June 2014
Personal Note From Your Updater - As my long-suffering readers know I enjoy preparing this free monthly Update as much as I enjoy my job. There is something that I enjoy even more -- my family. In March of this year my first and only 22-month old granddaughter, Katelyn, was diagnosed with hepatoblastoma - pediatric liver cancer. If you have ever enjoyed reading or gotten any value out of my Update, a donation to a fund that has been set up to help my daughter Laura and her husband Ben, as they fight this battle with their 22-month old Warrior Princess, would be a great way to show your gratitude. Thank you in advance. Tom Langan https://rally.org/KaringforKatelyn
Notes From Your Updater - Effective May 1, 2014, the Office of Workers' Compensation Programs (OWCP) will begin calculating the maximum allowable fee for pharmacy billings of prescription drugs using a formula which differentiates between brand name drugs and generic drugs. The maximum allowable fee for brand name drugs will be 90% of the average wholesale price (AWP) plus a $4.00 dispensing fee, and the maximum allowable fee for generic drugs will be 75% of the AWP plus a $4.00 dispensing fee. This change will affect prescriptions paid under all OWCP Programs. See the OWCP notice here.
On April 18, 2014, a petition for certiorari was filed with the U.S. Supreme Court in the case of Dize v. Association of Maryland Pilots, Docket No. 13-1268. This was the case in which a state court of last resort did an excellent analysis of the historical case law to drill down to the issue of what constitutes exposure to the “perils of the sea,” specifically holding that certain vessel maintenance duties performed dockside or ashore should not to be considered as exposure to the “perils of the sea,” and should not be included in the calculation of the percentage of work time spent in the service of a vessel in navigation [see July 2012 Longshore Update and October 2013 Longshore Update]. The question presented in the petition is, “When applying the Chandris 30-percent rule, may a court consider the time a maritime worker spends in the service of a vessel in navigation that is moored, dockside, or ashore, as the Third, Fifth, Sixth, and Ninth Circuits have held, or must a court categorically exclude such time, as the Eleventh Circuit and the Maryland Court of Appeals have held?
On April 1, 2014, a petition for certiorari was filed in the case of Singh v. Carnival Corporation, Docket No. 13-1203 [see November 2013 Longshore Update]. This is a seaman who was ordered to arbitrate his claim after the district court rejected his unconscionability and public policy defenses. The 11th Circuit affirmed and denied rehearing, holding the district court committed no reversible error in granting the employer's motion to compel arbitration.
On April 9, 2014, a petition for certiorari was filed with the U.S. Supreme Court in the case of American Commercial Lines, LLC v. Laurin Maritime AB, et al., Docket No. 13-1231 [see November 2012 and February 2014 Longshore Updates]. This litigation involved the large oil spill that resulted from a collision between an American Commercial Lines (ACL) owned barge, towed by D.R.D. Towing Company’s M/V MEL OLIVER and the M/V TINTOMARA. The question presented by the petition is: “Does a finding by the District Court which was affirmed by the Court of Appeals that the maneuvers made by the navigators aboard the M/V TINTOMARA before the collision were merely “reasonable” satisfy the exacting requirements of Inland Navigation Rule 17, 33 C.F.R. §83.17?” A response to the petition was filed on May 8, 2014.
On May 28 2014, BP Exploration & Production Inc, et al. submitted an applicationto recall and stay mandate pending the filing and disposition of a petition for a writ of certiorari to the United States Court of Appeals for the Fifth Circuit, Docket No. 13A1177. Just over four years after the massive oil spill in the Gulf of Mexico, the British oil giant BP PLC asked the Supreme Court on Wednesday to put on hold lower court rulings that it contends would mandate hundreds of millions of dollars in unconstitutional payments on damage claims. The application was submitted to Justice Scalia for consideration. Justice Scalia has the option of acting on his own, or sharing the issue with his colleagues. He also has the option of seeking a response from the claimants’ lawyers before he or the Court would act.
Over a vigorous dissenting opinion by Judge Clement, joined by Judges Jolly and Jones, the 5thCircuit denied the petition for rehearing en banc in the appeal by BP of the economic and property damage class action settlement. The dissent noted that the decision permitted payment for economic losses "without regard to whether such losses resulted or may have resulted from a cause other than the Deepwater Horizon oil spill."In re Deepwater Horizon (5th Cir., May 19, 2014) 2014 U.S. App. LEXIS 9314
The employer petitioned the Benefits Review Board to publish its decision in the case of Cline v. Huntington Ingalls, Inc., BRBS 13-0260 [see February 2014 Longshore Update]. The Board granted the petition and published the decision on April 24, 2014. Thanks to Frank Towers, of Blue Williams, LLP, for advising me of the outcome.
LHWCA DOES NOT PROVIDE THE COURT WITH JURISDICTION
GENUSA V. ASBESTOS CORPORATION LIMITED, ET AL.
Louis Genusa, Jr. worked as a longshoreman, truck loader, warehouse worker, and in other positions from 1963 to 1998 for various transportation companies. Genusa allegedly contracted malignant mesothelioma from asbestos exposure while conducting such work. Genusa filed suit against the miners, manufacturers, sellers, suppliers and distributors of asbestos products, as well as his employers, their executive owners, and owners of the premises on which he worked, in state court, alleging claims for negligence, failure to warn, strict liability, breach of express and implied warranty, and negligent infliction of emotional distress based on Louisiana law. One of the defendants, Baton Rouge Marine Contractors (BRMC), filed a third party demand seeking contribution or indemnity from International Longshoreman's Association, AFL-CIO, South Atlantic & Gulf Coast District, ILA, AFL-CIO, and Local 3033, ILA, AFL-CIO (collectively, the "Unions"), on the theory that they breached contractual duties to warn Genusa and BRMC of the dangers of asbestos exposure. The Unions timely removed the suit to federal court under 28 U.S.C. §1441(c), alleging that BRMC's third-party demand required interpretation of both collective bargaining agreements and labor organization constitutions under §301(a) of the Labor Management Relations Act, and that §301(a) completely preempted BRMC's claims under state law, providing the court with federal question jurisdiction under 28 U.S.C. §1331. Genusa filed a motion to sever and remand his state law claims, in accordance with 28 U.S.C. §1441(c)(2), on the ground that his claims were separate and independent from the third-party claims removed by the Unions and they did not raise any questions of federal law. BRMC opposed Genusa's motion to sever and remand on the basis that Genusa's claims were not separate and independent from the third-party claims. Other defendants opposed Genusa's motion to sever and remand on the basis that the court should retain jurisdiction over Genusa's claims under the court's admiralty jurisdiction and were governed by the procedures and remedies of the LHWCA. Genusa argued that LHWCA exclusivity did not apply because the LHWCA did not apply to pre-1972 land-based injuries sustained by longshoremen and Genusa's state law tort claims accrued in the 1960s when he was first exposed. The court agreed that BRMC's third-party claims required an interpretation of the collective bargaining agreement. Therefore, the Unions' removal of the action was proper and the court had subject-matter jurisdiction under the doctrine of complete preemption. The court found that the reasoning in Conner, which refused to find admiralty jurisdiction to asbestos claims raised by a predominately land-based worker, to be persuasive, rejecting the argument that the LHWCA accorded the court original admiralty jurisdiction over Genusa's claims under 28 U.S.C. §1333. As the court did not have jurisdiction over Genusa's claims under the LHWCA, there was no basis preventing the court from remanding Genusa's claims to the state court, which had jurisdiction over Genusa's claims. The court concluded that the Unions properly removed the action pursuant to 28 U.S.C. §1441(c) and that Genusa's claims against the defendants, and BRMC's third-party claims were severable from BRMC's third-party claims against the Unions, and must be remanded pursuant to 28 U.S.C. §1441(c). (USDC MDLA, April 22, 2014) 2014 U.S. Dist. LEXIS 64447
RES JUDICATA BARS JONES ACT CLAIM AFTER STATE WC CLAIM IS SETTLED
POLAK V. RIVERSIDE MARINE CONSTRUCTION, INC.
Michael Polak was employed by Riverside Marine Construction, Inc., when he was allegedly injured on the job, when a piling rolled off the blades of a Bobcat forklift and landed on his foot. After his employment with Riverside ended, Polak filed a claim for workers' compensation benefits. Riverside contested his claim that he was injured. The parties eventually reached an agreement, and the State of Maine Workers' Compensation Board issued a Consent Decree approving the parties' agreement. While Polak's entitlement to workers' compensation benefits was premised on his being a land-based rather than a maritime employee, that issue was never litigated as it was not disputed. Polak subsequently filed a seaman’s complaint, seeking compensation for his injuries under the Jones Act and general maritime law. Alternatively, Polak sought compensation under §905(b) of the LHWCA. Riverside moved for summary judgment, contending that Polak could not recover under the Jones Act or general maritime law because his claim of seaman status was precluded under the doctrine of res judicata and because the undisputed facts establish that Polak was not a seaman as a matter of law. Riverside also contended that it was entitled to summary judgment with respect to Polak's claim under the LHWCA because there is no evidence that Riverside was acting in its capacity as the owner of a vessel at the time of Polak’s alleged injury. Polak contended that the material facts are in dispute, and that each of his claims must be resolved by a jury. Under Maine law, workers' compensation benefits are not available to "[p]ersons engaged in maritime employment or in interstate or foreign commerce who are within the exclusive jurisdiction of admiralty law or the laws of the United States. The Maine Workers' Compensation Board issued a formal award settling Polak’s workers' compensation claim, thereby implicitly finding that Polak was an "employee" and therefore not a seaman. Therefore, the court found that the doctrine of res judicata barred Polak from litigating his status in the district court. The court observed that, in order to prevail on its claim against Riverside under §905(b), Polak had to show that any negligence on Riverside's part was attributable to it as vessel owner rather than as Polak's insured LHWCA employer. Because there was no dispute that Polak was on the pier at the time of Polak's injury, and that none of Riverside's vessels caused or contributed to cause the piling to land on Polak's foot, the court finds that the record did not support a claim under the LHWCA, and that Riverside was entitled to summary judgment with respect the LHWCA count of the complaint. Following a review of all the evidence and testimony, the court held that, while the preclusion issues raised by the case had not yet been decided by the First Circuit, the court nevertheless held that res judicata precluded Polak from claiming "seaman" status, and thus defeated Polak's claims under the Jones Act and general maritime law. The court further found that Polak's claim for negligence under §905(b) of the LHWCA failed as a matter of law. Accordingly, the court granted Riverside’s motion for summary judgment. (USDC DMA, May 28, 2014) 2014 U.S. Dist. LEXIS 72959
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #261. 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 indexthat 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 . . .
