous professional experience includes twelve years in leadership positions in the Minnesota Department of Labor & Industry’s Workers’ Compensation Division, with more than seven years managing the Minnesota Workers’ Compensation Special Fund. In addition, Brandon spent three years consulting with private companies on various risk management and insurance issues. He holds a Masters Degree in Finance and Risk Management. During his transition period, he worked closely with John Chamberlain to achieve as much knowledge transfer as possible before John’s retirement took effect. Check out his LinkedIn profile.
Great News About a Valuable Longshore Act Resource - John Chamberlain has returned to his home in Connecticut after retiring from the Department of Labor. He intends to continue studying and writing about the Longshore Act and its extensions, its history and its future. He is available as a consultant, researcher, teacher and mediator. John may be reached at john.chamberlain@johnchamberlainconsulting.com. His postal address is PO Box 987, Woodbury CT 06798-0987. He is currently developing his web site, http://www.johnchamberlainconsulting.com/.
5TH CIRCUIT WATERS DOWN ANDREPONT
CAREY V. ORMET PRIMARY ALUMINUM CORPORATION, ET AL.
Circuit Court Opinion
BRB Decision
ALJ Decision
James Carey was allegedly injured while working as a longshoreman for Ormet Primary Aluminum Corporation. Ormet voluntarily paid Carey benefits under the LHWCA based upon an average weekly wage of $1,423.92. Later, Ormet informed Carey that it believed that certain holiday, vacation, and container royalty benefits were improperly included in the calculation of Carey's AWW, and Ormet sought an informal conference to resolve the controversy. Ormet argued that Carey's AWW was properly calculated as $1,169.33, an amount that reflected the exclusion of premium pay. The district director rejected Ormet's argument and issued a written memorandum of informal conference recommending that Ormet continue to pay benefits based upon an AWW of $1423.92. Ormet contested the district director's decision by requesting a formal hearing, but continued to make payments to Carey based upon the AWW of $1423.92, which the District Director recommended. After a formal hearing, the ALJ rejected Ormet's argument that Carey's AWW should not include premium pay. Carey filed a petition for fees, seeking to shift liability to Ormet under §28(b). The ALJ denied the petition, finding that attorney's fees were inappropriate under § 28(b) "as no greater compensation was ever received after the informal conference." Carey moved for reconsideration, which the ALJ denied. Carey appealed to the BRB, which affirmed the ALJ's decision. Carey timely petitioned the circuit court for review, arguing that Ormet's decision to request a formal hearing before the ALJ to reargue the AWW was a refusal to accept the district director's recommendation. Ormet contended that, because it tendered the compensation recommended, it did not refuse that recommendation. Surprisingly, the appellate court held that, irrespective of any voluntary continuation of payment, Ormet sought to overturn the director's recommendation through litigation. The court characterized Ormet's attempt to avoid characterization of its actions as a refusal of the director's recommendation as bordering on frivolous. Ormet argued that because the ALJ-determined final award did not exceed the amount it voluntarily paid to Carey following the director's informal conference, the plain language of §28(b) precluded any shifting of attorney's fees. The appellate court cited Savannah Machine & Shipyard Co. v. Director, OWCP as being indistinguishable, where an ALJ awarded attorney's fees under § 28(b) and the BRB affirmed, finding that the employer's resistance to the claim necessitated the efforts of his attorney, and holding that the employer was liable for the attorney fees. Similarly, Ormet sought a formal hearing before an ALJ to argue for a reduction in the benefit amount it was paying, forcing Carey to utilize the services of an attorney. The court rejected Ormet’s argument that Andrepont compelled a different result and that Savannah Machine was no longer controlling precedent. Accordingly, consistent with Savannah Machine, the appellate court held that Carey had met the requirements of §28(b) and the ALJ and the BRB erred in denying him attorney's fees. The decision of the BRB was vacated and the case was remanded. (5th Cir, December 8, 2010) 2010 U.S. App. LEXIS 25029
Updater Note: This opinion puts me in the unusual situation of arguing that the BRB got it right and this panel of the 5th Circuit got it wrong. I simply do not see how a plain reading of the statute supports an attorney fee in this situation, where the employer voluntarily tendered the amount of compensation recommended by the District Director and the ALJ did not grant additional compensation; but awarded less. In my humble opinion, this decision infringes on the employer’s due process rights by essentially saying that if the employer asks for a formal hearing on any issue, the employer will be obligated to pay the claimant’s attorney fees.
THIS TIME THE PRICE WAS NOT RIGHT FOR PRICE
PRICE V. STEVEDORING SERVICES OF AMERICA, INC.,ET AL.
Circuit Court Opinion
BRB Decision
ALJ Decision
Arel Price was allegedly injured by a falling ship-lashing-chain on, while employed by Stevedoring Services of America, Inc. (SSA") and has been litigating his case for almost fifteen years now [see June 2004, February 2006, April 2009 and September 2009 Longshore Updates]. This latest appellate challenge dealt with the interest calculation on his past due disability payments. Price contended that the interest rate defined in 26 U.S.C. § 6621 (the provision of the tax code defining the interest rate applicable to over-or under-payment of taxes) or, in the alternative, annually compounded interest under 28 U.S.C. §1961(b) should apply to his past due payments. After hearing argument, the ALJ awarded Price simple interest on past due compensation at the rate established in 28 U.S.C. §1961(a), which defines interest for post-judgment interest payable on U.S. district court judgments and does not directly apply to compensation under the LHWCA. However, the ALJ noted that the BRB has used that section to award simple interest on past due payments since 1984. Price appealed the ALJ decision to the Board, making the same arguments he presented to the ALJ. The Board rejected Price's argument regarding interest, affirming the ALJ's decision to award simple interest at the rate determined by 28 U.S.C. §1961(a). On further appeal to the 9th Circus, Price argued that the interest rate defined in 26 U.S.C. §6621 better approximates the cost of borrowing money for a disabled employee. Price further contended that the Director's position (using an interest rate approximating interest earned on saved money) is unreasonable because, in reality, most disabled employees will actually need to borrow. The court noted that Price’s argument ignores the late payment penalty provisions of 33 U.S.C. §914 in arguing that interest awarded under 28 U.S.C. §1961(a) is unreasonable. Additionally, Price failed to provide any evidence to support his argument that most disabled employees must actually borrow funds while waiting for a determination of benefits. The court concluded that awarding simple interest at the rate defined in 28 U.S.C. §1961(a) is not an unreasonable method of compensating a claimant for past due compensation, since the statute ties the interest rate to the one-year U. S. treasury bill rate and adjusts with changes in the market. In the alternative, Price argued that, if the court upholds the Board's use of the interest rate in 28 U.S.C. § 1961(a), the interest rate must be computed as compound, not simple interest. The court rejected this alternative argument, holding that the Director is not bound to accept all the provisions of 28 U.S.C. §1961(b) in determining that simple interest at the §1961(a) rate is reasonable compensation for past due compensation in LHWCA cases. The court held that the Director's position regarding simple interest at the 28 U.S.C. §1961(a) rate Was not unreasonable and affirmed the BRB’s decision. (9th Cir, December 15, 2010) 2010 U.S. App. LEXIS 25504
Updater Note: In a refreshing concurring opinion, Judge O’Scannlain suggested that the time is now ripe for us the court to revisit the 9th Circuit's law governing the deference owed to the Director's litigating positions. Judge O’Scannlain argued that in his view, the Circuit’s rule mandating deference to the Director's reasonable litigating positions cannot be reconciled with Supreme Court precedent. Arguments like this make the 9th sound more like a Circuit, than a Circus.
