July 2015
Notes From Your Updater - On June 1, 2015, the U.S. Supreme Court denied the petition for certiorari in the case of Pysarenko v. Carnival Corporation, Docket No. 14-1004 [see December 2014 Longshore Update]. The question presented for review is, “May a cruise line based in the United States use an arbitration clause in a seaman's contract of employment as a device to exempt itself from all liability under the Jones Act?”
On June 29, 2015, the U.S. Supreme Court denied certiorari in the consolidated cases of Anadarko Petroleum Corporation v. United States, Docket No. 14-1167 and BP Exploration & Production Inc. v. United States, Docket No. 14-1217. The question presented by BP was “Whether the Fifth Circuit erred by giving mere lip service to the rule of lenity and penal canon when imposing Clean Water Act civil fine liability under 33 U.S.C. §1321(b)(7) on the owners of an offshore well, where oil discharged to federal waters not from the well itself but from a vessel and its associated equipment connected to the well.
Industry Notice 152 outlines the procedures to follow if you wish to take advantage of an optional electronic alternative to the statutory requirement that mandates delivery of orders via registered or certified mail. The Industry Notice also announced to new OWCP forms to be used if you wish to take advantage of this new email delivery option for service of compensation orders:
∙ LS-801 (Waiver of Service by Registered or Certified Mail for Employers and/or Insurance Carriers) is to be used by Employers, Insurance Carriers, and their representatives.
∙ LS-802 (Waiver of Service by Registered or Certified Mail for Claimants and Authorized Representatives) is to be used by claimants and their representatives.
Both forms may be submitted through the SEAPortal, and they may be accessed on the Division of Longshore and Harbor Workers’ Compensation (DLHWC) website.
The membership of the Benefits Review Board has changed significantly. Following the appointment of Greg J. Buzzard in December 2014 [see March 2015 Longshore Update], Judge Regina McGranery retired on May 29, 2015, after having served on the Board for 31 years. On April 13, 2015, Judge Betty Jean Hall was named the Chair and Chief Administrative Appeals Judge. Ryan C. Gilligan was appointed Vice Chairand Administrative Appeals Judge on May 4, 2015. Prior to his appointment, Judge Gilligan operated his own law firm, which focused on litigation consulting. He spent the early part of his career litigating federal black lung claims.
SUPREME COURT SAYS NO ADDITIONAL FEE FOR DEFENDING FEE PETITION
BAKER BOTTS LLP ET AL. V. ASARCO LLC
In this bankruptcy case, ASARCO LLC hired law firms, pursuant to §327(a) of the Bankruptcy Code, to assist it in carrying out its duties as a Chapter 11 debtor in possession. When ASARCO emerged from bankruptcy, the law firms filed fee applications requesting fees under §330(a)(1), which permits bankruptcy courts to “award . . . reasonable compensation for actual, necessary services rendered by” §327(a) professionals. ASARCO challenged the applications, but the Bankruptcy Court rejected ASARCO’s objections and awarded the law firms fees for time spent defending the applications. ASARCO appealed to the district court, which held that the law firms could be awarded fees for defending their fee applications. The Fifth Circuit reversed, holding that §330(a)(1) did not authorize fee awards for defending fee applications. The U.S. Supreme Court granted the petition for certiorari filed by the law firm, but held that §330(a)(1) does not permit bankruptcy courts to award fees to §327(a) professionals for defending fee applications. The Court noted that the American Rule provides the basic point of reference for awards of attorney’s fees, which is each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise. Congress did not depart from the American Rule in §330(a)(1)for fee-defense litigation, which authorizes “reasonable compensation for actual, necessary services rendered.” The word “services” ordinarily refers to labor performed for another. Thus, the phrase “reasonable compensation for services rendered” necessarily implies loyal and disinterested service in the interest of a client. The Court concluded that time spent litigating a fee application against the bankruptcy estate’s administrator could not be fairly described as “labor performed for”—let alone “disinterested service to”—that administrator. (U.S. Supreme Court, June 15, 2015) 2015 U.S. LEXIS 3920
Updater Note: While not a Longshore case, this recent opinion may have significant relevance in the Longshore arena, where plaintiff law firms routinely seek additional fees for defending their fee applications. Thanks to Ken Engerrand, of Brown Sims, Houston, TX, for bringing this opinion to my attention.
APPELLATE COURT REVERSES AWARD OF ADDITIONAL COMPENSATION
HUNTINGTON INGALLS INDUSTRIES, INC. V. EASON, ET AL.
Ricky Eason allegedly injured his right knee while employed as a pipe fitter at Newport News Shipbuilding and Dry Dock Company, now known as Huntington Ingalls Industries, Inc. (HIII), and was eventually diagnosed with a torn meniscus requiring surgery, keeping Eason completely out of work from October 2, 2008 through June 28, 2009. As a result, HIII paid Eason temporary total disability benefits for this period, and Eason returned to work full-time as a pipe fitter. Eason was given a 14% lower extremity permanent impairment rating and HIII paid the scheduled award over a seven month period. During this period, Eason had continued complaints related to his injured right knee and also his left knee. Although Eason was placed back on restricted duty, HIII did not offer Eason light-duty employment within his restrictions. In addition, during this period, Eason did not seek suitable alternative employment within the relevant labor market. Eason eventually brought a claim against HIII for temporary total disability or, alternatively, temporary partial disability for the subsequent restricted duty period. In response, HIII argued that Eason reached maximum medical improvement and had received permanent partial disability compensation under the schedule, and was not entitled to any additional temporary compensation--either total or partial--under PEPCO. At a formal ALJ hearing, HIII stressed that Eason's scheduled compensation for his knee injury presumed his actual loss of wage-earning capacity for that injury, such that any temporary compensation (total or partial) sought for a flare up of that injury already was covered by the payments made under the schedule. The ALJ agreed, holding that Eason reached maximum medical improvement in and the evidence did not support Eason's claim for additional compensation. On appeal, the BRB vacated the ALJ’s decision, holding that while Eason reached maximum medical improvement, this finding did not preclude the recovery of temporary partial disability compensation for Eason's knee injury. Consequently, the BRB remanded the case to the ALJ to determine whether Eason's work restrictions prevented him from performing his usual work. If they did, the BRB stated, Eason would have established a prima facie case of temporary total disability. On remand, a different ALJ found that Eason was not able to return to his usual work and concluded that Eason was temporarily partially disabled from May 19, 2010 through August 20, 2010 and entitled to compensation. HIII appealed and the BRB affirmed. This timely appeal to the circuit court followed. HIII challenged the award of temporary partial disability benefits, arguing that a claimant who receives scheduled compensation for a permanent partial disability cannot subsequently receive additional temporary partial disability compensation because the receipt of scheduled permanent partial disability compensation for an injury includes any temporary partial disability compensation. The appellate court observed that, in the case of a scheduled permanent partial disability that allegedly changes to a temporary partial disability because the claimant's injury flared up, there is no additional loss of wage-earning capacity. The claimant's loss of wage-earning capacity already is accounted for under the schedule. The appellate court found Eason's argument, that the LHWCA permits the recovery of additional temporary partial disability compensation, under the circumstances of this case is unpersuasive. There was no record evidence supporting a reclassification of Eason's disability to a permanent total or temporary total disability. His disability had remained permanent and partial throughout. The appellate court found both Eason’s and HIII’s interpretation of PEPCO flawed, but noted that the PEPCO decision was not outcome determinative for either Eason or HIII. The case addressed a discrete issue, and the reasons advanced by Eason and HIII for an expansive reading of the decision were not compelling. The appellate court granted the petition for review and remanded the case to the BRB to enter an order dismissing Eason's claim for temporary partial disability under the LHWCA. (4th Cir, June 2, 2015) 2015 U.S. App. LEXIS 9148
COURT HOLDS CLAIMS EXAMINER WRONG ABOUT LHWCA COVERAGE (CONT.)
GLOBAL MANAGEMENT ENTERPRISE, LLC V. COMMERCE & INDUSTRY INS. CO.