NAY TO “A FLOOD OF TRIVIAL SUITS & POSSIBILITY OF FRAUDULENT CLAIMS” SKYE V. MAERSK LINE, LIMITED CORPORATION
William Skye worked for Maersk Line Limited Corporation as chief mate, a job which required him to work overtime, which allegedly adversely affected his health because of fatigue, stress, and lack of sleep. Skye's cardiologist diagnosed him with left ventricular hypertrophy, which his cardiologist attributed to hypertension. Skye's cardiologist concluded that Skye's continued physical stress related to his job, with long hours and lack of sleep caused his labile hypertension-intermittent high blood pressure while on the job-which, in turn, caused his left ventricular hypertrophy. The cardiologist advised Skye to stop working on the vessel. Skye filed a complaint against Maersk for negligence under the Jones Act, alleged that his working conditions caused his left ventricular hypertrophy and that Maersk was negligent when it failed to provide him with reasonable working hours, an adequate crew, and adequate rest hours and instead overworked him to the point of fatigue. The case went to trial and, at the conclusion of trial, Maersk moved for a directed verdict on the grounds that Skye could not recover for money damages for an injury caused by work-related stress and, alternatively, that the statute of limitations barred his claim. Maersk argued that Gottshall, in which the Supreme Court held that plaintiffs could not recover for work-related stress under the FELA, barred Skye's claim as a matter of law. The district court denied the motion. The district court provided the jury with a special verdict form that required it to decide whether Skye's injury was "physical" or "emotional.” The jury returned a verdict finding that Skye sustained a physical injury, but that Skye was 75 percent at fault for his injuries. It found that Skye suffered damages of $2,362,299.00, which the district court reduced to $590,574.75 to account for Skye's comparative negligence. After the verdict, Maersk moved for a judgment as a matter of law, which the district court denied. Maersk appealed, arguing that Skye's injury was not cognizable under the Jones Act. The appellate court agreed, noting that, even drawing all inferences from the evidence presented to the jury in the light most favorable to Skye, and assumed that his work schedule caused him to develop left ventricular hypertrophy, the Jones Act does not allow seaman to recover for injuries caused by work-related stress because work-related stress is not a "physical peril." The appellate court held that the district court erred when it denied the motion of Maersk for a judgment in its favor as a matter of law, finding that Skye's complaint failed for the same reason that the plaintiff ‘s complaint failed in Gottshall. Notwithstanding a dissenting opinion, the majority of the appellate court panel vacated the judgment awarding Skye $590,574.75 and reversed the denial of the motion of Maersk for a judgment as a matter of law and rendered judgment in favor of Maersk. (11th Cir., May 15, 2014) 2014 U.S. App. LEXIS 9017
Updater Note: Thanks to Eddie Godwin, of Lau, Lane, Pieper, Conley & McCreadie, Tampa, Fl, for sending me this opinion. More importantly, congratulations on a great outcome, despite having a couple of obvious bleeding hearts on the panel.
JURY’S SEAMAN HOLDING IS AFFIRMED ON APPEAL
MULHOLLAND V. THE CITY OF NEW YORK
Gregory Mulholland brought under the Jones Act, based on alleged injuries that he suffered in the course of his employment aboard a passenger vessel for the City of New York. Trial of Mulholland’s case resulted in a jury award of $3.2 million. The City appealed from the final judgment and order of the district court, arguing that the jury could not have concluded, as a matter of law, that at the time of his alleged injury Mulholland was a seaman for the purposes of the Jones Act. The appellate court began its review by observing that a district court may set aside a jury's verdict pursuant to FRCP 50 only where there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men could not arrive at a verdict against him. Then the appellate court found that the evidence in the case did not support such a conclusion. The jury heard from Mulholland, for example, that his duties onboard the passenger vessel included hooking the vessel up to the bridges, handling lines, and assisting with navigation by telling the master whether he's coming in too fast or he's going to be higher or lower than the bridge. The appellate court concluded that the jury was entitled to credit this testimony as to Mullholland's responsibilities in assuring the accomplishment of the mission of the passenger vessel. The appellate court affirmed the district court's denial of the City's motion for judgment as a matter of law pursuant to Rule 50. (2ndCir, May 9, 2014) 2014 U.S. App. LEXIS 8721
ADMIRALTY JURISDICTION REJECTED FOR DRUNKEN MARINA BRAWL
TANDON V. CAPTAIN'S COVE MARINA OF BRIDGEPORT, INC., ET AL.
This case involved the appeal from a district court judgment, dismissing the action for lack of subject matter jurisdiction. Sapna Tandon and Robert Doohan, III, were the owners of a thirty-nine-foot recreational vessel. Visitors aboard the vessel were involved in a drunken fistfight on a floating dock operated by Captain's Cove Marina. At least one person was seriously injured in the fight. Tandon and Doohan subsequently filed a petition for limitation of liability, seeking to limit their tort liability for the incident. The district court dismissed their petition for lack of subject matter jurisdiction, holding that this case falls outside the general grant of admiralty jurisdiction in 28 U.S.C. §1333. The issue on appeal was whether a district court properly dismissed a petition for limitation of liability under the Limitation of Liability Act, for lack of admiralty jurisdiction under 28 U.S.C. §1333(1). The appellate court held that federal admiralty jurisdiction did not extend to tort claims arising from a physical altercation (drunken fistfight) among recreational visitors on and around a permanent dock surrounded by navigable water, because such an altercation did not have a potentially disruptive effect on maritime commerce. To invoke federal admiralty jurisdiction over a tort claim, plaintiffs had to satisfy conditions both of location and connection with maritime activity. Even assuming the location test was met, admiralty jurisdiction did not attach because the connection test was not met. The court affirmed the district court’s judgment. (2nd Cir, May 19, 2014) 2014 U.S. App. LEXIS 9265
YOU CAN'T HAVE YOUR CAKE AND EAT IT TOO!
GABARICK, ET AL. V. LAURIN MARITIME (AMERICA) INCORPORATED; ET AL.
American Commercial Lines (ACL) sought a declaratory judgment that certain vessel chartering agreements with DRD Towing Company, LLC were void ab initio. This case involved a bareboat charter of ACL's tug by DRD Towing. The chartered tug was pushing a loaded ACL fuel barge, when it was involved in a collision with the “M/V TINTOMARA. In the limitation action following the collision and oil spill, ACL contended (and the court agreed) that a valid bareboat charter existed. The district court dismissed the action pursuant to the equitable doctrine of judicial estoppel. It found that ACL's position in the declaratory judgment action—that the charters were void ab initio—clearly contradicted its earlier position in a related proceeding that the charters were valid, which had been accepted by the district court [see November 2012 Longshore Update]. ACL appealed the district court's dismissal, asking the appellate court to remand with instructions to declare the charters void ab initio. On appeal, ACL argued that its two positions were not inconsistent, claiming that, in the limitations actions, it only posited the agreements were intended to be valid charters. Simultaneously, ACL asserted that the district court's actual holding in the limitations action was that there was no act or omission of ACL which caused or contributed to the collision—not that the charters were actually valid instruments. The appellate court found ACL's characterizations of its previous argument and the district court's holding to be unavailing. In the limitations actions, ACL did not argue that the charters were merely "intended" to be valid. Rather, it actively opposed the TINTOMARA interests' position that the charters were "crewing agreements," which did not render DRD owner pro hac vice of the tug. ACL asserted that "there is no evidence that [the charters] were anything other than what they purported to be, valid and customary charters." The appellate court’s review of the record showed it was clear that the validity of the charters was central to the district court's judgment. The appellate court also rejected ACL’s alternative position argument, noting that once a court has accepted and relied upon one of a party's several alternative positions, any argument inconsistent with that position may be subject to judicial estoppel in subsequent proceedings. ACL also contended that judicial estoppel was inapplicable because the district court's order staying the declaratory judgment action prevented it from arguing that the charters were void ab initio. In ACL's view, the district court's stay order obliged it to argue that the charters were valid in the limitations action, and, accordingly, applying judicial estoppel would be inequitable. The appellate court rejected this argument, finding that the district court's stay order did not require ACL to adopt the position that the charters were valid, but only delayed resolution of the declaratory judgment action until the limitations actions concluded. The appellate court held that the district court did not abuse its discretion in dismissing the declaratory judgment action on grounds of judicial estoppel and affirmed the district court’s dismissal with prejudice. (5th Cir, May 21, 2014) 2014 U.S. App. LEXIS 9531
BE SURE YOU CAN SUPPORT THE VALUE OF THE VESSEL YOU ARE CHARTERING
CASHMAN EQUIPMENT CORPORATION V. ROZEL OPERATING COMPANY
Cashman filed suit against Rozel, alleging that Rozel breached the charter parties. It sought to recover the $2,000,000 stipulated value included in the charter. Rozel filed a counter-claim against Cashman for fraud and for fraudulently inducing it into chartering the barge that could not be raised. The parties tried the case before a jury, who returned a verdict substantially in Cashman's favor, finding that Cashman did not commit fraud or fraudulently induce Rozel into entering the charter. It further found that Rozel breached the charter party by failing to return the barge to Cashman. Finally, the jury found that Stokes was negligent in its handling of the barge, causing Cashman damages in the amount of $200,000. Of this amount, the jury found Rozel to be responsible for 40%, and Stokes responsible for 60%. It did not award the full $2,000,000 Cashman sought. The jury also did not award Cashman additional charter hire it sought, because the barge became a "constructive total loss" on that date. After the district court entered judgment, Cashman appeals the district court's judgment and denial of its motion for a retrial. On appeal, Cashman argued that the district court failed to enforce the contractual provisions governing the relationship between Cashman and Rozel, and erroneously interpreted the "Total Loss" contract provision so as to deny Cashman charter hire after Rozel "prematurely" abandoned the barge. Cashman also challenged the allocation of liability and challenged the district court's decision as to the reasonableness of the attorney's fees and costs awarded. The appellate court held that the district court did not err by failing to enforce the charter party's plain language because the jury found, and the court agreed, that the agreed value was so unreasonably large as to be a penalty. In its denial of Cashman's motion for a new trial, the district court reviewed the trial evidence that supported its conclusion that a reasonable value of the barge was $200,000, noting that Cashman paid only $50,000 for the wingwall that it converted into the barge. The appellate court also held that sufficient evidence supported the district court's determination that the barge was a constructive total loss and that Cashman had failed to meet its burden of proving that Rozel could have raised and returned the barge for a cost less than $200,000. The appellate court also found that Cashman failed to properly support its assertion that, because Rozel was liable under contract law and Stokes was liable under tort law, the district court's apportionment of damages was error. Finally, the appellate court found that an attorney's affidavit, without more, was insufficient to demonstrate billing judgment, and affirmed the district court’s judgment in all respects. (5th Cir, May 29, 2014, UNPUBLISHED) 2014 U.S. App. LEXIS 10009
BEANS MAY BE GOOD FOR YOUR HEART, BUT NOT MARITIME JURISDICTION
MIDDLETON V. M/V GLORY SKY I, ET AL.