3RD CIRCUIT CITES WINCHESTER TAKING A LIBERAL VIEW OF ADJOINING AREA
CONSOLIDATION COAL COMPANY V. BRB, ET AL. [SMITH]
Circuit Court Opinion
BRB Decision
ALJ Decision
Daniel Smith was a diesel mechanic for Consolidation Coal Company and worked in a maintenance garage at a Consolidation facility adjacent to the Monongahela River. Consolidation prepares and processes coal at the facility and receives "raw" coal from barges, moves the coal by conveyor belts through the processing plant, loads the processed coal back onto barges, or stockpiles and ships the coal later. Smith was allegedly injured while repairing a Terex machine that had become disabled while loading coal into the de-stock hopper belt, which was adjacent to the garage. While using a sixteen-pound sledgehammer to remove rusted hinge pins from the Terex, Smith allegedly injured his back. Smith initially was paid state workers’ compensation, but later claimed benefits under the LHWCA. The parties requested a formal hearing by Joint Motion asked that the issue of jurisdiction be bifurcated from all other issues in the case. The ALJ granted that request and held a formal hearing on the issue of jurisdiction, holding that Smith was eligible for compensation under the Act. Specifically, the ALJ held that Smith satisfied both the "status" and "situs" aspects of the jurisdictional test. The ALJ specifically found that Smith was responsible for servicing mobile equipment, including Terex machines, which were used to load coal from operations on land to barges. The ALJ also determined that Smith was injured on a covered "situs" under the Act. The ALJ reasoned that the garage was essential to the unloading of coal from vessels, was located within and around essential elements that comprise the loading process, and provided a site for repairs on equipment active in the loading process. Additionally, the ALJ noted that the Terex machine broke down in the midst of loading coal onto the de-stock belt, and was squarely within the facility’s loading or unloading area at the time. Consolidation appealed to the BRB, contending that Smith lacked status because the Terex was not used primarily to load coal and Smith had other duties unrelated to the loading/unloading process. The Board found that these uncontested facts were not dispositive, citing Schwalb to hold that a claimant's contribution to the loading process need not be constant. Further, the Board held that the ALJ rationally found that interruption of barge loading would occur if a mechanic did not service the heavy equipment used in the loading process. The Board also upheld the ALJ's decision that Smith's injury occurred on a covered situs; specifically affirming the finding that the garage was a covered situs. Consolidation filed a timely petition for review, arguing that the Board erred in affirming the ALJ's decision that Smith met both the situs and status tests under the Act. The appellate court concluded, base on its review of the record, that the Board acted in conformance with applicable law and the ALJ's decision was supported by substantial evidence. It found that Smith's injury placed him within the ambit of the Act's status and situs requirements. The appellate court began by rejecting Consolidation's argument that Smith failed to meet the status requirement, holding that the fact that Smith did not repair the Terex "at river's edge" was not dispositive. Although Smith's work was "land-based," because the ALJ found his work to be "integral" or "essential" to the loading or unloading operations, the appellate court held that he met the Act's status requirements. The court also rejected Consolidation's argument that the ALJ had no basis for finding that Smith's work was so integral or essential as to be covered by the Act. Noting that Consolidation did not challenge the ALJ's finding that the Terex was used at times to load processed coal ultimately deposited onto barges, the appellate court concluded that this aspect of Smith’s employment created a sufficient nexus to the loading and unloading of cargo. Finally, the appellate court rejected Consolidation’s contention that Smith was not injured on a covered situs because the garage in which he was injured was not an adjoining area customarily used by Consolidation for the loading, unloading, repairing, dismantling, or building of vessels. Citing Winchester favorably, the court held that an area adjoins the navigable waters of the United States if it is "close to" or "near" those waters. The court viewed the ALJ's finding that the garage was located within and around essential elements of the loading operation of the maritime component of the facility, specifically next to the stockpiled coal and 150 feet from the de-stock hopper, and had at least some maritime purpose, as evidence consistent with this conclusion. The appellate court affirmed the BRB’s holding that Smith's employment satisfied the status requirement and the garage where Smith was injured satisfied the situs requirement, concluding that the Board did not err in determining that Smith's claim fell within the intended scope of LHWCA. (3rd Cir, December 22, 2010) 2010 U.S. App. LEXIS 25979
SEQUENTIAL ANALYSIS REQUIRED IN MULTI-EMPLOYER OCCUPATIONAL CASES
ALBINA ENGINE & MACHINE V. DIRECTOR, OWCP, ET AL. [MCALLISTER]
Circuit Court Opinion
BRB 1; BRB 2; BRB 3
ALJ 1, ALJ 2, ALJ 3
James McAllister died of mesothelioma as a result of exposure to asbestos during his work as a carpenter for three shipyard employers; first for Willamette Iron & Steel Co., then for Albina Engine & Machine, and finally for a predecessor company to Lockheed. McAllister died in 2002 of mesothelioma and his widow, Karen McAllister filed a claim for death benefits, pursuant to §909 of the LHWCA, against all three shipyard employers. The principal issue to be decided by the ALJ at trial was the question of which employer - Lockheed, Albina or Willamette - should be liable for the payment of benefits. While the ALJ originally held Lockheed liable, after two BRB remands, another ALJ held Albina liable for the payment of benefits. In keeping with the BRB’s instructions, on the second remand, the ALJ weighed all of the evidence regarding decedent's exposure to asbestos at the three employers and determined that Lockheed's evidence was entitled to greater weight, noting that Willamette admitted that decedent was exposed to asbestos in its employ, and that decedent had done essentially identical work for Albina. The ALJ found that the evidence of asbestos exposure at Lockheed was weaker and determined that Lockheed had "met its burden of showing (more likely than not) the absence of exposure" during decedent's employment with Lockheed, and that there was no preponderance of evidence showing an absence of exposure at Albina. Because decedent worked for Albina after he worked for Willamette, Albina was held liable for the payment of benefits. The Board affirmed the third and final ALJ decision. Albina appealed arguing that the Board misconstrued existing law on the burden of proof in LHWCA proceedings against multiple employers, misapplied the "last employer" rule, and upheld the ALJ’s decision that was not supported by substantial evidence. Albina further contended that liability for payment of benefits should have been assigned instead to Lockheed, the decedent’s last employer. The appellate court initially noted that, contrary to the Board's repeated statements in its decisions in this case, the §20(a) presumption is relevant to the question of liability in a multi-employer case, and not just to the question of whether a claim is compensable in the first instance. The appellate court held that the analysis with respect to each employer is to be conducted sequentially, beginning with the last (most recent) employer, and need not be conducted for earlier employers once a responsible employer is found. Therefore, in multiple-employer occupational disease cases the fact-finder should conduct a sequential analysis, as follows: the ALJ should consider sequentially, starting with the last employer, (1) whether the §20(a) presumption has been invoked successfully against that employer, (2) whether that employer has presented substantial, specific and comprehensive evidence so as to rebut the §20(a) presumption, and (3) if the answer to the second question is yes, whether a preponderance of the evidence supports a finding that the employer is responsible for the claimant's injury. The appellate court then applied its sequential analysis to the facts of the case, finding that McAllister did submit some admissible evidence of asbestos exposure at Lockheed and Lockheed, on the other hand, did not submit any evidence, let alone substantial evidence, to rebut the evidence against it. As the last (most recent) employer to fail to rebut the § 20(a) presumption, the court held Lockheed liable for payment of death benefits. The judgment of the BRB was reversed. (9th Cir, December 10, 2010) 2010 U.S. App. LEXIS 25256
REDUCTION IN ATTORNEY FEE AWARD NOT ARBITRARY OR CAPRICIOUS
STALLWORTH V. NORTHROP GRUMMAN SHIP SYSTEMS, INC., ET AL.
Circuit Court Opinion
BRB Decision
ALJ Decision
Emmanuel Stallworth allegedly injured his shoulder at work, while employed by Northrop Grumman as a painter. Subsequently, Stallworth filed a claim for disability compensation pursuant to the LHWCA. Before the District Director, Stallworth's attorney largely focused his argument on the assertion that Stallworth's average weekly wage was $682.12. The ALJ, however, determined that Stallworth's AWW to be $581.76. Prior to this determination, Northrop Grumman had voluntarily been paying Stallworth an AWW of $588.07. After the ALJ issued his Decision and Order, Stallworth's attorney submitted a fee petition to the District Director seeking an attorney's fee of $4,871.25, representing 21.25 hours of legal services at $225.00 per hour, plus $90.00 of expenses. The District Director reduced counsel's hourly rate to $200, disallowed one of the itemized entries, and reduced the award by one-half. The District Director noted that Stallworth’s attorney's argument and presentation before the District Director focused mostly on the issue of AWW, an issue that Stallworth eventually lost since the ALJ awarded him an AWW lower than that he was already receiving from his employer. Stallworth appealed from a final order of the BRB, which affirmed the District Director's reduction of his counsel's attorney fees for services performed while Stallworth’s case was pending before the District Director. On appeal, Stallworth argued that the Board committed error in affirming the District Director's fee reduction since 1) the District Director's decision to reduce the fee award as a result of Stallworth's "losing on an issue" contravenes the Supreme Court's decision in Hensley; and 2) the District Director's decision to use a “fractional multiplier to reduce a fee award" was an act considered to be "arbitrary, capricious and/or abuse of discretion.” Affirming, the appellate court concluded that the District Director's order reducing the attorney's fee was supported by the substantial evidence in the record and was in accordance with the law. Accordingly, the court concluded that the Board did not err in affirming the District Director's fee reduction. The court disagreed with Stallworth’s contention that the decision to simply reduce the fee award by one-half - instead of meticulously calculating the exact number of hours the attorney spent on the "successful" versus the "non-successful" issue - constituted a decision that was arbitrary, capricious, and/or an abuse of discretion. An adjudicator could simply reduce the award to account for limited success. The decision of the Board was affirmed. (5th Cir, July 20, 2010, UNPUBLISHED) 385 Fed. Appx. 408; 2010 U.S. App. LEXIS 14873
ONLY AN ADMIRALTY CLAIM CAN SUPPORT A RULE B ATTACHMENT
ALPHAMATE COMMODITY V. CHS EUROPE, ET AL.