This case involved an employee of Global Management Enterprise, LLC, Librado De LaCruz, who was allegedly injured while lifting a sack of oil-contaminated sand to throw onto a pile of such sacks located on a beach. De LaCruz made a claim for benefits under the LHWCA and for state workers' compensation benefits. Chartis, (formerly Commerce and Industry Insurance Company) began paying workers' compensation benefits but later determined that De LaCruz held longshoreman status. Chartis then ceased payments and denied further coverage. In response, the instant lawsuit was filed. In an earlier ruling, the district court ruled that De LaCruz met both the situs and status requirements concluding that he was covered under the LHWCA [see February 2013 Longshore Update]. Global appealed, maintaining that de la Cruz did not meet the situs requirement of the Act post-New Orleans Depot Services, Inc. v. Director, OWCP, 718 F.3d 384 (5th Cir. 2013) (en banc). The Fifth Circuit subsequently remanded the case for the court to consider new case law that had recently been decided [see October 2013 Longshore Update]. After reviewing and considering the New Orleans case, the district court found that the opinion did nothing to change its previous ruling and that both the situs and status tests were still met. Global’s motion for summary judgment was denied [see January 2014 Longshore Update].
Global filed another timely appeal, arguing that the beach where De La Cruz was injured was not a location customarily used by an employer for a covered activity under the LHWCA. The appellate court agreed, finding that the beach upon which De La Cruz was allegedly injured was not a site customarily used for longshore work. Therefore, the appellate court held that De La Cruz's injury was not sustained at a situs reached by the LHWCA. Per the parties' common interpretation of the policy language, the injury was therefore not subject to the exclusion in dispute. Accordingly, summary judgment was reversed and the case was remanded [see July 2014 Longshore Update]. On remand, Chartis moved to have the court dismiss with prejudice all bad faith claims made in the case. Chartis argued that it relied on thirty years of Fifth Circuit jurisprudence defining maritime situs and status to posit that the LHWCA covered De LaCruz, excluding his claims for worker's compensation coverage pursuant to its policy exclusion. Chartis also reminded the court that the court itself had agreed twice with Chartis's position by denying Global's motions for summary judgment. The court agreed with Chartis, noting that in its prior opinion it had already considered all of Global’s arguments and determined that Chartis had not acted in bad faith, ultimately concluding that De LaCruz was a longshoreman based primarily on his daily duty of loading and unloading a vessel. Even though the court was ultimately found to be in error, that finding did not alter that court’s prior determination that Chartis did not act in bad faith in denying coverage. Chartis’s motion for summary judgment was granted [see October 2014 Longshore Update]. Global appealed the grant of summary judgment in favor of Chartis. The appellate court affirmed, holding that no reasonable factfinder could conclude that Chartis's incorrect interpretation of the LHWCA was arbitrary, capricious, or without probable cause. The appellate court found this case indistinguishable from Hickman. Although the district court erroneously concluded that De La Cruz was injured at a situs covered by the LHWCA, its holding was virtually conclusive that Chartis's decision to dispute LHWCA coverage was reasonable. Moreover, Global failed to argue or point to any evidence suggesting that the district court's error on the LHWCA issue was exceptional. Louisiana law provides that when the initial court to review an insurance dispute sides with the insurer, on a question of fact or law, that court's decision, which later proves erroneous, creates a very strong presumption that the insurer did not act in bad faith. Accordingly, the appellate court concluded that Chartis did not act in bad faith when it misinterpreted the LHWCA and denied coverage to De La Cruz, affirming the judgment of the district court. (5th Cir, June 2, 2015, UNPUBLISHED) 2015 U.S. App. LEXIS 9179
APPELLATE COURT DENIES CLASS AND RICO ACTIONS AS OUTSIDE DBA SCHEME
BRINK, ET AL. V. CONTINENTAL INSURANCE COMPANY, ET AL.
Daniel Brink, joined by thirty-one other individuals, brought a class action lawsuit, on behalf of themselves and an estimated 10,000 similarly situated workers seeking $2 billion in damages as well as declaratory and injunctive relief, stemming from the workers' compensation benefits owed to class members under the Defense Base Act, for injuries allegedly suffered while working for United States government contractors in Iraq and Afghanistan. In connection with their DBA claims, appellants alleged that several government contractors, insurance companies, and third parties (collectively "contractors") committed torts and violated the LHWCA, the Racketeer Influenced and Corrupt Organizations Act (RICO), and the Americans with Disabilities Act (ADA). The district court dismissed all of appellants' claims. Appellants moved for reconsideration pursuant to FRCP 59(e), and sought leave to file an amended complaint under FRCP 15(a) to correct the defects in their ADA claims. The district court denied both motions with prejudice. Appellants timely appealed, raising three issues: (1) whether the statutory scheme barred appellants' tort claims; (2) whether the district court erred in dismissing appellants' federal claims; and (3) whether the district court abused its discretion when it denied the motion for leave to allow some of the appellants to amend their ADA claims. The appellate court concluded that the statutory scheme barred appellants' class-wide tort claims and that the district court did not err in dismissing appellants' RICO and Longshore Act claims. Because the statutory scheme of the DBA and LHWCA contained exclusive remedies, it left no room for appellants' RICO or tort claims. However, the appellate court did note that the extensive factual allegations in the complaint included some assertions that could be predicates for independent legal claims, falling outside the class action. Additionally, Three individuals alleged violations of the ADA. Therefore, the appellate court found that the district court abused its discretion by denying without explanation the motion for leave to allow some of the appellants to amend their ADA claims. Although the appellate court affirmed the dismissal of appellants' class-wide tort claims as well their RICO and Longshore Act claims, it noted that the dismissal did not preclude any individual appellants from bringing independent claims outside of the DBA’s statutory scheme. With respect to the ADA claims brought by three individual appellants, the appellate court remanded to the district court to reconsider and explain its denial of leave to amend the complaint. (DC Cir, June 2, 2015) 2015 U.S. App. LEXIS 9112
APPELLATE COURT UPHOLDS FINDING OF NO SITUS OR STATUS
HERNANDEZ V. LA. WORKERS' COMP. CORP.
Luis Hernandez allegedly suffered an injury while cutting timber to be used in the construction of a boat ramp. This ramp was being built on a navigable waterway and the ramp was to be used to launch boats into the waterway. The uncontested facts established that Hernandez was not injured while on the ramp, but while working in a grassy area between thirty and one hundred feet from the ramp. Hernandez was an employee of UNO Enterprises, LLC, who assigned him to work under the direction and control of M. Matt Durand, LLC. Durand, a heavy construction company, which was hired to build the ramp. Hernandez filed a disputed claim for compensation with the Office of Workers' Compensation (OWC). UNO Enterprises was named as his employer, and Louisiana Workers' Compensation Corporation (LWCC) as UNO's workers' compensation insurer. LWCC answered the claim, admitting it was UNO's workers' compensation carrier, but denied coverage for Hernandez’s claim, asserting Hernandez was a longshoreman under the LHWCA and was not covered under the LWCC's policy, which did not provide coverage for LHWCA benefits. UNO subsequently filed a third party demand, naming Durand as the statutory employer of Hernandez. Durand filed a cross-claim against UNO and LWCC, alleging if it was liable as the borrowing employer for benefits, then UNO and LWCC were liable for half. Durand subsequently moved for partial summary judgment on the issue of whether the OWC possessed subject matter jurisdiction, which LWCC joined in. The motions were heard together in a single hearing before the OWC, after which the workers' compensation judge (WCJ) granted Durand's motion for partial summary judgment and denied LWCC's exception of lack of subject matter jurisdiction. The WCJ found Hernandez’s claims were not governed by the LHWCA, but were compensable under Louisiana's workers' compensation laws. LWCC appealed the ruling. The appellate court began by reviewing the WCJ's oral reasons, rendered in open court, which revealed she relied on the fact that Hernandez was hired for construction purposes and he was doing construction work, which was being done on land. LWCC argued the WCJ erred in not finding that both the situs and status requirements of the LHWCA were fulfilled under the facts of the case. After a thorough review of the record, the appellate court found no error on the WCJ's part. The appellate court agreed that the boat ramp was not a “pier” for purposes of the LHWCA. Nor was there any evidence to establish the adjoining area in question was customarily used by an employer in loading, unloading, repairing, dismantling or building a vessel. Moreover, the area where Hernandez was allegedly injured had not been previously used for maritime activities, as it was well off the bank, and was simply a grassy field where Hernandez performed his construction activities. The judgment of the WCJ granting the motion for partial summary judgment was affirmed. (La. App. 3rd Cir, June 3, 2015) 2015 La. App. LEXIS 1158
NO SEAMAN STATUS EQUATES TO NO UNSEAWORTHINESS FOR LONGSHOREMAN
WILLIS V. MCDONOUGH MARINE SERVICE, ET AL.
