August 2012
Notes From Your Updater - Longshore Industry Notice No-139 announced the transfer of cases from Baltimore to Norfolk Longshore District Office. Effective July 1st 2012, all open cases (with noted exceptions) for claimants living in Pennsylvania, Delaware, and West Virginia, will be transferred from the Baltimore MD Longshore District Office to the Norfolk VA Longshore District Office. The complete industry notice can be viewed using this link. Thanks to John Kawczynski of Field, Womack & Kawczynski, South Amboy, NJ for bringing this industry notice to my attention.
A petition for certiorari has been filed with the U.S. Supreme Court in the case of Icicle Seafoods, Inc. v. Clausen [see April 2012 Longshore Update], Docket No. 11-1475. The issues present to the court are: (1) Whether, in determining the ratio between compensatory and punitive damages for purposes of applying federal limits on punitive damages, court-awarded attorney’s fees are properly included as compensatory damages; and (2) whether, and to what extent, punitive damages in maritime cases may exceed the 1:1 ratio between compensatory and punitive damages applied by the Court’s Exxon Shipping Co. v. Baker decision. Interestingly, Justice Kennedy granted a stay on the award of punitive damage affirmed by the Washington Supreme Court. The case is set for conference on September 24, 2012.
On July 23, 2012, the U.S. Supreme Court released the calendars of oral argument for its first two sittings in the new Term. The Court will hear oral argument in the case Lozman v. City of Riviera Beach Docket No. 11-626, on Mon., October 1, 2012, the first day of the new Term. The case involves the question of whether a floating structure that is indefinitely moored, receives power and other utilities from shore, and is not intended to be used in maritime transportation or commerce constitutes a “vessel” under 1 U.S.C. § 3, thus triggering federal maritime jurisdiction.
On May 25, 2012, the Louisiana Supreme Court denied the Petition for Writ filed in the case of Holmes v. Pacarini USA, Inc. et al. [see April 2012 Longshore Update].
The Northwest Longshore Administrators Association (NWLAA) will be hosting a golf tournament at Heron Lakes Golf Course in Portland, OR, on September 12, 2012, followed by a two-day longshore seminar on “The Latest in Effective Management of Longshore Claims,” from September 13th to the 14th at The Governor Hotel, 614 SW 11th Ave., (SW 11th & Alder), Portland, Oregon 97205. Check out the agenda and make your reservations on line. You don’t need to do golf to get the latest on effective management of longshore claims.
“THIS CONCLUSION IS CONTRARY TO LAW AND COMMON SENSE”
NEW ORLEANS DEPOT SVCS, INC. V. DIRECTOR, OWCP [N.O. MARINE CONTRS]
Juan Zepeda was employed by New Orleans Depot Services, Incorporated (NODSI) as a container repair mechanic, until he quit because of a bone spur injury. Prior to his employment with NODSI, Zepeda performed container and chassis maintenance for New Orleans Marine Contractors (NOMC). During his employment with both NODSI and NOMC. Zepeda was exposed to loud noises on a continuous basis and did not use hearing protection. Zepeda now suffers from an 11.3 percent binaural hearing impairment, for which he sought permanent partial disability benefits under the LHWCA. At his formal hearing before the ALJ, Zepeda testified that he performed work for NODSI at two separate yards, one which was approximately 300 yards from the Industrial Canal, and the other which was approximately 100 yards from the waterfront. Neither yard had any docks, piers, or wharfs. It was undisputed that Zepeda was an employee covered under the Act while working for NOMC. The ALJ determined that NODSI was liable for Zepeda’s benefits as his last maritime employer, concluding that Zepeda repaired marine containers at least some of the time during his employment with NODSI, thus satisfying the maritime status requirement. Additionally, the ALJ determined that both yards satisfied the geographical nexus of the situs requirement and one of the yards satisfied the functional nexus component of the maritime situs requirement. Therefore, the ALJ determined that Zepeda’s injury occasioned during his employment with NODSI was covered by the LHWCA. On appeal, the BRB affirmed the ALJ’s decision. NODSI appealed, contending the ALJ erred in factually finding that its yard is a maritime situs and that Zepeda is a maritime employee for purposes of the LHWCA. While NODSI conceded that its one yard satisfies the geographic proximity requirement of the situs inquiry, it challenged the ALJ’s finding that the yard is a covered situs, in that the location lacks the functional relationship to maritime activity required by the LHWCA. Notwithstanding a vigorous dissent by Judge Edith Brown Clement, asserting that the functional nexus test could not be satisfied because marine shipping containers, which were stored and repaired at the yard, are loaded and, therefore, categorically are not items used as part of the loading process, the majority affirmed the BRB’s decision. The majority held that such a narrow distinction found no support in the language of the LHWCA, was contrary to the broad construction of the statute required by applicable precedents, and ignored the required deferential review of the ALJ’s factual determinations. The majority concluded that there was sufficient evidence establishing that the yard in question was “associated with items used as part of the loading process. Additionally, the majority found that the repair of marine shipping containers constitutes the “repair of tools, equipment, and facilities used in indisputably maritime activities. The ALJ considered marine container repair an essential function of the loading and unloading process. The majority held that the ALJ’s reasoning was consistent 5th Circuit precedent and the ALJ’s factual determination with respect to maritime status was entitled to deferential review for substantial evidence in the record. Holding that there was substantial evidence in the record to support the ALJ’s factual determinations and the BRB’s decision, NODSI’s petition for review was denied. (5th Cir, July 25, 2012) 2012 U.S. App. LEXIS 15336
Updater Note: I have to concur wholeheartedly with Judge Brown Clement’s dissent, that the majority’s analysis in this case expansively applies precedent that had already expanded the controlling statute to its limits, resulting in an outcome that is not only entirely divorced from the plain language of the statute, but that also lacks any connection to the realities of maritime industry and creates needless uncertainty for employers with operations anywhere in the vicinity of a waterway.
THE WORD “PERMANENT” TAKES ON A MEANING IN CONTEXT
PACIFIC SHIP REPAIR & FABRICATION INC., V. DIRECTOR, OWCP [BENGE]
Deborah Benge, a former employee of Pacific Ship Repair & Fabrication Inc., allegedly suffered neck and back injuries while working as a foreman on a ship in June 1999. Four months later, she returned to work for Pacific as a clerk. Benge filed a disability claim under the LHWCA seeking compensation from Pacific for her work-related injury. The ALJ found that Benge’s disability resulted from the overlay of her 1999 injury on her pre-existing back and neck injuries. The parties stipulated that because Benge’s condition had reached “maximum medical improvement,” she was incapable of returning to her previous position as a foreman; however, Benge retained residual wage-earning capacity in her lower-paying clerk position. The parties also stipulated, and the ALJ agreed, that because Benge still could work in some capacity, her disability at the time was partial (and not total), and that because her condition was not expected to improve, her disability at the time was permanent (and not temporary). The ALJ ordered Pacific to pay all disability compensation due for the first two years of Benge’s partial permanent disability; thereafter, the Special Fund was ordered to make the payments under §8(f) of the Act. The Board affirmed the OWCP’s appeal of the ALJ’s decision. The OWCP made partial permanent disability payments to Benge for the next five years. Benge’s condition continued to deteriorate, and in 2007 she underwent a three-level discectomy and fusion of her cervical spine. Benge was unable to return to work following surgery. There is no dispute that, in the end, the surgery left Benge totally disabled. According to the ALJ, the surgery was immediately followed by a nine-month “period of healing.” Benge’s condition then “abated” and reached “stationary status,” at which point it became both total and permanent. Noting that under Board law, “a period of recuperation or healing” is characteristic of a temporary disability, the ALJ determined that the nine-month total disability immediately following the surgery was temporary in nature. This determination absolved the OWCP from making disability payments during this time period; instead, Pacific was found liable for the payments. Pacific appealed to the Board, contending that Benge’s presurgery partial permanent disability remained permanent following her surgery because a disability once deemed permanent cannot transform into a temporary disability. The Board affirmed the ALJ, concluding that even if a disability is declared permanent, it may be later re-characterized as temporary when the underlying condition worsens and re-stabilizes following a surgical procedure. On further appeal, Pacific challenged the concept of a permanent disability transforming into a temporary disability, claiming that the Director's position is unreasonable, because Benge's maximum medical improvement point has always been clear and surgery was not expected to improve Benge's condition. Therefore, Pacific argued, Benge's partial disability remained permanent and should not be re-characterized as temporary. The appellate court considered this an issue of first impression in the circuit: whether a partial "permanent" disability may be re-characterized as "temporary" during a period of recuperation. In the context of maritime employment, the court noted that the label it affixed does not affect whether the disabled employee is entitled to disability benefits; instead, it determines who pays the benefits—either the employer or the special fund. The appellate court pointed out that §8(f) does not exempt employers from liability for paying temporary total disability benefits arising from an injury following the completion of the 104-week period of permanent partial disability liability for the same injury. The appellate court affirmed the decision of the Board, that an employee who has a permanent partial disability may be reclassified as temporarily totally disabled during a recovery period following surgery. (9th Cir, July 24, 2012) 2012 U.S. App. LEXIS 15223
I NEED A LAWYER APPOINTED FOR ME SO I CAN CONTINUE MY APPEAL
MOFFIT V. METRO MACHINE OF PENNSYLVANIA, ET AL.
Alvin Moffit filed a claim under the LHWCA alleging that he sustained work-related injuries to his wrist, and, in a separate incident, to his shoulder, spine, and back, both while employed by Metro Machine of Pennsylvania. He returned to work after each incident and continued his employment until voluntarily leaving the next month. Following a formal hearing, the ALJ denied Moffit's claim for benefits, concluding that both that his wrist and shoulder conditions were not related to his employment with Metro Machine and that his spine and back conditions were work-related but did not prevent him from performing his usual employment duties until he resigned. On appeal, the BRB vacated the ALJ's finding that Moffit had failed to show a causal relationship between his wrist and shoulder conditions and his employment with Metro Machine. On remand, the ALJ stuck to his guns and again determined that those conditions were not work-related but found that Moffit was entitled to medical benefits as a result of his spine and back conditions. Moffit appealed this decision to the BRB, which dismissed the appeal upon learning he had filed a motion for modification alleging new evidence. Moffit’s motion for modification was assigned to a new ALJ, who denied Moffit's claim for modification, finding he had failed to establish either a mistake in determination of fact in the prior ALJ’s decisions or a change in his condition. Moffit appealed that decision to the BRB, which determined that her findings of fact and conclusions of law were rational, supported by substantial evidence, and in accordance with the law, and thus affirmed her decision in full. The BRB subsequently denied Moffit's motion for reconsideration of that decision. Proceeding pro se, Moffit petitioned the circuit court for review of the BRB’s decision, but requested the court to appoint counsel for him. The appellate court found that there was substantial evidence for the denial of modification. Because there was substantial evidence in the record to deny modification, the appellate court concluded that Moffit had failed to meet his burden to show that the BRB erred in affirming the ALJ’s findings that . Moffit had failed to establish a mistake in fact with respect to the original ALJ’s determination that Moffit's wrist condition is not work-related, and Moffit's ability to work and the suitability of the employment Metro Machine offered, were dispositive of his entitlement to disability benefits. The appellate court denied Moffit’s request for appointment of counsel and affirmed the BRB’s decision in all respects. (3rd Cir, July 3, 2012, UNPUBLISHED) 2012 U.S. App. LEXIS 13572
WILLFUL OSHA VIOLATION DOESN'T OVERCOME SOLE REMEDY PREEMPTION
VAN DUNK V. RECKSON ASSOCS. REALTY CORP.