Circuit Court Opinion
The US Court of Appeals for the Fifth Circuit ruled that only a prima facie admiralty claim can undergird a Rule B attachment. Alphamate Commodity obtained a Supp. R. Adm. or Mar. Cl. & Asset Forfeiture Actions B maritime attachment on a shipment of corn. Alphamate was owed money by the intended recipient of the shipment. Intervenors, the corn seller and its affiliate, moved to vacate the attachment. The trial court agreed with the intervenors on the merits and vacated the attachment. Alphamate appealed. The intervenors contended that they owned the corn because under the contract between the seller and the intended recipient, title transferred upon payment, which had not occurred. The appellate court held that the district court lacked maritime jurisdiction over the dispute between Alphamate and the intended recipient of the corn. Their contracts for sales of grain were not wholly maritime, nor were the demurrage and detention charges suffered by Alphamate severable from the alleged breaches of their sales contracts. A sale of goods was not maritime merely because the goods were to ship by sea. The demurrage charges, which were maritime in nature, were thoroughly intertwined with the non-maritime breach of contract claims and most likely stood or fell with the broader default claims. Accordingly, the appellate court held it could not exercise maritime jurisdiction over that aspect of the dispute. The court did not have the power to issue a Supp. R. Adm. or Mar. Cl. & Asset Forfeiture Actions B maritime attachment. The judgment of the district court was vacated and remanded. (5th Cir., November 29, 2010) 2010 U.S. App. LEXIS 24370
NO MARITIME RELATIONSHIP BETWEEN SHIPYARD AND DAMAGED VESSEL
LANDERS V. BOLLINGER AMELIA REPAIR, LLC
Circuit Court Opinion
An offshore supply boat owned and operated by Kevin Gros Offshore, L.L.C., arrived at Bollinger Amelia Repair, L.L.C.’s dock for repairs, after its starboard stern hull next to its water tank was punctured by an offshore platform. The gangway aboard the Kevin Gros vessel was unusable because it was defective and blocked by cargo. In any event, Bollinger requires that vessels tied to its dock use a Bollinger gangway. Steve Landers, an unlicensed engineer assigned to the Kevin Gros vessel, and Leonard Horne, another crew member, obtained a thirteen-foot aluminum gangway from the Bollinger dock and placed it between the dock and the vessel. An employee of Kevin Gros inspected the gangway before the crew used it and found it to be free of defects. Landers used the gangway several times without a problem. Kevin Gros determined that the vessel crew could repair the damage around the water tank without Bollinger’s assistance and never contracted with Bollinger for the repair work. While Landers and Horne were in the process of removing the gangway, later in the day, the gangway stopped and sprang back, allegedly injuring Landers’ back. Afterwards, Landers claimed to have observed a broken metal cross bar on the underside of the gangway. Landers filed suit against Kevin Gros, and later added Bollinger as a defendant, claiming Bollinger was negligent under maritime law for failing to provide a safe gangway. Landers eventually settled his claims against Kevin Gros. The district court granted Bollinger’s motion for summary judgment, holding that Bollinger did not have a maritime relationship with Landers, and that any claim under Louisiana law had expired under the one-year statute of limitations for tort claims. Landers filed an appeal, arguing that by requiring docked ships to use Bollinger’s gangways, Bollinger stepped into the vessel owner’s shoes and, as a result, assumed a maritime duty to provide a gangway free from hidden defects. Landers asked the appellate court to establish a new legal precedent, that when a dock owner assumes the vessel owner’s duty to provide equipment to a vessel, then the dock owner should be potentially liable under the general maritime law of negligence. The appellate court found that Landers failed to present any cogent basis for it to expand maritime jurisdiction in this manner, and declined to do so. The appellate court found no relevant facts or law to support a finding that a maritime relationship existed between Bollinger and the docked vessel’s crew member; hence that court found no admiralty status and affirmed the judgment of the district court. (5th Cir, December 9, 2010, UNPUBLISHED) 2010 U.S. App. LEXIS 25243
SUMMARY JUDGMENT REVERSED FOR GIVING MORE THAN WAS REQUESTED
MELTON V. HORTON, ET AL.
Appellate Court Opinion
Joseph Heath Melton was employed by St. James Stevedoring, LLC as an equipment operator and worked on a vessel, which was also owned and operated by St. James. While on board the vessel, Melton was allegedly physically confronted by fellow employee, Torrence Horton. As a result of the confrontation with Horton, Melton allegedly suffered serious injuries to his right knee. Melton filed suit against both Horton and St. James, which included allegations of vicarious liability on the part of St. James under the Jones Act and the general maritime law. Melton later filed a supplemental petition which alleged a new cause of action stemming from another incident which allegedly re-aggravated his right knee while lifting an industrial-sized tire. St. James filed a Motion for Partial Summary Judgment, arguing that St. James was entitled to a partial summary judgment as a matter of law regarding the claims against Mr. Horton, averring Horton and Melton were co-employees involved in horseplay at the time of the incident. St James further averred the actions of Horton were not for the benefit of St. James and the incident was unforeseeable. The trial court granted St. James’s motion and dismissed Melton's claims against it with prejudice. Melton appealed the trial court’s ruling, arguing that the trial court erred by granting summary judgment as to all of his claims and causes of action raised, even when St. James did not seek to have all of his claims dismissed in its Motion for Partial Summary Judgment. Melton averred that the trial court not only dismissed the claims against St. James relating to the incident with Horton, but it also dismissed all of his claims related to the subsequent alleged incident. Because the other claims raised by Melton were not addressed by St. James in its Motion for Partial Summary, the appellate court found that the trial court erred in dismissing those claims in the summary judgment. The appellate court reversed the trial court's grant of the summary judgment and remanded the matter to the trial court for further proceedings. (La. App. 5th Cir, December 14, 2010) 2010 La. App. LEXIS 1727
GET ALL THE LHWCA BENEFITS YOU CAN, AND THEN CLAIM TO BE A SEAMAN
MENDEZ V. ANADARKO PETROLEUM CORPORATION, ET AL.
Grixi Mendez, an Anadarko Petroleum Corp. employee, was allegedly injured while working on a floating oil-production facility located on the outer continental shelf. After his claimed injury, Mendez applied for benefits under the LHWCA. After he had received $61,268 in medical expenses and $133,246 in compensation payments, Mendez sued Anadarko in Texas state court, seeking benefits under the Jones Act. Anadarko removed on the basis that Mendez was not a Jones Act seaman because the platform on which he worked was not a "vessel" for the purposes of that Act. Mendez moved to remand and Anadarko responded. At the conclusion of a hearing at which counsel presented oral argument on the amended motion to remand and response, the court held that based on the pleadings, the motions and responses, the extensive record evidence, the arguments of counsel, and the applicable law, the platform at issue was not a vessel for the purposes of the Jones Act and remand was not appropriate. Anadarko then moved for summary judgment on the basis that Mendez has received all the compensation for his injuries he was entitled to under the LHWCA, precluding suit to recover damages for those injuries. Mendez continued to argue that the court should reconsider its earlier decision and find that the platform was a vessel and that he was a Jones Act seaman. Mendez also argued that removal was improper under §1441(b) because the OCSLA claims did not provide a basis for removal and that there was no other removable claim asserted. The court found Mendez's argument unavailing because it came too late, noting that the purpose of the thirty-day rule is to resolve the choice of forum at the early stages of litigation, and to prevent the shuffling of cases between state and federal courts after the first thirty days. Turning to Anadarko’s summary judgment motion, the court noted that Mendez continues to receive these LHWCA benefits and that Mendez did not dispute that he has received all benefits to which he is entitled under the LHWCA. Holding that the §905(a) exclusivity provision applied, Mendez's motions for reconsideration and remand were denied, and Anadarko's motion for summary judgment was granted. (USDC SDTX, December 20, 2010) 2010 U.S. Dist. LEXIS 134279
TIME CHARTERER ABSOLVED OF LIABILITY IN LHWCA §905(B) ACTION
DUCZKOWSKI V. HYUNDAI AMERICA SHIPPING AGENCY, INC, ET AL.