Henry Willis Jr. was allegedly injured after he tripped and fell on a temporary stair set used to access an offshore module placed on a barge owned by McDonough Marine and bareboat chartered to TETRA Applied Technologies, LLC. Near the top of the stair set Willis caught his foot a piece of grating and he tripped and fell while carrying approximately 45 pounds of gear and equipment. At the time of the incident, Willis was employed by Omega Natchiq as a painter/sandblaster. The subject module was owned by non-party Poseidon and was being prepared for ultimate transport to an offshore platform also owned by Poseidon. Willis filed a §905(b) claim under the LHWCA against McDonough and TETRA. Both parties moved for summary judgment, arguing that neither of them owned the stair set on which Willis was allegedly injured, nor did either party have responsibility for its placement on the barge. Absent privity of ownership, defendants argued, the stair set may not be considered an appurtenance of the vessel such that defendants would be liable for injuries caused thereby. Further, defendants argued Willis had failed to present any evidence that either defendant breached any of the Scindia duties, applicable to workers under the LHWCA. Willis opposed the motion and argued that issues of fact sufficient to prevent summary judgment existed as to application of the LHWCA and his "Sieracki seaman" status. Willis also moved to file a second amended complaint, in which he leave to clarify assertion of his seaworthiness claim. The court initially noted that Willis was injured on navigable waters, and he was so injured in the course of his employment, it was apparent that he satisfied both the situs and status elements of LHWCA coverage and was entitled to bring claims for maritime negligence against McDonough Marine and TETRA if he could establish a breach of any of the three Scindia duties. The uncontroverted record evidence revealed that the stair set on which Willis was injured, and which he complains presented an unreasonable risk of harm, was not placed on the barge by either defendant. The court found that Willis had not shown that he would be able to establish any breach of the Scindiaduties on the part of defendants. The court further found that the weight of authority had concluded that the doctrine of "Sieracki seaman" had been abolished, not only for workers subject to the Longshore Act, but for other longshore and harbor workers as well. Appurtenance status of the stair set was only relevant if Willis was entitled to bring a cause of action for unseaworthiness, which required him to allege his injury was caused by a defective condition of the ship, its equipment or appurtenances. Since Willis was not a seaman under the traditional or "Sieracki" definition of that term, he had no unseaworthiness claim. In light of the foregoing, the court granted defendants' motion for summary judgment. Willis’s motion for leave to amend was denied. (USDC EDLA, June 18, 2015) 2015 U.S. Dist. LEXIS 79788
COURT DENIES SUMMARY JUDGMENT ON SECTION 905(B) CLAIM
FISHER V. GOLDEN SHORE CORPORATION, ET AL.
John Fisher was allegedly injured while employed as a longshoreman by Maher Terminals, where he claimed to have suffered a lower back injury after a slip and fall incident occurred on board a vessel operated by Golden Shore Corp. and owned by COSCO Container Co. Fisher contended that the cause of his injury was a pile of lashing bars blocking the passageway. Fisher commenced a lawsuit under §905(b) of the LHWCA, against lashing service A.G. Ship Maintenance Corp., Golden Shore, and COSCO. A.G. Ship moved for summary judgment and the motion was granted. Golden Shore and Cosco moved for summary judgment on Fisher’s remaining claims. Fisher contended the unsafe pile of lashing bars was not avoidable. In contrast, the crux of defendants' argument in support of summary judgment was that the Fisher had not proven how the pile of lashing gear was created and that the pile was obvious and therefore Fisher could have avoided injury by using reasonable care. This factual dispute concerned who was at fault for the pile of lashing gear, or, put differently, whether the dangerous condition of the vessel existed when the vessel was turned over. Undoubtedly, this issue was central to Fisher’s claim. The parties also disputed whether the vessel's crew performed an adequate inspection of the vessel's walkways when the ship arrived at port. Defendants argued that prior to arrival, the vessel's crew performed routine inspections of the vessel's walkways and there were no obstructions. Fisher denied this allegation, arguing that the vessel log did not indicate that the crew performed an inspection of the entire ship with specificity, and that there was significant evidence that COSCO's ships would regularly come in with unrecorded, cluttered walkways. The court found that a genuine issue of material fact remained as to, among other issues, the condition of the vessel and the avoidability of the lashing bars, and denied the motion for summary judgment. (USDC DNJ, June 25, 2015) 2015 U.S. Dist. LEXIS 82499
COURT REJECTS REMOVAL PURSUANT TO FEDERAL OFFICER STATUTE
SAVOIE V. PENNSYLVANIA GENERAL INSURANCE CO., ET AL.
Joseph Savoie, who had contracted mesothelioma, filed a claim in state court alleging that he was exposed to asbestos during the period in which he was employed by Huntington Ingalls, Inc. in various positions from approximately 1948 through 1996. Subsequent to filing his lawsuit, Savoie died as a result of his mesothelioma. Decedent's surviving wife and children then filed an amended petition for damages, joining the lawsuit, and seeking survival and wrongful death damages pursuant to Louisiana law. Defendants removed the lawsuit to federal court, asserting that the court had subject matter jurisdiction over the matter pursuant to the Federal Officer Removal Statute, 28 U.S.C. §1442. Plaintiff filed a motion seeking remand of the matter to state court, arguing that the Federal Officer Removal Statute did not provide a basis for federal jurisdiction. Defendants argued that the federal government exercised such extensive control over the construction of and safety regulations associated with the construction of vessels for the U.S. Navy and U.S. Coast Guard so as to warrant removal pursuant to the Federal Officer Removal Statute. Plaintiff argued that the factual circumstances and defendants' arguments in support of removal were virtually indistinguishable from a long list of cases involving the same defendants, all of which had been remanded. Defendants adhered to the position that these previous decisions were erroneous, and requested that the court instead follow decisions of the Middle District of Louisiana, in which that court declined to remand six cases with similar factual circumstances and nearly identical arguments for removal. The court found that defendants had failed to present the court with evidence that the federal government restricted their ability to warn its employees of their exposure to asbestos and the related dangers. Defendants' assertions that federal inspectors associated with the U.S. Navy and U.S. Coast Guard had a pervasive presence at the worksite, and that they controlled every aspect of the shipbuilding process, including safety regulations, were in direct conflict with the evidence in the record. In light of this, the court concluded that defendants had failed to show that removal was appropriate pursuant to the Federal Officer Removal Statute for Plaintiffs' failure to warn claims. As in Wilde, the court construed plaintiffs' claims for strict liability as claims essentially based in negligence. Despite evidence that the federal officers mandated defendants’ use of the asbestos-containing materials, the court found that defendants had failed to present any evidence that the federal government mandated how defendants handle these materials. Because defendants had failed to satisfy the causal nexus requirement. As such, removal pursuant to the Federal Officer Removal Statute was not warranted. Plaintiff’s motion to remand was granted. (USDC EDLA, June 8, 2015) 2015 U.S. Dist. LEXIS 73818
COURT DENIES MOTION FOR SANCTIONS DUE TO PROCEDURAL ERROR
HIGGINBOTHAM V. DRAKE TOWING, LLC, ET AL.