Emile Destin agreed to store 5,500 fifty-pound bags of black beans owned by David Middleton at a warehouse Destin operated through Fo Fo Import-Export Retail, Inc. After a series of authorized distributions from the warehouse, 3,800 bags remained. Middleton later learned that Destin had removed the remaining 3,800 bags and intended to transport them for sale in Haiti. Destin had taken the beans from the warehouse to the M/V GLORY SKY I, a ship Destin operated through Fo Fo Transport, Inc. Middleton demanded Destin return the beans, but Destin refused. Ultimately, the beans were shipped to Haiti and sold to an undisclosed third party without compensation to Middleton. Suit was filed by Middleton against the GLORY SKY in rem and Middleton sought and obtained arrest of the GLORY SKY pursuant to Rule C(3)(a)(i) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture. The GLORY SKY responded with an emergency motion for a hearing requiring Middleton to show cause why the court should not vacate the arrest of the GLORY SKY for lack of subject-matter jurisdiction. The district court, adopting a magistrate judge's report and recommendation, concluded that Middleton's allegations did not establish a tort on navigable water and that the court therefore lacked subject-matter jurisdiction over Middleton's claims. Middleton timely appealed the district court’s ruling, arguing that even though the original conversion might have taken place in the warehouse, the GLORY SKY committed a new, maritime conversion when Destin loaded the converted beans onto it. In an unpublished decision, the US Court of Appeals for the Eleventh Circuit affirmed the district court's dismissal of an action for alleged maritime conversion of 3,800 fifty-pound bags of black beans. The court ruled that the conversion occurred in the shoreside warehouse where the beans had been stored and unlawfully removed, rather than on the vessel in which the beans were ultimately transferred from Miami to Haiti. The appellate court found that the GLORY SKY, though a separate legal entity under maritime law, could only act through Destin. As a consequence, it could not re-appropriate the beans for its own purposes and thereby commit a new conversion separate from Destin's. Instead, by loading the beans onto the GLORY SKY, Destin only furthered his already-completed conversion that had taken place on land. The appellate court concluded that the district court did not err in dismissing Middleton's claims for lack of subject-matter jurisdiction. (11th Cir, May 28, 2014, UNPUBLISHED) 2014 U.S. App. LEXIS 9777
APPELLATE COURT REVERSES TRIAL COURT ON ARBITRATION AGREEMENT
FD FRONTIER DRILLING (CYPRUS), LTD. ET AL V. STEVE DIDMON
Steve Didmon filed suit alleging that he sustained personal injuries while employed as a subsea engineer above a drilling ship, while the vessel was operating offshore Singapore. Frontier Drilling AS is a foreign company based in Norway and was the owner of the drilling ship at the time of the alleged accident. Frontier Drilling USA is a wholly owned subsidiary of Frontier AS and is based in Houston, Texas. Frontier Drilling (Cyprus), Ltd. is a unit of Frontier US, and when a Frontier drilling vessel is in foreign waters, its crew is on Frontier Cyprus's payroll. After the incident made the basis of this suit, Noble Corporation acquired the Frontier entities by way of merger. As a new hire, Didmon signed an employment agreement and a separate ADR agreement with Frontier Cyprus, which contained an arbitration clause. Didmon filed suit against the Frontier entities in state court, asserting claims under the Jones Act and general maritime law for his alleged personal injuries. The served defendants answered the state court suit and asserted a right to arbitration in their answer. The defendants then removed the case to federal court, claiming their right to arbitration pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. In their motion the defendants alleged that arbitration was required under the terms of the ADR agreement and moved to dismiss, or alternatively stay, the proceedings pending resolution by arbitration. After briefing from the parties, the federal district court denied the defendants' motion to dismiss, and remanded the case to state court. Defendants filed this interlocutory appeal, contending the trial court erred by denying their motion to compel arbitration and stay the trial court proceedings. On appeal, Didmon argued that, under ordinary principles of Texas law, the appellate court should consider the EA and the ADR agreements together in determining the meaning of the arbitration agreement in the EA. The appellate court noted that federal law, not state law, applied when determining the scope of an arbitration agreement. Considering the fact that the parties attempted, unsuccessfully, to supercede the EA, the appellate court declined to use the terms of the ADR to vary the terms of the EA, which the parties agreed was effective. The appellate court found that Didmon's employment contract, which described his place of employment at a mobile offshore drilling unit, had some relevance to deciding this element of his case. The EA contemplated the benefits to which Didmon may be entitled due to an accident on duty during his employment. The appellate court concluded that the arbitration provision applied to any dispute arising out of or in connection with the contract. Accordingly, the appellate court held that the trial court erred in refusing to compel arbitration pursuant to the arbitration clause of the EA. The trial court's order was reversed and the cases was remanded for further proceedings. (Tex. 1st App., May 1, 2014) 2014 Tex. App. LEXIS 4727
COURT UPHOLDS ORAL SETTLEMENT OF JONES ACT CLAIM
RABENSTEIN V. SEALIFT, INC., ET AL.
Christian Von Rabenstein fractured bones in both feet while serving as first mate aboard a Sagamore Shipping LLC vessel, when he jumped from a hatch cover to a cargo container. Rabenstein claimed that he stepped or tripped, rather than jumped. Rabenstein subsequently underwent surgery, which included the installation of disposable hardware in his feet. Sealift, Inc., the managing agent for Sagamore, handled the payment of maintenance and cure for Rabenstein’s injury and Rabenstein was paid at a rate of $8 per day, pursuant to a collective bargaining agreement. Defendants were eventually notified that Rabenstein had applied for unemployment benefits and took this to mean that Rabenstein was ready, willing, able and fit to work. Rabenstein alleged that he was not fit for duty when he applied for unemployment compensation. Rabenstein and Sealift eventually entered into settlement discussion and agreed to settle all claims and any outstanding expenses that Rabenstein might have related to his foot injuries for $15,000.00. Sealift sent Rabenstein a"Red Letter Release" form. After receiving the Release, Rabenstein called Sealift and acknowledged receiving the letter and release and told the claims manager that he wanted to settle but did not feel comfortable signing the release. The vice president of Sealift contacted Rabenstein by telephone and later told the claims manager that Rabenstein represented that he was happy with the $15,000.00 settlement and wanted to get back to work. Although Rabenstein did not want to sign the release, he verbally represented that he would be content with the $15,000.00 and would not sue. The Sealift vice president directed the claims manager to send Rabenstein a check in the amount of $15,000.00 based on Rabenstein’s representations that in exchange for that amount, Rabenstein would not sue defendants for anything relating to his injury. A check for $15,000.00 was sent to Rabenstein, along with a letter which stated "Enclosed please find a check for $15,000.00 as full and final settlement for any/all claims during your employment on board the MV Sagamore." Rabenstein cashed the check shortly after receiving it and returned to work for Sagamore. Rabenstein continued to work for another two years, after which he left Sagamore to accept a master’s position with another company. Rabenstein later had the hardware removed from his feet, allegedly costing him $20,000 for the surgery. Rabenstein eventually commenced his seaman’s suit against Sealift and Sagamore, alleging Jones Act negligence, unseaworthiness and unpaid maintenance and cure. Defendants moved for summary judgment on all claims and the parties cross-moved for sanctions due to spoliation of evidence. The defendants argued that the parties reached a binding and enforceable oral agreement to settle all claims arising from Rabenstein’s foot injuries. Rubenstein contended that a contract was never formed as there was no meeting of the minds as to the terms of the alleged settlement. Although the Ciaramellafactors for determining the enforceability of alleged oral contracts have never been applied to maritime law, the court used these factors as guidelines in assessing whether parties intended to be bound by an oral settlement agreement absent a formally executed and signed agreement. In evaluating these factors, the court found that Rabenstein’s refusal to sign the release did not preclude a finding that the parties intended to be bound by an oral agreement. To the contrary, the record showed that Rabenstein was, or should have been, aware that by cashing the settlement check, he accepted that amount as full satisfaction of any and all claims arising from his foot injury or any other claim against the defendants resulting from his employment. The court observed that, while Rabenstein may now regret his decision, the mere fact that he chose to accept the $15,000.00 payment without advice of counsel did not present a material dispute as to Rabenstein’s full understanding of its implications. Although Rabenstein argued that the $15,000.00 tendered to him was grossly inadequate, the court found that he had failed to provide evidence to support his claim, other than his assertion that the sum failed to cover his subsequent hospital charges. Finally, after conducting a close examination of the release letter enclosing the settlement check, and the surrounding circumstances, the court found that defendants had sufficiently shown that Rabenstein released all claims stemming from his foot injury without coercion or deception and with full understanding of his rights. As to the cross-motions for spoliation sanctions, the court held that defendants had no duty to preserve the records after the settlement and did not have the requisite culpable state of mind. Holding that the release was enforceable, the court found that Rabenstein could not maintain his current claim and granted defendants' motion for summary judgment and denied the parties' cross-motions for sanctions based on spoliation of evidence. (USDC EDNY, May 9, 2014) 2014 U.S. Dist. LEXIS 64509
Updater Note: My jaw dropped when I read this decision. What happened to over-protecting the poor, friendless, ward of the court seaman? Great outcome, IMHO, but one that is likely to get reversed on appeal.