Kenneth Van Dunk was working for James Construction Company, Inc. as a laborer assisting in site-preparation work on a construction project. James was excavating a trench to relocate a dewatering sump in a retention pond. The task had been affected by thunderstorms and heavy rain that required work to be redone without additional compensation to James. Rain was again expected later that day, creating a motivation to complete the sump relocation before the rain arrived. As the crew worked, filter fabric that was being laid in the trench from outside the trench became tangled. Van Dunk volunteered to go into the trench to straighten the filter fabric, but the project superintendent told him not to do so because of risks attributable to the ground conditions. However, as problems persisted with laying the filter fabric, the project manager, in a moment of frustration, told Van Dunk to go into the trench and straighten out the fabric. Van Dunk was in the trench for less than five minutes when a trench wall caved in, burying Van Dunk to his chest. He sustained multiple injuries. An investigation by the OSHA revealed that James had not complied with safety requirements for trenches. The project superintendent acknowledged to OSHA that he knew the requirements and failed to follow them. The OSHA report concluded that James had committed a willful violation and assessed a fine. James did not contest the violation. Van Dunk and his wife filed this lawsuit against James and other defendants for damages arising out of his injuries from the trench collapse. The trial court granted James’s motion for summary judgment after concluding that Van Dunk had failed to show that James’s conduct met the intentional-wrong standard for overcoming the exclusive-remedy provision of the Workers’ Compensation Act. The Appellate Division reversed, holding that Van Dunk had produced sufficient evidence to show that James had committed an intentional wrong, rendering Van Dunk’s lawsuit free of the Act’s exclusivity bar. The New Jersey Supreme Court granted James’ petition for certification. The New Jersey Supreme Court found error in the appellate court’s ruling, concluding that the employer’s conduct fell short of an intentional wrong creating a substantial certainty of bodily injury or death and, therefore, the statutory bar against common-law tort suits precluded Van Dunk’s action. The court noted that not every willful violation of OSHA safety requirements constituted a wrong entitling an employee to recover outside of the Act. The court reversed the judgment of the Appellate Division. (NJ Sup. Ct, July 2, 2012) 2012 N.J. LEXIS 678
Updater Note: While this case is not a Longshore case, I believe it is highly relevant to the Longshore arena, considering the number of Longshore cases that have been allowed to proceed based on the exception to worker’s compensation preemption of civil suits when the employer commits an “intentional wrong.” This was an important holding by a state court of last resort that a willful violation of federal safety standards does not, on its own, overcome the worker’s compensation bar against civil suits. The court was critical of the Appellate Division’s reliance on Van Dunk’s argument that the defendants allegedly disregarded safety to increase profit and productivity, holding that such a standard was too broad and invited the possibility that it would inappropriately chasten an employer that acts with economic business motivation.
COGSA, NOT HARTER ACT, STATUTE OF LIMITATION APPLIES
GREENPACK OF PUERTO RICO, INC. V. AMERICAN PRESIDENT LINES
Greenpack of Puerto Rico, Inc. Hired American President Lines to convey Greenpack's cargo to San Juan from Costa Rica within seven days. The perishable food allegedly sat on the dock in Costa Rica for a number of days before being loaded on board. The last container arrived in San Juan a month later. Perhaps predictably, the items in the crates were no longer fit to sell upon their arrival in San Juan, and the Department of Agriculture duly decommissioned all four cargos. Greenpack filed suit against APL, claiming breach of contract and demanding damages for the lost cargo. The district court dismissed the complaint against APL as time-barred by the statute of limitations in the Carriage of Goods by Sea Act (COGSA). APL appealed the dismissal of its claim for damages due to delayed delivery of perishable goods. The appellate court ruled that a dispute over liability for damage to late-delivered perishable cargo is controlled by the COGSA where the relevant bills of lading included a Paramount Clause incorporating COGSA to cover the period prior to loading and after discharge. The cargo was apparently damaged when left on the pier for an excessive period prior to loading. Greenpack, though, waited for more than a year to bring suit against APL. The Harter Act, with a non-specific statute of limitations, would have applied, but for the Paramount Clause incorporating the COGSA one-year statute of limitations. The district court's decision was affirmed. (1st Cir, July 6, 2012) 2012 U.S. App. LEXIS 13840
LONGSHORE SETTLEMENT DOES NOT SURVIVE CLAIMANT’S DEATH
FERREIRA V. HOMEPORT INSURANCE COMPANY, ET AL.
Lester Ferreira was allegedly injured while working as a longshoreman for Stevedore Services of America (SSA), a subsidiary of SSA Marine. Homeport Insurance Company is SSA Marine's workers' compensation insurer. Ferreira and Homeport reached an agreement in principle to resolve his claim for workers' compensation against SSA, along with all possible claims he may have had for cumulative trauma over his career as a longshoreman, and any claims for reimbursement SSA or Homeport would have against Ferreira's recoveries against third parties for his alleged injury. Once the OWCP approved the settlement, Homeport was to pay Ferreira $370,000 over and above any compensation benefits previously paid for his injury. However, before the settlement was finally approved, Ferreira was diagnosed with pancreatic cancer and died. At the time of his death, Ferreira had not yet signed the application for approval of the settlement and it had not yet been submitted to the Department of Labor. An agreed provision regarding the scope of the release set forth in the application for approval provided that the settlement agreement would be null and void in the event of the claimant’s death. Homeport notified Ferreira’s widow that they would not effectuate the settlement. Ferreira’s widow, Eva Ferreira, who filed this suit as an individual and as executor of her late husband's estate, appealed from a final judgment for Homeport, SSA and SSA Marine (collectively Homeport). Ferreira sought damages on account of an unpaid workers' compensation settlement agreement that was pending but not yet approved at the time of her husband's death. The case was tried to the court, and Ferreira seeks review of two pre-trial orders that limited her causes of action. One order sustained without leave to amend the defendants' demurrer to her causes of action for breach of contract, for breach of the covenant of good faith and fair dealing, and for declaratory relief. The other order granted defendants summary adjudication on Ferreira's causes of action for negligent and intentional infliction of emotional distress. Homeport cross-appealed from a judgment entered in favor of Ferreira following trial on their cross-complaint for promissory estoppel. The cross-complaint sought the satisfaction by the decedent’s estate of a lien in favor of Homeport on any recovery in actions against third parties for his work-related injuries. The appellate court found that the demurrer was correctly sustained on the basis that Ferreira's contractually related claims were barred by the exclusive remedy provision of §905(a) of the LHWCA. The appellate court also agreed that entry of summary judgment on Ferreira's emotional distress claims was proper because Homeport’s conduct surrounding their refusal to pay the workers' compensation settlement fell within the litigation privilege. Finally, the appellate court concluded that Homeport’s cross-complaint was time barred under the one-year limitations period in Code of Civil Procedure, section 366.2. The trial court’s judgment was affirmed in all respects. (Ca. 1st App., July 23, 2012, UNPUBLISHED) 2012 Cal. App. Unpub. LEXIS 5412
THERE IS NO ENTITLEMENT TO HAVE AN ATTORNEY PRESENT AT AN IME
MACKENZIE V. CIVILIAN POLICE INTERNATIONAL, ET AL.
ALJ Decision (DMS file not yet posted)
Frank MacKenzie was scheduled by his employer, Civilian Police International (CPI), for a defense medical examination (DME), in connection with his LHWCA claim, pursuant to the Defense Base Act extension. MacKenzie had previously undergone a DME with the same physician over a year ago. MacKenzie moved to limit the duration of the DME and have a videographer present, alleging the physician involved was biased and dislikes him. CPI objected to any limitation on the duration of the examination or scope of the inquiry its physician may conduct. CPI also opposed the presence of a third-party videographer during the examination. MacKenzie argued that he has a right to counsel at a DME and, therefore, is entitled to demand the "less obstructive" presence of a videographer. The ALJ framed the issue as to whether a claimant has a right to counsel, and by extension, a right to have a third-party videographer at a DME. The ALJ began his analysis by noting that FRCP 35, which governs the conduct of medical examinations in the federal courts, and applied here in accordance with Section 18.1 (a) of Rules of Practice, does not expressly confer or deny a right to counselor other third party at medical examinations. The ALJ’s review of the case law in federal judicial proceedings revealed that, in a majority of the courts, the parties do not have the right to the presence of an attorney or other third party during mental or physical examinations conducted by physicians pursuant Rule 35(a) . Indeed, the ALJ found that no federal court has sanctioned, as a matter of right, either a counsel's presence or the presence of a third party at a medical examination scheduled by a party. Further, the federal courts are equally disinclined to confer a right to counselor other third party at medical examinations in agency proceedings. The ALJ concluded that neither the applicable statutes nor the federal courts, the regulations or the administrative decisions recognize or afford a claimant the right to have a third-party videographer attend a medical examination. The ALJ next addressed MacKenzie’s claim that there was good cause or special circumstances which warranted the presence of a videographer, because the physician’s prior reports demonstrate that he dislikes MacKenzie, does not believe him, and is biased against him. The ALJ rejected this argument, noting that a party alleging bias must show some actual indicia of unreliability or evidence indicating that the examining physician's notes and report will be unreliable. While MacKenzie might believe that the physician dislikes him, the ALJ found that MacKenzie had failed to provide any persuasive evidence that the physician, regardless of his personal feelings, would not conduct a professional examination. Nor does the fact that a doctor may question a claimant's veracity indicate that his notes and report will be unreliable. Accordingly, the ALJ concluded that MacKenzie had failed to demonstrate good cause or special circumstances which warranted the presence of a videographer at his DME. Nor had MacKenzie demonstrated that the examining physician would improperly conduct the examination, attempt to ask MacKenzie questions not pertinent to the examination, or otherwise engage in an unprofessional inquiry. Under such circumstances, the ALJ held that it would not be appropriate to limit the examining physician's inquiries or the duration of the examination. MacKenzie’s Motion to Limit Medical Examination and Have 3rd Party Present was denied.
Updater Note: I want to begin by thanking Ken Engerrand, of Brown Sims in Houston, for sharing this gem with me. As my readers know, I rarely review ALJ decisions; however, every once in awhile I run across a well-reasoned decision like this one that compels me to share it with the readership. We need more great decisions like this one and stop the imposition on an employer’s right to a fair medical examination. Any time you run across a gem like this one, please don’t hesitate to share it with me.
NEW TRIAL DENIED ON JURY’S VERDICT IN FAVOR OF SHIPOWNER
ROSS V. M/V STUTTGART EXPRESS, ET. AL.
