April 2017
Notes From Your Updater - The Signal 2017 Maritime Conference will be held May 22nd-24th, at the Westin Cleveland Downtown Hotel, 777 Saint Clair Avenue NE, in Cleveland, Ohio. You may review the event agenda and event summary and register on line. The registration deadline for this great annual Longshore event is May 24, 2017.
On March 3, 2017, a petition for certiorari was filed with the U.S. Supreme Court, in the case of Caraffa v. Carnival Corporation, Docket No. 16-1074. The question presented is, “when a Jones Act seafarer alleges negligence based on asbestos exposure, is the applicable causation test the 'featherweight' causation standard, or is it the 'substantial factor' causation test as applied in products liability cases?”
On February 28, 2017, President Trump issued an Executive Order that, among other things, directs the Administrator of the Environmental Protection Agency (EPA) and the Assistant Secretary of the Army for Civil works to review the 2015 rulemaking relating to the definition of waters of the United States for consistency with his policy for restoring the rule of law, federalism, and economic growth.
On February 28, 2017, Representative Thornberry ®-TX) introduced a bill (H.R. 1261) to clarify the definition of navigable waters, and for other purposes.
Senator Risch ®-ID) introduced a bill (S. 702) to amend the National Labor Relations Act and the Labor Management Relations Act, 1947 to deter labor slowdowns at ports of the United States, and for other purposes.
LIARS, LIARS, PANTS ON FIRE!
PRICE, ET AL. V. DIRECTOR, OWCP, ET AL.[LONGNECKER PROPERTIES, INC.]
Two oil riggers, Ronnie Price and Quentien Rogers, sought disability benefits under the LHWCA. Claimants were employed by Longnecker Properties and worked on a supply vessel. After the vessel was involved in an accident, Price and Rogers sought disability benefits for what they alleged were totally disabling injuries. At a formal hearing, claimants testified that the supply vessel was involved in a forceful collision with a shrimp boat, causing them to fall. Other crewmembers, though, testified that the supply vessel collided only with a shrimp boat's trawling line, not with the shrimp boat itself, so there wasn't any impact or jolt that could have caused a fall. Longnecker and the claimants both submitted medical reports. Claimants' reports indicated substantial injuries, but their doctor did not independently evaluate whether the collision caused their injuries. Longnecker's reports concluded that claimants could have returned to work and that their injuries were not caused by a recent traumatic event but were instead degenerative. The ALJ weighed the conflicting testimony and made credibility determinations. Citing claimants' lack of credibility and the improbability of their accounts, the ALJ found the collision did not generate sufficient force to have caused claimants' injuries. The medical evidence did not weigh either way, as it was at best neutral in terms of independently corroborating claimants' testimony. The ALJ denied benefits, concluding that claimants had not met their burdens of showing that their injuries could have been caused or aggravated by a workplace incident. On appeal, the Board affirmed, concluding that the ALJ did not err either by requiring claimants to prove their entitlement to the presumption or in his weighing of the evidence. Claimants petitioned for review by the appellate court, arguing the wrong legal standard was applied in concluding they were not entitled to benefits. The appellate court reviewed the entire record and found that the ALJ did not err when he denied disability benefits under the LHWCA, because the fact that some sort of collision occurred, did not necessarily establish the oil riggers' initial burden on causation. There was no definitive evidence indicating the intensity of the collision, and, in the absence of such evidence, the ALJ's finding that the oil riggers were totally unreliable and not credible was sufficient to discredit the oil riggers' evidence of a more serious incident. The appellate court held that the ALJ did not reversibly err when he gave greater weight to the evidence tending to show the incident could not have caused the oil riggers' injuries. The petition for review was denied. (5th Cir, March 20, 2017, UNPUBLISHED) 2017 U.S. App. LEXIS 4947
DBA CLAIMANT UNABLE TO SHOW EMPLOYER/EMPLOYEE RELATIONSHIP
MIKHA V. DIRECTOR, OWCP [SERVCO SOLUTIONS, LLC]
Firas Mikha sought workers' compensation, under the Defense Base Act extension of the LHWCA, for injuries he allegedly sustained from an improvised explosive device (IED) when he was driving a truck in Iraq in 2005, naming his employer as Theodor Wille Intertrade, GmbH (TWI), a Swiss corporation that did business in Iraq as Servco Solutions, LLC (Servco). TWI/Servco disputed Mikha's claim and the administrative law judge denied Mikha's claim, concluding Mikha could not show an employer-employee relationship with TWI/Servco. The Benefits Review Board affirmed. Mikha petitioned from this adverse agency ruling, arguing that he was in an employer-employee relationship with TWI/Servco because he was working for the benefit of Servco through a Servco subcontractor, likely a company named Big Apple. The appellate court noted that Mikha's theory was that he was working under the control of Eddie Nagel, an employee of a TWI subsidiary. Mikha's evidence to support this fact was his own testimony, a declaration from his friend, Wathek Sami, and a letter of recommendation written on his behalf by Nagel. The ALJ discounted Mikha's testimony, gave no weight to Sami's declaration, and credited Nagel's explanation that Nagel wrote the letter but did not supervise Mikha. The appellate court upheld the ALJ's credibility findings because they were not clearly in conflict with the record, incredible, or unreasonable. Mikha had hardly any probative, credible evidence in support of the position that he was working under Nagel's control. Substantial evidence supports the ALJ's finding that Mikha was not an employee of TWI/Servco. The petition was denied and the agency ruling was affirmed. (9th Cir, March 3, 2017, UNPUBLISHED) 2017 U.S. App. LEXIS 3879
LONGSHORE CLAIMANT PROHIBITED FROM COVERAGE UNDER THE ACT
STEWART V. RIVERSIDE TECHNOLOGY, INCORPORATED, ET AL.
Glenn Stewart allegedly broke his right ankle, while working for Riverside Technology, Inc. as a fishery observer aboard a fishing vessel. Stewart filed separate claims for benefits under the LHWCA and Federal Employees’ Compensation Act (FECA). Riverside filed a motion for summary decision with the administrative law judge as to the Longshore claim on the ground that Stewart was excluded from coverage pursuant to §903(b) of the LHWCA. Riverside maintained that Stewart’s work occurred under the Fisheries Conservation Management Act (FCMA), 16 U.S.C. §1801 et seq., which states that fishery observers, like Stewart, are “deemed” federal employees subject to the FECA. In his order, the ALJ, finding that claimant’s observer work renders him a federal employee for purposes of workers’ compensation under the FECA, granted Riverside’s motion and dismissed Stewart’s longshore claim. On appeal, Stewart challenged the ALJ’s grant of summary decision and dismissal of his longshore claim. Riverside and the Director each responded urging affirmance of the ALJ’s dismissal of Stewart’s longshore claim. After consideration of the administrative law judge’s findings, the arguments raised on appeal, and the evidence of record, the BRB held that the ALJ’s dismissal of Stewart’s claim was in accordance with law. The Board found that the ALJ properly found, viewing the evidence in the light most favorable to claimant, the non-moving party, that the case does not present any genuine issues of material fact and that Riverside was entitled to a decision in its favor as a matter of law. Accordingly, the BRB affirmed the ALJ’s order granting Riverside’s motion for summary judgment. Stewart sought further review of the BRB’s decision and order affirming the ALJ’s denial of longshore disability benefits. In a short per curiam opinion the appellate court concluded that the Board's decision was based upon substantial evidence and was without reversible error. Accordingly, the appellate court denied the petition for review. (4th Cir, March 14, 2017, UNPUBLISHED) 2017 U.S. App. LEXIS 4437
AL SUPREME COURT ALLOWS INTENTIONAL MISCONDUCT CLAIM TO PROCEED
IN RE: MICHAEL KESHOCK ET AL.
Austal USA, LLC operates a shipyard that builds naval vessels. Each of the plaintiffs, Michael Keshock, Martin Osborn, Richard Fitzgerald, Tyrone Lucas, Riley Bodiford, Tommie Brandon, Justin Reed, and William White, was an employee of Austal who claimed to have been injured while working in the course of his employment. Specifically, each plaintiff claimed to have been injured by a tool known as a "Miller saw." Plaintiffs alleged a claim of "intentional misconduct," specifically alleging that Austal had intentionally provided plaintiffs with a dangerous and defective Miller saw with the specific intent that it would cause injury to plaintiffs. Austal filed a Rule 12(b)(6) motion seeking to dismiss this count, arguing that it was immune from the claim asserted by virtue of the exclusivity provisions of the LHWCA and the Alabama Workers' Compensation Act. The trial court entered an order denying Austal's motion to dismiss the count. Austal moved the trial court to vacate its order or to certify its order for a permissive appeal. In the meantime, the plaintiffs filed an amended complaint, restating the "intentional-misconduct" claim and added five more counts, each alleging that Austal intentionally injured them. Austal moved to dismiss the additional five counts, contending that the claims were barred by the exclusivity provisions of the Alabama Workers' Compensation Act and/or the LHWCA. The trial court denied Austal's motion to dismiss the additional five counts, but also certified for immediate appeal the question whether all the intentional misconduct counts asserted claims upon which relief could be granted. Austal filed with the Alabama Supreme Court a petition for permission to appeal or, in the alternative, for a writ of mandamus. The appellate treated the petitions for permissive appeal as petitions for the writ of mandamus and ordered answers and briefs. There was no dispute that each of the plaintiffs was engaged in maritime employment sufficient to qualify for coverage under the LHWCA. Austal argued that, because the plaintiffs were injured within the line and scope of their maritime employment, Austal enjoyed immunity from tort claims by virtue of the exclusivity provision of the LHWCA. Austal also argued that, to the extent it applied, the Alabama Workers' Compensation Act barred the plaintiffs' tort claims. Nevertheless, based on the briefs before it, the appellate court noted that it appears that the parties considered the case to be ultimately governed by the LHWCA, and declined to address the applicability of the exclusivity bar of the Alabama Workers' Compensation Act. The appellate court began its analysis by observing that in Rodriquez-Flores, it recognized that there was an "exceedingly narrow" exception to an employer's tort immunity under the LHWCA where the employer has committed an intentional tort with the specific intent or desire that the injury occur. The appellate court went on to point out that, regardless of its view on the likelihood of the plaintiffs' ultimate ability to establish the truth of the intent-to-injure allegations, or even to survive the summary-judgment stage, it could not deny that there was at least some possibility that those allegations were true. Accordingly, the plaintiffs were entitled to at least limited discovery on the issue whether their claims are subject to the exclusivity provision of the LHWCA. Thus, the appellate court held that Austal had not shown a clear legal right to a Rule 12(b)(6) dismissal and denied the petition. (Ala. Sup. Ct, March 3, 2017) 2017 Ala. LEXIS 20
YOU CHOSE THE METHOD OF ACCESSING THE VESSEL (CONT.)
SCHNAPP V MILLER'S LAUNCH, INC.
Wayne Schnapp was allegedly injured while boarding a vessel owned and operated by Miller 's Launch, Inc., and chartered by Schnapp’s employer, nonparty Weeks Marine, Inc., to transport workers and equipment to and from job sites. Schnapp claimed Miller’s negligence, including its vessel’s inadequate equipment and unsafe condition and inadequate warnings, caused his injury. Schnapp was employed by Weeks Marine as a surveyor working on a bridge rehabilitation project at the time of his alleged injury, and was transported to shore on board Miller’s vessel. Schnapp, who was not involved in the unloading or loading of equipment, disembarked by climbing up to the pier. When re-boarding the vessel, he injured his leg by jumping down from the pier onto the deck while reaching forward in an attempt to grab the shoulder of another Weeks Marine employee as an anchor standing on the vessel a few feet in front of plaintiff. Schnapp did not notify the captain when re-boarding nor request assistance in re-boarding and admitted that he decided to jump down to the deck. Schnapp collected LHWCA benefits from his employer after the incident, but later filed a §905(b) action against Miller’s, who moved for summary judgment dismissing Schnapp’s complaint because the undisputed facts established that Miller’s conduct did not amount to negligence under the LHWCA. Miller’s further insisted that Schnapp’s claim of the vessel' s negligence in failing to provide him a safe means to board or disembark constituted a claim against the vessel owner for unseaworthiness, barred under LHWCA. In opposition Schnapp claimed he was a passenger on Miller’s chartered vessel, so that Miller’s owed him a duty of reasonable care and was negligent in failing to provide him a safe means of egress from and access to the vessel. Based on the open, obvious distance down from the pier to the deck, the court held that Miller’s was entitled to rely on Schnapp’s experience working at his employer 's facility, his familiarity with the conditions there and the process of boarding from the pier to the vessel, and hence his reasonable steps to avoid or remedy such a hazard. Since Schnapp failed to identify any viable breach of Miller’s Scindia duties, the court granted Miller’s motion for summary judgment, dismissing Schnapp’s claim of negligence under §905(b) [see February 2015 Longshore Update]. Schnapp appealed, raising issues about the various duties that a vessel owner owes a harbor worker asserting a claim pursuant to the LHWCA under Scindia. The appellate court initially noted that Schnapp was not a mere passenger on the Miller’s Launch vessel, but was working aboard the vessel at the time of the accident. Notwithstanding a vigorous dissent from Judge Richard Andrias, the majority found that there were issues of fact as to whether Miller’s Launch violated both the turnover duty and the duty to intervene. The motion court concluded that because the hazard was open and obvious, Miller’s Launch could not be liable for violating the turnover duty, citing Kirksey v. Tonghai Maritime. However, the appellate court pointed out that this was not dispositive of the appeal, noting that the turnover duty requires a vessel to provide a safe means of access to the ship. The fact that the Miller’s Launch vessel was not designed to carry a gangway suitable for all docks was of no moment; there were other methods of safely boarding the boat. Accordingly, under Scindia, questions of fact existed as to whether Miller’s Launch breached its turnover duty. It was up to a jury to determine whether Miller's stated policy of not providing a gangway, and instead leaving it up to its passengers to decide whether embarkation was safe, breached that duty. There were also issues of fact as to whether Miller’s Launch violated its duty to intervene. Schnapp contended that the dangerous condition was that the vessel docked four feet below the bulkhead, a situation that made it unsafe for him to embark without assistance. Moreover, Schnapp testified at his deposition that in the previous 12 times or so that he had re-boarded the vessel he jumped down to the boat on his own. Thus, the vessel captain should have known that Schnapp was boarding the vessel by jumping. The appellate court held that Miller’s was not entitled to summary judgment on Schnapp’s personal injury claim under §905(b), because there were issues of fact as to whether the owner violated the turnover duty and the duty to intervene, including, whether Schnapp really had the option of obtaining a gangway or insisting that one be provided. The order on summary judgment was reversed and the case was remanded to the trial court. (1st App Div, Sup Ct. of NY, March 23, 2017) 2017 N.Y. App. Div. LEXIS 2116
COURT HOLDS LONGSHOREMAN DOES NOT HAVE A MARITIME CLAIM (CONT.)