Jedediah Higginbotham filed a petition in state court against Saratoga Resources, Inc., Drake Towing LLC and John Doe Company Man, alleging that while he was working for Alliance Oilfield Services on a Drake vessel, being directed by Saratoga and/or its Company Man, he was required to work on the well in the dark, and sustained injuries, including, but not limited to, contusion of the left chest wall, pulmonary contusion of the left lung, pneumothorax left, fractured ribs left, thigh, arm and other injuries, requiring hospitalization. Higginbotham alleged that his injuries were caused in whole or in part by the negligence and/or gross negligence of defendants, their agents, servants and/or employees. Plaintiff settled his claims against Saratoga and non-suited his state claim without prejudice, and filed in federal court against Drake and Inland Marine, LLC. Higginbotham subsequently voluntarily dismissed without prejudice his claims against Inland Marine in accordance with FRCP Rule 41(a)(1)(A)(I). Drake’s defense counsel sent a "safe harbor" letter to Higginbotham’s counsel, stating that he would file a motion for sanctions under FRCP Rule 11 if Higginbotham’s complaint were not withdrawn because it was "materially false" and was filed for an "improper purpose." Defense counsel contended that the federal complaint alleged that Higginbotham was working on a barge, whereas his state-court petition stated that he was required to work on the well, and all of the discovery materials from the prior case established that Higginbotham was working on the well at the time of the accident. Defense counsel also stated that plaintiff improperly invoked this court's admiralty subject-matter jurisdiction. Higginbotham’s counsel did not withdraw the complaint and Drake filed its motion for sanctions, contending that dismissal of the complaint and an award of attorneys' fees and costs incurred in conjunction with the filing of the motion were justified because the court lacks admiralty subject-matter jurisdiction over Higginbotham’s claims, and the complaint contained statements that were inconsistent with those found in a state-court petition and related discovery. Higginbotham argued that sanctions were not appropriate because he was not denying that he fell from the well, and his statements in the complaint were consistent with the petition and discovery in the state case. The court found that Drake had failed to comply with the service requirement of FRCP Rule 11(c)(2). Although Drake demonstrated that it served a "safe harbor" letter on Higginbotham’s counsel 21 days before filing its motion for sanctions, Drake did not demonstrate that it served its motion on Higginbotham’s counsel 21 days prior to filing it. Rule 11 and the Advisory Committee Notes to the 1993 Amendments specify that the actual motion must be served on opposing counsel 21 days prior to its being filed in court, not solely a letter informing counsel of the intent to file a motion. Additionally, the court noted that Drake's motion challenged the court's subject-matter jurisdiction, and a motion for sanctions was not the appropriate procedural vehicle with which to raise jurisdictional questions. Drake's motion for sanctions under Rule 11 was denied. (USDC EDLA, June 17, 2015) 2015 U.S. Dist. LEXIS 82675
ALJ APPLIES NEW ORLEANS DEPOT STANDARD TO RAIL YARD WORKER
WATSON V. RAIL SWITCHING SERVICES, INC., ET AL.
Jesse Watson brought a claim for benefits under the LHWCA, against Rail Switching Services, Inc. (RSSI), alleging that he was exposed to workplace noise, which caused his alleged hearing loss. Watson became aware of the relationship between his employment and his hearing loss on September 22, 2012, and notified RSSI on November 18, 2013. RSSI controverted the claim, which was eventually referred for formal hearing on the issues of situs and status, extent of disability, and entitlement to benefits under the Act. Watson began working for RSSI in 1992, operating switching engines as a trackman. Watson testified that he and other workers would take turns driving the switching engines, while another person would couple and uncouple the cars, which can be a loud procedure and he did not wear ear protection during this time. Watson also testified when grain season would begin, he would pull cars over to a building where he would unload the grain. This building was on a ship channel, with the silo next to that, and then there were about ten railroad tracks where box cars were switched. Finally, Watson testified he was a member of the longshoreman’s union, when he was employed by RSSI, and did longshoreman work. RSSI contended that Watson’s claim for hearing loss should be dismissed for lack of subject matter jurisdiction and coverage under the Act, asserting that Watson failed to meet the situs test under the Act because he did not work on, over, or adjacent to navigable waters at any time. Further, RSSI contended that Watson did not meet the status test because his work, primarily the switching of rail cars, was not maritime employment that was integral or necessary to the loading or unloading of a vessel. The ALJ found that Watson did not fulfill the situs requirement, citing New Orleans Depot and Sherwin Alumina, noting that Watson failed to satisfy both the geographical and functional components of the situs test, noting that under the New Orleans Depot standard, the rail yard did not adjoin navigable waters because it was not contiguous with, or touching or bordering on such waters. Nor was the rail yard customarily used by RSSI for the loading or unloading of a vessel. Assuming arguendo that Watson established situs coverage, the ALJ also found that Watson failed to meet the situs requirement, as he was not a ship repairman, shipbuilder, or shipbreaker, nor was he directly involved in the loading or unloading of a vessel while employed by RSSI. The ALJ found that Watson did not perform work that was an integral or essential part of the loading or unloading process, such that if he failed to perform his duties, the loading process would come to a halt. Consequently, the ALJ found that Watson was not engaged in maritime employment and did not satisfy the status requirement of the Act. Watson’s claim was denied. (OALJ Case 2014-LHC-864, June 5, 2015)
Updater Note: Thanks to John Walker, of Schouest, Bamdas, Soshea & BenMaier, Houston, TX, for sharing this case with me, and congratulations on the outcome.
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #267. Although you get great up-to-date information as a subscriber to the Longshore Update, you can use this excellent resource to keep your Judges’ Benchbook up to date. Just follow the above link to the OALJ web site.
The last full supplement to the Longshore Benchbook was published in January 2005. However, OALJ has published an index that provides a cross-reference between Benchbook Topics and U.S. Supreme Court, Federal District and Circuit Courts, and Benefits Review Board decisions, issued since 2004 and covered in OALJ's "Recent Significant Decisions Monthly Digest."
And on the Admiralty front . . .
APPELLATE COURT AFFIRMS FOREIGN SEAMAN EXCLUSION (CONT.)
JOHNSON, ET AL. V. PPI TECHNOLOGY SERVICES, L.P., ET AL
This case involved a consolidated maritime personal injury action wherein James Johnson and Robert Croke alleged that they received various injuries when gunmen attacked an oil rig platform off the coast of Nigeria, on which Johnson and Croke were working. Johnson alleged that he was working as an employee of PPI Technology Services, L.P, when gunmen shot him in the leg. Croke alleged that he was working on the same rig, for the same company, when he was shot in the foot and hit by falling ceiling tiles. Both Johnson and Croke filed suit, bringing claims under the Jones Act and claims for unseaworthiness and maintenance and cure under general maritime law. Croke sued PPI and GlobalSantaFe Offshore Services, Inc., claiming that the former was his employer and the latter employed other rig workers. Both companies, he contended, were negligent in failing to take protective measures that would have avoided the incident. Because Croke was a citizen of Canada and the incident at issue occurred in Nigerian waters, the district court dismissed the case under the foreign seaman exclusion provisions of the Jones Act. This case raised numerous jurisdictional disputes and motions for summary judgment [see June 2012 Longshore Update, December 2012 Longshore Update, March 2013 Longshore Update, July 2013 Longshore Update , January 2014 Longshore Update, April 2014 Longshore Update, and May 2014 Longshore Update]. After his case was dismissed, Croke appealed, contending that the district court erred in applying the foreign seaman exclusion provisions of the Jones Act. The district court held that this exclusion applied because Croke was a citizen of Canada and his claims involved an incident that occurred in Nigerian waters. Because Croke did not challenge that determination, the appellate court did not disturb it. The dispute to be resolved was whether 46 U.S.C. §30105(c)'s exception to the exclusion was applicable. Specifically, the issue was whether Croke satisfied his burden on summary judgment of showing, pursuant to §30105(c), that a remedy was not available under the laws of Nigeria or Canada. Finally, Croke contended that the district court erred in not allowing him to amend his complaint. The appellate court held that Croke could not challenge the district court's denial of his motion to amend the complaint because, to the extent that the district court may have erred, Croke invited the error. Having represented to the district court that the law did not allow him to assert his Canadian law claims (the appellate court saw no alternative interpretation of his statement), he could not now challenge on appeal the district court's adoption of such conclusion. The district court's judgment was affirmed. (5thCir, June 1, 2015, UNPUBLISHED) 2015 U.S. App. LEXIS 9086
READ YOUR POLICY CAREFULLY IF YOU WANT MARINE INSURANCE COVERAGE
GUAM INDUSTRIAL SERVICES, INC., ET AL. V. ZURICH AMERICAN INS. CO., ET AL.