Joseph Duczkowski, an employee of Delaware River Stevedores, Inc, was performing his duties as a crane operator discharging cargo off a vessel owned and operated by defendant Daria Shipping Limited, and under a time charter to Hyundai America Shipping Agency, Inc., when he allegedly slipped on oil as he descended the crane's access ladder. Duczkowski filed suit, under §905(b) of the LHWCA, against both defendants claiming that they were liable for his injuries due to their negligence. Duczkowski claimed that Hyundai exerted control over the vessel's maintenance, and specifically with regard to the crane, and it therefore can be held responsible for his injuries. Hyundai moved for summary judgment, arguing that the vessel owner and the crew retained responsibility for the vessel's maintenance and repair through a Time Charter agreement, and it did not otherwise assume control over its maintenance and repair. Because it was not responsible for the maintenance and repair of the vessel and its cranes, Hyundai contended that it could not be liable for Duczkowski’s injuries as a matter of law. Duczkowski opposed Hyundai's motion. Hyundai pointed out that courts uniformly hold that in order for liability to attach to a time charterer, it is critical that there be an independent act of negligence that is the direct cause of the injury or that the time charter agreement specifically allocates the responsibilities to the time charterer. Hyundai also relied upon the fact that the vessel's crew repaired and inspected the crane, and Hyundai did not in any way direct, supervise, control or participate in the repair of the crane. The court rejected Duczkowski’s arguments opposing summary judgment as unavailing, finding the undisputed evidence in the record showed that the vessel's crew endeavored to fix a broken crane, and in doing so, apparently spilled oil on the crane's intermediate decking, which ended up on the ladder, allegedly causing Duczkowki's fall and injuries. The undisputed evidence also showed that Hyundai had no involvement in the inspection or repair of the crane. The only evidence showing Hyundai's involvement in the crane functioning is a general command from the port captain to repair any broken cranes in order to facility the discharge of its cargo. The court concluded this was insufficient to establish Hyundai's liability for plaintiffs' injuries. Additionally, Duczkowski failed to point to any provision in the Time Charter that would hold Hyundai liable for the crew's negligence, despite Hyundai's own lack of culpability. Consequently, because Duczkowski could not establish Hyundai's negligence or its assumption of liability for plaintiffs' injuries, summary judgment was entered in Hyundai's favor. (USDC NJ, December 20, 2010) 2010 U.S. Dist. LEXIS 134288
LHWCA EMPLOYER HELD NOT TO BE AN AGENT OF VESSEL OWNER
ALFRED V. SUPERIOR ENERGY SERVICES, INC., ET AL.
Zachery Alfred, an employee of SMI Companies, Inc, alleged that he sustained personal injuries while working as a sandblaster/painter on or adjacent to a vessel owned and operated by Superior Energy Services, Inc. SMI had been contracted to perform sandblasting and painting work on a platform adjacent to the vessel. Alfred and other workers were transported from the deck of the Superior vessel to the platform on which they were working and back by way of a spider basket. The basket was hoisted by a crane located on the vessel, and the crane was operated by a Superior employee. Alfred claimed that as he began to climb over the basket fence to exit, the crane operator gave slack in the line, which caused the basket to tilt and resulted in Alfred falling and sustaining injuries. Alfred sued Superior for its crane operator's negligence in causing his injuries and for its failure to furnish a safe place to work. Alfred also sued SMI for its negligence in failing to provide a safe place to work and failing to supervise. SMI pointed out that Alfred is a covered employee under the LHWCA and that under §905(a), the liability of an employer under the LHWCA is exclusive and in place of all other liability of such employer to his employee. Accordingly, SMI moved for summary judgment, arguing that there is no basis upon which it can be held liable, and therefore summary judgment must be granted and SMI must be dismissed from Alfred’s suit. Alfred claimed that SMI became an agent of Superior when Superior permitted the company to place its equipment on the vessel's deck and left it without a Superior supervisor or other designated agent. The court found that while Alfred’s argument was novel, it was contrary to traditional agency principles as well as established jurisprudence regarding §905(b). The court concluded that the actions taken by Superior in allowing SMI to place its equipment on the vessel's deck and not providing a designated agent of Superior on that specific portion of the vessel could not be construed to constitute a manifestation of Superior's intent to have SMI act on its behalf and subject to its control, nor consent by SMI to do so. The court held that no agency relationship existed between the two independent companies. As such, the relationship underlying the doctrine of "dual capacity" does not exist, and this line of cases clearly does not apply. Moreover, even assuming that Superior effectively turned over control of the deck of the vessel to SMI, which SMI disputed, such action has not been held to render an independent employer an agent of the vessel. The court found there was no additional basis upon which SMI could be held liable; therefore, its Motion for Summary Judgment was granted. (USDC EDLA, December 17, 2010) 2010 U.S. Dist. LEXIS 134468
THREE POTENTIAL EMPLOYERS EQUALS THREE DEEP POCKETS
MADDUX V. UNITED STATES OF AMERICA, ET AL.
James Maddux was a contracted employee of Honeywell Technology Solutions, Inc., employed as a seaman on a time-chartered vessel under contract between the United States government, as charterer, and Expresser, as contractor. Expresser is a subsidiary of Maersk, and Maersk was the operator of the vessel. Honeywell was Maddux’s direct employer in relation to his work as a mechanic, but Maddux also had duties to Maersk, the vessel operator. Maddux was allegedly injured while the vessel was moored in Guam. While returning from shore leave, Maddux allegedly fell from a stairway and into a safety net that was defective and improperly rigged causing him to fall fifteen feet to the deck below. Maddox suffered a complete spinal cord injury at T10-12 and was rendered a paraplegic. Maddux filed suit for his injuries under the Jones Act and the general maritime law of the United States, or in the alternative the LHWCA, alleging that Honeywell, Maersk, and Expresser were negligent and that the vessel was unseaworthy. Maddux further claimed Jones Act negligence, maintenance and cure, and punitive damages for willful failure to maintain a seaworthy vessel. Maersk and Expresser moved for summary judgment arguing that because Maddux was employed by Honeywell, he can only assert liability claims against Honeywell. Defendants also argued that punitive damages for unseaworthiness are unavailable as a matter of law, or in the alternative, that Maddux had failed to show evidence of any punitive conduct. Maddox responded arguing that a question of fact existed about who was his employer. He claimed to have been an employee of Honeywell as well as a borrowed servant of Maersk and Expresser. Maersk and Expresser argued that the evidence compelled rejection of the borrowed-servant doctrine here because Maersk or Expresser did not exercise control over Maddux, supervise his work, issue paychecks to him, or have the right to make decisions about his employment. The court found that Maddux had shown sufficient facts to indicate that Maersk and Expresser had actual control and the right to control Maddux’s mode and manner of work. While Honeywell may have controlled his work as a mechanic, Maddux had many duties owed directly to Maersk, and more specifically, duties that he owed directly to the captain of the vessel, who was a Maersk employee. Additionally, Maersk had responsibility for the vessel's safety and controlled Maddux’s participation in safety drills, fire drills, lifeboat drills, security drills, and first-aid drills. Finding that a jury could reasonably find for Maddux on the evidence he had presented, the court held that Maddux could assert liability against all three defendants and denied the motion for summary judgment as to the borrowed servant issue. The court reserved judgment on the motion for summary judgment with respect to the availability of punitive damages for unseaworthiness, indicating it would issue an opinion and order regarding this issue before the trial. (USDC SDOH, December 15, 2010) 2010 U.S. Dist. LEXIS 132466
Updater Note: the court did not even attempt to do a worthwhile analysis of the Ruiz factors with respect to borrowed servant status. It is clear what the court is doing here . . . leave all the defendants potentially exposed, hoping to force a settlement in this unfortunate personal injury case. And shame on the court for leaving the punitive damage issue hanging like a chad on a ballot.
I NEED THE VESSEL OWNER TO HELP ME PROVE MY §905(B) CLAIM (CONT.)
SCIONEAUX V. ELEVATING BOATS, L.L.C., ET AL.
Antonie Scioneaux was an employee of Elevating Boats, LLC (EB). for approximately fifteen years prior to his death from acute myelogenous leukemia ("AML"). While employed with EB, Scioneaux worked in the shop, in the yard, and on numerous vessels owned by EB. Throughout his employment, Scioneaux was allegedly required to use numerous heavy, toxic chemicals to perform certain tasks. Scioneaux also allegedly had to use chemicals supplied by EB owned vessels to perform certain tasks during his time at EB. On June 24, 1999, Scioneaux submitted an injury report stating that he came into contact with a high detergent soap that caused a serious chemical burn on his leg and ankle. Prior to his death, Scioneaux allegedly told his wife and his physician that he believed that he had contact with numerous benzene containing chemicals while cleaning EB's vessels. Scioneaux was diagnosed with AML and he died a little more than three months later. Scioneaux's widow filed this action alleging that Scioneaux developed and died from AML as a result of being exposed to benzene while working at ED. The widow further alleged that Scioneaux was a longshoreman, and bought claims under the LHWCA against EB as a vessel owner under §905(b). EB moved for summary judgment, contending that there is no evidence that Scioneaux was exposed to benzene on a vessel owned by EB, or that benzene exposure caused his death. The court denied EB’s initial motion for summary judgment, agreeing with the widow that EB’s responses to discovery were imperative to her ability to pursue her case and, therefore, summary judgment was premature without further discovery [see August 2010 Longshore Update]. Following discovery EB renewed its motion for summary judgment arguing that Scioneaux had not offered an expert report that establishes that Scioneaux's AML was caused by benzene exposure that occurred on EB's vessels. The court noted that Scioneaux had provided the report of a purported expert toxicologist. EB did not contest that the report provided evidence of general causation; rather EB argued that the report failed to provide any analysis regarding specific causation, entitling it to summary judgment. The court rejected EB’s position, holding that the report raised issues of fact as to whether the specific level of exposure to which Scioneaux was subjected caused his illness, which must be resolved at trial. EB’s renewed motion for summary judgment was denied. (USDC EDLA, December 17, 2010) 2010 U.S. Dist. LEXIS 133847
THESE PRO SE CASES ARE USUALLY PRETTY ENTERTAINING
ELLISON V. CADDELL CONSTRUCTION CO INC.