FERNANDEZ V. CITY OF NEW YORK
Jose Fernandez alleged that he was injured while working on a heavy steel pipe valve, when a chain fall device failed causing the disc and stem to fall into the body of the valve onto his right hand. The valve was a component of a ship owned by the United States of America that was undergoing repairs in a shipyard operated by GMD Shipyard Corp. Fernandez sued the City, alleging causes of action premised on common-law negligence and NY Labor Law §§ 200, 240 and 241. The City moved to dismiss the complaint on the ground that the complaint failed to state a cause of action in light of Fernandez’s failure to timely serve notice of claim and his cross-motion to amend the complaint. Fernandez opposed the City’s motion alleging that New York's notice of claim requirement was rendered unenforceable in his case because it is preempted by the statute of limitations applicable to a federal maritime tort cause of action, asserts he had a maritime tort claim because he applied for and was awarded benefits under the LHWCA. Fernandez argued that, since §933(b) expressly allows an employee to commence a negligence action within six months of acceptance of an award, and since the statute of limitations for a maritime tort is three years, his rights under maritime law preempted application of the notice of claim provisions of the General Municipal Law. The court disagreed, noting that §933(b) does not create any rights or remedies, but rather, merely establishes procedures by which third-party claims are to be prosecuted in the context of a predicate LHWCA claim. The court also found that Fernandez had failed to show that he had a maritime tort cause of action, as his accident on land did not fall within maritime jurisdiction. While the vessel was being repaired in drydock, the accident itself occurred in GMD's work shop. Nothing in this identification of the accident location as a work shop allows an inference that the work shop may be deemed to be on navigable waters. Fernandez’s allegations also did not allow an inference that the accident was proximately caused by the vessel or an appurtenance thereof, since the pump at issue had been removed from vessel, placed in the work shop and, at the time of the accident, was being repaired by Jen-Mar. Fernandez had failed to allege any facts suggesting that it was still under the control of the ship or its crew. In the absence of maritime tort jurisdiction, the maritime tort statute of limitations was inapplicable. Therefore, the court dismissed Fernandez’s complaint [see September 2014 Longshore Update]. Fernandez appealed the trial court’s ruling dismissing his complaint. The appellate court held that the trial court properly granted the City's motion to dismiss and denied his cross-motion pursuant to CPLR 3025(b) for leave to amend the complaint because he failed to serve a timely notice of claim, as required by General Municipal Law §§50-e and 50-i, and his proposed complaint alleging a "maritime tort" under § 933(a) of the LHWCA, in addition to the causes of action under Labor Law §§200, 240(1), and 241(6), was patently devoid of merit inasmuch as the accident allegedly occurred at a location not subject to maritime jurisdiction. The order of dismissal was affirmed. (2nd App. Sup Ct. Of NY, March 22, 2017) 2017 N.Y. App. Div. LEXIS 1986
LHWCA PAYMENT OF MEDICALS DOES NOT PRECLUDE STATE COMP. PAYMENT
NORTHROP GRUMMAN SHIPBUILDING, INC. V. WARDELL ORTHOPAEDICS, P.C.
Charles Everett allegedly suffered an injury at work while in the employ of Newport News Shipbuilding, later known as Northrop Grumman Shipbuilding, Inc. and now known as Huntington Ingalls Incorporated. Everett was voluntarily paid benefits under the LHWCA, but later filed a claim for benefits with the Virginia Workers’ Compensation Commission. Everett and employer eventually filed a joint petition to the Commission requesting the entry of a settlement order. In the petition, the parties agreed that claimant would receive a lump sum payment of $57,500, less a deduction for attorney's fees. In exchange, employer would be released from any and all further liability for further compensation, past, present or future, and future medical benefits. The joint petition asserted, "Employer shall be responsible for medical treatment pursuant to Section 65.2-603 incurred by the Claimant through the date of the entry of the Order approving the settlement and the Claimant shall be responsible for any and all medical expenses or any other costs incurred thereafter." Employer contested the compensability of Everett’s claim in the joint petition. The joint petition also asserted that Everett had already been paid $61,115.57 pursuant to the LHWCA for his alleged injury. Subsequent to the settlement, Wardell Orthopaedics, P.C. filed a healthcare provider's application with the Commission seeking payment by employer of outstanding balances for medical services rendered to Everett for injuries he sustained as a result of his alleged injury. A hearing on the issue was held by the deputy commissioner, at which employer offered numerous defenses. The deputy commissioner found in favor of provider and awarded to provider $12,438.43 in unpaid medical services rendered to claimant prior to the entry of the settlement order. The deputy commissioner also rejected employer's accord and satisfaction defense, finding that there was no evidence that representatives of provider gave assurances to employer that provider agreed to be bound by the payments made under the LHWCA. Employer appealed the matter to the full Commission, which affirmed the findings of the deputy commissioner in a unanimous opinion. In a further appeal, employer argued that the Commission erred by exercising jurisdiction over a dispute that did not involve any right of any injured worker, by ignoring and perverting the terms of the employer's settlement with Everett of all claims for past, present, and future medical expenses, by finding that Dr. Arthur Wardell was an authorized treating physician under the Virginia Workers' Compensation Act, by failing to require the provider to establish by preponderant evidence that the treatment provided was due to a compensable injury by accident that occurred during the course of and arose out of employment, by permitting provider retroactively to seek additional sums under the Virginia Workers' Compensation Act when reimbursement had been paid fully and finally pursuant to the LHWCA, and when the provider admitted it had long since written off the remaining account balance upon receipt of the Longshore payment, and by liberally applying the doctrine of waiver and estoppel against the employer, equating ironically the settlement of all claims with the knowing waiver of all defenses to such claims, and by refusing to apply the doctrine of accord and satisfaction to bar the claim of provider from reviving previously written off medical bills. The appellate court affirmed, finding that the Commission did not err in exercising jurisdiction over provider's application. It found that the Commission's award of medical expenses did not violate the settlement order or render meaningless the terms of the parties' settlement, and that the Commission's award was consistent with the terms of the settlement order. Because the parties did not agree in their settlement agreement that employer was not responsible for medical treatments provided by Dr. Wardell, the Commission did not err when it found that employer was responsible for the costs associated with medical treatments related to the accident that Everett received through the date of the settlement order, including the medical treatments through that date provided by Dr. Wardell. The appellate court also found that, pursuant to the terms of the settlement order, the Commission did not err when it found that provider was not required to prove that claimant suffered a compensable injury in order to recover. The appellate court also held that the Commission did not err when it found that provider's acceptance of payments under the LHWCA did not preclude its ability to recover under the Virginia Workers' Compensation Act. Finally, the appellate court found that the Commission did not err in rejecting employer's accord and satisfaction defense to provider's application for an award for medical payments. Consequently, the decision of the Commission was affirmed. (Va. App. Ct, February 28, 2017) 2017 Va. App. LEXIS 51
MONEY HUNGRY ORTHOPEDIST PREVAILS OVER SHIPYARD’S OBJECTIONS
NEWPORT NEWS SHIPBUILDING & DRY DOCK CO. V. WARDELL ORTHOPAEDICS
Charles Bell allegedly incurred a compensable left knee injury from a forklift accident while working for Newport News Shipbuilding & Dry Dock Co. (NNSB), who accepted the injury as compensable under the LHWCA. Bell later also filed a claim under the Virginia State Compensation Act. Bell chose Dr. Kerry F. Nevins from the panel of three physicians chosen by NNSB. The state Commission awarded Bell the payment of all reasonable and necessary medical treatment causally related to the accident for as long as necessary. After Dr. Nevins retired, Bell had to select a new treating physician. Bell chose not to select a panel physician as chosen by NNSB, instead, Bell chose Dr. Wardell as his treating physician. The Commission found that Dr. Wardell treated Bell for the effects of the accident from September 29, 2010 through June 4, 2013. NNSB paid Wardell for Bell's treatment pursuant to the Department of Labor fee schedule in accordance with the LHWCA a total of $17,205.96. A Wardell administrator requested a hearing before the Commission because, Wardell had only received partial payments from NNSB for Bell, claiming that Wardell was due $28,157 for the medical treatment of Bell, but that NNSB had only paid $17,205.96. Wardell sought the difference of $10,951.04. The Commission found that accepting payment under the DOL fee schedule did not indicate a knowing waiver of Wardell's right to receive payment of the prevailing community rate pursuant to Code § 65.2-605 for medical treatment of Bell. NNSB appealed the Commission of $10,951.04 for services rendered Bell, contending that the Commission erred in failing to give legal effect to the employer's panel physician form, instead, requiring NNSB to prove an affirmative waiver defense before relying on its panel offer; allowing Wardell to challenge the validity of NNSB's panel physician form; finding Dr. Wardell an authorized treating physician pursuant to the Virginia Workers' Compensation Act; failing to recognize an accord and satisfaction between Wardell and NNSB; and permitting Wardell to retroactively seek additional reimbursement pursuant to the Act when reimbursement had been paid fully pursuant to the LHWCA. The appellate court affirmed the award, finding that Wardell did not challenge the employer's panel form, rather it was done sua sponte by the Commission, and NNSB never raised this issue before the Commission. As such, Rule 5A:18 barred the appellate court’s consideration of the issue for the first time on appeal. The appellate court rejected NNSB's argument that Bell waived his right to treatment under the Act by choosing a physician that was not included in NNSB's physician panel, finding it was bound by a Commission's findings of fact as long as there was credible evidence presented such that a reasonable mind could conclude that the fact in issue was proved, even if there is evidence in the record that would support a contrary finding. NNSB failed to meet its burden of establishing Bell waived his right to treatment. Furthermore, as it was never challenged that the fee sought by Wardell was the prevailing rate in the community, the appellate court affirmed the Commission's decision to allow recovery for the difference of the prevailing rate in the community and the amount paid pursuant to the federal DOL fee schedule. NNSB alternatively argued that Wardell's acceptance of payments under the DOL fee schedule and corresponding write-off amounted to an accord and satisfaction of the claim against NNSB. The appellate court found that the evidence was not sufficient to prove that Wardell either expressly or implicitly accepted the DOL fee schedule payments as a full satisfaction of the charge. While Wardell may have written off the payments, it never made its internal accounts known to NNSB. Therefore, mere acceptance of the payments did not constitute an accord and satisfaction and Wardell could claim the difference of the DOL Longshore fee payment and the prevailing rate in the community for the medical procedure. Finally, NNSB argues that it presented clear and convincing evidence of an implied waiver by Wardell which estops Wardell from recovering written-off account balances. The appellate court held that there was no neglect or delay by Wardell for an unexplained period that was prejudicial to NNSB. The Commission was correct in deciding that the doctrine of laches should not bar Wardell's claim because as soon as Wardell became aware of the underpayment in 2013 the claim was filed in early 2014. Furthermore, NNSB did not present evidence that it was prejudiced in any way by Wardell's delay in claiming payment. For all of these reasons, the appellate court affirmed the judgment of the Commission
awarding Wardell an additional fee of $10,951.04 for services rendered to Bell in connection with Bell's industrial accident. (Va. App. Ct, February 28, 2017) 2017 Va. App. LEXIS 52
ALLOWING AMENDED COMPLAINT WOULD WASTE THE COURT’S TIME (CONT.)
BOSWORTH V. FOSS MARITIME, ET AL.(CONT)
Larry Bosworth alleged that his employment with Foss Maritime Company was wrongfully terminated and his union, Inland Boatman's Union (IBU), failed to properly represent him in connection with his termination. The crux of Bosworth’s allegations was that Foss required him to undergo a training program, but the program was merely a pretext. According to Bosworth, Foss did not actually provide him with any training and instead placed him in high-stress job situations where he was likely to fail. Both Foss and IBU moved to dismiss Bosworth’s complaint, which the court granted in part and denied in part. The dismissal was without prejudice, and the court allowed Bosworth to file a motion seeking leave to file a second amended complaint. The magistrate judge concluded that all of the claims in the Bosworth’s proposed amended complaint were futile and recommended that the court deny Bosworth’s motion for leave to file it. Bosworth appealed the magistrate’s recommendation, but the court concluded that Bosworth’s objections do not contain any ground that warranted rejection of the magistrate judge's recommendation and adopted same in its entirety and denied Bosworth’s motion for leave to file an amended complaint and granted final judgment in favor of the defendants [see December 2016 Longshore Update]. Proceeding pro se, Bosworth filed a new motion seeking reconsideration of the court’s prior order, which defendants opposed. In support of his new motion, Bosworth argued that this is a Jones Act case; he has a well-documented injury that constitutes the severe emotional injury necessary to support a claim for intentional infliction of emotional distress pursuant to the Jones Act; the court erred by failing to consider evidence favorable to Bosworth’s claims; and his fraud claim was not limited to statements made during his call to the employee hotline. The court initially noted that, to the extent that Bosworth argued that the court should review its prior order under ade novo standard, the motion for reconsideration was denied. The court also pointed out that when determining whether Bosworth’s claims in the proposed complaint were futile, the magistrate judge and the court assumed that the factual allegations in the proposed complaint were true and concluded that, even with that assumption, Bosworth still failed to allege plausible claims for relief. Based on that standard, the court was not required to consider the evidence itself. To the extent that the motion for reconsideration was alleging that the court should have considered evidence in support of his claims, Bosworth’s motion for reconsideration was denied. The court then found that Bosworth’s Jones Act arguments, emotional injury arguments, and arguments about his fraud claim essentially repeat arguments that he raised in connection with his prior motion. Therefore, the court concluded that the motion for reconsideration's Jones Act arguments, emotional injury arguments, and fraud arguments did not present any grounds that would warrant reconsideration of the prior order. After considering all Bosworth’s remaining arguments, including those supposedly made under §938 of the LHWCA, the court concluded that Bosworth had not presented any grounds that warranted reconsideration of the prior order. Bosworth’s motion for reconsideration was denied. (USDC DHI, February 28, 2017) 2017 U.S. Dist. LEXIS 27785
LONGSHOREMAN LOSES ALL OF HIS DEFENDANTS IN §905(B) CASE
SHEERAN V. BLYTH SHIPHOLDING S.A., ET AL.