COURT RECOGNIZES THAT REMOVAL STATUTE HAS CHANGED (CONT.)
HARROLD V. LIBERTY INSURANCE UNDERWRITERS, INC., ET AL.
Randall Harrold filed suit in state court against multiple defendants and their insurers alleging a claim under the Jones Act, claiming he was hired by Aerotek, Inc., to work on a barge, owned and operated by Weeks Marine, Inc. Harrold alleged that he was injured on the barge, when an assistant welder working for Southern Crane & Hydraulics LLC twisted the rail of a boom stop, causing the rail to fall off the boom and strike Harrold, who then fell to the deck below. The defendants subsequently removed the case to federal court and vessel-owner Weeks Marine, Inc. filed a Verified Complaint for Exoneration From or Limitation of Liability pursuant to the Limitation of Liability Act. In those proceedings, Aerotek, Southern Crane, and Liberty Insurance Underwriters, Inc. asserted claims for contribution, and/or alternatively, indemnity against Weeks, in the event any of them were liable for the damages suffered by Harrold. The court consolidated the exoneration/limitation action with the action filed by Harrold and Harrold filed his claim and answer in the limitation action. The court subsequently severed and remanded Harrold's Jones Act claim against Weeks and Aerotek, while refusing to remand the remaining claims [see February 2014 and March 2014 Longshore Updates]. Harrold then filed him motion seeking to lift the restraining order implemented in the exoneration/limitation action and to administratively stay those proceedings. Both Weeks and Aerotek opposed the motion. The court observed that, while Harrold's amended "Stipulation of Claimants" was purportedly being made on behalf of Aerotek, Southern Crane, and Liberty, those parties had neither signed the document nor provided any other indication of their assent. Moreover, Aerotek had actually taken the affirmative step of filing a sur-reply in which it expressly provides that it is withholding its consent to the stipulations. Accordingly, the court found that the stipulations filed by Harrold were insufficient, and the court denied Harrold’s motion to lift the restraining order and to administratively stay the limitation proceeding. (USDC MDLA, May 27, 2014) 2014 U.S. Dist. LEXIS 71824
SEAMAN’S EX-FATHER-IN-LAW SUPPORTS EMPLOYER’S MCCORPEN DEFENSE
HARE V. GRAHAM GULF, INC.
Jason Hare allegedly suffered injuries while he was working as a deck hand for Gulf Graham, Inc. on its vessel. Hare claimed he sustained injuries to his head, neck, and lower back after slipping and falling on the deck of the vessel. Hare filed suit against Graham Gulf seeking to recover under the Jones Act and general maritime law. Hare moved for partial summary judgment on his maintenance and cure claim, seeking benefits from Graham Gulf until such time he reaches maximum medical cure. Graham Gulf moved for summary judgment seeking dismissal of Hare's claim for maintenance and cure, asserting a McCorpen defense. Graham Gulf asserted Hare intentionally withheld information about an earlier back injury, and that, if Graham Gulf had known of that injury, such injury would have materially affected its decision to hire him. Hare argued the medical records relied upon by Graham Gulf were insufficient to show he had an earlier back injury. The court found the bulk of the facts relevant to Graham Gulf's summary judgment motion were not in dispute. Hare applied for employment with Graham Gulf, specifically denying a prior back injury multiple times on the medical questionnaires. Based on the representations Hare made in these evaluations and a pre-employment physical examination, Graham Gulf hired Hare as a deck hand. It was also undisputed Hare underwent treatment for lower back pain stemming from an injury sustained while doing yard work, where he was diagnosed with a "probable herniated nucleus pulposas." Graham Gulf also submitted an affidavit of Hare's former father-in-law, which stated that Hare always complained about having a bad back and Hare sought medical treatment over many years for his low back condition. The court found that Gulf Graham had clearly established that Hare intentionally misrepresented or concealed his medical history before he was hired and Hare had failed to create a genuine issue of fact with respect to the materiality of Hare's concealment of his medical history. Finally, the back injury Hare suffered prior to his employment, the existence of which was intentionally withheld from Gulf Graham, was clearly related to the back injury Hare was seeking maintenance and cure for. The court held that Graham Gulf had carried its burden of showing it there are no material facts in dispute and was entitled to judgment as a matter of law with respect to its McCorpen defense. Graham Gulf's motion was granted and Hare's claims for maintenance and cure were dismissed. (USDC EDLA, May 27, 2014) 2014 U.S. Dist. LEXIS 71903
SEAMAN WINS THE MAINTENANCE AND CURE BATTLE BUT LOSES WAR (CONT.)
BARNES V. SEA HAWAII RAFTING, LLC, ET AL.
Chad Berry Barnes was employed by Kris Henry and/or Sea Hawaii Rafting, LLC as a crew member on their vessel. Barnes was allegedly injured when a small explosion occurred under the deck of the boat as Barnes was starting its engine and helping to launch it. Barnes filed suit against Sea Hawaii, Kris Henry, and a number of Doe defendants, in personam, and the vessel, in rem, asserting negligence under the Jones Act, unseaworthiness, maintenance, cure, and wages under general maritime law, as well as compensation and recovery for negligence pursuant to the LHWCA under §905(b), individual liability of Kris Henry and the Doe Defendants for the negligence of Sea Hawaii pursuant to a theory of "piercing the veil of limited liability" and intentional and/or negligent infliction of emotional distress as against all defendants, and punitive damages, and recovery of attorney's fees. Barnes subsequently moved for summary judgment as to his claim for recovery of maintenance and cure and punitive damages pursuant to general maritime law. The court issued an order granting in part and denying in part Barnes motion, finding that Barnes was entitled to maintenance and cure the date of his injury until he reaches maximum cure, but denying Barnes motion as to the appropriate amount of maintenance and cure, finding that Barnes failed to proffer sufficient evidence to demonstrate the reasonable amount of maintenance for a seaman [see December 2013 Longshore Update]. Barnes filed a new motion, supported by a concise statement of facts and a number of exhibits. Defendants opposed the motion, but offered to stipulate to $30 per day without prejudice to a future determination as to the fairness of that amount. Barnes declined this offer. Based on the disparities between the evidence provided by the parties on the reasonable cost of living, the court found that there was a genuine dispute of material fact and declined to make a determination as a matter of law as to the reasonable cost of living in Barnes's locale, or as to the proper amount of maintenance. Barnes's motion for summary judgment for payment of maintenance was denied [see May 2014 Longshore Update]. Barnes moved the court to reconsider its prior ruling, arguing that the court should reconsider its prior order and set a maintenance rate of $23.99 per day in order to correct clear error and prevent manifest injustice. Defendants filed a memorandum in opposition. The court observed that Barnes was apparently asserting that, because his proposed maintenance figure was below the defendants' lowest estimate, there is no disagreement that it represented the lowest reasonable cost of living for Barnes. The court noted that it would be inappropriate to disregard Barnes’ prior entire range of estimated cost of living and consider a new one on reconsideration. The court noted that Barnes could reasonably have argued that $23.99 was the reasonable cost of living prior to the court's prior order, but did not. Accordingly, the court found there was simply no legal basis upon which to grant Barnes’ motion. The court denied Barnes motion for reconsideration. (USDC DHI, May 14, 2014) 2014 U.S. Dist. LEXIS 66123
YOU SAID YOURSELF IT WAS YOUR OWN “DUMB, STUPID MISTAKE.” (CONT.)
MOORE V. OMEGA PROTEIN CORPORATION, ET AL
This case arose from an ankle injury suffered by William Moore aboard a commercial fishing vessel owned and operated by Omega Protein, Inc. Moore alleged that he was injured when his leg became caught in the coil of a rope he was using to secure the vessel to a piling. Moore filed suit, bringing a claim for negligence under the Jones Act, alleging that his accident was caused by the negligence of the vessel's master, and a claim of unseaworthiness, alleging that the accident was caused by the condition of the vessel. The case was tried to a jury and the jury returned a unanimous verdict in favor of the Omega. The district court entered judgment and dismissed Moore's claims with prejudice. The court also denied Moore’s motion for a new trial finding that the verdict was not against the great weight of the evidence. Moore appealed the district court’s judgment, and the Fifth Circuit affirmed [see February 2012 Longshore Update]. Issues relating to the Moore's maintenance and cure claim were not tried to the jury. Rather, the court dismissed this claim as "moot" based upon Moore's counsel's representation that it was no longer being pursued and upon the fact that such issues were not included in the jury verdict forms and other pretrial materials submitted to the court. After the judgment was affirmed on appeal and certiorari denied, Moore filed suit in state court, against his attorneys, alleging that eighteen months after the completion of trial, he had received collection notices from Air Med Services, LLC and/or Acadian Ambulance Services, for air medical transport services rendered to the plaintiff on the date he fractured his leg. Moore alleged that Acadian later sued him on the invoice and obtained a judgment against him in the amount of $13,519.59. Moore alleged that his attorneys had breached their duty of care to him by failing to oppose dismissal of the maintenance and cure claim and by failing to introduce evidence contradicting Omega Protein's assertions that all maintenance and cure benefits had been paid. The suit was removed to federal court. After removal, Moore amended his complaint to add a claim against Omega Protein and its fishing vessel, alleging that Omega was aware of the existence of the Acadian Invoice and/or Omega's outstanding obligation to pay cure benefits relating to the medical treatment and/or services rendered to Moore by Acadian. Omega moved to dismiss, arguing that Moore’s amended complaint failed to state a viable claim because Omega and its vessel owed no duty to ensure that all of the plaintiff's claims were advanced during the personal injury suit, Moore’s maintenance and cure claims were barred by res judicata; and Moore was attempting to seek relief from a prior judgment, which attempt was untimely under FRCP Rule 60(c).The court found that all of Omega’s argument failed. Rather the duty underlying Moore’s claim was a duty of candor and truthfulness to the court, to Moore, and to opposing counsel. Moore’s claim was not that Omega failed to advocate on his behalf, but that they made misrepresentations of fact, by claiming they had "paid maintenance and cure benefits to Moore from the date of his accident to the date he reached maximum medical cure." Moore alleged that notwithstanding this representation, Omega was aware of the existence of the Acadian Invoice and/or Omega's outstanding obligation to pay cure benefits relating to the medical treatment and/or services rendered by Acadian. The court noted that, if proven, this would constitute a fraud on the court. Therefore, the court found that Moore had stated a claim that was plausible on its face. The court also cautioned Omega, that if the Moore’s allegations were true, it would be well served to fulfill its obligations to Moore post haste, or risk punitive damages for willful failure to pay cure benefits and subject its attorneys to sanctions. The motion to dismiss for failure to state a claim was denied. (USDC EDLA, April 30, 2014) 2014 U.S. Dist. LEXIS 60051
YOU KNOW WHAT HE WANTS & THE CONSEQUENCES FOR NOT PROVIDING IT
BARTO V. J. RAY MCDERMOTT INTERNATIONAL VESSELS LTD., ET AL.