Reginald Ross, was fatally injured aboard the M/V Stuttgart Express while employed as a longshoreman, working for Stevedoring Services of America (SSA). Ross was not employed by any of the defendants. At the time of the relevant events, Ross was lashing containers after they had been loaded onto the vessel. Although there were no eyewitnesses as to what precipitated the containers to start swaying, the parties agree that a container broke loose and struck Ross and caused his death. Ross’s estate filed suit under §905(b) of the LHWCA. At trial, Ross’s estate submitted evidence and argued that the accident was caused by the negligence of the ship owners and in particular, a defective part, known as a "twist lock" on the ship caused the death of Ross. Defendants submitted evidence and argued that the ship owners were not negligent, and that the accident was caused by the negligence of Ross and not by any actions of the ship owners. Prior to trial, the court denied summary judgment on the issue of whether defendants breached the "turnover duty" as well as the "duty to intervene" based on defective parts of the ship. However, the court granted partial summary judgment in favor of defendants on the issue of whether they breached any duty of active control. Following a six-day jury trial, the jury entered a verdict in favor of defendants, finding that defendants were not negligent in any manner alleged by the Ross’s estate. Following the jury verdict, Ross’s estate brought a Motion for New Trial, arguing that the court erred in numerous respects, including the exclusion of evidence involving electron microscopic inspection of the twist lock, custom and practice of longshoremen inspecting twist locks, and improper jury instruction related to the turnover duty, among others. The court denied the request for a new trial holding that Ross’s estate had failed to show that the jury's verdict was clearly against the weight of the evidence, as would be required for a jury verdict to be set aside. The court further found that the court’s prior summary judgment holdings were correctly decided for the reasons contained in that order. The court also found that a new trial was not warranted on the basis of the alleged errors in the court's instructions. (USDC NDCA, July 27, 2012) 2012 U.S. Dist. LEXIS 105118
QUESTIONS OF FACT PRECLUDE SUMMARY JUDGMENT ON §905(B) CLAIM
ALCAZAR V. AVONETTE LTD., ET AL.
Gerardo Alcazar claimed to have sustained injuries as the result of a fall aboard a vessel, while employed by Shipper's Stevedoring Company as a longshoreman. Alcazar filed suit, under §905(b) of the LHWCA, against the vessel owner and operator, Avonette Limited and Oceanstar Management, Inc. Avonette and Oceanstar moved for summary judgment, which Alcazar opposed. After reviewing and carefully considering the motion, response, the parties' additional filings, and their oral arguments, the court concluded that the motion must be denied. The court noted that the uncontroverted summary judgment evidence showed that Hold No. 2 on the vessel had four separate ladderways extending from the tween deck down to the tank top. Accessway No. 2, located in Hold No. 2 at the forward starboard bulkhead, had a ladderway from the tween deck leading downward to a platform; and from that platform, except on this occasion, a lower ladderway leading from the platform down to the tank top. Because the lower ladder and its upper handrails had been damaged in a previous port, the vessel had removed the lower ladderway and upper handrails that extended from the platform to the tank top before the vessel docked. Alcazar was allegedly injured when, after descending the upper ladderway from the tween deck to the platform, he allegedly fell from the platform down to the tank top. After applying the summary judgment standard, the court found that there were underlying fact issues, including whether the defendants retained active control over Accessway No. 2, from which they had removed the lower ladder; whether they had turned over to the stevedore the entirety of Hold No. 2, before Alcazar fell; and whether the missing lower ladder from the platform to the tank top, when Hold No. 2 was turned over to the stevedore, was a hidden defect. The motion for summary judgment was denied. (USDC SDTX, July 2, 2012) 2012 U.S. Dist. LEXIS 91377
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #242. Although you get great up-to-date information as a subscriber to the Longshore Update, you can use this excellent resource to keep your Judges’ Benchbook up to date. Just follow the above link to the OALJ web site.
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 . . .
“OCCURRENCE” IS SYNONYMOUS WITH "MANIFEST" FOR M&C PURPOSES
MESSIER V. BOUCHARD TRANSPORTATION
Richard Messier asserted that he was entitled to maintenance and cure pursuant to general maritime law, because he suffered from B-cell lymphoma while serving as a seaman aboard Bouchard’s tug. Messier’s illness was asymptomatic during the entire time he was serving on the vessel, and that was not diagnosed until over a month after his service ended — but which he undoubtedly contracted some months earlier, and suffered from (albeit without exhibiting any symptoms) while he was in the service of the Bouchard’s ship. Both parties moved for summary judgment on the issue of whether Messier was entitled to maintenance and cure. Messier argued that a person "manifests" a disease if he has it, even if the disease is completely asymptomatic and does not interfere with a seaman's work on board the ship, and even if it is not diagnosed (or even suspected) until after the seaman has left the service of the ship. Bouchard urged that "manifesting" a disease requires exhibiting symptoms of the disease during the period while the seaman is in the service of the ship. Following a thorough review of cases in other circuits that had touched on the issue, the trial court held that the dictionary definition of "manifest" is consistent with the numerous cases holding that a seaman is entitled to maintenance and cure, regardless of when the disease was definitively diagnosed, as long as he showed symptoms of the disease during his tour of duty. The court declined the invitation to extend the applicability of maintenance and cure to diseases that were not made evident or certain by showing or displaying symptoms during service to a ship. Bouchard’s cross motion for summary judgment dismissing the complaint was granted, and Messier’s motion for summary judgment was denied [see December 2010 Longshore Update]. Messier appealed the grant of summary judgment in favor of Bouchard, arguing that a seaman may obtain maintenance and cure for an injury that occurs during his service of the ship, even if it does not present symptoms until his service is over. Acknowledging that this question was a matter of first impression among the federal appeals courts, the appellate court began its analysis by noting that the only evidence submitted by either party established that Messier’s illness occurred during Messier’s service aboard Bouchard’s vessel. The well-established rule of maintenance and cure provides that a seaman is entitled to maintenance and cure for any injury or illness that occurs or becomes aggravated while he is serving the ship, and does not permit an exception for asymptomatic diseases—so long as the illness was present during the seaman’s service. The appellate court labeled this its “occurrence rule.” The appellate court found that the district court erred by creating an exception to the occurrence rule, in holding that an injury must not only occur, but also “manifest,” during a seaman’s service. Because Messier’s illness indisputably occurred during his service, the appellate court concluded he was entitled to maintenance and cure regardless of when he began to show symptoms. The appellate court reversed the district court’s grant of summary judgment for Brousard and remanded the case with instructions to enter partial summary judgment for Messier. (2nd Cir, July 20, 2012) 2012 U.S. App. LEXIS 14945
Updater Note: The appellate court should have given the cautions of the district court much more consideration. This is a very dangerous opinion, which opens the door to a whole new line of potential recovery/liability. As the district court pointed out, the practical effect of the occurrence rule, as the appellate court applied it here, will “inevitably lead to exceedingly complicated litigation over when a seaman first contracted a particular slow-growing disease.” As we all know, medical science is not an exact science, but there are so many medical whores out there who have no problem opining that they know it all.
MARITIME OPERATIONS SHOULD BE SUSPENDED IN CHOPPY SEAS (CONT.)
NAYLOR V. ATLANTIC SOUNDING COMPANY, INC. ET AL.
Antonio Naylor, a seaman employed by Atlantic Sounding Co., Inc., allegedly injured his back while working as a deckhand aboard a dredge owned and operated by Weeks Marine, Inc. The operation required a floating discharge line, referred to as the “pontoon line,” to carry the dredged material from the vessel to the banks. The pontoon line consisted of a pipeline that floated on top of evenly spaced pontoon tanks that were approximately ten feet long, four feet wide, and three feet high above the water line. The pontoon line had to be disconnected periodically to allow ship traffic to pass, and then reconnected to continue the dredging. Naylor was allegedly injured when an outside tug, operated by Caillou Island Towing Company, Inc. Rammed the pontoon line, causing Naylor to fall and injure himself. Naylor filed against Atlantic Sounding, Weeks, and Caillou Island, alleging claims under the Jones Act, unseaworthiness, general maritime tort law, and maintenance and cure. Defendants settled with Naylor and a bench trial was held solely on the issue of the apportionment of fault between Atlantic Sounding and Caillou Island. Naylor testified that his accident occurred when the tug rammed the discharge line and then rammed in between the discharge line and the pontoon tank while it was trying to maneuver to the other side of the pontoon tank to get downwind to make the reconnection. Notwithstanding Naylor’s testimony that he did not believe the reconnection process itself was unsafe, the court found that Atlantic Sounding failed to use ordinary prudence under the circumstances when it attempted the reconnection process in adverse weather conditions, noting that all of the witnesses to the accident described the seas as choppy and the reconnection process had taken longer than usual. The court found that Caillou Island breached that duty by ramming into the pontoon line twice, which caused Naylor’s injury. The court held that Caillou Island was 60% at fault in causing Naylor’s injuries, and Atlantic Sounding was 40% at fault in causing Naylor’s injuries [see December 2011 Longshore Update]. Atlantic Sounding appealed the judgment, arguing that the district court failed to identify any act or omission by Atlantic that contributed to Naylor’s injury, and that therefore the district court’s finding on causation was clearly erroneous. The appellate court disagreed with Atlantic Sounding’s argument, referring to evidence that the seas were rough, that the reconnection process was more hazardous and took longer in rough seas, and that the rough seas contributed to the accident. Taking that record evidence into account, the appellate court was not left with a definite and firm conviction that the district court erred in finding that Atlantic Sounding failed to exercise ordinary prudence under the circumstances when it attempted the reconnection process in choppy conditions. The district court’s finding that Atlantic Sounding bore partial liability for Naylor’s injury was affirmed.. (5th Cir, July 13, 2012, UNPUBLISHED) 2012 U.S. App. LEXIS 14429
Updater Note: This opinion really hurts my batting average at the appellate level and, with all due respect to the panel, it is just plain wrong. The decision that was appealed was just begging for reversal, based upon the evidence introduced at trial. When the appellate courts start telling the maritime industry that they are going to be found negligent if they do not shut down operations in choppy seas, only to affirm a poorly reasoned underlying decision, they are simply demonstrating their naiveté about the real world of maritime commerce.
PHYSICIAN GETS ADDICTED TO PAIN PILLS AND SHIPOWNER PAYS
HINES V. TRIAD MARINE CENTER, INCORPORATED, ET AL.