Ted Miles Ellison, a former employee of Caddell Construction Co., Inc., contended that he was injured while working at a construction site of the U.S. Consulate, located in Juarez, Mexico. Specifically, Ellison contended that while he was under the duress of his alleged job-related injuries, agents of Caddell, conspired, and did, cause him additional harm by injecting him with a substance intended to mask his job-related injuries and acted with gross negligence in subsequently failing to provide proper medical care. Caddell moved to dismiss Ellison’s case, contending the Defense Base Act (DBA) was his exclusive remedy. The court noted that it was not surprised that Ellison, as a pro se litigant, had made little substantive rejoinder. The court did acknowledge, however, that Ellison had astutely argued, albeit, in a single sentence, that Caddell had not supported its position that the DBA is the exclusive remedy for his "assault and battery claim," the implication being that the DBA does not preclude suits for intentional torts. The court pointed out that Ellison’s suit, in no respect, sought justice for the job-related injury, initially suffered, which was ostensibly accidental. Rather, it complained of the subsequent and allegedly intentional acts, which Ellison believes produced intended or, rather, expected additional injury. On the face of the Complaint, therefore, the court found that Ellison had alleged non-accidental injury, which would appear to remove the entire case from the DBA's ambit, in light of the way the court construed the Act. Caddell’s motion to dismiss was denied. (USDC SC, November 10, 2010) 2010 U.S. Dist. LEXIS 130652
TRAVEL REIMBURSEMENT RATE INCREASED
IRS INCREASES MILEAGE REIMBURSEMENT RATE EFFECTIVE 1/1/11
On December 3, 2010, the Internal Revenue Service released the optional standard mileage rates to use for 2011 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. Beginning Jan. 1, 2011, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
• 51 cents per mile for business miles driven;
• 19 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service to a charitable organization.
The charitable standard mileage rate is set by law. The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile.
Updater Note: You can check out the revised IRS mileage rates here. The Office of Government-wide Policy, GSA also sets mileage reimbursement rate for use of a privately owned automobile (POA) on official travel. GSA published their 2011 rates on December 21, 2010 and you may review the bulletin here. However, by law, GSA may not exceed the standard mileage reimbursement rate for a privately owned automobile (POA) established by the Internal Revenue Service (IRS). Which rate should you be using to reimburse travel under the Longshore Act? That is a question you may want to consult with your attorney on.
OFFICE OF ADMINISTRATIVE LAW JUDGES
SUPPLEMENT TO THE 2008 EDITION OF THE JUDGES’ BENCHBOOK:
BLACK LUNG BENEFITS ACT
The Office of Administrative Law Judges has posted its Supplement to the 2008 Edition of the Judges’ Benchbook: Black Lung Benefits Act, as of December 21, 2010. Hopefully, we will be seeing an updated Supplement (or preferably a complete Benchbook update) to the Longshore Act sometime in the New Year.
The last full supplement to the Longshore Benchbook was published in January 2005. However, OALJ has published an index that provides a cross-reference between Benchbook Topics and U.S. Supreme Court, Federal District and Circuit Courts, and Benefits Review Board decisions, issued since 2004 and covered in OALJ's "Recent Significant Decisions Monthly Digest."
And on the Admiralty front . . .
NONSENSICAL DOUBLE TALK FROM THE SEVENTH CIRCUIT
DEERING V. NATIONAL MAINTENANCE & REPAIR, INC.
Circuit Court Opinion
Vincent Ray Deering, employed as a river-boat pilot by National Maintenance & Repair, Inc., sued National for injuries he allegedly sustained in an accident. National counterclaimed for serious damage that it alleged Deering had caused the boat - namely, sinking it. The district court dismissed the counterclaim, precipitating National's interlocutory appeal The appeal presented questions of admiralty law and of jurisdiction over interlocutory appeals in admiralty cases. In deciding whether it had jurisdiction over the appeal, the court found that the appeal raised a controlling question of law and also an issue that arose from a separate claim within the meaning of Fed. R. Civ. P. 54(b), i.e., whether National should be allowed to counterclaim for property damage was a separate issue from the merits of Deering’s personal injury claim or National’s limitation of liability claim; thus, it was the kind of interlocutory matter that was frequently allowed even in non-maritime cases. Although National’s notice of appeal was untimely, its FRCP 59(e) motion met the notice requirements and served as a notice of appeal. After reviewing the case law and the history of the Jones Act and the Federal Employers' Liability Act, the court concluded that combining a property-damage counterclaim with a limitation of liability in order to wipe out a substantial personal injury claim under the Jones Act was a liability-exempting device forbidden by 45 U.S.C. §55. The court did not resolve whether a shipowner who did not seek to limit his liability was forbidden to set off damages for negligent damage to property against a Jones Act claim. The court affirmed the dismissal of defendant's counterclaim. (7th Cir, December 2, 2010) 2010 U.S. App. LEXIS 24580
Updater Note: The 5th Circuit got it right in Withhart v. Otto Candies, L.L.C., when it observed that comparative fault has long been the accepted risk-allocating principle under the maritime law and held that there is no statutory provision in the Federal Employers' Liability Act, and consequently, the Jones Act, that prohibits a shipowner-employer from pursuing a claim against its negligent seaman-employee for property damage. When an employee is injured in an accident which causes damage to property, and the employee sues the employer, the employer may counterclaim for property damage against the plaintiff whose negligent acts allegedly caused the property damage. Judge Posner’s nineteen pages of double talk, trying to equate a justifiable negligence claim by the employer to a FELA-defined “device” to exempt itself liability and ridicule the 5th Circuit, is ludicrous. Instead of trying to call the employer’s claim a device or setoff, call it what it really is - comparative fault. Hopefully, Judge Posner’s similarly feeble attempt to avoid a circuit court split on the issue, by confining it to limitation of liability cases, will also not withstand further appellate scrutiny.
ENY, MEANY, MINEY, MOE - WHICH POLICY PROVIDES COVERAGE?
CAL-DIVE INTERNATIONAL, INC., ET AL. V. SEABRIGHT INSURANCE COMPANY
Circuit Court Opinion
David Brown was allegedly injured and filed a Jones Act suit against his employer, Coastal Catering, and Horizon for failing to provide him with a reasonably safe workplace aboard the a vessel owned by Horizon. Coastal had entered into a contract to provide catering services aboard Horizon's vessel, and Coastal sent Brown to work on the vessel pursuant to that contract. In his complaint, Brown alleged that both Coastal and Horizon were his employers. According to the Horizon-Coastal Contract, Coastal was obligated to defend Horizon, which Coastal did through State National Insurance Company (SNIC), its Maritime General Liability (MGL) insurer. Coastal also had in effect a Maritime Employer's Liability (MEL) policy with Seabright, and Seabright defended Coastal in the Brown litigation. After the underlying litigation was settled with the insurers each paying 50% of the agreed settlement amount, the MGL insurer sought reimbursement from the MEL insurer for the costs the MGL insurer incurred in defending Horizon. The trial court granted summary judgment in favor of the MGL insurer. The MEL insurer appealed. The appellate court determined that the MEL insurer had no obligation to defend Horizon because coverage of Horizon was excluded under the MEL policy's protection and indemnity exclusion, which excluded coverage if its insured maintained a protection and indemnity policy that covered injuries to its crew, and it was uncontested that Horizon had such a policy. Horizon maintained a protection and indemnity policy with AEGIS covering the crew on its vessel. The appellate court reversed the summary judgment entered by the district court and rendered judgment in favor of the MEL insurer. (5th Cir, November 22, 2010, Revised December 22, 2010) 2010 U.S. App. LEXIS 24017
MARINER MUST EXHAUST ADMINISTRATIVE REMEDIES BEFORE BRINGING SUIT
DRESSER V. MEBA MEDICAL & BENEFITS PLAN, ET AL.