Mark Barto allegedly suffered injuries when a board he was standing on broke suddenly and without warning, causing him to fall backwards, and allegedly strike his head, left elbow and low back. Barto's filed his maritime personal injury claims against Shore Construction, LLC, J. Ray McDermott International Vessels, Ltd., and McDermott, Inc. Barto received maintenance and cure benefits from Shore throughout his treatment, but when Barto's treating physician recommended surgical intervention, and when defendants' physician disagreed with this recommendation, Shore denied Barto's request that it pay for the surgery. Barto amended his complaint, seeking damages for defendants' failure to authorize and pay for recommended surgery. Defendants moved to dismiss for failure to state a claim, because Barto had not pled any specific acts of Shore that would constitute unreasonable, arbitrary, and/or capricious conduct. Defendants cited Twomblyand Iqbal for the proposition that a plaintiff may not simply plead the labels of arbitrary, capricious, or without probable cause, but rather must include additional factual allegations to support such labels. Barto contended that he had fully satisfied notice pleading requirements. Given the non-complex nature of the case, the court found that Barto's allegations satisfied notice pleading requirements, noting that the allegations made defendants aware of what the claim is (breach of the duty to provide full maintenance and cure), the grounds upon which the claims rest (failure to pay for the surgery recommended by Barto's physician), and the relief sought (compensatory and punitive damages). The court found its ruling supported by the fact that defendants had already made such an inference and clearly explained the nature of the dispute in the motion to dismiss. Therefore, the defendant was clearly on notice of the claims against it, making dismissal unwarranted. Defendants’ motion to dismiss was denied. (USDC EDLA, May 13, 2014) 2014 U.S. Dist. LEXIS 65641
DO SHOWERS NEED TO BE SLIP RESISTANT TO BE SEAWORTHY?
MYERS V. HERCULES OFFSHORE SERVICES, LLC
Garrard M. Myers, a roustabout and Jones Act seaman onboard a Hercules Offshore Services, LLC’s vessel, allegedly fell and injured his ankle while showering. Myers eventually underwent surgery to repair a resultant ankle fracture and torn ligaments. Thereafter, Myers participated in physical therapy until his physician determined that he reached maximum medical improvement and released him to full duty. Myers filed his suit, alleging that Hercules' negligence and the unseaworthiness of its vessel caused his accident and injury, claiming that the shower was unreasonably dangerous because it did not have handrails, a mat or slip resistant material. Myers claims that Hercules was negligent and the vessel was unseaworthy because of the failure to provide those safety features. Myers also claimed wrongful termination and failure to pay short-term disability benefits, alleging that he was terminated because he filed a personal injury suit against Hercules. A motion for summary judgment was filed by Hercules, arguing that it was entitled to summary judgment dismissing Myers’ Jones Act negligence and unseaworthiness claims because Myers could not prove that the shower in which he was injured was unreasonably dangerous. Further, Hercules argued that it was entitled to summary judgment regarding Myers’ wrongful termination claim because it was undisputed that Myers was terminated after Hercules sold the vessel on which Myers was employed. The court cited several cases which demonstrated that a vessel shower that does not have handrails, a mat or other slip resistant material may be unseaworthy or the employer negligent for not providing such items. Hercules argued that the cases cited by the court were distinguishable, because the ships involved were ocean-going vessels and the courts found that the showers had other issues, whereas its vessel was a barge operated solely on inland waters, was stationary at the time of Myers' accident, and no other problems with the showers had been established. The court noted that, while the Hercules vessel did not go to sea, it was a vessel that moved under tow and was subject to the ebb and flow of the waters upon which it navigated. Even slight rocking might make it more difficult to step into or out of a shower that does not have handrails, a mat or other slip resistant material. Because other courts had found vessel showers that do not have handrails, mats or other slip resistant material unseaworthy, the court declined to find, at the summary judgment stage, that the shower on the Hercules vessel was reasonably fit for its intended purpose, or that the employer was not negligent for not providing such items. Turning to the unlawful termination allegation, the court noted that it was undisputed that Hercules sold the vessel to which Myers was assigned, while Myers was out on medical leave due to the complained of injury. There was no evidence that Myers was terminated for any reason other than the sale of the vessel. Because of this evidence, the court concluded that Myers could not establish that Hercules' decision to terminate him was motivated in substantial part by Myers' personal injury lawsuit, and Hercules had shown that Myers' lawsuit was not a substantial motivating factor for the discharge. Hercules motion was granted as to Myers’ wrongful termination claim, and that claim was dismissed with prejudice. Hercules’ motion was denied as to Myers’ Jones Act negligence and unseaworthiness claims. (USDC EDLA, May 16, 2014) 2014 U.S. Dist. LEXIS 67607
COURT DENIES DIVER’S PLEA FOR APPLICATION OF PER SE NEGLIGENCE
LAYMAN V. LAHAINA DIVERS, INC, ET AL.
Christopher Layman alleged that he was injured while working as a PADI certified SCUBA diver for Lahaina Divers, Inc. (LDI). LDI is a dive tour company and dive shop, that owns and operates two 46-foot sister ships that take passengers for hire on SCUBA dive tours. Layman allegedly suffered three separate injuries while working as a seaman aboard LDI's vessels; namely a fall into an open hatch aboard an LDI vessel, abdominal pain following a series of SCUBA dives for LDI and another episode of abdominal pain following another series of SCUBA dives he made while serving as a dive master for tour groups. Layman subsequently filed his seaman's complaint for compensatory and punitive damages for his alleged injuries Under the Jones Act and general maritime law. Following some discovery, Layman moved for partial summary judgment, which addressed only his Jones Act negligence claim, and concerned only the two separate alleged diving injuries he claimed to have sustained. Layman sought to establish that LDI may be held liable for per se negligence for its failure to adhere to the Coast Guard regulations governing commercial diving operations, pursuant to Kernan v. American Dredging Co. LDI disputed whether the Commercial Diving Operations regulations were even applicable to its operations. The court initially observed that the Coast Guard Commercial Diving Operations regulations applied on their face to any commercial diving operations taking place from vessels required to have a certificate of inspection issued by the Coast Guard. Since both of LDI’s vessels were required to have a certificate of inspection issued by the Coast Guard, the court turned to the question of whether LDI’s operations constituted "commercial diving operations." Commercial diver" is defined as "a diver engaged in underwater work for hire excluding sport and recreational diving and the instruction thereof. Layman asserted, while at the time of his injuries he may have been leading a tour group of recreational divers, he himself was performing underwater work for wages, and was therefore a "commercial diver" for purposes of the Coast Guard regulations. The court disagreed, finding that the plain language of the provision indicates that Layman, as a dive master leading a recreational SCUBA diving tour, was not a commercial diver as that term is defined in the regulations. Having concluded that the Coast Guard's Commercial Diving Operations regulations were not applicable to LDI or Layman at the time of Layman's alleged injuries, the court turned to the applicability of per se negligence pursuant to Kernan, which provides that "common-law concepts of foreseeability and risk of harm are not applicable where the employer violates a federal statute or a Coast Guard regulation. The court therefore concluded that, because LDI was not subject to the Coast Guard Commercial Diving Operations regulations at the time of Layman’s injury, the KernanRule was inapplicable. Layman also sought judgment as to the issue of whether the Pennsylvania Rule applied, requiring the burden to fall on LDI, rather than Layman, to prove causation. As an initial matter, the court noted that it was not at all clear that the Pennsylvania Rule applied to cases that do not involve a collision or other "navigational" accident, or to claims made under the Jones Act. Nevertheless, because the Coast Guard Commercial Diving Operations regulations were inapplicable to Layman at the time of his injury, the court held that LDI was under no mandatory duty to comply with them. Thus, the PennsylvaniaRule did not apply. The court granted Layman’s motion only to the extent that the parties had stipulated there was no question of fact that Layman was injured in the course of his employment for LDI as a Jones Act seaman. The court denied the motion insofar as it found Layman was not a "commercial diver" as that term is defined in 46 C.F.R. §197.204. The court further denied the motion in that it declined to apply per se negligence pursuant to the Kernan Rule, or the burden shifting set forth in the Pennsylvania Rule. (USDC DHI, May 28, 2014) 2014 U.S. Dist. LEXIS 73443
COURT FINDS POST-ACCIDENT STATEMENTS NOT CONSIDERED WORK PRODUCT
NORMAN V. ODYSSEA MARINE, INC. ET AL.
Richard A. Norman alleged that he sustained personal injuries when his foot slipped off of a ladder at the top of the wheelhouse, and he fell onto the deck, while he was assisting his crew to lower and maintain the mast of the vessel he was employed by Odyssea Marine, Inc. Norman filed suit against Odyssea on the grounds that it allegedly failed to furnish a safe place to work for him, and that the unseaworthy conditions of the vessel were a proximate cause of his injuries. Besides compensatory damages, Norman also sought maintenance and cure and an award of punitive damages. During discovery, Norman moved to compel production of certain statements made by co-workers of Norman. Odyssea objected to producing these statements, asserting that the work product doctrine was applicable to them. Norman argued that Odyssea had failed to establish that these documents were protected by the work product doctrine, and therefore, sought an order from the court to compel production of the statements at issue. Odyssea contended that the work product doctrine was applicable to the witnesses statements because Norman had failed to show any substantial need or an inability to obtain the substantial equivalent of the statements without undue hardship. Furthermore, Odyssea contended that Norman sought medical treatment on the day he was injured, and took the sta6tements five days later reasonably expecting litigation to ensue. Norman argued that Odyssea had failed to establish that these statements were taken in anticipation of litigation, as it was unable to prove that these statements were taken at the direction of its in-house counsel or its attorney of record. After considering the arguments of the parties, the court found that these documents were not protected by the work product doctrine, because documents created by an insurer, its representative, or a claims adjuster tend not to be protected by the work product doctrine if they were prepared as a more or less routine investigation of a possibly resistible claim. Counsel for Odyssea indicated that a claims adjuster was the person who hired the independent adjuster that took the statements, and not the company’s in-house counsel. The claims adjuster, who routinely handled safety related matters of Odyssea, was not likely preparing for litigation specifically to Norman's injuries, but rather, operating in the ordinary course of business by obtaining an independent adjuster to assess the severity of the claims. Furthermore, the court found that the affidavit of the claims adjuster alone was not specific enough to establish that the primary motivating purpose in taking the statements were in preparation or anticipation of litigation. Therefore, the court found that the statements at issue were not protected by the work product doctrine and should be produced. The court granted Norman's request to obtain the witness statements taken by the independent adjuster and ordered Odyssea to produce the witness statements no later than seven (7) days from the issuance of the court’s order. (USDC EDLA, May 20, 2014) 2014 U.S. Dist. LEXIS 69063
EMPLOYEE SEAMAN OR SELF-EMPLOYED INDEPENDENT CONTRACTOR? (CONT.)