In this maritime personal injury case, Triad Marine Center, Inc. (Triad Marine), and its employee, John Banister Hyde appeal from the district court's judgment awarding more than $10 million in damages to Dr. Benjamin G. Hines, Jr. The district court's judgment was based on injuries Hines suffered during a sea trial of a boat offered for sale by Triad Marine. As a wave passed beneath the boat, the bow lost contact with the water and rose into the air. Immediately thereafter, the bow allegedly slammed back down, causing Hines to strike his head, fall to the deck, and injure both his ankles. Hines sustained a bimalleolar fracture to his left ankle, and a less severe injury to his right ankle. Hines, a urologist, eventually became addicted to pain medication and claimed the opioids effected his cognitive functions to the extent that he had to withdrawn from the practice of medicine. After a four-day bench trial, the district court concluded that Hyde was negligent in his operation of the Triad vessel, and that his negligence was imputed to Triad Marine, as Hyde's employer. The trial court also determined that Hines had a 20 percent permanent partial impairment with respect to his left ankle, which, together with his chronic pain and use of narcotics medication, prevented him from engaging in any gainful employment. Accordingly, the court entered judgment in the amount of $10,397,291.58, jointly and severally, against Hyde and Triad Marine. Included in this award were $900,000 in compensatory damages for future pain and suffering, and $3,320,995.58 in prejudgment interest. On appeal of the trial court’s judgment, the defendants asserted that the court committed clear error in concluding that they breached the standard of care, and in determining damages based in part on the court's finding that Hines no longer can engage in any gainful employment. The defendants also argued that their substantial rights were affected by the exclusion of evidence regarding Hines' disability insurance income, and that the court abused its discretion by applying the North Carolina statutory interest rate in the calculation of prejudgment interest. The appellate court held that the opinion of an expert witness, when considered together with Hines testimony, provided sufficient evidence to support the conclusion that the defendants breached the standard of care applicable to a boat operator. Hines testified regarding the height of the waves, the orientation of the vessel relative to the oncoming waves, and the porpoising that caused the bow of the boat to leave the surface of the water. Additionally, the expert witness testified that, in view of the conditions present during the small craft advisory, the proper operation of a vessel the size of the boat required that the boat be operated at idle speed and approach oncoming waves at an angle. The appellate court also found that the district court did not clearly err in determining that Hines’ injury, pain, and necessary medications prohibited him from pursuing gainful employment. Hines’ injuries eventually resulted in drug addiction. Hines presented evidence sufficient to support the district court's conclusion that he would continue to experience pain and suffering. The court ruled that the district court did not abuse its discretion by employing two different interest rates in making two distinctly different types of calculations. The judgment was affirmed. (4th Cir, July 9, 2012, UNPUBLISHED) 2012 U.S. App. LEXIS 13992
WORK IN AWKWARD OR CONFINED QUARTERS CAN BE HELD NEGLIGENT (CONT.)
MARTINEZ V. OFFSHORE SPECIALTY FABRICATORS, INC.
Ramiro Martinez was allegedly injured while he was employed by Offshore Specialty Fabricators, Inc. as a mechanic aboard an offshore derrick barge owned and operated by Offshore. Martinez claimed that he was sent to repair a winch on board a tug (also owned by Offshore) and used several sledgehammers, including a homemade sledgehammer consisting of a sledgehammer head welded to a metal pipe, to hammer a rusted and frozen pin into the winch. Because of the cramped conditions on the vessel, Martinez alleged injuries to his spine and other portions of his body. Martinez eventually underwent a three-level cervical fusion, which he claimed was necessitated by the injuries he sustained. Offshore admitted that Martinez sustained an injury while in the course of duty and has therefore paid him maintenance and cure. But Offshore denied that the injury was a result of an accident caused by its negligence or any unseaworthy condition on board the vessel. Following a bench trial, the court observed that the problem with the winch was due to heavy rust and corrosion. The accumulation of rust was obviously not a sudden occurrence but one that had been allowed to develop as a result of poor maintenance or oversight by the vessel's crew before the vessel was ever dispatched to the job site. The court also noted that the substantial weight of the testimony established that the winch was located in a position on the stern of the vessel that provided a cramped, limited space for Martinez to swing the sledgehammer. There was also some evidence to suggest that one of the sledgehammers was makeshift, and caused vibrations and increased the stress on Martinez’s body. The court cited case law to support its holding that requiring a Jones Act seaman to work in "awkward and confined quarters without adequate help and without suitable tools and equipment" can constitute negligence under the Jones Act. The court concluded that the weight of the evidence established that Offshore was negligent in requiring the Martinez to swing a sledgehammer in cramped conditions that required him to crouch and bend forward in a manner that increased the risk of injury to his neck and upper torso. The court also found the vessel was unseaworthy because the winch pin was rusted and corroded, and obviously must have been in that condition for some time. Additionally, the court found that the fact that the winch had been allowed to become so rusted and corroded that it required repair in cramped and confined conditions played a substantial part in causing Martinez’s injury. The court did hold Martinez to be 20% contributorily negligent, in light of his extensive experience working aboard boats and as a mechanic, holding Martinez knew or should have known that using a sledgehammer in cramped conditions such as those aboard the vessel could increase the risk of injury [see May 2011 Longshore Update]. On appeal, Offshore argued that the district court clearly erred in finding that Martinez’s workspace was restricted based upon Martinez’s deposition testimony and other evidence. Offshore further argued that Martinez and his co-employee were incredible witnesses at trial, while Martinez argued that Offshore failed to call any witnesses at trial to rebut the testimony they offered at trial, that the work space was insufficient. In light of the record evidence, the appellate court found that the district court did not clearly err in finding that the workspace was cramped. While Offshore challenged the credibility of the testimony offered by Martinez and his co-worker at trial, the appellate court concluded that the district court was in a far better position to assess their credibility. Although there was conflicting evidence about a cramped workspace, the court could reasonably credit the fully developed trial testimony that it was able to witness. Nor did the district court clearly err in finding that Offshore was negligent. The evidence upon which the district court relied to make this factual was sufficient to make the finding plausible in light of the record as a whole. Offshore also argued that the finding of negligence was in error because no evidence was introduced that Offshore knew or should have known of the unsafe working conditions. The appellate court dismissed this argument by noting that the negligence of an employee is imputed to a Jones Act employer, and there was sufficient evidence presented to support a finding that Martinez’s supervisor, knew or should have known that the work Martinez was engaged in was unsafe. Because the finding of negligence was sufficient to support the judgment in favor of Martinez, the appellate court declined to consider the alternative basis of unseaworthiness. Finally, Offshore argued that the district court erred in finding that Martinez was only 20% at fault for his injury. The appellate court found that none of the cases cited by Offshore in support of this argument established that the district court’s finding of fault was clear error. Because Offshore has failed to present authority or argument that shows the district court’s determination of relative fault was clearly erroneous, the appellate court upheld its contributory negligence finding. The judgment of the district court was affirmed in all respects. (5th Cir, July 25, 2012, UNPUBLISHED)
REMAND TO STATE COURT DOESN’T CUT OFF APPELLATE JURISDICTION
WILLIAMS V. NCL (BAHAMAS) LTD.
Hugh Williams filed in a seaman’s complaint in state court that, while working onboard an NCL (Bahamas) Ltd. vessel, he was injured as a result of the negligence and other tortious conduct of the vessel owner. NCL removed the action to federal court on the ground that Williams was contractually bound to arbitrate his complaint under the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards. Williams moved to remand the action to state court. The district court ruled that the arbitration clause was unenforceable and then the district court granted Williams' motion to remand. NCL appealed and the appellate court ruled that the agreement to arbitrate was enforceable. Williams appealed the subsequent order to arbitrate, contending that the appellate court no longer had jurisdiction since the action had been remanded. The Eleventh Circuit ruled that it has authority to review the order of a district court denying a motion to compel arbitration where the district court also remanded the action to a state court. The appellate court held that it has authority to review district court orders that lead to, but are separate from, orders of remand and have a conclusive effect upon the ensuing state court action. The appellate court reversed the order denying the motion to compel of NCL, vacated the order remanding Williams' complaint to state court, and remanded with instructions to compel arbitration. (11th Cir, July 9, 2012) 2012 U.S. App. LEXIS 13979
MAINTENANCE & CURE CLAIM IS ALSO SUBJECT TO ARBITRATION
FERNANDES V. CARNIVAL CORPORATION
Kenneth Fernandes filed a seaman’s suit seeking damages for injuries he allegedly sustained while working as a fitter mechanic for Carnival Cruise Lines. Fernandes claimed that Carnival failed to provide him with adequate medical care when he injured his back working on Carnival’s vessel and that Carnival forced him to continue working in a post of employment that aggravated his injury. Fernandes’s complaint, originally filed in Florida state court, was removed to the federal district court by Carnival, who moved to compel arbitration in accordance with Fernandes’s seaman’s agreement. Following an initial denial of Fernandes’s motion to remand his case, the district court ordered the parties to arbitrate their dispute. Fernandes appealed the court's order to compel arbitration, arguing that public policy prohibits the enforcement of the arbitration agreement and claiming that an arbitrator in the Philippines applying Bahamian law would not recognize his claim under the Jones Act. Citing its opinion in Lindo, the appellate court found that public policy is no defense to enforcement of Fernandes’s arbitration agreement. Fernandes also that his claim for maintenance and cure was not subject to arbitration because it arose from his employment relationship with Carnival, not from his employment contract with Carnival and cannot be contracted away. The appellate court rejected this argument as well, finding that Fernandes had failed to show that he would have no remedy for his maintenance and cure claim under Bahamian law. The appellate court affirmed the ruling that Fernandes’s claim for maintenance and cure was subject to arbitration. (11th Cir, July 12, 2012) 2012 U.S. App. LEXIS 14270
11TH CIRCUIT DECLINES INVITATION TO REVISIT ITS ARBITRATION PRECEDENT
ESCOBAL V. CELEBRATION CRUISE OPERATOR, INC., ET AL.
Milton Escobal, a Peruvian seaman, allegedly injured his back while working for Celebration Cruise Operator, Inc. aboard one of its cruise liners. Escobal’s employment contract with Celebration required that all disputes arising out of the contract be arbitrated in one of three foreign forums (in this case, the Bahamas). The contract also included a litigation choice-of-forum provision designating a Bahamian court. Nevertheless, Escobal sued Celebration in a Florida state court, asserting claims for Jones Act negligence and unseaworthiness. The Defendants removed the case to federal court and agreed to allow the application of U.S. law to Escobal's statutory claims. The defendants then moved to compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The district court granted that motion. Escobal appealed, contending that the arbitration provision was ambiguous. The appellate court disagreed, holding that the litigation choice-of-forum provision cited by Escobal did not render the arbitration provision ambiguous. Escobal also argued that he cannot be compelled to arbitrate his claim against Celebration because it is not a signatory to the arbitration agreement. The appellate court rejected this argument, finding that Escobal's claim against Cruise Line was inextricably intertwined with his claims against the contract signatory Celebration. Escobal argued that if he must arbitrate, he must be allowed to do so in a forum where venue is proper under §6 of the Federal Employer's Liability Act (FELA). This argument was also rejected by the appellate court, noting that under the court’s prior precedent §6 of the FELA does not apply to Jones Act claims. Rejecting the remainder of Escobal’s arguments and invitation to revisit the court’s prior precedent, the appellate court affirmed the district court’s order to compel arbitration of Escobal’s claims. (11th Cir, July 20, 2012, UNPUBLISHED) 2012 U.S. App. LEXIS 14891
BESIDES PLAYING MUSIC, I CAN PLAY WITH MY MMI DATE & DOCTOR SHOP
GABRIEL V. DISNEY CRUISE LINE
Gabor Gabriel, a professional musician, allegedly sustained an injury during the course of his employment aboard a Disney Cruise Line cruise ship. After receiving medical care onboard and from a specialist in the Caribbean, he went on medical disembark and was treated by an orthopedic surgeon, who performed two surgeries to treat the loss of movement in Gabriel's shoulder, a torn rotator cuff, and tennis elbow. Subsequent to the procedures, the surgeon issued two reports. In the first report, the surgeon opined that Gabriel's shoulder and elbow had fully recovered, that Gabriel had achieved maximum medical improvement, and that Gabriel could return to playing music professionally. Less than a month later, however, the same doctor issued a second report clearly advising against Gabriel’s return to work and, while confirming the success of the surgeries, opined that Gabriel, while not fully improved, reached the "possible" level of improvement. It is undisputed that Disney covered Gabriel's medical expenses up to the second report. Several months later, Gabriel began playing music again and the pain allegedly returned. Gabriel sought further treatment and consequently filed this action against Disney. Two of the four counts of the complaint alleged that Disney failed to provide him with maintenance and cure for his injuries, and that Disney was negligent under the Jones Act for failing to provide him with prompt and adequate medical care. In support of his claims, Gabriel alleged he had not reached MMI, based upon an opinion from a new orthopedic surgeon. However, when he was deposed, this new physician was equivocal about his MMI opinion. Disney moved for summary judgment, arguing there was no dispute Disney provided the required maintenance and cure and proper medical care until Gabriel reached MMI. After a hearing, the trial court granted Disney's motion for summary judgment. Gabriel appealed from the trial court's summary judgment of his complaint for unseaworthiness, Jones Act negligence, and maintenance and cure. The appellate court found that the second physician’s affidavit, stating Gabriel had not reached MMI, established a genuine issue as to a material fact precluding summary judgment. The appellate court rejected Disney’s claim that the physician changed his opinion at deposition, holding that a fair reading of the deposition testimony revealed that Disney failed to ask whether the physician expressly changed his medical opinion in the affidavit. Instead, Disney asked ambiguous questions about the physician’s interpretation of the MMI date. Accordingly, the trial court's entry of summary judgment as to the maintenance and cure claim was reversed. Summary judgment as to Disney’s provision of prompt and adequate medical care claim is affirmed. (Fl. 5th App, July 27, 2012) 2012 Fla. App. LEXIS 12212
HOSPITAL KILLS SEAMAN THEN SUES FOR PAYMENT OF ITS BILL (CONT.)