Steven Sheeran was employed as a longshoreman with Gloucester Marine Terminals, LLC (GMT), when he was allegedly injured while working aboard a vessel owned by Blyth Shipholding, SA, and under a term charter to NYK Cool AB. Sheeran was working as a hold man, discharging palletized fruit. He was in the process of steadying a full pallet tray in the hold of the vessel while it was being lowered by a crane when the tray swayed and Sheeran slipped and fell on the floor of the ship's hold. As soon as Sheeran slipped, the tray lowered to the floor and crushed his left foot. Sheeran settled his workers' compensation claim, pursuant to the LHWCA, and then filed this suit in state court against Holt Logistics Corporation, NYK Cool, and Inchcape Shipping Services. NYK Cool contracted with Inchcape Shipping Services to serve as its port agent at GMT. Holt is a company owned by the same family that owns Sheeran’s employer, GMT. Each of the defendants moved for summary judgment. Holt’s motion to dismiss was unopposed. Because there was no evidence in the record by which a jury could reasonably find that Holt controlled GMT's stevedoring operations, Holt owed Sheeran no duty of care as a matter of law. Holt’s motion for summary judgment was granted. NYK Cool argued that it did not provide or inspect the crane or cargo tray involved in Sheeran’s accident, nor did it pay, train, or supervise any of the longshoremen. The parties did not dispute that NYK Cool was the time charterer of the ship, and this conclusion was consistent with the record before the court. Because Blyth retained control of the ship and provided its crew, NYK Cool could not have been an owner pro hac vice. Accordingly, NYK Cool could only be liable to Sheeran if it breached a duty owed to him in its capacity as a time charterer, responsible for the commercial and logistical aspects of the ship's call at GMT. Sheeran’s position that NYK Cool owed him a duty to provide a safe environment aboard the ship was inconsistent with well-settled law. Accordingly, because there were no material factual disputes about NYK Cool's role with regards to the ship, and no evidence that it breached any duties owed or undertaken as the time charterer, NYK Cool's motion for summary judgment was granted. Finally, Sheeran alleged that Inchcape, as the port agent, owed a duty to exercise reasonable care in the work to be performed on the vessel and/or at the Port and to provide a safe work environment. The court found that the record was devoid of any evidence that Inchcape's role as a port agent implicated the equipment or longshoremen that caused Sheeran’s accident. Because there were no material factual disputes about Inchcape's role with regards to the ship, and no evidence that it breached any duties owed or undertaken as the port agent for the ship's time charterer, Inchcape's motion for summary judgment was also granted. (USDC DNJ, March 27, 2017) 2017 U.S. Dist. LEXIS 44208
Updater Note: Thanks to Mary Elisa Reeves, Esq., of Reeves McEwing, LLP, Philadelphia, PA, for bringing this case to my attention; and congratulations on the win!
COURT POURS OUT CLAIMANT IN HER MARITIME SUIT AS BORROWED SERVANT
CRUZ V. UNITED STATES OF AMERICA, ET AL.
Sira Cruz fell down a ladder entrance while working in a tank on board a U.S. vessel. She blamed general contractor National Steel and Shipbuilding Company (NASSCO) for failing to cover the entrance. She blamed subcontractor Peterson Scaffolding for installing scaffolding too close to the entrance. NASSCO and Peterson both moved for summary judgment on Cruz’s suit. The court began its analysis by observing that the LHWCA provided the exclusive remedy for injured maritime employees to recover from their employer. Additionally, under maritime law, parties can recover for negligence when a defendant breaches a duty of reasonable care. Peterson installed scaffolding in accordance with specific plans from NASSCO a month before Cruz entered the tank. Tradesman International, a staffing agency, sent Cruz to work for NASSCO for two years. NASSCO trained, supervised, and directed Cruz to perform work on the U.S. vessel. The day before her fall, Cruz traversed the two ladder entrances, also known as baffle holes, and brought equipment down to the bottom of the tank. The next day, Cruz again entered the tank and safely navigated the ladders. When she returned to the tank after lunch, however, Cruz took a misstep on the landing, and fell 12 feet down the entrance to the second ladder. Cruz subsequently sued NASSCO and Peterson for her fall under maritime law. In its summary judgment motion, NASSCO argued that, since Cruz was a borrowed employee, the Longshore Act bars her negligence claim against NASSCO. Cruz argues that she wasn't NASSCO's employee because she was never under the control or supervision of NASSCO; and NASSCO waived the borrowed employee doctrine by signing a contract that said Tradesman's workers wouldn't be considered NASSCO employees. The Court disagreed. After examining all of the Ruizfactors, the court found that Cruz was a borrowed employee of NASSCO. Cruz only submitted one piece of rebuttal evidence, which was her own five-page declaration that offered only conclusory allegations that contradicted the parties' undisputed statement of facts. The court concluded that Cruz’s declaration wasn't reliable evidence that created a material issue of fact. The court also considered the reality at the work site and the parties' actions in carrying out the Tradesman contract, and held that the parties actions could impliedly modify, alter, or waive express contract provisions. Based on the evidence of borrowed employee status, the court found that's NASSCO had not waived its borrowed servant defense. The court also found that Peterson didn't have a duty to protect Cruz from falling. Cruz admitted that NASSCO was responsible for covering the ladder entrance, and, that NASSCO was responsible for the precise placement of the scaffolding. Cruz's admissions resolved the key issues of fact. Regardless, the court found that there were four independent reasons that Peterson didn't owe a duty to a non-employee who fell down a ladder entrance next to its scaffolding. The court held that Cruz was NASSCO's borrowed employee and was barred from suing her employer under the Longshore Act. The court also found that Peterson Scaffolding didn't owe Cruz a duty to protect her from falling. The defendants' motions for summary judgment were granted. (USDC SDCA, March 27, 2017) 2017 U.S. Dist. LEXIS 44722
COURT HOLDS STATE LAW, NOT MARITIME LAW, APPLIES TO OCSLA CASE
SPISAK V. APACHE CORPORATION, ET AL.
Timothy Spisak was employed by Greene's Energy Services, LLC as a helper. Greene's entered into a contract with Apache Corporation, whereby Greene's would provide workers and equipment to flush a pipeline on an offshore platform so that an Apache oil well on the platform could be plugged and abandoned. Apache also contracted with Stella Maris, LLC to provide an individual, Brian Ray, to accompany the Greene's crew to the platform and assist with the flushing operation. The flushing project took place on a fixed platform on the Outer Continental Shelf approximately 140 miles off the coast of Louisiana. Greene's sent a crew of five men, including Spisak, to perform the flushing operation. Spisak claimed that he was injured as the crew was rigging-down their equipment at the end of the job. As Spisak and another member of the Greene's crew were carrying a ten-foot-long section of chicksan pipe, Spisak either tripped or was pushed by the other Greene's employee on the deck of the fixed platform. Spisak eventually filed suit against multiple defendants. Defendants moved for summary judgment arguing that Louisiana state law applied in this case through the operation of the Outer Continental Shelf Lands Act (OCSLA). Spisak opposed the motion, arguing that maritime law applied. The court began its analysis by noting that in his original and first amended complaint, as well as in his inserts to the Rule 26(f) report, Spisak alleged that jurisdiction fell under the general maritime law and the LHWCA, specifically §905(b). Spisak was also deemed a longshoreman by virtue of OCSLA. The court also pointed out that it is also well-settled law that the LHWCA, specifically, 33 U.S.C. §905(b), does not create a new or broader cause of action in admiralty than that which previously existed. To be cognizable under § 905(b), a tort must occur on or in navigable waters subject, of course, to the provisions of the Admiralty Extension Act, and there must be the traditional admiralty nexus. It was undisputed that the tort alleged did not occur on navigable water. It is also undisputed that the incident was not caused by a vessel on navigable water such that the Admiralty Extension Act might apply. Therefore, the court concluded that it did not have jurisdiction under the general maritime law. Based on the allegations of the complaint, as amended, and the undisputed facts which the court may consider in aid of determining its jurisdiction, there was no viable argument to counter the application of OCSLA's jurisdictional statute to vest the court with subject matter jurisdiction. Therefore, the court found that its subject matter jurisdiction was based on 33 U.S.C. §1349. Considering the evidence, the law, and the arguments of the parties, the court found that Louisiana law applied to the issues presented in this case, and granted the motion for summary judgment. (USDC WDLA, March 8, 2017) 2017 U.S. Dist. LEXIS 33253
FACTUAL ISSUES PRECLUDE SUMMARY JUDGMENT FOR PLATFORM OWNER
SALAZAR, ET AL. VERSUS WOOD GROUP PRODUCTION SERVICES, INC., ET AL.
Joe Salazar was employed by Tannin Energy Services, Inc. as a compressor mechanic. He was assigned to work on a fixed production platform located on the Outer Continental Shelf. The platform was primarily owned by Renaissance Offshore, LLC and operations were being conducted on the platform by Wood Group Production Services, Inc. and Wood Group PSN, Inc. The contract between Renaissance and Tannin required Tannin to provide a mechanic for the platform. The Master Service Agreement between Renaissance and Tannin stated that Tannin was an independent contractor and that all of Tannin employees shall remain under Tannin's direct and sole supervision and control at all times. Salazar claimed that he fell in the generator room due to oil that leaked from the number one generator. There were no witnesses to the alleged accident and Salazar failed to fill out an accident report. His daily report indicates both that there was an oil spill in the generator room that day and also that he cleaned the floor in the generator room that day, but it does not indicate that he fell or sustained any type of injury. Salazar claimed that he told his Wood Group supervisor that he had fallen and was injured. Salazar filled out a written accident report about a month after the alleged accident occurred. After Salazar filed his OCSLA suit, naming Renaissance as one of the defendants, Renaissance moved for summary judgment, arguing that there were no Renaissance employees on the platform at the time of the alleged accident. A Wood Group employee was in charge. However , the court noted that there was testimony that Renaissance owned the generator that was allegedly leaking. Renaissance argued in support of its motion that Tannin and its employee Salazar were in control of the generator room and responsible for its maintenance and that of the equipment in the generator room at the time of the accident, and Salazar's deposition testimony generally supported that conclusion. In opposition to the motion, the plaintiffs offered the an affidavit and expert, opining that Renaissance was responsible for the accident because it failed to keep the walking area of the platform free of oil and grease, the platform lacked the proper non-skid grating, the lighting in the generator room was improper, and Renaissance failed to require that the generator be repaired so as to prevent it from leaking oil. The court found that there was a genuinely disputed issue of material fact concerning whether Tannin or Renaissance had custody of the platform's number one generator and generator room at the time of Salazar's alleged accident, whether the flooring on the deck in the generator room presented an unreasonable risk of harm and whether the lighting system itself created an unreasonable risk of harm. All three involve at least one of the elements Salazar must prove in order to prevail on his premises liability claim. The existence of the factual issues precluded summary judgment in Renaissance's favor. Accordingly, Renaissance’s motion for summary judgment was denied. (USDC WDLA, March 24, 2017) 2017 U.S. Dist. LEXIS 43509
COURT FINDS PORT PROTECTED BY SOVEREIGN IMMUNITY
WELCH V. PROP TRANSPORT & TRADING, LLC, ET AL.