ALLEGRO VENTURES, INC. V. ALMQUIST
Allegro Ventures, Inc. filed a complaint against Michael Almquist, seeking declaratory relief under general maritime law and asking the court to resolve a dispute concerning whether Almquist was employed as a seaman in service of Allegro’s vessel when he suffered from a seizure that eventually led to the discovery of metastatic melanoma in his brain and lung. Allegro owned a seventy-foot luxury motor yacht. Almquist, a licensed mariner, provided boat maintenance and captain services to various yacht-owning clients, doing business as Almquist Yacht Management. Almquist delivered Allegro’s yacht to a boat yard and, while driving to meet the yacht owner for a meeting at the boatyard, Almquist suffered a seizure-like episode and lost consciousness, crashing his pickup on the side of the freeway. While receiving emergency treatment following the crash, a brain scan was undertaken to discover the cause of the seizure. It revealed small lesions in Almquist's left parietal lobe and right lung, which were diagnosed as metastatic melanoma. Allegro initially paid Almquist's medical expenses for the craniotomy and lung biopsy after being informed that Almquist was possibly infected with a parasite while working for Allegro. But after discovery of the melanoma, a dispute arose concerning whether Allegro was responsible for paying any further medical bills related to both the automobile injuries and the cancer treatments. The court had previously denied both parties' cross motions for summary judgment, concluding that a genuine issue of material fact existed as to whether an employment relationship existed under maritime law [see July 2013 Longshore Update]. Almquist subsequently moved in limine to exclude evidence of his smoking and alcohol use under FRE Rule 402, asserting that any evidence of smoking and drinking was irrelevant because there is no evidence linking smoking or drinking to metastatic melanoma. Alternatively, Almquist argued that admitting the evidence would be unfairly prejudicial. Allegro opposed the motion, asserting that such evidence was relevant to the jury’s determinations concerning whether Almquist was in the service of the ship at the time of the accident and the viability of Allegro’s maintenance and cure defense that Almquist was guilty of willful misconduct, of concealing his pre-existing condition and that he could not have reasonably considered himself fit for duty by virtue of his chronic alcoholism. The court initially noted that it was clear that evidence of Almquist's smoking and drinking had no bearing on the threshold issue of Almquist's status as an employee or as a seaman. However, the court found that evidence of Almquist's history of alcohol use was relevant in determining the sole cause of the automobile accident and the cure expenses associated with those injuries. The parties both acknowledged that such evidence did not address the sole cause of Almquist's metastatic melanoma, and, thus, was not relevant to the cure related to those medical expenses. Accordingly, the court granted in part and denied in part Almquist's motion in limine and ordered that evidence of Almquist's drinking and smoking was admissible only in regard to Allegro’s willful misconduct defense with respect to Almquist's claims for damages relating to the injuries sustained in the automobile accident, and not his damages in connection with his cancer. Amquist also sought to exclude the testimony of Allegro’s expert witness, claiming his opinion on application of facts to the law invades the province of the jury. The court agreed, to the extent that Allegro sought to have its expert testify about what the applicable law was for the case; however, to the extent that Allegro’s expert was called to testify as an expert concerning the maritime industry, this testimony would not invade the province of the court, and held that he could testify as to his conclusion on whether Almquist was a seaman or not or whether he was had a sufficient employment connection to the Allegro’s yacht to give rise to an obligation on the part of the owner to pay maintenance and cure. The court allowed Allegro’s other expert witness to testify to the extent that his opinions were based on the correct legal standards set out by the court. Certain defense witnesses were also excluded, because they were not properly disclosed during discovery. Almquist’s remaining motions in limine were denied. The court granted Allegro’s motion in limine to preclude any undisclosed expert witness testimony from Almquist’s witnesses, not allow introduction of additional documentary evidence not produced during discovery, to bifurcate liability and damages issues at trial. The court denied Allegro’s remaining in limine motions. (USDC SDCA, May 8, 2014) 2014 U.S. Dist. LEXIS 64008
PLATFORM WORKER HELD NOT TO BE A SEAMAN ON SUMMARY JUDGMENT
ALEXANDER V. EXPRESS ENERGY OPERATING SERVICES, LP, ET AL
Mike Alexander commenced a maritime personal injury action, alleging he was injured when an e-line and tool assembly struck him, and asserted claims for negligence under the Jones Act, as well as claims for unseaworthiness and maintenance and cure. Alexander was employed as a lead hand for plug and abandonment operations for Express Energy Services Operating, L.P. , and he had never performed any other job during his approximate eight month employment with Express Energy. During the course of his employment with Express Energy, Alexander had been assigned to work on six different projects on five different oil wells for four different customers, and most of these projects were short-term assignments. He was never assigned to a specific platform or vessel. None of the lift boats used by Alexander were owned or operated by Express Energy, and it was Express Energy's customers that contracted for the lift boats. At the time the alleged incident occurred, Express Energy had assigned Alexander to work on fixed drilling platforms for Apache Corporation, and in connection with this assignment, Alexander was using a lift boat owned and operated by Aries Marine Corporation. The crane that was installing the e-line assembly that struck Alexander was being operated by an Aries employee and was attached to and being operated from the lift boat. Express Energy moved for summary judgment on Alexander’s seaman status, seeking dismissal of Alexander's claims against it, arguing that the evidence clearly showed that Alexander was not a seaman and that he cannot meet the two-prong showing required by Chandris. Alexander, on the other hand, contended that the facts he presented indicate that he is a seaman, or at least that there was a genuine issue of material fact as to seaman status. The court found that Alexander failed to meet the first prong of the Chandris test; therefore, summary judgment was appropriate. Alexander worked for Express Energy, thus he was not employed by the vessel owner, Aries. Further, the fact that the offending crane was on the vessel did not mean that Alexander contributed to the mission of the vessel, rather it showed that the vessel supported the operations of Express Energy's work. Rather, as was the case in Teaver and Hufnagel, the facts indicated that Alexander was only a passenger on the lift boat and that the lift boat was merely a support vessel for the platform operations. Therefore, the court held that Alexander had failed to meet his burden as to the first prong of Chandris, making summary judgment on his seaman status appropriate. Express Energy's motion was granted and Alexander’s claims against it were dismissed with prejudice. (USDC EDLA, April 29, 2014) 2014 U.S. Dist. LEXIS 60066
GO TRY YOUR FRAUDULENT JONES ACT CLAIM IN STATE COURT IF YOU WISH
LANDERMAN V. TARPON OPERATING AND DEVELOPMENT, LLC., ET AL.
Jerry Landerman filed suit in state court against six defendants, asserting claims under the Jones Act and the general maritime law based on injuries he allegedly sustained while working for Pan Ocean Energy Services, LLC on an offshore platform. Landerman was being transferred from the platform, to a vessel owned by Rene Offshore, LLC, by means of a personnel basket that was hanging from a crane on the platform. The crane operator, who was allegedly employed by either Tarpon Operating and Development, LLC, Shamrock Energy Solutions, LLC, or Nabors Offshore Corporation, set the personnel basket down on top of equipment on the deck of the vessel, causing the basket to tipped over, allegedly causing Landerman to fall to the deck of the vessel and sustain his alleged injuries. Landerman alleged that his injuries were a direct result of the unseaworthiness of the vessel and the negligence of all defendants. In addition to the Jones Act and the general maritime law, the complaint also invoked as possible theories of recovery the Outer Continental Shelf Lands Act (OCSLA), the LHWCA and the general negligence laws of Louisiana. Defendants timely removed the lawsuit to this federal court pursuant to 28 U.S.C. §§1331, 1441, and 1446. Landerman then moved to remand the case to state court, arguing that cases brought in state court under the general maritime law are not removable. The defendants responded that the court had original jurisdiction on two independent bases, OCSLA and under 28 U.S.C. 1333, which grants the district courts original jurisdiction over admiralty and maritime cases, and hence that removal of the action was proper under §1441. Pan Ocean also argued that Landerman fraudulently pled his Jones Act claim and accordingly requests that the claim be dismissed. Pan Ocean contended that, because Landerman worked as a welder on an offshore platform rather than as a crewmember on a vessel or identifiable group of vessels, he lacked seaman status and should not be allowed to maintain a Jones Act claim. The court held that it had removal jurisdiction over the case under OCSLA, but that Landerman’s Jones Act claim should be severed and remanded to state court pursuant to §1441(c). The court noted that district courts have original federal question jurisdiction of cases brought under OCSLA, and hence such cases can be removed to federal court under §1441. As the court found that Landerman’s lawsuit satisfied the “but for” test and arose under OCSLA, it was properly removed to federal court. As the court had jurisdiction over the case under OCSLA, the validity vel non of Landerman's Jones Act claim was irrelevant. Therefore, the court declined to reach Pan Ocean's argument that Landerman's Jones Act claim was meritless. Instead, in accordance with the mandatory language of §1441(c), the court simply severed that claim and remanded it to state court. The court denied Landerman’s motion to remand, except insofar as it concerns his Jones Act claim. That claim was severed from the case and remanded to state court. (USDC EDLA, May 1, 2014) 2014 U.S. Dist. LEXIS 60651
SUMMARY JUDGMENT MOTION ON DOCTRINE OF LACHES DEFENSE FAILS
CSX TRANSPORTATION, INC. V. ABC MARINE TOWING, LLC, ET AL.