DAY CRUISES MARITIME, L.L.C, ET AL. V. CHRISTUS SPOHN HEALTH SYSTEM, ET AL.
Judy Ann Lanado was employed as a card dealer on a casino vessel owned by Day Cruises Maritime, L.L.C. and jointly managed and operated by Florida Day Cruises, Inc. and Corpus Christi Day Cruise, L.L.C. While working on the vessel, Lanado, who was pregnant at the time, became ill. She was admitted to Christus Spohn Hospital Memorial with a diagnosis of cholelithiasis. Following surgery at Christus to treat her gall bladder condition, Lanado developed complications, the fetus died and Lanado suffered severe brain damage due to lack of oxygen and lapsed into a cerebral coma leaving Lanado in a permanent vegetative state. Lanado remained at Christus until her transfer to a nursing home. Her treatment at Christus lasted over thirteen months and resulted in total medical charges of $1,089,959.82, which an HR assistant from the vessel had allegedly guaranteed payment for upon admission. Christus subsequently filed a counterclaim against the vessel, contending it was solely responsible for paying Lanado's hospital bill. After a hearing, the trial court granted Christus's motion for summary judgment and ordered payment of the entire hospital bill, prejudgment interest and attorney fees. The vessel appealed claiming that there are issues of material fact with respect to: (1) whether Lanado reached "maximum cure" prior to the time she was discharged from Christus; and (2) whether the charges incurred by Lanado at Christus were reasonable and necessary. The appellate court found that affidavit evidence that the vessel owner submitted, taken as true, raised a genuine issue of material fact with regard to the reasonableness and necessity of the medical charges incurred by Lanado at Christus. Because there are issues of material fact in dispute with regard to the extent of the vessel owners’ liability under the maintenance and cure doctrine, the appellate court concluded that the trial court erred in granting Christus's motion for summary judgment on its counterclaim on this ground [see May 2008 Longshore Update]. After remand, Christus amended its counterclaim to include claims that Day Cruises was liable under theories other than maintenance and cure, claiming that Day Cruises breached Lanado's written employment agreement with the Philippines Overseas Employment Administration (POEA) and that Day Cruises breached an oral agreement arising out a telephone call made by its representative to Christus's business office. Christus also added claims of promissory estoppel and fraud. After the trial court denied a motion for directed verdict filed by Day Cruises, the case proceeded to trial. The jury found that Day Cruises breached the POEA agreement and its oral promise, committing fraud against Christus. The jury also found that Christus's negligence, if any, did not proximately cause any of Lanado's injuries. The jury awarded reasonable and necessary hospital expenses of $762,948.63 and trial attorney's fees of $557,384.63 as well as conditional appellate fees. Day Cruises appealed the judgment, contending that Christus could not recover maintenance and cure benefits as the employee's assignee under maritime law, Christus should not have been permitted to amend its pleadings following remand, there was insufficient evidence to support Christus's promissory estoppel, breach of oral contract, and fraud claims, the trial court erred and abused its discretion, and attorney's fees are not recoverable under a promissory estoppel theory. The appellate court declined to address the maintenance and cure issue of contention, because the theories of recovery submitted to the jury were not based in any way on Day Cruises’ duty to pay maintenance and cure benefits, or on the assignment of Lanado's rights corresponding to that duty. The appellate court also rejected Day Cruises contention that the court’s remand opinion limited the scope of remand, thereby prohibiting Christus from amending its pleadings to add claims other than recovery of maintenance and cure. Viewing the evidence in the light most favorable to the verdict, the appellate court concluded that the jury's findings as to the remaining contentions raised by Day Cruises was supported by legally sufficient evidence. Finally, the appellate court agreed with the majority of courts and concluded that attorney's fees are available for a plaintiff prevailing on a promissory estoppel theory. The judgment of the trial court was affirmed. (13th Tex. App., July 5, 2012) 2012 Tex. App. LEXIS 5343
COURT ALLOWS PUNITIVE DAMAGES CAUSE OF ACTION TO GO TO THE JURY
GONZALEZ V. MAERSK LINE, LIMITED, ET. AL.
Ruben R. Gonzalez alleged that he suffered an injury to his right knee aboard a Maersk Line Limited vessel, while working as a member of the crew of said vessel, and claims he is now disabled as a result of said accident. Gonzalez filed a seaman’s suit against Maersk and its insurer, claiming Jones Act negligence, unseaworthiness, and that Maersk had willfully and arbitrarily failed to pay his maintenance and cure, entitling him to an award of punitive damages. Maersk moved for partial summary judgment on Gonzalez’s punitive damages cause of action, arguing that the Gonzalez’s delay in receiving medical treatment were the fault of the treating physician in refusing to accept the Union plan and insistence on a letter providing guarantees from both the Union and the employer. Maersk also argued that its temporary interruption of maintenance and cure benefits was a reasonable response to another physician’s fit for duty and maximum medical cure declaration, especially considering that the physician was a treating physician. Finally, Maersk asserted that there is no evidence that it acted wantonly, willfully, capriciously or in bad faith, as required by law for the imposition of punitive damages. The court began its analysis by initially rejecting some of the materials by both parties, finding that some were not properly authenticated or prepared simply to create an issue of fact. Gonzalez opposed Maersk’s motion and cross-moved for summary judgment, contending that Maersk delayed its authorization of payment for treatments for months, resulting in the postponement of scheduled surgeries; Maersk required Gonzalez to pay for his medical treatments in advance and unlawfully relied on one physician's report to terminate maintenance benefits and refused to investigate the matter, interrupting Gonzalez’s maintenance for 547 days, all resulting in grave physical harm and mental damages. Gonzalez argued that genuine issues of material fact exist as to whether Maersk’s conduct was arbitrary, capricious, willful and callous and that a jury, as the triers of fact, should resolve whether or not Maersk's acted in accordance with its obligation to provide maintenance and cure under the law, and if not, what amount of punitive damages should be imposed. Following a review of the admitted evidence, the court found that, while Maersk was not exactly hasty in responding to Gonzalez and his physician, the court expressed its belief that the delay in Gonzalez’s treatment was not entirely the fault of Maersk. Although a shipowner's duty to pay maintenance and cure encompasses a duty to guarantee payment prior to treatment for all reasonable medical expenses, the court found that Maersk duly complied with this duty, and was not obligated to pay for medical services in advance. The court observed that four months after his injury, Gonzalez sought the medical attention of a different doctor, who requested authorization for surgery. After the insurer authorized the surgery, Maersk complied with the Gonzalez’s request to send its written guarantee of payment. All further delays after said date were admittedly due to internal problems at the hospital where the surgery was due to take place. Therefore, the court found that Maersk complied with its cure obligation with respect to the surgical request and subsequent treatment. After Gonzalez’s treating physician concluded that Gonzalez had reached maximum medical improvement and could not find a reason why Gonzalez could not return to work, Maersk terminated maintenance and cure. Rather than returning to work, Gonzalez contested his ability to return to work and went to his primary care physician to obtain a finding that he could not return to work. The court agreed with Maersk that, at first, it had a reasonable defense in refusing to pay maintenance and cure when Gonzalez’s treating physician, declared that Gonzalez had reached maximum medical improvement. Nevertheless, the court found that subsequent treatment records from other physicians established doubts as to Gonzalez’s medical condition. The court found that Maersk never conducted an independent medical examination or otherwise properly investigate the conflicting medical evidence or Gonzalez’s claim for restoration of his maintenance and cure until after he was forced to file suit. The court found that genuine issues of material fact, that precluded summary judgment on the issue of punitive damages, existed. After careful review of the record and the applicable case law, the court concluded that Gonzalez has presented sufficient evidence entitling him to have the jury resolve whether Maersk's actions in the case and its failure to further investigate Gonzalez’s claim in view of conflicting medical diagnoses and prognoses were in fact arbitrary, capricious, wanton, willful and in bad faith. Maersk’s motion for partial summary judgment was denied. (USDC DPR, July 5, 2012) 2012 U.S. Dist. LEXIS 93017
Updater Note: Shame on this court, and any others, that promote “doctor shopping” like we see here. This claimant was found to be at maximum medical improvement by his self-chosen orthopedic surgeon, who also found that he could return to full duty. Rather, than returning to work the claimant “doctor shopped,” first with his primary care physician and later with a physician his attorney sent him to, in order to get another out of work slip. Requiring the employer to rebut every out of work slip a claimant obtains from some medical lackey, who was never involved in the overall treatment of the work-related injury, is unreasonable and a blatant abuse of discretion.
THIS IS A TOUGH ONE. LET’S SEND IT BACK FOR MORE DISCOVERY (CONT.)
MCLAUGHLIN, ET AL. V. BOSTON HARBOR CRUISE LINES, INC. ET AL.