Dewey Welch filed a complaint alleging that he was injured while in the bucket of a crane working in his capacity as a barge-loading supervisor for his employer, Prop Transport & Trading, LLC. Welch alleged general negligence, maintenance and cure (punitives); alternatively, he brings claims under the Jones Act as a seaman, and alternatively, he brings claims under the LHWCA. Pertinent to the instant motion, Welch also brought claims against the Greenville Port Commission, alleging that the operator of the crane was an employee of the Greenville Port Commission. Welch alleged that the Port was liable under state law for general negligence and under general maritime law for unseaworthiness. The Port moved for partial summary judgment, arguing that the court can determine as a matter of law that Welch could not state an unseaworthiness claim against it because it is not the owner or operator of the vessel upon which Welch was allegedly injured. The Port further argues that it is entitled to the protections afforded to governmental entities by the Mississippi Tort Claims Act (MTCA) as to Welch's state law claims for general negligence. Accordingly, the Port requested that the court enter an order granting its motion for partial summary judgment. The court initially found that the Port was entitled to summary judgment on Welch's claim of unseaworthiness, as there was no ground for imposing liability under general maritime law for unseaworthiness as against the Port because the Port did not own or operate the vessel in question. Welch did not argue that the Port was a vessel owner or operator. He also cited no case law to the effect that the Port may be held liable because the crane that was used on the date of the accident may be considered an appurtenance. While the crane may potentially be considered an appurtenance, the unseaworthiness claim as against the Port must fail. The MTCA governed Welch's remaining claims against the Port. Welch alleged in his amended complaint, and the Port agreed, that the Port is a political subdivision of the State of Mississippi. For these, as well as the reasons and authorities cited by the Port, the court found Welch's argument that his state law claims against the Port are not to be governed by the MTCA to be without merit. Pursuant to Miss. Code. Ann. § 11-46-15(2), Welch's claim for punitive damages against the Port must be dismissed. The court granted the Port's Motion for partial summary judgment and dismissed with prejudice Welch's claim for unseaworthiness against the Port and Welch's claim against the Port for damages in excess of $500,000; and Welch's claim for punitive damages against the Port. (USDC NDMS, March 10, 2017) 2017 U.S. Dist. LEXIS 34679
NO ADMIRALTY JURISDICTION OVER ASBESTOS RECOVERY ACTION
SIGNAL MUTUAL INDEM. ASSOC, LTD., ET AL. V. ASBESTOS CORP., LTD., ET AL.
While working as a longshoreman, truck loader, and warehouse worker, Louis Genusa, Jr. was exposed to asbestos. Genusa allegedly was exposed to asbestos throughout his career while working for various shipment and transportation companies. Genusa's last injurious exposure to asbestos allegedly occurred while he was working for Baton Rouge Marine Contractors, Inc. (BRMC). Genusa contracted malignant mesothelioma and passed away. Genusa's wife filed a claim for death benefits under the LHWCA against BRMC. As a result, BRMC and its insurer, Signal Mutual Indemnity Association, Ltd., paid benefits under the LHWCA to Genusa's wife. Plaintiffs filed this action against thirteen defendants that allegedly designed, tested, evaluated, manufactured, packaged, furnished, stored, handled, transported, installed, supplied and/or sold the asbestos-containing product that were the proximate cause of Genusa's injuries, in order to recover the benefits they paid to Genusa's wife under the LHWCA, stating causes of action for negligence, strict liability, breach of express or implied warranty, and unjust enrichment. Through the course of the proceedings, plaintiffs moved to voluntarily dismiss twelve of the thirteen defendants. The only remaining defendant is Port of Greater Baton Rouge Port Association, also known as Greater Baton Rouge Port Commission, who moved to dismiss plaintiffs’ suit for failure to state a claim. Signal and BRMC opposed the motion. The court reviewed the complaint, noting that plaintiffs filed the action in federal court with the intent of invoking the court's admiralty; however, the court found that it lacked subject-matter jurisdiction over the matter. The court found that Genusa's claims met the locality test, in part, because he did his stevedoring work both on floating vessels on the Mississippi River, a navigable waterway, and on land. When this Court applied the connection test, however, it found that Genusa was a primarily land-based worker and that the prospect of injuries to a predominantly land-based worker is less likely to disrupt maritime commerce because such workers are not necessary for ships to operate on the navigable waters. As a result, the court found that it did not have original admiralty jurisdiction over Genusa's claims. Greater Baton Rouge Port Commission's motion to dismiss was granted. (USDC MDLA, March 13, 2017) 2017 U.S. Dist. LEXIS 35827
COURT HOLDS CONTRACTOR HAD NO DUTY TO INTERVENE UNDER OCSLA
SPISAK V. APACHE CORPORATION, ET AL.
This case arose out of an incident that allegedly occurred aboard a fixed oil and gas production platform, located on the outer continental shelf off the coast of Louisiana. The platform had no means of propulsion and was connected to the seabed by a mooring system consisting of chains, cables, and piles or caissons embedded into the ocean floor. Williams Field Services, LLC was the owner of the platform and Eni US Operating Co. Inc. was the operator. Apache Corporation was the owner of a well that was tied into the platform by pipeline. The well was in the process of undergoing plug and abandonment operations at the time of Timothy Spisak’s alleged accident. Siren Oilfield Services LLC contracted with Eni to act as operations coordinator for work on another well; however, Eni enlisted the assistance of a Siren employee to perform what was described as clerical work and act as liaison on the safety side between Eni and rig personnel. Apache and Greene's Energy Group, Spisak’s employer, entered into a Master Service Contract. Spisak claimed that he was injured during the rig down operation when he and another member of the Greene's crew were carrying a ten-foot-long section of chicksan pipe. Spisak claimed he tripped and was then pushed by the other Greene's employee on the opposite end of the pipe. Spisak contended the Greene's crew was denied access to the cranes on the platform for the rig down operations, and therefore, he and other members of the Greene's crew had to carry the chicksan pipe by hand. Siren moved for summary judgment, arguing it had no contractual relationship with Greene's. Jurisdiction in the case was premised on the jurisdictional provision of the Outer Continental Shelf Lands Act (OCSLA), and the law of Louisiana, as the adjacent state, governed Spisak’s claims against Siren as the controversy arose on a situs covered by the OCSLA, maritime law did not apply of its own force, and Louisiana law was not inconsistent with federal law. The court concluded that Siren owed no legal duty to the employees of Greene's. Louisiana law imposed no affirmative duty to intervene in the unsafe acts of another absent some special relationship between the parties. Therefore, the court found that Siren had established the absence of any genuine issue of material fact as to an element of Spisak’s claim for which Spisak bore the burden of proof. Accordingly, Siren's motion for summary judgment was granted, and Spisak’s claims against Siren were dismissed with prejudice. (USDC WDLA, March 16, 2017) 2017 U.S. Dist. LEXIS 38146
In another ruling in this same case, the court addressed another summary judgment motion filed by Stella Maris, LLC. Apache and Stella Maris entered into a Master Service Contract, under which Apache hired Stella Maris to perform certain work or render certain services as set forth in separate job orders. Under Section 7 of the contract, Stella Maris was designated as an independent contract not subject to the control or direction of Apache. While Stella Maris controlled the manner and methods by which it performed its work under the contract, Apache was only interested in the compliance of the work with the job order. Spisak’s claim against Stella Maris centers on its employee’s participation in the decision not to use a crane to lift chicksan pipe during the derigging operation. The court again found that Louisiana Law governed the claims against Stella Maris, and found that genuine issues of material fact existed concerning Stella Maris's potential liability, because there was a genuine issue of material fact concerning the scope of the Stella Maris employee’s authority over the Greene's crew, particularly with regard to making the decision to wait for a crane or to move chicksan pipe manually, and the disputes precluded summary judgment in Stella Maris's favor. Stella Maris's motion for summary judgment was denied. (USDC WDLA, March 24, 2017) 2017 U.S. Dist. LEXIS 43500
THOSE DEFENSE AND INDEMNITY PROVISIONS ARE TOUGH TO ENFORCE
BUTLER V. SUPERIOR ENERGY SERV., INC., ET AL.
This case involved a lawsuit for personal injuries allegedly sustained by Myron Butler onboard a liftboat owned by Seacor Liftboats, LLC. Butler alleged that, at the time of his accident, he was attempting to maneuver a section of pipe being transferred by crane from the liftboat to a platform. The liftboat was being used to transport workers and materials to McMoRan's offshore platform on the Outer Continental Shelf. Pursuant to a time charter between Seacor and McMoran, the liftboat was provided to McMoran. Superior Energy Services, LLC was under contract to provide services and labor to McMoRan to assist in plugging and abandoning the oil and gas well at that platform. As a contractor of McMoran, Superior was required to sign a Vessel Boarding Agreement (VBA) with Seacor as a condition of being allowed to use the liftboat. The VBA that Superior signed obligated Superior to defend and indemnify Seacor. After Butler filed his lawsuit against Superior and Seacor demanded defense, indemnity, and insurance coverage from Superior, but was refused. Thereafter, Seacor answered Butler’s complaint and filed a cross claim against Superior. In its answer to the cross claim, Superior denied it was contractually obligated to Seacor for defense, indemnity, and insurance coverage, and asserted that Seacor's claim was barred by the Louisiana Oilfield Indemnity Act (LOIA), and/ or Section 905(b) of the LHWCA. Seacor moved for summary judgment, arguing there was no genuine issue of material fact that Superior owed Seacor defense, indemnity, and insurance coverage from the claims of Butler, on the basis that the VBA between Seacor and Superior is a maritime contract that is not subject to the LOIA. In opposition, Superior argued Seacor had not met its burden to show the VBA was a maritime contract, and that disputed facts prevented the issue from being determined. Superior suggested Louisiana law, rather than maritime law, governed the VBA, and if the court ultimately decided that Louisiana law does govern, the LOIA renders the defense and indemnity clause relied upon by Seacor void and unenforceable. After consideration of the record and the arguments of the parties, the court concluded the VBA in question was a maritime contract, and consequently, was not subject to the LOIA. As a defense to Seacor's claim for defense and indemnity, Superior, also, argues the VBA is unenforceable pursuant to Section 905(b) of the LHWCA. Seacor, however, argued the exception contained in §905(c), which addresses reciprocal indemnity agreements applied and argued the prohibition of 905(c). The court agreed with Seacor that, under the language of §905(c), reciprocal indemnity provisions were not barred, thus, the LHWCA would not act to bar the indemnity provisions. However, court went on to note that the relief requested by Seacor was overly broad. Whether the actual contractual language was otherwise enforceable, was not a matter raised by the arguments made by the parties and the court declines to reach beyond the findings noted - the VBA is a maritime contract; the LOIA does not apply and assuming §905(c) were to apply, it would not, as a matter of law, vitiate the reciprocal indemnity agreement. Seacor’s motion was granted in part and denied in part. It was granted to the extent that the court concluded that maritime law governed the VBA between Seacor and Superior, and the defense and indemnity provisions contained therein were not barred by the LOIA, nor would they be barred by §905(c), if applicable. The court was unable to determine whether other provisions of the VBA might impact the defense and indemnity provisions, therefore, the court concluded only that the provisions were not vitiated by the application of the LOIA, nor §905(c) of the LHWCA. (USDC WDLA, March 22, 2017) 2017 U.S. Dist. LEXIS 43702
LONGSHOREMAN OR SEAMAN? SUMMARY JUDGMENT PREMATURE
IN RE: MARQUETTE TRANSPORTATION CO.
These consolidated cases involved two accidents that occurred on two separate dates. On September 22, 2014, a Marquette Transportation Company vessel struck a barge chartered to Kostmayer Construction, LLC, and pushed it into another barge, also owned by Kostmayer. Kostmayer alleged that the barges sustained substantial damage as a result of the impact and required extensive repairs. A second and unrelated accident between Kostmayer and Marquette occurred on December 29, 2014. In this accident, Marquette was operating a vessel, which allegedly contacted two other crane barges operated by Kostmayer. At the time of the accident, the cranes were spudded down, or anchored. Kostmayer invoked the court's jurisdiction pursuant to 28 U.S.C. §§1332 and 1333, and asserted multiple negligence theories based on the actions of the captain and crew manning Marquette’s vessel. Marquette denied all allegations of negligence and asserted a number of affirmative defenses. James Ainsworth and Michael Bankston were employed by Kostmayer as welders, while Joseph Solomon was employed by Ameri-Force and assigned to work for Kostmayer. At the time of the accident, Ainsworth and Bankston were eating lunch on one of the vessels, while Solomon was working on another, the two crane barges involved in the accident. Solomon avers that when the Marquette vessel allided with the barge where he was working, he sustained personal injuries. Solomon sought various damages, including loss of earnings and earning capacity, pain and suffering, and mental anguish. Kostmayer eventually resolved its claims against Marquette. Similarly, Ainsworth and Bankston resolved their personal injury claims. Marquette moved the court to addresses the seaman status of Solomon, arguing that Solomon is a seaman, such that Kostmayer was liable for his injuries as Solomon's employer. Solomon's employer, Ameri-Force and its insurer opposed the motion. Kostmayer also opposed the motion. Marquette argued that Solomon is a Jones Act seaman such that Kostmayer, as his employer, is liable for any injuries he may have sustained. Further, Marquette contended that if Solomon is a seaman, he may be partially at fault for failing to maintain a lookout on the day of the accident. Marquette explained that Solomon was not employed directly by Kostmayer, but instead by Ameri-Force, and was assigned to work for Kostmayer as the operator of a crane. Ameri-Force opposed Marquette's motion and argued there is insufficient evidence whether Solomon's work on the vessel was incidental to his work as a welder at a construction site, and whether Kostmayer had sufficient control over his work to preclude him from borrowed servant status. Further, Ameri-Force argued that this motion was premature, as they had not had adequate time to use discovery to determine whether Solomon is a Jones Act seaman. The court found that, while some facts may support a finding that Solomon was entitled to seaman's status, the court held that the factual record was too underdeveloped to resolve the issue via summary judgment. During oral argument, the parties indicated they have not had an opportunity to conduct discovery regarding the conditions of Solomon’s employment and specific job duties. That, combined with the fact that Solomon was not himself seeking seaman's status, indicated the issue was not ripe for summary judgment. Furthermore, the court noted that Ameri-Force was correct that summary judgment regarding whether Solomon was a borrowed employee was premature. The scant evidence on this point, namely that Solomon received some instructions from Kostmayer staff and some from Ameri-Force, while Ameri-Force handled his payroll and human resource materials, was inconclusive to determine who employed him at the time of the accident. Because there were genuine disputes of material fact as to whether Solomon had a substantial connection to a vessel or was exposed to the perils of the sea, in addition to factual questions regarding Solomon's employer, summary judgment was denied. (USDC EDLA, March 29, 2017) 2017 U.S. Dist. LEXIS 47639
BRB HOLDS DISTRICT DIRECTOR FAILED TO CONSIDER FEE PETITION OBJECTIONS
SEEL V. NAVY EXCHANGE SERVICE COMMAND
After an award of compensation to Lauren Seel, her counsel filed a fee petition seeking $78,620 in fees and $10,252.39 in costs. The fees were calculated at $400 per hour for 196.55 hours. The administrative law judge determined that the relevant market was San Francisco, and, after addressing the evidence presented, he awarded counsel an hourly rate of $ 305.00. The ALJ disallowed 13.45 hours for work that was performed before the district director, as well as 4.1 hours of "trial preparation" that was dated after the hearing had occurred. Due to claimant's limited success and what the ALJ deemed to be counsel's inadequate settlement efforts, the ALJ then reduced the total fee by 35 percent; however, due to the delay in payment of a fee, the ALJ increased the award by two percent. Thus, he awarded claimant's counsel a fee of $ 36,196.49, payable by employer. The administrative law judge awarded $ 6,985.44 in costs. Navy Exchange Services Command appealed the order awarding attorney's fees and costs and the claimant responded, urging affirmance. The district director relied on the ALJ’s findings and awarded counsel an hourly rate of $305 as well, awarding claimant's counsel a total fee of $12,184.75, plus $88.73 in costs, payable by employer. The district director denied claimant's motion for reconsideration. Employer appealed the district director's fee award, and claimant responded, urging the Board to find the petition for review untimely filed and, alternatively, to affirm the award. On appeal the Navy Exchange contended the ALJ and the district director erred in awarding counsel a fee for the time he spent preparing his fee petition and on any briefs related to his securing an attorney's fee. Employer asserted that, pursuant to the Supreme Court's decision in Baker Botts L.L.P. v. ASARCO LLC, counsel is not entitled to a fee for services related to securing his attorney's fee because the Longshore Act, like the Bankruptcy Code addressed in Baker Botts, does not specifically authorize shifting liability to employer for the payment of a fee that is not in pursuit of "compensation" for the claimant. For the reasons it had previously set forth in Clisso, the BRB rejected employer's contention that the ALJ and district director erred in awarding counsel a fee for services related to securing a fee and defending his fee application, as fees for these services may be shifted to employer in accordance with Section 28 of the Act. As there was no other challenge to the attorney's fee awarded by the ALJ, the Board affirmed it. Employer also contended the district director erred in failing to address its objections to counsel's fee petitions. The Board agreed. In his compensation order, the district director stated that employer filed a letter in 2013 which indicated only that it had objections to the fee petition generally. The district director addressed only the challenge to the hourly rate, stating that employer's other objections were not specified. However, contrary to the district director's statement the administrative file contained employer's fee objections. Therefore, the Board vacated the district director's fee award and remanded the case for him to further consider counsel's fee petitions and employer's objections. (Benefits Review Board, February 8,2017) 2017 DOLBRB LEXIS 32
OFFICE OF ADMINISTRATIVE LAW JUDGES
RECENT SIGNIFICANT DECISIONS
The Office of Administrative Law Judges has posted its newest RECENT SIGNIFICANT DECISIONS - MONTHLY DIGEST #278. 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 . . .