CSX Transportation, Inc. made claim against ABC Marine Towing, LLC, in personam, and its tug, in rem, for alleged damage to a fender system of a railroad swing bridge it owns, that was allegedly caused when a barge in the tow of ABC’s tug allided with one of the bridge's fenders in 2010. ABC moved for summary judgment, arguing that CSX’s claims against ABC and its tug were barred by the maritime doctrine of laches. CSX did not file suit against ABC and its tug until August 2013. Defendants argued that the action should be dismissed under the maritime doctrine of laches because they were prejudiced by CSX's unreasonable delay in filing suit, pointing out that its tug captain was now deceased and CSX repaired the bridge, which prevents defendants from obtaining their own survey of the alleged damage. CSX argued that the delay in filing suit should be excused because it was pursuing non-litigation means by which to settle its claim against defendants and that defendants had notice of the allision as early July 1, 2010. Defendants argued that they may have had notice of the allision in July 2010, but they never received other alleged correspondence, and did not know that CSX was holding them responsible for damage to the bridge until the suit was filed. The court noted there was obviously disagreement as to whether defendants received certain CSX correspondence regarding its intent to hold them responsible for damage to the bridge allegedly occurring as a result of the June 27, 2010, allision. These factual disputes regarding defendant's notice of the claim precluded summary judgment on their laches defense. Thus, their motion for summary judgment was denied. (USDC EDLA, May 16, 2014) 2014 U.S. Dist. LEXIS 67608
ANOTHER SPLIT DECISION ON A REMOVAL ACTION INVOLVING THE JONES ACT
SHULTZ V. HERCULES OFFSHORE, INC.
Syrelle Shultz, a motorman and crew member aboard a Hercules Offshore, Inc. jack-up rig, allegedly tripped on the six-inch tall lip of a watertight door and fell on his knee. A few months later, he allegedly aggravated this injury while walking down some stairs on the rig. Shultz filed suit in state court, claiming that his injuries occurred as a proximate result of the unsafe and unseaworthy condition of the rig and its appurtenances and equipment, and, in whole or in part, as a proximate result of negligence on the part of" Hercules, alleging claims under general maritime law and the Jones Act. Hercules timely removed the case to federal court, and Shultz moved for remand, arguing that remand is improper because general maritime law claims are not removable unless some independent basis for the exercise of federal jurisdiction exists apart from federal question jurisdiction. Hercules argued that the removal of a maritime claim based on this court's admiralty jurisdiction was permissible under the recently amended version of 28 U.S.C. §1441. In the alternative, Hercules asserts that OCSLA provides an independent basis for the exercise of removal jurisdiction because Shultz's injuries occurred while he was working on a jack-up oil rig on the Outer Continental Shelf. The court found that the evidence adduced by Hercules, consisting of two incident reports about Shultz's alleged injuries and an affidavit, demonstrated that each of the three Barker factors were satisfied to show that Shultz’s claims arose under OCSLA. Because the case was properly removed under OCSLA, the court declined to examine whether general maritime claims were removable pursuant to §1441 absent an independent basis for federal jurisdiction. However, the court found that Shultz's Jones Act claim should be severed and remanded to state court. Hercules argued that Shultz’s case was simply a general maritime case about the unseaworthiness of its rig, not a true Jones Act case. Notwithstanding this assertion, the court noted that Hercules did not argue that Shultz's Jones Act claim was fraudulently pleaded. Because Jones Act claims are made nonremovable by §1445(a), the provisions of §1441(c)(2) require that they be severed and remanded, Shultz's Jones Act claim was severed and remanded to state court. Shultz's motion for remand was granted in part and denied in part. The court granted his request for remand of his Jones Act claim but denied remand of his general maritime claims. (USDC EDTX, May 15, 2014) 2014 U.S. Dist. LEXIS 67449
ZAINEY WANTS CONGRESS TO SPEAK MORE CLEARLY ON REMOVAL STATUTE
PERRIER, ET AL. V. SHELL OIL CO., ET AL.
Plaintiffs filed this lawsuit in state court to recover for injuries that Paul Perrier, Sr. allegedly sustained when he fell from a crew boat owned by Weber Marine. In the same petition, Perrier joined a Jones Act claim against his employer, Cooper/T. Smith, for an unrelated incident. Plaintiffs sought a trial by jury for all claims. Weber Marine removed the action to federal court, arguing that the law had changed and that claims based on general maritime law were now removable to federal court. Plaintiffs moved to remand the case to state court arguing that under the law of the circuit none of the claims that they pleaded were removable. The court initially noted that the law has been well-settled in that maritime claims are not removable to federal court unless subject matter can be established on some basis other than admiralty jurisdiction. Although Cooper complained of the paucity of Perrier's factual allegations pertaining to the Jones Act claim, Cooper did not claim or cite any authority for the proposition that Perrier's state court pleading was deficient under Louisiana's fact pleading rules. Therefore, the court found that Cooper had not met its heavy burden of demonstrating that Perrier has no reasonable possibility of establishing a Jones Act claim on the merits. Weber Marine took the position that the 2011 amendment to the forum defendant rule in 28 U.S.C. §1441 effected a change in the law such that admiralty cases are now removable to federal court in their own right even in the absence of an independent jurisdictional basis. The court did not agree that the 2011 amendments to §1441 eliminated the long-held requirement of diversity jurisdiction in saving cases filed in state court. Instead, the court expressed its opinion that if Congress had intended to open the federal courts to an entirely new class of cases, that had historically been excluded, it could hardly suppose that it would have failed to use some appropriate language to express that intention. The court noted that, until Congress passes legislation [ignoring the fact that is exactly what they did when they amended §1441] that alters the way the Fifth Circuit and the Supreme Court have previously interpreted the saving to suitors clause, or until those courts reverse direction, the court remained persuaded that maritime claims brought in state court are not removable in the absence of diversity jurisdiction. Plaintiffs’ motion to remand was granted. (USDC EDLA, May 21, 2014) 2014 U.S. Dist. LEXIS 70374
ANOTHER REMOVAL ACTION BITES THE DUST
RAWLS, ET AL. V. PHILLIPS 66 COMPANY ET AL.
William Rawls filed a petition for damages in state court, asserting claims against numerous defendants under the general maritime law and the Jones Act. Two of the named defendants, North River Insurance Company and Coastal of Abbeville, LLC, filed a timely notice of removal pursuant to 28 U.S.C. §1441(c). Rawls moved to remand, arguing that there was no independent basis for jurisdiction. Defendants respond that the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125 Stat. 758, changed the general rule. The court declined to address this argument finding, instead, that the presence of a Jones Act claim in the case precluded removal pursuant to §1441(c). Citing Freeman, the court observed that Rawls had alleged a Jones Act claim consistent with §1441(c)(1)(B), but had not alleged a claim that would give rise to federal question jurisdiction consistent with §1441(c)(1)(A). Accordingly, even if Rawls’ maritime claims were otherwise removable on the basis of admiralty jurisdiction, which the court declined to decide, the defendants could not overcome the statutory bar to removal relative to Rawls’ Jones Act claim. The defendants argued that Rawls’ Jones Act claim was fraudulently pled, because Rawls did not allege that the oil rigs on which he worked were vessels. The court found that this argument, which was not accompanied by citation to supporting evidence or authority, was an unpersuasive attempt to shift the burden to Rawls. The court noted that Rawls un-rebutted deposition testimony indicated that he worked on a jack-up drilling rig, and there was a reasonable basis for predicting that such a rig is a vessel. Rawls motion was granted and his claims were remanded to state court. (USDC EDLA, May 15, 2014) 2014 U.S. Dist. LEXIS 66962
ONLY IN THE LAND OF FRUIT AND NUTS! (CONT.)
IN RE: ROSS ISLAND SAND & GRAVEL CO.