Megan McLaughlin, and the other plaintiffs (hereinafter “McLaughlin) in this action, worked on a variety of passenger vessels operated by the defendants and were classified as either "deckhands" or "galley attendants" and were treated as exempt from the FLSA's overtime requirement under the "seaman" exemption. McLaughlin sought to recover overtime wages allegedly wrongfully withheld, contending that the "seaman" exemption was inapplicable. McLaughlin worked as a deckhand on a Boston-based commuter ferry owned and operated by Boston Harbor Cruise Lines, Inc. McLaughlin alleged she was employed as a “deckhand” on Boston Harbor’s commuter ferry boats, working approximately 80 per week in the summer and 60 hours per week in the winter, but that most of her duties as a “deckhand” involved taking passenger’s tickets, loading and unloading passengers, collecting fares, and cleaning the boat and dock areas. She contended that she devoted little or no time to operating the vessels or to duties directed related to the navigation of the vessels. She sued, alleging that Boston Harbor was not paying her overtime pay that was due to her under the FLSA. In response, Boston Harbor filed a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), noting that any employee employed as a "seaman" was exempt from the overtime requirements under the FLSA, and alleging that, based on McLaughlin's complaint, she could prove no set of facts that would take her outside of this exemption. The district court agreed with Boston Harbor and dismissed the case on the papers with no written opinion. On appeal, McLaughlin relied heavily on interpretative regulations issued by the Department of Labor, contending that it is the "character of the work" performed, and not "what it is called or the place where it is performed" is determinative, and emphasizing that an employee will be regarded as a "seaman" for purposes of the exemption only if she performs "service which is rendered primarily as an aid in the operation of such vessel as a means of transportation, provided she performs no substantial work of a different character." McLaughlin argued that because most of her work involved taking tickets, loading and unloading passengers, and cleaning the boat, she did not meet this test. Finally, McLaughlin argued that the legislative history of the FLSA makes it clear that the exemption should be interpreted narrowly and differently from other acts like the Jones Act. Boston Harbor, on the other hand, argued that the definition of the term "seaman" within the FLSA should not be overly narrow, and should generally match the definition given in other statutes, so that "seamen" receive both the special employment benefits and special burdens associated with their profession. Boston Harbor also argued that the Secretary's contrary interpretation, articulated in her amicus brief, was not entitled to deference because it is inconsistent with the Secretary's past interpretations and was asserted for the first time in this litigation context. The First Circuit Court of Appeals whimped out of addressing the question, concluding instead that, because the applicability of the "seaman" exemption to an individual like McLaughlin was a fact-dependent issue best decided after a full factual record had been compiled, it was error to dismiss this case at the 12(b)(6) stage [see September 2005 Longshore Update]. On remand, the district court entered summary judgment for Boston Harbor, holding that McLaughlin and similarly situated crew members assigned to be “deckhands” and “galley attendants” on harbor cruise boats were “seamen,” irrespective that their duties included preparing and serving food and drinks to passengers and cleaning and maintaining the galley areas, where at all times they served under the authority of the vessels’ masters and their duties included handling mooring lines, manning the gangway, performing vessel housekeeping, observing the passengers in the interests of safety, helping in emergencies, and were counted as part of the essential sailing complement for purposes of Coast Guard regulations (they were crew members required by the vessels’ Certificates of Inspection while passengers were aboard). The District court held that the work done by general deckhands, that is, those not assigned primarily to the galley of the vessel, was clearly "service . . . rendered primarily in aid of the operation of the vessel as a means of transportation." The district court held that duties such as galley attendant, housekeeping duties, routine maintenance, and cleaning are also traditional duties of seamen. The district court also held that periods of “inactive duty” must be considered seamen’s time in calculation of the 80% of time considered seamen’s duties. Accordingly, the court held that the "seaman" exemption set forth in 29 U.S.C. § 213(b)(6) applies to McLaughlin and the other plaintiffs and defeated their claims to overtime pay. (USDC DMA, July 20, 2012) 2012 U.S. Dist. LEXIS 100922
NO WRITTEN NOTICE = NO TIME BAR TO LIMITATION ACTION (CONT.)
IN RE: DOWN SOUTH MARINE, LLC.
David Williams and Terrence Hankton allegedly sustained injuries, while riding aboard a vessel owned by Down South Marine (DSM), as a result of rough weather and/or sea conditions. Williams and Hankton filed a Jones Act personal injury action in state court. DSM was not a party to the state suit; however, in connection with the alleged incident forming the basis for the state claim, DSM filed two limitation of liability actions in federal court. The first limitation action was dismissed, based on a lack of case or controversy. Williams and Hankton sought to dismiss DSM’s second limitation of liability action based on the argument that it was time barred because it was not filed within six months. In an earlier decision, the court found that Williams and Hankton did not issue written notice of any type to DSM until they filed their formal claims in DSM's original limitation action and DSM's filing was timely under the relevant statute (see April 2012 Longshore Update). The court subsequently granted Hankton's unopposed motion to dismiss his claim against DSM, without prejudice. Williams, having never filed a claim in the limitation action, was no longer a party to the case. Since the deadline for filing additional claims had passed, the court ordered that DSM’s limitation action would be dismissed without prejudice if said dismissal were not opposed. In response DSM filed a motion in opposition, a motion to stay the limitation action, and motion for entry of a default judgment. While DSM’s motion was pending, the Fifth Circuit issued a ruling affirming the court's decision to dismiss the original limitation of liability action. The court ordered DSM to show cause why the second limitation action should not be dismissed for the reasons stated in the court's order dismissing the original limitation action. DSM argued that the ruling of the Fifth Circuit did not affect the viability of its second limitation action or the sustainability of the relief requested in its pending motion, and argued that dismissal of the limitation action could be prejudicial. While the court recognized DSM's concern that, if the limitation action was dismissed, DSM could be barred from availing itself of its statutory remedies under the limitation of liability statutes if claims are later asserted against it by Williams and Hankton. The court granted DSM’s motion in part, holding that putting the limitation action on inactive status was appropriate until such time that all possible time delays for pursuing legal action against DSM had expired. DSM’s motion was denied insofar as the court declined to enter default judgment against all persons who have not yet filed or pursued claims against DSM with respect to the underlying event giving rise to the limitation action, giving potential claimants the benefit of the three-year statute of limitations period.(USDC EDLA, July 2, 2012) 2012 U.S. Dist. LEXIS 91101
COURT ATTEMPTS TO BLUR THE GOTTSHALL NON-PHYSICAL STRESS LINE (CONT)
SKYE V. MAERSK LINE LIMITED CORPORATION
William C. Skye worked as a chief mate onboard a ship, operated and managed by Maersk Line Limited Corp. Skye alleged that he suffered physical injury - physical changes to his heart, including left ventricular hypertrophy and torn mitral valve chordae - as a result of Maersk’s failure to comply, and lack of effort to ensure compliance, with federal law prescribing when, how long, and under what conditions mariners may work. Skye filed this maritime personal injury action against Maersk, asserting claims under the Jones Act and for unseaworthiness. Maersk disputed the nature of Skye’s injury, when that alleged injury occurred, and moved for summary judgment, arguing that Skye’s alleged injury is a manifestation of work-related stress and is not a physical injury precluding relief under the Jones Act or under the doctrine of unseaworthiness. Maersk also argued Skye’s claim is time-barred because he failed to file suit within three years of the date his cause of action accrued and any claims raised by Skye for conduct between 2000–2004 fail because Maersk did not operate the vessel during that time frame. The court found that there was a genuine issue of material fact that rendered summary judgment inappropriate, because the court declined to conclude as a matter of law whether Gottshalllimits Skye’s action. While the Court acknowledged that injuries to the heart, such as heart attacks, may be the result of non-physical stress, subject to Gottshall’s requirements, Skye’s treating physician had opined that Skye’s injury is a physical injury caused by the working conditions onboard the vessel. Therefore, the court concluded that there was sufficient evidence that the nature of Maersk’s conduct constituted a physical stress that was not limited by Gottshall and summary judgment was inappropriate on this issue. The court also found genuine issues of material fact also remained as to Maersk’s other contentions. Maersk’s motion for summary judgment was denied [see May 2012 Longshore Update]. The case was tried to a jury, who rendered a verdict in favor of Skye. The jury unanimously found the Skye sustained a physical injury and that his left ventricular hypertrophy was not related to his complaints in 2000. The jury also found that Maersk’s negligence was a legal cause of Skye’s injury, but that the percentage of negligence attributable to Maersk was only 25%, while 75% of the negligence was attributable to Skye. The jury awarded damages in the amount of $2,362,299. This case is currently being fought in post-trial motions. Regardless of what occurs post trial, it is expected that unless the parties are willing to settle for reasonable amounts, the case will be appealed. (USDC SDFL, May 16, 2012)
IF I TAKE AWAY ALL YOUR DEFENSES, I CAN MAKE YOU LOSE
CAMPBELL V. CHET MORRISON CONTRACTORS, LLC
Shaun Campbell brought suit against his former employer, Chet Morrison Contractors, LLC, for alleged injuries arising out of an accident that occurred on a fixed platform while he was attempting to remove and replace ball valves as a dive tender. Campbell allegedly injured his right index finger by swinging a twelve-pound hammer onto his own finger. Supposedly because he was tasked with swinging the heavy hammer overhead within a tight and awkward working space over an extended period of time. Campbell brought suit under the Jones Act and general maritime law, alleging Morrison's negligence and unseaworthiness. Campbell argued that his injury was caused by no fault of his own, but rather by the negligence of Morrison and the unseaworthiness of the vessel. Campbell's main contentions of negligence and unseaworthiness include the tools used to perform the project and the unsafe working surface. Specifically, Campbell argued that pneumatic tools should have been used to remove and replace the ball valves instead of hammers and hammer wrenches. Campbell also took issue with the lack of a compressor needed to operate the pneumatic tools since both of the vessel's compressors were in use. Morrison argued that Campbell's injury was 100% attributed to his own negligence. With regard to the use of hammers and hammer wrenches, Morrison pointed to the testimony that it is commonplace and standard practice in the industry to utilize a hammer and hammer wrench as tools to break nuts and bolts on the flanges of a riser. With regard to the work area, Morrison vehemently denied the area was unsafe or unstable. Unfortunately, the court conveniently excluded all of Morrison’s photographs of the work area on a technicality. The court also excluded Morrison’s surveillance evidence and the testimony of its medical expert. Morrison further argues the work area was well-lit. Morrison contended that, had the work area been unsafe, Campbell should have requested an all-stop. Ultimately, according to Morrison, Campbell hitting his own finger is attributed to his own carelessness or inattentiveness. Following a bench trial the bleeding heart liberal judge that heard the case decided that this terrible injury was worth $1,538,484.00 in damages and found Morrison 100% negligent for Campbell's injury due to Morrison's failure to supervise, failure to provide a compressor and pneumatic tools, and failure to provide a safe working space. The court also found the vessel to be unseaworthy for failure of providing a compressor on board the vessel. (USDC WDLA, July 24, 2012) 2012 U.S. Dist. LEXIS 103324
Update Note: This is the type of opinion and use of judicial discretion that tends to make me sick. I can only hope a appeal is taken.
COURT APPLIES “BARE METAL DEFENSE” TO MARITIME ASBESTOS CASE
MCINTYRE V. NORTHROP GRUMMAN SHIP, SYSTEMS, INC.