APPELLATE COURT UPHOLDS REFORM OF MASTER SERVICE CONTRACT
RICHARD V. ANADARKO PETROLEUM CORPORATION, ET AL.
This appeal was rooted in Raylin Richard's personal injury lawsuit against Anadarko Petroleum Corporation, Dolphin Drilling Ltd., and Smith International Inc. Richard worked as a casing supervisor for OES at the time of his injury. Anadarko and OES had a longstanding master services contract At its core, this appeal was simply an insurance coverage dispute. Offshore Energy Services (OES), the appellee, indemnified all three companies for tort claims filed against them by Richard. OES considered itself contractually obligated to indemnify the other companies under an agreement with an oil and gas project's principal. Liberty Mutual, OES's insurer, denied OES's claim for reimbursement of the funds OES spent defending against, and ultimately settling, the tort suit. After Liberty Mutual denied coverage, Anadarko and Dolphin Drilling both filed third-party complaints impleading OES and Liberty Mutual. The district court dismissed Anadarko and Dolphin Drilling's third-party claims against Liberty Mutual with prejudice. This did not, however, resolve the related issue of whether Liberty Mutual owed OES coverage for the amounts OES spent indemnifying Anadarko, Dolphin Drilling, and Smith International. OES cross-claimed against Liberty Mutual seeking coverage for its indemnification of Dolphin Drilling, Smith International, and Anadarko. The district court granted summary judgment in Liberty Mutual's favor, concluding that Dolphin Drilling and Smith International were Anadarko's "contractors," which the MSC's indemnity provisions did not cover, rather than "subcontractors," which the MSC's indemnity provisions would cover. Subsequently, the district court granted Anadarko, Dolphin Drilling, Smith International, and OES's motions for reconsideration of the initial summary judgment ruling. While the district court declined to revisit its prior construction of the MSC, the court permitted Anadarko and OES to reform the MSC to reflect a mutually-intended knock for knock indemnity scheme that would require, under the circumstances of Richard's injury, OES to indemnify Anadarko, Smith, and Dolphin. On appeal of the district court’s ruling, Liberty Mutual contended the district court erred by permitting OES and Anadarko to equitably reform their MSC. Second, Liberty Mutual asserted the district court interpreted the OES-Liberty Mutual insurance policy erroneously when it concluded the policy obligated Liberty Mutual to reimburse OES for all of the attorney's fees OES incurred in connection with the tort suit, rather than a pro-rata portion of those fees. The appellate court affirmed the district court's ruling permitting reformation of the MSC, but found the district court erred when it interpreted the insurance policy to require reimbursement of all the attorneys' fees the employer incurred in connection with the employee's suit because the policy only obligated the insurer to pay a pro-rata share of the attorney's fees. The appellate court modified the district court's judgment awarding attorney's fees, holding that Liberty Mutual owed $168,695.96, which represented its pro-rata share of OES's attorney's fees, rather than the district court awarded $468,599.90 OES spent defending itself, Dolphin Drilling, and Smith International. (5th Cir, March 2, 2017) 2017 U.S. App. LEXIS 3812
SEAMAN FAILS TO PROPERLY CLAIM NEGLIGENCE/UNSEAWORTHINESS (CONT.)
MARTINEZ V. THE CITY OF NEW YORK
Charles Martinez initiated his Jones Act suit, alleging that he was injured by the City of New York’s negligence while working on a City-owned vessel and fell from a ladder while climbing out of the ferry's southeastern steering compartment, causing injury to his right knee. Martinez’s complaint alleged Jones Act negligence, unseaworthiness, and failure to pay maintenance and cure. After discovery came to a close, the City filed a motion for summary judgment, pursuant to FRCP 56, arguing that Martinez had failed to state a claim for which relief could be granted. The court found that Martinez’s complaint was wholly conclusory, including no specifics about the accident that he suffered or how it came to pass. The complaint's sole substantive allegation regarding the accident was that Martinez sustained injuries to his right knee when he slipped and fell from a ladder located in the vessel's engine room. With regard to Martinez’s maintenance and cure claim, the court observed that each side's position regarding the status of the bills being paid or unpaid, was backed up only by their own statements. Therefore, there existed a genuine factual dispute precluding summary judgment. The City's motion for summary judgment was granted in part, with respect to Martinez’s negligence and unseaworthiness causes of action, and denied in part, with respect to the maintenance and cure cause of action [see April 2016 Longshore Update]. Martinez appealed the trial court’s ruling, arguing that he fell when climbing a ladder from the below-deck steering compartment to the main deck, because the steering compartment floor was covered with oil and grease, which got on the soles of his shoes, causing him to slip; and the ladder between the steering compartment and the main deck lacked a handhold above the top rung. Martinez relied on his own sworn affidavit. The district court concluded that the deposition testimony and affidavit were insufficient to raise a triable issue of fact as to an unseaworthy condition in the absence of independent corroboration. The appellate court noted that its precedent was to the contrary. The appellate court pointed out that its task was not to assess the strength of Martinez's unseaworthiness claim regarding the compartment floor or the likelihood of his prevailing. The court concluded only that when it assumed, as it must, that a jury fully credits Martinez's affidavit and testimony and draws all inferences favorable to him, it cannot be said as a matter of law that the jury could not find the condition of the steering compartment floor to have rendered it no longer reasonably fit for its intended use by the crew. As the district court recognized, the record did not expressly identify what "untaken measures" the City might have employed to ensure the seaworthiness of the compartment floor, but on summary judgment review, the appellate court noted it must assume the jury would resolve this question favorably to Martinez, particularly in light of his affidavit statement that the containers collecting oil and grease regularly overflowed. The same conclusion obtained as to Martinez's related Jones Act claim. The City acknowledged that his affidavit provides evidence that he notified City port engineers about accumulating oil and grease in the steering compartment. It nevertheless asserts that Martinez cannot establish its failure to use due care in light of undisputed evidence of City measures to guard against accidents, notably, installing containers and pads to collect oil and grease, requiring employees to keep the compartment floor clean, and providing them with cleaning supplies. Whether Martinez's notice and the City's actions were sufficient, however, were questions that could not be resolved as a matter of law on the instant record. Accordingly, the appellate court vacated the award of summary judgment on Martinez's seaworthiness and Jones Act claims pertaining to the condition of the steering compartment floor. The appellate court affirmed the district court's award of summary judgment on Martinez's Jones Act claim pertaining to the ladder. Accordingly, the judgment of the district court was affirmed as to Martinez's Jones Act claims regarding the ladder and otherwise vacated and remanded for further proceedings. (2nd Cir, March 29, 2017, UNPUBLISHED) 2017 U.S. App. LEXIS 5423
PUNITIVE DAMAGES HELD TO BE AVAILABLE FOR UNSEAWORTHINESS CLAIMS
TABINGO V. AMERICAN TRIUMPH LLC ET AL.
Allan Tabingo was allegedly injured while working aboard a fishing trawler owned and operated by American Seafoods Company LLC and American Triumph LLC (collectively American Seafoods). Tabingo claimed the lever used to operate a hatch in the trawler's deck broke when an operator tried to stop the hatch from closing. The hatch closed on Tabingo's hand, leading to the amputation of two fingers. Tabingo filed suit against American Seafoods. He claimed negligence under the Jones Act, as well as several general maritime claims, including one for unseaworthiness of the vessel. He requested compensatory damages against American Seafoods for all of his claims, and punitive damages for his general maritime claims, including his unseaworthiness claim. American Seafoods filed a motion for partial summary judgment moving to dismiss Tabingo's punitive damages claim. American Seafoods argued that as a matter of law, punitive damages were unavailable for unseaworthiness claims, and asked that the trial court follow a recent Fifth Circuit case, McBride v. Estis Well Serv., LLC. After oral argument, the trial court granted the motion for partial summary judgment, finding the measure of damages available in a Jones Act negligence claim and an unseaworthiness claim were identical. The trial court ruled that a plaintiff may not seek non-pecuniary damages in either general maritime or negligence claims and, because punitive damages are non-pecuniary, dismissed Tabingo's punitive damages claim. Tabingo filed a direct interlocutory petition for review with the State Supreme Court, which was granted. The appellate court began its analysis by observing that the general maritime claim for unseaworthiness had a long history, arising as an independent cause of action in American maritime law in the 1870s. Though the limits of an unseaworthiness claim were still developing when Congress passed the Jones Act, unseaworthiness was open to seamen before the passage of the act in 1920. The appellate court then went on to find that the United States Supreme Court's rationale in Townsend was applicable to Tabingo’s punitive damages cause of action for unseaworthiness, rejecting the Fifth Circuit’s en banc holding in McBride. As noted in Townsend, punitive damages have historically been available at common law and those common law punitive damages extend to general maritime law. The appellate court felt only question then, was whether there was reason to believe that unseaworthiness is excluded from this general admiralty rule, noting that, similar to maintenance and cure, neither the United States Supreme Court nor Congress have indicated that unseaworthiness should be excluded from the general admiralty rule. Therefore, the appellate court found that a request for punitive damages may be brought for a general maritime unseaworthiness claim, specifically holding that Miles was not controlling. The appellate court also opined that the Fifth Circuit's rational for its decision in McBride misinterpreted both Miles and its interaction with Townsend, finding that Miles was limited to tort remedies grounded in statute and that unseaworthiness was not such a remedy. Absent an indication that a general maritime cause of action has been removed from the general maritime rule, the appellate court held that common law remedies were still available and applied Townsend's rationale to find that punitive damages are available for unseaworthiness claims. Finally, the appellate court threw in the “last resort” reasoning that recognizing the availability of punitive damages supports the policy of protecting seamen as wards of admiralty. The trial court's partial dismissal was reversed and the case was remanded to that court for further proceedings. (Wash. Sup. Ct, March 9, 2017) 2017 Wash. LEXIS 328
Updater Note: In this en banc decision, the Supreme Court of the State of Washington ruled that seamen are entitled to seek punitive damages when their alleged injuries are due in part to an unseaworthy condition on their vessel in circumstances indicating at least recklessness on the part of the vessel owner. The court noted that unseaworthiness actions arise in common law and that punitive damages are available in common law. This issue is also currently on appeal in the 9thCircuit, in Batterton v. Dutra Group (Case No. 15-56775), and Professor David Robinson was quick to file this recent ruling with the 9thCircuit in the Batterton case as a citation of supplemental authority. I’m sure everyone in the maritime community will be watching both of these cases very closely.