Circuit Court Opinion
Christopher J. Dresser was a licensed marine engineer. The U.S. Coast Guard initiated a Suspension and Revocation (S&R) action against Dresser’s license after the Coast Guard was notified that Dresser had tested positive for tetrahyrdocannabinol (THC), a metabolite detected in the urine of those who have ingested marijuana. Dresser maintained that he tested positive as a result of his ingestion of hemp seed oil as a dietary supplement, not from the use of marijuana. After a full hearing, a Coast Guard ALJ directed the revocation of Dresser’s license for illegal drug use. Dresser appealed to the Commandant, who upheld the ALJ decision. Dresser then brought suit in federal district court, asserting that the Coast Guard decision was unconstitutional. The district court ruled against Dresser, holding that the court had no subject matter jurisdiction as Dresser had failed to exhaust his administrative remedies. Dresser appealed and the appellate court affirmed. The US Court of Appeals for the Fifth Circuit ruled that federal courts lack jurisdiction to review a decision of the Commandant of the US Coast Guard to revoke a mariner’s license where the mariner has not appealed that decision to the National Transportation Safety Board. (5th Cir., December 22, 2010) No. 10-30301
APPELLATE COURT IGNORES DISTINCTION BETWEEN LAND-BASED & SEAGOING
NAVARRE V. KOSTMAYER CONSTRUCTION COMPANY, INC.
Appellate Court Opinion
Jason Navarre filed suit against Kostmayer Construction Company, Inc., for alleged injuries sustained as a result of the alleged negligent operation of a crane spud barge. Navarre was employed as a welder by Kostmayer and allegedly broke an ankle while he was in a basket, suspended from a crane, cutting pilings that were holding the barge in place. Kostmayer filed a Motion for Summary Judgment, arguing that Navarre was a land-based employee and did not satisfy the standards and criteria of a Jones Act seaman. The trial court granted Kostmayer’s motion for summary judgment. Navarre appealed, assigning as error the trial court's grant of Kostmayer’s motion for summary judgment and the trial court's finding that Navarre failed to satisfy the requirements of a Jones Act seaman. Kostmayer argued that the trial court got it correct, noting that Navarre would drive to a job site, perform the welding repair, either on land, docks, or spud barges that were fixed in place. Navarre never ate any meals nor stayed overnight on any vessel, but returned home when his shift was complete at the end of each day. Navarre argued that he performed repairs to the hull of the barge itself; spent 60-70% of his work day aboard the barge; and that his duties included tying and untying mooring lines, and spudding and unspudding of the barge, which he maintained are traditional deckhand duties. The appellate court initial observed that Navarre's extensive work on the barge established that the first prong of the Chandris test was met; accordingly, only the second prong, whether Navarre's connection to the barge was substantial in nature and duration, was at issue. Although the appellate court acknowledged Richard’s holding that a welder helper's work in connection with the vessels was "not substantial in nature or duration," the court nevertheless pointed to insignificant distinctions between Navarre and the employee in Richard to find that summary judgment as to seaman status was inappropriate. Instead the court held that, considering the totality of the circumstances surrounding Navarre's employment, his connection to the barge was substantial in both duration and nature, and that he was entitled to a trial on the merits of his Jones Act claim. The lower court's grant of Kostmayer’s motion for summary judgment was reversed. (La. App. 4 Cir, November 24, 2010) 2010 La. App. LEXIS 1617
Updater Note: This is a disheartening appellate opinion. Rather than looking at the totality of Navarre’s employment, the appellate court appears to have focused on a six month period of that employment, when Navarre was doing a lot of work with this particular barge. The appellate court clearly ignored Chandris’s holding that land-based maritime workers do not become seamen when they happen to be working aboard a vessel, and seamen do not lose Jones Act coverage when their service to a vessel takes them ashore.
SPOLIATION INSTRUCTION TO JURY RESULTS IN REVERSAL
WILLIS V. INDIANA HARBOR STEAMSHIP CO., L. L. C., ET AL.
Appellate Court Opinion
Daniel J. Willis was employed by Indiana Harbor Steamship Co. And was working as a crewman of a vessel, when he was allegedly injured on a dock owned by Duluth, Missabe & Iron Range Railway Company (DM&IR). Willis was handling one of his vessel’s mooring lines when he slipped on the dock and fell. Willis alleged that at the place where he fell the dock was covered by a slime of water and limestone, and that his knee hit both the dock and taconite pellets that were obscured by the milky limestone mixture. Willis’s alleged fall occurred on a Friday and, although Central Marine Logistics was informed of the accident on that afternoon, DM&IR was not notified of the incident until the following Monday. Willis eventually was diagnosed with deep vein thrombosis stemming from the injury to his knee. Willis sued his employers, a charterer, and the dock owner under the Jones Act and general maritime law. The case was tried to a jury and, because of the late reporting of the accident to DM&IR and the fact that the condition of the dock was not maintained, the trial court gave a negative-inference jury instruction as a sanction based on its interpretation of the doctrine of spoliation. The trial court entered a judgment in favor of Willis on a jury's verdict that awarded damages totaling $1,818,898. The defendants appealed the judgment, challenging a negative-inference jury instruction based on spoliation, the determination that damages were governed by Minnesota law; the amount of damages awarded; and the denial of a request to determine collateral sources under Minn. Stat. §548.251. The primary argument on appeal was that, because they lacked control over the dock and its condition, they could not be subject to a spoliation sanction for changes to the condition of the dock after the accident. The appellate court found nothing in the record that indicates that defendants had any control of the dock or when the dock was cleaned. The only party who had control over the dock or would have cleaned the dock, and thus destroyed the spill evidence, was DM&IR. The district court, however, concluded that a spoliation-based negative-inference instruction was appropriate despite the fact that the other defendants never had control over the dock or the condition related to the spill. The appellate court found that giving the negative-inference instruction based on spoliation was reversible error, as the evidence did not show that they actually controlled the dock. The appellate court also noted that because the case was a Jones Act case, and federal laws expressly applied to Jones Act claims, the federal maritime standard of premises liability applied as substantive law. The appellate court found that the challenges to the damages awards were without merit but that the giving of a negative-inference instruction was reversible error. As a result, it partly affirmed the trial court's judgment, partly reversed that judgment, and remanded the case to the trial court for further proceedings.(Minn. App, October 19, 2010) 790 N.W.2d 177; 2010 Minn. App. LEXIS 153
CIRCUIT SPLIT IN LA OVER WHETHER STATE EMPLOYEE MAY PURSUE JONES ACT
JAMES V. STATE OF LOUISIANA, DEPARTMENT OF WILDLIFE & FISHERIES
Appellate Court Opinion
Joey James was employed by the State of Louisiana, through the Department of Wildlife & Fisheries (the department), as a Senior Wildlife Enforcement Agent, when he was allegedly injured. James alleged a number of deficiencies in his assigned boat and its operation, and its lack of seaworthiness, claiming remedies under the Jones Act and general maritime law. The department responded with a number of exceptions, all based upon its contention that James's exclusive remedy lay in workers' compensation. The trial court denied those exceptions. The department appealed the summary judgment granted in favor of James, declaring that James, an employee of the department, was entitled to pursue his remedies under the Jones Act. The appellate court reversed the trial court’s ruled, holding that a state that has not waived sovereign immunity or otherwise consented to being sued is arguably not subject to suit under the Jones Act. The third circuit specifically rejected a holding by an en banc panel of the fourth circuit, which held that the department is subject to Jones Act claims, creating a split in the state circuit courts. The court found that while the state may be sued in contract or tort, the legislature retains the right to define the circumstances under which it is liable and limit the amount of its liability. The pertinent question that follows is whether the legislature has limited the department's liability to a seaman it employed. The court opined that the answer was obvious: James is a state employee and, therefore, La. R.S. 23:1034 applied. State employees are not entitled to make claims under the Jones act or any other statutorily created remedy. Workers' compensation is the exclusive remedy for state employees without exception. The appellate court held that the State of Louisiana has, through the legislature, chosen to limit its liability to employees injured on the job to the benefits afforded by the Workers' Compensation Act. This exclusivity of remedy admits of no exception. The judgment of the trial court granting summary judgment in favor of appellee, James, was reversed and costs of this appeal were taxed to James. (La. App. 3rd Cir, December 22,2010) 2010 La. App. LEXIS 1762
Updater Note: Judge Painter dissented from the majority opinion. I expect this issue is headed to the Louisiana Supreme Court. See Fulmer v. Louisiana Department of Wildlife and Fisheries, et al., in the November 2010 Longshore Update, for the conflicting circuit opinion.
NEGLIGENT ACT, IN AND OF ITSELF, DOESN’T CONSTITUTE SUPERSEDING CAUSE
THERRELL V. ROWAN COMPANIES, INC.