Edward McIntyre worked as a painter aboard submarines manufactured by Northrop Grumman Ship Systems, Inc., where he was allegedly exposed to asbestos. McIntyre’s legal heirs filed suit claiming McIntyre’s death resulted from asbestos exposure when workers of other trades removed insulation and gaskets in close proximity to McIntyre, aboard various submarines. While the plaintiffs asserted that McIntyre developed and died from an illness as a result of his asbestos exposure, McIntyre was never deposed prior to his death. Northrop Grumman moved for summary judgment, arguing that (1) plaintiffs could not establish that Northrop Grumman (or any of its products) caused McIntyre’s illness, (2) it was immune from liability by way of the government contractor defense, and (3) it is entitled to summary judgment on grounds of the sophisticated user defense. The court initially rejected the parties’ assertion that California law applied, finding instead that where a case sounds in admiralty, application of a state's law (including a choice of law analysis under its choice of law rules) would be inappropriate. The held that maritime law was applicable to the case. The court went on to note that the so-called "bare metal defense" is recognized by maritime law, such that a manufacturer has no liability for harms caused by - and no duty to warn about hazards associated with - a product it did not manufacture or distribute. The court also observed that it would not grant summary judgment on grounds of the sophisticated user defense when maritime law applies, because maritime law has not recognized this defense in situations involving an intermediary, such as the Navy. Northrop Grumman argued that plaintiffs failed to establish their strict products liability claim against it because they could not show that Northrop Grumman manufactured a "product" (i.e., a ship is not a "product" for purposes of strict products liability law), plaintiffs had no evidence that Northrop Grumman caused McIntyre’s illness, and (3) plaintiffs produced no evidence that any asbestos to which McIntyre was allegedly exposed was originally installed by Northrop Grumman. Plaintiffs alleged that McIntyre was exposed to asbestos from ships manufactured by Northrop Grumman, and that Northrop Grumman is liable for his illness because the asbestos was installed by Northrop Grumman. However, the court found there was no evidence in the record that asbestos insulation (or any other asbestos product) was ever installed aboard any of the submarines (as original products or as replacement products). Therefore, even when construing the evidence in the light most favorable to plaintiffs, the court found that no reasonable jury could conclude from the evidence that McIntyre was exposed to asbestos from any product manufactured or supplied (i.e., installed) by Northrop Grumman such that it was a "substantial factor" in the development of his illness. Moreover, with respect to asbestos to which McIntyre may have been exposed aboard the ship, but which was not manufactured or supplied (i.e., installed) by Northrop Grumman, the court concluded that, under maritime law, Northrop Grumman could not be liable, based on the "bare metal defense." The court granted summary judgment in favor of Northrop Grumman. (USDC EDPA, June 21, 2012) 2012 U.S. Dist. LEXIS 92698
DOES FAILURE TO CONDUCT A JHA BREACH A GENERAL MARITIME STANDARD?
CONWAY V. OMEGA PROTEIN, INC.
In this case, the court considered the issue of whether Omega Protein, Inc., owed Robert E. Conway a legal duty, under general maritime standards applicable to the commercial fishing industry, to perform a job hazard analysis regarding vessel to vessel ingress and egress. Conway had originally sought to base imposition of such a duty upon Omega through OSHA regulatory standards, but abandoned that approach. Conway asked the court to allow its expert to testify at trial that the standard of care in the maritime industry in a situation such as a commercial fishing operation and under general maritime safety industry standards is that a Job Safety or Job Hazard Analysis must be undertaken to recognize potentially harmful and repetitive activity by the seamen and that Omega’s failure to conduct a JHA breached an industry standard. After reviewing and reflecting upon each of the cases presented by counsel, as well as the legal arguments and materials placed into the record, the court now found that Omega owed no such legal duty to Conway. The court noted that the Jones Act cases it reviewed revealed some judicial reluctance to impose a duty upon a maritime employer to perform a job hazard analysis with respect to commonplace or routine tasks that produce injury to a seaman. The court generally agreed with Omega’s position that vessel to vessel ingress and egress represents just such an ordinary task. However, the court's holding was not based on any such factual conclusion. Instead, the court found that the gravamen of Conway’s claim, regarding a duty to perform a job hazard analysis on vessel to vessel ingress and egress, actually relies upon an evaluation of whether the employer properly utilized the safety-related information normally developed from such an analysis. If the duty owed by an employer began and ended with an obligation to undertake a job hazard analysis, then an employer might perform one with respect to a particular seaman's task, fail to thereafter utilize the results to warn or train its employees with respect to the hazards of the task, and yet successfully argue that it discharged its legal duty to its employee. Conversely, an employer that does not perform a job hazard analysis of a task, that results in a seaman injury, might be held liable for that injury based upon the failure to conduct the analysis, even though the employer had fully apprised the seaman of the task's inherent dangers and trained him how to safely accomplish it. The court refused to endorse such an approach, as it separates the performance of the legal duty from the tort element of injury causation. In upholding Omega’s motion in limine, the court ruled that Conway’s expert witness would not be allowed to testify as proffered. (Va. Cir., November 30, 2011) 2011 Va. Cir. LEXIS 247
Updater Note: Great decision. I just don’t know why it took so long to show up in Lexis.
DISPATCHER OR MATE MAY HAVE BEEN NEGLIGENT
DIXON V. KEVIN GROS OFFSHORE, L.L.C.
Charles Dixon alleged that he was injured while working for Kevin Gros Offshore, LLC as a captain and assigned to work aboard an offshore utility boat. On the date of the accident, weather conditions had supposedly deteriorated, ultimately causing the wheelhouse windows to be broken out and causing Dixon to allegedly slip and fall on a wet ladder resulting in his injuries. Dixon filed a seaman’s complaint, pursuant to the Jones Act and general maritime law. Kevin Gros moved for partial summary judgment on the grounds no genuine issue of material fact exists that it was not negligent, as the captain of the vessel had the duty to monitor weather conditions and, further, had the ultimate authority to decide whether to operate the vessel is such weather conditions. Dixon opposed the motion. The court observed that Dixon testified that when he told Kevin Gros’s dispatcher that weather conditions were becoming unsafe and he wanted to come in, the dispatcher "encouraged" him to remain on station. Additionally, he testified that the person he spoke to on the platform told him to stay out there if at all possible. Additionally, when Dixon went to bed, he instructed his mate to get into shallow water. Instead of heading for shallow waters, the mate ran weather patterns until the windows began to break because of the weather. Based on the evidence of record, the court concluded that a genuine issue of material fact existed as to whether it was the dispatcher’s decision or merely a "suggestion" to let the vessel remain at seas despite Dixon's concern about the bad weather. Additionally, an issue of fact existed as to whether the mate was negligent in failing to follow Dixon's order to head for shallow water instead of running weather patterns. Kevin Gros’s Motion for Partial Summary Judgment was denied. (USDC WDLA, July 5, 2012) 2012 U.S. Dist. LEXIS 93833
COURT DECLINES TO ENFORCE PROPOSED QUESTIONABLE CLAIM SETTLEMENT
JOHNSON V. BP EXPLORATION AND PRODUCTION, INC., ET AL.
Elton Johnson claims that he was injured aboard a ship near the Deepwater Horizon, when the explosion at the rig threw him against a bulkhead. Johnson brought a Jones Act claim against BP that was removed and pooled in the multi-district system. Meanwhile, Johnson also sought to settle his claims through the Gulf Coast Claims Facility(GCCF), the administrator of BP’s $20-billion dollar compensation fund. The administrator wrote to Johnson proposing to pay him $2,698,095 if he accepted the offer amount and released his claims from the incident. Should he accept, Johnson was required to sign and return the letter, after which GCCF would send the release. Johnson signed and sent the letter but, after receiving the letter, the administrator began to question the validity of Johnson's claims and, after further investigation, withdrew its offer. Johnson filed suit to enforce the settlement, claiming that his returning the signed settlement letter created a contract, obliging the trustee to deliver the release and Johnson to sign it. BP argued that no contract was formed because the settlement letter clearly indicated that both acceptance of the amount and the release of all legal claims were conditions precedent for payment. Johnson responded by arguing that, because the missing release is the fault of the trustee, its absence is excused, and the payment is due. BP responded that any alleged contract lacks consideration since Johnson did not release his claims and the settlement letter does not oblige him to do it. The court found that no contract was formed. A contract requires an acceptance that objectively demonstrates a commitment to all material terms, including the essential elements to be included in later documents. It must also include adequate consideration from both parties. The court found that Johnson did not agree to all of the material terms of the settlement. The letter specifically required that the recipient must accept the amount and sign the release before payment was due. Johnson's response agreed to the amount only. The court also found that Johnson's acceptance lacked consideration. A promise to release a party is not the same as an actual release. The latter induces the trustee to dispense the settlement amount. The former does not bind Johnson and provides no reason to pay. The court ordered that Johnson take nothing and dismissed his case. (USDC SDTX, July 19, 2012) 2012 U.S. Dist. LEXIS 100731
OOPS! COURT SETS ASIDE EMPLOYER’S DEFAULT
PENTON V. DAIGLE TOWING SERVICE, LLC, ET AL.
Robert Penton, a third captain employed by Daigle Towing Services, allegedly fell while attempting to pull a starboard cable from the winch aboard the a vessel owned by defendants. Penton claimed that the cable jammed, causing his fall and the resulted in alleged injuries to his spine. He sued defendants for negligence and the unseaworthiness of the vessel. Defendants' responsive pleadings were to Penton’s suit were not timely filed and Penton moved for an entry of default, which the clerk of court granted. Defendants moved to set aside the default three days later and subsequently filed a corrected Answer, after the first one they filed was stricken because of a deficiency. In their motion to set aside the default, defendants claimed "human error," and contended that although Penton's counsel was in regular contact with defendants' adjuster, plaintiff's counsel never mentioned that he had filed suit against defendants. Penton opposed defendants' motion, noting that service was proper, and arguing that the court should not set aside the default based merely on the defendants' unsupported claims of "human error." After hearing the parties' arguments, the court granted defendants' motion to set aside the default, noting there was no evidence that the defendants willfully delayed in answering Penton's complaint, and defendants were expeditious in moving to correct the default only three days after its entry. Finally, the court found that Penton had failed to explain how setting aside the default after a modest delay in the early stages of litigation would cause him any prejudice. (USDC EDLA, July 23, 2012) 2012 U.S. Dist. LEXIS 101600
JONES ACT COMPLAINT FAIL TO PASS MUSTER UNDER TWOMBLY AND IQBAL
PETROVIC V. PRINCESS CRUISE LINES, LTD.
Zeljko Petrovic alleged that while working as a seaman a Princess Cruise Lines, Ltd. vessel he was allegedly “injured . . . as a result of delayed, improper, incomplete, and/or inadequate medical care and/or treatment," which supposedly resulted in Petrovic suffering permanent heart damage. Princess moved to dismiss all Counts of Petrovic’s Complaint, due to Petrovic's failure to meet Twombly and Iqbal's "plausibility standard" and the "fair notice" requirement of FRCP 8. Specifically, Princess contended that as the Complaint was drafted, it is impossible to determine which acts or omissions Petrovic contends each party committed, and more specifically, which claims are directed toward Princess individually. Petrovic failed to specify in the Complaint who "Defendants" are. The court noted that the essence of Petrovic's argument was that because he does not explicitly state that Princess was not his employer, Princess may still possibly be his employer. The court found that this hardly equates with an allegation that Princess was a potential employer of Petrovic, nor was it sufficient post-Iqbal and post-Twombly. Petrovic alternatively argued that long-standing maritime jurisprudence allows him to sue multiple Defendants as alleged potential Jones Act employers, asserting that he need not allege who his employer was, as that is for the finder of fact to determine under the "borrowed servant doctrine.