COURT GRANTS SUMMARY JUDGMENT ON MCCORPEN DEFENSE
CENAC MARINE SERVICES, LLC V. CLARK
Jason Clark applied for a position as a tankerman with Cenac Marine Services, LLC. As part of the application, Clark underwent a pre-employment physical, where he answered sixteen questions posed in the physical form and fifty-two questions posed in a medical history form. Clark signed the questionnaires and certified that the information on the forms was correct and truthful. The only medical history Clark indicated during this physical, both to the screening doctor and on the questionnaires, was a prior hernia with repair. He certified he had no prior back injuries or back pain. Less than a month later, Clark completed a Cenac accident report form, alleging that he had injured his back the day before, when he was moving a cross-over hose without the help of his deckhand. The accident report form asked whether the employee submitting the form had ever hurt the area of the body allegedly injured in the report, meaning his back. Clark answered "no" to this question, again certifying that he had never injured his back before the accident. After Cenac deposed Clark and in the course of discovery following the filing of Clark's lawsuit, Cenac obtained medical records relating to treatment of Clark after he was in a vehicle accident, reporting low back pain and left shoulder pain. Clark attended fifty-two medical appointments during the four and a half year period, continuously complaining of neck and back pain. Nearly two months after his last appointment, Clark reported his work-related accident to Cenac and completed the incident report form. Initially, he was cleared for light duty work and then cleared for duty without restrictions. Clark failed to communicate and report to Cenac for his assigned hitch. Cenac terminated Clark's employment for his failure to communicate and report for work, poor performance evaluations, and various violations of Cenac's safety rules during his employment. Following his termination, Clark retained counsel, sought additional medical attention, and demanded maintenance and cure. Cenac agreed to pay maintenance and cure to avoid punitive damages, but informed Clark's counsel that it was doing so "under protest" with a full reservation of all rights to seek reimbursement. Cenac was first to file suit, seeking a declaratory judgment that Cenac was not obligated to pay Clark maintenance and cure benefits. Clark then filed a lawsuit against Cenac, alleging Jones Act and unseaworthiness claims, as well as claims for maintenance and cure and punitive damages for failure to pay maintenance and cure. Cenac moved for summary judgment on Clark's maintenance and cure and related punitive damages claims. Additionally, Cenac moved for leave to file a counterclaim against Clark for an offset from any recovery he may be awarded for maintenance and cure payments it made to Clark. Cenac argued that Clark intentionally misrepresented or concealed medical facts when he denied having prior back pain on two medical questionnaires filled out in the course of his job application. On the record before it, the court could not find a genuine issue of material fact as to whether there was intentional concealment, a material factor in hiring and a causal nexus between the concealed injury and the complained-of injury; both injuries were to the lumbar spine and the record did not support a finding that the new injuries to the thoracic spine arose during the time of employment. Accordingly, the court held that Cenac successfully employed the McCorpen defense. Clark then attempted to characterize Cenac’s late filing of a motion for leave to file a counterclaim as an additional bludgeon for Clark to have to deal with. However, the court pointed out that it was Clark’s own act of concealing relevant medical history that was the root of the motion, and held that there was "good cause" for allowing the late filing. The court granted Cenac’s motion to file a counterclaim, but noted that by granting leave to file a counterclaim the court was not ruling on the legal viability of the counterclaim itself. Cenac's motions for partial summary judgment and leave to file a counterclaim were granted. Clark’s maintenance and cure claims and related punitive damages claims were dismissed with prejudice. Cenac's counterclaim for an offset of maintenance and cure payments against any damages Clark recovers was ordered to be filed in the record and tried with Clark’s remaining Jones Act and unseaworthiness claims. (USDC EDLA, March 22, 2017) 2017 U.S. Dist. LEXIS 41167
I WALKED INTO A TABLE, SO MY EMPLOYER IS NEGLIGENT (CONT.)
ALLEN V. NCL AMERICA, LLC.
Marvin Allen filed this action against NCL America, LLC, who he worked for as a galley hand, alleging injuries sustained while employed aboard its vessel, alleging claims under the Jones Act and general maritime law. Allen claimed that while carrying a tray of silverware from the dishwasher to a table, he struck his knee on the leg of a table. Allen claimed he continued working, but again struck his knee on a table leg while carrying a stack of plates. Allen went on to allege that as a direct result of NCL’s negligence, he sustained great physical pain, mental anguish, and extreme shock to the nervous system. NCL moved to dismiss all counts pursuant to FRCP 12(b)(6), asserting that Allen had failed to comply with Twombly and Iqbal, in failing to state a claim upon which relief could be granted. The court found that Allen’s cause of action under the Jones Act exemplified the type of "bare-bones" allegations that Twombly and Iqbalprohibit. Having found that the legal conclusions in Allen’s complaint failed to support the Jones Act or unseaworthiness causes of action under Iqbaland Twombly, the court granted NCL’s motion to dismiss both causes of action. The court found that Allen’s complaint against NCL sufficiently stated a plausible claim for breach of maintenance and cure, and refused to dismiss Allen’s final cause of action. NCL’s motion to dismiss pursuant to FRCP12(b)(6) was granted in part and denied in part [see June 2016 Longshore Update]. After Allen filed his second amended complaint, again alleging Jones Act negligence, unseaworthiness, and maintenance and cure causes of action, NCL again moved to dismiss Allen’s Jones Act and unseaworthiness claims. NCL maintained that Allen’s claims at Counts I and II suffered the same factual deficiencies as his first Amended complaint, in that it failed to state with sufficient particularity. The court agreed, holding that without some factual basis for the allegation that an elevated table in a galley was defective or that NCL had notice of its dangers, Allen’s claim for Jones Act negligence failed as a matter of law. The court found that Allen had not asserted facts that any instrumentality he was required to use was defective, nor had he asserted he was instructed to perform his duties in an unsafe manner. Therefore, the court dismisses Allen’s claim for negligence under the Jones Act. Without plausible facts demonstrating defective equipment, inadequate staffing or unsafe instruction, the court also found that Allen’s second amended complaint failed to allege a claim of unseaworthiness and the court granted NCL’s motion to dismiss this cause of action as well. Because NCL did not move on Allen’s maintenance and cure claim, the court did not dismiss the entire second amended complaint. (USDC NDOH, March 1, 2017) 2017 U.S. Dist. LEXIS 29622
SOUR GRAPES AFTER SETTLEMENT (CONT.)
SCHMIDT VERSUS CAL-DIVE INTERNATIONAL, INC., ET AL.
Andrew Schmidt was formerly employed by Cal Dive International, Inc. as a commercial diver. Schmidt allegedly suffered a brain injury due to decompression sickness contracted while surfacing from a work-related dive. Schmidt sued Cal Dive, alleging the injury left him permanently disabled. Schmidt was represented by attorneys Thomas R. Edwards and Joseph W. Walker. Cal Dive filed a counterclaim for reimbursement of maintenance and cure, recission of the employment contract, and damages and attorneys' fees, alleging Schmidt had purposefully and willfully concealed his medical history from Cal Dive in his employment application and while employed. Just prior to the bench trial of his case, Schmidt executed a written Release of all claims. The settlement agreement called for a lump sum payment with the balance, as well as attorney's fees to Edwards and Walker, to be paid through a structured settlement funded by Cal Dive and administered by BHG Structured Settlements, Inc. and Berkshire Hathaway. The court issued a final Judgment granting the parties' joint motion to dismiss with prejudice. One year after the settlement was placed on the record, Cal Dive filed suit seeking to dismiss the final judgment of dismissal and set aside the settlement agreement for mistake, misrepresentation, and fraud under Rule 60(b)(3), claiming they were fraudulently induced by Schmidt into resolving the suit before trial because video surveillance shows that Schmidt's injuries were not as serious or extensive as they believed at the time of the settlement. Schmidt’s attorneys filed a motion to dismiss for failure to plead fraud with particularity under Rule 9(a), failure to state a claim for unjust enrichment and/or restitution under Rule 12(b)(6), and on the grounds of res judicata. During the settlement, Cal Dive was represented by counsel, the parties negotiated at arms-length and in apparent good faith. The court found that Cal Dive’s allegations failed to state a plausible claim that discovery will lead to the clear and convincing evidence that Schmidt engaged in fraud or other misconduct which prevented Cal Dive from fairly presenting their case. The court therefore concluded that Cal Dive had failed to establish that the court's judgment should be dismissed under Rule 60(b)(3). Accordingly, the court denied Cal Dive’s claims under Rule 60(b)(3) and dismissed them [see April 2015 Longshore Update]. The Fifth Circuit later affirmed, finding Cal Dive and its insurer failed to state a claim of fraudulent inducement, as they did not sufficiently plead reliance. According to the Fifth Circuit, the record conflicted with Cal Dive’s conclusory assertion that it relied upon Schmidt's material fraudulent misrepresentations [see February 2016 Longshore Update]. Then, Schmidt, Walker and Edwards each filed separate lawsuits in federal court against Cal Dive, its insurer, and their attorneys, asserting causes of action for defamation, tortious interference with a maritime contract, bad faith breach of a Jones Act settlement, wrongful injunction, sanctions, punitive damages, and negligence. Plaintiffs eventually dismissed Cal Dive from all suits after receiving notice Cal Dive had filed for bankruptcy. As a result of the dismissal of Cal Dive, complete diversity existed over the claims of Schmidt and Walker, and defendants removed those suits to federal court. The remaining defendants filed the pending motions to dismiss all claims pursuant to Rule 12(b)(6). The court reviewed all pleadings filed in the Cal Dive Suit and found there were no allegations that Edwards and Walker had knowledge of any misrepresentations by Schmidt. Because Edwards and Walker failed to identify any defamatory statements directed towards them in the Cal Dive Suit, the court found Edwards and Walker failed to state a claim of defamation against the defendants. Additionally, because the pleadings failed to allege facts showing specific malice or an intent to harm on the part of the Schonekas Parties in persuading their clients to initiate and continue the Cal Dive suit, the court found plaintiffs failed to state a claim of defamation against the Schonekas Parties for statements made in the Cal Dive litigation. The court also found that qualified privilege applied to the matter. The statements were material, because whether Schmidt committed fraud and/or perjury by failing to disclose his condition (or improved condition) was the central issue in dispute in the Cal Dive Suit. Accordingly, the court found plaintiffs failed to plead sufficient facts to overcome the qualified privilege. The court found no behavior alleged in the matter which was "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency." Accordingly, the court found plaintiffs failed to state a claim of intentional infliction of emotional distress. The court also found that plaintiffs failed to identify any duty owed to them by defendants. Accordingly, the court found plaintiffs failed to state a claim for intentional interference with contractual relations. While plaintiffs' complaint stated the filing of the suit for rescission was "intended to breach the settlement agreement," and was "intended to rescind the contract," plaintiffs never affirmatively state any payments under the contract were delayed. Similarly, in their opposition brief, plaintiffs state defendants "attempted to rescind the settlement contract" and sought "to cut off the settlement's funding," but never affirmatively state any payments under the settlement contract were delayed. As plaintiffs have failed to plead an essential element of their claim, the court found plaintiffs failed to state a claim for breach of contract. Plaintiffs also failed to demonstrate punitive damages were available for their claims of defamation or intentional infliction of emotional distress. Therefore, even if maritime law applies to the Jones Act settlement, plaintiffs failed to state a claim for punitive damages. Finally, the court found nothing in the pleadings warranting the imposition of sanctions. The motion to dismiss submitted by the defendants was granted. (USDC WDLA, March 6, 2017) 2017 U.S. Dist. LEXIS 31779
COURT DISMISSES CLAIM OF INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
BROWN V. ROYAL CARIBBEAN CRUISES, LTD.
Joseph Brown brought this suit against Royal Caribbean Cruises, Ltd. for compensatory damages for bodily injury and illness allegedly suffered by Brown. After his cruise ship sailed, Brown received a written notice from Royal Caribbean that all passengers on the ship had possibly been exposed to Legionnaires' disease, that Legionnaires' disease had been discovered in the ship's water system and that two cases of passengers contracting the disease had been confirmed. After the cruise was over, Brown was admitted to the hospital and treated for Legionnaires' disease and allegedly suffered kidney disease, congestive heart failure, and pulmonary failure, among other things. As a result, Brown had to retire from his job. After Brown filed his suit against Royal Caribbean, asserting claims for maritime negligence, negligent infliction of emotional distress, and intentional infliction of emotional distress, Royal Caribbean moved to dismiss Brown’s claim for intentional infliction of emotional distress (IIED). The court pointed out that, in order to state a claim for IIED under Florida law, a plaintiff must show: (1) deliberate or reckless infliction of mental suffering; (2) outrageous conduct; (3) that the conduct caused emotional distress; and (4) that the distress was severe. Royal Caribbean argued that Brown had failed to assert any factual predicate for his claim that it acted intentionally or outrageously, that Browns’s allegations failed to rise to the level of outrageous conduct necessary to state a claim for IIED, and that Brown’s allegations of emotional distress were not sufficiently severe. Even construing the facts in the light most favorable to Brown, Royal Caribbean's alleged conduct was not such that it went beyond all possible bounds of decency and would be regarded as atrocious and utterly intolerable in a civilized community. While Brown’s allegations might describe objectionable behavior, the allegations simply did not rise to the level of outrageousness required by the applicable case law. Accordingly, the court granted Royal Caribbean’s motion to dismiss Brown’s claim for intentional inflection of emotional distress. (USDC SDFL, March 17, 2017) 2017 U.S. Dist. LEXIS 39644
COURT SANCTIONS COUNSEL FOR CONTACTING PLAINTIFF’S PHYSICIAN
TERREBONNE V. B & J MARTIN, INC., ET AL.