Appellate Court Opinion
Christopher Therrell was a seaman employed by Rowan Companies, Inc. as a driller and crew member assigned to work on a semi-submersible drilling rig vessel. Therrell was allegedly injured while troubleshooting, testing, and using a man-lift. At the time of the accident, Rowan was refurbishing the vessel at Rowan's dock. In order to refurbish the vessel, Rowan had contracted with Tidewater Dock, Inc./Blue Tide, Inc. ("Tidewater") to provide contract welders and necessary equipment, including a barge and two man-lifts. Tidewater, in turn, had contracted with NES to provide the man-lifts to be used on the Rowan project. The man-lift at issue was manufactured by JLG Industries, Inc. As a result of the accident, Therrell sued Rowan under the Jones Act and under general maritime law for his injuries. Rowan then filed third-party claims against NES, Tidewater, and JLG, seeking contribution under general maritime law. According to Rowan, a post accident investigation revealed that the man-lift had a broken pin in the boom's retraction chain, which, at the time of the accident, was hidden from the operator's view. Rowan further contended that the retraction chains themselves were in such a degraded or sub-standard condition that the equipment would not have passed a proper pre-use inspection, had such occurred. In response to Rowan's third-party demands, JLG, NES, and Tidewater each filed separate motions for summary judgment, making the common argument that Rowan’s instructions to Therrell to try to make the man-lift work, after being told by the contract welders that the man-lift was not working properly, constituted a "superseding cause" of Therrell’s accident, thereby releasing the third-party defendants from any liability as a matter of law. After hearing arguments on the third-party defendants' motions for summary judgment, the trial court found that the actions of Rowan's employee/supervisor in ordering Therrell to attempt to fix the man-lift without calling for a repair and without first giving notice to Tidewater, JLG, and NES, constituted a superseding cause of Therrell’s accident relieving these parties of liability for the ensuing accident. Accordingly, the trial court granted the motions for summary judgment and dismissed with prejudice all claims asserted by Rowan against the third-party defendants. On appeal, Rowan contended in its sole assignment of error that the trial court erred when it held, as a matter of law, that its supervisor’s instruction to Therrell to see if he could determine what was wrong with the man-lift was a superseding cause of Therrell’s accident and injuries, which thereby relieved NES of any liability. The appellate court initially noted that the fact that an intervening act of a third person is negligent in itself or is done in a negligent manner does not make it a superseding cause of harm to another, which the actor's negligent conduct is a substantial factor in bringing about, if: (a) the actor at the time of his negligent conduct should have realized that a third person might so act; or (b) a reasonable man knowing the situation existing when the act of the third person was done would not regard it as highly extraordinary that the third person had so acted; or © the intervening act is a normal consequence of a situation created by the actor's conduct and the manner in which it is done is not extraordinarily negligent. Given the testimony of Rowan’s supervisor, that Rowan employees had routinely "looked at" the unit to see if they could fix the problem before calling either Tidewater or NES to send a mechanic to repair it, The appellate court held that the supervisor’s actions, while ultimately contributing to the accident, could equally be characterized as a "normal consequence" and not so "highly extraordinary considering the whole of the circumstances" as to rise to the level of an independent, superseding cause, as a matter of law. Finding merit to Rowan's assignment of error, the motion to dismiss the appeal filed by NES was denied and the judgment of the trial court, dismissing Rowan's third-party demand against NES and granting summary judgment in favor of NES, was reversed and the matter is remanded to the trial court for further proceedings. (La. App. 1st Cir. 12/22/10, UNPUBLISHED) 2010 La. App. Unpub. LEXIS 761. In a separate opinion, the appellate court also reversed and remanded the trial court’s judgment in favor of Tidewater. Therrell v. Rowan Companies, Inc., (La. App. 1st Cir, December 22, 2010, UNPUBLISHED) 2010 La. App. Unpub. LEXIS 755. In a separate opinion, the appellate court also reversed and remanded the trial court’s judgment in favor of JLG Industries, Inc. Therrell v. Rowan Companies, Inc.; (La. App. 1st Cir. 12/22/10) 2010 La. App. Unpub. LEXIS 772
SOME JUDGES NEED TO LEARN HOW TO AUTHOR A BETTER OPINION
BENNETT V. CENAC TOWING COMPANY, LLC, ET AL
Calbert George Bennett alleged that he was injured twice during his employment with Cenac Towing Co., LLC; once while assisting in the loading of groceries onto his vessel and on another occasion while lifting a hatch aboard Cenac's barge in order to wash his laundry. Bennett sued Cenac for maintenance and cure, Jones Act negligence and unseaworthiness. Cenac moved for summary judgment on Bennett’s claims. In his opposition, Bennett did not oppose Cenac's motion for summary judgment with respect to liability for the injury allegedly sustained while loading groceries. Accordingly, the court granted Cenac's Motion for Summary Judgment to the extent that it sought summary judgment dismissal of Bennett’s Jones Act and unseaworthiness claims related to the first alleged incident. The court denied Cenac’s motion with respect to Bennett’s Jones Act and unseaworthiness claims stemming from the second alleged incident, finding that there were genuine issues of material fact. Interestingly, the court declined to make any findings with respect to what those genuine issues of material fact were. The court also noted that there were undefined genuine issues of material fact as to Cenac's McCorpen defenses stemming from both of Bennett’s alleged injuries. However, without resolving whether or not Cenac had successful McCorpen defenses the court nevertheless granted Cenac's Motion for Summary Judgment to the extent that it seeks summary judgment dismissal of Bennett’s maintenance and cure claim for any more than what Cenac had already paid Bennett. (USDC EDLA, December 16, 2010) 2010 U.S. Dist. LEXIS 133849
Updater Note: In my humble opinion, this is a poorly written decision, consisting of a bunch of rulings without any explanation behind those rulings. This type of decision is extremely frustrating to all parties and represents a lack of proper consideration by the court.
PORT ENGINEER MAY SPEND 80% OF TIME ON VESSELS, BUT IS NOT A SEAMAN
CASSER V. MCALLISTER TOWING AND TRANSPORTATION COMPANY, INC, ET AL.
Charles Cassar allegedly sustained injuries on two separate occasions, more than two years apart, while he was employed as a port engineer by McAllister Towing & Transportation Co., Inc. Casser eventually brought a lawsuit pursuant to the Jones Act. McAllister moved for summary judgment, arguing that the undisputed evidence demonstrated that Cassar was a land-based maritime worker at the time of the accidents and thus did not qualify as a "seaman" entitled to relief under the Jones Act. After reviewing the evidence and hearing oral argument, the court found that when the Cassar became a port engineer, he went from being a seagoing worker to an office worker. The records reflected that Cassar had allowed his seaman’s license to lapse and, after becoming a port engineer, Cassar had 23 days of sea time in 2002, 30 days of sea time in 2003, 23 days of sea time in 2004, 49 days of sea time in 2005, 29 ½ days of sea time in 2006, 10 ½ days of sea time in 2007, no sea time in 2008, and 4 ½ days of sea time in 2009. Although the court acknowledged that one of Cassar’s two alleged injuries occurred while he was boarding a tug, and Cassar did spend a good deal of his work time aboard McAllister’s vessels, the court nonetheless held that Cassar could not qualify as a seaman under the Jones Act because his connection to the vessel or fleet of vessels was not substantial in duration or nature. The court noted that the vessels Cassar works on are typically at dockside over 90% of the time and the sea records confirm that Cassar is only very rarely on vessels that are actually underway. Even if Cassar were to satisfy the temporal component of the second Chandris prong, the court concluded that Cassar would still fail to satisfy the functional component, because his connection to the vessels is not substantial in nature. McAllister’s motion for summary judgment was granted and Cassar’s claims were dismissed with prejudice. (USDC SDNY, December 7, 2010) 2010 U.S. Dist. LEXIS 130462
SEAMAN CLAIMS RETALIATORY DISCHARGE FOR REPORTING SAFETY HAZARD
POLEK V. GRAND RIVER NAVIGATION COMPANY, INC.
This is a retaliatory discharge case brought under the Seaman's Protection Act, 46 U.S.C. § 2114. Jeffrey Polek was employed by Grand River Navigation Company, Inc. as a 3rd Assistant Engineer aboard one of Grand River’s vessels. Polek reported a leak in the starboard side bow of the vessel and, when nothing was allegedly done about it, Polek reported the situation to the Coast Guard, asking that his name not be revealed as he was still serving on the vessel. After Coast Guard officials contacted the vessel to inform the captain that someone had reported that there was a hole or a crack in the hull, the vessel’s chief engineer approached Polek on the deck and they had a conversation. The substance of that conversation was in dispute. Polek alleged that he was fired; Grand River asserts that Polek quit. In any event, Polek departed the vessel shortly thereafter. Prior to his departure, Polek informed the ship's captain that he had contacted the Coast Guard. The Seaman's Protection Act provides in relevant part that "[a] person may not discharge or in any manner discriminate against a seaman because the seaman in good faith has reported or is about to report to the Coast Guard or other appropriate Federal agency or department that the seaman believes that a violation of a maritime safety law or regulation prescribed under that law or regulation has occurred. After suit was filed by Polek, Grand River moved for summary judgment on the grounds that Polek could not prove that he was discharged, the evidence failed to show that Grand River had knowledge that Polek had called the Coast Guard, and Polek’s report to the Coast Guard was not a good faith report of a violation of a maritime safety law or regulation because the leak was "minor.” Grand River also moved for summary judgment on Polek’s prayer for punitive damages, asserting that punitive damages were inappropriate under the circumstances. The court found that the conflicting testimony surrounding the circumstances of Polek’s departure from the vessel created a genuine dispute over a material issue of fact regarding whether Polek quit or was terminated. Accordingly, the court concluded that summary judgment on the ground that Polek could not prove he was discharged was not appropriate. The court also had no trouble concluding that a jury, after reviewing the evidence in the case, could reasonably come to the conclusion that Polek was asked to leave the vessel because his superiors believed he had reported or was about to report the leak to the Coast Guard. Accordingly, Grand River was not entitled to summary judgment on this basis. The court also found that the evidence clearly showed that Polek honestly and in good faith believed that a safety violation was occurring. Whether the leak subsequently was categorized as severe enough to meet the technical definition of "hazardous condition" is irrelevant under Gaffney. Because a factfinder could reasonably find in favor of the non-movant on this issue, summary judgment was deemed inappropriate. Finally, viewing the evidence and inferences therefrom in the light most favorable to Polek, the court declined to grant summary judgment on the prayer for punitive damages. (USDC EDMI, November 30, 2010) 2010 U.S. Dist. LEXIS 133494
FEEBLE EFFORT TO PROVE UNSEAWORTHINESS OR JONES ACT NEGLIGENCE
WHATLEY V. WATERMAN STEAMSHIP CORP.