This insurance coverage case arose out of the sinking of a dry dock, loaded with barrels of oil, during a typhoon on Guam. The dry dock was owned by Guam Industrial Services, Inc. At the time of the sinking, one of its insurance policies covered damage to the dock, and one covered liability for property damage caused by pollutants. After the dock sank, Guam Industrial filed a claim under each policy. The insurers denied the claims, and Guam Industrial brought suit. The district court granted summary judgment for the insurers, finding that the first policy was voidable because Guam Industrial had failed to maintain the warranty on the dock, and that the coverage under the second policy was never triggered because no pollutants were released. On appeal, the panel affirmed the district court's summary judgment in favor of the insurance companies concerning coverage under two policies issued to Guam Industrial. The Hull and Machinery Policy covered damage to the dry dock, and required as a condition of coverage that Guam Industrial obtain and maintain Navy Certification for the dry dock. The panel held that strict compliance with marine insurance policy warranties was required, even when the breach of warranty did not cause the loss. The panel applied that law to the facts, and concluded that Guam Industrial failed to comply with the Navy Certification warranty. The Ocean Marine Policy covered liability for property damage caused by pollutants. It was undisputed that no oil leaked out of the containers and into the water in the harbor. The panel held that because there was no actual discharge of pollutants, even though the containers of oil were submerged after the sinking of the dry dock, Guam Industrial's costs of retrieving the containers from the sea were not covered by the policy's allowance of coverage for cleanup after the "discharge, dispersal, release, or escape" of pollutants. Judge Kozinski dissented in part, and would find that pollutants were "discharged, dispersed, and released" from the dry dock under the Ocean Marine Policy. (9TH Cir, June 1, 2015) 2015 U.S. App. LEXIS 9045
APPELLATE COURT AFFIRMS AFFIRMATION OF ARBITER’S SALVAGE AWARD
FARNSWORTH V. TOWBOAT NANTUCKET SOUND, INC.
Rodney Farnsworth, III, entered into a salvage contract with Towboat Nantucket Sound, Inc. (TNS), to obtain help when Farnsworth's boat went aground on rocks one night. Farnsworth later tried to rescind the whole contract, claiming that he had signed it under duress, and disputed the sum owed to TNS. The parties by agreement submitted the dispute to a panel of three arbitrators pursuant to a binding arbitration clause in the salvage contract. After the arbitration proceeding had started, Farnsworth chose to file this lawsuit, seeking a preliminary injunction against the arbitration and a declaration that the salvage contract was unenforceable because Farnsworth had entered into it under duress. His complaint drew no distinction between the obligation to arbitrate and the merits issue of what payment was owed to TNS. The district court denied the motion for injunctive relief and stayed the case pending the outcome of the arbitration. The arbitration panel found in favor of TNS and ordered Farnsworth to pay a salvage award of $60,306.85. The district court confirmed that award over Farnsworth's objection. Farnsworth appealed, arguing that the district court erred in confirming the arbitration award without first addressing his duress claim as to the arbitration clause. The appellate court held that, because Farnsworth did not challenge the validity of the arbitration clause specifically in his complaint (or indeed at any time before the conclusion of the arbitration proceedings), the district court correctly found that the duress claim in all its aspects was for the arbitrator to resolve. The district court’s judgment was affirmed. (1st Cir, June 17, 2015) 2015 U.S. App. LEXIS 10203
COURT DENIES REMAND ON FRAUDULENTLY PLED JONES ACT CASE (CONT.)
SKINNER V. SCHLUMBERGER TECHNOLOGY CORP., ET AL
Richard Skinner, was hired by Coil Tubing Services, a subsidiary of Schlumberger Technology Corporation, as a Field Specialist Trainee, who worked onshore, offshore on platforms and vessels and on inland waters. Skinner initially spent eleven days undergoing paid, onshore training and did not work from any vessels until two months later, when he was allegedly injured during an offshore job while on board a lift boat owned and operated by Hercules Liftboat Co., LLC, while the vessel was jacked up and servicing a fixed platform well. Skinner filed suit in state court, asserting claims under the general maritime law and a claim under the Jones Act against his employer, Schlumberger, who removed the action to federal court, claiming Skinner fraudulently pled his Jones Act claim. The court had previously entered an order denying Skinner’s motion to remand as the record before it did not support Skinner’s claims as a Jones Act seaman [see March 2014 Longshore Update]. Schlumberger then moved for summary judgment on Skinner’s Jones Act claim, arguing that Skinner worked for Schlumberger, for at least 189 days, and that the longest possible time he spent in service of a vessel or identifiable fleet of vessels was 42 days. Skinner worked sporadically with eight different vessels, which were not under common ownership. Skinner failed to oppose the motion. The court granted Schlumberger motion for summary judgment based upon its statement of undisputed material facts [see December 2014 Longshore Update]. Skinner subsequently moved for a new trial, stating that his intention to file an opposition in response to the motion for summary judgment was hindered by counsel for Schlumberger and submitted a memorandum as to what would have been his response. The court granted the motion for new trial and ordered both parties to fully brief the issues. Schlumberger maintained that all of the evidence in the case supported its position that Skinner could not meet the seaman duration rule-that an employee seeking Jones Act seaman status must be able to demonstrate he spends at least thirty percent of his work in service of a vessel in navigation. Skinner argued the coiled tubing work he performed constituted a new assignment and his seaman status should be evaluated using only the total hours he worked during that period of time. The court found that the evidence clearly established that, regardless of whether or not Skinner was working under a new assignment when he was injured, or whether his seaman status calculations are based on the number of days or the number of hours he worked on board vessels, he could not show that at least 30% of his time was spent in the service of a vessel or an identifiable fleet of vessels under common ownership or control, and therefore, he could not prove seaman status. Therefore, the court granted Schlumberger’s motion for summary judgment and Skinner’s claims were dismissed with prejudice. (USDC WDLA, June 2, 2015) 2015 U.S. Dist. LEXIS 71339
SEAMAN’S EMPLOYER ESTABLISHES MCCORPENDEFENSE
LADNIER V. REC MARINE LOGISTICS, LLC, ET AL.
Darrell Ladnier was employed by REC Marine Logistics, LLC as a vessel captain, and alleged he was injured while participating in a required training exercise, at Helicopter Underwater Escape Training at a facility owned, operated, and controlled by SafeZone Safety Systems, LLC. During his training, Ladnier sat inside a helicopter simulator, which was inverted in a pool as part of the exercise. Ladnier claimed his safety belt failed to operate properly when the simulator was inverted, thereby trapping him underwater and causing him to injure his right shoulder. Ladnier was diagnosed with a right shoulder rotator cuff tear and underwent two repair surgeries but claimed that he remained unfit and incapable of returning to duty as a seaman. His doctor also has recommended a third surgery for a reverse right shoulder replacement. Ladnier filed suit against REC Marine and SafeZone asserting claims for negligence. Additionally, Ladnier sought maintenance and cure benefits from REC Marine. Although REC Marine paid for Ladnier’s first two surgeries, it refused to pay for the third recommended surgery. REC Marine also moved for partial summary judgment on Ladnier’s maintenance and cure claim based upon a McCorpen defense, arguing the Ladnier concealed material medical facts relating to a pre-existing shoulder condition while filling out REC Marine's pre-employment medical history questionnaires. Ladnier argued there were genuine disputes of fact as to the intentional concealment element. The court found that Ladnier failed to disclose on the pre-employment questionnaires his bilateral shoulder impingement diagnosis and the nature of his arthritis, as well as to explain his past treatment for shoulder pain, including injections and prescription medication, and held that Ladnier intentionally misrepresented or concealed medical facts. The court also found that Ladnier’s misrepresentation or concealment was material to REC Marine's hiring decision. Finally, the court found that Ladnier’s bilateral shoulder impingement and arthritis affected the right shoulder and the alleged injury was in the exact same area, making the causal connection clear. As REC Marine established all three elements of the McCorpen defense, the court granted REC Marine’s motion for partial summary judgment. (USDC EDLA, June 19, 2015) 2015 U.S. Dist. LEXIS 79843
COURT FINDS THAT CONTINUING TO WORK IN ROUGH SEAS WAS NEGLIGENT
GRANGER V. ODYSSEA VESSELS, INC., ET AL.