David Terrebonne alleged that he began to experience chest pain while working aboard a vessel owned and operated by B & J Martin, Inc. Terrebonne claimed that he informed his employer of the chest pain for weeks, but the B&J allegedly would not permit him to leave the vessel to seek medical attention. Terrebonne further alleged that when he was finally permitted to leave, he was called back before he could obtain medical help. Eventually, Terrebonne suffered a cardiac event, was hospitalized advised that he needed a small procedure, but B&J allegedly refused to pay and allegedly refused to cover the procedure for another five months until Terrebonne finally was forced to undergo open heart surgery. Terrebonne alleged that B&J’s negligence exacerbated the illness and sued his employer, stating a number of claims under general maritime law and sought damages of $1,850,000. Terrebonne subsequently moved for sanctions against B&J and its counsel of record for improper contact with Terrebonne’s treating physician, arguing that the B&J’s counsel had committed a number of ethical violations and engaged in bad faith. In particular, Terrebonne sought to have a report authored by his treating physician to be stricken; for monetary sanctions imposed on B&J’s counsel, including attorney's fees and costs associated with the filing of the motion; and, ultimately, for the disqualification of B&J’s attorney from the case. The motion was opposed, by B&J, who argued that its counsel’s conduct had not violated Louisiana's narrow health care provider-patient privilege; that its counsel had not engaged in bad faith; and that the court should specifically allow ex parte communication by B&J with Terrebonne’s treating physicians. Moreover, B&J argued that counsel’s efforts were not in bad faith but rather good faith attempts to investigate if Terrebonne had reached maximum medical improvement. The first question the court looked to was the propriety of B&J’s communication with the Terrebonne’s treating physician, looking to either general maritime law, the Constitution, or federal statutes or rules to determine if a privilege applied. The court found that the communications with Terrebonne’s treating physicians violated the requirements for HIPPA disclosure in connection with a judicial proceeding. Moreover, in addition to the violation of HIPPA's requirements and procedures that the communication engaged in, the practice of unqualified ex parte communications with a plaintiff's treating physician when examined under federal principles has been frowned upon by other courts in the district. In addition to the problematic nature of counsel’s ex parte communication with Terrebonne’s treating physician, the court also found the manner in which B&J’s counsel communicated with the physicians to be ethically troubling. Given the foregoing, the court found that B&J’s counsel acted in bad faith, but did not believe that the conduct exhibited merited disqualification. Nonetheless, the court found the other two sanctions requested by Terrebonne to be appropriate. The court struck and disallowed B&J from using the ill-gotten report furnished by Terrebonne’s physician and required B&J’s counsel to pay for the attorney's fees associated with the motion for sanctions. Terrebonne’s motion for sanctions was granted. (USDC EDLA, March 17, 2017) 2017 U.S. Dist. LEXIS 38635
In another ruling in this case, B&J sought summary judgment on Terrebonne’s claim for cure, arguing that it was precluded by Terrebonne’s Medicaid eligibility. Terrebonne responded in opposition, arguing that B&J’s motion was premature. The parties agreed that Medicaid satisfied a defendant's cure obligation to the extent an injured seaman qualifies for Medicaid, and the Medicaid facilities are available within a reasonable distance from the seaman's residence, and competent physicians are likewise available and will accept Medicaid payment. Though Terrebonne conceded that his claim for cure was abrogated to the extent that his medical bills are paid by Medicaid, he argued that B&J’s cure obligation should not be fully discharged, pointing to multiple outstanding bills from several medical providers for which Medicaid had not yet paid benefits. The court granted summary judgment in favor of B&J to the extent that Medicaid had provided payment for Terrebonne’s medical expenses. (USDC EDLA, March 21, 2017) 2017 U.S. Dist. LEXIS 40058
COURT PUNTS ON SEAMAN STATUS SUMMARY JUDGMENT MOTION
WADE V. BAYWATER DRILLING, LLC, ET AL.
Premiere, Inc. hired Jordan Wade as a floorhand for casing crews in Premier's in-land shop. Wade worked as a tong operator in the shop and in the field. Wade returned to casing crew duties, contending that he was fired from his tong operator duties and then re-hired. Premiere, on the other hand, contended that Wade was not fired, but rather transferred when the tong operator shop closed. Wade was assigned to a casing crew that performed work aboard a drilling barge owned by Baywater Drilling, LLC and operated by Tana Exploration, LLC pursuant to a Master Service Agreement between Premiere and Tana. Wade was allegedly injured while he was working as a floorhand on a Premiere casing crew aboard the drilling barge. Wade filed suit against Premiere, Baywater and Tana, seeking damages for his alleged injuries, claiming that he was a Jones Act seaman. Premiere moved for summary judgment arguing that Wade was not a Jones Act seaman, arguing he could not satisfy the Chandristest for seaman status, because he could not demonstrate that he has a substantial connection to a vessel or an identifiable fleet of vessels in navigation. Wade moved to stay Premiere's motion for summary judgment, arguing that further discovery was required for him to adequately oppose Premiere's motion. Wade argued that the court should not consider his entire term of employment at Premiere, but only his employment at Premiere from the date he contended he was re-hired after allegedly being fired, averring that he could not adequately oppose Premiere's motion for summary judgment until he deposed a Premiere employee and Premiere's corporate representative to solicit information regarding whether he was fired and re-hired or transferred, and also whether he would have continued to work aboard the drill vessel if he had not been injured. Premiere argued that the depositions were unnecessary because Wade's personnel file speaks for itself with respect to the amount of time Wade spent working on vessels, and thus, ultimately, Wade's seaman status. The court reasoned that, although the documents provide information relevant to Wade's work assignments and seaman status, Wade had not had the opportunity to question Premiere about these records. Since the discovery deadline had not yet expired, the court concluded it was reasonable to permit Wade the opportunity to conduct the requested deposition. Wade's motion to stay was granted and the decision on Premiere's motion for summary judgment was stay, subject to re-submission at the end of the discovery period. (USDC EDLA, March 15, 2017) 2017 U.S. Dist. LEXIS 36886
MY FALL WAS MY EMPLOYER’S FAULT
WALLS V. CROUNSE CORPORATION
While onboard a Crounse Corporation vessel, Anthony Walls fell down a flight of stairs and allegedly fractured his right ankle. Walls, a crewmember, had just finished soogeying, or mopping, the vessel's second deck. He believes that he stepped in the soapy solution immediately before he slipped and fell. There were no witnesses to Walls' alleged fall. The parties disputed the cause of Walls' accident. Walls claimed that Crounse's vessels only have non-skid surfaces on the lower deck, and that there was no non-skid surfacing on the landing from which he fell. However, Captain Dale Kendall testified that Crounse's policy is to have non-skid paint at the top and bottom of every stairwell, and that non-skid was in fact present. Additionally, Walls claimed that he was wearing Chuck Taylor tennis shoes when the accident occurred because Crounse failed to provide him with the soogeying boots he had requested on multiple occasions. Walls admitted, though, that Crounse required crewmembers to have one pair of work boots. Walls did not wear his work boots when he sagged because he didn't want to get them wet. Walls brought suit against Crounse, alleging that Crounse was liable to him under the Jones Act, and under a theory of unseaworthiness for requiring him "to soogey without soogey boots on a non-skidless surface which was unreasonably slippery. Crounse moved for summary judgment on both of Walls' claims. The court held that Crounse was not entitled to summary judgment on either of Walls' claims. Both the Jones Act and the doctrine of unseaworthiness impose a high duty of care upon ship owners with respect to their employees. Under either theory, Walls may prevail against Crounse if he proves that Crounse's failure to apply non-skid paint and to provide him with the appropriate style of boots caused him to fall and break his ankle. Furthermore, Crounse's contentions that Walls' conduct was negligent go only to his comparative negligence, and do not entirely ameliorate Crounse's liability. Because genuine issues of material fact existed as to both of Walls' claims, they must accordingly be submitted to a jury for resolution. Crounse’s motion for summary judgment was denied. (USDC WDKY, March 8, 2017) 2017 U.S. Dist. LEXIS 32728
COURT FINDS FEDERAL JURISDICTION TO BE PROPER AND DENIES REMAND
JOHNSON V. SUNOCO, INC. (R&M), ET AL.
Plaintiffs' (Rudolph and Lois Johnson) alleged that from 1992 to 2005 Rudolph Johnson worked as a mechanic and seaman on various United States navigation vessels. In this role he repaired engines, cleaned tanks, and performed other miscellaneous tasks. Plaintiffs alleged that during the course of his employment, Johnson, on almost a daily basis, was directly and indirectly exposed to various benzene-containing solvent products manufactured, refined, designed, produced, processed, compounded, converted, packaged, sold, distributed, marketed, re-labeled, supplied and/or otherwise placed into the stream of commerce by defendants. Plaintiffs further contended that while working on the vessels, Johnson was also exposed to the vapors, aerosols, mists and fogs from said products, by means of inhalation, ingestion and dermal absorption (from direct dermal contact with said products, dermal contact with clothes contaminated by said products and/or dermal contact with benzene vapors in the air. Johnson was diagnosed with myelodysplastic syndrome (MDS). Johnson's MDS eventually mutated into acute myeloid leukemia (AML). Plaintiffs filed suit in state court, alleging that Johnson contracted MDS and AML as a result of his exposure to benzene. Plaintiffs also contended that as a result of the MDS/AML that Johnson contracted, he suffered multiple side effects, conditions, illnesses and symptoms and the medical treatments necessitated thereby, which caused him pain, suffering, disability, disfigurement, deformity, impairment, mental anguish, anxiety, humiliation, and increased susceptibility to infection. Defendants removed the case to federal court, pursuant to the "federal officer removal" statute, arguing that American Overseas Marine Corporation (AMSEA) operated the vessels in question, pursuant to instructions contained within federal government contracts. Accordingly, defendants claimed AMSEA was in all respects acting under orders of an officer of the federal government and entitled to have its rights and defenses evaluated and considered by a federal, rather than a state court. Plaintiffs then moved to remand this matter back to the Court of Common Pleas. The court found that defendants satisfied the Mesa four-part test to establish federal officer removal jurisdiction under §1442(a)(1) and held that the federal district court was the appropriate forum. In light of the foregoing, plaintiffs' motion to remand to the Court of Common Pleas of Philadelphia County was denied. (USDC EDPA, February 28, 2017) 2017 U.S. Dist. LEXIS 28595
PARTIES REACH AGREEMENT ON IME AT ORAL ARGUMENT
WILLIAMS V. NGUYEN, ET AL.
Frank Williams, III alleged that he was employed by Tim Nguyen, C9, Inc., Nghia Nguyen, and/or Nghia, Inc. and assigned to the C9, a vessel. The C9 was lashed to another vessel and, while so lashed, the C9 was struck by a third vessel owned and operated by Jeremiah Pierron and/or Miss Carla, LLC. Williams’ alleged that the force of the impact threw him from his bunk where he was resting, and that he suffered injuries as a direct result of the allission. Defendant filed a motion to compel Williams’ physical examination with an independent medical examination by a board certified orthopedic surgeon. Williams opposed the motion, for the sole reason that the IME would require over 120 miles of travel from his location. The defendants offered to pay for his transportation there. However, Williams did not argue that his physical health was not "in controversy" or that there is not "good cause" for an IME. During oral argument, the parties reached an agreement concerning the IME. The defendant provided that it would pay for either an Uber or a taxi to transport Williams to and from the IME and would work with Williams in securing a mutually agreeable date. Williams agreed to these terms. As such, the court granted the motion to compel the IME pursuant to the parties’ terms. (USDC EDLA, March 29, 2017) 2017 U.S. Dist. LEXIS 47271
SEAMAN GETS SUMMARY JUDGMENT ON WAGE CLAIM
SCHUSTER V. SEARCH, SURVEY & RECOVERY, INC.
Scott Schuster was a seaman employed by Search, Survey & Recovery, Inc. d/b/a SSR, Inc. to work aboard two of its vessels, who was allegedly not paid for his services. Schuster claimed he was due $3,000.00 arising from his service on one vessel and $11,500 arising from his service on the other. In addition to wages, he claimed he was due unpaid costs in the amount of $188.13. Schuster was employed pursuant to a written contract and served just 25 days before being discharged, before one month's wages were earned. The discharge was without his consent and Schuster claimed there was no fault justifying his discharge. Schuster moved for summary judgment on his wage claim. In response, SSR, Inc. moved for an extension of sixty days to respond to the motion but failed to file a timely response with the court. SSR, Inc. Failed to proffer any admissible evidence with the court on which a genuine issue of material fact could be premised and raised no legal argument as to why a grant of summary judgment would be not be appropriate. The court pointed out that when a seaman who has signed an agreement is discharged improperly before one month's wages are earned, without the seaman's consent and without the seaman's fault justifying discharge, the seaman is entitled by statute to receive from the owner, in addition to wages earned, one month's wages as compensation under 46 U.S.C. §10313(c). Additionally, prejudgment interest is awarded in maritime cases, except in unusual circumstances. Schuster also sought to recover attorneys' fees as a result of SSR’s, arguing that a court is empowered to award attorney’s fees to a seaman required to file suit in order to obtain payment of his wages. But the court noted that Schuster provided no authority to support the premise that requiring a seaman to file suit in order to obtain payment is sufficient, in and of itself, to constitute bad faith. Accordingly, the court found no bad faith on the part of SSR in the conduct of the litigation and declined an award of attorneys' fees on those grounds. The court went on to order judgment in favor of Schuster, and against SSR, Inc., in the amount of $14,500 for unpaid wages, and $188.13 for unreimbursed costs. In addition to his wages and costs, the court awarded Schuster the amount of $15,000 for one month's wages in accordance with 46 U.S.C. §10313(c) and prejudgment interest on the claims for wages and costs at the rate of 2.32% per annum. (USDC SDFL, March 3, 2017) 2017 U.S. Dist. LEXIS 31360
COURT SPLITS DEFENDANTS BETWEEN STATE COURT AND ARBITRATOR
WEXLER V. SOLEMATES MARINE, LTD, ET AL.