The court granted Princess’s motion to dismiss and Petrovic’s Complaint was dismissed without prejudice. (USDC SDFL, July 20, 2012) 2012 U.S. Dist. LEXIS 100919
DJ ACTION DISMISSED AND LIMITATION ACTION STAYED
BROWN WATER MARINE SERVICE, INC. V. ALVARADO
George Alvarado, a seaman employed by Brown Water Marine Service, Inc., was allegedly injured while attaching barges to Brown Water's towing vessel. After Alvarado was allegedly injured, he filed suit against Brown Water under the Jones Act and the general maritime law in state district court in Aransas County, TX. He voluntarily dismissed that suit without prejudice, but subsequently re-filed against in state district court in Brazoria County, TX. While Alvarado's motion to dismiss his first state court suit was pending, Brown Water filed a declaratory judgment action in federal court, requesting a declaration of its obligations of maintenance and cure to Alvarado. Brown Water subsequently exercised their right to file a petition for Limitation of Liability, thereby enjoining the state court litigation. The federal court consolidated Brown Water's two federal cases—the declaratory judgment action and limitation petition. Alvarado moved to dissolve the limitation petition injunction and dismiss the declaratory judgment action so that his injury suit could proceed in state court. Brown Water argued that the maintenance and cure issues in Alvarado's case were properly before the court, such that Alvarado's motion should be denied. The court found that, since Alvarado is the only claimant, and that the precise extent of Brown Water's liability will be determined by the state court action, Brown Water’s right to limitation would be adequately protected if the court stayed the limitation action so that it may act if the state court proceedings jeopardize Brown Water’s rights under the Limitation Act. The court also held that the balance of factors favored dismissing Brown Water's declaratory judgment action, because adjudicating it would impinge Alvarado's rights under the savings to suitors clause and the Jones Act. Although Alvarado has no standalone right to have his maintenance and cure claim decided by a jury, that claim must nonetheless be tried before a jury if Alvarado presents it alongside his Jones Act claim. The court ordered that the merits of Alvarado's claims, including maintenance and cure issues, would be adjudicated in his pending state court action. Alvarado's Opposed Motion to Dismiss Brown Water’s Complaint for Declaratory Judgment was granted. Brown Water’s limitation action was stayed. (USDC SDTX, July 20, 2012) 2012 U.S. Dist. LEXIS 101106
COURT DISMISS OYSTER HARVESTERS’ CLAIMS ON 11TH AMENDMENT IMMUNITY
IN RE: MANSON CONSTRUCTION CO.
This case involved alleged losses incurred by numerous oyster harvesters as a result of dredging operations performed by vessel owners at the direction of an agency of the State of Louisiana.
Vessel owners Manson Construction Co. and Great Lakes Dredge & Dock Co., LLC, and other dredgers (collectively “dredgers”) asserted that between June of 2010 and April of 2011, their vessels performed certain dredging operations and offloaded materials in designated re-handling sites as a part of the "Barrier Berm Project." According to claimants, who are commercial oyster harvesters with oyster leases located in the coastal waters of Southeast Louisiana, said operations involved dredging and pumping sand near or upon claimants' oyster leases. Claimants subsequently alleged that they sustained damage to their oyster leases as a result of the dredging operations, and filed suit. Claimants sued the State, as well as dredgers, based on participation in the Barrier Berm Project. Dredgers moved to dismiss the complaint on grounds of Eleventh Amendment Immunity, asserting that their work on the Barrier Berm Project was performed under the specific direction and control of the State of Louisiana through the Office of Coastal Protection and Restoration Authority, the United States Army Corps of Engineers and the Commander of the National Incident Command for the Macondo Well casualty, which were acting under authority pursuant to Acts of Congress and the laws of the State of Louisiana. Claimants opposed the State's motion to dismiss on the grounds that the State waived its right to claim sovereign immunity by filing multiple lawsuits seeking to recover its expenses from third parties for the same actions which caused claimants’ damages. The court did not find this argument persuasive, noting that the State filed a completely separate lawsuit in federal court against multiple defendants not involved in the present case seeking to recover costs, damages, and penalties associated with the Oil Spill. The court found no support for the proposition that the state waived its sovereign immunity by invoking federal court jurisdiction in an entirely different case. The court held that the third-party complaint filed by claimants fell within the prohibitions of the Eleventh Amendment; because the Eleventh Amendment deprives federal courts of any jurisdiction to entertain claims entitled to immunity. The court granted the motion to dismiss on grounds of Eleventh Amendment Immunity. (USDC EDLA, July 26, 2012) 2012 U.S. Dist. LEXIS 104093
Vessel owners Manson Construction Co. and Great Lakes Dredge & Dock Co., LLC, and other dredgers (collectively “dredgers”) asserted that between June of 2010 and April of 2011, their vessels performed certain dredging operations and offloaded materials in designated re-handling sites as a part of the "Barrier Berm Project." According to claimants, who are commercial oyster harvesters with oyster leases located in the coastal waters of Southeast Louisiana, said operations involved dredging and pumping sand near or upon claimants' oyster leases. Claimants subsequently alleged that they sustained damage to their oyster leases as a result of the dredging operations, and filed suit. Claimants sued the State, as well as dredgers, based on participation in the Barrier Berm Project. Dredgers moved to dismiss the complaint on grounds of Eleventh Amendment Immunity, asserting that their work on the Barrier Berm Project was performed under the specific direction and control of the State of Louisiana through the Office of Coastal Protection and Restoration Authority, the United States Army Corps of Engineers and the Commander of the National Incident Command for the Macondo Well casualty, which were acting under authority pursuant to Acts of Congress and the laws of the State of Louisiana. Claimants opposed the State's motion to dismiss on the grounds that the State waived its right to claim sovereign immunity by filing multiple lawsuits seeking to recover its expenses from third parties for the same actions which caused claimants’ damages. The court did not find this argument persuasive, noting that the State filed a completely separate lawsuit in federal court against multiple defendants not involved in the present case seeking to recover costs, damages, and penalties associated with the Oil Spill. The court found no support for the proposition that the state waived its sovereign immunity by invoking federal court jurisdiction in an entirely different case. The court held that the third-party complaint filed by claimants fell within the prohibitions of the Eleventh Amendment; because the Eleventh Amendment deprives federal courts of any jurisdiction to entertain claims entitled to immunity. The court granted the motion to dismiss on grounds of Eleventh Amendment Immunity. (USDC EDLA, July 26, 2012) 2012 U.S. Dist. LEXIS 104093
A SUMMARY JUDGMENT MOTION DRESSED IN MOTION TO DISMISS CLOTHING
JOHNSON V. PPI TECHNOLOGY SERVICES, L.P., ET AL.
James Johnson's was employed as a drilling supervisor aboard a drilling rig, operating off the coast of Nigeria, when Nigerian gunmen boarded the rig to rob and/or take hostage its occupants. In the melee, one of the gunmen shot Johnson in the leg with an AK-47 rifle, causing injuries that required multiple surgeries, a muscle transplant, months of hospitalization, and continuing therapy. Johnson subsequently files suit, alleging that the named defendants were negligent, that the vessel was unseaworthy, and that PPI Technology Services, L.P. is responsible for providing him maintenance and cure benefits based upon general maritime law. PPI, Johnson's alleged employer, has filed a counterclaim against him alleging that a consulting agreement between Johnson and PSL, Ltd. obligates Johnson to indemnify, defend, and hold PPI harmless for the injuries Johnson suffered, effectively precluding Johnson's recovery against PPI. Johnson moved the court to dismiss the counterclaim under FRCP 12(b)(6), arguing that the consulting agreement which PPI was relying on in its pleading was amended to remove Johnson as a party to the contract, and that even if Johnson were a party, the document violates public policy, is vague and ambiguous, is ineffective for want of consideration, and would create limitless indemnification unrecognized by law. PPI, in turn, moved the court to convert Johnson’s motion to dismiss into a motion for summary judgment, and to grant additional time to conduct discovery before deciding Johnson’s motion. Johnson opposed both the conversion and PPI’s request for additional discovery. The court initially noted that it could consider the original Johnson-PSL contract without converting Johnson's motion to dismiss into a motion for summary judgment, as the contract attached to the motion was of unquestioned authenticity, referred to in the challenged pleading, and integral to PPI's counterclaim. Nevertheless, the court found that even if it were proper to consider the alleged amendment to the contract, which was neither attached to nor referenced in PPI's pleading, the chain of emails supporting Johnson's contentions about the contract's formation was beyond the scope of the pleadings and could not properly be considered on a motion to dismiss. Therefore, the court converted Johnson’s motion to dismiss into a motion for summary judgment. The court then turned to PPI’s request for additional time to conduct discovery before resolving the converted motion for summary judgment. Finding that PPI had satisfied its burden as to why it needed additional discovery and how the additional discovery would likely create a genuine issue of material fact, the court granted PPI’s motion for additional discovery. The court found there was no evidence of dilatory motive from PPI, and its need for discovery was merely a natural consequence of Johnson’s decision to dress a summary judgment motion in 12(b)(6) clothing. The court granted PPI's motion, and denied Johnson's motion, without prejudice, until the parties have completed the requisite discovery. (USDC EDLA, July 27, 2012) 2012 U.S. Dist. LEXIS 104798
THEY ORDERED ME TO DO IT. NO WE DIDN’T. = QUESTION OF FACT.
INGRAM V. EXPRESS ENERGY SERVICES OPERATING, LP
Arthur Ingram was working as a rigger for Express Energy on an offshore platform located on the Outer Continental Shelf. Pyramid GOM, Inc., contracted Express to perform a "plug and abandon" operation on the platform. (Rec. Doc. No. 34-1 at 2). Deltide Energy Services, L.L.C. was a co-independent contractor hired by ACS to perform mechanical cutting on the same offshore platform. Ingram allegedly sustained a back injury while moving a slip plate with a fellow Express employee and a Deltide employee. Ingram filed suit, naming both Express and Deltide as defendants. Express filed an unopposed motion for summary judgment, which was granted. Deltide subsequently moved for summary judgment, contending it was entitled to summary judgment, because no genuine issues of material fact existed. Specifically, Deltide asserted that it did not owe a duty to Ingram and that it did not breach any duty to Ingram under Louisiana or Texas law. The court relied on Ingram’s contention and proffered record evidence supporting his contention that he was directed to assist in lifting the slip plate at issue, and because Deltide denied having authority or exercise of such authority to do such, the court concluded that summary judgment was not appropriate. Deltide's Motion for Summary Judgment was denied. (USDC EDLA, July 26, 2012) 2012 U.S. Dist. LEXIS 104794
Quotes of the Month . . .“Even if you’re on the right track, you’ll get run over if you just sit there.”-- Will Rogers
“The only thing worse than being talked about is not being talked about.” -- Oscar Wilde
“There are no rules here – we’re trying to accomplish something.” -- Thomas A. Edison
Tom Langan
Corporate Risk Manager
Weeks Marine, Inc.
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