Joni Hawkins, the personal representative of the estate of James P. Granger, filed a personal injury claim against several defendants, including Odyssea Marine, Inc., Granger's employer; Odyssea Vessels Inc., the owner of the vessel upon which the injury allegedly occurred; and Apache Corporation, which hired the vessel to perform work at the time the injury occurred. Granger was allegedly injured while working as a deckhand aboard an Odyssea vessel as he was pulling in a line. Due to rough sea conditions, a wave came over the stern of the vessel and knocked Granger over, causing him to sustain injuries to his leg. An MRI taken a short time later revealed that Granger had damaged his medial collateral ligament and required arthroscopic surgery on his knee. Following surgery and rehabilitation therapy, Granger resumed working for Odyssea for two brief stints as a deckhand, and later as an engineer. Granger subsequently developed chronic right knee pain, which his physician related to overuse in his left knee, and chronic low back strain with possible pinched nerve in his right leg, which caused him to cease working and lose interest in other activities. Granger subsequently died as the result of a heart attack. Plaintiff initiated this action seeking maintenance and cure, Jones Act damages, and damages for unseaworthiness. Following a bench trial, defendants moved for partial judgment pursuant to FRCP 52(c) that plaintiff's claims against the Apache Corporation, claims against Odyssea Vessels, Inc., claim for maintenance and cure under general maritime law, and claims against Odyssea Marine for negligence under the Jones Act be dismissed. The court granted the motion as to plaintiff's claims against Apache and Odyssea Vessels, and as to plaintiff's claim for maintenance and cure. The court denied the motion as to plaintiff's claim against Odyssea Marine under the Jones Act. The court found that Odyssea Marine was negligent in failing to avoid the hazardous conditions of the line retrieval operation in rough sea, noting that the court's review of case law on this matter showed 8 to 12 foot seas to be significantly higher than what is normally regarded as safe for back deck operations. The court also concluded that Granger was contributorily negligent for failing to avoid the hazardous conditions of the line retrieval operation. However, the court found that Granger's failure to exercise stop work authority did not absolve Odyssea Marine of liability. The court awarded plaintiff $70,000 in damages, and found Odyssea Marine was 85% liable for the injuries that Granger sustained. Those injuries included a damaged medial collateral ligament and chondromalacia in his right knee, damage to the disks of the lower spine, associated pain and suffering, and costs of medical treatment. As such, plaintiff was entitled to recover $59,500 from Odyssea Marine. (USDC EDLA, June 18, 2015) 2015 U.S. Dist. LEXIS 79786
ALLEGED SEAMAN’S CLAIM DISMISSED ON SUMMARY JUDGMENT
ZIEGLER V. BOH BROTHERS CONSTRUCTION COMPANY, LLC
Richard Ziegler’s claims arose from an injury he allegedly suffered when he fell while attempting to board a Boh Bros. Construction Co., LLC crew boat. After Ziegler filed his seaman’s suit, Boh Bros. moved for summary judgment, arguing that Ziegler’s claims lacked merit because he does not a qualify as a "seaman" as is required for him to prevail on his Jones Act and maintenance and cure claims. Citing the time he spent operating vessels during his employment, Ziegler argued the contrary. Following a review of Ziegler’s detailed payroll records, Ziegler’s supervisors had quantified his work, during his employment by Boh Bros., as being 92.75% land-based operations and 7.25% vessel operations. Although Ziegler contended that the actual percentages should be much more heavily weighed in favor of vessel operations, and contended that Boh Bros. representatives manipulate payroll codes as they see fit, the court found that the only evidence that Ziegler offered in support of his contentions was his own uncorroborated and conclusory testimony. Applying the current legal principles for determining seaman status on summary judgment, the Court found that Boh Bros. had met its burden, under Rule 56(a) and (c), of demonstrating that the submitted record evidence contained insufficient proof of Ziegler’s claims, and that Boh Bros. was entitled to judgment as matter of law as to those claims. The Court also noted the Ziegler had failed to satisfy his burden, under Rule 56(c), of citing to particular record documents demonstrating the existence of a genuine dispute as to material facts. Although the court recognized that, in certain factual scenarios, the only supporting evidence reasonably available to a plaintiff was his own testimony, such that his uncorroborated testimony may alone be enough to satisfy his Rule 56 burden, the court was not persuaded that this was one of those cases. Rather, given the nature of Boh Bros.’ work and Ziegler’s involvement in that work, a number of potential evidentiary sources were presumably are available to Ziegler, which he failed to avail himself of. Accordingly, on the showing made, Ziegler’s Jones Act claims failed. The court granted Boh Bros.’ motion for summary judgment and Ziegler’s claims were dismissed with prejudice. (USDC EDLA, June 17, 2015) 2015 U.S. Dist. LEXIS 78532
COURT DENIES REMAND ON FRAUDULENTLY PLED JONES ACT CLAIM
PERKINS V. ARCHER DANIELS MIDLAND CO.
Bryant Perkins allegedly injured his leg while working on an Archer Daniels Midland Co. (ADMC) barge. Perkins brought an action in state court asserting a negligence claim under the Jones Act, as well as a claim for maintenance and cure under general maritime law. ADMC removed the action to federal court, invoking the court's diversity jurisdiction under 28 U.S.C. §1332(a) and argued that Perkins fraudulently pled that he was a Jones Act seaman, and thus was not entitled to savings to suitors protections, which generally precludes removal even when diversity of jurisdiction exists. ADMC maintained that Perkins was a land-based worker whose remedy lies with the federal LHWCA, rather than the Jones Act. Perkins timely filed a motion to remand, reasserting that he is a seaman subject to the protections of the Jones Act, and because the Jones Act prohibits removal, remand is required. In support of his assertion that he is a seaman for purposes of the Jones Act, Perkins submitted his own affidavit in which he attested that he performed many duties for ADMC that are traditionally associated with seaman status, including general deckhand duties, such as cleaning and sweeping barges, clearing barges of ice, opening hatches, and inspecting for leaks. Perkins maintained that he did not have to establish that he is a seaman to warrant remand, but must simply show, through his pleadings and affidavit, that it is possible he could be found to be a seaman. ADMC did not dispute that Perkins performed the duties described in his affidavit, but maintained that they did not grant Perkins seaman status. Although Perkins did spend part of his workday on board vessels, he did not have a connection to an identifiable fleet of vessels under common ownership or control that was substantial enough in terms of its nature and duration to qualify as a seaman under the Jones Act. Rather, Perkins was employed by ADMC as an elevator worker, and performed mostly tasks on land, such as unloading grain from trucks, cleaning cargo spills, and operating the control board to direct grain to the proper bins. ADMC’s affidavit stated that during the 12 months preceding Perkins’ injury, the facility loaded 357 barges, owned by 14 separate entities and, at most, Perkins spent 23.2 percent of his time performing duties while on board barges floating in the river. After the court compared ADMC’s evidence to Perkins’ conclusory attestation that the amount of time he spent working on barges was "significant," the court concluded that Perkins’ assertion that he is a Jones Act seaman was so "baseless, colorable and false" as to constitute a fraudulent attempt to evade federal court. The second prong of the Chandris test is conjunctive in nature; an injured worker's connection to a vessel or group of vessels must be substantial in terms of both nature and duration. Because the court held that Perkins had failed to meet the second component of the Chandristest, the court declined to address whether Perkins had a connection to a group of vessels that was substantial in nature. The court concluded that ADMC had met its heavy burden of showing that Perkins’ Jones Act claim was fraudulently pled, and thus, removal was proper. Perkins’ motion for remand was denied. (USDC EDMO, June 1, 2015) 2015 U.S. Dist. LEXIS 70159
PARTIAL SUMMARY JUDGMENT DENIED ON SEAMAN STATUS AND PUNIES
PELLEGRIN V. MONTCO OILFIELD CONTRACTORS, LLC