Ron Green filed a Jones Act and general maritime law suit in state court against Ross Island Sand & Gravel Co, for injuries he allegedly sustained while he was employed as a seaman by Ross Island, when a section of dredge pipe fell on him. Ross Island removed the complaint from state court, asserting that Green fraudulently pled seaman status within the meaning of the Jones Act, and that as a consequence the Jones Act's bar to removal did not apply to the case. Ross Island further claimed that removal of the case was proper under 28 U.S.C. § 1441(a), because the district court had original jurisdiction over the case, and under 28 U.S.C. § 1332(a), as the parties had diversity of citizenship and the amount in controversy exceeded $75,000. Green moved to remand the case to state court, arguing he has properly pled a Jones Act claim, and so his case was not removable as a matter of law. The court rejected all of Ross Island’s arguments and remanded the action to state court, finding that on the face of the complaint, Green's Jones Act claim was properly pled and therefore not removable [see February 2014 Longshore Update]. Ross Island subsequently filed a limitation complaint, seeking exoneration from or limitation of liability against all parties, for any and all loss, damages, injury, and other claims of destruction arising out of the injuries claimed by Green. Ross Island claimed the value of the barge after the alleged incident did not exceed $35,000.00. The court issued Ross Island's proposed order issuing a monition, directing claimants to file and make proof of their claims, and staying any prosecution of suits with respect to any claim arising out of the Green incident. Green then filed this motion to increase the value of the limitation fund, pursuant to Rule F(7), arguing that Ross Island set the limitation fund low, knowing that Green would not stipulate to the amount, thereby preventing him from proceeding with his suit in state court. Green and Ross Island were unable to agree on the stipulations required under the "single claimant exception," due to a disagreement as to the value of the limitation fund. Green conceded that the court had exclusive jurisdiction over the limitation issues, and offered to waive the res judicata effect of any intervening state court verdict he might obtain, but refused to approve the amount of the limitation fund, believing it was inadequate. The court noted that a reappraisal of the limitation fund, based on the "flotilla doctrine," may establish a fund value to which Green would be willing to stipulate. But, as was noted in Norfolk, the "flotilla" issue requires a fact-based assessment and may be rendered moot. The court, therefore, postponed any such determination until Green acquired a judgment in state court that exceeded the limitation fund as it was currently set, if that happens. The court allowed Green to stipulate to the $35,000 value of the barge, and also maintain his contention that the limitation fund should include all vessels in the flotilla. The court ruled that this stipulation, along with Green’s waiver of the right to res judicata based on his state court proceeding and his concession that the district court had exclusive jurisdiction to determine the limitation of liability issues, would satisfy the stipulation requirements under Newtonand Ross Island, allowing Green to proceed with his state court case, while also preserving his ability to renew the "flotilla doctrine" issue later in the limitation proceedings, if necessary. The court denied Green's motion to increase the limitation fund, without prejudice. (USDC NDCA, May 23, 2014) 2014 U.S. Dist. LEXIS 70640
SUMMARY JUDGMENT MOTIONS PREGNANT WITH GENUINE FACTUAL DISPUTES
IN RE: OMI ENVIRONMENTAL SOLUTIONS
These consolidated limitation/exoneration actions arose out of a collision between two vessels on the Mississippi River. The M/V INTREPID III, headed downriver, was owned and operated by United States Environmental Services, LLC (USES). The M/V OMI 4233, headed upriver, was owned and operated by OMI Environmental Solutions (OMIES). Shortly after the collision, OMIES and USES filed separate petitions for limitation of liability, which were consolidated by the court. Various claimants filed two motions for partial summary judgment seeking judgment as a matter of law that neither USES nor OMIES were entitled to limit their liability. In the first motion, claimants, who were passengers on the vessels, moved for partial summary judgment against USES, contending that the collision was caused at least in part by the negligence of the operator of the USES vessel, and the negligence was within USES's privity or knowledge. In opposition, USES placed the blame entirely the operator of the OMIES vessel. In the second motion, the operator of the USES vessel moved for partial summary judgment against OMIES, contending that its operator caused the accident through his own negligence and incompetence, which were within the privity and knowledge of OMIES. In opposition, OMIES placed the blame entirely on the USES operator for failing to turn on the running lights of its vessel. The court found both motions pregnant with genuine factual disputes which precluded partial summary judgment as to whether USES and OMIES are entitled to limit their liability. There were also disputed facts precluding summary judgment as to whether the shipowners had knowledge or privity of the alleged acts of negligence or alleged conditions of unseaworthiness. Both motions for partial summary judgment were denied. (USDC EDLA, May 23, 2014) 2014 U.S. Dist. LEXIS 71063
GEOFF WEBSTER IS REINED IN AGAIN BY THE COURT
IN RE: OMI ENVIRONMENTAL SOLUTIONS
These consolidated limitation/exoneration actions arose out of a collision between two vessels on the Mississippi River. The M/V INTREPID III, headed downriver, was owned and operated by United States Environmental Services, LLC (USES). The M/V OMI 4233, headed upriver, was owned and operated by OMI Environmental Solutions (OMIES). Shortly after the collision, OMIES and USES filed separate petitions for limitation of liability, which were consolidated by the court. USES moved to strike claimants' proposed liability expert, E. Geoff Webster, who opined that the collision occurred because USES’ operator had not been trained properly to navigate at night and was not following USES’ safety protocols. Webster also opined that the boat was unsafe due to dark tinting being on the windows of the cabin, which greatly reduced the pilot's visibility at night, and offered a hodgepodge of other criticisms of the equipment on the boat and the operator’s conduct. USES sought to exclude Webster's testimony because (1) he is not qualified to testify as an expert in marine navigation, (2) his testimony will not help the trier of fact, and (3) he offered no more than legal conclusions. With respect to opinions that are within the area of marine navigation, the court deferred the question of whether Webster was qualified as an expert in that area, allowing USES to examine Webster about his qualifications (with respect to marine navigation, Coast Guard regulations, the Rules of the Road) at trial, after which the court would determine the extent of his expertise, noting that Webster would not be allowed to testify regarding areas in which he is not qualified, such as training. With respect to USES' argument that Webster's opinions are legal conclusions, the court agreed that Webster could not offer an inadmissible ultimate legal conclusion that a vessel is unseaworthy or that certain conduct was negligent. Finally, the court noted its strong doubts about whether Webster's proposed opinions would assist the court as trier of fact, but reserved a ruling, noting the it would give Webster's testimony whatever weight, if any, it warranted. USES's motion was granted in part and denied in part, with the court holding that Webster would not be permitted to testify regarding (1) training or (2) ultimate legal conclusions. He may be permitted to testify regarding marine navigation if, after examination, the court determines he is qualified to offer those opinions. (USDC EDLA, May 27, 2014) 2014 U.S. Dist. LEXIS 72586
ACT OF GOD DEFENSE DOES NOT WIN THE DAY ON HURRICANE DAMAGES
POKRAS V. HERMAN
Doris Pokras filed a small claims complaint against Kenneth Herman alleging property damage to her pier due to Herman’s alleged negligent mooring of an aluminum float. The undisputed testimony at the trial was that Herman constructed an aluminum float, approximately 25 feet in length and 13 feet in width, which he moored in waters in the vicinity of his pier. The float, which had ladders, a slide and seating, was used for recreational purposes by Herman and members of the community, including Pokras’s family. The float had a history of breaking free of its moorings during severe weather so Herman continually enhanced the float's moorings. By the time Hurricane Irene struck on August 27, 2011 the float was moored by heavy chains and swivels connected to three small engine blocks. Despite these enhancements, the force of Hurricane Irene caused the float to drag its anchors and strike up against Pokras’s pier causing damage to the pier. The court began its analysis by noting well-settled law that a party whose vessel drifts from its moorings into collision or allision with another object is liable for any ensuing damage unless the party can show affirmatively that the accident was the result of an act of God. Based on the credible testimony and evidence presented by the parties, the court found that Pokras had sustained her burden of proof by a fair preponderance of the evidence and, thus, judgment is awarded in her favor, because an Herman failed to show that his hurricane preparations were reasonable under the circumstances and the evidence showed that 36 square feet of decking, a mooring pole, and an electrical outlet were damaged when the float struck the pier. Accordingly, judgment was awarded in favor of Pokras in the amount of $1,600.00. (NY 2nd DC, April 11, 2014) 2014 N.Y. Misc. LEXIS 2042; 2014 NY Slip Op 24120
Updater Note: Thanks to Jim Mercante, of Rubin, Fiorella & Friedman LLP, New York, NY, for sharing this decision with me.
THE LAW IN THIS CIRCUIT IS CLEAR - SEAMEN ARE REQUIRED TO ARBITRATE
PYSARENKO V. CARNIVAL CRUISE LINES
Vitalil Pysarenko allegedly injured his back, while transporting karaoke equipment, while working as a seaman for Carnival Cruise Lines. Pysarenko sought assistance from the ship's doctor, who provided him with pain medication. Nevertheless, Pysarenko claimed that his pain worsened, his condition deteriorated, and, of course he sued Carnival. When he began his employment with Carnival, Pysarenko signed a seafarer agreement, which provided that any dispute, other than a wage dispute, was to be arbitrated. After Pysarenko filed suit, Carnival moved to compel arbitration. Pysarenko moved to remand. The court initially noted that Pysarenko had failed to challenge any of the four jurisdictional prerequisites to compelling arbitration; instead, he raised only affirmative defenses. Pysarenko argued that seamen, as wards of maritime law, are free to access the courts of their choosing and that seamen's employment contracts are exempt from arbitration under the Federal Arbitration Act. The court rejected both arguments as being in conflict with Eleventh Circuit precedent. The court found all of Pysarenko’s arguments unpersuasive and held that seamen are not free from arbitrating under the Convention. The court found Pysarenko’s public policy arguments to be premature and held that it would enforce arbitration pursuant to the Convention, noting that the court would have a later opportunity to review the arbitral award. Conducting its required "limited inquiry" at this stage, the court concluded that all jurisdictional prerequisites applied and that Pysarenko had not raised any satisfactory Article II defenses. The court denied Pysarenko’s motion for remand. (USDC SDFL, April 30, 2014) 2014 U.S. Dist. LEXIS 59990
ANOTHER CASHMAN CHARTER GOES BAD
CASHMAN EQUIPMENT CORP. V. INLAND MARINE SERVICES, LLC
Inland Marine Services, LLC chartered the use of Cashman Equipment Corporation's dredge, consisting of a barge and its crane, on two separate occasions. Approximately two months into the second charter, Cashman reclaimed its dredge from Inland and terminated the second charter for alleged non-payment of the charter hire. Unable to work through an impasse, Cashman filed this maritime lawsuit asserting breach of contract claims. Cashman sought to recover unpaid repair costs for its equipment as a result of Inland's neglect, inaction, and negligence during both charters, as well as unpaid charter hire costs arising out of the second charter. In response to Cashman's claims and demands, Inland filed its counterclaim, alleging claims of breach of warranty asserting that Cashman knew or should have known that the leased equipment had latent defects rendering it unseaworthy and unable to be used for its intended purpose. Upon the completion of fact discovery, Inland moved for summary judgment contending that there were no genuine issues of material fact as to Cashman's claims for charter repair costs and unpaid charter hire. The court found that, based on the conflicting evidence about whether certain repairs were, in fact, necessary and whether certain repairs were performed appropriately, there was a genuine issue of material fact in dispute as to causation of damage. It was undisputed that Inland failed to pay the charter hire owed to Cashman for the period of time during the second charter. In fact, Inland admitted that it withheld charter hire payment totaling $102,877.69.91, because the dredge was inoperable resulting from Cashman's breach of warranty and failure to provide a dredge in good condition suitable for the purposes it was leased. The court found that the plain language of the contract could not be any clearer. Inland was not permitted to take any deductions from its monthly rental rates for any non-working time. Until the issue of causation was resolved as to the second charter, the plain language of the contract controlled. Accordingly, the court denied summary judgment as to Inland's failure to pay the charter hires for the second charter. Inland Marine’s motion was granted in part as to certain invoices in connection with the fist charter, but denied in all respects with respect to the second charter. (USDC MDLA, May 30, 2014) 2014 U.S. Dist. LEXIS 73578
Quotes of the Month . . .“Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship.”--Buddha
“Find a place inside where there's joy, and the joy will burn out the pain.” --Joseph Campbell
“Don't judge each day by the harvest you reap but by the seeds that you plant.” --Robert Louis Stevenson
Tom Langan
Corporate Risk Manager
Weeks Marine, Inc.
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