Linnea Wexler was employed by Solemates Marine as a Sous Chef aboard a yacht, which Solemates owned at the time. The terms and conditions of Wexler’s employment with Solemates were provided in a Seafarer Employment Agreement, which did not contain an arbitration provision. Wexler was required to participate in a safety drill, during which she was ordered to open a heavy and allegedly ill-maintained overhead hatch. She was unable to open the hatch on her first attempt. While attempting to open the hatch a second time, Wexler allegedly sustained an injury to her neck. Solemates allegedly did not provide Wexler with any medical care despite having been notified of her alleged injury. Wexler remained employed with Solemates aboard the vessel until it was sold to Seavisions, and then Wexler began employment with Seavisions, retaining her position as a Sous Chef aboard the yacht. As part of that employment, Wexler signed a Seafarer Employment Agreement with Seavisions. Unlike the Solemates SEA, the Seavisions SEA did contain an arbitration provision. Wexler allegedly informed both the new captain and the yacht’s nurse of her injury and claimed that the resulting pain was worsening. Despite being informed of Wexler’s injury, however, Seavisions did not provide her with shoreside medical care and instead required her to continue working onboard the yacht for the next several weeks, during which time Wexler’s injury was allegedly exacerbated by rough seas.
Wexler eventually signed off the vessel due to a family emergency and took it upon herself to seek medical care for her injury. As part of her medical treatment, Wexler received an MRI on her cervical spine, which revealed that she had allegedly sustained a C5/6 left posterolateral disc herniation causing compression on the left spinal cord and posterior displacement of the left C7 nerve root and was taken out of work. Wexler filed suit against Solemates and Seavisions in state court, requesting a jury trial, and asserting claims of Jones Act negligence, unseaworthiness, failure to provide maintenance and cure, along with various other causes of action. Seavisions, with the consent of Solemates, removed the case to federal court pursuant to 28 U.S.C. §1441, et seq., and 9 U.S.C. §205. Seavisions then moved to dismiss and compel arbitration, pursuant to the arbitration provision included in the Seavisions SEA. Alternatively, Seavisions sought dismissal of Wexler’s complaint on the bases of insufficient service of process, lack of personal jurisdiction, forum non conveniens, and failure to state a claim. Solemates also moved to dismiss, seeking dismissal of on the same bases, though Solemates did not request that Wexler’s claims against Solemates be compelled to arbitration. Wexler moved to remand, arguing that no arbitration agreement existed between her and Solemates and that her personal injury and conversion claims against Seavisions were not covered by the arbitration agreement between them. The court initially found that if the arbitration clause in the Seavisions SEA was applicable to all of the claims at issue, including the claims made against Solemates, then the court had subject matter jurisdiction to compel arbitration of all of those claims pursuant to the Convention and its enabling legislation. If, on the other hand, the arbitration clause of the Seavisions SEA is not applicable to some or all of the claims at issue, then the court would not have subject matter jurisdiction of those claims and they must be remanded. The court initially found that the Seavisions SEA did not retroactively apply to the events that form the basis of Wexler’s claims against Solemates. Consequently, Solemates was unable to satisfy the first jurisdictional element of Bautista. Nevertheless, the court found that all of Wexler’s claims against Seavisions were well within the scope of the arbitration clause. Accordingly, the court found that the entirety of Wexler’s dispute against Seavisions arose from the Seavisions SEA. Therefore, each of Wexler’s claims against Seavisions was subject to the Seavisions SEA's mandatory arbitration clause. Seavisions motion to dismiss and compel arbitration was granted and Solemates motion to dismiss was denied. Wexler's motion to remand was granted in part and her claims against Solemates were remanded. (USDC SDFL, March 14, 2017) 2017 U.S. Dist. LEXIS 36376
LACK OF SERVICE ON ESSENTIAL PARTY PRECLUDES SUMMARY DISMISSAL
TURNER V. COASTAL MARINE CONTRACTORS LLC, ET AL.
James Turner was employed by Frederick Brugge and assigned to a vessel towing a barge, when he allegedly sustained injuries. Turner claimed that the outer layers on the towing line that they used to pull the barge had peeled all the way back, so when it was entangled in the tug's prop after the captain put the tug in reverse, it severed. To secure an emergency line, Turner alleged that he was ordered to jump onto the barge from the tug boat. As he attempted to return to the tug boat, the boat crashed into the barge, causing Turner to fall and allegedly suffer injuries to his abdomen, back, and neck. Turner filed suit against Coastal Marine Contractors, LLC, the company tasked with making repairs to the vessel before its voyage, and Brugge, requesting actual and punitive damages, maintenance and cure benefits, costs, and attorneys' fees. Turner later dismissed Coastal Marine and brought claims against LR Maritime, LLC, Tesza Marine, Inc., Conequipos Ing. Ltda., and Brugge, claiming that the vessel he was assigned to was owned by LR Maritime, chartered by Tesza and Conequipos, and operated by those parties jointly. Turner also added Global Mariner S.A.S. , because it was a signatory to a contract relating to the provision of a crew for the vessel. However, Global Mariner was never served. Conequipos and LR Maritime sought summary dismissal from the suit, averring they relinquished operational control of the vessel pursuant to a Sea Staff Supplying Agreement between the charterer, Global Mariner, and the contractor, Brugge. Because neither defendant employed Turner or operated the vessel at the time of Turner’s allege injury, defendants argued that Turner could not prove that they breached any duty to him. Turner did not dispute that defendants Conequipos and LR Maritime were not his employers and therefore agreed that they were entitled to summary judgment as to his claims for maintenance and cure and negligence under the Jones Act. Nonetheless, Turner maintained that both defendants were liable under general maritime law because they did not relinquish operational control; and even if they did relinquish such control, LR Maritime breached its non-delegable duty to provide a seaworthy vessel and Conequipos breached its general duty to exercise reasonable care. While defendants maintained that the agreement between Global Mariner and Brugge delegated all responsibility for the crew to Brugge, the court agreed with Turner that there was no evidence that Global Mariner, which has not been served, had any authority to relinquish control of the vessel to Brugge on behalf of either LR Maritime or Conequipos, noting that the relationship between the parties was unclear. LR Maritime purportedly owned the vessel, while Conequipos chartered it and directed Coastal Marine to repair it. On the evidence before it, the court found it impossible to determine the proximate cause of Turner’s injuries, and noted that a reasonable jury could return a verdict for Turner, so defendants were not entitled to summary judgment. The court held that Conequipos and LR Maritime were entitled to summary judgment dismissing Turner’s maintenance and cure and negligence claims under the Jones Act. However, defendants were not entitled to summary judgment on either Turner’s unseaworthiness claim against LR Maritime or his negligence claim against Conequipos. (USDC EDLA, March 13, 2017) 2017 U.S. Dist. LEXIS 35328
WHERE OR WHERE DID THIS INCIDENT OCCUR?
COPLEY V. C.J. MAHON CONSTRUCTION COMPANY, LLC
Grover Copley who worked on the crew of a dredge owned and operated by C.J. Mahon Construction Company, LLC, and was allegedly injured while trying to tie off barges. Following his alleged injury, which occurred within the jurisdiction of the court where Copley filed his seaman’s complaint, Copley was treated for his injuries in Evansville, Indiana, and went through rehabilitation at home near Huntington, West Virginia. Copley brought his suit under the Jones Act for negligence and under general maritime law for unseaworthiness and for maintenance and cure. C.J. Mahon moved to transfer the case to the Western district of Kentucky, arguing that the accident actually occurred within Kentucky's jurisdictional waters on the Ohio River, and maintained that the suit has no connection with Illinois and should therefore be moved to the Western District of Kentucky for the convenience of the parties. Copley argued in response that the Smithland locks are on the Illinois side of the Ohio River and that, contrary to C.J. Mahon's assertions, the incident occurred in Illinois. As a preliminary matter, the court noted that venue was proper in the district regardless of the state in which the accident occurred. C.J. Mahon did not contest that it resides in Illinois under 28 U.S.C. §1391(c)(2) because it was subject to personal jurisdiction there. Instead, it sought a change of venue for convenience under 28 U.S.C. §1404(a). In addition, the court noted that it must give substantial weight in favor of the forum in which the plaintiff chose to file the complaint. Even if the circumstances indicated that a transfer would be clearly more convenient to the parties and witnesses, a court may still refuse to transfer the case if it is not in the interest of justice. Given all these factors, the court concluded that C.J. Mahon had not carried its burden of showing that hearing this case in the Western District of Kentucky was clearly more convenient than hearing this case in the Southern District of Illinois. Therefore, the court denied the motion to transfer venue. (USDC SDIL, February 28, 2017) 2017 U.S. Dist. LEXIS 28040
TOO MANY ENSCO ENTITIES TO KEEP TRACK OF
O'BERRY V. ENSCO INTERNATIONAL, LLC, ET AL.
Willis D. O'Berry filed a Seaman Complaint against ENSCO International, Inc. And other ENSCO entities, alleging that he was a mandatory participant in a water survival training course required by defendants and taught by their agent, SMTC Global. This course, which O’Berry conceded was taught ashore, included participating in an at-sea escape from a downed helicopter and boarding life rafts. O’Berry, who was then sixty-two years old, alleged he had great difficulty getting out of the helicopter and into a life raft and, while struggling to climb into a life raft from the water, he was injured when he was grabbed at the neck by fellow participants and was roughly hauled aboard the raft. O’Berry claimed that, as a result, he suffered serious cervical neck injuries for which a lumbar fusion operation was required. He further alleged that he was not paid maintenance and cure. ENSCO filed a Rule 12 motion to dismiss, arguing the court lacked subject matter jurisdiction, as the alleged claims were neither subject to admiralty jurisdiction nor federal question jurisdiction given that U.S. law did not apply and the alleged incident took place onshore in Saudi Arabia. In addition, ENSCO argued that the court lacked personal jurisdiction over the ENSCO entities, as the accident occurred overseas and only involved foreign parties who lacked sufficient minimum contacts with the United States. Finally, ENSCO argued the O’Berry’s Jones Act claims against it were also subject to dismissal on 12(b)(6) grounds considering O’Berry was never employed by ENSCO, but rather, was employed by a separate and distinct Cayman corporation. The court allowed the parties time to conduct jurisdictional discovery. O’Berry filed an amended complaint naming ENSCO Limited and ENSCO Inc. as defendants. The court then granted O’Berry’s ex parte motion to dismiss defendants Ensco International, Inc. and Ensco Inc. without prejudice. ENSCO motion to dismiss was denied to the extent it sought dismissal of O’Berry’s claims pursuant to FRCP 12(b)(1), Rule 12(b)(2) and forum non conveniens. The court further ordered that O’Berry was granted leave to amend his complaint to address the arguments raised in ENSCO Rule 12(b)(6) motion to dismiss, noting that if O’Berry timely filed his second amended complaint, ENSCO’s Rule 12(b)(6) Motion to Dismiss would be dismissed without prejudice as moot. ENSCO would be free to re-urge its motion to dismiss in a timely fashion after O’Berry’s second amended complaint was filed. (USDC EDLA, March 20, 2017) 2017 U.S. Dist. LEXIS 39260
ANOTHER REMOVAL ACTION BITES THE DUST-AND THIS ONE WAS OURS
GRAHAM V. ATLANTIC SOUNDING CO., INC., ET AL.
Reco Graham allegedly sustained injuries while employed by Atlantic Sounding Co., Inc. as a deckhand aboard a dredge, owned by Weeks Marine, Inc. Graham alleged that the deck captain ordered Graham and another deckhand to jump from the dredge to a barge. As Graham prepared to attempt the jump, a four-inch mooring line tying the barge to the dredge snapped, striking Graham on his left leg, both feet, hip and back, and knocked Graham backwards onto the dredge. Graham filed his seaman’s suit in state court, alleging that defendants breached their duty to provide him with a safe and seaworthy vessel on which to work, in violation of the Jones Act and general maritime law, requesting damages in excess of $1,000,000. For purposes of diversity, Graham is a citizen of Florida and defendants are citizens of New Jersey. Defendants removed the case to federal court on the basis of diversity jurisdiction. , but argued that venue was not proper in the Southern District of Texas, Brownsville Division. Instead, Defendants requested that this case be transferred to the Southern District of Texas, Houston Division. As the basis for their transfer request, Defendants argued that Graham’s Jones Act claim was subject to a valid and binding "Employee Acceptance of Forum Selection" agreement (hereafter "EAFS agreement") between Weeks Marine and Graham. Graham moved to remand, arguing that Jones Act claims are not removable and that federal jurisdiction cannot be created by contract. Graham also argued that forum selection clauses are unenforceable. Defendants opposed the motion to remand, arguing that although Graham’s claims were filed pursuant to the savings-to-suitors clause, his claims nevertheless were removable because defendants had established an independent basis for federal jurisdiction, namely diversity. Defendants clarified that they do not seek to create federal jurisdiction by contract, but rather rely on the EAFS agreement to establish defendants' right to be sued in one of the venues identified by the contract. The court found that Graham’s case could not be removed from state court because, absent a fraudulent pleading, Graham’s Jones Act claim could not be removed. The court also found that Graham had not pled a fraudulent Jones Act complaint. The court also concluded there was sufficient evidence to support a finding that Weeks Marine served as the alter ego of Atlantic Sounding. As to the borrowed servant doctrine, the law is well settled that a Jones Act plaintiff can prove he was a borrowed servant at the time of injury by establishing that the defendant against whom recovery is sought had the power to control, manage and direct the servant in the performance of his work. Therefore, the court found that defendants failed to meet their burden of demonstrating that there was no possibility Graham was an employee of one company and a "borrowed servant" of the other. Finally the court held that a general maritime claim, removable on diversity jurisdiction, cannot be removed when filed in conjunction with a Jones Act claim. Accordingly, Graham’s Jones Act claim and general maritime claim were held to be non-removable and remanded. Although Graham had requested attorney fees in connection with his motion, the court found that defendants had an objectively reasonable basis for removal and denied the fee request. (USDC SDTX , March 22, 2017) No. 1:16-cv-249
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