Brandon Pellegrin was employed by Montco Oilfield Contractors, LLC (MOC) as an offshore welder engaged in the deconstruction of decommissioned offshore platforms. While performing this work, Pellegrin and the other MOC employees were stationed aboard a lift vessel owned and operated by Montco Offshore that was jacked down beside the platform being decommissioned. The MOC employees rode on the liftboat from one job site to another, but once the vessel was stationed at a jobsite, the MOC employees went to and from the vessel via crewboat for their hitches. The MOC employees ate and slept aboard the liftboat. The welders worked on the platform being decommissioned, a materials barge and the liftboat. Pellegrin informed his supervisor that he was feeling ill with nausea and a headache, so his supervisor excused Pellegrin from work and sent him to a private bunk room. Pellegrin was eventually sent home, but two days later he went to the emergency room where he was diagnosed with pneumococcal meningitis. Two months later, Pellegrin's physician released him to full duty and Pellegrin returned to work for MOC. The following year, Pellegrin was fired for cause. After he was fired, Pellegrin filed suit alleging that he was a seaman and crew member of the liftboat when he contracted pneumococcal meningitis. He alleged that he sustained brain damage and other injuries because Montco Offshore failed to provide immediate medical care, and that Montco Offshore is liable under the Jones Act and the general maritime law. MOC moved for partial summary judgment, arguing that Pellegrin did not qualify as a seaman because less than 30% of his work was performed on the liftboat. MOC further contended that the vessel's mission was to serve as a floating hotel for the MOC employees who were working on decommissioning the platform. The court found that there were genuine issues of material fact regarding Pellegrin's precise relationship to the liftboat. Pellegrin was employed by MOC, and permanently assigned to the liftboat, owned and operated by Montco Offshore, a related entity. The record did not clearly establish the relationship between Montco Offshore and MOC. Similarly, the record was unclear as to whether the materials barges used in the work were controlled by MOC. The court found that the genuine issues of material fact precluded partial summary judgment on seaman status, and defendants' motion was denied. MOC also moved for partial summary judgment on Pellegrin's claim for attorneys' fees and punitive damages associated with its alleged failure to pay maintenance and cure, arguing MOC had paid all maintenance and cure due. Pellegrin agreed that all maintenance and cure had been paid, but argued that his claim for attorneys' fees and punitive damages was associated with MOC's willful and wanton failure to provide cure while he was aboard the liftboat, and then failing to send him ashore via helicopter and immediately take him to the hospital. MOC’s motion was also denied regarding Pellegrin’s claim for attorneys' fees and punitive damages. Finally, the court ordered the defendants to identify their excess insurance carriers up to $50 million of coverage and granted the motion to extend the pleadings deadline. (USDC EDLA, June 11, 2015) 2015 U.S. Dist. LEXIS 75722
PUNITIVE DAMAGE CLAIMS DISMISSED IN LIGHT OF MCBRIDE HOLDING
JOHN PAUL JONES, JR. V. YELLOW FIN MARINE SERVICES, LLC
John Paul Jones, Jr. brought his seaman’s action seeking damages pursuant to the Jones Act and the general maritime law for injuries he allegedly sustained during the course and scope of his employment aboard a Yellow Fin Marine Services, LLC vessel. Jones also sought punitive damages on both his Jones Act and unseaworthiness claims. Yellow Fin moved to dismiss Jones’ claims for punitive damages under the Jones Act and the general maritime law, arguing that such damages were not recoverable as a matter of law, in light of the recent en banc Fifth Circuit opinion in McBride v. Estis Well Service, LLC. The court agreed that McBrideheld that punitive damages were not recoverable under either an unseaworthiness claim or the Jones Act. Because the Fifth Circuit had so held, the court held that Jones’ punitive damage claims must be dismissed. Yellow Fin’s motion was granted and Jones’ punitive damage claims were dismissed with prejudice. (USDC EDLA, May 15, 2015) 2015 U.S. Dist. LEXIS 77771
COURT DENIES MOTION TO SEVER MAINTENANCE AND CURE CLAIM
BERGERON V. ZURICH AMERICAN INSURANCE COMPANY, ET AL.
Edward J. Bergeron was employed by Massman Construction Company as a Captain of one of its towing vessels. Bergeron claimed that he had just gotten of the tug, after securing the moorings, and was required to exit the tug by climbing onto a crane barge, which was moored to a smaller pontoon barge, which was connected to a gangway which extended to the adjacent shore. Bergeron claimed that he sustained his alleged injuries as he sought to exit the gangway by the only means made available to him by his employer, slipping on mud, lubricant, or other slippery substance, causing him to fall. Bergeron filed his seaman’s suit against Massman and its insurer, Zurich American Insurance Company (collectively “Massman”), making claims under the Jones Act and general maritime law. Massman answered the complaint, denying Bergeron’s claimed injuries and seaman status. Bergeron then moved to sever his maintenance and cure cause of action for an expedited trial, maintaining that he was under extreme financial hardship and required surgery for which Massman had thus far refused to pay. Massman opposed the motion, arguing that Bergeron was not under extreme financial hardship because he had received $18,570.00 in workers' compensation benefits and refused Massman’s offer of light duty work (at full pay). With respect to Bergeron’s surgery request, Massman emphasized that Bergeron failed to attend a scheduled independent medical examination intended to provide an independent evaluation of the alleged need for surgery. After carefully reviewing the information provided by the parties, the court found severance of Bergeron’s maintenance and care claim was inappropriate, noting that financial hardship generally does not warrant severance and expedited trial of maintenance and cure claims. Furthermore, the trial date was less than five months away and, even if expedited, a separate trial of the maintenance and cure claim likely would be held only a month or two before the currently set date for trial of all issues. Finally, because Bergeron had requested a jury trial, granting his severance request would necessitate two separate trial proceedings. The court concluded that judicial economy and efficiency weighed in favor of having a single trial of all the issues. The court found that Bergeron had not demonstrated that severance and expedited trial of his maintenance and cure claim were warranted and denied Bergeron’s motion. (USDC EDLA, June 22, 2015)2015 U.S. Dist. LEXIS 80765
PARTIAL SUMMARY JUDGMENT GRANTED ON DIRECT ACTION CLAIM
BRATKOWSKI V. ASPEN INSURANCE UK, LTD.
Kenneth Bratkowski filed suit against his employer, Cal Dive International, Inc., after allegedly suffering a back injury, during the course of his employment. Bratkowski, who is a diver, allegedly hurt his back while pulling on a 70-pound bell hatch. Bratkowski sought to recover monetary damages in the amount of $15,000,000, for Jones Act negligence, unseaworthiness, and for maintenance and cure. After Bratkowski’s suit was filed, Cal Dive filed for bankruptcy, pursuant to Chapter 11. A few weeks later, Bratkowski sued Aspen Insurance UK Ltd., Cal Dive's insurer, alleging the same claims arising from the same incident. Aspen Insurance moved for summary judgment, arguing dismissal of Bratkowski's claims (for Jones Act negligence, unseaworthiness, and maintenance and cure) against it under the Louisiana Direct Action Statute was warranted because neither the policies of insurance it issued to Cal Dive, nor the accident giving rise to the plaintiff's injuries occurred in Louisiana. Aspen submitted that the policies of insurance it issued to Cal Dive were issued and delivered in Houston, Texas, not Louisiana; and the accident sued upon occurred on the high seas on a vessel, located in MP block 300, which is on the Outer Continental Shelf and, therefore not within the territorial waters of the State of Louisiana. The Louisiana Direct Action Statute, La.R.S. 22:1659, permits an action against an insurer of a tortfeasor if the plaintiff can establish that (1) the accident or injury occurred in Louisiana, (2) the policy was written in Louisiana, or (3) the policy was delivered in Louisiana. The court noted it was undisputed that the accident giving rise to Bratkowski's Jones Act and unseaworthiness claims occurred on the outer continental shelf, not in Louisiana. Accordingly, the court concluded that those claims could not be pursued by way of direct action against Aspen. However, the court noted that it was likewise undisputed that Bratkowski's claims for failure to pay maintenance and cure sounded in tort. Insofar as Bratkowski alleged in his amended complaint that the injury occurred in Louisiana, and there had been no discovery on the issue, the court found that Aspen was not entitled to judgment as a matter of law dismissing Bratkowski's failure to pay maintenance and cure claim. Accordingly, Aspen’s motion for summary judgment was granted in part and denied in part. (USDC EDLA, June 17, 2015) 2015 U.S. Dist. LEXIS 78536
COURT ORDERS INCREASE IN LIMITATION FUND BASED ON CONTRACT VALUE
GREAT LAKES DREDGE & DOCK CO., LLC V. PREPA, ET AL.