Mary J. Whatley was employed as a cook aboard a vessel operated by Waterman Steamship Corporation. The vessel was anchored off the coast of Saipan, and Waterman arranged for a third party to provide launch services to ferry the crew to the island for shore leave and back to the vessel. Whatley took overnight shore leave. Early the next morning, while walking back to the launch, she stepped in a pothole and fell, suffering several broken bones. Waterman paid maintenance and cure. Whatley filed suit seeking recovery under the Jones Act and under general maritime law for unseaworthiness. Waterman moved for summary judgment arguing that unseaworthiness provides no remedy for injuries suffered off the vessel. Waterman also argued that it had no duty under the Jones Act with respect to Whatley’s travel toward the launch. The court agreed with Waterman’s argument that an unseaworthiness remedy is not available for injuries which occur on shore during the loading or unloading process and which are not caused by a vessel on navigable water. Noting that Whatley offered no rebuttal to this doctrine, the court concluded that Whatley had no viable claim for unseaworthiness. Extrapolating from FELA, Whatley argued that Waterman could be held liable under the Jones Act if the Port was its agent, performing Waterman’s operational activities. Assuming without deciding that this is a correct proposition of law, and assuming further that returning to the vessel from shore leave constitutes an "operational activity," the court noted that Whatley admitted that agency requires a "contractual relationship," and she further admits that she did not know whether the vessel or Waterman had a contract or other relationship with the Port of Saipan. The court also found inadequate Whatley’s argument that the mere fact the Port suffered crew of this vessel and others to traverse its property would allow a properly functioning jury to find the Port to be the vessel's agent. Waterman’s motion for summary judgment was granted. (USDC SDAL, December 23, 2010) 2010 U.S. Dist. LEXIS 135916
NON-PECUNIARY DAMAGES NOT AVAILABLE IN SURVIVOR ACTION
IN RE: OMEGA PROTEIN, INC.
This case involved a claim by the survivor of, Willie Boggs, Jr., as well as the fishing vessel owner's request for exoneration. Boggs drowned after jumping of the fishing boat, on which he served as a crew member, in order to avoid ammonia released from the steamer's ammonia system relief valve. The owner of the fishing vessel, Omega Protein, Inc., requested dismissal of all claimants who were not the personal representative of Willie Boggs, on the grounds that only the personal representative is the proper party to bring an action against Omega. Omega also requested dismissal of all claims for non-pecuniary damages, as they are unavailable under the Jones Act and general maritime law. Boggs' mother, Sandra Walker, brought a wrongful death action under the Jones Act and the general maritime law. Omega argued that there was no evidence that Sandra Walker is the decedent's personal representative. The court found that, while this may have been true at the time Omega’s motion was filed, Walker had now submitted an Order appointing her Administratrix of Boggs' estate. Thus, it appeared that Walker was now a proper party plaintiff in this suit and Omega was not entitled to summary judgment on the basis of standing. With respect to the categories of damages requested by Walker, the court found that Omega had shown that Walker would not be able to recover loss of society, loss of consortium, and past and future loss of enjoyment of life. To that extent, the court granted Omega's Motion for Partial Summary Judgment. (USDC SDMS, December 13, 2010) 2010 U.S. Dist. LEXIS 132308
ARBITRATION RULE IN INSURANCE CONTRACT MAKES CASE REMOVABLE
ADAMS V. OCEANEERING INTERNATIONAL, INC., ET AL
Michael Cody Adams filed a Seaman's Petition for Damages in state court seeking to recover under the Jones Act and general maritime law for injuries he allegedly sustained while working for Oceaneering International, Inc. aboard its vessel. Adams later amended his petition to bring a claim against Oceaneering's insurer. The insurer removed the action to federal court under the Federal Arbitration Act and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, because the insurer’s rules provided for mandatory arbitration in London pursuant to the English Arbitration Act of 1996. Adams moved to remand the matter to state court, pursuant to 28 U.S.C. §1447(c), on grounds that the insurer’s Notice of Removal was insufficient to establish the existence of removal jurisdiction, as it fails to set out sufficient facts to establish the existence of a valid arbitration agreement in the case. Adams also sought attorney's fees on grounds that the insurer did not have an objectively reasonable basis for removal. Adams further contended that his Jones Act claim is nonremovable because arbitration would impair his substantial rights as a Jones Act seaman and that the arbitration agreement between the insurer and Oceaneering is void under Louisiana law for lack of consent because Adams was not a signatory to the agreement. Applying Section 205 as well as the jurisprudence setting out the Fifth Circuit's liberal standard for removal under the Convention, the court found that the litigation is related to the arbitration clause in the insurer’s and Oceaneering's insurance contract. Because the arbitration agreement fell under the Convention pursuant to Section 202, and the litigation related to the agreement, pursuant to Section 205, the court concluded the insurer had established that the court had removal jurisdiction and may enforce the arbitration clause at issue. As to Adam’s contention that his Jones Act action is nonremovable under the Convention, the court found Adams had not supported his position with any jurisprudence contrary to Freudensprung. Adams’ Motion To Remand was denied. (USDC WDLA, December 21, 2010) 2010 U.S. Dist. LEXIS 135581
MOTION TO DISMISS VESSEL OWNER’S LIMITATION ACTION HELD PREMATURE
IN RE: ISLAND MARITIME SERVICES, INC.
A tug belonging to Island Maritime Services, Inc. sank in international waters and Island Maritime filed this action for exoneration from or limitation of liability after being sued in state court by various claimants, each alleging injury stemming from the sinking of the tug. Total Ventures filed suit to recover damages for cargo lost when the tug sank. Total Ventures claims that the tug was carrying 12,964 gallons of fuel oil, valued at $33,965.68, on behalf of Total Ventures when it sank. Total Ventures moved to dismiss Island Maritime ‘s limitation complaint, contending that its claims against Island Maritime did not arise from the voyage described in the limitation complaint, but instead arose three months earlier, when Island Maritime accepted Total Ventures' fuel oil for safe keeping. Total Ventures also argued that dismissal of the limitation proceedings was appropriate on the basis of the personal contract doctrine. Island Maritime responded that the arguments in Total Ventures’ motion to dismiss were prematurely asserted. The court agreed with Island Maritime’s position, finding that the issue of when Total Ventures’ claims arose was not subject to final adjudication on the present, limited record. The complaint asserted that Total Ventures’ claims arose from the sinking of the tug, and at this point in the proceedings, the court concluded it must accept Island Maritime’s allegation as it was maintained in the complaint. Furthermore, the court noted that Island Maritime persuasively argued that there is a logical relationship between the sinking of its tug and Total Ventures’ claimed loss. The court also held Total Ventures’ second contention, that the personal contract doctrine will prevent Island Maritime from limiting their liability, was also prematurely asserted. At this stage of the proceedings, the court found it could not make a determination as to whether Island Maritime’s purported contract with Total Ventures was personal in nature. Total Ventures’ motion to dismiss Island Maritime ‘s Complaint for Exoneration from or Limitation of Liability was denied. (USDC MDFL, December 21, 2010) 2010 U.S. Dist. LEXIS 135103
Quotes of the Month . . . "He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has." -- Epictetus
“A life spent making mistakes is not only more honorable but more useful than a life spent in doing nothing.” --George Bernard Shaw
"The struggle is always between the individual and his sacred right to express himself and... the power structure that seeks conformity, suppression and obedience."--Justice William O. Douglas
Tom Langan
Corporate Risk Manager
Weeks Marine, Inc.
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