The United States Army Corps of Engineers hired Dragados USA to complete a major project in San Juan, part of which involved dredging work. Dragados, in turn, hired Great Lakes Dredge & Dock Co., LLC to complete some of the dredging work. Great Lakes’ subcontract required it to be bound to Dragados by all items of agreement between Dragados and the Corps in the prime contract. During its dredging operation, Great Lakes dug up underwater power cables in on two separate occasions-delaying dredging each time. The Puerto Rico Electric Power Authority (PREPA) alleged that it owned the cable that Great Lakes allegedly damaged and subsequently removed at the instruction of Dragados. Great Lakes sought exoneration or limitation of liability under 45 U.S.C. § 30505, estimating that the maximum value of its Dredge 51 on the date of the incident was $4,775,000.00, and the maximum value of the freight pending at the time of the incident amounted to $23,080.00. Consistent with Great Lakes' estimate of the combined value of the vessel and pending freight, the court accepted security in the form of three letters of undertaking, worth a total of $4,798,080.00. PREPA subsequently filed its claim under the limitation action and moved to increase the fund from under $5 million to $10 million. Dragados also filed a claim seeking indemnity from Great Lakes for any judgment PREPA might secure against Dragados. PREPA premised its request to increase the value of the limitation fund on three independent arguments. First, it asserts that Great Lakes' estimate of its pending freight improperly disregarded the value of Great Lakes' subcontract. Second, PREPA claimed that Great Lakes failed to include the value of the vessels assisting Dredge 51 in Great Lakes' performance of the subcontract, as the so-called flotilla doctrine allegedly demands. Third, PREPA argued that Great Lakes' valuation of its Dredge 51 lacked sufficient factual support and failed to consider certain legally pertinent factors. Because PREPA's first argument was sufficient to justify increasing the security in the case to $10 million-which is all PREPA requests-the court declined to consider the latter two arguments. The court found that the security Great Lakes had originally submitted in the case was premised on an improperly meager estimate of its pending freight. Because Great Lakes, Dragados, and the Corps treated the electricity cable as a differing site condition-the removal of which earned Great Lakes additional compensation not included in the originally negotiated value of the subcontract, pursuant to a supposed modification of that agreement-Great Lakes argued that its pending freight was equal to the value of that additional consideration alone, namely $23,080. The court found that there were at least two phases of the contract at issue in this case-the dredging phase, during which Great Lakes discovered the cable and began pulling on it, as well as the cable's subsequent removal pursuant to a putative contract modification. Accordingly, the court concluded that Great Lakes' security must be increased by the contractually stipulated value of that dredging, $7,828,800.00, which Great Lakes omitted from its initial estimate. The stipulated value of Dredge 51, combined with this new estimate of pending freight, thus rose to $12,635,823.50. That figure exceeded the $10 million, which was all the security PREPA sought. Accordingly, Great Lakes was ordered to increase its security to $10 million and PREPA’s motion was granted. (USDC DMD, June 16, 2015) 2015 U.S. Dist. LEXIS 77462
COURT ALLOWS PUTATIVE “EXPERT” TO TESTIFY
PASTER V. INGRAM BARGE COMPANY
Tommy Paster alleged that he was injured, while working as a deckhand aboard a vessel owned and operated by Ingram Barge Company, when he felt a "twinge" in his back while lifting equipment from a tugboat up to the deck of an adjacent barge. Paster filed suit against alleging that the unseaworthiness of the vessel and Ingram’s negligence caused his injuries. In support of his claim, Paster offered the expert report of Robert Borison, which purported to describe the accident that occurred and presented findings on factors that may have contributed to the alleged injuries sustained. Ingram moved in limine to exclude the testimony of Borison, arguing that they were based on insufficient facts, were misleading, and would not be helpful to the jury. Taken together, Borison's expert testimony sought to establish that Paster’s work assignment required him to assume an unsafe lifting position, thereby causing his injury, a reasonably competent safety professional would have assigned more manpower or mechanical power to assist Paster with the lift, and Ingram failed to adequately train Paster on proper lifting techniques under the circumstances. Although they probably should have, Ingram did not challenge Borison's credentials. Instead, Ingram argued that all three of Borison's opinions were within the scope of the jury's common experience and Borison's opinions were misleading. The court initially found that Borison's proposed testimony was not within the scope of a layman's common experience, and would likely assist the trier of fact in determining whether Ingram’s conduct fell beneath the applicable standard of care. The court also rejected Ingram’s argument that Borison's opinions were misleading or factually deficient, noting that Borison’s “negligent-sounding” section titles were not evidence. Although the court agreed with Ingram, that Borison's report was not the model of clarity, Ingram’s defendant's complaints about Borison's headings did not render Borison's underlying opinions inadmissible. Ingram’s motion to exclude Borison’s testimony was denied. (USDC EDLA, June 12, 2015) 2015 U.S. Dist. LEXIS 76310
Updater Note: Having personally had the displeasure of listening to this purported safety windbag testify, I’m inclined to think the court made a mistake here. That said, Borison does not come off well before a jury, which should inure to Ingram’s benefit.
OWNER NOT LIABLE FOR ACTS OF INDEPENDENT CONTRACTOR
MOREAU ET AL. V. SHELL OIL COMPANY
Teska Moreau alleged that he sustained a back injury during a Helicopter Underwater Escape Training (HUET) course. Moreau was required to complete this training every four years in order to be transported to and from his worksite by helicopter. At the time of the alleged accident, Moreau was a seaman employed by Galliano Marine Service, LLC. The training exercise was conducted by Petrofac Training Inc. on Shell Exploration and Production Company and Shell Offshore, Inc.'s (collectively "Shell") property. Moreau claimed that while participating in the HUET course, the operator, an employee, controlling the descent of the helicopter simulator into the pool, allegedly submerged the simulator suddenly and without warning. Moreau reported that he panicked and sustained injuries while trying to escape the simulator. Moreau contended that Shell was liable for the negligent acts of Petrofac and/or the Petrofac instructor because they were agents or employees of Shell. Shell moved for summary judgment, arguing that it owed no duty to Moreau and Petrofac was an independent contractor. The court found that none of the facts alleged by Moreau established the requisite control necessary to create a master/servant relationship. Additionally, Moreau had failed to submit any evidence to dispute Shell's assertion that Petrofac controls its employees, as well as the content and implementation of the HUET training course. The court found that Shell could not be held liable for the acts of Petrofac's employees, as Moreau had submitted no evidence the Shell exerted any control over Petrofac employees, and Petrofac had admitted that it was responsible for the hiring, firing, training, paying, and supervising of its employees. Accordingly, Shell was not liable, as a matter of law, for the negligent acts of its independent contractor's employees, and the court granted Shell’s motion for summary judgment. (USDC EDLA, June 4, 2015) 2015 U.S. Dist. LEXIS 73157
STIPULATIONS IN LIMITATION CASE FOUND ADEQUATE TO LIFT STAY
IN RE: GALVESTON BAY ENERGY, LLC
Paul Blasingame filed a personal injury action under the Jones Act and general maritime law against his employer in state court under the saving-to-suitors provision, to recover for injuries allegedly suffered when he worked onboard a vessel owned by Galveston Bay Energy, LLC (GBE). GBE filed a limitation of liability action in federal court and Blasingame became the sole claimant in the limitation action. Blasingame subsequently moved to lift limitation stay so that he could proceed with his state court action, arguing that he had met the requirements for such relief by filing appropriate stipulations to protect the shipowner's rights under the Limitation of Liability Act. The court found that Blasingame’s three notarized stipulations, attached to his motion, satisfied the requirements for the court to vacate the injunction on his state court proceeding. Because the court found that GBE’s rights were adequately protected by the stipulations, the court ordered that the motion to lift limitation stay was granted and its previous order restraining prosecution of claims was vacated. (USDC SDTX, June 10, 2015) 2015 U.S. Dist. LEXIS 74728
Quotes of the Month . . .“Great spirits have always encountered violent opposition from mediocre minds."-- Albert Einstein
“We make way for the man who boldly pushes past us.” -- Christian Nestell Bovee
“A man's errors are his portals of discovery." --James Joyce
Tom Langan
Risk Management Director
Weeks Marine, Inc.
If the links above do not take you directly to the case, try cutting and pasting the link into the URL location on your browser. Links are not provided for District Court or other cases where a charge is imposed by the court for access.
Please note that these opinions and statements are my own. They do not represent the position of my employer or any other organization to which I belong. These opinions may not even represent my own opinion at a later time or place. Under no circumstances should these opinions and statements be considered legal advice. If you want legal advice, please consult an attorney.
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